NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to the Indian Capital Market
A client of a DP asks which of the following instruments is traded in the money market rather than in the capital market.
Treasury bills are money market instruments because they are short-term securities with maturity of up to one year. Equity shares, long-term debentures and ten-year government bonds are long-term instruments and belong to the capital market.
- ATreasury billsCorrect
- BEquity shares
- CLong-term debentures
- DGovernment bonds of 10-year tenor
Explanation
The money market deals in short-term instruments with maturity up to one year, and Treasury bills are of such short tenor. Equity shares, long-term debentures and 10-year government bonds are long-term capital market instruments.
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