UPSC PRELIMS · ECONOMICS · MONEY MARKET INSTRUMENTS
With reference to the Indian economy, consider the following statements: 1. ‘Commercial Paper’ is a short-term unsecured promissory note. 2. ‘Certificate of Deposit’ is a long-term instrument issued by the Reserve Bank of India to a corporation. 3. ‘Call Money’ is short-term finance used for interbank transactions. 4. ‘Zero-Coupon Bonds’ are interest-bearing short-term bonds issued by Scheduled Commercial Banks to corporations. Which of the statements given above is/are correct?
Take a breath. Choose one. Press A–D on your keyboard if you like.
EXPLANATION
Commercial paper and call money have the stated characteristics; certificates of deposit are not long-term RBI-issued corporate instruments, and zero-coupon bonds do not pay periodic interest.
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