[Solved] With reference to the Indian economy, “Collateral Borrowing and Lending Obligations” are the instruments of: Bond market Forex market Money market Stock market

Q70. With reference to the Indian economy, “Collateral Borrowing and Lending Obligations” are the instruments of:

1. Bond market
2. Forex market
3. Money market
4. Stock market

Answer: 3

• Collateral Borrowing and Lending Obligations (CBLO)

• is a money market instrument that represents an obligation between a borrower and a lender.

• This works like a bond where the lender buys the CBLO and a borrower sells the money market instrument with interest.

• The term, the interest rate, and the specifics of the CBLO are often all

negotiable between the two parties.

• In India, CBLOs are operated by the Clearing Corporation of India Ltd. (CCIL) and RBI.

• Hence option (c) is the correct answer