A bond issued by the U.S. Treasury with a maturity of 90 days is sold on the(1 point)
Responses
secondary market.
secondary market.
money market.
money market.
primary market.
primary market.
capital market.
money market.
A bond issued by the U.S. Treasury with a maturity of 90 days is sold on the money market.
A bond issued by the U.S. Treasury with a maturity of 90 days is sold on the money market.
To arrive at this answer, let's break down the options given:
1. Secondary market: The secondary market refers to the buying and selling of previously issued securities, such as bonds, stocks, or derivatives. However, in this case, the question specifically mentions a bond "issued by the U.S. Treasury," which typically implies new issuances. Therefore, the secondary market is not the correct answer.
2. Money market: The money market is a segment of the financial market where short-term debt instruments, such as Treasury bills, commercial paper, and certificates of deposit, are traded. Since a 90-day bond falls within the category of short-term debt, the money market is the most suitable market for its sale.
3. Primary market: The primary market refers to the market where new securities, such as bonds and stocks, are issued and sold directly to investors. While this could be a possible answer for bonds issued by other entities, the fact that the bond in question is issued by the U.S. Treasury suggests that it is not sold in the primary market.
4. Capital market: The capital market is a broader market that encompasses the buying and selling of long-term financial instruments, such as stocks and bonds, with maturities exceeding one year. As the bond in question has a maturity of only 90 days, it does not fall within the capital market's scope.
Therefore, the correct answer is that a bond issued by the U.S. Treasury with a maturity of 90 days is sold on the money market.