Question
Consider the following statements regarding Open Market Operations:
Select the correct answer using the code given below:
- It is conducted by Commercial Banks
- It is conducted by RBI
- It is about debt securities
- It is about equity securities
Select the correct answer using the code given below:
Answer: Option A
Answer: (a)
Government issues only debt securities like treasury bills, cash management bills, dated securities and state development loans.
Anybody can give a loan (debt) to the government but they cannot own government i.e. they cannot purchase government shares. The government never issues shares.
‘Government’ is different from ‘government companies’ (PSUs) which can issue shares and bonds.
Open Market Operations is conducted by RBI where it buys or sells govt. bonds. (debt securities) So, (ii) & (iii) statements are true.
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Answer: (a)
Government issues only debt securities like treasury bills, cash management bills, dated securities and state development loans.
Anybody can give a loan (debt) to the government but they cannot own government i.e. they cannot purchase government shares. The government never issues shares.
‘Government’ is different from ‘government companies’ (PSUs) which can issue shares and bonds.
Open Market Operations is conducted by RBI where it buys or sells govt. bonds. (debt securities) So, (ii) & (iii) statements are true.
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