After building a strong foundation in Part 1, the second part focuses on advanced concepts and deeper understanding of money market instruments. This helps aspirants tackle higher-level questions asked in banking exams.
Money Market Advanced Concepts, FREE PDF
The Money Market Part 2 FREE PDF provides in-depth coverage of advanced instruments and concepts. It includes topics like commercial bills, call/notice/term money, repos and reverse repos, and MIBOR.
The PDF explains how these instruments function in real-world banking and how RBI uses them to control liquidity and interest rates. It also includes detailed comparisons, examples, and quick revision tables for better understanding.
| Category | Concept / Instrument | Description | Key Details | Impact / Purpose |
| Instrument | Commercial Bills | Trade finance instrument | Bill of Exchange | Provides working capital |
| Instrument | Call Money | Overnight interbank funds | 1 day | Maintains liquidity |
| Instrument | Notice Money | Short-term funds | 2–14 days | Short-term adjustments |
| Instrument | Term Money | Slightly longer duration | >14 days–1 year | Structured funding |
| Instrument | Repo | Borrowing from RBI | Against securities | Controls liquidity |
| Instrument | Reverse Repo | RBI borrows from banks | Absorbs liquidity | Inflation control |
| Benchmark | MIBOR | Interbank lending rate | Calculated by NSE | Benchmark rate |
| Concept | Bridge Financing | Short-term funding gap | Used via CP | Supports corporates |
Q1. Money Market instruments generally have a maturity of:
Q2. Which authority uses the Money Market to control liquidity?
Q3. Which of the following is a short-term government security?
Q4. Treasury Bills do not pay interest because they are:
Q5. Which institution issues Treasury Bills in India?
Q6. Certificate of Deposit is issued by:
Q7. Commercial Papers are issued mainly by:
Q8. Commercial Papers are considered:
Q9. Which of the following is an inter-bank market?
Q10. Call Money is borrowed for:
Q11. Notice Money is borrowed for:
Q12. Which market deals with long-term funds?
Q13. Which regulator controls the Capital Market?
Q14. Which instrument is negotiable and transferable?
Q15. Fixed Deposits are:
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Q16. CBLO transactions are:
Q17. CBLO is operated by:
Q18. Ways and Means Advances help:
Q19. Who provides WMA facility?
Q20. Treasury Bills are considered:
Q21. Money Market ensures:
Q22. Participants in Money Market include:
Q23. Commercial Paper maturity can extend up to:
Q24. Treasury Bills are issued in multiples of:
Q25. Which instrument helps banks manage overnight liquidity?
Q26. Money Market instruments are:
Q27. Which of the following is highly liquid?
Q28. Which market helps RBI implement monetary policy?
Q29. Treasury Bills are redeemed at:
Q30. Which instrument is safest among the following?
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