The money market exist so that people, corporation and government units can borrow funds when needed or lend or invest funds to earn interest for a short period of time (liquidity financing) the money market investments therefore are characterizes by three fundamental characteristics. They have: >Low default risk (issued by high quality borrowers) >Low price risk (maturity is short---one year or less) in addition, they >Have low transaction cost >Transactions are in large denominations (1 million to 10 million)
The money market exist so that people, corporation and government units can borrow funds when needed or lend or invest funds to earn interest for a short period of time (liquidity financing)…