Question : It is a short term finance repayable on demand it is used for interbank transactions. Which money market instrument is highlighted in the given statement?
Option 1: Treasury bill
Option 2: Commercial paper
Option 3: Call money
Option 4: Commercial bill
Correct Answer: Call money
Solution : Call money is redeemed on demand whose maturity period varies from 1 day to 15 days it is used for interbank transactions. Call Money used by banks to maintain the CRR(cash reserve ratio).
Hence, option C is correct.