ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -They have the maturity period of less than one year. Treasury bills, repurchase agreement and commercial paper all are short term investments and have a maturity level of less than one year. Hence, shares and bonds having maturity of more than one year are not considered as money market instrument.

Detailed explanation-2: -Detailed Solution. Gold is not considered fiat money. Fiat money is the currency issued by the government which is not backed by any physical commodity such as silver or gold. Paper currency, coins, and demand drafts are fiat money.

Detailed explanation-3: -Equity shares are long-term instruments and hence, cannot be a money market instrument.

Detailed explanation-4: -The U.S. government issues Treasury bills in the money market, with maturities ranging from a few days to one year.2 Primary dealers buy them in large amounts directly from the government to trade between themselves or to sell to individual investors.

Detailed explanation-5: -The money market is the trade in short-term debt. It is a constant flow of cash between governments, corporations, banks, and financial institutions, borrowing and lending for a term as short as overnight and no longer than a year. The capital market encompasses the trade in both stocks and bonds.