Myca Angeles BSA501

I.

Although banks have an advantage for people or investor, the money market has advantages too. The money
market continues to exist because it allows savers to lend money to those in need of short-term loans,
allowing capital to be allocated to the most productive use. Governments, corporations, and banks require
these loans to meet short-term obligations or regulatory requirements. They are frequently made overnight or
for a few days or weeks. Local and international traders in desperate need of short-term finances might turn
to the money market for help. It offers the ability to discount bills of exchange, allowing for rapid payment of
goods and services.

II.

1. Investment Companies
They have a surplus of money market securities and can assist an investor or other investor in selling
them when necessary. There are situations when an investor invests in a money market fund with a
maturity date of less than a year but requires the funds before the maturity date expires. This is when
investment businesses assist them in selling their fund, even at a lower profit margin. As a result, the
liquidity requirement of immediately transforming them into cash is still achieved.
2. Commercial Banks
Commercial banks are financial entities that accept deposits, provide checking account services, and
provide a variety of loan products. The interest income earned by these banks comes from the loans
they provide to consumers. Commercial banks provide a variety of loans, including home loans, auto
loans, and personal loans. Customers' deposits, such as checking and savings accounts, provide the
capital for these loans. When you put money into a savings account, for example, you are basically
lending money to the bank. For the money you deposited, you will be paid interest. This interest rate,
however, may be lower than the rates charged by the bank on the money they lend.
3. Bureau of Treasury
The Bureau of the Treasury is the primary custodian of the federal government's financial assets. It
provides funding for a variety of government programs and projects. It aids in the formation of
borrowing, investment, and capital market development policies, as well as the management of cash
resources, tax collection, and debt control and servicing. Example of this is government supply short-
term securities that are promptly converted or liquidated into cash, assisting the government in getting
funds.