NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Introduction to Securities Markets
Which of the following is a money market instrument rather than a capital market instrument?
A 91-day Treasury bill is a money market instrument because money market instruments mature within one year. Equity shares, ten-year government bonds and five-year preference shares are long-term securities and therefore form part of the capital market.
- ATreasury bill with 91 days maturityCorrect
- BEquity share of a listed company
- CGovernment bond with 10 years maturity
- DRedeemable preference share with 5 years maturity
Explanation
Money market instruments have a maturity of up to one year, and a 91-day Treasury bill fits this. Equity shares, 10-year government bonds and 5-year preference shares are long-term instruments belonging to the capital market.
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