Money Market Assignment Help: Definition

Money Market Definition

For people who want liquidity and safety, the money market will be an ideal choice for investment. The maturity of this type of investment ranges from one day to one year. Money market refers to a financial market where short=term financial assets with the liquidity of one year or less are traded on stock exchanges. The trading bills or securities are highly liquid. The participants in the financial markets are large institutional investors, banks, and individual sectors. A variety of instruments are traded in the money market in stock exchanges, NSE and BSE which involves certificates of deposit, repurchase agreements, treasury bills, etc. The money market is considered to be the safest place for investment since securities that are being traded are highly liquid in nature.

Types of money market

Here are the following types of money market instruments:

Commercial Papers
Repurchase Agreements
Banker’s acceptance
Treasury Bills (T-Bills)
Certificates of Deposits (CD)

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Money market instruments

Money market instruments are referred to as security which offers government, businesses, and banks low-cost capital for a short time. The period can be overnight, weeks. Few days or even months but they are always less than a year. It refers to the financial market where short-term financial assets have liquidity of a year or less get traded on stock exchanges. The participants in the financial market are large institutional investors, bank individual investors. The Reserve Bank has control over the interest rate of various instruments in the money market. Know about equilibrium price.

It plays a significant role in the world of the economy. It has a variety of participants to raise funds. It offers y to both the borrower and the investor.

Main objectives of money market:

It provides borrowers like government, individual investors, etc with short-term funds at a reasonable rate. Even lenders will benefit from liquidity as the securities.
Organizations tend to be short on their working capital requirements and thus, the money market helps organizations to have all the necessary funds to meet the requirements of the working capital.
It is considered an important financial source for the government sector or both international and national trade.
It allows lenders to turn their idle funds into an effective investment.

Benefits of money market:

Money market instrument is a vital instrument used by the RBI for drafting monetary policies
Since they provide a route that can be used to extract funds in a shorter-term and at a reasonable cost, they are considered a crucial source for companies.
Liquidity is not a big issue.
It is a great place to park money.

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Money market diagram

When you are studying macroeconomics, understanding and creating graphs becomes a vital part. If you are dealing with money marketing, you will have to come across a money market model or diagram. Let’s give you a quick review of the model.

You will find two axes- a horizontal axis labeled as ‘Quantity of Money’ or QM and a vertical axis labeled as ‘Nominal interest or n.i.r.

Quantity of Money’

Sm is used to show the vertical money supply curve and Dm is used for the downward sloping money demand curve.

vertical money supply curve

An equilibrium interest rate

equilibrium interest rate

If you had any doubts, the above diagram will clear your concept of money marketing. If you need help with more graphs of money marketing, our experts can give you a detailed analysis. Just specify the deadline and d we will send you within the allotted time. Get marketing assignment help.

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How to make money on the stock market?

Investing money in the stock market is the best way to build your wealth. It may sound exciting, but many people, especially youngsters, do not have any idea how it works. If you are studying in finance subject, the stock market is a common topic you have to deal with. You should know about perfect competition.

Your basic must be clear on how to make money on the stock market. Follow the list to learn how to make money on the stock market.

Take advantage of time

You need to understand that the real income happens from the compound interest you earn on long-term holdings. The total amount in your account will grow when the value of your assets is increased. This way stock market earnings get increased over time exponentially. For taking full advantage of the exponential growth, consider building your portfolio as early as possible. So the ideal thing to do is start investing as early as possible.

Invest regularly

If you do not start saving your mo0ney, even decades of compounding returns will not be able to save you. It is an essential factor for your overall portfolio growth.

Set it and forget it

If you are waiting to see healthy returns on stock market investments, then you are here a long game. Short-time trading does not get the tax benefits that you can easily glean if you hold on to your investment for a longer period. You need to own your investment at least for a year but if you sell a stock before the year ends, you will end up paying a higher tax than what you would have to pay for longer-term capital gains. Get information about marginal utilitys.

Diversify your portfolio

Diversifying portfolio will safeguard you from losing all your assets in case the investments don’t go as planned. When you invest in different securities, you will become better prepared to weather stock market corrections.

Consider hiring a professional

If people ever feel hesitant toward putting their money in the market, they have the option of hiring an investment advisor. Hiring a professional does not mean that you are all safe from all risks of losses, but you will feel more confident knowing you have an expert by your side.

Just like an investment advisor showing you the right track of investment, MyAssignmenthelp.com will also help you secure the best grade in the class by giving you access to all relevant information.