Which statement best describes the current form of money market instruments?

Which statement best describes the current form of money market instruments?

• A. Always issued as registered securities with identity.
• B. Historically bearer form; now tend to be issued electronically.
• C. They are bearer form and now issued electronically.
• D. Always issued in bearer form in modern times.

Answer: (B)

Money market instruments have largely moved from physical bearer securities to electronic, book-entry ownership. Historically, these instruments were bearer—you could claim ownership by holding the paper. Today, most are issued electronically with ownership recorded in central clearing systems, which speeds transfers and reduces the risk of loss or fraud. That’s why the best description is that they were bearer in the past and are now issued electronically. The other statements are too absolute or inconsistent with the current trend toward dematerialization and registered ownership.

Money market instruments have largely moved from physical bearer securities to electronic, book-entry ownership. Historically, these instruments were bearer—you could claim ownership by holding the paper. Today, most are issued electronically with ownership recorded in central clearing systems, which speeds transfers and reduces the risk of loss or fraud. That’s why the best description is that they were bearer in the past and are now issued electronically. The other statements are too absolute or inconsistent with the current trend toward dematerialization and registered ownership.