Question : Which of the following statement is incorrect?
Option 1: Commercial bill is a self liquidating instrument
Option 2: Commercial bill is used for long term finance
Option 3: Commercial bill is used to finance the credit sale of firms
Option 4: None of the above
Correct Answer: Commercial bill is used for long term finance
Solution : Commercial bill is a bill of exchange used by Business firms to finance their working capital requirements. It is a short term,negotiable money market instrument. It is used to finance the credit sale of firms.
Hence, option B is correct.
Option 1: Certificate of deposit issued against the deposits kept by companies and institutions.
Option 2: Commercial bill is short term borrowing instrument issued by RBI.
Option 3: Call money is a short term finance generally used by banks to maintain cash reserve ratio
Question : It is a bill of exchange used by Business firms to finance their working capital requirements.Which money market instrument is highlighted in the given statement?
Option 1: Treasury bill
Option 2: Commercial paper
Option 3: Certificate of deposits
Option 4: Commercial bill
Question : Which of the following statement is correct? Statement 1: Commercial bill used to finance the cash sales. Statement 2: Commercial bill is a short term instrument generally issued for a period of 90 days.
Option 1: Both are true
Option 2: Both are false
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 1 is false and statement 2 is true.
Option 1: Commercial paper is a negotiable instrument
Option 2: Commercial paper is also known as Zero coupon bonds.
Option 3: Commercial paper helps to satisfy short term requirements of funds.
Question : Statement 1: Commercial bill is a short-term negotiable instrument used for financing trade.
Statement 2: Commercial bill is a long-term bond issued by the government.
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.
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