Question

Choose the incorrect statement about 'Money market':

(A) The main instruments traded in this market are Treasury bills, Trade bills, Commercial paper and Certificates of deposit.

(B) In this market, transactions entail huge sums of money as the instruments are quite expensive.

(C) Participation in this market is by and large undertaken by institutional participants such as the Reserve Bank of India, banks, financial institutions and finance companies.

(D) It deals in medium and long term securities.

Answer 1

(D) It deals in medium and long term securities.

The Money market primarily deals with short-term debt securities, such as Treasury bills, Trade bills, Commercial paper, and Certificates of deposit. It does not deal with medium and long-term securities, which are typically traded in the capital market. Therefore, option (D) is incorrect.