| The Money Market is the financial market
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| | behalf. However, some Money Market
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| for short-term borrowing and lending,
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| | instruments like the Treasury bills can
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| usually up to a time span of thirteen
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| | be purchased directly and if you fail to
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| months. This contrasts with the capital
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| | acquire that, they can be acquired
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| market for longer-term funds that feature
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| | through other large financial
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| within the Market.
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| | institutions with direct access to these
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| This is the place where banks lend to and
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| | types of markets.
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| borrow from each other, short-term
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| | Understanding the Money Market better
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| financial instruments, for instance
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| | There are tons of different instruments
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| certificates of deposit or enter into
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| | within the markets that are offering
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| agreements, repurchase agreements are
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| | various returns at various risks, which
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| taken place.
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| | is an aspect element within the sections
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| It provides short to medium term
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| | that take a look at the major Money
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| liquidity aspect element within the
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| | Market instruments.
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| global financial system. Money Market
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| | Also a better-known place for large
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| derivatives include forward rate
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| | institutions and government to manage
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| agreements and short-term interest rate
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| | their short-term cash needs is the Money
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| futures.
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| | Market. However, individual investors
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| The Market is a subsection of the fixed
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| | have access to the market through a
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| income market. We usually think of the
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| | variety of different securities.
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| term fixed income as being synonymous to
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| | These types of markets specialize in debt
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| bonds. In reality, a bond is just one
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| | securities that mostly mature in less
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| sort of fixed income security.
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| | than one year. These securities are very
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| The difference between the Money Market
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| | liquid, and are considered very safe and
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| and the bond market is that the money
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| | as a result, they often offer a lower
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| market specializes in very short-term
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| | return than other securities. The easiest
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| debt securities that is debts that mature
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| | way for consumers to gain access to the
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| in less than one year time span. Money
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| | Money Market is through a mutual fund.
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| investments can also be termed as the
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| | Some terms that are used in the this
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| cash investments because of their short
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| | markets are the T-bills, which are
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| maturities.
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| | short-term government securities that
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| Money Market securities are essentially
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| | mature in one year or less from their
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| IOUs issued by governments, financial
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| | issue date and are considered to be one
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| institutions and large corporations.
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| | of the leading safest investments - they
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| These instruments are very liquid and are
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| | do not provide a fantastic return.
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| considered unusually safe. As they are
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| | Another term that is used in the Money
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| extremely conservative, Money Market
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| | Market is a certificate of deposit, which
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| securities offer significantly lower
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| | is a time deposit with a bank. Annual
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| returns than most other securities.
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| | percentage yield takes into account
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| Comparing the Money Market with the Stock
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| | compound interest, annual percentage rate
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| market
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| | does not. Certificate Deposits are safe,
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| The major difference between the Money
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| | but the returns aren't wonderful, and
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| Market and the stock market is that most
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| | your money is tied up for the length of
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| Money Market securities trade in very
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| | the deposit. Commercial paper is an
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| high denominations. This, in turn
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| | unsecured, short-term loan issued by a
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| restricts access for the individual
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| | corporation. In the Money Market returns
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| investor.
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| | are higher than T-bills because of the
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| Furthermore, the Money Market is also a
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| | higher default risk.
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| dealer market, which means that firms buy
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| | The banker's acceptances are negotiable
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| and sell securities in their own
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| | time draft for financing transactions in
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| accounts, at their own risk. Comparing
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| | goods. They are new in international
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| this to the stock market where a broker
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| | trade and are commonly only available to
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| receives commission to act as an agent,
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| | individuals through the funds.
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| while the investor takes the risk of
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| | The Eurodollars are U.S.
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| holding the stock.
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| | dollar-denominated deposit at banks
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| Another characteristic of a dealer market
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| | outside of the United States. The average
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| is the lack of a central trading floor or
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| | Eurodollar deposit is very large and the
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| exchange. Deals are transacted over the
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| | only way for consumers to invest in this
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| phone or through the use of electronic
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| | market is indirectly through a Money
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| systems.
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| | Market fund.
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| These accounts and funds pool together
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| | Hence, we can now understand that a Money
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| the assets of thousands of investors in
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| | Market can surely make a difference in
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| order to buy the securities on their
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| | the financial matters of a country.
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