Question : Assertion: Commercial banks play a significant role in the money market.
Reason: Commercial banks provide long-term loans to individuals and businesses.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Assertion is false, but the reason is true.
Correct Answer: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Solution : The correct answer is (b) Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
The assertion is true. Commercial banks indeed play a significant role in the money market by participating in various money market instruments and activities.
The reason is true but not the correct explanation for the assertion. Commercial banks primarily provide short to medium-term loans, but the assertion doesn't specify the term of the loans. The money market deals with short-term borrowing and lending, so the reason doesn't directly explain why commercial banks play a significant role in the money market.
Question : Assertion: Certificate of Deposit (CD) is an instrument issued by commercial banks.
Reason: CD is a negotiable instrument that represents a time deposit with a bank.
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