Question : Statement 1: Money market deals with short-term debt instruments.
Statement 2: Money market deals with long-term bonds and shares.
Option 1: Statement 1 is true, and statement 2 is true.
Option 2: Statement 1 is true, but statement 2 is false.
Option 3: Statement 1 is false, and statement 2 is true.
Option 4: Statement 1 is false, and statement 2 is false.
Correct Answer:
Statement 1 is true, but statement 2 is false.
Solution : The correct answer is (b) Statement 1 is true, but statement 2 is false.
Statement 1 is true. The money market indeed deals with short-term debt instruments, such as Treasury bills, commercial paper, certificates of deposit, and other similar instruments with short maturities.
Statement 2 is false. The money market is not concerned with long-term bonds and shares; those are typically part of the capital market. The money market primarily deals with short-term debt instruments and not long-term investments like bonds or shares.
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