Which of the following is characterized as unsecured money market instrument?
A) Treasury bill
B) Debentures
C) Commercial paper
D) All of the above
E) a and c

Question

Quizplus · Accepted Answer

Treasury bills are considered as secured money market instruments as they are backed by the government's creditworthiness. Debentures, on the other hand, are long-term debt securities issued by companies that pay interest to the holders. Commercial paper is a short-term unsecured promissory note issued by companies to meet their immediate financing needs. Therefore, the unsecured money market instrument is Commercial paper, and the best choice is E, which includes both commercial paper and treasury bills.

Which of the Following Is Characterized as Unsecured Money Market