Which of the following is NOT classified as a money market instrument?

The classification of financial instruments into money market and capital market categories is based on the duration of the instruments and their liquidity characteristics. Money market instruments are typically short-term debt securities that are highly liquid and generally have maturities of less than one year.

Long-term corporate bonds fall outside of this category because they are designed for longer durations, usually ranging from one year to several decades, thereby offering investors long-term capital with fixed interest payments. Since long-term corporate bonds do not meet the criteria of being short-term and liquid, they are classified as capital market instruments instead of money market instruments.

In contrast, commercial paper, zero coupon bonds, and floating rate notes are all typically characterized by shorter maturities and higher liquidity, placing them firmly within the money market classification. Commercial paper usually has maturities of less than 270 days, zero coupon bonds can often have short maturities, and floating rate notes are often reset to market interest rates, making them suitable for the money market as well. This is why identifying long-term corporate bonds as the option not classified as a money market instrument is correct.