Question : Which of the following is an example of a money market instrument?
Option 1: Corporate bonds
Option 2: Mortgage-backed securities
Option 3: Treasury bills
Option 4: Preferred stocks
Correct Answer: Treasury bills
Solution : The correct answer is (c) Treasury bills.
Treasury bills are an example of a money market instrument. They are short-term debt instruments issued by governments, typically with maturities of less than one year. Treasury bills are considered to be low-risk investments and are backed by the creditworthiness of the issuing government.Treasury bills are commonly traded in the money market, which is a segment of the financial market that deals with short-term debt instruments and provides a platform for short-term borrowing and lending. The money market includes various instruments, such as treasury bills, commercial paper, certificates of deposit, and other short-term securities.
Question : Which of the following is an instrument of the money market?
Option 2: Treasury bills
Option 3: Common stocks
Option 4: Mortgage-backed securities
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