Commerce Notes

Money Market: Meaning and its Characteristics

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by Anjali Yadav
  • Money Market: Meaning and its Characteristics
    Money Market: Meaning and its Characteristics

What do you mean by money market? What are the characteristics of money market?

Meaning of Money Market

Money market deals with financial assets and securities which have a maturity period of upto one year. Money market is a market for purely short term funds. It is a market for financial assets or short-term loans. It provides lending and borrowing facilities of short-term funds. It does not actually deal in cash or money. It deals with near substitutes for money e.g. trade bills, promissory notes and Government papers.

Money market meets the short-term needs of borrowers or provides liquidity.

Definition of Money Market

According to Geoffrey Crowther, “The money market is the collective name given to the various firms and institutions that deal in the various grades of near money.”

Characteristics of Money Market

Following are the characteristics of money market:

1. It is a market for short-term loans or financial assets.

2. It does not refer to a particular place.

3. It comprises all individuals, institutions and intermediaries dealing with short-term funds.

4. No personal contact or presence of two parties is essential.

5. Its period may be upto one year.

6. Money market deals in bills of exchange, treasury bills, commercial papers and certificate of deposit etc.

7. In money market, transactions have to be conducted without the help of brokers.

8. It is not a single homogeneous market.

9. Oftenly transactions take place through oral communication.

10.Money market deals with financial assets which can be converted into cash readily without cash.

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Anjali Yadav

इस वेब साईट में हम College Subjective Notes सामग्री को रोचक रूप में प्रकट करने की कोशिश कर रहे हैं | हमारा लक्ष्य उन छात्रों को प्रतियोगी परीक्षाओं की सभी किताबें उपलब्ध कराना है जो पैसे ना होने की वजह से इन पुस्तकों को खरीद नहीं पाते हैं और इस वजह से वे परीक्षा में असफल हो जाते हैं और अपने सपनों को पूरे नही कर पाते है, हम चाहते है कि वे सभी छात्र हमारे माध्यम से अपने सपनों को पूरा कर सकें। धन्यवाद..

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