SIE practice questioneasyMoney Market Instruments
Which of the following is a money market instrument?
- AA 90-day commercial paper note✓ Correct answer
- BA 30-year Treasury bond
- CA 10-year corporate debenture
- DA 5-year municipal revenue bond
Explanation
Why A — A 90-day commercial paper note
Money market instruments are short-term debt securities with maturities of one year or less. Commercial paper (typically 1-270 days) is a classic money market instrument. Other examples include T-bills, banker's acceptances, repos, and negotiable CDs. The other choices all have maturities exceeding one year, placing them in the capital markets.
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