Consider the following statements in regard to money market in India:
It is a market for short-term and long-term funds with maturity ranging from overnight to one year.
It acts as an instrument of liquidity adjustment for the Central Bank.
Which of the statements given above is/are correct?
Options:
A . 2 only
B . Both 1 and 2
C . 1 only
D . Neither 1 nor 2
Answer: Option A Answer: (a)The money market consists of financial institutions and dealers in money or credit who wish to either borrow or lend. Participants borrow and lend for short periods of time, typically up to thirteen months. Money market trades in short-term financial instruments commonly called “paper.”
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