ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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corporate bonds.
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preference shares.
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promissory notes.
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debentures
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all of the above
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Detailed explanation-1: -T Bills, commercial paper, certificate of deposit, trade credit, bills of exchange, promissory notes, call money, etc. are some of the examples of money market instruments. These are highly liquid instruments and can be redeemed easily.
Detailed explanation-2: -Money markets include markets for such instruments as bank accounts, including term certificates of deposit; interbank loans (loans between banks); money market mutual funds; commercial paper; Treasury bills; and securities lending and repurchase agreements (repos).
Detailed explanation-3: -Money Market Instruments-FAQs Interbank loans (loans between banks), money market mutual funds, commercial paper, Treasury bills and securities lending and repurchase agreements, are all examples of money markets instruments.
Detailed explanation-4: -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-5: -Common examples of negotiable instruments include checks, money orders, and promissory notes.