Which statement about the Money Market is correct?

• A. It is for long-term funding
• B. It is for short-term borrowing under a year
• C. It deals with real estate investments
• D. It is a sub-market of the labor market

Answer: (B)

The money market is the part of the financial system that handles short-term debt instruments and liquidity management. Its instruments mature in under or up to one year, making it ideal for meeting immediate funding needs and for parking surplus funds with high liquidity and relatively low risk. This is why the statement describing the money market as for short-term borrowing under a year is the best fit.

Long-term funding belongs to the capital market, not the money market. Real estate investments are not money market instruments; they involve longer horizons and tangible assets. The labor market is about employment and wages, not financial instruments.