What is the characteristic of short-term debt securities in the market that includes instruments like T-bills and banker's acceptance?

What is the characteristic of short-term debt securities in the market that includes instruments like T-bills and banker's acceptance?

• A. Equity market
• B. Asset-backed securities
• C. Money market
• D. Bond market

Answer: (C)

Short-term debt securities are primarily associated with the money market, which is a segment of the financial market that deals with the issuance and trading of short-term debt instruments. Instruments such as Treasury bills (T-bills) and banker's acceptances are typically characterized by their high liquidity and short maturities, often ranging from a few days to a year. The money market is where these instruments are bought and sold, providing a mechanism for managing short-term funding needs and facilitating the efficient transfer of funds. In this context, T-bills are government securities that are sold at a discount to their face value and mature within a year, making them a popular choice for investors seeking safety and liquidity. Banker's acceptances are time drafts guaranteed by a bank, often used in international trade, also falling under the umbrella of short-term instruments due to their maturity terms. Other markets, like the equity market, involve ownership stakes in companies, while the bond market deals with longer-term debt securities, making them distinct from the characteristics of short-term securities found in the money market. Asset-backed securities are financial instruments backed by a pool of assets, which can include loans or receivables, and do not specifically pertain to the short-term debt category. Thus, the money

Short-term debt securities are primarily associated with the money market, which is a segment of the financial market that deals with the issuance and trading of short-term debt instruments. Instruments such as Treasury bills (T-bills) and banker's acceptances are typically characterized by their high liquidity and short maturities, often ranging from a few days to a year. The money market is where these instruments are bought and sold, providing a mechanism for managing short-term funding needs and facilitating the efficient transfer of funds.

In this context, T-bills are government securities that are sold at a discount to their face value and mature within a year, making them a popular choice for investors seeking safety and liquidity. Banker's acceptances are time drafts guaranteed by a bank, often used in international trade, also falling under the umbrella of short-term instruments due to their maturity terms.

Other markets, like the equity market, involve ownership stakes in companies, while the bond market deals with longer-term debt securities, making them distinct from the characteristics of short-term securities found in the money market. Asset-backed securities are financial instruments backed by a pool of assets, which can include loans or receivables, and do not specifically pertain to the short-term debt category. Thus, the money