Economics JAMB

Which of the following institutions does not operate in the money market?

A. central bank
B. mortgage banks
C. money deposit banks
D. insurance companies

Correct Answer:

Option B – mortgage banks

Explanation

This question is a little bit tricky to answer because out of the 4 options provided only one is not a participant in the (Nigeria) money market and that is the mortgage banks because mortgage loans are usually not in the short term of say 13months which makes it not fit into the money market characterized by short term loans. The central bank, Money deposit bank and insurance companies are all participants of the money market because they offer short-term loans.

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