Money market instruments, in Malaysia, are securities that provide businesses, banks, and the government with substantial amounts of low-cost funding for a limited period of time. The time span can be overnight, a few days, weeks, or even months, but it is usually shorter than a year. Businesses must wait for payment for goods already sold if they do not have access to money market instruments. This would result in a delay in the acquisition of raw materials and a slowdown in the manufacturing of the finished product.

1. What is the difference between the repurchase agreements and federal funds? What is the interest rate charges for two of them?

2. Why are short-term maturities and low default risk required for money market securities?