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As a corporate treasurer who is unsure how soon funds will be needed, which type of money market investment might you prefer? explain the trade-offs

Sagot :

The type of money market investment if the liquidity is a primary concern, then T-Bills may be the best choice because they are by far the most liquid.

T-Bills or Treasury Bills are considered one of the most popular money market instruments. This instrument issued by the Government of India comes at a discount for 14 days to 364 days, and comes with varying short-term maturities.

Because of government backing and high liquidity, they also typically offer the lowest rate of return. If one knows that the certain funds will not be needed, then term repos, banker's acceptances, or commercial paper can offer better rates of return.

Hence, the answer is given and explained above.

To learn more about T-Bills here:

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