Financial Market — Business Studies STD 12 Commerce — Question
CBSE BoardEnglish MediumSTD 12 CommerceBusiness StudiesFinancial Market3 Marks
Question
"Money market instruments are more liquid than capital market instruments". Comment.
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Answer
Money market instruments are considered as more liquid because the time period within which these securities get converted into cash is very short in some cases it is one day only and before the time period also these securities can be discounted easily from banks and discount Finance house (DFH) has been established for discounting the securities of money market.Capital market securities are long term securities and they get liquidity in stock market but in stock market there may not be a buyer for share in the stock market. So liquidity of capital market securities depends upon the demand of these securi
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