ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Commercial paper
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Stocks
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Corporate bonds
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Mortgage
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Detailed explanation-1: -Detailed Solution. The correct answer is Commercial paper. Key Points Capital market: A capital market is a financial market in which investors buy and sell financial securities, such as bonds and shares.
Detailed explanation-2: -The Reserve Bank of India is India’s central banking institution, which controls the monetary policy of the Indian rupee. RBI is not a part of capital market.
Detailed explanation-3: -Capital markets consist of securities with maturities of more than 270 days, while the money market comprises all fixed-income instruments that mature in 270 days or fewer. The commercial paper falls into the latter category and is a common fixture in many money market mutual funds.
Detailed explanation-4: -Treasury bill and commercial paper are the instruments of money market not capital market.
Detailed explanation-5: -Stock is a capital market instrument issued by companies to raise capital. It is also known as equity share. Investment in company stocks gives you ownership and voting rights in the company.