NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to the Indian Capital Market
A client of a DP asks which instrument, traded in the money market, has a original maturity of up to one year. Which of the following is a money market instrument?
A Treasury bill is a money market instrument because its original maturity is up to one year, such as 91, 182 or 364 days. Equity shares, long-dated debentures and 30-year government securities belong to the capital market.
- ATreasury billCorrect
- BEquity share
- CDebenture with 10-year maturity
- DGovernment security with 30-year tenor
Explanation
Money market instruments have original maturity up to one year; Treasury bills are issued for 91, 182 and 364 days. Equity shares have no maturity, and a 10-year debenture or 30-year government security are capital market debt instruments.
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