Definition of Money Market Instruments

Definition of Money Market Instruments

In the economical industry, a difference is made between the main capital marketplaces and the cash marketplaces.

The money market provides very short-term resources to organizations, cities and the U.S. govt. The short-term financial obligations and investments marketed on the money markets which are recognized as the money market instruments.

Brief Explanation of Money Market Instruments

. Money market investments are economical debt issues with maturities of one season or less. The main town companies are a source of intermediate-term to long-term funding in the form of value or economic debt investments with maturities of more than one season. Money market instrument give companies, banking organizations, and govt. authorities a means to finance their short-term cash specifications. There are three main characteristics. These characteristics are:

  • Safety – Money market instrument also provide a relatively high level of protection because their providers have the maximum credit scoring.
  • Liquidity – Money market instrument are extremely liquid because they are fixed-income investments with short-term maturities of a season or less.
  • Discount Pricing – A third attribute Money market instruments have in common is that they are released at a lower price to their face value.


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