Which of the following statements is most correct?
A)Capital markets include short-term and long-term debt securities such as Treasury bills, notes, and bonds.
B)Money market instruments include commercial paper, federal funds, repurchase agreements, and Treasury notes.
C)Real estate mortgages are money market instruments.
D)Federal agencies, and state and local governments, generally issue longer-term financial claims which trade in the capital market.

Question

Quizplus · Accepted Answer

The statement that federal agencies, and state and local governments, generally issue longer-term financial claims which trade in the capital market is correct. Conversely, statement A is incorrect because short-term debt securities such as Treasury bills are considered part of the money market, not the capital market. Statement B is also incorrect because commercial paper, federal funds, and repurchase agreements are money market instruments, but Treasury notes are part of the capital market. Statement C is incorrect because real estate mortgages are not generally considered money market instruments as they are longer-term debt securities.

Which of the Following Statements Is Most Correct