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?
(a) Only one
(b) Only two
(c) Only three
(d) All four


In the given list:

  1. The Government Bond Market refers to a sector of the capital markets where investors can trade in government-issued securities. These are usually long-term investments, as they tend to have maturities that extend beyond one year.
  2. The Call Money Market, on the other hand, is a segment of the money market. It deals with short-term borrowing and lending, typically overnight transactions. It is not a part of the capital markets because capital markets handle long-term investments.
  3. The Treasury Bill Market is also a segment of the money market. Treasury bills are short-term securities issued by a government to finance its short-term expenditure. These instruments typically have maturities of less than one year, so they do not fall under the category of capital markets.
  4. The Stock Market is a central component of the capital markets. It offers a platform for the issuance and trading of equity (or shares), which represent ownership in a company. Such instruments are generally long-term in nature.

From the above analysis, it is clear that among the given markets, only the Government Bond Market and the Stock Market belong to the capital markets. Hence, the correct answer is (b) Only two.

Inputs from Indian Economy Mindmap Notes 

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