Multiple Choice Questions on Consider the following markets 1 Government Bond Market 2 Call Money Market 3 Treasury Bill Market 4........... for Combined State Civil Services Preparation

Financial System

Indian Economic System(CSC)

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    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 Answer

     Only two

    Correct Answer

    Only three

    Incorrect Answer

    All four

    Incorrect Answer
    Explanation:

    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.

     

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