{"id":247715,"date":"2022-07-14T05:38:03","date_gmt":"2022-07-14T05:38:03","guid":{"rendered":"https:\/\/imarticus.org\/?p=247715"},"modified":"2023-08-31T11:14:10","modified_gmt":"2023-08-31T11:14:10","slug":"how-to-ensure-profits-in-the-money-market","status":"publish","type":"post","link":"https:\/\/imarticus.org\/blog\/how-to-ensure-profits-in-the-money-market\/","title":{"rendered":"How to ensure profits in the money market"},"content":{"rendered":"

How to ensure profits in the money market<\/span><\/h1>\n

Money markets refer to an organized exchange where people borrow and lend large sums of money for a period equal to or less than one year. Investors choose money markets because of their safety and liquidity features. Some of the important money market instruments in India include commercial paper, treasury bills, certificates of deposit, government securities with a maturity of less than one year, and money market mutual funds or liquid funds. Money market securities management falls within the ambit of an investment banker.\u00a0<\/span><\/p>\n

An investment banking career in the finance and investment industry is a highly favored role, as it comes with the requirement of advanced qualifications and a high remuneration package. You can undergo money market training through the <\/span>Certified Investment Banking Operations Professional course<\/a><\/strong> at Imarticus Learning Pvt. Ltd.<\/span><\/p>\n

Some of the money market instruments available in India include the following:<\/strong><\/h2>\n

Commercial paper (CP)<\/b><\/h3>\n

It is a short-term unsecured promissory note issued by reputed corporates with a good credit rating. Commercial paper has been in India since January 1990. Typically, corporations meet working capital requirements and short-term liquidity requirements through the issue of commercial paper. They are short-term discounted bonds. Other banks, insurance companies, and corporates buy CPs to park their short-term liquidity.<\/span><\/b><\/p>\n

The company issuing a CP should not have a net worth or working capital lower than Rs. 4 crores. CPs have rated instruments with maturities of less than one year.\u00a0<\/span><\/p>\n

Treasury bills<\/b><\/h3>\n

These are short-term instruments issued by the Central Bank on behalf of the government to meet the government\u2019s short-term financing requirements. Treasury bills are discounted instruments that pay the total face value on the instrument’s maturity. The investors include banks, insurance companies, corporates, and foreign institutional investors. The tenor varies from 14 days to 364 days.<\/span><\/b><\/p>\n

These instruments, sold by auction, form a part of the authorized investments under the Statutory Liquidity Ratios of the commercial banks. RBI uses this method to introduce additional liquidity into the market or withdraw surplus liquidity from the market.<\/span><\/p>\n

Certificates of deposit (CDs)<\/b><\/h3>\n

These are negotiable instruments used by commercial banks in return for the placement of a large deposit with the bank. This is payable to the bearer. It reduces the administrative expenses of both the bank and the depositor and can even be sold in the secondary market.<\/span><\/b><\/p>\n

Investors in CDs include large corporations, institutions, and high-net-worth individuals. The tenor varies from 3 months to one year, with the minimum investment being Rs. 1 crore. This is also a discounted instrument.<\/span><\/p>\n

Money market mutual funds or liquid funds<\/b><\/h3>\n

These are mutual funds that invest in all or any of the above instruments. The pool is securitized and sold to a large number of retail investors.\u00a0\u00a0<\/span><\/b><\/p>\n

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What Is Investment Banking?<\/b><\/h2>\n

Investment banking is a special division of banking relating to creating capital for companies, governments, and other entities. Investment banking includes underwriting the new debt and equity securities, aiding in the sale of the securities, and facilitating mergers, acquisitions, reorganizations, and broker trades in all the above-mentioned securities for corporations and other entities. Investment bankers help plan and manage the financial aspects of large projects for corporations, governments, and other entities.\u00a0<\/span><\/p>\n

You will be exposed to the gamut of all these investment banking activities when you do a course on <\/span>investment banking<\/a><\/strong> at Imarticus Learning Private Ltd.<\/span><\/p>\n

Eligibility to Do an Investment Banking Course<\/b><\/h3>\n
    \n
  1. A graduate degree in commerce; a Bachelor of Commerce is an essential requirement.<\/span><\/li>\n
  2. An MBA in Finance and Investments will also be useful as a stepping stone to an investment banking career<\/a><\/strong>.<\/span><\/li>\n
  3. \u00a0Lastly, doing the Certified Investment Banking Operations Professional course \u2013 which comes with a 100% job assurance program \u2013 will be the final step to launching your career as an investment banking professional.\u00a0\u00a0<\/span><\/li>\n<\/ol>\n

    Career Path of an Investment Banking Professional\u00a0<\/b><\/h3>\n