What is Money Market? Definition of Money Market, Money Market Meaning - The Economic Times (2024)

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What is Money Market? Definition of Money Market, Money Market Meaning - The Economic Times? ›

Money market has become a component of the financial market for buying and selling of securities of short-term maturities, of one year or less, such as treasury bills and commercial papers. Over-the-counter trading is done in the money market and it is a wholesale process.

The money market involves the purchase and sale of large volumes of very short-term debt products, such as overnight reserves or commercial paper. An individual may invest in the money market by purchasing a money market mutual fund, buying a Treasury bill, or opening a money market account at a bank.

Money Market. The part of the global financial market that deals with financial instruments that are easily converted to cash (highly liquid) and have very short maturities, usually one year or less.

Money markets include markets for such instruments as bank accounts, including term certificates of deposit; interbank loans (loans between banks); money market mutual funds; commercial paper; Treasury bills; and securities lending and repurchase agreements (repos).

Money market instruments are short-term financing instruments which can be converted easily to cash. Interbank loans (loans between banks), money market mutual funds, commercial paper, Treasury bills and securities lending and repurchase agreements, are all examples of money markets instruments.

Money is a system of value that facilitates the exchange of goods in an economy. Using money allows buyers and sellers to pay less in transaction costs, compared to barter trading. The first types of money were commodities. Their physical properties made them desirable as a medium of exchange.

Money is a commodity accepted by general consent as a medium of economic exchange. It is the medium in which prices and values are expressed. It circulates from person to person and country to country, facilitating trade, and it is the principal measure of wealth.

Kids Definition

money market. noun. : the trade in short-term negotiable instruments (as U.S. Treasury securities)

Money market funds invest in low-risk assets like Treasury bonds, CDs, or short-term, high-quality corporate bonds with maturities of less than a year. Unlike stock or bond funds, they have a fixed price of $1 per share² —and money market funds aim to maintain their Net asset value (NAV).

money market. /ˈmʌn·i ˌmɑr·kɪt/ the system in which banks and other similar organizations buy, sell, lend, or borrow money for profit. (Definition of money market from the Cambridge Academic Content Dictionary © Cambridge University Press)

What bank has the best money market account? ›

Because they invest in fixed income securities, money market funds and ultra-short duration funds are subject to three main risks: interest rate risk, liquidity risk and credit risk.

Like other mutual funds, money market funds sell shares to investors who can then earn income from the portfolios. MMFs blend highly-rated, short-term securities with longer-dated securities (up to 397 days for most funds).

Investors can purchase shares in money market mutual funds directly from brokerage companies or mutual fund firms, just as they would purchase shares in a stock or equity mutual fund.

A Fixed Deposit is ideal for those who have a lumpsum amount and want to invest immediately. In this type of investment, you earn interest on the total amount paid initially and can redeem the principal and interest at the end of the term.

Definition. In economics, a market is a coordinating mechanism that uses prices to convey information among economic entities (such as firms, households and individuals) to regulate production and distribution.

A cash market is a marketplace in which the commodities or securities purchased are paid for and received at the point of sale. For example, a stock exchange is a cash market because investors receive shares immediately in exchange for cash.

Economists understand by the term Market, not any particular market place in which things are bought and sold, but the whole of any region in which buyers and sellers are in such free intercourse with one another that the prices of the same goods tend to equality easily and quickly.