CA Foundation · Business Economics · Money Market
In the Indian money market, funds that are borrowed and lent for a period of just one day (overnight) are known as:
Such funds are called call money. Call money is lent and borrowed overnight for one day, mainly between banks and other participants in the money market to meet short-term liquidity needs. Notice money is different, since it runs for 2 to 14 days.
- ATerm money
- BCall moneyCorrect
- CNotice money
- DRediscounted bills
Explanation
Call money is borrowed and lent for one day, mainly by banks to meet their reserve and liquidity needs. Notice money covers a longer period of 2 to 14 days, so it is not the correct choice.
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