CA Foundation · Business Economics · Money Market
Which of the following is an instrument of the money market in India?
Treasury Bills are money market instruments because they are short-term government securities issued with maturities up to one year. Equity shares, preference shares and long-term debentures are long-term capital market instruments, so they do not belong to the money market.
- ATreasury BillsCorrect
- BEquity shares
- CDebentures of 10-year maturity
- DPreference shares
Explanation
The money market deals in short-term debt instruments with maturity up to one year, such as Treasury Bills, commercial paper, certificates of deposit and call money. Equity shares, long-dated debentures and preference shares are capital market instruments.
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