Which of the following is the most active segment of the money market in India?

Call Money/Notice Money Market

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Repo/Reverse Repo

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Commercial Paper (CP)

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Certificate of Deposit (CD)

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Solution

The correct option is A Call Money/Notice Money Market
A Money Market may be defined as the market for lending and borrowing of short-term funds. It is the place where the short-term surplus investable funds at the disposal of banks and other financial institutions are bid by borrowers comprising companies, individuals and the Government.
The organised money market in India has a number of sub-markets such as the Treasury Bills Market; the Commercial Bills Market and the Inter-Bank Call Money Market.

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Similar questions

Q3. Financial market is classified into money market and capital market. Which of the following are money market instruments?

1. Treasury Bills 2. Preference shares

3. Commercial papers

Select the correct answer using the codes given below

Q41) With regarding to money market in India, consider the following statements

i) Money market is the market for short term lending and borrowing and deals only with secured loans

ii) Call money and notice money are important instruments of money market

iii) If the lending/borrowing is for only one day it is called call money

iv) If the lending /borrowing is for 2-14 days it is called notice money

Identify the correct statement/s

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