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Question
Central government is a borrower in the money market through the issue of ______.
Options
commercial papers
trade bills
treasury bills
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Solution
Central government is a borrower in the money market through the issue of treasury bills.
Explanation:
Treasury Bills are short term securities issued by Reserve Bank of India on behalf of the Central Government of India to meet the government's short term funds requirement. Treasury Bills have three maturity periods - 91 days, 182 days and 364 days. These bills are sold to banks and individuals, firms, institutions, etc. These bills are negotiable instruments and are freely transferable.
RELATED QUESTIONS
Match the pair.
| Group ‘A’ | Group ‘B’ |
| a) Financial market | 1) Long term fund |
| b) Money market | 2) New issue market |
| c) Primary market | 3) Trading of commodities |
| d) Commercial paper | 4) Short term fund |
| 5) Trading of financial securities | |
| 6) Share market | |
| 7) Unsecured promissory note | |
| 8) Secured promissory note |
Write a word or a term or a phrase which can substitute the following statement.
A market which provides long term funds
Write a word or a term or a phrase which can substitute the following statement.
A market which provides short term funds
Write a word or a term or a phrase which can substitute the following statement.
A money market instrument used by banks when one bank faces a temporary shortage of cash.
State whether the following statement is true or false
Capital market is the market for the long term funds.
Complete the sentence.
When trade bills are accepted by commercial banks, it is known as _________.
Complete the sentence.
In capital market the instruments traded have maturity period of more than ______ year.
Select the correct option from the bracket.
| Group ‘A’ | Group ‘B’ |
| a) Money market | 1) ____________ |
| b) Zero risk instrument | 2) _____________ |
| c) __________ | 3) Capital market |
| d) __________ | 4) Secondary market |
(Buying and selling of existing securities, Treasury Bills, Funds for long term, Fund for short term)
Answer in one sentence.
What is call money market?
Correct the underlined word/s and rewrite the following sentence.
Financial market can be classified as capital market and call money market.
Explain the following term/concept.
Repurchase agreement
Explain the following term/concept.
Call money market
Explain the following term/concept.
Commercial bills
Answer in brief.
State any four features of money market
Justify the following statement.
Money market makes available short term finance through different instruments.
Justify the following statement.
There are many participants in money market.
Answer the following question
State the instruments in money market.
