The main characteristics or features of money market can be highlighted as follows:
1. Short Maturity Period
Money market involves in the buying and selling of securities having short maturity period (one year or less).
2. Purpose
It helps to fulfill the short term financial requirements of the firm such as working capital and operating expenses.
3. Instruments
Call money, commercial papers, treasury bills etc. are the main credit instruments of money market.
4. Level Of Risk
It is less riskier than capital market because of short maturity period.
5. Operating Institutions
Banks, discount houses and other financial institutions operate the money market.
6. Liquidity
Money market deals with liquid investment. Instruments can be bought or sold in the secondary market easily without any complication.
Also Read:
Also Read:
7. Safety
Because of short maturity period and low level of risk, it is more safe than capital market.
8. Regulation
It is regulated by the central bank.
