Money market instruments, Financial Management

Just as any other financial market, money market also involves transfer of funds in exchange for financial assets. Because of the nature of the money market, the instruments used in it represent short-term financial claims (i.e., instruments issued with maturities up to 12 months). Though there are no statutory definitions for the money market instruments, it is accepted that the maturity preriod of money market instruments varies from one day to one year, thus enabling a short holding period between entrance and exit, paving the way for liquidity. At times, the liquidity of a security may make it a part of the money market even though the maturity may be beyond a year. With short-term liquidity being the main purpose of the money market, various instruments have been developed to suit these short-term requirements. For instance, the amount of funds required by banks to meet their statutory reserves will vary from one day to a fortnight. Similarly, corporates may require funds for their working capital purpose for any period up to a year. Given below is a broad classification of the money market instruments depending upon the type of issuer and the requirements they meet.

Posted Date: 9/8/2012 5:27:44 AM | Location : United States







Related Discussions:- Money market instruments, Assignment Help, Ask Question on Money market instruments, Get Answer, Expert's Help, Money market instruments Discussions

Write discussion on Money market instruments
Your posts are moderated
Related Questions
Corporate bonds are debt securities issued by private and public corporations. These bonds are issued to meet specific requirements like building a new plant, pur

Solutions to this Conflict In common, to make sure that managers act to the best interest of shareholders, the firm will: (a) Acquire Agency Costs in the form of:

Traditional   Capital Budgeting Techniques These techniques are usually very simple and easily catchable. But the fundamental drawback of these methods is that they don't cons

An options strategy by which an investor owns a position in both a call and put market with the same strike price and expiration date.

Examine the reasons for holding inventories by a firm & also discuss the techniques of inventory control

Explain foreign equity ownership restrictions. Why do you think countries entail these restrictions? Several countries restrict the maximum fractional ownership of local organiza


Application of Shareholder Value Maximization Framework   Factors affecting Shareholder's Value are: Capital Market Conditions Profitability à Includes factors li

What are the types of Inventory cost? Explain the elements of inventory cost also. Types: 1. Ordering cost    2. Holding cost Elements: 1. Unit cost  2. Reordering