NISM Certifications · NISM-Series-XV: Research Analyst · Introduction to Securities Market
Which of the following instruments is traded in the money market rather than the capital market?
A 91-day treasury bill belongs to the money market because money market instruments have original maturity of up to one year. Equity shares, ten-year corporate bonds and fifteen-year government securities are long-term or perpetual instruments and therefore trade in the capital market.
- AEquity shares of a listed company
- BTreasury bills with 91-day maturityCorrect
- CCorporate bonds with 10-year maturity
- DGovernment securities with 15-year maturity
Explanation
The money market deals in instruments with maturity up to one year, such as treasury bills, commercial paper and certificates of deposit. A 91-day T-bill fits this. Equity, long corporate bonds and 15-year G-secs are capital market instruments.
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