UPSC Prelims 2023 · Question 45 of 97
UPSC Prelims 2023 question on Capital Market Segments
- ExamUPSC CSE
- Year2023
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicMoney Market
- DifficultyMedium
- TypeStatement
Consider the following markets:
1. Government Bond Market
2. Call Money Market
3. Treasury Bill Market
4. Stock Market
How many of the above are included in capital markets?
Show answer
Answer: B. Only two
Analysis
A capital market is a financial market where long-term debt or equity-backed securities are bought and sold.
Only Government Bond Market and Stock Market are capital markets → Option (b) Only two.
Statement by statement
Statement 1 – CORRECT: Government Bonds fall under the broad category of government securities (G-Sec) and are primarily long term investment tools issued for periods ranging from 5 to 40 years. It can be issued by both Central and State governments of India — included in capital markets.
Statement 2 – INCORRECT: Call Money Market is an essential part of the Indian Money Market, where the day-to-day surplus funds (mostly of banks) are traded — it is a money market instrument, not capital market.
Statement 3 – INCORRECT: Treasury bills are money market instruments issued by the Government of India — not capital market.
Statement 4 – CORRECT: Capital market refers to a broad spectrum of tradeable assets that includes the stock market as well as other venues for trading different financial products.