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Assertion: Call Money, Notice Money, and Term Money are all types of money market instruments used for short-term borrowing and lending.
Reason: These instruments facilitate efficient allocation of funds in the capital markets.
- a)Both Assertion and Reason are true, and the Reason is a correct explanation of the Assertion.
- b)Both Assertion and Reason are true, but the Reason is not a correct explanation of the Assertion.
- c)Assertion is true, but the Reason is false.
- d)Assertion is false, but the Reason is true.
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Assertion: Call Money, Notice Money, and Term Money are all types of m...
Both the Assertion and Reason hold true in this context. Call Money, Notice Money, and Term Money are indeed distinct types of money market instruments employed for short-term borrowing and lending. These instruments play an essential role in providing financial institutions with avenues to manage their short-term liquidity needs and allocate funds efficiently within the money market. The Reason aptly complements the Assertion by explaining that these money market instruments contribute to the broader goal of efficient fund allocation within the capital markets. By enabling financial entities to access short-term funds and manage their immediate liquidity requirements, Call Money, Notice Money, and Term Money collectively contribute to the optimal utilization of resources within the money market, thus aligning with the overarching objective of efficient capital allocation across various financial instruments and entities.
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Assertion: Call Money, Notice Money, and Term Money are all types of m...
Understanding Call Money, Notice Money, and Term Money
Call Money, Notice Money, and Term Money are essential instruments in the money market, facilitating short-term borrowing and lending between financial institutions.
Assertion Explained
- Call Money: Funds borrowed or lent for one day (overnight).
- Notice Money: Borrowed or lent for a period ranging from 2 to 14 days.
- Term Money: Funds borrowed or lent for a period of more than 14 days but up to one year.
These instruments are crucial for maintaining liquidity in the banking system, allowing banks to manage their short-term funding needs effectively.
Reason Explained
- These instruments enable efficient allocation of funds, ensuring that surplus funds can be quickly channeled to institutions in need of liquidity.
- They help stabilize interest rates in the money market by allowing institutions to meet their immediate funding requirements.
Conclusion
Both the assertion and reason are true as they highlight the role of these money market instruments in the financial ecosystem. The reason provided does accurately explain the assertion, as the efficient allocation of funds is a direct consequence of the existence and use of Call Money, Notice Money, and Term Money.
Thus, the correct answer is option A: Both Assertion and Reason are true, and the Reason is a correct explanation of the Assertion.
Call Money, Notice Money, and Term Money are essential instruments in the money market, facilitating short-term borrowing and lending between financial institutions.
Assertion Explained
- Call Money: Funds borrowed or lent for one day (overnight).
- Notice Money: Borrowed or lent for a period ranging from 2 to 14 days.
- Term Money: Funds borrowed or lent for a period of more than 14 days but up to one year.
These instruments are crucial for maintaining liquidity in the banking system, allowing banks to manage their short-term funding needs effectively.
Reason Explained
- These instruments enable efficient allocation of funds, ensuring that surplus funds can be quickly channeled to institutions in need of liquidity.
- They help stabilize interest rates in the money market by allowing institutions to meet their immediate funding requirements.
Conclusion
Both the assertion and reason are true as they highlight the role of these money market instruments in the financial ecosystem. The reason provided does accurately explain the assertion, as the efficient allocation of funds is a direct consequence of the existence and use of Call Money, Notice Money, and Term Money.
Thus, the correct answer is option A: Both Assertion and Reason are true, and the Reason is a correct explanation of the Assertion.
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Assertion: Call Money, Notice Money, and Term Money are all types of money market instruments used for short-term borrowing and lending.Reason: These instruments facilitate efficient allocation of funds in the capital markets.a)Both Assertion and Reason are true, and the Reason is a correct explanation of the Assertion.b)Both Assertion and Reason are true, but the Reason is not a correct explanation of the Assertion.c)Assertion is true, but the Reason is false.d)Assertion is false, but the Reason is true.Correct answer is option 'A'. Can you explain this answer?
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Assertion: Call Money, Notice Money, and Term Money are all types of money market instruments used for short-term borrowing and lending.Reason: These instruments facilitate efficient allocation of funds in the capital markets.a)Both Assertion and Reason are true, and the Reason is a correct explanation of the Assertion.b)Both Assertion and Reason are true, but the Reason is not a correct explanation of the Assertion.c)Assertion is true, but the Reason is false.d)Assertion is false, but the Reason is true.Correct answer is option 'A'. Can you explain this answer? for Bank Exams 2025 is part of Bank Exams preparation. The Question and answers have been prepared according to the Bank Exams exam syllabus. Information about Assertion: Call Money, Notice Money, and Term Money are all types of money market instruments used for short-term borrowing and lending.Reason: These instruments facilitate efficient allocation of funds in the capital markets.a)Both Assertion and Reason are true, and the Reason is a correct explanation of the Assertion.b)Both Assertion and Reason are true, but the Reason is not a correct explanation of the Assertion.c)Assertion is true, but the Reason is false.d)Assertion is false, but the Reason is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Bank Exams 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Assertion: Call Money, Notice Money, and Term Money are all types of money market instruments used for short-term borrowing and lending.Reason: These instruments facilitate efficient allocation of funds in the capital markets.a)Both Assertion and Reason are true, and the Reason is a correct explanation of the Assertion.b)Both Assertion and Reason are true, but the Reason is not a correct explanation of the Assertion.c)Assertion is true, but the Reason is false.d)Assertion is false, but the Reason is true.Correct answer is option 'A'. Can you explain this answer?.
Assertion: Call Money, Notice Money, and Term Money are all types of money market instruments used for short-term borrowing and lending.Reason: These instruments facilitate efficient allocation of funds in the capital markets.a)Both Assertion and Reason are true, and the Reason is a correct explanation of the Assertion.b)Both Assertion and Reason are true, but the Reason is not a correct explanation of the Assertion.c)Assertion is true, but the Reason is false.d)Assertion is false, but the Reason is true.Correct answer is option 'A'. Can you explain this answer? for Bank Exams 2025 is part of Bank Exams preparation. The Question and answers have been prepared according to the Bank Exams exam syllabus. Information about Assertion: Call Money, Notice Money, and Term Money are all types of money market instruments used for short-term borrowing and lending.Reason: These instruments facilitate efficient allocation of funds in the capital markets.a)Both Assertion and Reason are true, and the Reason is a correct explanation of the Assertion.b)Both Assertion and Reason are true, but the Reason is not a correct explanation of the Assertion.c)Assertion is true, but the Reason is false.d)Assertion is false, but the Reason is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Bank Exams 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Assertion: Call Money, Notice Money, and Term Money are all types of money market instruments used for short-term borrowing and lending.Reason: These instruments facilitate efficient allocation of funds in the capital markets.a)Both Assertion and Reason are true, and the Reason is a correct explanation of the Assertion.b)Both Assertion and Reason are true, but the Reason is not a correct explanation of the Assertion.c)Assertion is true, but the Reason is false.d)Assertion is false, but the Reason is true.Correct answer is option 'A'. Can you explain this answer?.
Solutions for Assertion: Call Money, Notice Money, and Term Money are all types of money market instruments used for short-term borrowing and lending.Reason: These instruments facilitate efficient allocation of funds in the capital markets.a)Both Assertion and Reason are true, and the Reason is a correct explanation of the Assertion.b)Both Assertion and Reason are true, but the Reason is not a correct explanation of the Assertion.c)Assertion is true, but the Reason is false.d)Assertion is false, but the Reason is true.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for Bank Exams.
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ample number of questions to practice Assertion: Call Money, Notice Money, and Term Money are all types of money market instruments used for short-term borrowing and lending.Reason: These instruments facilitate efficient allocation of funds in the capital markets.a)Both Assertion and Reason are true, and the Reason is a correct explanation of the Assertion.b)Both Assertion and Reason are true, but the Reason is not a correct explanation of the Assertion.c)Assertion is true, but the Reason is false.d)Assertion is false, but the Reason is true.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice Bank Exams tests.
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