What is an example of a money market instrument?

Money market instruments are debt securities that are usually short-term, typically maturing in one year or less. These instruments are utilized for borrowing and lending in the short-term money market, and they are generally characterized by their high liquidity and low risk.

Bills of exchange, often considered IOUs, are a classic example of money market instruments. They are legally binding documents that require one party to pay a specified amount to another party at a predetermined future date. This short-term nature and the fact that they facilitate transactions and financing make them a perfect fit within the money market category.

Equity shares represent ownership in a company and are thus not classified as money market instruments; they are considered equity instruments in the capital markets. Government bonds with a maturity of more than 10 years fall into the long-term debt instrument category, not the money market. Retirement funds represent a savings vehicle for individuals, often consisting of various investments, but they do not fit the definition of a money market instrument. Therefore, bills of exchange clearly stand out as the correct answer within the context of the question.