The Money Market

What is a market

Buyers and sellers exchange goods or services

What is the money market

Market for short-term debt securities (like t-bills)

Who are the buyers and sellers in the money market

Sellers: Corporations and government looking to borrow for one year or less

Buyers: Investors

Which treasury security is a money market instrument

T-Bills

Do you need to hold a T-Bill until maturity?

No, you can sell them before maturity in the secondary market but the price depends on current interest rates.

Are T-Bills issued at par?

No, they are issued at a discount

Do stockbrokers sell bonds and money market securities?

Yes they sell both

Which security's rate represents the nominal risk-free rate?

US Treasury Securities

Are money market instruments debt capital or equity capital?

Debt capital (think short-term DEBT security)