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Question
Justify the following statement.
There are many participants in money market.
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Solution
- In the money market, lending and borrowing of funds take place for a short period of time, which may vary from one day to a year.
- Participants of the money market include RBI, Central and State governments Public Sector Undertakings, Scheduled commercial banks, Insurance companies, Mutual funds, Non-Banking Finance Companies, Corporates, Primary dealers, etc.
RELATED QUESTIONS
Central government is a borrower in the money market through the issue of ______.
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 short term funds
Write a word, or a term, or a phrase which can substitute for the following statement.
A bill which is issued by Reserve Bank of India on behalf of the Government of India.
State whether the following statement is true or false
Capital market is the market for the long term funds.
State whether the following statement is true or false
Commercial paper is a secured promissory note.
Find the odd one.
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.
Answer in one sentence.
What is Trade Bill?
Explain the following term/concept.
Call money market
Explain the following term/concept.
Treasury bills
Explain the following term/concept.
Commercial bills
Justify the following statement.
Financial markets acts as link between investor and borrower.
Justify the following statement.
Money market makes available short term finance through different instruments.
Answer the following question
State the instruments in money market.
Study the following case/situation and express your opinion.
| Joy ltd. company is a newly incorporated company. It wants to raise capital for the first time by issuing equity shares. |
- Should it go to the primary market or secondary market to issue its shares?
- Should it offer its shares through public offers or rights issues?
- What will be the issue of Equity shares by Joy Ltd. co. called, IPO or FPO?
