Which of the following financial assets would be traded on the money market?(1 point)

Question

Responses

a bond sold at a face value of $500
offering a 3%
annual yield and a 5-year maturity
a bond sold at a face value of 500 dollars offering a 3 percent annual yield and a 5-year maturity

a bond sold at a face value of $100
offering a 0.5%
annual yield and a 6-month maturity
a bond sold at a face value of 100 dollars offering a 0.5 percent annual yield and a 6-month maturity

a stock purchased for $50
which can be traded immediately
a stock purchased for 50 dollars which can be traded immediately

a stock purchased for $500
which can be traded immediately

Answer 1

The characteristics of the money market primarily include short-term debt securities that typically have maturities of one year or less. In your examples, bonds with longer maturities (such as 5 years) are generally not considered money market instruments.

Therefore, the financial asset that would be traded on the money market from your options is:

A bond sold at a face value of $100 offering a 0.5% annual yield and a 6-month maturity.

This bond has a short maturity (6 months), which makes it eligible for the money market. The other assets listed either have longer maturities (5 years) or are stocks, which are not traded in the money market.