Financial Markets
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Indian Economy and Indian Financial System — JAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is a financial market?
A financial market is a marketplace where buyers and sellers participate in the trade of financial assets such as equities, bonds, currencies, and derivatives. It facilitates the transfer of funds from surplus units to deficit units in the economy.
What is the difference between the money market and the capital market in terms of maturity?
Money market deals with short-term instruments (up to one year); capital market with long-term.
What is the primary distinction between money market and capital market?
The money market deals in short-term instruments with maturity up to one year, while the capital market deals in long-term instruments with maturity exceeding one year. Money market provides liquidity, whereas capital market facilitates long-term investment.
What is the minimum amount required to invest in a Certificate of Deposit (CD) in India?
Minimum investment in a CD is Rs. 1 lakh.
Which regulatory body oversees the Indian capital market?
The Securities and Exchange Board of India (SEBI) regulates and oversees the Indian capital market. It was established in 1992 under the SEBI Act to protect investors and develop the securities market.
What is a 91-day Treasury Bill and what is its purpose?
A 91-day T-Bill is a short-term government borrowing instrument maturing in 91 days.
What is a Treasury Bill and who issues it?
A Treasury Bill (T-Bill) is a short-term government debt instrument issued by the Government of India through the Reserve Bank of India. T-Bills are issued with maturities of 91 days, 182 days, and 364 days.
Which institution acts as the regulator of the money market in India?
The Reserve Bank of India (RBI) regulates the Indian money market.
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