Question : Case Study 1:
ABC Corporation is a well-established manufacturing company looking to optimize its short-term funding needs.
Question :
ABC Corporation is seeking short-term funding to meet its operational requirements. Which market would be suitable for this purpose?
Option 1: Primary market
Option 2: Secondary market
Option 3: Money market
Option 4: Capital market
Correct Answer: Money market
Solution : The correct answer is (c) Money market
The money market is the most suitable market for ABC Corporation to seek short-term funding to meet its operational requirements. The money market is where short-term borrowing and lending of funds occur, typically for periods of one year or less. It provides a platform for organizations to manage their short-term liquidity needs efficiently and cost-effectively. Examples of money market instruments include Treasury bills, commercial paper, certificates of deposit, and short-term government or corporate bonds. These instruments offer ABC Corporation flexibility and liquidity for their short-term funding needs.
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