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Consider the following statements regarding financial markets in India:
Short term financial market is known as the Capital Market, while the long term financial market is known as the Money Market.
Short term financial market fulfils requirements of funds for a period maximum Up to 90 days.
Which of the statements given above is/are Correct?
- a)1 only
- b)2only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'D'. Can you explain this answer?
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Most Upvoted Answer
Consider the following statements regarding financial markets in Indi...
The given statements regarding financial markets in India are not correct. Let's analyze each statement separately:
1) Short-term financial market is known as the Capital Market, while the long-term financial market is known as the Money Market.
This statement is incorrect. In India, the capital market refers to the market for long-term securities, such as shares and debentures. It consists of both primary and secondary markets. The primary market is where new securities are issued, while the secondary market is where existing securities are traded. On the other hand, the money market refers to the market for short-term funds, typically with maturities of up to one year. It includes instruments like Treasury Bills, Commercial Papers, Certificates of Deposit, etc. Therefore, the short-term financial market is known as the Money Market, not the Capital Market.
2) Short-term financial market fulfills requirements of funds for a period maximum up to 90 days.
This statement is also incorrect. The money market in India fulfills the requirements of funds for a short-term period, typically up to one year, rather than just 90 days. The instruments traded in the money market have varying maturities, ranging from overnight to one year. The maturity of Treasury Bills is typically 91 days, but other money market instruments like Commercial Papers and Certificates of Deposit can have varying maturities. Therefore, the money market caters to short-term funding needs for a period of up to one year, not limited to 90 days.
In conclusion, both statements given in the question are incorrect. The short-term financial market in India is known as the Money Market, and it fulfills the requirements of funds for a short-term period of up to one year, not just 90 days. Therefore, the correct answer is option 'D' - Neither 1 nor 2.
1) Short-term financial market is known as the Capital Market, while the long-term financial market is known as the Money Market.
This statement is incorrect. In India, the capital market refers to the market for long-term securities, such as shares and debentures. It consists of both primary and secondary markets. The primary market is where new securities are issued, while the secondary market is where existing securities are traded. On the other hand, the money market refers to the market for short-term funds, typically with maturities of up to one year. It includes instruments like Treasury Bills, Commercial Papers, Certificates of Deposit, etc. Therefore, the short-term financial market is known as the Money Market, not the Capital Market.
2) Short-term financial market fulfills requirements of funds for a period maximum up to 90 days.
This statement is also incorrect. The money market in India fulfills the requirements of funds for a short-term period, typically up to one year, rather than just 90 days. The instruments traded in the money market have varying maturities, ranging from overnight to one year. The maturity of Treasury Bills is typically 91 days, but other money market instruments like Commercial Papers and Certificates of Deposit can have varying maturities. Therefore, the money market caters to short-term funding needs for a period of up to one year, not limited to 90 days.
In conclusion, both statements given in the question are incorrect. The short-term financial market in India is known as the Money Market, and it fulfills the requirements of funds for a short-term period of up to one year, not just 90 days. Therefore, the correct answer is option 'D' - Neither 1 nor 2.
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Consider the following statements regarding financial markets in Indi...
Option (d) is the correct answer. Financial markets in every economy are having two separate segments today, one catering to the requirements of Short-term funds and the other to the requirements of long-term funds.
Statement 1 is incorrect. The short-term financial market is known as the money market, while the long-term financial market is known as the capital market.
Statement 2 is incorrect- The short-term financial market i.e. the money market fulfils the requirements of funds for a period up to 364 days while long-term financial marketi.e.the capital market does the same for the period above 364 days.
- It is Fund-term market funds.
- It’s maturity period of up to one year.
- It trades with assets that can be transformed into cash easily.
- All transactions take place through phone, email, text, etc.
- Broker not required for the Transaction
- The components of a money market are the Commercial Banks,Non- banking financial companies,and CentralBanketc.Important features of the capital market are:
- Unites entrepreneurial borrowers and savers
- Deals long-term investments.
- Agents are required.
- It is controlled by government rules and regulations.
- Deals in both commercial and non-commercial securities.
- Foreign Investors.
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Consider the following statements regarding financial markets in India: Short term financial market is known as the Capital Market, while the long term financial market is known as the Money Market. Short term financial market fulfils requirements of funds for a period maximum Up to 90 days. Which of the statements given above is/are Correct?a)1 onlyb)2onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer?
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Consider the following statements regarding financial markets in India: Short term financial market is known as the Capital Market, while the long term financial market is known as the Money Market. Short term financial market fulfils requirements of funds for a period maximum Up to 90 days. Which of the statements given above is/are Correct?a)1 onlyb)2onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. 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 Consider the following statements regarding financial markets in India: Short term financial market is known as the Capital Market, while the long term financial market is known as the Money Market. Short term financial market fulfils requirements of funds for a period maximum Up to 90 days. Which of the statements given above is/are Correct?a)1 onlyb)2onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding financial markets in India: Short term financial market is known as the Capital Market, while the long term financial market is known as the Money Market. Short term financial market fulfils requirements of funds for a period maximum Up to 90 days. Which of the statements given above is/are Correct?a)1 onlyb)2onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'D'. Can you explain this answer?.
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