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Which of the following is a money market instrument? A) A Treasury note. B) A federal...

Which of the following is a money market instrument?

A) A Treasury note.

B) A federal funds loan.

C) A corporate bond.

D) A mortgage loan

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Homework Answers

Answer #1

Correct Answer is option A
Treasury note is a money market instrument.
Money market Instrument- Money market instrument involves the sale and purchase of short term debt products on a large volume. Money market instrument are more safe and they have liquidity in the market.
Examples - Treasury bills, Commercial paper , Certificate of deposits.
Money market instrument are traded in discount , Federal fund loan don't

Treasury bills- It is issued by the Central government, it is the safest instrument and the zero risk involved in this.

Other option are not the short term instruments , they are issue for a couple of years, they are not the money market instruments.

I hope this clear your doubt.

Feel free to comment if you still have any query or need something else. I'll help asap.

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