ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Call money
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Treasury bills
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Commercial bills
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All of the above
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Detailed explanation-1: -Some of the instruments traded in the money market include Treasury bills, certificates of deposit, commercial paper, federal funds, bills of exchange, and short-term mortgage-backed securities and asset-backed securities.
Detailed explanation-2: -What Are Some Examples of Money Market Instruments? The money market is composed of several types of securities including short-term Treasuries (e.g. T-bills), certificates of deposit (CDs), commercial paper, repurchase agreements (repos), and money market mutual funds that invest in these instruments.
Detailed explanation-3: -Money market instruments include Bills of Exchange or Commercial Bills, Treasury Bills (T-Bills), Commercial Papers (CP), Certificate of Deposits (CD), Repurchase Agreements, Banker’s Acceptance and Call & Notice Money. Capital market instruments include bonds and stocks.
Detailed explanation-4: -Money markets serve five functions-to finance trade, finance industry, invest profitably, enhance commercial banks’ self-sufficiency, and lubricate central bank policies.
Detailed explanation-5: -(i) Treasury Bil (T-Bills) Treasury Bill refers to a promissory note used for short term borrowing by the government. (ii) Call Money. (iii) Commercial Paper (CPs) (iv) Certificate of Deposit (CDs) (v) Commercial Bill.