Identify the money market instrument that can be used for bridge financing ?

Commercial paper

The correct answer is option (2) : Commercial paper

The money market instrument that can be used for bridge financing is (2) Commercial paper. Commercial paper is a short-term unsecured promissory note issued by companies to raise funds for a short period of time. It is usually issued for a period of 7 days to 1 year and is used to finance short-term working capital needs, including bridge financing.

1. Call money: Call money is a short-term finance option where funds are borrowed or lent on a daily basis. It is usually used by banks and financial institutions to meet their short-term liquidity needs. Call money is not typically used for bridge financing.

3. Certificate of Deposit: A Certificate of Deposit (CD) is a time deposit that is issued by banks and financial institutions. It is a low-risk investment option that offers a fixed rate of return over a fixed period of time. CDs are not typically used for bridge financing.

4. Commercial Bill : A Commercial Bill is a short-term negotiable instrument that is used to finance trade transactions. It is a written promise to pay a certain amount of money on a specific date. Commercial Bills are not typically used for bridge financing.