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?

1. A. Only one
2. B. Only two
3. C. Only three
4. D. All four

Answer: B

Explanation

Capital markets are financial markets where long-term debt or equity-backed securities are bought and sold, typically with maturities exceeding one year. The money market, in contrast, deals with short-term debt instruments (usually less than one year).
1. Government Bond Market: Government bonds (G-Secs) are long-term debt instruments, often issued for periods ranging from 5 to 40 years, making them a part of the capital market.
2. Call Money Market: This is a segment of the money market where short-term funds (overnight or up to 14 days) are borrowed and lent, primarily by banks. It is not part of the capital market.
3. Treasury Bill Market: Treasury bills (T-Bills) are short-term debt instruments issued by the government, typically with maturities of 91, 182, or 364 days. They are part of the money market.
4. Stock Market: This is where equity shares, representing long-term ownership in companies, are traded. It is a core component of the capital market.
Therefore, only the Government Bond Market and the Stock Market are included in capital markets. This question assesses foundational knowledge of financial markets.