Question

A rise in call money rates makes other sources of finance such as commercial paper and certificates of deposit.

• A. Creates no effect on other sources.
• B. Cheaper in comparison with banks that raise funds from these sources.
• C. Expensive in comparison with banks that raise funds from these sources.
• D. None of the above

Answer 1

The correct option is B

Cheaper in comparison with banks that raise funds from these sources.

Answer (b) Cheaper in comparison with banks who raise funds from these sources.

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.