- 8 Marks
FM – MAY 2019 – L2 – Q1b – Financial markets
Explain the different short-term money market instruments such as Bankers’ acceptance, Commercial Paper, Repurchase Agreement, and Term deposit.
Question
Question:
The money market is the arena in which financial institutions make available to a broad range of borrowers and investors the opportunity to buy and sell various forms of short-term securities. The short-term debts and securities sold on the money markets, known as money market instruments, have maturities ranging from one day to one year and are extremely liquid.
Required: Explain the following short-term market instruments:
- Bankers’ acceptance (2 marks)
- Commercial Paper (2 marks)
- Repurchase Agreement (Repo) (2 marks)
- Term deposit (2 marks)
(Total: 8 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Financial instruments, Money market, Short-term securities
- Level: Level 2
- Topic: Financial markets
- Series: MAY 2019
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