Disadvantages of Money Market Quiz
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Questions and Answers

What is one disadvantage of the money market compared to equity markets?

Returns are lower

What characteristic of money market limits retail participation?

High threshold limits for transacting

What is a disadvantage of the money market in terms of tax advantage?

Lower tax advantage due to 3-year qualifying period for LTCG

What risk factor is associated with commercial papers in the money market?

<p>Unsecured</p> Signup and view all the answers

What type of corporates enjoy the benefits of raising funds in the money market?

<p>Large corporates with high ratings</p> Signup and view all the answers

What are some risks that the money market suffers from?

<p>Inflation risk, interest rate risk, market risk, credit risk</p> Signup and view all the answers

What is the role of a central bank in a developed money market?

<p>Controls, regulates, and provides liquidity</p> Signup and view all the answers

What is the importance of an organised banking system in the money market?

<p>Pivot around which the money market revolves</p> Signup and view all the answers

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