Financial market

Multiple Choice

Which of the following best describes the money market?

• A market for long-term funds

• A market for short-term funds

• A physical place where money is traded

• A market for consumer goods

Multiple Select

Which of the following are examples of money market instruments?

• Treasury Bills

• Commercial Paper

• Certificate of Deposit

• Equity Shares

Fill in the Blank

Treasury Bills are issued by RBI on behalf of the ___ Government.

Open Ended

Explain the concept of 'discount' in the context of Treasury Bills and why they are issued at a price lower than their face value.

Multiple Choice

Which of the following statements about Commercial Paper is correct?

• It is an unsecured promissory note issued to the public with a fixed maturity period.

• It is a secured loan issued by the government.

• It is only available for periods longer than one year.

• It is issued by the Reserve Bank of India.

Multiple Choice

What is the primary purpose of issuing Commercial Paper?

• To meet flotation cost, brokerage, advertising, and printing share applications

• To finance long-term infrastructure projects

• To provide loans to individuals

• To pay employee salaries

Multiple Choice

Which of the following is an important source of working capital and bridge financing for raising long-term funds from the capital market?

• Commercial Paper

• Equity Shares

• Debentures

• Preference Shares

Multiple Select

Which of the following statements about Call Money are correct?

• It deals with day-to-day surplus funds of banks and financial institutions.

• The duration of call money is from one day to 15 days.

• Interest paid on call money is called call rate.

• It is issued by the government to the public.

Fill in the Blank

The maturity period of a Certificate of Deposit (CD) ranges from ___ months to ___ months.

Multiple Choice

Which instrument is a short period, negotiable, and self-liquidating instrument used to finance credit sales?

• Commercial Bill

• Certificate of Deposit

• Call Money

• Commercial Paper

Open Ended

Explain the main features and uses of Commercial Bills (Trade Bills) in the money market.

Multiple Choice

What happens to a bill of exchange when it is accepted by the buyer (drawee)?

• It becomes a trade bill and a marketable instrument

• It is destroyed

• It is returned to the seller

• It is sent to the government

Open Ended

Explain the process by which a commercial bill can provide funds to a seller before its maturity.

Multiple Select

Which of the following are considered money market instruments?

• Treasury Bills

• Commercial Bill

• Commercial Paper

• Equity Shares

Open Ended

How do capital markets benefit both borrowers and lenders?

Fill in the Blank

The capital market enables borrowers to raise ___ for their purpose.

Fill in the Blank

A security means a certificate of title evidencing investment made in the ___ or debt of any entity.

Multiple Choice

Which of the following is NOT an instrument of the capital market?

• Equity shares

• Preference shares

• Debentures

• Savings account

Fill in the Blank

The value of one unit in the capital market can be as low as Rs. ___

Multiple Select

Which of the following are features of the capital market?

• Liquidity

• High risk

• Short term instruments

• Expected return

Multiple Choice

Who controls the capital market in India?

• RBI

• SEBI

• Ministry of Finance

• NABARD

Open Ended

Explain the difference between the money market and the capital market based on their duration and participants.

Open Ended

Describe the role of a stock exchange in the capital market and explain why it is important for investors.

Multiple Choice

What is the primary purpose of the money market?

• To provide long-term loans

• To facilitate the trading of stocks

• To provide short-term funds

• To issue government bonds

Open Ended

Summarize what you have learned about the money market and its main characteristics.