Match the LIST-I with LIST-II
| LIST-I | LIST-II |
| (Instruments of money market) | (Explanation) |
| A. Treasury Bill | I. Unsecured, negotiable, short term instruments in bearer form, issued by commercial banks and financial institutions. |
| B. Commercial Paper | II. Short term unsecured promissory note, negotiable and transferable by endorsement and delivery with a fixed maturity period used for bridge financing. |
| C. Call Money | III. An instrument of short term borrowing by the Government of India. |
| D. Certificate of Deposit | IV. Short term finance repayable on demand, with a maturity period of one day to fifteen days. |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → A-III, B-II, C-IV, D-I
(A) Treasury Bill — this matches (III) An instrument of short term borrowing by the Government of India. A treasury bill is issued by the Reserve Bank of India on behalf of the Government of India to meet its short-term need for money.
(B) Commercial Paper — this matches (II) Short term unsecured promissory note, negotiable and transferable by endorsement and delivery with a fixed maturity period used for bridge financing. Large companies issue commercial paper to raise short-term money. It is used for bridge financing, for example to meet the cost of a public issue until the long-term funds come in.
(C) Call Money — this matches (IV) Short term finance repayable on demand, with a maturity period of one day to fifteen days. Banks lend call money to each other for a very short time, and it must be paid back whenever the lender calls for it.
(D) Certificate of Deposit — this matches (I) Unsecured, negotiable, short term instruments in bearer form, issued by commercial banks and financial institutions. A certificate of deposit is issued by a bank, not by a company or the government, and can pass from hand to hand.
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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