Which of the following is an example of a capital market instrument? A) Money market mutual funds. B) Banker's acceptances. C) Preferred stock. D) Commercial paper. E) U.S. Treasury bills. | Homework.Study.com (2024)

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Which is an example of a capital market instrument? ›

Capital market instruments are various financial tools available in the capital markets for investment and fundraising. They include equities like stocks, debt securities like bonds and debentures, derivatives such as options and futures, Exchange-Traded Funds (ETFs), and foreign exchange instruments.

Funding instruments traded in the capital markets include debentures, shares, bonds, debt instruments, ETFs, etc. The securities exchanged here are typically long-term investments. The capital market includes the securities market and the bond market.

Explanation: A capital market investment refers to investing in long-term securities such as stocks and bonds. Out of the options given, ​Treasury bills are an example of a capital market investment. Treasury bills are short-term debt instruments issued by the government to raise funds.

Money markets include markets for such instruments as bank accounts, including term certificates of deposit; interbank loans (loans between banks); money market mutual funds; commercial paper; Treasury bills; and securities lending and repurchase agreements (repos).

capital instrument. ACCOUNTING, FINANCE. a security in the form of shares, bonds, etc. that a company sells to raise the money it needs to operate: Legally, capital instruments are debt and should therefore be disclosed within liabilities.

What are examples of capital markets? The New York State Exchange, NASDAQ, London Stock Exchange, and the American Stock Exchange are some highly organized capital markets. NASDAQ offers electronic trading as opposed to the other capital markets.

Stocks, bonds, mutual funds, ETFs, and derivatives are among the capital market examples.

Commercial paper is issued by a corporate entity to fund its short-term need for capital. Thus, it is not a capital market instrument.

Capital equipment is any machinery or device that has a long-term use and a high initial cost, such as medical equipment, industrial machinery, or construction vehicles.

Capital markets are the markets in which securities with maturities of greater than one year are traded. The most common capital market securities include stocks, bonds, and real estate investment trusts (REITs). Money markets are the markets for financial products with maturities of less than one year.

Which of the following are capital market? ›

Capital markets are used to sell different financial instruments, including equities and debt securities. These markets are divided into two categories: primary and secondary markets. The best-known capital markets include the stock market and the bond markets.

Market cap is the total dollar value of a company's outstanding shares of stock. For example, if a company has 1 million shares of outstanding stock and the stock currently trades at $50 per share, then its current market cap is $50 million.

The main money market instruments are Treasury bills, commercial papers, certificate of deposits, and call money. It is highly liquid as it has instruments that have a maturity below one year. Most of the money market instruments provide fixed returns.

The correct answer is Commercial paper. Key Points Capital market: A capital market is a financial market in which investors buy and sell financial securities, such as bonds and shares. These transactions take place through various exchanges.

Money market funds are a type of mutual fund that invests in low-risk, short-term debt securities, such as Treasury bills, municipal debt, or corporate bonds. They're designed to offer a safe, stable investment option for money you may need to access in the short term, like an emergency fund or a short-term goal.

Capital market instruments include both long-term debt and common stocks.

The correct answer is Commercial paper.