Q. Consider the following markets:

1. Government Bond Market
2. Call Money Market
3. Treasury Bill Market
4. Stock Market

How many of the above are included in capital markets?
Answer: Only two
Notes: Call Money Market and Treasury Bill Market belong to the money market, while the Government Bond Market and Stock Market are part of the capital market. Money Market Instruments:

• Treasury Bills: Risk-free, issued by the central bank.
• Certificates of Deposit: Receipts for deposited funds.
• Commercial Paper: Unsecured promissory notes with higher returns.
• Repurchase Agreements: Short-term loans involving resale.
• Banker’s Acceptance: Future payment guarantees by banks.

Capital Market Instruments:

• Equities: Company shares.
• Debt Securities: Interest-bearing financial assets.
• Derivatives: Value depends on underlying assets.
• Exchange-Traded Funds (ETFs): Investor-pooled funds for capital market instruments.
• Foreign Exchange Instruments: Currency agreements and derivatives.

This question is part of UPSC Daily 20 MCQ Series Course on GKToday Android app.