Suppose Mr$.$ Trimble, a software engineer in Silicon Valley, wants to buy $$400$ thousand worth of highly liquid, short$-$term IOUs.

Would such a transaction take place in the money market?

Yes

Suppose that two firms, GreenSun LTD$,$ the leader in the market for solar panels, and Mishka Co$,$ a successful producer of stuffed teddy bears, each need a safe place to park excess cash, $$14$ million, for the short term. GreenSun LTD chooses to deposit the funds at a local bank, whereas Mishka uses the funds to purchase money market instruments. Which of the following is the most accurate assessment of the described situation?

GreenSun LTD will earn a higher return than GreenSun LTD$,$ because yield on a bank deposit is higher than on money market instruments.

Mishka Co will earn a higher return than GreenSun LTD$,$ because yield on money market instruments is higher than on a bank deposit.

Both firms make a mistake, as they would be much better off buying stocks of reputable businesses.

Both firms will earn the same return regardless of whether they buy money market instruments or make bank deposits.