Which of the following are money market instruments? Check all that apply. Common stocks Treasury bills Certificates of deposit Corporate bonds Preferred stocks

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Answer: No one of the options but Commercial paper

Explanation:  Commercial paper is an unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts payable and inventories and meeting short-term liabilities. Maturities on commercial paper rarely range longer than 270 days.

Money Market Instruments are financial instruments that are highly liquid and safe for short-term and long-term investments. These securities are either issued by government organizations or by financial institutions.

What are Money Market Instruments?

  • Treasury Bills are defined as the short-term US government debt obligation, which has the maturity of one year or less and is backed by the Treasury Department.

  • A certificate of Deposit or CD is a simple saving vehicle offered by credit unions or banks.

  • Corporate bonds are defined as the bonds issued by a corporation to raise the financing on operations, market, and research, and to expand the business.

Thus, the treasury bills, corporate bonds, and certificates of deposits are money market instruments.

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