Question : Which of the following is an instrument of the money market?
Option 1: Corporate bonds
Option 2: Treasury bills
Option 3: Common stocks
Option 4: Mortgage-backed securities
Correct Answer: Treasury bills
Solution : The correct answer is (b) Treasury bills.
Treasury bills are short-term debt instruments issued by the government to finance its short-term funding needs. They are commonly traded in the money market. Treasury bills typically have maturities of less than one year, usually ranging from a few days to 52 weeks. They are considered low-risk investments and are highly liquid.
Question : Which of the following is an example of a money market instrument?
Option 2: Mortgage-backed securities
Option 3: Treasury bills
Option 4: Preferred stocks
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