Name: Ibtasam Jamil

Class: BBA (Viii) Sec A

Roll NO: (3947)
Department :( Management Science)
Submitted to: Sir Dr. Imad-ud-din-Akbar
Subject: Investment Portfolio Management
Assignment No: 2
Shift: Evening
 Tools of money market
The money market is a financial market where short-term borrowing and lending of funds take
place, usually for a period of one year or less. The following are some of the tools of the money
market:

 Treasury bills (T-bills):

These are short-term debt instruments issued by the government to raise funds. These are short-
term debt securities issued by the government with a maturity of less than one year. They are
usually issued for a period of 91 days, 182 days, or 364 days and are sold at a discount to their
face value.

 Commercial paper:
These are unsecured, short-term promissory notes issued by corporations with a maturity of up to
270 days. They are used to raise funds for working capital and other short-term nee This is a
short-term unsecured promissory note issued by corporations to raise funds. It is usually issued
for a period of 1 to 270 days and is sold at a discount to its face value.

 Repurchase agreements:
These are short-term loans backed by collateral such as government securities or other high-
quality assets. They are used to raise short-term funds by borrowing cash and promising to buy
back the collateral at a later date.

 Certificates of deposit (CDs):

These are time deposits issued by banks with a fixed term and fixed interest rate. CDs typically
have a maturity of up to one year and are insured by the FDIC (Federal Deposit Insurance
Corporation) up to a certain amount.

 Commercial bills:
These are short-term negotiable instruments issued by businesses to raise funds. They are usually issued
for a period of 30 to 180 days and are traded in the secondary market.

 Money market funds:

These are mutual funds that invest in short-term debt securities such as Treasury bills,
commercial paper, and CDs. Money market funds are considered to be low-risk investments that
provide a high degree of liquidity.
Overall, the money market provides a range of tools for investors and institutions to manage
short-term cash flows and investments.
  Banker's acceptances:
These are short-term negotiable instruments that are used to facilitate international trade
transactions. They are issued by banks on behalf of their customers and are backed by the
creditworthiness of the bank.