Which of the following is NOT a money markets instrument?
[A]National Savings Certificates
[B]A 3-month certificate of deposit
[C]A treasury bill with 7 days to maturity
[D]A 14-day repurchase agreement of Treasury 8% 2007
National Savings Certificates
Money Markets are the markets where securities with less than one year maturity are traded. NSC does not come under money markets.
All of the following are money market instruments except__: ?
[A]Certificate of deposit
[C]Indian Depository Receipt
Indian Depository Receipt
Indian Depository Receipt is a capital market instrument. Money market instruments in India include Call Money / Notice Money / Term Money Market, Treasury Bill (T – Bills), Commercial Bills, Certificate Of Deposits (CDs), Commercial Papers (CP), Money Market Mutual Funds (MMMFs), The Repo / Reverse Repo Market etc.
Which is the most active Money Market Instrument in India ?
The most active segment of the money market is “Overnight Call market” or repo.
Which of the following segments of Money Markets is indicator of day to day interest rates?
[A]Term Money Market
[B]Call Money / Notice Money Market
[C]Money Market Mutual Funds
Call Money / Notice Money Market
Call Money / Notice Money market is most liquid money market and is indicator of the day to day interest rates. If the call money rates fall, this means there is a rise in the liquidity and vice versa. Interest Rates in Call / Notice Money Markets are market determined i.e. by the demand and supply of short term funds. The intervention of RBI is prominent in the short term funds money market in India and it can influence the rates prominently.
Which among the following can be used to channelize surplus funds from savers to institutions for short term use?
While first three belong to capital market, last one is an instrument of Money Markets. Money Markets are essentially short term markets.
Which of the following is used by RBI for sterilization of the Capital Inflows?
[A]Base Rate System
[C]Open Market Operations
[D]Credit Authorization Scheme
Open Market Operations
To check the reverse Capital Inflows, central banks often attempt what is known as the “sterilization” of capital flows. In a successful sterilization operation, the domestic component of the monetary base (bank reserves plus currency) is reduced to offset the reserve inflow. Theoretically, this can be done by encouraging private investment overseas, or allowing foreigners to borrow from the local market. The classical form of sterilization, however, has been through the use of open market operations, that is, selling Treasury bills and other instruments to reduce the domestic component of the monetary base.
What is sold and purchased during Open Market Operations by RBI?
[C]Certificates of Deposits
[D]Global Depository Receipts
OMOs are conducted by the RBI via the sale/purchase of government securities to/from the market with the primary aim of modulating rupee liquidity conditions in the market OMOs are an effective quantitative policy tool in the armoury of the RBI, but are constrained by the stock of government securities available with it at a point in time
In context with banking, a Certificate of Deposit is _ :
[A]Money Market Instrument
[D]All of above
All of above
With reference to Commercial papers (CP), which of the following is not a correct statement?
[A] Prior approval of RBI is needed to issue CP
[B] Issued in the multiples of Rs. 5 lakh
[C] Issued in the form of usance promissory note
[D] Issued at a discount to face value
Prior approval of RBI is needed to issue CP
To issue CPs, no prior approval of RBI is needed and underwriting the issue is not mandatory.
Who among the following is / are eligible to issue Commercial papers in India?
[C]All-India Financial Institutions
[D]All of the above
All of the above
The Commercial Papers can be issued by listed company which have working capital of not less than Rs. 5 Crores. The corporates, primary dealers (PDs) and the All-India Financial Institutions (Fis) are eligible to issue CP.