Q. Consider the following statements regarding “call money market”:
1.It is an inter-bank money market where funds are borrowed and lent.
2.Under these funds can be borrowed/raised for a maximum period up to 14 days.
Which of the statements given above is/are correct?
Answer: C
Notes:
Explanation: Call Money Market (CMM): This is basically an inter-bank money market where funds are borrowed and lent, generally, for one day—that is why this is also known as over-night borrowing market (also called money at call).
- Fund can be borrowed/raised for a maximum period up to 14 days (called short notice).
- Borrowing in this market may take place against securities or without securities.
Source: Ramesh Singh
