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Answer -
Money market is a market for funds that are short term in nature. The term of borrowing and lending in the money market or the maturity period is variable, it can range from one day to a year. Money market instruments act as important sources of working capital requirements for the business. These instruments are highly liquid in nature. The common types of money market instruments are treasury bills, commercial paper etc.
The features of Money market can be discussed as follows:
1. Due to large volume of transaction in the money market it is also known as wholesale market.
2. The participants of the money market are various financial entities such as investment institutions, mutual funds, public and private sector banks.
3. There is impersonal relationship between the participants in a money market.