Discussion
When money is lent or borrowed for one day or on overnight basis it is known as :
Answer: B
Money lent or borrowed for one day is call money.
In the Indian money market, banks lend surplus funds to each other to meet day-to-day shortfalls, including their reserve requirements. Funds lent overnight, for one day, are call money and the rate is the call rate.
Funds for 2 to 14 days are notice money, and funds for 15 days to one year are term money. Near money refers to highly liquid assets, such as time deposits or treasury bills, that can be turned into cash easily but are not money themselves.
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