What are 'open market operations'?

Activities of SEBI registered brokers

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Selling of currency by the RBI

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Selling securities issued by the government

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Sale of shares by FIIs

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Solution

The correct option is D Selling securities issued by the government
Open market operation is the method that the central bank employs to modify the level of money circulating in the banking system. It does this by selling or buying back government securities. If it wants to contract the money supply it will sell government securities in order to reduce the money available with people in the economy, usually to curb inflationary pressures.

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Similar questions

Q. ABC Ltd. issued prospectus for the subscription of its shares for Rs.

500

crores in

2008

. The issue was oversubscribed by

20

times. The company issued shares to all the applicants on pro-rata basis. Later SEBI inspected the prospectus and found some misleading statement about the management of the company in it. SEBI imposed a penalty of Rs.

5

crores and banned its three executive directors for dealing in securities market for three years. Identify the function and its type performed by SEBI in the given case.

By purchasing government securities in the open market, the central bank intends to release greater money supply in the market.

ABC Ltd. issued a prospectus for the subscription of its shares for Rs.500 crores in 2008. The issue was oversubscribed by 20times. The company issued shares to all the applicants on a pro-rata basis. Later SEBI inspected the prospectus and found some misleading statement about the management of the company in it. SEBI imposed a penalty of Rs.5 crores and banned its three executive directors for dealing in the securities market for three years. Identity the function.

Q. are financial instruments required by Investors or Hedge Funds to invest in Indian securities without having to register with the SEBI.

___are known as a new issue market as it is the market for new long-term capital securities issued by the company.

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