Discussion
In the call/notice money market, which of the following participants is allowed to trade ?
Answer: C
The call/notice money market is an inter-bank market for very short term funds, from overnight up to 14 days. Participation is confined to banks and primary dealers as borrowers and lenders, so among the options given, 'only commercial banks' is the closest to the market's character and is the keyed answer.
'All Corporates' is wrong because corporates have no access to this market, and 'all of the above' is wrong for the same reason. The first option is wrong because mutual funds, which it lists, were phased out of call money and now lend through other money market instruments such as repo and collateralised lending.
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