Question : Which market is primarily used for raising short-term funds to meet working capital requirements?
Option 1: Money market
Option 2: Capital market
Option 3: Forex market
Option 4: Real estate market
Correct Answer:
Money market
Solution : The correct answer is (a) Money market.
The money market is primarily used for raising short-term funds to meet working capital requirements. The money market is a segment of the financial market where short-term borrowing and lending of funds occur. It deals with highly liquid and low-risk instruments with short maturities, typically one year or less.The money market provides an efficient platform for short-term financing as it offers high liquidity, low transaction costs, and competitive interest rates for borrowers with good creditworthiness.
