In 2006, which of the following are money-market instruments? (a) Treasury, 8% 2011 (b) National…
The three-month certificate of deposit, Treasury bill with seven days remaining and fourteen-day repurchase agreement are money-market instruments. Their short maturities…
Choose your answer
In 2006, which of the following are money-market instruments?
(a) Treasury, 8% 2011
(b) National Savings certificates
(c) 3 month certificate of deposit
(d) Treasury bill with 7 days to maturity
(e) 14-days repurchase agreement of Treasury 8% 2007
Answer and explanation
Correct answer D
The three-month certificate of deposit, Treasury bill with seven days remaining and fourteen-day repurchase agreement are money-market instruments. Their short maturities distinguish them from the Treasury security maturing in 2011 and the longer-term National Savings Certificates; the repo remains short-term even though its collateral has a later maturity.
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Karnataka SET (KSET)