Tag: money markets

Quizzes (0) Questions (28)

Questions Related to money markets

Multiple choice business organisation capital market money markets participants in money market types of markets

The statistical technique used by Altman to distinguish between a bankrupt and a non bankrupt firm is ______________.

  1. Multiple Discriminant Analysis

  2. Correlation

  3. Joint Probability

  4. Multiple Regression Analysis

  5. Both (B) and (D) above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Multiple discriminant Analysis (MDA) is the statistical technique that is used to distinguish between bankrupt and non bankrupt firms.

Multiple choice business organisation capital market money markets participants in money market types of markets

A _________ is basically an instrument of short-term borrowing by the Government of India maturing in less than one year.

  1. call money

  2. treasury bill

  3. commercial paper

  4. certificate of deposit
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A treasury bill is basically an instrument of short-term borrowing by the Government of India maturing in less than one year.  Treasury bills enable government to get short term borrowings as these bills are sold to banks and general public. Maturity of Treasury bills varies from 14 to 364 days.

Multiple choice business organisation capital market money markets participants in money market types of markets

Money market mutual funds ________.

  1. enable individuals and small businesses to invest indirectly in money-market instruments

  2. are available only to high net-worth individuals

  3. are used in acquiring and placing mortgages

  4. are mostly tradable on stock exchange
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Money market mutual funds are used in acquiring and placing mortgages. Money market deals with short term securities having maximum tenure of 1 year. Money market mutual funds can be defined as short term liquid investments which invest in high quality money market instruments.

Multiple choice business organisation capital market money markets participants in money market types of markets

A __________ is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms.

  1. money market

  2. treasury bill

  3. certificate of deposit

  4. commercial bill
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A commercial bill is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms. Commercial bills are known as trade bills or accommodation bills. These are common instruments used in credit purchase and sale. These have short term maturity period generally 90 days and can be discounted with bank even before the maturity period.

Multiple choice business organisation capital market money markets participants in money market types of markets

The money market is a market for __________ funds which deals in monetary assets whose period of maturity is upto one year.

  1. short-term

  2. long-term

  3. medium-term

  4. nano-term
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The money market is a market for short-term funds which deals in monetary assets whose period of maturity is up to one year. Generally money market is the source of finance for working capital. Transactions of money market include lending and borrowing of cash for a short period of time and also sale and purchase of securities having one year time.

Multiple choice business organisation capital market money markets participants in money market types of markets

All of the following are essentials of a valid acceptance of an instrument, except _____.

  1. must be conditional.

  2. signed by drawee or his agent.

  3. accepted must appear on the holder.

  4. accepted of valid Acceptance.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A valid acceptance of a bill of exchange must be absolute and unconditional. If an acceptance is conditional, it is generally considered a qualified acceptance, which may not be binding on all parties without consent.

Multiple choice business organisation capital market money markets participants in money market types of markets

Money market mutual funds ____________________________.

  1. Enable individuals and small business to invest indirectly in money-market instruments

  2. Are available only to high net-worth individuals

  3. Are used in acquiring and placing mortgages

  4. Are mostly tradable on stock exchange
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Money market mutual funds are used in acquiring and placing mortgages. Money market mutual funds can be referred to short-run liquid investments which invest in high quality money market instruments. It helps to provide investors with a reasonable returns over a period up to 1 year.

Multiple choice business organisation capital market money markets participants in money market types of markets

In the call/notice money market, which of the following participants is allowed to trade?

  1. All Banks, Primary Dealers and Mutual Funds

  2. Insurance companies

  3. Only Commercial Banks

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

The call/notice money market has gradually opened up to various participants, including mutual funds and insurance companies, in addition to commercial banks and primary dealers. Therefore, 'All of the above' is the most comprehensive answer in a modern context.