23 Topics.
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What to Study: What does a financial market trade? The segments are counted in two ways: money, capital and forex markets, or only money and capital markets. Be aware of both. Forex market detail is not needed here.
What to Study: Understand the money market: the maturity limit of its instruments, its purpose (short-term liquidity) and who takes part. Which of its instruments are unsecured, and which are backed by collateral? Who regulates the money market and its instruments, Commercial Paper and Certificates of Deposit included?
Asked in UPSC PrelimsUPSC 2023
What to Study: How do the two markets differ in maturity, purpose and instruments? Remember which regulator covers government securities and which covers corporate debt and equity in the capital market.
Asked in UPSC PrelimsUPSC 2018UPSC 2023
What to Study: Who issues Treasury Bills, and in which three tenors? Understand how an investor earns a return on them through the issue price and the face value. Be clear about how a retail investor can buy them today.
What to Study: Why did the government introduce Cash Management Bills, and who issues them? Remember their maturity limit and when they were introduced. How do they differ from Treasury Bills?
Asked in UPSC PrelimsUPSC 2020
What to Study: Which institutions can issue Certificates of Deposit under the current RBI Directions, and which cannot? Remember their maturity, whether they can be traded, and the form in which they must be issued now. How does a CD differ from an ordinary fixed deposit? Know the current minimum size from RBI rules.
Asked in UPSC PrelimsUPSC 2020
What to Study: Remember which entities issue Commercial Paper and why. Know its maturity range, whether it is secured, how it is issued (at a discount or with interest), and the minimum credit rating required. How does it differ from a Certificate of Deposit?
What to Study: Know what a commercial bill is, which transaction creates it, and who the drawer and the drawee are. Remember its usual maturities. How does it differ from commercial paper?
What to Study: Be clear about what an inter-corporate deposit is, who lends to whom, and whether it is secured.
Asked in UPSC PrelimsUPSC 2020UPSC 2023
What to Study: Learn the tenor of each of the three. Are these loans secured? Understand what decides the call rate and why banks borrow in this market. Which entities may take part under the current RBI rules, and are non-banks allowed?
Asked in UPSC PrelimsUPSC 2024
What to Study: Is a market repo the same as the RBI's repo under the Liquidity Adjustment Facility? Know what CBLO was and who ran it, and which instrument replaced it. What is the role of the tri-party agent in that instrument?