Which of the following is NOT an instrument in the money market?

Step 1: Analyze the question We need the option that is NOT a money market instrument.

Step 2: Explain the concept The financial market has two main parts:

• Money market: deals in short-term funds (usually one year or less). Its instruments are highly liquid and low risk.
• Capital market: deals in long-term funds (more than one year). Its instruments include stocks, shares, debentures, and bonds.

Step 3: Check each option

• A. Treasury bill: a short-term government security (91, 182, or 364 days). It is a money market instrument.
• B. Bill of exchange: a short-term credit instrument used in trade, usually payable within 90 to 180 days. It is a money market instrument.
• C. Stocks and shares: these represent ownership in a company and have no fixed maturity. They are traded on the Nigerian Exchange (formerly the Nigerian Stock Exchange), which is part of the capital market. They are not money market instruments.
• D. Call money fund: very short-term loans between banks and discount houses, repayable on demand or within a day or two. It is a money market instrument.

Step 4: Answer Stocks and shares belong to the capital market, so they are the odd one out.

Exam tip: Remember "Money = Short, Capital = Long." Whenever you see stocks, shares, bonds, or debentures, think capital market. Treasury bills, commercial bills, certificates of deposit, and call money are the money market.