1. 1. What characteristics define the money markets? 2. 3. Why does the existence of banks not eliminate the need for money markets? 3. 5. What motivated regulators to impose interest ceilings on bank savings accounts? What effect did this eventually have on the money markets? 4. 7. Why do business use money markets? 5. 8. What purpose initially motivated Merrill Lynch to offer money market mutual funds to its customers? 6. 9. Why do property and casualty insurance companies invest more funds than life insurance companies in the money markets? 7. 11. Distinguish between competitive bidding and noncompetitive bidding for Treasury securities. 8. 12. Who lends or borrows federal funds, and what is the usual purpose of those funds? 9. 13. Does the Federal Reserve directly set the federal funds interest rate? How does the Fed influence this rate? 10. 15. Why are banker's acceptances so popular for international transactions? 11. I. Why does the U.S. Government use the Money Market? 12. II. Which of the Money Market securities are considered the most liquid and the most risk free? Why? 13. III. Who issues Commercial Paper and for what purpose? 14. A. What factor was instrumental in banks not being able to meet the short-term financing need that was filled by the creation and growth of the money markets? 15. B. What are the main features that distinguish all money market security from other securities? 16. C. Why do insurance companies, both life and property and casualty, invest large amounts in money market securities? 17. D. Why are money market mutual funds so popular with individuals? 18. E. Why is it important for money markets to be deep and liquid? 19. F. What is the purpose of federal funds? 20. G. How do money markets benefit individual investors?