BANKING AFFAIRS

BANKING GENERAL KNOWLEDGE

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which one of the following is not a ‘Money Market Instrument’?
A
Treasury Bills
B
Commercial Paper
C
Certificate of Deposit
D
Equity Shares
Explanation: 

Detailed explanation-1: -Equity shares are long-term instruments and hence, cannot be a money market instrument.

Detailed explanation-2: -The major difference between money market instruments and equity securities is that these instruments are meant to fund short-term capital needs. On the other hand, equity securities are issued to raise capital for the long term.

Detailed explanation-3: -Treasury Bills, Certificate of Deposit as well as Commercial papers are money market instruments.

Detailed explanation-4: -The correct answer is Bonds. Money Market is used to defining a market where short-term financial assets with a maturity of up to one year are traded.

There is 1 question to complete.