FMS Quiz

Which of the following statements best describes the Call Money Market?

• It is used by individuals for short-term personal loans

• It is a market for overnight borrowing and lending among banks

• It deals in long-term government securities

• It is regulated by the central government.

Notice money refers to funds lent for a period of:

• 1 day

• 2 to 14 days

• 15 to 30 days

• More than 30 days

MIBOR is:

• A long-term interest rate set by SEBI

• The repo rate determined by RBI weekly

• The average cost of borrowing by mutual funds

• The benchmark overnight interbank lending rate

In a Repo transaction:

• Borrower sells securities with agreement to buy back

• Lender gives loan without collateral

• It is done only between RBI and government

• Government securities are bought permanently

Which institution introduced the Triparty Repo System (TREPS) in India?

• RBI

• SEBI

• CCIL

• NSE

A banker’s acceptance becomes a negotiable instrument when:

• It is issued by RBI

• It is paid before maturity

• The buyer signs the bill

• A bank accepts and guarantees payment

Which of the following is not a typical participant in the Indian Money Market

• Discount and Finance House of India (DFHI)

• SEBI

• Commercial Banks

• Mutual Funds

Treasury Bills differ from commercial bills because:

• T-Bills are government securities with zero credit risk

• T-Bills have fixed coupon rates

• T-Bills are issued by banks

• T-Bills are riskier

A key limitation in the development of the Acceptance Market in India is:

• Excessive government interference

• High default rates

• RBI restrictions on international trade

• Lack of acceptance houses and uniform practices

The main reason why banks in India prefer to hold bills till maturity is:

• High interest rates

• Lack of a secondary market and genuineness concerns

• Excess supply of bills

• Regulatory requirement