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What are money market instruments?

Updated: 9/11/2023
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Money market instruments are investment choices that help optimize funds. Some of these might include Government of Canada Treasury Bills, Banker Deposit Notes and Commercial/Financial Paper.

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Q: What are money market instruments?
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What are some characteristics of money market instruments?

please i'd like to know thecharacteristics of money market especially in Nigeria


How do money market firms work?

Money market fund firms operate by combining many small investors' funds to accumulate the volume of money needed to buy money market instruments.


Examples of money market instruments?

Some examples of money market instruments include commercial paper commodities such as bonds and treasury bills. They are highly liquid and they have maturity periods based on different agreements.


What are the foreign exchange market instruments?

what are the FOREX market instrument?


What are capital market instruments?

Capital market instruments Capital market instruments are those instruments which are not facilitate the transfer of capital in the financial markets (!). Let's start with a basic definition of capital markets. A capital market is where people (individuals, corporations, governments)lend or borrow money.To faciliate an example, we ask: how do lenders decide who should borrow from them? The markets have evolved uniform instruments to help lenders in the capital markets make investment decisions.One example of these uniform instruments is a fixed rate bond. A fixed rate bond allows a company/government to borrow money for a fixed period of time while paying a fixed interest rate on that borrowed money. In the capital markets, the uniformity of fixed rate bonds faciliate the transfer of capital from lender to borrower.Other examples of capital market instruments include equity, floating rate bonds, convertible bonds, asset backed securities, mortgage backed securities, and interest rate swaps.

Related questions

What is the scope on money market instruments?

it is correct.


Are equity shares a money market instruments?

Equity shares are long term instruments and hence can not be a money market instrument. They are traded in a market known as stock market. The equity segment of the exchange is different from other markets such as debt market and money markets.


Money Market Instruments in nigeria in 2009?

The major money market instrument are treasury bills and bonds, federal agency.


What are some characteristics of money market instruments?

please i'd like to know thecharacteristics of money market especially in Nigeria


What is capital market and debt market?

The capital market provides financing to meet the denomination, liquidity, maturity, risk (with respect to credit, interest rate, and market), and other characteristics desired by those who have a surplus of funds and those who have a of funds. The capital market as a whole consists of overnight to long-term funding. The short to medium end of the maturity spectrum is called the money market proper, and the long end is identified as the capital market. The financial instruments range from money market instruments to thirty-year or longer bonds in credit markets, equity instruments, insurance instruments, foreign-exchange instruments, hybrid instruments, and derivative instruments. There has been an explosion of innovation in the creation and development of instruments in the money and capital markets since about 1960 in both debt and equity instruments. -Jennifer


How do money market firms work?

Money market fund firms operate by combining many small investors' funds to accumulate the volume of money needed to buy money market instruments.


What are types of financial instruments in capital markets?

The financial instruments range from money market instruments to thirty-year or longer bonds in credit markets, equity instruments, insurance instruments, foreign-exchange instruments, hybrid instruments, and derivative instruments.


Examples of money market instruments?

Some examples of money market instruments include commercial paper commodities such as bonds and treasury bills. They are highly liquid and they have maturity periods based on different agreements.


What are the major characteristics of money market instruments?

1. Money market generates higher rate of returns than holding cash. 2. Money Market funds are liquid 3. low risk The three fundamental characteristics of money market instruments are: (a) low default risk, (b) short-term to maturity, and (c) high marketability. These characteristics give money market instruments their characteristic of being low risk. Money market investors demand low-risk securities because their cash excesses are only temporary.


Is treasury bond issued 29 years ago with sis month remaining before it matures a money markets instruments?

Equity shares are long term instruments and hence can not be a money market instrument. They are traded in a market known as stock market.


What are securities with maturities of one year or less classified as?

Money market instruments are securities with maturities of one year or less. A common stock is an example of something that is not a money market security.


What are the functions and duties of money markets in Nigeria?

The money market allows money available for short periods to be directed to those who can use it. The functions fulfilled by the money market are the following:Provides a mechanism such that institutions in a deficit position can borrow funds temporarily and institutions in a surplus position can invest the funds temporarily.The money market allows institutions to hold a proportion of their funds in liquid assets that will enable them realise cash quickly should the need arise.Enables the imbalances in the supply of money between the financial system as a whole and the government to be smoothed out. Through the conduct of Open Market Operation, the Central Bank will, through MMDs, daily offer to buy/sell money market instruments to the public in order to influence the money supply level. Where the intention is to decrease money supply (i.e. mop up liquidity), the CBN will sell instruments to the market. Conversely, where one intends to increase the money supply level (provide liquidity), the CBN will offers to buy instruments from the market.