| 1. Repo and Reverse Repo |
| 2. Open Market Operations |
| 3. Response and Reverse Repo |
| 4. Relative Market Operations |
A) 1 and 2
B) 2 only
C) 3 only
D) 1, 2 and 4
Correct Answer: B
Solution :
Open Market Operations refers to the RBI buying and selling eligible securities to regulate money supply. Traditionally RBI was not resorting to this method. However, after the large inflow of foreign funds since 1991, RBI has had to step in to sterilize v the flow to avoid excess liquidity
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