Money Market
The money market is a sector of the financial market where short-term borrowing, lending, buying, and selling of securities with maturities of one year or less occur. Common instruments in the money market include Treasury bills, commercial paper, certificates of deposit (CDs), and repurchase agreements (repos). The money market provides high liquidity and is used by institutions and governments for short-term funding needs.
Example
A company purchases a 6-month Treasury bill in the money market to park excess cash while earning a return on the short-term investment.
Key points
• A market for short-term financial instruments with maturities of one year or less.
• Provides high liquidity and is used by institutions for short-term funding.
• Common instruments include Treasury bills, commercial paper, and CDs.
Quick Answers to Curious Questions
Get the latest insights & exclusive offers delivered straight to your inbox.
Start Your Journey
Put your knowledge into action by opening an XS trading account today
