GPSC Class 1-2 2021 · Question 1 of 10

Consider the following statements: Statement 1 : T-Bills, Commercial papers and certificates of deposits are instruments of money markets Statement 2 : Equity shares, preference shares, debentures and bonds are the instruments of Capital markets statement 1

Economics - Financial Markets

ABoth Statements 1 and 2 are correct and statement 2 is the correct explanation for statement 1
BBoth Statements 1 and 2 are correct but Statement 2 is not the correct explanation forCorrect
CStatement 1 is correct but statement 2 is incorrect
DStatement 1 is incorrect and statement 2 is correct

Answer: B. Both Statements 1 and 2 are correct but Statement 2 is not the correct explanation for

Explanation

Both statements are correct. T-Bills, Commercial Papers and CDs are money market instruments (short-term). Equity, preference shares, debentures and bonds are capital market instruments (long-term). But Statement 2 does not explain Statement 1.

Source: GPSC Gujarat Administrative Service Prelims 26 Dec 2021 (Advt 30/2021-22) - English version

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