CUET Preparation Today
Money Market is a market for short term funds which deals in monetary assets whose period of maturity is upto one year. It's instruments are A. Call Money Choose the correct answer from the options given below: |
A, D and E only A, B and C only B, C and D only B, C and E only |
A, D and E only |
The correct answer is Option (1) → A, D and E only. A. Call Money- Money market instrument Money Market is a market for short-term funds. It deals in monetary assets whose period of maturity is less than one year. The instruments of money market includes treasury bills, commercial paper, call money, Certificate of deposit, commercial bills, participation certificates and money market mutual funds.
* Call Money: Call money is short-term finance repayable on demand, with a maturity period of one day to fifteen days, used for inter-bank transactions. Call money is a method by which banks borrow from each other to be able to maintain the cash reserve ratio. * Certificate of Deposit: Certificates of deposit (CD) are unsecured, negotiable, short-term instruments in bearer form, issued by commercial banks and development financial institutions. They can be issued to individuals, corporations and companies during periods of tight liquidity when the deposit growth of banks is slow but the demand for credit is high. They help to mobilise a large amount of money for short periods. * Treasury bill is basically an instrument of short-term borrowing by the Government of India maturing in less than one year. They are also known as Zero Coupon Bonds issued by the Reserve Bank of India on behalf of the Central Government to meet its short-term requirement of funds. |
