RENOCKS GH Ltd. is a large and creditworthy company that manufactures steel for the Ghanaian market. It now wants to expand to the Nigerian market and decides to invest in new hi-tech machines. Since the investment is large, it requires long-term finance. It decides to raise funds by issuing equity shares. The issue of equity shares involves huge floatation cost. To meet the expenses of floatation cost, the company decides to tap the money market.

Required:

i. Name and explain the money-market instrument the company can use for the above purpose. (2 marks)

ii. What is the duration for which the company can get funds through this instrument?

(1 mark)

iii State any other TWO purposes for which this instrument can be used.