One key characteristic of the money market is that it deals with short-term borrowing and lending of funds, typically with maturities of one year or less. It is a sector of the financial market where highly liquid, low-risk instruments are traded, such as Treasury bills, certificates of deposit, commercial paper, and repurchase agreements. The money market serves as a means for governments, financial institutions, and corporations to manage their short-term funding needs, while also offering investors a safe and relatively stable place to park their money for a short period. The low-risk nature of the instruments traded in the money market ensures a high degree of liquidity, which allows participants to quickly convert their investments into cash. This characteristic makes the money market an essential component of the broader financial system, facilitating efficient cash flow and short-term financial management.

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