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What are the major characteristics of money market instruments?

Answer:
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.

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