Final answer:
Corporate bonds and long-term certificates of deposit are instruments traded in the capital markets, while commercial paper and Treasury bills are traded in the money markets. Option a
Step-by-step explanation:
In the context of financial markets, capital markets are venues where borrowing and lending of funds occur for periods longer than a year. Instruments typically traded in the capital markets include corporate bonds, government bonds, and long-term certificates of deposit.
In contrast, money markets are where investors can loan money for shorter durations, typically less than one year. This would involve instruments like commercial paper, certificates of deposit with short maturities, and Treasury bills, among others.
Specifically:
Corporate bonds are issued by companies to raise capital for longer-term investments and are traded in the capital markets.
Commercial paper represents short-term promissory notes issued by large corporations and is a part of the money markets.
Certificates of deposit (CDs) can be traded in both capital and money markets, depending on their maturity dates. Short-term CDs are part of the money market, whereas long-term CDs are in the capital market.
Treasury bills, or T-bills, are short-term government securities with maturities of one year or less and are as such part of the money markets.
Therefore, among the options provided, a) corporate bonds and potentially c) long-term certificates of deposit are instruments that are typically traded in the capital markets. Options b) commercial paper and d) Treasury bills are more commonly associated with the money markets. Option a