CMA Intermediate · Financial Management and Business Data Analytics · Money Market
Within the organised structure of the Indian money market, the call/notice money market is best described as a market for:
The call/notice money market is an inter-bank market for unsecured funds, where call money is overnight and notice money runs from two to fourteen days. Participants are mainly banks and primary dealers adjusting their short-term liquidity, so it is not a market for long-term, equity or derivative dealings.
- AOvernight to 14-day unsecured borrowing and lending among banks and primary dealersCorrect
- BLong-term loans against mortgage of immovable property
- CIssue of equity shares to retail investors
- DTrading in derivative contracts on commodities
Explanation
Call money is overnight lending and borrowing, and notice money covers 2 to 14 days, both unsecured and mainly among banks and primary dealers. The other options describe the mortgage loan market, primary equity market and commodity derivatives, none of which is the call market.
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