Financial System And Money Market

The following statements are correct concerning the Indian economy: - **Commercial Paper** is a short-term unsecured promissory note. It's a money market instrument issued by companies to raise short-term funds. - **Call Money** is a short-term finance used for interbank transactions. Banks borrow or lend money from each other for overnight periods to meet their liquidity requirements. Incorrect statements: - **Certificate of Deposit** is not issued by the Reserve Bank of India. It's a negotiable instrument issued by commercial banks to depositors for a fixed maturity period at a predetermined interest rate. - **Zero-Coupon Bonds** can be long-term or short-term, but they are not issued by Scheduled Commercial Banks. These bonds don't pay periodic interest, but are sold at a discount to their face value. The difference between the purchase price and the maturity value represents the return on investment.  Therefore, the correct codes are 1 and 3 only.

* **Collateral Borrowing and Lending Obligations (CBLO)** are instruments of the: C. Money market * CBLO is a **money market instrument** that facilitates borrowing and lending operations on a **collateralized basis**. It is used by banks, financial institutions, and other entities to manage their short-term liquidity requirements.