Question : Which of the following is not a characteristic of the money market?
Option 1: High liquidity
Option 2: Short-term maturities
Option 3: Low risk
Option 4: Trading of long-term government bonds
Correct Answer: Trading of long-term government bonds
Solution : The correct answer is (d) Trading of long-term government bonds.
The money market is characterized by short-term borrowing and lending of funds, typically with maturities of one year or less. It primarily deals with highly liquid, low-risk instruments. However, the trading of long-term government bonds is not a characteristic of the money market. The trading of long-term government bonds is not a characteristic of the money market. Long-term government bonds, which have maturities exceeding one year, are typically traded in the bond market, which is distinct from the money market.
Question : The money market deals with the trading of:
Option 1: Stocks and bonds
Option 2: Currencies and commodities
Option 3: Short-term debt instruments
Option 4: Long-term government securities
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