Ans: D

Exp:

The money market is a market for short-term funds that deals in monetary assets whose period of maturity is up to one year. These assets are close substitutes for money. It is a market where low-risk, unsecured, and short-term debt instruments that are highly liquid are issued and actively traded every day. 

Some of the common money market instruments are–

• Call Money
• Treasury Bill (T-Bill)
• Cash Management Bill (CMB)
• Ways and Means Advances (WMAs)
• Certificate of Deposit (CD)
• Commercial Paper (CP)
• Commercial Bill (CB)

Reference: Chapter 8, Financial Market, Nitin Singhania Economy.

Ans: C

Exp:

Statement 1 is correct: Treasury bills are issued in the form of a short-term promissory note. They are highly liquid and have assured yield and negligible risk of default. They are issued at a price which is lower than their face value and repaid at par. The difference between the price at which the treasury bills are issued and their redemption value is the interest receivable on them and is called a discount. 

Statement 2 is incorrect: T-bills are issued by the Central Government, and the bills are sold by the RBI on behalf of the government, while the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs).

Statement 3 is correct: Treasury bills are money market instruments used to finance short-term requirements of the Government of India. The RBI sells T-Bills on behalf of the Central Government as it is a banker to the government.

Ans: A

Exp:

Statement 1 is incorrect: Masala Bonds are rupee-denominated bonds that can be issued by entities such as governmental bodies, Non-Bank Financial Companies (NBFCs) and eligible corporates to raise money from overseas markets.

Statement 2 is correct: The first Masala Bond was issued by the International Finance Corporation (IFC) in 2014 to raise Rs 1,000 crore to fund infrastructure projects in India. The word ‘masala’ was used by IFC (arm of World Bank Group) to symbolise the culture of India for specifically distinguishing Indian rupee-denominated bonds from other bonds. Similarly, ‘Dim Sum Bonds’ are used for bonds issued in Hong Kong, denominated in Chinese Renminbi and Komodo Bonds for Indonesia.

Statement 3 is incorrect: The Masala Bonds cannot be used for real estate activities other than for the development of integrated township or affordable housing projects. It also cannot be used for investing in capital markets, purchase of land and on-lending to other entities for such activities as stated above.

Reference: Chapter 8, Financial Market, Nitin Singhania Economy.

Ans: B

Exp:

Statement 1 is incorrect: Endogenic geomorphic processes are geological processes that originate from within the Earth and shape the Earth’s surface through various internal mechanisms. They are mainly `land-building forces originating from the interior of the earth.

Statement 2 is correct: Due to variation in geothermal gradients and heat flow from within, crustal thickness and strength, the action of endogenic forces are not uniform, and hence the tectonically controlled original crustal surface is uneven.

Ans: C

Exp:

Endogenic geomorphic processes are geological processes that originate within the Earth and shape the Earth’s surface through various internal mechanisms. These processes are driven by forces and energy sources that originate from the Earth’s interior. It includes :

• Tectonic Plate Movements, 
• Volcanic Activity, 
• Earthquakes, 
• Folding and Faulting, and
• Diastrophism.