Features of Money Market (Short Term) - SS2 Accounting Past Questions and Answers - page 1
What is the maturity of the financial instruments traded in the money market?
One year or less
Two years or more
Three years or more
Five years or more
What is the risk level associated with investing in the money market?
High risk
Medium risk
Low risk
No risk
Who sets the interest rates for many of the financial instruments traded in the U.S. money market?
The Federal Reserve
The Securities and Exchange Commission
The Internal Revenue Service
The Treasury Department
What type of market is the money market?
Centralized exchange market
Decentralized exchange market
Primary market
Secondary market
What is the typical return on investments in the money market?
High return
Medium return
Low return
No return
What are some of the financial instruments traded in the money market?
Some of the financial instruments traded in the money market include treasury bills, certificates of deposit, commercial paper, and banker's acceptances.
Why is the money market considered to be a vital component of the financial system?
The money market provides short-term funding to institutions that need it while offering investors a low-risk investment option, which helps to ensure the stability of the financial system.