Consider the following markets:
1. Government Bond Market
2. Call Money Market
3. Treasury Bill Market
4. Stock Market
How many of the above are included in capital markets?
This questions was previously asked in
UPSC CSP Previous Year Paper (2023)
Only one
Incorrect AnswerOnly three
Incorrect AnswerAll four
Incorrect AnswerExplanation:
Capital markets are markets for buying and selling equity and debt instruments. They channel savings to investments and facilitate the growth of the economy. Capital markets typically include the stock and bond markets.
Government Bond Market: This market deals with government-issued bonds. Since bonds are long-term financial instruments, this market is a part of the capital market.
Call Money Market: This is a market for very short-term funds. In the call money market, funds are lent and borrowed for a day. This is a part of the money market and not the capital market.
Treasury Bill Market: Treasury bills are short-term instruments issued by the government. Since their maturity period is less than a year, they are a part of the money market and not the capital market.
Stock Market: This is where company shares or stocks and derivatives are bought and sold. It's a primary component of the capital market.
Out of the given options, only the Government Bond Market and the Stock Market are part of the capital markets. So, only two of the markets listed above are included in capital markets.
By: Parvesh Mehta ProfileResourcesReport error