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Which of the following statements about the Call Money Market is INCORRECT?

hard Q9 of 15
Financial Awareness - Risk, Stability & Emerging Finance
Which of the following statements about the Call Money Market is INCORRECT?
AIt is a market for short-term funds with maturity up to 14 days
BIt is used by banks to manage their day-to-day liquidity requirements
CIt is a market for trading long-term government securities
DOnly banks and financial institutions can participate in the call money market
Step-by-Step Solution
  1. Step 1: Understand Call Money Market features

    Call money market deals with very short-term funds (overnight to 14 days) mainly for liquidity management.
  2. Step 2: Analyze options

    Options about short-term funds, liquidity management, and participants are correct. Trading long-term government securities is done in the government securities market, not call money market.
  3. Final Answer:

    It is a market for trading long-term government securities → Option C
  4. Quick Check:

    It is a market for trading long-term government securities = correct ✅
Quick Trick: Call money market = short-term funds, not long-term securities.
Common Mistakes:
  • Confusing call money market with government securities market.
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