Difference between Money Markets and Capital Markets Archives

Banking Awareness Study Material – Money Market And Capital Market

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Financial Market

Financial Market is a transfer process between lender and debtor through which the transfer of financial fund can be done easily. It provides safe exchange of financial assets. It provides liquidity to investors in the sale of financial assets and also ensures the minimum cost of exchange and related information.

Components of Indian Financial Market
Components of Indian financial market are as follows

Money Market It is used by a wide array of participants from a company raising money by selling commercial paper into the market to an investor purchasing CDs as a safe place to park money in the short term.
Capital Market It is a market for buying and selling equity and debt instruments. Capital market channel savings and investment among suppliers of capital such as retail investors and institutional investors and users of capital like businesses,government and individuals.
Commodity Market It is a market that trades in primary rather than manufactured products. Soft commodities are agricultural products such as wheat, coffee and sugar. Hard commodities are mined such as gold, rubber and oil.
Derivatives Market It is the financial market for derivatives, financial instruments like future contracts or options, which are derived from other forms of assets.
Insurance Market Objective of this market is the equitable transfer of the risk of a loss from one entity to another. It is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss.
Foreign Exchange Market The Foreign Exchange Market (Forex, FX or currency market) is a global decentralised market for the trading of currencies. The main participants in this market are the larger international banks.

Money Market
The cluster of financial institutions that deal in short term securities and loans, gold and foreig exchange are termed as money market.

The money market is a key component of the financial system, as it is the function of monetary operations conducted by the Central Bank in its pursuit of Monetary policy objectives. It is a market for short term funds with maturity ranging from overnight to one year and includes financial instruments that are deemed to be close substitutes of money.

Functions of Money Market
The money market performs three broad functions which are as follows

It provides an equilibrating mechanism for demand and supply of short term funds.
It enables borrowers and lenders of short term funds to fulfill their borrowing and investment requirements at an efficient market clearing price.
It provides an avenue for Central Bank intervention in influencing both quantum and cost of liquidity in the financial system, thereby transmitting Monetary Policy impulses to the real economy.

Types of Money Market
In Indian money market, Reserve Bank of India plays the central role, as it regulates and controls the money market. Indian money market is mainly divided into two parts

Organised Sector It comprises of all the public sector banks and foreign exchange banks except Reserve Bank of India.
Unorganised Sector It comprises of domestic bankers and moneylenders. They do not have been given any financial validity or certification by any financial institution. They are commonly found in underdeveloped areas, e.g. moneylenders landlord, broker, committee, etc.

Sub-Markets and Instruments

A specialised sub-division of a market is known as sub-market. In Indian money market, sub-market is an inevitable part. It includes call money market, bill market, etc.

Call Money Market
The call/notice money market forms an important segment of the Indian money market. It is an amount borrowed or lent on demand for a very short period.If the period is greater than 1 day and upto 14 days, it is called the notice money otherwise, the amount is known as call money.

No collateral security is needed to cover these transactions. This is a completely inter bank market. Interest rates are market determined.

In view of the short tenure of these transactions, both borrowers and lenders are required to have current accounts with Reserve Bank of India (RBI).

Bill Market
The underlying purpose of developing the bill market was to enable banks and other financial institutions to invest their surplus funds profitably by selecting appropriate maturities.

Some types of bill market are as follows

Commercial Bill It is the market that deals in commercial bills. Commercial bills of exchange are negotiable instruments drawn by the seller or drawer of the goods of the buyer or drawee of the goods for the value of the goods delivered. These bills are called trade bills. These trade bills sure called commercial bills when they are accepted by commercial banks. Duration of commercial bill is 1 to 14 days only.
Treasury Bills (T-Bills) It is an instrument for short term borrowing by the government. The bills are issued by tender to the money market and to government departments through tap issues. Tenders are invited every \freek from bankers, discount houses and brokers.On the one hand, T-bills provide the government with a highly flexible and relatively cheap means of borrowing money to meet its fluctuating needs for cash and on the other, the bills provide a sound security for dealings in the money market. The Reserve Bank of India, being the banker to the government, issues treasury bills at a discount.

There are four types of treasury bills

14 days T-bill
91 days T-bill
182 days T-bill
364 days T-bill

The Reserve Bank now auctions 91 days T-bills on a weekly basis and 182 days T-bills (re-introduced in April, 2005) and 364 days T-bills on a fortnightly basis, on behalf of the Central Government. The Reserve Bank has been paying special attention to this market segment.

Commercial Paper (CP): Commercial Paper is issued in the form of a promissory note, sold directly by the issuer to investors or else placed by the borrowers through agents such as merchant banks and security houses. CP can be issued in denominations of ? 5 lakh or multiples thereof.

These papers have a maturity of minimum 7 days and maximum of upto 1 year from the date of issue. These are negotiable and transferable by endorsement.

Promissory Note (PNs): It is a legal document between a lender and a borrower, whereby the latter agrees to certain conditions for the repayment of the sum of money borrowed. When one borrows from a commercial bank, he signs a promissory note.

Particular forms of promissory notes, known as commercial paper, can be bought and sold. They are usually issued by large corporations, but in some countries. Promissory notes are a common form of small business finance.

Certificate of Deposits (CDs): It is a negotiable claim issued by a bank in return for a term deposit. Certificates of Deposits (CDs) are securities that are purchased for less than their face value, which is the bank’s promise to repay the deposit and thus, offer a yield to maturity. Certificate of Deposits were first issued in New York in the 1960s and thus, denominated in dollars.

Sterling Certificate of Deposits followed in 1968. Maturity period of Certificate of Deposits is from 7 months to 1 year. Certificate of Deposits is issued for ₹ 1 lakh or its multiples.

Unorganised Money Market
The sector consists of unregulated non-bank financial intermediaries such as moneylender’s chit funds, nidhis, etc. Chit funds are savings institutions. They are of various types and do not have any standardised form. Chit funds have regular members, who make periodic contributions. Organised chit funds are regulated by the Registrar of Chit Funds and the relevant legislation in this regard is the Chit Funds Act, 1982. There is however, regulatory confusion since Collective Investment Schemes (CIS) cure to be registered and regulated by SEBI. Many chit funds take advantage of the regulatory loopholes.

Money in Financial Market
Money is an object or record that is generally accepted as payment for goods and services and repayment of debts in a given socio-economic context of country. Any kind of object or secure variable record that fulfills these functions can be considered as money.

Adjacent Money: It is not exact money, but near to money. Because it’s nature of liquidity is more in comparison to others like bond, government debenture, etc.

Different Types of Money

Three main types (forms) of money in a modern economy metallic money, paper money and credit money. Economists, however, further classify money into many other forms.

The important types of money are explained below

Metallic Money: Money made up of any metal is called’metallic money. It refers to coins that are made up of various metals like gold, silver, nickel, copper, etc. The right of minting coins, is the monopoly of the state.

Metallic money is further classified into

Standard Money: Standard money or full bodied money is that money whose face value (value as money) is equal to the intrinsic value (value as commodity). Standard money/coins are generally made up of gold and silver.
Token Money: Token money is that money whose face value (value as money) is greater than its intrinsic value (value as commodity). Token money/coins are generally made up of cheaper metals like copper, nickel etc; (Indian ₹1 coin is token money).
Subsidiary money: The purpose of subsidiary money is to help the token money. All coins from 50 paise to ₹10 is the subsidiary money. It is legal money.

Paper Money
Money made up of paper is called paper money. Paper money consists of currency notes issued by the government or the Central Bank of a country.

Paper money is of following types

Representative Paper Money The paper money which is fully backed by gold and silver reserves is called representative paper money.
Convertible Paper Money It is that paper money which is convertible into standard coins.
Inconvertible Paper Money It is that paper money which is not convertible into standard coins or valuable metals.
Fiat Money Paper money which circulates on the authority (i.e. fiat) of the government is fiat money. Fiat money is created and issued by the state. It is only a variety of inconvertible paper money.

Acceptable Money
On the basis of general acceptability, money can be categorised into legal tender money and non-legal tender money (optional money).

Legal Tender Money
It refers to that money which the state and the people accept as means of payment in discharge of debts. Legal tender money is enforced by law. No one can refuse to accept it as a means of payment.

Legal tender money may be of two types

Limited Legal Tender Money It is accepted only upto a certain limit, e.g. In India, the small coins of 50 paise is legal tender money only upto a sum of₹ 10.
Unlimited Legal Tender Money It is that money which has to be accepted as a medium of payment upto any amount. In India, 50 paise coins, ₹1, ₹ 2,₹5 coins and currency notes of all denominations are unlimited legal tender money.

Non-Legal Tender Money: It is also known as optional money. It refers to that money which may or may not be accepted as a means of payment. Optional money has no legal sanction. No one can be forced to accept optional money. Different credit instruments like cheques, bankdrafts, bill of exchange, treasury bills, insurance policies, bonds etc; are examples of optional money.

Demonetization: Demonetization is the act of Banning/taking back of a currency unit of its status as legal tender. Demonetization is necessary whenever there is a change of national currency. The old unit of currency must be retired and replaced with a new currency unit.

History of Demonetization in India: PM Narendra Modi has demonetised ₹ 500 and ₹ 1000 notes from 9th Nov, 2016 similar banknote demonetisation have been taken in the past. In January 1946, banknotes of ₹ 1000 and ₹ 100 were withdrawn and new notes of ₹ 1000,₹ 50 and ₹ 10000 were introduced in 1954. The Janata Party coalition government had again demonetised banknotes of? 1000, ₹5000 and ₹ 10000 on 16 Jan, 1978 as a means to curb counterfeit money and black money.

Monetary Standards
It refers to the commodity that fixes the value of the standard money used in a country. Monetary standard, on the other hand, relates to commodity by which the standard money unit is determined. A sound monetary standard aims at the following

Stability in the internal value of the currency through internal price stability.
Stability in the external value of the currency through exchange rate stability.

Monetary Standards in India
These are as follows

Gold Exchange Standard In 1898, Fowler Committee was appointed and on their recommendations, gold standard was established in India.This standard was used till 1914-15 but after the first world war put to an end the volatility of money in gold.

Paper Currency in India Reserve Bank of India was established in 1935 as Central Bank ofIndia and controller of credit. British Government had given right of issuing of currency notes to Bank of Bengal, but from 1st April, 1935, the only rights of issuing currency was given to RBI.

Capital Market

Capital market is one of the most important segments of the Indian financial system. It is the market available to the companies for meeting their requirements of the long term funds. It refers to all the facilities and the institutional arrangements for borrowing and lending funds. In other words, it is concerned with the raising of capital money for purposes of making long term investments.

The demand for long term capital comes predominantly from private sector manufacturing , industries, agriculture sector, trade and to government agencies, while the supply of funds for the capital market comes largely from individual and corporate savings, banks, insurance companies, specialized financing agencies and the surplus of governments. The Indian capital market is broadly divided into the following

Gilt edged market
The Industrial Securities Market

Securities Exchange Board of India (SEBI)
The regulatory authority under the SEBI Act, 1992 was established on 12 April, 1992 in order toprotect the interests of the investors in securities as well as to promote the development of the capital market. SEBI has its headquaters at Mumbai and its regional offices in New Delhi, Kolkata, Chennai and Ahmedabad respectively.

It involves regulating the business in stock exchanges supervising the working of stock brokers, share transfer agents, merchant bankers, underwriters etc, as well as prohibiting unfair trade practices in the securities market.

Function of SEBI
The main functions of SEBI are as follows

To regulate the business of the stock market and other securities market.
To promote and regulate the self-regulatory organisations.
To prohibit fraudulent and unfair trade practices in securities market.
To promote awareness among investors and training of intermediaries about safety of market.
To prohibit insider trading in securities market.
To regulate huge acquisition of shares and take over of companies.

SEBI’s Guidelines in 1999
The SEBI, had issued guidelines in 1999 (referred to as ESOP Guidelines) to provide a regulatory framework for the listed companies to implement security based compensation schemes.

New Law of SEBI, 2014
In August 2014, the Securities Laws (Amendment) Act, 2014, gave SEBI additional powers, including to order the arrest of violators and seek call data records of individuals under investigation. The new law gave SEBI the powers to search and obtain information, including call records, about any suspected entity from within or outside the firm.

The main objectives of SEBI Amendment Act, 2014 are as following

To empower SEBI to seek permission for search and seizure from a designated Court/Magistrate in Mumbai. Excessive delegation of power to SEBI with regard to Collective Investment Schemes.
To empower disgorgement (repayment) i.e. amount of profit made or the loss averted in the said fraudulent transaction.
Securities Appellate Tribunal’s (SAT) power with regard to settlement proceedings.
A set of new provisions in the form of Section 26A to 26E has been inserted by the Act, which provides for the establishment of Special Courts for speedy trial of all offences committed under the SEBI Act.
Rationalising the penalties that can be imposed under the Act.

Indian Capital Market
The capital market in India is a market for securities, where companies and government can raise long term funds. It is a market designed for the selling and buying of stocks and bonds. This market refers to the market which deals in equities and debentures of the corporates.

It is further divided into two parts

Primary Market: Primary market (new issues market) deals with ‘new securities’, i.e. securities which were not previously available and are offered to the investing public for the first time. It is the market for raising fresh capital in the form of shares and debentures.It provides the issuing company with additional funds for starting a new enterprise or for either expansion or diversification of an existing one and thus, its contribution to company financing is direct. The new offerings by the companies are made either as an Initial Public Offering (IPO) or rights issue.Initial Public Offering (IPO) or Stock Market Launch is ; a type of public offering where shares of stock in a i company are sold to the general public, on a securities | i exchange for the first time. Through this process, a = private company transforms into a public company.
Secondary Market: Secondary market/Stock market (old issues market or stock exchange) is the market for buying and selling securities of the existing companies. Under this, securities are traded after being initially offered to the public in the primary market and/or listed on the stock exchange. The stock exchanges are the exclusive centres for trading of securities.Security market is an economic institute within which the sale and purchase transactions of securities take place between subjects of the economy on the basis of demand and supply.

Difference between Money Markets and Capital Markets

	Money Markets	Capital Markets
Duration	It is for short term funds (1 year or less).	It is for long term funds (more than 1 year).
Instruments	Instruments are T- bill, commercial papers, certificates of deposit, etc.	Instruments are shares, debentures, bonds, etc.
Institutions	Centred Banks, commercial banks, acceptance houses, non-banking financial institutions, bill brokers, etc.	Stock exchanges, Commercial Banks and non-banking institutions such as insurance companies, mortgage banks, building societies, etc.
Broker	Transaction without the help ofbroker.	Transaction have to be Conducted with the help ofbroker.
Market	Commercial	The institutions are
Regulation	banks are closely regulated.	not much regulated.

Types of Bond Markets: The Securities Industry and Financial Markets Association (SIFMA) classified the broad bond market into five specified bond markets.They are
It is defined as the environment in which the issuance and trading of debt securities occurs. The bond market primarily includes government issued securities and corporate debt securities and facilitates the transfer of capital from servers to the issuers or organisations requiring capital for government projects, business expansions and ongoing operations.

Corporate
Government and agency
Municipal
Mortgage backed
Fund

Bond Market Participants: These participants are similar to participants in most financial markets

Institutional investors
Traders
Individuals
Governments

Stock Market: An equity market or stock market is the aggregation of buyers and sellers (a loose network of economic transactions, not a physical facility or discrete entity) of stocks (share), these are securities listed on stock exchange as well as those only traded privately.

Share Market: A share is one unit into which the total share capital is divided. Share capital of the company can be explained as a fund or sum with which a company is formed to carry on the business and which is raised by the issue of shares. Shares are the marketable instruments issued by the companies in order to raise the required capital. These are very popular investments which are traded everyday in the stock market and the value of the share at the end of the day decides the value of the firm.

D-Mat Account
In India, shares and securities are held electronically in a Dematerialised account (D-Mat account) instead of the investor taking physical possession of certificates.A Dematerialised account is opened by the investor while registering with an investment broker (or sub-broker).

The Dematerialised account number is quoted for all transactions to enable electronic settlements of trades i to take place. Every shareholder will have a Dematerialised account for the purpose of transacting shares.

Types of Shares
The shares which are issued by companies are of two types

Equity Shares: These shares are issued and are traded everyday in the stock market. Equity shareholders only get dividend after preference shareholders and debenture holders. The returns on the equity shares are not at all fixed.It depends on the amount of profits made by the company. The Board of Directors decides on how much of the dividends will be given to equity shareholders. Shareholders can accept to it or reject the offer during the annual general meeting. Equity shareholders have the right to vote on any resolution placed before the company.
Preference Shares: These are other type of shares. The preference shares are market instrument issued by the companies to raise the capital. Preference shares have the characteristics of both equity shares and debentures.Fixed rate of dividends are paid to the preference shareholder as in case of debentures, irrespective of the profits earned company is liable to pay interest to preference shareholders.

Debentures
Debentures are creditorship securities representing long term indebtedness of a company. A debenture is an instrument executed by the company under its common seal acknowledging indebtedness to some person or persons to secure the sum in advance.Debentures are usually secured by the company by a fixed or floating debentures at periodical intervals, generally 6 months and the*.company agrees to pay the principal amount at the expiry of the stipulated period according to their terms of issue. Like shares, they are issued to the public at part, at a premium or at a discount. Debenture holders are creditors of the company.

They have no voting rights, but their claims rank prior to preference shareholders and equity shareholders. Their exact rights depend upon the nature of debentures they hold.

Advantages of Debentures
It involves less cost to the firm than the equity financing because

investors consider debentures as a relatively less risky investment alternative and therefore, require a lower rate of return.
interest payments are tax deductible.
the floatation costs on debentures is usually lower than floatation costs on common shares.
debenture holders do not have voting rights and therefore, debenture issue does not cause dilution of ownership.
debenture holders do not participate in extraordinary earnings of the company. Thus, their payments are limited to interest.
during periods of high inflation, debenture issue benefits the company. Its obligations of paying interest and principal, which remain fixed, decline in real terms.

Types of Debentures
The major types of debentures are as follows

On the Basis of Record Point of View

Registered Debentures: These are the debentures that are registered with the company The amount of such debentures is payable only to those debenture holders, whose name appears in the register of the company.
Bearer Debentures: These are the debentures which are not recorded in a register of the company. Such debentures are transferable merely by delivery. Holder of bearer debentures is entitled to get the interest.

On the Basis of Security

Secured or Mortgage Debentures: These are the debentures that are secured by a charge on the assets of the company. These are also called mortgage debentures. The holders of secured debentures have the right to recover their principal amount with the unpaid amount of interest on such debentures out of the assets mortgaged by the company.
Unsecured Debentures Debentures: which do not carry any security with regard to the principal amount or unpaid interest are unsecured debentures. These are also called simple debentures.

On the Basis of Redemption

Redeemable Debentures: These are the debentures which are issued for a fixed period. The principal amount of such debentures is paid off to the holders on the expiry of such period. These debentures can be redeemed by annual drawings or by purchasing from the open market.
Non-Redeemable Debentures: These are the debentures which are not redeemed in the life time of the company. Such debentures are paid back only when the company goes to liquidation.

On the Basis of Convertibility

Convertible Debentures: These are the debentures that can be converted into shares of the company on the expiry of pre-decided period. The terms and conditions of conversion are generally announced at the time of issue of debentures.
Non-Convertible Debentures: The holders of such debentures cannot convert their debentures into the shares of the company.

On the Basis of Priority

First Debentures: These debentures are redeemed before other debentures.
Second Debentures: These debentures are redeemed after redemption of first debentures.

Stock Exchanges in India
Bombay Stock Exchange (BSE), the oldest stock exchange in Asia, was established in 1875. It is synonomous with Dalai Street. BSE was corporatised and renamed BSE Limited in 2005. In 1894, the Ahmedabad Stock Exchange was started to facilitate dealing in the shares of textile mills.

In 1908, Calcutta Stock Exchange was started to facilitate market for shares of plantations and jute mills. At present, there are 21 stock exchanges in the country.

List of Approved Stock Exchanges in India: Approved stock exchanges in India are as follows

UP Stock Exchange, Kanpur
Vadodra Stock Exchange, Vadodara
Coimbatore Stock Exchange, Coimbatore
United Stock Exchange of India Limited
Bombay Stock Exchange, Mumbai
Over The Counter Exchange of India, Mumbai
National Stock Exchange, Mumbai
Ahmedabad Stock Exchange, Ahmedabad
Bangalore Stock Exchange, Bengaluru
Bhubaneshwar Stock Exchange, Bhubaneshwar
Calcutta Stock Exchange, Kolkata
Cochin Stock Exchange, Cochin
Delhi Stock Exchange, Delhi
Guwahati Stock Exchange, Guwahati
Hyderabad Stock Exchange, Hyderabad
Jaipur Stock Exchange, Jaipur
Ludhiana Stock Exchange, Ludhiana
Chennai Stock Exchange, Chennai
Madhya Pradesh Stock Exchange, Indore
Pune Stock Exchange, Pune
Interconnected Stock Exchange of India Limited

Tit – Bits

Bull and Bear A bull market is a period of generally rising prices. A bear market is a general decline in the stock market.
Penny stock They are common shares of small public companies that trade at low prices per share.
Badla Badla was an indigenous carry forward system inverted on the BSE as a solution to the perpetual lock of liquidity in the secondary market. It was banned by SEBI in 1994.

National Stock Exchange (NSE)
NSE was promoted by leading financial institutions at the behest of the Government of India and was incorporated in November, 1992 as a tax-paying company unlike other stock exchanges in the country. On the basis of the recommendations of high powered Pherwani Committee, the National Stock Exchange was incorporated in November, 1992.

Indices of NSE

S and P CNX Nifty (NSE-50, renamed on July, 1998)
CNX Nifty Junior
CNX 100
S and P CNX 500 (Crisil 500 renamed on July, 1998)
CNX Midcap Nifty Midcap 50
S and P CNX Deflty
S and P CNX Nifty Dividend
India VIX

MIBOR and MIBID
NSE had developed MIBID (Mumbai Inter Bank Bid I Rate) and MIBOR(Mumbai Inter Bank Offer Rate) for the overnight market. This was launched sometime l in 1998. They are the reference rates, then NSE > launched the 14 days MIBID/MIBOR and then the 1 month and the 3 months MIBOR and MIBID. Thus all the 4 categories of MIBOR and MIBID are now available.

It is the simple average of the quotes by the various participants in the market banks, PDs, institutions polled on a daily basis.

LIBOR (London Inter Bank Offered Rate) It is the average of interest rates provided by leading banks in London that they would be charged while borrowing from other banks. It is used as a global benchmark interest rate by many banks around the world.

World’s Most Important Index

Index	Place
DOLLEX, SENSEX, S and P CNX-NIFTY FIFTY BANKEX	Mumbai
Dow Jones	New York
Nikkei	Tokyo
MIDDAX	Germany
HONG SENG	Hongkong
SIMEX, STRAITS TIMES	Singapore
KOSPI	Korea
SET	Thailand
TAIEN	Taiwan
SHANGHAI COM	China
NASDAQ	USA
SandP	Canada
BOVESPA	Brazil
MIBTEL	Itali
IPC	Mexico

Bombay Stock Exchange (BSE)

It was established in 1875, BSE Limited (formerly known as Bombay Stock Exchange Limited), is Asia’s first stock exchange and one of India’s leading exchange groups. Over the past 137 years, BSE has facilitated the growth of the Indian corporate sector by providing it an efficient capital raising platform.

Major BSE Indices
Five share indices are working under BSE which are as follows

SENSEX: It is measured by sensory index and at present 30 companies are notified under it.
BSE 500: This new index started operation in the year 1999 by BSE and it is the biggest base index.
National Index: 100 companies are there in this index and it is coated by the regional share markets.
BSE 200: It is the share index of 200 biggest base companies. It is also called Dollex as it also depicts the value of the American Dollar.
Indo Next: It is established by BSE and Federation of India Stock Exchange (FISE) with the aim of liquidity among small companies encouraging.

BSE-GREENEX

Bombay Stock Exchange on 22nd Feb, 2012 has launched a new index called ‘BSE-GREENEX’ which measures the performance of the company’s interims of Carbon Emissions. The top-ranking companies from each sector like power, steel, cement have made it to the new index called BSE-GREENEX. Greenex has 20 companies from the broader BSE 100 index that meet energy efficiency norms, allowing investors to derive benefit from the related cost savings.

Around 5000 companies are listed on BSE, making it world’s No. 1 exchange in terms of listed members. BSE limited is world’s 5th most active exchange in terms of number of transactions handled through its electronic trading system. It is also one of the world’s leading exchange (5th largest in May, 2012) for index options trading (Source-World Federation of Exchanges).
BSE is the first exchange in India and second in the world to obtain an ISO 9001:2000 certification.
It is also the first exchange in the country and second in the world to receive Information Security Management System Standard certification for its BSE On-line Trading System (BOLT).

Over the Counter Exchange of India (OTCEI)
Traditionally, trading in stock exchanges in India followed a conventional style, where people used to gather at the exchange offices and bids and offers were made by open outcry. This old-age trading mechanism in the Indian stock markets used to create many functional in efficiencies. OTCEI was incorporated in 1990, under the Companies Act, 1956.

OTCEI is the first screen based nationwide stock exchange in India created by Unit Trust of India (UTI), Industrial Credit and Investment Corporation of India (ICICI), Industrial Development Bank of India (IDBI), SBI capital markets, Industrial Finance Corporation of India (IFCI), General Insurance Corporation (GIC) and its subsidiaries and bank financial services.

Residex
Keeping in view, the prominence of housing and real estate as a major area for creation of both physical and financial assets and its contribution in overall national wealth, a need was felt for setting up of a mechanism which could track the movement of prices in the residential housing segment. Regular monitoring of the house prices can be useful inputs for the different interest groups.

Futures Market

A futures market is an auction market in while participants buy and sell commodity and future contracts for delivery on a specified future date.Examples of future markets are the New York Mercantile Exchange, the Kansas City Board of Trade, the Chicago Mercantile Exchange, the Chicago Board of Options Exchange and the Minneapolis Grain Exchange. Originally, trading was carried on though open yelling and hand signals in a trading pit, though in the 21st century, like most other markets, future exchanges were mostly electronic.

Merging of SEBI and Future Market Commission

With the Forward Markets Commission (FMC) formally got merged with SEBI on 28th Sep, 2015. The first priority would be to develop trust in the commodities market and then the focus would be ; on developing the market.

MCX Stock Exchange (MCX-SX)
It is a private stock exchange headquartered in Mumbai, which was founded in 2008. Now, it is a MCX-SX full-fledged stock exchange. Securities and Exchange Board of India (SEBI) on 10th July, 2012 granted permission to MCX Stock Exchange (MCX-SX) to operate as full-fledged stock exchange. MCX-SX would be able to offer additional asset classes such as equity and equity F and O (Futures and Options) interest rate futures and wholesale debt segments. SEBI has not allowed the exchange to operate in segments other than currency derivatives. This move of SEBI will bring more competition in the market.

Commodity Exchange

Multi-Commodity Exchange of India Limited (MCX)
National Commodity and Derivatives Exchange Limited (NCDEX)
National Multi-Commodity Exchange (NMCE)
Indian Commodity Exchange Limited ICEX
MCX Stock Exchange (MCX-SX)
Universal Commodity Exchange (UCX)

Future Trading of Foreign Currency
It is exchange where people can trade standardised future contract. That is a contract to buy specific quantities of a commodity at specified price with delivery set at a specified time in future.

Apart from this, India has (ICE) regional exchanges. All these commodity exchange are overseen by Forward Market Commission (FMC), which was setup in 1953.

Reference Rates
A reference rate is an accurate measure of the market price. In the fixed income market, it is an interest rate that the market respects and closely watches. It plays a useful role in a variety of situations.

Credit Rating

It is a company that assigns credit ratings to institutions that issue debt obligations i.e. assets backed by receivables on loans, such as mortgage backed securities.

These institutions can be companies, cities, non-profit organisations or national governments and the securities they issue can be traded on a secondary market. Credit Rating Agency at present, there are four credit rating agencies in the country. They are

Credit Rating Information Services of India (CRISIL)
Investment Information and Credit Rating Agencies of India (CRAI)
Credit Analysis and Research (CART)
Duff Falps Credit Rating India Private Limited (DCR India)
Cruist is the first credit rating agency of the country started in its functionary, since 1988.

Credit Rating Information Services of India Limited (CRISIL)
It is a global analytical company providing ratings, research, risk and policy advisory services. CRISIL’s majority shareholder is Standard and Poor’s, a division of McGraw Hill financial and provider of financial market intelligence. Headquarter of CRISIL is in Mumbai. CRISIL ratings has rated/assessed over 61000 entities in India.

International Cultivar Registration Authorities (ICRA)
It is an Indian independent and professional investment information and credit rating agency. It was established in 1991 and was originally named Investment Information and Credit Rating Agency of India Limited (IICRA, India). It is second largest Indian rating company in terms of customer base.

It was a joint venture between Moody’s and various Indian commercial banks and financial services companies. Headquarter of ICRA is Gurugram.

Credit Analysis and Research Ltd. (CARE)
CARE Ratings commenced operations in April,1993 and over nearly two decades, it has established itself as the second largest credit agency in India. CARE Ratings has also emerged as the leading agency for covering many rating segments like that for banks, sub-sovereigns and IPO gradings.

Various Countries and their Currencies

Country	Currency
Afghanistan	Afghan Afghani
Algeria	Algirian dinar
Argentina	Argentine peso
Australia	Australian dollar
Austria	Euro
Bangladesh	Bangladeshi taka
Belarus	Belarusian rusle
Belgium	Euro
Bhutan	Ngultrum
Brazil	Brazilian real
Myanmar (Burma)	Burmese kyat
Canada	Canadian dollar
Chile	Chilean peso
China	Yuan
Cyprus	Euro
Denmark	Danish krone
Egypt	Egyption pound
Fiji	Fijian dollar
France	Euro
Germany	Euro
Hong Kong	Hong kong dollar
India	Indian rupee
Indonesia	Indonesian rupian
Iran	Iranian rial
Iraq	Iraqi dinar
Ireland	Euro
Israel	Israeli new shekel
Italy	Euro
Japan	Yen
Kazakhstan	Kazakhstani tenge
Libya	Libyian dinar
Malaysia	Malaysian rufiyaa
Maldives	Maldivian rufiyaa
Mauritius	Mauritian rupee
Mexico	Mexican peso
Nepal	Nepalese rupee
New Zealand	New Zealand dollar
Nigeria	Nigerian naira
Pakistan	Pakistani rupee
Philippines	Philippine peso
Qatar	Qatari riyal
Romania	Romanian len
Russia	Russian ruble
Saudi Arabia	Sandi riyal
Singapore	Singapore dollar
South Africa	South African rand
Sri Lanka	Sri Lankan rupee
Switzerland	Swiss franc
Taiwan	New Jaiwan dollar
Thailand	Thai baht
Turkey	Turkish lira
Ukraine	Ukranian hryvnia
UAE	UAE
United Kingdom	British pound
USA	Dollar
Veitnam	Vietnamese dong
Zimbabwe	South African rand

QUESTION BANK

Commercial paper can be issued

by all corporates
by all corporates with net worth of atleast ₹ 10 crore
by all corporates with net worth of atleast ₹5 crore
can be issued only by banks
All of the above

2. Commercial bills market is a part of

organised money market
unorganised money market
stock market
capital market
None of the above

3. Interest is usually paid on money market instruments

at maturity
on request
twice a year
annually
All of these

4. If the monetary standard based on gold, it is called

gold standard
silver standard
double standard
multi standard
None of these

5. The gold standard was broken down in the year

1936
1946
1956
1966
1970

6. Government securities with terms of more than 1 year are called

government bonds
treasury bills
bills of exchange
capital bills
None of these

7. Money that a government has required to be accepted in settlement of debts is

barter money
commodity money
legal tender
currency value
None of these

8. Which of the following is not a money market instrument?

Treasury Bills
Commercial Paper
Certificate of Deposit
Equity Share
None of these

9. Which of the following cannot issue a Commercial Paper?

Companies
Primary Dealers
Commercial Banks
All Indian Financial Institution
None of the above

10. Maximum period for which a commercial paper can be issued is

3 months
6 months
1 yr
2 yr
None of these

11. Treasury Bills means

salary bills drawn by Government officials on the treasury
bills drawee by the Government contractors and other suppliers on the treasury for the dues owed to them by the Government
obligation of the Government of India issued by the Reserve Bank of India and payable normally 91 days after issue
a mode of drawings by the Treasury Office on the Reserve Bank of India
None of the above

12. Which one of the following is the major component of the money supply in the Indian Economy?

Currency component
Deposit component
Treasury bill with public
Both 1 and 2
Both 2 and 3

13. Which of the following organisations is known as the market regulatonin India?

IBA
SEBI
AMFI
NSDL
None of these

14. Which of the following was the first mutual fund listed on the newly launched mutual fund platform on National Stock Exchange?

UTI Mutual Fund
SBI Mutual Fund
LIC Mutual Fund
Bank of Baroda Mutual Fund
None of the above

15. SEBI allows retail investors to apply for shares of Initial Public Offerings without actual transfer of their funds from their accounts. What is this facility known as?

Systematic transfer plans
Systematic investment plans
Hedge fund accounts
ASBA
None of the above

16. Which of the following best describes the Securities and Exchange Board of India?

SEBI is the regulator for the capital markets
SEBI protects the interest of investors
SEBI is for ethical practices
All of the above
None of the above

17. The stock market index of London, stock market is referred as

sensex
footsie (FTSE)
nifty
bullish
None of these

18. Which is the first Indian company to be listed on NASDAQ?

Reliance
TCS
HCL
Infosys
None of these

19. In the capital market, the term arbitrage is used with reference to

purchase of securities to cover the sale
sale of securities to reduce the loss on purchase
simultaneous purchase and sale of securities to make profits from price
variation in different markets
All of the above

20. What is an Indian depository receipt?

A deposit account with a public sector bank
A depository account with any of the depositories in India
An instrument in the form of depository receipt created by an Indian depository against underlying equity shares of the issuing company
An instrument in the form of deposit receipt issued by Indian depositories
None of the above

21. Capital market regulator is

RBI
IRDA
NSE
BSE
SEBI

22. The maturity period of a cash management bill can be

less than 364 days
less than 182 days
less than 91 days
any period at discretion of the Govt.
None of the above

23. Which of the following is the regulator of the credit rating agencies in India?

RBI
SBI
SIDBI
SEBI
None of these

24. Which of the following cannot be called as a debt instrument as referred in financial transactions?

Certificate of deposits
Bonds
Stocks
Commercial papers
Loans

25. The availability or cash and other cash like marketable instruments that are useful in purchases and investments are commonly known as

cash crunch
liquidity
credit
marketability
None of these

26. In a company, the use of price-sensitive corporate information by the company people to make gains or cover losses is known as

insider trading
future trading
foreign trading
stock- trading
None of these

27. Which of the following financial products are not much popular in India as they have been launched only recently?

Development bonds
Insurance policies
Mutual funds
Sovereign wealth funds
All are very popular products in India

28. The actual return of an investor is reduced sometimes as the prices of the commodities go up all of a sudden. In financial sector, this type of phenomenon is known as

probability risk
market risk
inflation risk
credit risk
None of the above

29. Many a times, we read a term ‘SEPA’ in financial newspapers. What is the full form of the SEPA?

Single Exchange Processing Agency
Single Euro Payments Area
Single Electronic Processing Agency
Super Electronic Purchase Agency
None of the above

30. What is the full form of ‘ULIP’, the term which was in the news recently?

Universal Life and Investment Plan
Unit Loan and Insurance Plan
Universal Loan and Investment Plan
Uniformly Loaded Investment Plan
Unit Linked Insurance Plan

31. In one of his speeches, Pranab Mukherjee said that the government had no plans to dilute the roles of market regulators. This means, the role of which of the following will not be diluted?

Life Insurance Corporation of India (LIC)
Confederation of Indian Industry (CII)
Federation of Chambers of Commerce and Industry (FICCI)
Bureau of Indian Standards
Securities and Exchange Board of India (SEBI)

32. Equity schemes managed strong NAV gains which boost their assets’ was a new in some financial newspapers. What is the full form of NAV used as in above headlines?

Nil Accounting Variation
Net Accounting Venture
Net Asset Value
New Asset Venture
None of the above

33. As per the announcement made by the RBI, some stock exchanges in India are allowed to introduce Plain Vanilla Currency Option. The term Plain Vanilla Currency Option is associated with which of the following activities/operations?

Dollar Rupee exchange rate
Floating of commercial papers
Launch of new mutual funds
Deciding the opening price of a share on a particular business day
None of the above

34. A ……is a type of transferable financial instrument traded on a local stock exchange of a country but represents a security issued by a foreign publicly listed company.

depository receipt
derivative
option
participatory notes
None of these

35. What is the maturity period of treasury bills issued by Govt, of India?

14 and 91 days
91 and 182 days
14 and 182 days
91, 182 and 364 days
None of these

36. Specified interest rate on a fixed maturity security fixed at the time of issue is called

market rate of interest
call rate
repo rate
coupon rate
discount rate

37. Money lent for 15 days or more in Inter bank market is called

call money
notice money
term money
All of these
None of these

38. Money lent for one day is called

call money
notice money
term money
All of these
None of these

39. First share market in India was established in

Delhi
Mumbai
Kolkata
Chennai
None of these

40. The primary issuers of capital market securities include

the Central Government
the Local Government
corporations
the Central and Local Governments and corporations
Local Government and corporations

41. Which of the following is a characteristic of a capital market instrument?

Liquidity
Marketability
Long maturity
Liquidity premium
All of these

42. Which one of the following is a capital market Instrument?

A Treasury bill
A negotiable certificate of deposit
Commercial paper
All of the above
None of the above

43. Which of the following is the Regulator of the credit rating agencies in India?

RBI
SBI
SIDBI
SEBI
None of these

44. What is the maximum denomination for a commercial paper?

5 lac
10 lac
25 lac
no ceiling
None of these

45. What is the minimum denomination amount for a commercial paper?

5 lac
10 lac
25 lac
15 lac
None of these

46. To issue commercial paper, a company should have

Net worth of ₹ 4 core
Sanctioned working capital limits
Loan accounts in standard Units
All of these
None of these

47. T-bills are financial instruments initially sold by to raise funds

Commercial Banks
the government
corporations
agencies of the State Government
None of the above

48. Commercial paper is a short term security issued by to raise funds

the Reserve Bank of India
Commercial Banks
large and well-known companies
National Stock Exchange
State and Local Government

49. Which of the following statements is true regarding a corporate bond?

A corporate callable bond gives the holder the right to exchange it for a specified number of the company’s common shares
A corporate debenture is a secured bond
A corporate indenture is a secured bond
A corporate convertible bond gives the holder the right to exchange the bond for a specified number of the company’s common shares
Holders of corporate bonds have voting rights in the company

50. Which one of the following is not a money market instrument?

ATreasury bill
A negotiable certificate of deposit
Commercial paper
Treasury bond
Repo

51. Which of the following statements about the money market are true?

Not all Commercial Banks deal for their customers in the secondary market
Money markets are used extensively by businesses both to warehouse surplus funds and to raise short term funds
The single most influential participant in the US money market is the US Treasury Department
All of the above are true
1 and 2 of the above are true

52. Money market instruments

are usually sold in large denominations
have low default risk
mature in one year or less
characterised by all of the above
are characterised by 1 and 2

53. The money market in India consists of two sectors namely, the organised and the unorganised sector. Which of the following do not fall under unorganised sector?

RBI, Commercial Banks and SBI
LIC and QIC
Unit Trust of India
Indigenous Banks
None of these

54. Interest is calculated on actual/365 days basis respect of the following products, except one

Call money
Notice money
Term money
Gol dared securities
None of these

55. Treasury bill is

negotiable security
non-negotiable security
no security at all
quasi-negotiable security
None of the above

56. Who issues treasury bills?

Reserve Bank of India, as the agent of the Central Government
Any govt deptt. of State and Central
Any commercial bank
All of the above
None of the above

57. The treasury bills are issued at a

discount
premium
Both 1 and 2
face value
None of the above

58. For issuing a commercial paper, a company should have credit rating of

AAA
P2 from CRISIS or equivalent
P2 from any of rating agencies
Not required any more
None of the above

59. Choose the correct statements.
I. A reference rate is an accurate measure of the market price.
II. NSE had developed MIBID and MIBOR for the overnight market.
III. MIBID and MIBOR was launched in 2005.

Codes

I and II
II and III
I and III
All of the above
None of the above

60. Consider the following statements
I. Call Money- Money lent for 1 days.
II. Notice Money – Money sent for a period exceeding 1 day.
III. Term Money – Money lent for 15 days or more in inter bank market

Which is/are correct?

I and II
II and III
I, II and m
I and III
Only III

61. Choose the correct statements.
I. The small coins of 50 paise is legal tender money.
II. Legal tender money is enforced by law.
III. Limited legal tender money is accepted only upon a certain limit.

Codes

Only II
I and II
I, II and III
II and III
None of these

62. Consider the following statements.
I. Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia.
II. BSE was established in 1875.
III. BSE was corporatised and renamed BSE limited in 2005.

Which is/are correct?

Only III
I and III
II and HI
I and II
I, II and III

63. Choose the correct statements;
I. Treasury bills are money market instruments.
II. Commercial Bill is a short term, negotiable and self-liquidating instrument with low risk.
III. Treasury bills are issued by the Central Government to secure short term loans.

Codes

Only II
II and III
I and II
I, II and III
I and III

64. Many times, we read about future trading in newspapers. What is ‘future trading’?
I. It is nothing but a trade between any two stock exchanges, wherein it is decided to purchase the stocks of each other on a fixed price throughout the year.
II. It is an agreement between two parties to buy or sell an underlying asset in the future at a predetermined price.
III. It is an agreement between stock exchanges that they will not trade the stocks of each other under any circumstances in future or for a given period of time.

Select the correct answer using the codes given below

Only I
Only II
Only III
II and III
None of these

65. FIMMDA stands for [Allahabad Bank 2011]

Foreign Investment Markets and Derivatives Market Association
Fixed Income Money Markets and Derivatives Association
Fixed Income and Money Market Development Association
Floating Income and Money Markets Derivative Assets
None of the above

66. Many times, we read in newspapers that a company is planning to bring a public issue. What does it mean? [Syndicate Bank 2011]
I. Shares of the company will be issued only through public sector organisations like banks/central financial institutions etc.
II. Shares of the company will be issued to general public only through primary market.
III. This means some stakeholders/promoters are willing to leave company. Hence, they wish to sell their stock to the general public.

Select the correct answer using the codes given below

Only I
Only II
Only III
All of these
None of these

67. SEBI is a/an [Indian Overseas Bank 2011]

advisory body
statutory body
constitutional body
non-statutory body
registered as a society

68. Which of the following organisations/ agencies has established a fund known as Investor Protection Fund? [Indian Overseas Bank 2011]

RBI
SIDBI
Bombay Stock Exchange
Ministry of Finance
Ministry of Commerce and Industry

69. Which of the following bodies promoted Securities Trading Corporation of India Limited (STCI) jointly with the public sector banks? [Indian Overseas Bank 2011]

SEBI
ICICI Limited
IDBI Limited
RBI
IRDA

70. Which of the following is not a component or India’s securities market? [Andhra Bank 2011]

Commodity futures
Small savings in national saving certificates
Government bonds
Corporate equity
Derivatives on currency

71. Non-convertable debentures are [IBPS PO 2012]

debt instruments which acquire equity ‘status at the issuers’ option
debt instruments which acquire equity status at the investors option
debt instruments which acquire equity status with the permission of Registrar of Companies
debt instruments which acquire equity status on maturity
debt instruments which retain their debt character and cannot acquire equity status

72. Which of the following stock exchanges in India, recently launched ‘Carbon Index’, so that investors can assess risk and opportunities associated with climate change? [IBPS Specialist Officer 2012]

Delhi Stock Exchange
National Stock Exchange
Bombay Stock Exchange
Kolkata Stock Exchange
Ahmedabad Stock Exchange

73. Which of the following is the main advantage of ‘ASBA’ applicants for share allotment? [IBPS Specialist Officer 2012]

They have got secured allotment of shares
They have got certain preference in allotment of shares as compared to general applicants
They need not remit the fund for allotment of shares, they will do so after shares are allotted to them
Their deposit/OD account is not debited, only the funds are blocked for the same and they continue to avail interest till the shares are allotted to them
None of the above

74. MCX is the index of which of the following stock exchanges of India? [SBl PO 2012]

National Stock Exchange
Bombay Stock Exchange
Delhi Stock Exchange
Kolkata Stock Exchange
Multi Commodity Stock Exchange

75. Which of the following terms is not used in banking/finance? [SBl PO 2012]

Public Debt
Plasma
Joint Venture
Net Demand and Time Liability
Treasury Bill

76. Which of the following Organisations is the Regulators of Stock Exchanges in India? [SBl Assistant 2012]

RBI
SIDBI
SEBI
NABARD
IBA

77. What does the letter ‘D’ denote in the term ‘SDR’? (as used in Finance) [SBl Assistant 2012]

Deposits
Data
Drawing
Debt
Dealers

78. Which of the following terms is not directly associated with the functioning of RBI? [SBl Assistant 2012]

Open Market Operations
Cash Reserve Ratio
SENSEX
Liquidity Adjustment Facility
Public Debt Office

79. A new scheme has been announced in the budget 2012-13 giving tax exemptions to first time equity market investors. The scheme is titled as [SBl Assistant 2012]

Rajiv Gandhi Equity Savings Scheme
Rashtriya Equity Saving Scheme
National Equity Savings Scheme
Indira Gandhi Equity Savings Scheme
Prime Minister’s Equity Savings Scheme

80. Which of the following is a receipt listed in India and traded in rupees declaring ownership of share of a foreign company? [IBPS PO 2013]

Indian Depository Receipt (IDR)
European Depository Receipt (EDR)
Global Depository Receipt (GDR)
American Depository Receipt (ADR)
Luxemburg Depository Receipt (LDR)

81. An Equity share is also commonly referred to as [IBPS PO 2013]

ordinary share
debenture
convertible share
security Receipt
preferred stock

82. A non performing asset is [SBl PO 2013]

money at call and short notice
an asset that ceases to generate income
cash balance in till
cash balance with RBI
balance with other banks

83. BSE (Bombay Stock Exchange), the oldest stock exchange in Asia has joined hands with one more International index in February, 2013. This association has resulted in change of name of BSE index. What is the change of name effected? [SBl PO 2013]

Dow Jones BSE Index
NASDAQ BSE Index
S & P BSE Index
Euronext BSE Index
Other than those given as options

84. Which of the following organisation is made specifically responsible for empowering Micro, Small and Medium enterprises in India? [SBl PO 2013]

NABARD
RBI
SIDBI
ECGG
SEBI

85. Commercial Paper (CP) is an unsecured money market instrument issued in the from of a promissory note. Commercial paper can be used in denominations of [SBl PO 2014]

₹one lakh or multiples thereof
₹ two lakh or multiples thereof
₹three lakh or multiples thereof
₹ five lakh or multiples thereof
₹ ten lakh or multiples thereof

86. The abbreviation ASBA stands for [SBl PO 201]

Applications Supported by Blocked Account
Applications Supported by Bank Amount
Applications Serviced by Blocked Account
Applications Serviced by Bank Account
Applications Supported by Blocked Amount

87. Which of the following institutions provides secured depository services? [IBPS Clerk 2014]

NSE
RBI
NSDL
BSE
Other than those given as options

88. A Credit Guarantee Trust Fund has been set up for guaranteeing collateral free facilities by lending institutions to small scale industries. This funds is being managed by which of the following institutions? [SBl Clerk 2014]

IDBI
NABARD
SBl
SIDBI
RBI

89. Which of the following is a sovereign instrument with a fixed coupon (payable on a specified date or half yearly) issued by Reserve Bank for market borrowing programme of the government of India?[SBl Clerk 2014]

Fixed deposits
Dated government securities
Debentures
Bonds
Equity shares of PSBs

90. A bond issued at a price less than its face value and payable on its due at its face value bearing no Rate of Interest (Rol) is called [SBl Clerk 2014]

Preference Bond
Zero Coupon Bond
Convertible Bond
Perpetual Bond
Sovereign

91. Which of the following authorities is responsible for maintaining accounts, deposits and cash management of the government through issue of Bonds and Treasury Bills? [SBl Clerk 2014]

SEBI
IBA
IRDA
SBl
RBI

92. Which one of the following is known as ‘Demat’ account? [IBPS PO 2015]

Account in which shares are held in electronic form
Other than those given as options
Account allowed to be operated by guardian of minor
Account operated by business correspondents in rural centres
Account opened with zero balance

93. The introduction of e-IPO would [IBPS Clerk 2015]

help eliminate the printing of application forms
help in reducing the overall cost of public issuance
support companies in reaching more retail investors in small towns
All of the above
None of the above

94. In periods of boom, which leads to economic instability, the Reserve Banks of India (RBI) resorts to [IBPS Clerk 2015]

hike in the Bank Rate as a measure of open market operations
buying of approved securities in the market as a measure of open market operations
sale in the market of first class securities in its possession to reduce the supply of money as a measure of open market operations
All of the above
None of the above

95. Who amongst the following is the regulator in the financial system of the country? [SBI Clerk 2015]

Other than those given a options
SEBI
CRISIL
TRAN
CERC

96. Which of the following is the negotiable instrument? [SBI Clerk 2015]

Fixed deposit of a bank
Share certificate issued by a PSU
Demant draft issued by a bank
Debenture of a company
Airway receipt

97. The segment of money market which pertains to day-to-day funds requirements of the bank, is known as [RBI Grade B 2015]

Call Money market
Capital market
Mutual fund market
Equity funds market
Index funds market

98. Which of the following stock exchanges with a median response time of 6 |ls, is now considered as the world’s fastest stock exchange? [SBI PO 2016]

New York State Exchange
National Stock Exchange of India
NASDAQ New YorkLondon Stock Exchange Group
Bombay Stock Exchange Limited

99. Which of the following is not money market instrument? [SBI PO 2016]

Treasury bills
Certificate of deposit
Commercial Bill
Promissory Notes
Gilt edged bill

100. CRISIL is a [SBI Clerk 2016]

credit rating agency
banking supervisionary agency
payment system of India
investment fund
small finance bank

101. FMC merged with [SBI clerk 2016]

SBI
CRISIL
RBI
SEBI
None of these

102. World’s largest stock exchange [SBI Clerk 2016]

New York Stock Exchange
BSE
NSE
London Stock Exchange
None of these

103.In India ‘Commodities Derivatives Market’ is regulated by ……[RBI Grade B 2016]

PFRDA
FCI
IRDAI
SEBI
RBI

Banking Awareness Study Material – Money Market And Capital Market

QUESTION BANK

ANSWERS