Multiple choice

Who are the participants in Call Money Market?

  1. Primary Dealers(PD) and selected Mutual Funds (MFs)

  2. Insurance Companies and Development Financial Institutions

  3. Banks

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Call Money Market is a segment of the money market where financial institutions borrow and lend funds for very short periods, typically overnight or up to 14 days. Primary Dealers and Mutual Funds participate to manage their daily liquidity requirements. Banks are the most active participants, but other institutions like insurance companies and development financial institutions also engage in this market to optimize their short-term cash flows. All the listed entities are legitimate participants in the Call Money Market.

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