Solution
✅ Correct Option: 2
- Bank Rate -> minimum lending rate
- Marginal Standing Facility -> penal interest rate
- Repo Rate -> securities are pledged
- Reverse Repo Rate -> central bank borrows funds
Option 2 is correct: (A) - (II) matches -> Bank Rate is minimum rate, (B) - (III) matches -> Marginal Standing Facility is penal, (C) - (I) matches -> Repo Rate involves securities, (D) - (IV) matches -> Reverse Repo Rate involves central bank borrowing.
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