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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Introduction to the Indian Financial Markets

In the Indian financial system, which of the following instruments is traded in the money market rather than the capital market?

Treasury bills are money market instruments because they are short-term government securities with maturities of up to 364 days. Equity shares, 10-year debentures and close-ended equity fund units are long-term capital market products.

  1. AEquity shares of a listed company
  2. BTreasury bills issued by the Government of IndiaCorrect
  3. CDebentures with a 10-year maturity
  4. DUnits of a close-ended equity mutual fund scheme

Explanation

The money market deals in short-term instruments with maturity up to one year. Treasury bills are issued with maturities of 91, 182 and 364 days, so they belong to the money market. Equity shares, long-dated debentures and close-ended equity fund units are long-term capital market instruments.

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