Economics • Banking & FinanceMedium
Which of the following financial instruments represents a certificate of deposit issued by a bank in bearer form or registered form?
A. Certificate of Deposit (CD)✓ Correct Answer
B. Treasury Bill
C. Promissory Note
D. Dated Government Security
💡 Solution & Explanation
A Certificate of Deposit is a negotiable money market instrument issued by scheduled commercial banks and financial institutions in dematerialised form or as a usance promissory note for specified maturity periods. Treasury bills represent short-term debt instruments issued by the central government, while dated securities are longer-term bonds. Money market instruments are a staple of banking and financial economics syllabi.
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