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

Forecasting yield volatility, There are several methods available to ...

There are several methods available to forecast yield volatility. But before that, let us look into the calculation of forecasted standard deviation. Assume th

LPP, A paper mill produces two grades of paper viz., X and Y. Because of ra...

A paper mill produces two grades of paper viz., X and Y. Because of raw material restrictions, it cannot produce more than 400 tons of grade X paper and 300 tons of grade Y paper i

Treasury yield curve, Treasury securities are government bonds issued...

Treasury securities are government bonds issued by the US Treasury Department. These are issued through the Bureau of the Public Debt. They are debt-financing ins

Disadvantages of just-in-time inventory management, Q. Disadvantages of jus...

Q. Disadvantages of just-in-time inventory management? A JIT inventory management system mayn't run as smoothly in practice as theory may predict since there may be little room

Agency relationship, what are the ten agency problems between shareholders ...

what are the ten agency problems between shareholders and auditors and their solutions

Examine about environmental analysis, Examine about Environmental (external...

Examine about Environmental (external) analysis "A study that considers potential environmental effects during planning phase before an investment is made or an operation start

Treasury bills or t-bills, Treasury bills are the bills, the governme...

Treasury bills are the bills, the government issues with maturity period of one year or less than one year. Treasury bills are usually issued as discount securiti

Explain the term- trade receivable days, Explain the term- Trade receivable...

Explain the term- Trade receivable days (turnover) [Yearend trade receivables/Credit sales (or turnover)] x   365days It is the average length of time taken by customers t

Agency policy theorem, How might management try to solve the problems foun...

How might management try to solve the problems found in agency theorem

#title Find the NPV of 2 Projects, Woody Construction is considering a new ...

Woody Construction is considering a new 3 year expansion project that requires an initial fixed asset investment

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