What is money market explain its scope and characteristics?
The money market can be understood as an organized exchange marketplace, wherein, participants can either borrow or lend money. Such a market enables the trading of short-term, high quality debt instruments with an average maturity of a year or less.
What is money market What are its characteristics?
The money market is a market for financial assets that are close substitutes for money. It is a market for overnight short-term funds and instruments having a maturity period of one or less than one year. It is not a place (like the Stock market), but an activity conducted by telephone.
What is meant by money market?
The money market refers to trading in very short-term debt investments. At the wholesale level, it involves large-volume trades between institutions and traders. At the retail level, it includes money market mutual funds bought by individual investors and money market accounts opened by bank customers.
What are the characteristics of money market in India?
Indian Money Market is characterized by diversity in interest rates. Prime examples are the Government borrowing rates, deposit and lending rates of commercial banks, deposit and lending rates of co-operative banks and so on.
What is money market and examples?
Money markets are unorganised markets. Financial institutions, banks, brokers and money dealers trade for a short period. T Bills, commercial paper, certificate of deposit, trade credit, bills of exchange, promissory notes, call money, etc. are some of the examples of money market instruments.
What is money market Class 12?
(i) Money Market, It is a market for short-term funds meant for dealing in monetary assets whose period of maturity is less than one year.
What is money market and types?
The money market is a part of the larger financial market and consists of numerous smaller sub-markets like bill market, acceptance market, call money market, etc. Money market deals are not carried out in money / cash, but other instruments like trade bills, government papers, promissory notes, etc.
What is the money market called?
Definition: Money market basically refers to a section of the financial market where financial instruments with high liquidity and short-term maturities are traded.
What are the 4 types of money?
The 4 different types of money as classified by the economists are commercial money, fiduciary money, fiat money, commodity money.
What are the 7 characteristics of money?
The characteristics of money are durability, portability, divisibility, uniformity, limited supply, and acceptability.
What are the characteristics of good money?
The qualities of good money are:
- General acceptability.
- Portability.
- Durability.
- Divisibility.
- Homogeneity.
- Cognizability.
- Stability.
What are the 2 different types of money?
As members of the public, we only have access to two of them – physical money and commercial bank money.
- Physical money. Physical money, meaning cash and coins, is created by the US Treasury. …
- Central bank reserves. …
- Commercial bank money.
What are M1 and M2?
M1, M2 and M3 are measurements of the United States money supply, known as the money aggregates. M1 includes money in circulation plus checkable deposits in banks. M2 includes M1 plus savings deposits (less than $100,000) and money market mutual funds. M3 includes M2 plus large time deposits in banks.
What type of currency is gold?
Under a free market system, gold is a currency. Gold has a price, and that price will fluctuate relative to other forms of exchange, such as the U.S. dollar, the euro, and the Japanese yen. Gold can be bought and stored, but it is not usually used directly as a method of payment.
What are 3 types of money?
Economists differentiate among three different types of money: commodity money, fiat money, and bank money. Commodity money is a good whose value serves as the value of money. Gold coins are an example of commodity money.
What are the 6 types of money?
The various types of money are:
- Commodity Money.
- Fiat Money.
- Fiduciary Money.
- Commercial Bank Money.
- Metallic Money.
- Paper Money.
- Reserve Money.
What are the 5 types of money?
There are 5 different types of money in the world: Fiat, commodity, representative, fiduciary, and commercial bank money. They also all have three functions in common; they serve as a medium of exchange, as a store of value, and as a unit of account.
What are the 5 functions of money?
So money serves all of these functions— it is a medium of exchange, store of value, unit of account, and standard of deferred payment.
What are the functions of money market?
Money markets serve five functions—to finance trade, finance industry, invest profitably, enhance commercial banks’ self-sufficiency, and lubricate central bank policies.
What are the two primary or basic function of money?
Medium of exchange and measure of value are the two primary functions of money.