Question

2. Corporate Bonds would be a part of the:
   1. Money Market
   2. Capital Market
   3. Foreign Exchange Market
   4. Commodity Market

3. The interest a bank pays to a depositor can be negative, that is, a depositor can be charged some interest rate for leaving deposits in their account.
   1. True.
   2. False.

Answer 1

Question 1

Correct answer is b. - Capital Market

Capital market is a type of financial market for long term financial securities (where securities are sold for more than one year). Securities such as bonds, equity shares, preference shares, debentures, ect are traded in capital market.

There are two types of capital market-

--> Primary market - Market for freshly issued securities.

--> Secondary market - Market for sale or purchase of existing securities.

Other options are incorrect as -

Money market is the market for short term securities which are to be redeemed within one year and bonds are issued for more than one year.

Foreign Exchange Market is the market where foreign exchanges ( currency of different countries) are traded.

Commodity market is the market for buying and selling for commodities such as oil, gold, other agricultural products, etc.

Question 2

Correct answer is True.

The interest a bank pays to a depositor can be negative, in this case a depositor can be charged some interest rate for leaving deposits in their account.

This is a situation where the economy is falling and the central bank wants to discourage people to save and keep the funds in the bank and encourage them to borrow and spend to increase the aggregate demand.

Hope it helps!