Question

Answer Question number 13-16 with reference to the information given here.
Kumar Ltd. is a large credit worthy firm manufacturing TV for the Indian market. It is
planning to invest in new machines to cater to the new market outside India. They require
long term finance, so they decide to raise funds by issuing equity shares. The issue of equity
shares involves huge flotation cost. To meet the expenses Kumar Ltd decides to look
forward to the money market
13.Name the money market instrument the company can use to raise to meet the flotation
cost.
A. Commercial paper
B. Certificate of deposit
C. Treasury bill
D. Call money
14. What is the duration for which Kumar Ltd can get the money from the above mentioned
instrument.
A. One day to 15 days
B. 15 days to 1 year
C. 1 year to 5 years
D. 5 years to 15 years
15. It is issued by
A. Reserve bank of India
B. The company which needs money
C. The commercial bank with the company which needs funds
D. Third party on behalf of the bank
16. Select the statement which is not true for the money market instrument chosen above.
A. It is a negotiable instrument
b. sold at discount
c. redeemed at par
d. it is also called zero coupon bond​

Answer 1

Answer:

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