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Which statement describes risk in the Money Market?

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Question

Which statement describes risk in the Money Market?

Options

  • Relatively risky for both return and principal repayment.

  • Relatively safe, issued for short duration by sound entities.

  • Highly liquid due to an active ready market.

  • Lower expected returns because of shorter maturity.

MCQ
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Solution

Money Market instruments are relatively safe. They are issued for short duration by sound entities.

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