Which of the following is not a money market instrument

A money market instrument or money market deposit account (MMDA) is a deposit that can be held by an individual with a banking institution. It can be “negotiable” or “non-negotiable”. In the former case, it can be immediately converted into money and withdrawn at any time. In the latter, it can only be withdrawn upon maturity. A negotiable MMDA is similar to a time deposit, except that a time deposit has better interest rates and MMDA has higher liquidity. The income from an MMDA is generally taxable but exempt if held less than one year.

Gold

The money market is the financial market where short-term debt instruments are issued, managed and traded. Money market instruments include treasury bills, commercial paper and certificates of deposit (CDs).

The interest rates on these instruments are generally low, but they can be short-term investments.

In addition to being short-term investments, money market instruments are considered very safe because they are backed by the full faith and credit of the U.S. government or other large institutions like banks or corporations.

Treasury bills

Treasury bills, or T-bills, are short-term debt instruments issued by the U.S. Treasury Department to raise money for the federal government. A T-bill is a zero coupon bond because it doesn’t pay interest until maturity. The return on a T-bill is based on the difference between its purchase price and its redemption value at maturity date.

The term “T-bill” can refer specifically to Treasury bills that are issued with maturity terms of 13 weeks or less, though the term is most commonly used to refer to all Treasury securities with maturities of less than one year.

Treasury bills are sold electronically through auctions (via the Federal Reserve’s Electronic Treasury Auction System) and have been since 1994. The minimum denomination for T-bills is $100,000; however, there are no upper limits on denominations offered during auctions.

Exchange Traded Funds (ETF)

Exchange Traded Funds (ETF) are mutual funds that can be traded like stocks. They are traded on a stock exchange and typically have low management fees and high liquidity. ETFs are also mutual funds that track an index, but they trade like stocks.

This means you can buy and sell them at any time during the day, unlike traditional mutual funds and unit investment trusts (UITs). ETFs can also be customized to track indexes in specific areas or sectors of the market.

Some of the most popular ETFs include:

• iShares Core S&P 500 (IVV) – This is a broad market index fund that tracks 500 large U.S.-listed stocks for a low cost fee. It’s one of the largest ETFs in the world with over $50 billion in assets under management (AUM).
• iShares MSCI EAFE Index Fund (EFA) – This fund tracks companies in Europe, Australia and Southeast Asia, which comprise about half of global GDP by market capitalization. It has over $27 billion AUM, making it one of the largest foreign equity ETFs on the market today.

Certificate of deposits

Money market accounts are savings accounts that offer higher interest rates than regular savings accounts. They’re not insured by the Federal Deposit Insurance Corporation (FDIC), but they’re backed by the full faith and credit of the institution that issued them. Money market deposit accounts (MMDAs) are similar to money market mutual funds, but they’re held in one institution and don’t trade on an exchange.

Certificate of deposits (CDs) are fixed-term savings accounts that earn more interest than regular savings accounts. CDs have maturities ranging from three months to five years. Rates can vary depending on the length of the CD’s maturity, with longer terms offering higher rates of return. \

Money market accounts (MMA) are savings accounts that pay higher interest rates than regular savings accounts because they have restrictions on withdrawal amounts and frequency, which makes them safer investments for banks than standard checking or savings accounts. Commercial paper

Commercial paper is a short-term debt instrument issued by large corporations to fund their ongoing operations. Commercial paper is also known as ABCP, for asset-backed commercial paper. Commercial paper has a maturity of up to 270 days and pays interest at a rate that’s fixed or floating.

Commercial papers are issued in large denominations ($1 million or more) and are sold through dealers such as banks or broker/dealers.

Not all commercial papers are backed by assets; some are unsecured debt obligations.

In the U.S., commercial paper is issued by corporations with an investment grade credit rating from Moody’s Investors Service or Standard & Poor’s (S&P).

The public provident fund is not a money market instrument

Money market instruments are short-term, highly liquid investments that are issued by financial institutions that are extremely safe and are traded on an active secondary market. Examples of money market instruments include commercial paper, certificates of deposit (CDs), treasury bills, bankers acceptances and commercial paper.

Conclusion

A money market instrument is a short-term debt security issued by a U.S. corporation or a depository bank. Money market instruments are usually associated with high quality; generally there is no risk of principal loss and the interest rates are fixed and payable at prearranged time intervals. As a result, money market instruments generate lower returns than corporate bonds, but their liquidity and safety make them attractive to individual investors who seek these characteristics.