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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 a short-term finance used for interbank transactions.
4. ‘Zero-Coupon Bonds’ are the interest bearing short-term bonds issued by the Scheduled Commercial Banks to corporations.
2. ‘Certificate of Deposit’ is a long-term instrument issued by the Reserve Bank of India to a corporation.
3. ‘Call Money’ is a short-term finance used for interbank transactions.
4. ‘Zero-Coupon Bonds’ are the interest bearing short-term bonds issued by the Scheduled Commercial Banks to corporations.
Which of the statements given above is/are correct?
- a)1 and 2 only
- b)4 only
- c)1 and 3 only
- d)3 and 4 only
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
With reference to the Indian economy, consider the following statement...
Commercial paper is a commonly used type of unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable and inventories, and meeting other short-term liabilities. Maturities on commercial paper typically last several days, and rarely range longer than 270 days. So statement 1 is correct.
The Certificate of Deposit (CD) is an agreement between the depositor and the bank where a predetermined amount of money is fixed for a specific time period. It is issued by the Federal Deposit Insurance Corporation (FDIC) and regulated by the Reserve Bank of India, the CD is a promissory note, the interest on which is paid by the bank. CDs are short-term debt instruments issued by Banks. So statement 2 is not correct.
Call Money is short term finance used for inter-bank transactions. It has a maturity period of one day to fifteen days. Call money is a facility under which banks borrow money from each other to adjust short-term liquidity imbalances at rate of interest known as Call Rate. This rate keeps on changing from day to day and sometimes from hour to hour. So statement 3 is correct.
A zero-coupon bond is a debt security that does not pay interest but instead trades at a deep discount, rendering a profit at maturity, when the bond is redeemed for its full face value. These bonds have been traditionally issued by government, but banks are also allowed to issue them since last few years. But ZCBs are generally Long-Term Bonds. So statement 4 is not correct.
Therefore, the correct answer is (c).
Therefore, the correct answer is (c).
Most Upvoted Answer
With reference to the Indian economy, consider the following statement...
India is the world's seventh-largest economy in terms of nominal GDP.
2. The agriculture sector contributes the largest share to India's GDP.
3. India has a high unemployment rate, particularly among the youth.
All three statements are true.
2. The agriculture sector contributes the largest share to India's GDP.
3. India has a high unemployment rate, particularly among the youth.
All three statements are true.
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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 a short-term finance used for interbank transactions.4. ‘Zero-Coupon Bonds’ are the interest bearing short-term bonds issued by the Scheduled Commercial Banks to corporations.Which of the statements given above is/are correct?a)1 and 2 onlyb)4 onlyc)1 and 3 onlyd)3 and 4 onlyCorrect answer is option 'C'. Can you explain this answer?
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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 a short-term finance used for interbank transactions.4. ‘Zero-Coupon Bonds’ are the interest bearing short-term bonds issued by the Scheduled Commercial Banks to corporations.Which of the statements given above is/are correct?a)1 and 2 onlyb)4 onlyc)1 and 3 onlyd)3 and 4 onlyCorrect answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about 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 a short-term finance used for interbank transactions.4. ‘Zero-Coupon Bonds’ are the interest bearing short-term bonds issued by the Scheduled Commercial Banks to corporations.Which of the statements given above is/are correct?a)1 and 2 onlyb)4 onlyc)1 and 3 onlyd)3 and 4 onlyCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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 a short-term finance used for interbank transactions.4. ‘Zero-Coupon Bonds’ are the interest bearing short-term bonds issued by the Scheduled Commercial Banks to corporations.Which of the statements given above is/are correct?a)1 and 2 onlyb)4 onlyc)1 and 3 onlyd)3 and 4 onlyCorrect answer is option 'C'. Can you explain this answer?.
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 a short-term finance used for interbank transactions.4. ‘Zero-Coupon Bonds’ are the interest bearing short-term bonds issued by the Scheduled Commercial Banks to corporations.Which of the statements given above is/are correct?a)1 and 2 onlyb)4 onlyc)1 and 3 onlyd)3 and 4 onlyCorrect answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about 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 a short-term finance used for interbank transactions.4. ‘Zero-Coupon Bonds’ are the interest bearing short-term bonds issued by the Scheduled Commercial Banks to corporations.Which of the statements given above is/are correct?a)1 and 2 onlyb)4 onlyc)1 and 3 onlyd)3 and 4 onlyCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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 a short-term finance used for interbank transactions.4. ‘Zero-Coupon Bonds’ are the interest bearing short-term bonds issued by the Scheduled Commercial Banks to corporations.Which of the statements given above is/are correct?a)1 and 2 onlyb)4 onlyc)1 and 3 onlyd)3 and 4 onlyCorrect answer is option 'C'. Can you explain this answer?.
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