1. The trade in short-term, low-risk securities, such as certificates of deposit and U.S. Treasury notes.
2. A mutual fund that sells its shares in order to purchase short-term securities, the income from which is distributed among shareholders in the form of additional shares in the fund. Also called money market fund.
The securities market dealing in short-term debt and monetary instruments. Money market instruments are forms of debt that mature in less than one year and are very liquid.
Treasury bills make up the bulk of the money market instruments. Securities in the money market are relatively risk-free.
Money market fund
A mutual fund that invests only in high-yielding, short-term money market instruments (U.S. Treasury bills, bank certificates of deposit, and commercial paper).
A collective term for the many markets in which funds that are loaned for short periods to businesses or to governments are bought and sold.