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Question : Which of the following is a feature of a money market instrument?

Option 1: High credit risk

Option 2: long maturity period

Option 3: Low liquidity

 

Option 4: Low interest rate


Team Careers360 8th Jan, 2024
Answer (1)
Team Careers360 10th Jan, 2024

Correct Answer: Low interest rate


Solution : The correct answer is (d). Low interest rate

Money market instruments are short-term debt securities that are typically characterized by low interest rates. They are considered to be relatively low-risk investments due to their short maturity periods and high liquidity. Money market instruments include Treasury bills, commercial paper, certificates of deposit, and short-term government and corporate bonds. They are commonly used by investors as a means to preserve capital and provide a safe haven for funds in the short term.

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