Question

Which of the following statements is not true with regard to call money?

• A. Its maturity period ranges from one day to fifteen days.
• B. It is used for inter-bank transactions.
• C. There is a direct relationship between call rates and other short-term money market instruments.
• D. It is short-term finance repayable on demand.

Answer 1

The correct option is C

There is a direct relationship between call rates and other short-term money market instruments.

.Answer (c) There is a direct relationship between call rates and other short-term money market instruments.

Explanation: Call money is any sort of short-term, interest acquiring monetary credit that the borrower needs to take care of quickly at whatever point the bank requests it. Call money permits banks to procure revenue or interest, known as the call loan rate, on their excess or surplus assets. Call money is commonly utilised by financier firms and brokerage firms for transient funding needs.