Money market instruments, Financial Management

Assignment Help:

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.


Related Discussions:- Money market instruments

Types of t-bills, Types of T-Bills In the US markets, though there ar...

Types of T-Bills In the US markets, though there are many types of T-bills, they can be broadly classified into two types - regular-series bills and irregular-series bills.

Account balance - inherent risk, Account balance - Inherent risk At a...

Account balance - Inherent risk At account balance / class of transaction level Balances susceptible to misstatement. History of errors. Complexity of transac

Traditional capital budgeting techniques, Traditional   Capital Budgeting ...

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

Degree of uncertainty in predicting cash balances, Q. Degree of uncertainty...

Q. Degree of uncertainty in predicting cash balances? Probability approaches identify a degree of uncertainty in predicting cash balances and allow for a range of outcomes to

Explain interest rate risk, Explain Interest rate risk Interest rate r...

Explain Interest rate risk Interest rate risk considers to interest rates changing not favorably before the swap dealer can lay off with an opposing counterparty the unplaced

Calculate debt or equity ratio, Calculate Debt or Equity Ratio XYZ LI...

Calculate Debt or Equity Ratio XYZ LIMITED Key data related to XYZ for last three years is as follows:   2011/12 2010/12

Differences in working capital for different industries, Differences in wor...

Differences in working capital for different industries   Manufacturing Retail Service Inventories H

Nature of the business, Q. Nature of the business? The working capital ...

Q. Nature of the business? The working capital requirement of the firm basic depends upon the nature of the business. public utility undertaking like the water supply and rai

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd