UPSC CSE Prelims
Question 66
Consider the following markets :
- Government Bond Market
- Call Money Market
- Treasury Bill Market
- Stock Market
How many of the above are included in capital markets?
View correct answer and explanation
Correct answer: B
Correct Option: B (Only two)
Explanation: Capital markets channel medium- and long-term funds. Government bonds and equities qualify; call money and Treasury Bills are short-term money-market instruments.
Statement / Pair / Item-wise Analysis:
1. Correct/True - Tradable government bonds are debt securities in the capital market when long-term.
2. Incorrect/False - Call money consists of very short-term interbank lending and belongs to the money market.
3. Incorrect/False - Treasury Bills have maturities under one year and are money-market instruments.
4. Correct/True - Shares are traded in the equity/stock capital market.
Option-wise Analysis:
A. Incorrect-it counts 1, but items 1, 4 qualify, giving 2.
B. Correct-exactly 2 of the 4 listed items satisfy the condition.
C. Incorrect-it counts 3, but only 2 qualify; item(s) 2, 3 do not.
D. Incorrect-it counts 4, but only 2 qualify; item(s) 2, 3 do not.