Consider the following markets:1. Government Bond Market2. Call Money Market3. Treasury Bill Market4. Stock MarketHow many of the above are included in capital markets?
✓ Correct answer: b) Only two
ExplanationCapital markets are financial markets where long- term debt or equity-backed securities are bought and sold.They facilitate the raising of capital for businesses, governments, and other entities.Capital markets include:Government Bond Market: Government bonds are long- term debt instruments issued by the government to finance its expenditures.They are part of the capital market because they have maturities typically longer than one year.Stock Market: The stock market is a quintessential part of the capital market, as it deals with the buying and selling of equity shares, which represent ownership in companies.Markets Not Included in Capital Markets:Call money market is part of the money market, not the capital market.It deals with short-term funds (typically with maturities of 1 day to 14 days) used for interbank lending and borrowing.It is used to meet short-term liquidity requirements.Treasury bills (T-bills) are short-term debt instruments issued by the government with maturities of less than one year (usually 91 days, 182 days, or 364 days) which are part of the
Practice more Economy PYQs
Attempt a free 10-question quiz or browse the full Economy previous-year-question bank with instant answers and explanations.
📈 Economy PYQs →