Hot money is a term that is most commonly used in financial markets to refer to the flow of funds (or capital) from one country to another in order to earn a short-term profit on interest rate differences and/ or anticipated exchange rate shifts. These speculative capital flows are called "hot money" because they can move very quickly in and out of markets, potentially leading to market instability.

Correct Option: C

Hot money is a term that is most commonly used in financial markets to refer to the flow of funds (or capital) from one country to another in order to earn a short-term profit on interest rate differences and/ or anticipated exchange rate shifts. These speculative capital flows are called "hot money" because they can move very quickly in and out of markets, potentially leading to market instability.

Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. So it is accepted by people and government on a legal basis. Paper currency and coins are common forms of legal tender in many countries.

Correct Option: B

Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. So it is accepted by people and government on a legal basis. Paper currency and coins are common forms of legal tender in many countries.

Open Market Operation (OMO) refers to the buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system. A central bank uses OMO as the primary means of implementing monetary policy.

Correct Option: C

Open Market Operation (OMO) refers to the buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system. A central bank uses OMO as the primary means of implementing monetary policy.

There are two types of money in a fractional-reserve banking system, currency originally issued by the central bank, and bank deposits at commercial banks: (a) central bank money (all money created by the central bank regardless of its form, e.g. banknotes, coins, electronic money); and (b) commercial bank money (money created in the banking system through borrowing and lending) - sometimes referred to as chequebook money.

Correct Option: D

There are two types of money in a fractional-reserve banking system, currency originally issued by the central bank, and bank deposits at commercial banks: (a) central bank money (all money created by the central bank regardless of its form, e.g. banknotes, coins, electronic money); and (b) commercial bank money (money created in the banking system through borrowing and lending) - sometimes referred to as chequebook money.

A bear is a speculator who is wary of fall in prices and hence sells securities so that he may buy them at cheap price in future. He does not have securities at present but sells them at higher prices in anticipation that he will supply them business purchasing at lower prices in the future. If the prices move down as per the expectations of the bear he will earn profits out of these transactions.

Correct Option: B

A bear is a speculator who is wary of fall in prices and hence sells securities so that he may buy them at cheap price in future. He does not have securities at present but sells them at higher prices in anticipation that he will supply them business purchasing at lower prices in the future. If the prices move down as per the expectations of the bear he will earn profits out of these transactions.