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12 June, 13:01

Which money market instruments are short-term funds transferred between financial institutions

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  1. 12 June, 15:01
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    Federal funds

    Explanation:

    When we refer to the money-market, we are talking about that part of the economy that provide short-term funds.

    There are several money market instruments. These money market instruments are those transaction vehicles in the money market. They are the means through which business transactions are carried out in the the money market.

    In this particular question, the money market instrument we are talking about is the federal funds. These federal funds refers to the excess funds that financial institutions such as commercial banks deposit in reserve banks and can be accessed by other financial institutions in form of short-lived short term loans who has the need for it to meet a particular lending or reserve needs by the financial institution in question.
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