Which of the following is are money market instruments? (2024)

Which of the following is are money market instruments?

Examples of money market instruments are treasury bills, commercial papers, certificates of deposits, call money, call (overnight), commercial bills and short-notice (up to fourteen days) money, and term money. All these instruments will have a maturity period of less than 1 year.

What are the instruments used in the money market?

Some of the instruments traded in the money market include Treasury bills, certificates of deposit, commercial paper, federal funds, bills of exchange, and short-term mortgage-backed securities and asset-backed securities.

Which of the following is a money market instrument quizlet?

Commercial paper, Treasury bills, and banker's acceptances are debt instruments with maturities of 1 year or less and are therefore money market instruments. A newly issued Treasury note would have a maturity of 2 to 10 years and therefore would not be a money market instrument.

Which is the most active money market instrument?

The popular types of money market instruments are “treasury bills, bonds, commercial papers, and certificates of deposit.” These money market instruments are the primary choice for investors who want to invest for short duration with no or minimum risk.

Which one of the following is not a money market instrument?

Equity shares are long-term instruments and hence, cannot be a money market instrument.

What are money market instruments and capital market instruments?

The money market offers short-term liquidity with instruments like Treasury bills, certificates of deposit, repurchase agreements, and commercial papers. On the other hand, the capital market provides long-term investment avenues through bonds, debentures, and stocks.

What are money markets accounts?

A money market account is a type of account offered by banks and credit unions. Like other deposit accounts, money market accounts are insured by the FDIC or NCUA, up to $250,000 held by the same owner or owners. Money market accounts tend to pay you higher interest rates than other types of savings accounts.

Which of the following is an example of a capital market instrument?

Answer and Explanation:

They risk losing money, called liquidation, but are considered a safer option than common stock. Hence, it can be stated that preferred stocks are an example of a capital market instrument.

Is common stock a money market instrument?

The different kinds of money market instruments include Certificates of Deposit, Bankers Acceptance, Treasury Bills and Commercial Papers. Whereas common stock, preferred stock, and Treasury Bonds classify as types of financial securities used within organizations.

Which of the following money market instruments is typically the most liquid?

U. S. Treasury bills are considered the most liquid security in the money market. As its credibility and liquidity lie in the hands of the government of the United States. Therefore, these securities can be easily sold against cash even before the date of maturity in the market by the security holder.

Is a banker's acceptance a money market instrument?

A banker's acceptance is a money market instrument and, like most money markets, it is relatively safe and liquid, particularly when the paying bank enjoys a strong credit rating. The bank carries primary responsibility for the payment.

Which of the following is not a money market instrument quizlet?

Bonds are long-term debt instruments. They are not money market instruments. Thus, the answer is corporate bonds.

What is an example of a money market fund?

Types of money market funds

Investments can include short-term U.S. Treasury securities, federal agency notes, Eurodollar deposits, repurchase agreements, certificates of deposit, corporate commercial paper, and obligations of states, cities, or other types of municipal agencies—depending on the focus of the fund.

What are the three most common characteristics of all money market instruments?

What are the money market hedge instruments?

A money market hedge is a technique for hedging foreign exchange risk using the money market, the financial market in which highly liquid and short-term instruments like Treasury bills, bankers' acceptances, and commercial paper are traded.

Which of the following is not a characteristic of money market instruments?

D) Maturity greater than 1 year. In this exercise, we will determine which is not a characteristic of a money market instrument. Money market instruments are highly liquid assets with less than one year of maturity. These securities are also low-risk and easily traded.

Is warrant a money market instrument?

A warrant is an equity-like security that entitles the holder to buy a pre-specified amount of common stock of the issuing company at a pre-specified per share price (called the exercise price or strike price) prior to a pre-specified expiration date.

Is money market a debt instrument?

Money market instruments are short-term debt instrument. That is, those are financial assets paying par value (face value) at maturity and typically having maturities of one year or less (and are usually zeros; no coupon payment before maturity). They are also typically safe and liquid.

Which of the following money market instruments has the lowest rate?

Bills have the largest volume outstanding and the most active secondary market of any money market instrument. Because bills are generally considered to be free of default risk, while other money market instruments have some default risk, bills typically have the lowest interest rate at a given maturity.

What are the three types of capital market instruments?

Which of the following statements about the money market is false?

Statement 1: Non-Banking Finance Companies (NBFCs) are financial institutions that constitute organised component of money market. This statement is incorrect because : NBFCs are financial institutions that are not organised components of the money market.

How many types of money market accounts are there?

As with savings accounts, there are two types of money market accounts: traditional and high-yield accounts. Traditional money market accounts offer relatively low interest rates, albeit better than most traditional savings accounts on average.

How does money market works?

Money market accounts work just like other bank accounts — you deposit money, earn interest and can withdraw your money with relative ease. Money market accounts earn interest, just like savings accounts, but can include options normally only available with checking accounts, such as debit cards and checks.

Which of the following is classified as a money market mutual fund?

A “basket” of money pooled in by many investors to acquire securities based on the value of cash. Explanation: A money market mutual fund is a type of investment fund that pools money from many investors to invest in short-term, low-risk securities such as Treasury bills, commercial paper, and certificates of deposit.

What is the main instrument in the capital market?

Capital market instruments encompass a broad range of financial tools, including equities, bonds, derivatives, ETFs, and foreign exchange instruments. They play a crucial role in fundraising for entities and offering diverse investment opportunities, crucial for economic growth, risk management, and wealth generation.