[Banking Awareness 2015-2016] Money Markets Quiz -3


Which of the following is NOT a part of Broad Money in India?
[A]Currency with the Public
[B]Demand Deposits with Banks
[C]Time Deposits with Banks
[D]Other Deposits with RBI

Other Deposits with RBI
Broad money does not include the interbank deposits such as deposits of banks with RBI or other banks. At the same time, time deposits of public with all banks including the cooperative banks are included in the Broad Money.


Which of the following is / are salient features of Treasury Bills?
[A]They have zero default risk
[B]They are highly liquid
[C]No tax is deducted at source
[D]All of above

All of above
The benefits of investment in treasury bills include: No tax deducted at source Zero default risk being sovereign paper Highly liquid money market instrument Better returns especially in the short term Transparency Simplified settlement High degree of tradability and active secondary market facilitate meeting unplanned fund requirements.


Auction of treasury bills is done by which of the following organisations?

In the primary market, the auction of treasury bills is done by Reserve Bank of India (RBI),Mumbai.


Which of the following is High Powered Money?

The other name of the Reserve Money is “High Powered Money” and also “Monetary Base”. Reserve Money is all the Cash in the economy and denoted by M0.


Identify the instrument of capital markets from the following:
[A]Certificate of Deposit
[B]Commercial Paper
[C]Repurchase Agreement
[D]Shares and bonds

Shares and debentures
Shares and debentures are capital market instruments.