Maharashtra State BoardHSC Commerce 12th Board Exam
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Justify the following statement. Money market makes available short term finance through different instruments. - Secretarial Practice

Short Note

Justify the following statement.
Money market makes available short term finance through different instruments.

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Solution

  1. In the money market, lending and borrowing of funds take place for a short period of time, which may vary from one day to a year.
  2. Financial instruments in this market can be easily converted into cash without loss of time and value.
  3. In other words, money market deals with only those financial instruments which are immediate substitute for money.
  4. Some of the instruments used in the money market are call and notice money, treasury bills, trade/ commercial bills, commercial papers, certificates of deposits, government securities, repurchase agreements, Money Market Mutual Funds, etc.
  5. All these instruments have a maturity period of less than a year
  6. Hence, the money market makes available short-term finance through different instruments.
Concept: Types of Financial Market
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APPEARS IN

Balbharati Secretarial Practice 12th Standard HSC Maharashtra State Board
Chapter 11 Financial Market
Exercise | Q 6.2 | Page 169
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