Question

Money market funds were a financial innovation partly inspired to circumvent ________.

• A. Regulation Q, which is no longer in existence
• B. Regulation M
• C. Regulation D
• D. Regulation B, which is still in existence

Answer 1

The correct option is A Regulation Q, which is no longer in existence

Money market funds were a financial innovation partly inspired to circumvent regulation Q, which is no longer in existence. The money market is a market for short-term funds which deals in monetary assets whose period of maturity is up to one year. Generally money market is the source of finance for working capital. Transactions of money market include lending and borrowing of cash for a short period of time and also sale and purchase of securities having one year time.