In: Finance
Which of the following is a capital market security?
Group of answer choices
Fed funds
Commercial paper
Treasury bills
Repo
Preferred stock
Ans: Preferred Stock
explanation:
Capital market is the market for securities where companies and the government can raise long term fund
It is the palce where buyers and sellers of the securities can enter into transaction to purchase and sell Shares,Bonds and debentures.
Preferred or preference share is an instrument for Long term fund.
Preference share capital have 2 priorities ie, the repayment of capital and repayment of divident.
but the preference share holders have no voting rights in the company.
Fed funds,Commercial paper,Treasury bills and Repo are the instuemnt for short term fund ir less than 1 year.
they are traded in money market. they can be easly converted in to cash.