Question : Which of the following statement is correct?
Statement 1: The demerit of money market is it provides less liquidity in the transaction of securities.
Statement 2: There is no need of brokers for the transaction done in the money market.
Option 1: Both are true
Option 2: Both are false
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 1 is false and statement 2 is true.
Correct Answer: Statement 1 is false and statement 2 is true.
Solution : Generally there is no need of brokers for transaction done in the money market therefore buying and selling in the money market involves less expenses. One important feature of the money market is more liquidity in the transaction of securities. In this market there is a formal arrangement of creating liquidity.
Hence, option D is correct.