Commerce · Class 12 Commerce
Ch 6Money Market — Class 12 Commerce, concept-first.
Every business, bank, and government occasionally needs cash for a short while — to pay wages before a big receivable comes in, to bridge a temporary mismatch between spending and revenue, or to park surplus funds for a few days rather than let them sit idle.
Key concepts
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Meaning and Features of Money Market
The money market is the segment of the financial market dealing in short-term funds with maturity up to one year, characterised by high liquidity, low risk, wholesale (institutional) dealings, no single fixed location, a…
Most relevant Q&A
Chapter contents
The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.
Meaning and Features of Money Market
Every business, bank, and government occasionally needs cash for a short while — to pay wages before a big receivable comes in, to bridge a temporary mismatch between spending and revenue, or to park…
Functions and Importance of Money Market
The money market performs several functions that keep the wider financial system, and the economy built on top of it, running smoothly:
Participants in the Money Market
A range of institutions participate in the money market, each playing a distinct role:
Instruments of the Money Market
The money market trades a specific set of short-term instruments, each suited to a different borrower and purpose:
Money Market vs. Capital Market
The money market and the capital market are both segments of the wider financial market, but they serve very different purposes and are structured quite differently.
Role of RBI in the Money Market
The Reserve Bank of India is not merely one participant among many in the money market — under powers granted by the Reserve Bank of India Act, 1934, it is the money market's apex regulator and its mo…
Exercises
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- Q1What is a money market? State any four of its features.Free
- Q2Explain any four functions of the money market.Free
- Q3Who are the main participants in the money market? Explain briefly.Free
- Q4What is a Treasury Bill? Why is it considered the safest money-market instrument?Preview
- Q5Distinguish between Commercial Paper and Certificate of Deposit.Preview
- Q6What is call money and notice money? How do they help commercial banks?Preview
- Q7What are commercial bills? How do they help in financing trade?Preview
- Q8What is meant by repo and reverse repo? How does RBI use them?Preview
- Q9Distinguish between money market and capital market on the basis of (a) maturity of instruments, (b) purpose of funds raised, and (c) regula…Preview
- Q10Explain the role of RBI in the money market.Preview
Sample & Board Papers
Sample papers and previous-year board questions for this subject.
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- Q1What are the features of Treasury Bills ?Preview
- Q2(a) Differentiate between money market and capital market (any 5). OR (b) Distinguish between conditions and warranty.Preview
- Q3A major player in the money market is the ______. (a) State Bank of India (b) Commercial Bank (c) Central Bank (d) Reserve Bank of IndiaPreview
- Q4(a) Differentiate between the Money Market and Capital Market. (any 5) OR (b) What are the responsibilities of Consumers ? (any 5)Preview
- Q5The market for buying and selling of Commercial Bills of Exchange is known as a ______. (a) Commercial Bill Market (b) Commercial Paper Mark…Preview
- Q6A major player in the money market is the ______. (a) State Bank of India (b) Commercial Bank (c) Central Bank (d) Reserve Bank of IndiaPreview
- Q7What are the types of Commercial bills ? (Any 3)Preview
- Q8What are the general features of a Treasury Bill? (any three)Preview