Question

    A rate at which RBI (Reserve Bank of India) lends to

    commercial banks by purchasing securities:
    A Bank rate Correct Answer Incorrect Answer
    B Repo rate Correct Answer Incorrect Answer
    C Reverse repo rate Correct Answer Incorrect Answer
    D Bond yield Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    The rate at which RBI lends to commercial banks by purchasing the securities is called the repo rate. The bank rate is the rate at which RBI lends to commercial banks without purchasing the securities.

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