Which of the following is a capital market instrument?Group of answer choicesTreasury billsCertificates of depositsPreferred sharesCommercial papers

Preferred shares are a capital market instrument.

Here's why:

1. Capital Market Instruments: These are long-term financial instruments in the form of debt or equity that are traded either on a securities exchange or directly between the parties. The capital markets consist of the primary market, where new securities are issued and sold, and the secondary market, where already-issued securities are traded between investors.

2. Treasury Bills: These are short-term debt instruments issued by a government. They are not considered a capital market instrument because they have a maturity of less than one year.

3. Certificates of Deposit: These are time deposits offered by banks with a specific, fixed term, and, usually, a fixed interest rate. They are also not considered a capital market instrument because they are not traded on a securities exchange.

4. Preferred Shares: These are shares of a company's stock with dividends that are paid out to shareholders before common stock dividends are issued. Preferred shares are considered a capital market instrument because they are equity securities that are traded on a securities exchange.

5. Commercial Papers: These are short-term debt instruments issued by companies. Like Treasury bills, they are not considered a capital market instrument because they have a maturity of less than one year.