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Read the following… (Class 12 Business Studies 2026, Q7)

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Business StudiesCBSE Class 12 · Board exam 2026, set 66/1/1 · 1 mark · Assertion-reason

CBSE Class 12 Business Studies 2026: question 7

Set in the CBSE Class 12 board exam of 2026, paper 66/1/1, section A, question 7, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q7 · 1 mark · Assertion-reasonCompetency-basedFinancial Markets

Read the following statements – Assertion (A) and Reason (R) :

Assertion (A) : Money market instruments have a higher degree of liquidity as compared to capital market securities.

Reason (R) : Money market instruments are traded on the stock exchanges.

Choose the correct alternative from the alternatives given below :

  1. (A)Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
  2. (B)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
  3. (C)Assertion (A) is true and Reason (R) is false.
  4. (D)Assertion (A) is false and Reason (R) is true.

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 66/1/1.

Hints

Open one hint at a time and try again before the next.

Hint 1

Where are treasury bills and commercial paper traded?

Hint 2

Short maturity means high liquidity.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Assertion: True. Money market instruments are short-term and can be converted into cash quickly, so they are more liquid than capital market securities.

    Reason: False. Money market instruments are not traded on stock exchanges; they are dealt over the telephone or electronically through banks and financial institutions.

  2. A is true and R is false. Option (C).

    1 mark

Answer: (C) Assertion (A) is true and Reason (R) is false.

Where the marks are

  • Truth of A and R and the link between them (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Financial Markets, one at a time, marked against the answer key and marking points.Back to the full paper2026 board paper, set 66/1/1: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.