Money markets
A)involve trading in debt instruments with maturities of more than one year.
B)are used by large corporations to finance inventories.
C)involve trading in equities.
D)are used by large corporations to finance long-term investments in plant and equipment.

Question

Quizplus · Accepted Answer

Money markets involve trading in short-term debt instruments such as treasury bills, certificates of deposit, and commercial paper, all of which have maturities of less than one year. These markets are used by large corporations to finance their short-term working capital needs, such as inventory and accounts receivable, as well as by government entities to manage their cash flows. Money markets do not involve trading in equities or debt instruments with maturities of more than one year. They also do not typically finance long-term investments in plant and equipment, which are more commonly financed through the corporate bond market or equity market.

Money Markets