Match the items of List I with the correct items of List II
| List I | List II |
|---|---|
| A. Treasury Bill | I. Companies use it for bridge financing |
| B. Commercial Paper | II. Used for inter bank transactions |
| C. Call money | III. Issued by RBI on behalf of Central government |
| D. Commercial Bill | IV. It is a bill of exchange used to finance the working capital requirement of business |
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → A-III, B-I, C-II, D-IV
(A) Treasury Bill → (III) Issued by RBI on behalf of Central government — A treasury bill is a short-term borrowing instrument of the Government of India. It is issued by the Reserve Bank of India on behalf of the Central Government.
(B) Commercial Paper → (I) Companies use it for bridge financing — Companies use commercial paper to meet short-term needs. One use is bridge financing, that is, meeting the floatation costs of raising long-term funds.
(C) Call money → (II) Used for inter bank transactions — Call money is short-term finance repayable on demand. Banks borrow from each other through it to keep their cash reserve ratio.
(D) Commercial Bill → (IV) It is a bill of exchange used to finance the working capital requirement of business — A commercial bill is a bill of exchange. It finances the working capital needs of business firms, mainly their credit sales.
Note: Although the chapter ‘Financial Markets’ was dropped from the NCERT textbooks during rationalisation, it has stayed in the NTA syllabus every year since 2022, except for 2025, and it is part of the syllabus again from 2026. This question is therefore based on the pre-rationalised NCERT, an extract from which is given below. NCERT (Pre-rationalised Edition):
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