Join thousands of students who trust us to help them ace their exams!Watch the first video
Multiple Choice
Capital markets do not include which of the following securities?
A
Common stocks
B
Preferred stocks
C
Corporate bonds
D
Treasury bills (T-bills)
Verified step by step guidance
1
Understand the concept of capital markets: Capital markets are financial markets where long-term securities such as stocks and bonds are traded. These securities typically have maturities longer than one year.
Identify the types of securities included in capital markets: Common stocks, preferred stocks, and corporate bonds are examples of long-term securities traded in capital markets.
Clarify the nature of Treasury bills (T-bills): Treasury bills are short-term debt instruments issued by the government with maturities of less than one year. They are traded in money markets, not capital markets.
Compare the securities listed in the question: Common stocks, preferred stocks, and corporate bonds are long-term securities, while Treasury bills are short-term securities.
Conclude that Treasury bills (T-bills) are not included in capital markets because they are short-term instruments traded in money markets.