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

Propose which investment plan, Problem There are two investment plans i...

Problem There are two investment plans in the market whose details are given below based on which you need to decide which investment plan you need to select. Propose which inv

Passive management, In the efficient markets, whether it is sec...

In the efficient markets, whether it is security, equity or fixed-income markets it is believed that the investors use some type of passive strategy in

Factors affecting cost of capital, Factors Affecting cost of capital are el...

Factors Affecting cost of capital are elements in the business environment that cause a company cost of capital to be high and low. Figure below illustrative the various primary fa

Corporate governance, CORPORATE GOVERNANCE Corporate governance can be ...

CORPORATE GOVERNANCE Corporate governance can be stated in different ways, for example: The Private Sector Corporate Governance Trust (PSCGT) defines that corporate governan

Non-callable versus non-refundable bonds, A bond is said to be curr...

A bond is said to be currently callable if the issue is not protected against early call provision. But most new bond issues, even if currently callable, us

Liquidity risk, what role do core deposits play in predicting the probabili...

what role do core deposits play in predicting the probability distribution of net deposit drains

Discuss about stock market and stock exchanges , Successful managers and in...

Successful managers and investors understand the various financial markets and the investments these markets offer. A good understanding of potential gains and losses, as well as t

Example on interest rate movements, Q. Example on interest rate movements? ...

Q. Example on interest rate movements? Cap/floor volatility is consideration to be higher than swaption volatility because the market buys volatility trough swaptions as well a

Net present Value, Given below are the cash flows of a project. Find out th...

Given below are the cash flows of a project. Find out the net present value of the project. Cost of capital is 18% and initial investment is Rs. 2,00,000. Year Cash Flows (lakhs)

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