Prices of money market instruments undergo the least price fluctuations because of
A)the short terms to maturity for the securities.
B)the heavy regulations in the industry.
C)the price ceiling imposed by government regulators.
D)the lack of competition in the market.

Question

Quizplus · Accepted Answer

Money market instruments typically have short terms to maturity, ranging from overnight to one year. This means that there is less time for market conditions to change and affect the price of the security. As a result, money market instruments tend to be more stable and experience fewer fluctuations in price compared to other securities with longer maturities.

Prices of Money Market Instruments Undergo the Least Price Fluctuations