Money market instruments are:

A. Equity shares

B. Bonds

C. Debentures

D. Commercial papers

E. Treasury bills

Choose the correct answer from the options given below :

D and E only

The correct answer is option (3)- D and E only.

Commercial papers and Treasury bills are money market instruments.

The money market is a market for short term funds which deals in monetary assets whose period of maturity is upto one year. These assets are close substitutes for money. Some instruments of money market are Treasury Bill, Commercial Paper, Call Money, Certificate of Deposit, Commercial Bill.

* Commercial Paper: Commercial paper is a short-term unsecured promissory note, negotiable and transferable by endorsement and delivery with a fixed maturity period. It is issued by large and creditworthy companies to raise short-term funds at lower rates of interest than market rates. It usually has a maturity period of 15 days to one year.

* Treasury Bill: A Treasury bill is basically an instrument of short-term borrowing by the Government of India maturing in less than one year. They are also known as Zero Coupon Bonds issued by the Reserve Bank of India on behalf of the Central Government to meet its short-term requirement of funds. Treasury bills are issued in the form of a promissory note. They are highly liquid and have assured yield and negligible risk of default. They are issued at a price which is lower than their face value and repaid at par. The difference between the price at which the treasury bills are issued and their redemption value is the interest receivable on them and is called discount.