Money market is defined as the market for buying and selling what?

• A. Short-term loanable funds in securities or loans.
• B. Long-term corporate bonds.
• C. Real estate mortgages.
• D. Foreign exchange.

Answer: (A)

The money market is about short-term debt instruments and the buying and selling of short-term loanable funds. It focuses on highly liquid, low-risk maturities typically one year or less, such as Treasury bills, commercial paper, and certificates of deposit. This is why the correct description is short-term loanable funds in securities or loans. Long-term corporate bonds and real estate mortgages fall into longer-term, capital-market instruments, not the money market, and foreign exchange is the currency market rather than the market for short-term debt.