{"id":91759,"date":"2025-06-01T11:05:07","date_gmt":"2025-06-01T11:05:07","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=91759"},"modified":"2025-06-01T11:05:07","modified_gmt":"2025-06-01T11:05:07","slug":"with-reference-to-the-indian-economy-consider-the-following-statement","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-indian-economy-consider-the-following-statement\/","title":{"rendered":"With reference to the Indian economy, consider the following statement"},"content":{"rendered":"<p>With reference to the Indian economy, consider the following statements:<\/p>\n<ul>\n<li>\u2018Commercial Paper\u2019 is a short-term unsecured promissory note.<\/li>\n<li>\u2018Certificate of Deposit\u2019 is a long-term instrument issued by the Reserve Bank of India to a corporation.<\/li>\n<li>\u2018Call Money\u2019 is a short-term finance used for interbank transactions.<\/li>\n<li>\u2018Zero-Coupon Bonds\u2019 are the interest bearing short-term bonds issued by the Scheduled Commercial Banks to corporations.<\/li>\n<\/ul>\n<p>Which of the statements given above is\/are correct ?<\/p>\n<p>[amp_mcq option1=&#8221;1 and 2 only&#8221; option2=&#8221;4 only&#8221; option3=&#8221;1 and 3 only&#8221; option4=&#8221;2, 3 and 4 only&#8221; correct=&#8221;option3&#8243;]<\/p>\n<div class=\"psc-box-pyq-exam-year-detail\">\n<div class=\"pyq-exam\">\n<div class=\"psc-heading\">This question was previously asked in<\/div>\n<div class=\"psc-title line-ellipsis\">UPSC IAS &#8211; 2020<\/div>\n<\/div>\n<div class=\"pyq-exam-psc-buttons\"><a href=\"\/pyq\/pyq-upsc-ias-2020.pdf\" target=\"_blank\" class=\"psc-pdf-button\" rel=\"noopener\">Download PDF<\/a><a href=\"\/pyq-upsc-ias-2020\" target=\"_blank\" class=\"psc-attempt-button\" rel=\"noopener\">Attempt Online<\/a><\/div>\n<\/div>\n<section id=\"pyq-correct-answer\">\nThe question asks to identify the correct statements regarding different financial instruments in the Indian economy.<br \/>\n<\/section>\n<section id=\"pyq-key-points\">\n&#8211; Statement 1: &#8216;Commercial Paper&#8217; is indeed a short-term (typically 7 days to one year) unsecured promissory note issued by highly-rated corporations to raise funds from the money market. This statement is correct.<br \/>\n&#8211; Statement 2: &#8216;Certificate of Deposit&#8217; (CD) is a marketable receipt for funds deposited in a bank for a specified period (minimum 7 days). It is issued by commercial banks and financial institutions, not the Reserve Bank of India, and can be short to medium-term, not exclusively long-term. This statement is incorrect.<br \/>\n&#8211; Statement 3: &#8216;Call Money&#8217; is a short-term finance (usually overnight) used in the interbank market for lending and borrowing funds to manage liquidity. This statement is correct.<br \/>\n&#8211; Statement 4: &#8216;Zero-Coupon Bonds&#8217; do not pay periodic interest (coupon). They are sold at a discount to their face value, and the difference between the face value and the purchase price represents the investor&#8217;s return. They are not characterized as &#8220;interest bearing&#8221; in the traditional sense and can be issued by various entities (government, corporations, banks), not just Scheduled Commercial Banks to corporations. This statement is incorrect.<br \/>\n<\/section>\n<section id=\"pyq-additional-information\">\nThese instruments are key components of the money market (short-term) and capital market (long-term), facilitating funding and investment activities in the economy.<br \/>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>With reference to the Indian economy, consider the following statements: \u2018Commercial Paper\u2019 is a short-term unsecured promissory note. \u2018Certificate of Deposit\u2019 is a long-term instrument issued by the Reserve Bank of India to a corporation. \u2018Call Money\u2019 is a short-term finance used for interbank transactions. \u2018Zero-Coupon Bonds\u2019 are the interest bearing short-term bonds issued by &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"With reference to the Indian economy, consider the following statement\" class=\"read-more button\" href=\"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-indian-economy-consider-the-following-statement\/#more-91759\">Detailed Solution<span class=\"screen-reader-text\">With reference to the Indian economy, consider the following statement<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1092],"tags":[1288,1120,1190],"class_list":["post-91759","post","type-post","status-publish","format-standard","hentry","category-upsc-ias","tag-1288","tag-economic-development","tag-money-banking","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>With reference to the Indian economy, consider the following statement<\/title>\n<meta name=\"description\" content=\"The question asks to identify the correct statements regarding different financial instruments in the Indian economy. - Statement 1: &#039;Commercial Paper&#039; is indeed a short-term (typically 7 days to one year) unsecured promissory note issued by highly-rated corporations to raise funds from the money market. This statement is correct. - Statement 2: &#039;Certificate of Deposit&#039; (CD) is a marketable receipt for funds deposited in a bank for a specified period (minimum 7 days). It is issued by commercial banks and financial institutions, not the Reserve Bank of India, and can be short to medium-term, not exclusively long-term. This statement is incorrect. - Statement 3: &#039;Call Money&#039; is a short-term finance (usually overnight) used in the interbank market for lending and borrowing funds to manage liquidity. This statement is correct. - Statement 4: &#039;Zero-Coupon Bonds&#039; do not pay periodic interest (coupon). They are sold at a discount to their face value, and the difference between the face value and the purchase price represents the investor&#039;s return. They are not characterized as &quot;interest bearing&quot; in the traditional sense and can be issued by various entities (government, corporations, banks), not just Scheduled Commercial Banks to corporations. This statement is incorrect.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-indian-economy-consider-the-following-statement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"With reference to the Indian economy, consider the following statement\" \/>\n<meta property=\"og:description\" content=\"The question asks to identify the correct statements regarding different financial instruments in the Indian economy. - Statement 1: &#039;Commercial Paper&#039; is indeed a short-term (typically 7 days to one year) unsecured promissory note issued by highly-rated corporations to raise funds from the money market. This statement is correct. - Statement 2: &#039;Certificate of Deposit&#039; (CD) is a marketable receipt for funds deposited in a bank for a specified period (minimum 7 days). It is issued by commercial banks and financial institutions, not the Reserve Bank of India, and can be short to medium-term, not exclusively long-term. This statement is incorrect. - Statement 3: &#039;Call Money&#039; is a short-term finance (usually overnight) used in the interbank market for lending and borrowing funds to manage liquidity. This statement is correct. - Statement 4: &#039;Zero-Coupon Bonds&#039; do not pay periodic interest (coupon). They are sold at a discount to their face value, and the difference between the face value and the purchase price represents the investor&#039;s return. They are not characterized as &quot;interest bearing&quot; in the traditional sense and can be issued by various entities (government, corporations, banks), not just Scheduled Commercial Banks to corporations. This statement is incorrect.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-indian-economy-consider-the-following-statement\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T11:05:07+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"With reference to the Indian economy, consider the following statement","description":"The question asks to identify the correct statements regarding different financial instruments in the Indian economy. - Statement 1: 'Commercial Paper' is indeed a short-term (typically 7 days to one year) unsecured promissory note issued by highly-rated corporations to raise funds from the money market. This statement is correct. - Statement 2: 'Certificate of Deposit' (CD) is a marketable receipt for funds deposited in a bank for a specified period (minimum 7 days). It is issued by commercial banks and financial institutions, not the Reserve Bank of India, and can be short to medium-term, not exclusively long-term. This statement is incorrect. - Statement 3: 'Call Money' is a short-term finance (usually overnight) used in the interbank market for lending and borrowing funds to manage liquidity. This statement is correct. - Statement 4: 'Zero-Coupon Bonds' do not pay periodic interest (coupon). They are sold at a discount to their face value, and the difference between the face value and the purchase price represents the investor's return. They are not characterized as \"interest bearing\" in the traditional sense and can be issued by various entities (government, corporations, banks), not just Scheduled Commercial Banks to corporations. This statement is incorrect.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-indian-economy-consider-the-following-statement\/","og_locale":"en_US","og_type":"article","og_title":"With reference to the Indian economy, consider the following statement","og_description":"The question asks to identify the correct statements regarding different financial instruments in the Indian economy. - Statement 1: 'Commercial Paper' is indeed a short-term (typically 7 days to one year) unsecured promissory note issued by highly-rated corporations to raise funds from the money market. This statement is correct. - Statement 2: 'Certificate of Deposit' (CD) is a marketable receipt for funds deposited in a bank for a specified period (minimum 7 days). It is issued by commercial banks and financial institutions, not the Reserve Bank of India, and can be short to medium-term, not exclusively long-term. This statement is incorrect. - Statement 3: 'Call Money' is a short-term finance (usually overnight) used in the interbank market for lending and borrowing funds to manage liquidity. This statement is correct. - Statement 4: 'Zero-Coupon Bonds' do not pay periodic interest (coupon). They are sold at a discount to their face value, and the difference between the face value and the purchase price represents the investor's return. They are not characterized as \"interest bearing\" in the traditional sense and can be issued by various entities (government, corporations, banks), not just Scheduled Commercial Banks to corporations. This statement is incorrect.","og_url":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-indian-economy-consider-the-following-statement\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T11:05:07+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-indian-economy-consider-the-following-statement\/","url":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-indian-economy-consider-the-following-statement\/","name":"With reference to the Indian economy, consider the following statement","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T11:05:07+00:00","dateModified":"2025-06-01T11:05:07+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"The question asks to identify the correct statements regarding different financial instruments in the Indian economy. - Statement 1: 'Commercial Paper' is indeed a short-term (typically 7 days to one year) unsecured promissory note issued by highly-rated corporations to raise funds from the money market. This statement is correct. - Statement 2: 'Certificate of Deposit' (CD) is a marketable receipt for funds deposited in a bank for a specified period (minimum 7 days). It is issued by commercial banks and financial institutions, not the Reserve Bank of India, and can be short to medium-term, not exclusively long-term. This statement is incorrect. - Statement 3: 'Call Money' is a short-term finance (usually overnight) used in the interbank market for lending and borrowing funds to manage liquidity. This statement is correct. - Statement 4: 'Zero-Coupon Bonds' do not pay periodic interest (coupon). They are sold at a discount to their face value, and the difference between the face value and the purchase price represents the investor's return. They are not characterized as \"interest bearing\" in the traditional sense and can be issued by various entities (government, corporations, banks), not just Scheduled Commercial Banks to corporations. This statement is incorrect.","breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-indian-economy-consider-the-following-statement\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-indian-economy-consider-the-following-statement\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/with-reference-to-the-indian-economy-consider-the-following-statement\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"UPSC IAS","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/upsc-ias\/"},{"@type":"ListItem","position":3,"name":"With reference to the Indian economy, consider the following statement"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/91759","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=91759"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/91759\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=91759"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=91759"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=91759"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}