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Assertion and Reasoning: Assertion (A): Money market economizes use of cash Reasoning (R): Money market deals with financial instruments that are close substitutes of money

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Question

Assertion and Reasoning:

Assertion (A): Money market economizes use of cash

Reasoning (R): Money market deals with financial instruments that are close substitutes of money

Options

  • (A) is True, but (R) is False

  • (A) is False, but (R) is True

  • Both (A) and (R) are True and (R) is the correct explanation of (A)

  • Both (A) and (R) are True and (R) is not the correct explanation of (A)

MCQ
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Solution

Both (A) and (R) are True and (R) is the correct explanation of (A)

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Chapter 9: Money Market and Capital Market in India - Exercise [Page 92]

APPEARS IN

Balbharati Economics [English] Standard 12 Maharashtra State Board
Chapter 9 Money Market and Capital Market in India
Exercise | Q 4. (1) | Page 92

RELATED QUESTIONS

Capital market is a market for ______.


Assertion and reasoning question:

  • Assertion (A): The money market economises the use of cash.
  • Reasoning (R): The money market does not deal with financial instruments that are close substitutes for money.

Constituents in the organised money market in India:

  1. Commercial banks
  2. Moneylenders
  3. Traders
  4. Discount and Finance House of India

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Government securities market : Capital market : : Loan companies : ______.


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A debt instrument issued by a government with a promise of repayment at maturity.


Assertion (A) : Money market economizes use of cash

Reasoning (R) : Money market deals with financial instruments that are close substitutes of money


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Money market : Short term funds : : ______ : Long term funds. 


Complete the correlation.

Money market : Short term funds ______ Long term funds


Complete the correlation:

Money market: Short term funds :: ______ : Long term funds 


What do people and institutions do in the money market?


Which group contains examples of the “near money” dealt in by the money market?


Which characteristics describe money market instruments?


What is the maturity period of money market instruments?


What kind of instruments does the money market use to deal in short-term monetary assets?


What funding need does the money market help people and institutions meet?


A Treasury Bill is a short-term borrowing instrument of which entity?


Who issues Treasury Bills on behalf of the central government?


What is another name for a Treasury Bill?


Which risk-and-return description applies to a Treasury Bill?


Which institutions use call money for interbank transactions?


Call money helps banks meet which requirements?


What is the interest on call money called?


What relationship does the call rate have with instruments like CPs and CDs?


What happens to other money market instruments when the call rate rises?


What form does Commercial Paper take?


What is the maturity range of Commercial Paper?


Who mainly uses Commercial Paper for bridge financing?


Commercial Paper acts as an alternative to which sources of finance?


How does the interest paid by companies on Commercial Paper compare with market rates?


Commercial Paper can be used to meet which cost on long-term borrowings?


Commercial Bills are a source of short-term finance for what?


Which needs can Commercial Bills finance?


What type of instrument is a Commercial Bill?


In a Commercial Bill transaction, who draws the bill and who accepts it?


Who issues Certificates of Deposit?


To whom are Certificates of Deposit issued?


What is the maturity range of Certificates of Deposit?


What are banks not allowed to do with Certificates of Deposit?


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