Chapter 7

Money Market and Liquidity Management


The money market is used to finance liquidity. Liquidity is the ability to satisfy the liabilities at due time. The basic measurement of liquidity is working capital. Working capital is the difference between current assets and current liabilities.


working capital
capital cycle
commercial paper
bill of exchange

7.1. Money market

Money market – the market for liquid assets.
The primary goal of the money market is to provide working capital to the entities. The money market does not have a standard structure and one place of operation; typically it is an OTC market. ...

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