[amp_mcq option1=”All Banks, Primary Dealers and Mutual Funds” option2=”All Corporates” option3=”Only Commercial Banks” option4=”All of the above” correct=”option4″]
The correct answer is D. All of the above.
The call/notice money market is a market for short-term loans, typically with maturities of up to one year. Participants in the call/notice money market include banks, primary dealers, mutual funds, and corporates.
Banks are the most active participants in the call/notice money market. They use the market to borrow and lend short-term funds to meet their liquidity needs. Primary dealers are banks that are authorized to deal in government securities. They use the call/notice money market to finance their inventory of government securities. Mutual funds use the call/notice money market to invest short-term surplus funds. Corporates use the call/notice money market to finance their working capital needs.
The call/notice money market is a very important market for the financial system. It provides a mechanism for banks, primary dealers, mutual funds, and corporates to borrow and lend short-term funds. This helps to ensure that there is always enough liquidity in the financial system.