Financial Markets Test - 31

Call money is a method by which banks borrow from each other to be able to maintain the cash reserve ratio. The interest rate paid on call money loans is known as the call rate. It is a highly volatile rate.

OTCEI (Over the Counter Exchange of India) was incorporated in the year 1990 on the lines of NASDAQ which is the OTC in USA. OTCEI is a fully computerized and transparent stock exchange.

Securities and Exchange Board of India (SEBI) was first established in 1988 as a non-statutory body for regulating the securities market. It became an autonomous body on 30 January 1992. Controller of capital issues was the regulatory authority before SEBI came into existence. It derived authority from the capital issues (control) Act, 1947.

A Treasury bill (T-Bill) is a short-term debt obligation backed by the Treasury Dept.

Only institutional investors can participate in money market. The money market consists of financial institutions and dealers in money or credit who wish to either borrow or lend. Participants borrow and lend for short periods, typically up to thirteen months.

Securities and Exchange Board of India (SEBI) was first established in 1988 as a non-statutory body for regulating the securities market.

The National Stock Exchange of India Limited (NSE) commenced trading in derivatives with the launch of index futures on June 12, 2000. The futures contracts are based on the popular benchmark Nifty 50 Index.

Money market instrument enjoy a higher degree of liquidity. A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded.

A private placement is the sale of securities to a relatively small number of select investors as a way of raising capital. Investors involved in private placements are usually large banks, mutual funds, insurance companies and pension funds.

A zero-coupon bond, also known as an "accrual bond," is a debt security that doesn't pay interest (a coupon) but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its full face value.