Money market instruments are short-term securities sold on the money market that have maturities ranging from one day to one year and are extremely liquid. 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. Treasury bills, federal agency notes, certificates of deposit(CDs), Eurodollar deposits, commercial paper, bankers' acceptances, and repurchase agreements are examples of instruments. The suppliers of funds for money market instruments are institutions and individuals with a preference for the highest liquidity and the lowest risk. Although securities purchased on the money market carry less risk than long-term debt, they are still not entirely risk free.
What are money market instruments ?
Money market instruments are short-term securities sold on the money market that have maturities ranging from one day to one year and are extremely liquid. 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. Treasury bills, federal agency notes, certificates of deposit(CDs), Eurodollar deposits, commercial paper, bankers' acceptances, and repurchase agreements are examples of instruments. The suppliers of funds for money market instruments are institutions and individuals with a preference for the highest liquidity and the lowest risk. Although securities purchased on the money market carry less risk than long-term debt, they are still not entirely risk free.
