Chapter 6: Money Market — Online MCQ Test
COMMERCE · CLASS 12th · Tamil Nadu State Board
Practice Chapter 6: Money Market with a free chapter-wise online MCQ test.
This chapter covers: This chapter explores short-term financial systems and debt instruments. Students analyze money market participants key differences from capital markets and core instruments like T....
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Chapter 6: Money Market — Important Questions & Answers
What is the main purpose of the money market?
- A. To provide long-term capital to companies
- B. To deal with short-term funds and financial instruments
- C. To trade only shares and debentures
- D. To finance fixed assets of businesses
Answer: B. To deal with short-term funds and financial instruments
The money market deals with short-term borrowing and lending, usually for funds needed for up to one year.
The money market deals with short-term borrowing and lending, usually for funds needed for up to one year.
Which of the following is a money market instrument?
- A. Equity shares
- B. Debentures
- C. Treasury Bills
- D. Preference shares
Answer: C. Treasury Bills
Treasury Bills are short-term debt instruments issued by the government and are part of the money market.
Treasury Bills are short-term debt instruments issued by the government and are part of the money market.
The money market mainly provides funds for a period of:
- A. Less than one year
- B. More than ten years
- C. Five to fifteen years
- D. Only for equity investment
Answer: A. Less than one year
Money market instruments are used for very short-term financial requirements, generally less than one year.
Money market instruments are used for very short-term financial requirements, generally less than one year.
Which of the following best distinguishes the money market from the capital market?
- A. Money market deals with long-term securities, capital market with short-term funds
- B. Money market deals with short-term funds, capital market with long-term funds
- C. Money market deals only with shares, capital market only with bonds
- D. Money market is regulated, capital market is not regulated
Answer: B. Money market deals with short-term funds, capital market with long-term funds
The key difference is the maturity period: money market instruments are short-term, while capital market instruments are long-term.
The key difference is the maturity period: money market instruments are short-term, while capital market instruments are long-term.
Which one of the following is NOT correctly matched?
- A. Treasury Bills - Government short-term borrowing
- B. Certificates of Deposit - Issued by commercial banks
- C. Commercial Bills - Trade credit instrument
- D. Gilt-edged Securities - Issued by private companies
Answer: D. Gilt-edged Securities - Issued by private companies
Gilt-edged securities are issued by the government, not by private companies.
Gilt-edged securities are issued by the government, not by private companies.