69 + Interview Questions in MONEY MARKET IN GENERAL AWARENESS Page 2 InterviewSolution

51.	Find the odd word :Types of Bank Accounts.
Answer» Saving A/c, D-mat A/c, Recurring A/c, Current A/c.

Discussion

52.	Complete the correlation :(1) Money market : Short term funds :: …………….. : Long term funds.(2) …………….. : Central Bank:: SBI : Commercial Bank.(3) Co-operative banks : Organized sector :: Indigenous bankers : ……………..(4) Primary market : …………….. :: Secondary market : Old issues
Answer» 1. Capital market 2. RBI 3. Unorganised sector 4. New issue

52.

Complete the correlation :(1) Money market : Short term funds :: …………….. : Long term funds.(2) …………….. : Central Bank:: SBI : Commercial Bank.(3) Co-operative banks : Organized sector :: Indigenous bankers : ……………..(4) Primary market : …………….. :: Secondary market : Old issues

Answer»

1. Capital market

2. RBI

3. Unorganised sector

4. New issue

Discussion

53.	Individual investors have lost confidence in the capital market due to (a) lack of financial instruments. (b) high transaction costs. (c) low returns. (d) financial scams.
Answer» Option : (d) financial scams.

Discussion

54.	Commercial banks act as intermediaries in the financial system to (a) make profits (b) accelerate the country’s economic growth. (c) mobilize the savings and allocating them to various sectors of the economy. (d) control the credit.
Answer» Option : (c) mobilize the savings and allocating them to various sectors of the economy.

Discussion

55.	Find out names of the Central Banks of the following countries :(1) USA (2) Canada (3) Russia (4) Germany (5) China (6) UK (United Kingdom) (7) Sweden (8) France (9) Japan (10) Australia
Answer» (1) USA : Federal Reserve System (2) Canada : Bank of Canada (3) Russia : Central Bank of Russia (4) Germany : Deutsche Bundes bank (5) China : People's Bank of China (6) UK (United Kingdom) : Bank of England (7) Sweden : Sveriges Riksbank (8) France : Banque de France (9) Japan : Bank of Japan (10) Australia : Reserve Bank of Australia

55.

Find out names of the Central Banks of the following countries :(1) USA (2) Canada (3) Russia (4) Germany (5) China (6) UK (United Kingdom) (7) Sweden (8) France (9) Japan (10) Australia

Answer»

(1) USA : Federal Reserve System

(2) Canada : Bank of Canada

(3) Russia : Central Bank of Russia

(4) Germany : Deutsche Bundes bank

(5) China : People's Bank of China

(6) UK (United Kingdom) : Bank of England

(7) Sweden : Sveriges Riksbank

(8) France : Banque de France

(9) Japan : Bank of Japan

(10) Australia : Reserve Bank of Australia

Discussion

56.	Who are the participants of Money Market?
Answer» 1. Government of different countries 2. Central Banks of different countries 3. Private and Public Banks 4. Mutual Funds Institutions 5. Insurance Companies 6. Non-Banking Financial Institutions 7. RBI and SBI 8. Commercial Banks 9. State Governments 10. Public

56.

Who are the participants of Money Market?

Answer»

1. Government of different countries

2. Central Banks of different countries

3. Private and Public Banks

4. Mutual Funds Institutions

5. Insurance Companies

6. Non-Banking Financial Institutions

7. RBI and SBI

8. Commercial Banks

9. State Governments

10. Public

Discussion

57.	A marketable document of title to a time deposit for a specified period may be referred to as a _____ (a) Treasury Bill (b) Certificate of Deposit (c) Commercial Bill (d) Government Securities
Answer» (b) Certificate of Deposit

Discussion

58.	What is a CD market?
Answer» Certificate of Deposits are short-term deposit instruments issued by banks and financial institutions to raise large sums of money. The Certificate of Deposit is transferable from one party to another. Due to their negotiable feature, they are also known as negotiable certificate of deposit.

Discussion

59.	Explain the types of Treasury Bills.
Answer» Treasury Bills are issued to the public and other financial institutions for meeting the short term financial requirements of the Central Government. Treasury Bills may be classified into three! They are: 1. 91 days Treasury Bills 2. 182 days Treasury Bills 3. 364 days Treasury Bills

59.

Explain the types of Treasury Bills.

Answer»

Treasury Bills are issued to the public and other financial institutions for meeting the short term financial requirements of the Central Government. Treasury Bills may be classified into three!

They are:

1. 91 days Treasury Bills

2. 182 days Treasury Bills

3. 364 days Treasury Bills

Discussion

60.	Define the term “Money Market”
Answer» According to Crowther, ’’the money market is the collective name given to the various firms and institutions that deal in the various grades of near money”.

Discussion

61.	Money Market provides _____ (a) Medium-term Funds (b) Short-term Funds (c) Long-term Funds (d) Shares
Answer» (b) Short-term Funds

Discussion

62.	Debt Instruments are issued by Corporate Houses are raising short-term financial resources from the money market are called ___(a) Treasury Bills (b) Commercial Paper (c) Certificate of Deposit (d) Government Securities
Answer» (b) Commercial Paper

Discussion

63.	What are the types of Commercial Bill?
Answer» 1. Demand and Usance Bills 2. Clean bills and documentary Bills 3. Inland bills and Foreign Bills 4. Indigeneous Bills 5. Accommodation and supply Bills

63.

What are the types of Commercial Bill?

Answer»

1. Demand and Usance Bills

2. Clean bills and documentary Bills

3. Inland bills and Foreign Bills

4. Indigeneous Bills

5. Accommodation and supply Bills

Discussion

64.	Explain the Instruments of Money Market.
Answer» (i) Treasury Bills: Treasury bills are very popular and enjoy a higher degree of liquidity since they are issued by the Government. A Treasury bill is nothing but a promissory note issued for a specified period stated therein. The Government promises to pay the specified amount mentioned therein to the bearer of the instrument on the due date. The period does not exceed a period of one year. (ii) Certificate of Deposits: Certificate of Deposits are short-term deposit instruments issued by banks and financial institutions to raise large sums of money. The Certificate of Deposit is transferable from one party to another. Due to their negotiable feature, they are also known as negotiable certificate of deposit. (iii) Commercial Bills: The Commercial Bill is an instrument drawn by a seller of goods on a buyer of goods. It possesses the advantages like self-liquidating in nature, recourse to two parties, knowing exact date of transactions, transparency of transactions etc.,

64.

Explain the Instruments of Money Market.

Answer»

(i) Treasury Bills: Treasury bills are very popular and enjoy a higher degree of liquidity since they are issued by the Government. A Treasury bill is nothing but a promissory note issued for a specified period stated therein. The Government promises to pay the specified amount mentioned therein to the bearer of the instrument on the due date. The period does not exceed a period of one year.

(ii) Certificate of Deposits: Certificate of Deposits are short-term deposit instruments issued by banks and financial institutions to raise large sums of money. The Certificate of Deposit is transferable from one party to another. Due to their negotiable feature, they are also known as negotiable certificate of deposit.

(iii) Commercial Bills: The Commercial Bill is an instrument drawn by a seller of goods on a buyer of goods. It possesses the advantages like self-liquidating in nature, recourse to two parties, knowing exact date of transactions, transparency of transactions etc.,

Discussion

65.

Define Money Market and Capital Market. Explain the difference between the Money -Market and Capital Market.

Answer»

(i) Money Market Definition: According to Crowther, “the money market is the collective name given to the various firms and institutions that deal in the various grades of near money.”

(ii) Capital Market Definition: According to Aran K. Datta, capital market may be defined as “a complex of institutions investment and practices with established links between the demand for and supply of different types of capital gains”.

S.No.	Features	Money Market	Capital Market
1.	Duration of Funds	It is a market for shortterm loanable funds for a period of not exceeding one year.	It is a market for long-term funds exceeding period of one year.
2.	Supply of Fupds	This market supplies funds for financing current business operations working capital requirements of industries and short period requirements of the government.	This market supplies funds for financing the fixed capital requirements of trade and commerce as well as the longterm requirements of the government.
3.	Deals with Instruments	It deals with instruments like commercial bills (bill of exchange, treasury bill, commercial papers etc.)	It deals with instruments like shares, debentures, Government bonds, etc.,
4.	Money Value	Each single money market instrument is of large amount. A treasury bill is of minimum for one lakh. Each certificate of deposits or commercial paper is for minimum of Rs 25 lakh.	Each single capital market instrument is of small amount. Each share value is Rs 10. Each debenture value is Rs 100.
5.	Role of Major Institution	The central bank and commercial banks are the major institutions in the money market	Development banks and Insurance companies play a dominant role in the capital market

Discussion

66.	Money market is a market for purely ______ (a) Short-term funds(b) Long-term funds (c) Medium-term funds (d) None of these
Answer» (a) Short-term funds

Discussion

67.

Write any three differences between money market and capital market.

Answer»

Features	Money Market	Capital Market
Duration of Funds	It is a market for short-term loanable funds for a period of not exceeding one year.	It is a market for long-term funds exceeding period of one year.
Supply of Funds	This market supplies funds for financing current business operations working capital requirements of industries and short period requirements of the government.	This market supplies funds for financing the fixed capital requirements of trade and commerce as well as the long-term requirements of the government
Deals with Instruments	It deals with instruments like commercial bills (bill of exchange, treasury bill, commercial papers etc.).	It deals with instruments like shares, debentures, Government bonds, etc.,

Discussion

68.	….. is a primary function of commercial banks. (a) Safe deposit vault(b) Letter of credit (c) Accepting deposits (d) Transfer of funds
Answer» Correct option: (c) Accepting deposits

Discussion

69.

Distinguish between :Organized sector and Unorganized sector of money market.

Answer»

Organized Sector	Unorganized Sector
(a) The organized sector of the money market is within the direct purview of RBI regulation.	(a) This market is unorganized because its activities are not systematically coordinated by the RBI.
(b) It consist of Reserve Bank of India. Commercial Bank, Co-operative Bank, Regulated Financial Intermediaries, etc.	(b) The unorganized Indian Money market is largely made up of indigenous bankers, money lenders and unregulated non-bank financial intermediaries.

Discussion

Explore topic-wise InterviewSolutions in .

Find the odd word :Types of Bank Accounts.

Individual investors have lost confidence in the capital market due to (a) lack of financial instruments. (b) high transaction costs. (c) low returns. (d) financial scams.

Commercial banks act as intermediaries in the financial system to (a) make profits (b) accelerate the country’s economic growth. (c) mobilize the savings and allocating them to various sectors of the economy. (d) control the credit.

Find out names of the Central Banks of the following countries :(1) USA (2) Canada (3) Russia (4) Germany (5) China (6) UK (United Kingdom) (7) Sweden (8) France (9) Japan (10) Australia

Who are the participants of Money Market?

A marketable document of title to a time deposit for a specified period may be referred to as a _____ (a) Treasury Bill (b) Certificate of Deposit (c) Commercial Bill (d) Government Securities

What is a CD market?

Explain the types of Treasury Bills.

Define the term “Money Market”

Money Market provides _____ (a) Medium-term Funds (b) Short-term Funds (c) Long-term Funds (d) Shares

Debt Instruments are issued by Corporate Houses are raising short-term financial resources from the money market are called ___(a) Treasury Bills (b) Commercial Paper (c) Certificate of Deposit (d) Government Securities

What are the types of Commercial Bill?

Explain the Instruments of Money Market.

Define Money Market and Capital Market. Explain the difference between the Money -Market and Capital Market.

Money market is a market for purely ______ (a) Short-term funds(b) Long-term funds (c) Medium-term funds (d) None of these

Write any three differences between money market and capital market.

….. is a primary function of commercial banks. (a) Safe deposit vault(b) Letter of credit (c) Accepting deposits (d) Transfer of funds

Distinguish between :Organized sector and Unorganized sector of money market.