Question : Assertion: Corporate bonds are debt instruments issued by governments to raise funds.
Reason: Corporate bonds are issued by corporations to raise capital.
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: Assertion is false, but the reason is true.
Solution : The correct answer is (d) Assertion is false, but the reason is true.
The assertion is false. Corporate bonds are not debt instruments issued by governments. They are, in fact, debt instruments issued by corporations (business entities) to raise capital.
The reason is true. Corporate bonds are indeed issued by corporations to raise capital for various purposes like expanding operations, acquisitions, debt refinancing, and other financial needs.
Question : Assertion: Commercial paper is a short-term debt instrument issued by corporations.
Reason: Commercial paper is often used to meet short-term financing needs.
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