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Test: Money Market and Capital Market structure in India- 1 - B Com MCQ


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10 Questions MCQ Test - Test: Money Market and Capital Market structure in India- 1

Test: Money Market and Capital Market structure in India- 1 for B Com 2024 is part of B Com preparation. The Test: Money Market and Capital Market structure in India- 1 questions and answers have been prepared according to the B Com exam syllabus.The Test: Money Market and Capital Market structure in India- 1 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Money Market and Capital Market structure in India- 1 below.
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Test: Money Market and Capital Market structure in India- 1 - Question 1

What is the primary function of the "Call Money Market"?

Detailed Solution for Test: Money Market and Capital Market structure in India- 1 - Question 1
The Call Money Market deals with call loans, where institutions borrow and lend short-term funds on a day-to-day basis.
Test: Money Market and Capital Market structure in India- 1 - Question 2

What role does the "Clearing Corporation of India Limited (CCIL)" play in the Indian money market?

Detailed Solution for Test: Money Market and Capital Market structure in India- 1 - Question 2
The CCIL is responsible for clearing transactions in government securities and repurchase agreements on the Negotiated Dealing System.
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Test: Money Market and Capital Market structure in India- 1 - Question 3

What is the primary reason behind the seasonality of the Indian money market?

Detailed Solution for Test: Money Market and Capital Market structure in India- 1 - Question 3
The Indian money market experiences seasonality due to its agricultural-based economy, with higher demand for funds during busy agricultural seasons.
Test: Money Market and Capital Market structure in India- 1 - Question 4
What is the primary function of a money market?
Detailed Solution for Test: Money Market and Capital Market structure in India- 1 - Question 4
The money market primarily deals with short-term funds and provides liquidity to borrowers while meeting the short-term requirements of borrowers.
Test: Money Market and Capital Market structure in India- 1 - Question 5
Which financial institution plays a pivotal role in the Indian money market?
Detailed Solution for Test: Money Market and Capital Market structure in India- 1 - Question 5
The central bank, Reserve Bank of India (RBI), holds a strategic position in the Indian money market. It regulates and influences the market by controlling liquidity and interest rates.
Test: Money Market and Capital Market structure in India- 1 - Question 6
What is the purpose of a "Discount Market" in the money market?
Detailed Solution for Test: Money Market and Capital Market structure in India- 1 - Question 6
The Discount Market specializes in discounting short-term commercial bills, providing flexibility to banks and financing home and foreign trade.
Test: Money Market and Capital Market structure in India- 1 - Question 7
Which committee was formed in 1984 to review the Indian monetary system?
Detailed Solution for Test: Money Market and Capital Market structure in India- 1 - Question 7
The Sukhamoy Chakravarty Committee was appointed in 1984 to review the Indian monetary system and suggest reforms.
Test: Money Market and Capital Market structure in India- 1 - Question 8
What is the purpose of a "Money Market Mutual Fund (MMMF)"?
Detailed Solution for Test: Money Market and Capital Market structure in India- 1 - Question 8
MMMFs were established to provide short-term investment revenue by selling units to corporate and individual investors.
Test: Money Market and Capital Market structure in India- 1 - Question 9
How has the interest rate policy in the Indian money market changed over time?
Detailed Solution for Test: Money Market and Capital Market structure in India- 1 - Question 9
The interest rate policy has shifted towards a more liberal approach, where interest rates are determined by the working of market forces, except for a few regulations.
Test: Money Market and Capital Market structure in India- 1 - Question 10
What major role does the Reserve Bank of India (RBI) play in the Indian money market?
Detailed Solution for Test: Money Market and Capital Market structure in India- 1 - Question 10
The RBI holds a pivotal role in regulating and influencing the Indian money market through various policies and mechanisms.
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