____________ allocates saving efficiently in an economy to ultimate users
either for investment in real assets or for consumption.
A.
Economic system
B.
Banking system
C.
Financial system
D.
Market system
Answer»
C. Financial system
2.
Which of the following is not a regulatory institution in Indian financial system?
A.
RBI
B.
CIBIL
C.
SEBI
D.
IRDA
Answer»
B. CIBIL
3.
_____________ is regarded as a queen of Indian financial system.
A.
SEBI
B.
RBI
C.
Finance Ministry
D.
BSE
Answer»
B. RBI
4.
National Housing bank is a fully owned subsidiary of___________.
A.
HDFC
B.
HSBC
C.
RBI
D.
HUDCO
Answer»
C. RBI
5.
Financial institutions are also known as ______________.
A.
Financial organization
B.
Financial intermediaries
C.
Financial system
D.
Any of the above
Answer»
B. Financial intermediaries
6.
____________is the first development financial institution in India.
A.
IDBI
B.
ICICI
C.
IFCI
D.
RBI
Answer»
C. IFCI
7.
IDBI was established in ____________.
A.
1948
B.
1954
C.
1992
D.
1964
Answer»
D. 1964
8.
______________is an apex institution to coordinate, supplement and integrate the activities of all
existing specialized financial institutions.
A.
IFCI
B.
IDBI
C.
RBI
D.
SEBI
Answer»
B. IDBI
9.
Which of the following is not an asset held by Commercial Banks?
A.
Bills of Exchange
B.
Current Account Deposits
C.
Money Lent at short Notice
D.
Credit Balances with the Reserve Bank
Answer»
B. Current Account Deposits
10.
Which of the following combinations is correct?
A.
NABARD--------Industrial Loan
B.
RBI---------------Long term Finance
C.
RRB---------------Agriculture Finance
D.
IDBI---------------Short Term Loans
Answer»
C. RRB---------------Agriculture Finance
11.
Which of the following is not an organized sector in India?
A.
Nationalized Banks
B.
Regional Rural Banks
C.
Cooperative Banks
D.
Chits and Money lenders
Answer»
D. Chits and Money lenders
12.
In which year was the Banking Regulation Act passed?
A.
1949
B.
1955
C.
1959
D.
1969
Answer»
A. 1949
13.
When did the National Bank of Agriculture and Rural Development establish?
A.
July, 1982
B.
July, 1969
C.
June, 1951
D.
June, 1961
Answer»
A. July, 1982
14.
Which of the following is the apex institution which handles refinance for agriculture and rural
development in India?
A.
RBI
B.
SIDBI
C.
NABARD
D.
RBI
Answer»
C. NABARD
15.
At which of the following cities is the Head Office of Reserve Bank of India located?
A.
Mumbai
B.
New Delhi
C.
Kolkata
D.
Dehradun
Answer»
A. Mumbai
16.
“Scheduled bank” in India means a bank _____.
A.
Incorporated under the Companies Act, 1956
B.
Authorized to the Banking business
C.
Governed by the Banking Regulation Act, 1949
D.
Included in the Second schedule to the Reserve Bank of India Act 1934
Answer»
D. Included in the Second schedule to the Reserve Bank of India Act 1934
17.
Which is the largest commercial bank in India?
A.
Bank of India
B.
Axis Bank
C.
State Bank of India
D.
HDFC
Answer»
C. State Bank of India
18.
Co-operative Societies Act was enacted in which year?
A.
1912
B.
1949
C.
1935
D.
1913
Answer»
A. 1912
19.
With whom does the ownership of Public sector banks rest?
A.
Government of India
B.
Jointly with Government of India and share-holders from the public
C.
Jointly with Government of India and State Bank of India
D.
Jointly with Government of India and Reserve Bank of India
Answer»
A. Government of India
20.
In which year was the Bank of Maharashtra established?
A.
1937
B.
1935
C.
1934
D.
1949
Answer»
B. 1935
21.
Urban Cooperative Banks are also called as?
A.
Short-term co-operatives
B.
Secondary Cooperative Banks
C.
Primary Cooperative Banks
D.
Long-term co-operatives
Answer»
C. Primary Cooperative Banks
22.
What is the full-form of NBFC?
A.
Non-Bank Financial Competition
B.
Non-Bank Foreign Company
C.
Non-Banking Financial Company
D.
Non-Banking Finance Corporation
Answer»
C. Non-Banking Financial Company
23.
Who insures banks in India?
A.
IRDA
B.
EXIM
C.
DICGC
D.
ECGC
Answer»
C. DICGC
24.
How many developments banks are there in India?
A.
5
B.
6
C.
7
D.
8
Answer»
B. 6
Chapter: Indian Money Market
25.
Which of the following is the regulator of Money market?
A.
Reserve Bank of India
B.
Government of India
C.
Telecom Regularity Authority
D.
Insurance Regularity Department
Answer»
A. Reserve Bank of India
26.
What is Call Money?
A.
It is an overnight loan in the Money Market
B.
It is loan of above1 day to 14 days in the money market
C.
It is loan of above14 day to 364 days in the money market
D.
It is an amount charged on ISD
Answer»
A. It is an overnight loan in the Money Market
27.
What is Notice Money?
A.
It is an overnight loan in the Money Market
B.
It is loan of above1 day to 14 days in the money market
C.
It is loan of above14 day to 364 days in the money market
D.
It is an amount charged on ISD
Answer»
B. It is loan of above1 day to 14 days in the money market
28.
What is Term Money?
A.
It is an overnight loan in the Money Market
B.
It is loan of above1 day to 14 days in the money market
C.
It is loan of above14 day to 364 days in the money market
D.
It is a loan provided on certain terms and conditions by Bank to its customer
Answer»
C. It is loan of above14 day to 364 days in the money market
29.
Which of the following is not related with Money Market?
A.
Treasury Bills
B.
Commercial Bills
C.
Certificates of Deposit
D.
Shares
Answer»
D. Shares
30.
Which of the following is related with Money Market?
A.
Treasury Bills
B.
Commercial money
C.
Cheque
D.
Shares
Answer»
A. Treasury Bills
31.
Which of the following statement is true about Commercial Paper?
A.
It is traded in the money market
B.
It is a promissory note
C.
It was introduced in 1990
D.
It is a secure Instrument
Answer»
C. It was introduced in 1990
32.
Which of the following statement is true about Certificates of Deposits?
A.
It is secure instrument in comparison of Commercial Paper
B.
It is a promissory note
C.
It is traded in Capital Market
D.
It was introduced in 1990
Answer»
A. It is secure instrument in comparison of Commercial Paper
33.
Which of the following statement is false about Treasury Bills?
A.
It is a secure Instrument
B.
It is a promissory note
C.
It is issued by government
D.
It is issued maximum for maturity of 1 year
Answer»
D. It is issued maximum for maturity of 1 year
34.
Which of the following statement is true about Commercial Bill?
A.
It is a promissory note
B.
It is a bill of Exchange
C.
It is a trade Bill
D.
It is issued by RBI
Answer»
C. It is a trade Bill
35.
Which of the following statement is related to dated Securities?
A.
It is a secure Instrument
B.
It is issued by government
C.
It acknowledge the debt by the government
D.
The date of maturity is mentioned on the certificate
Answer»
D. The date of maturity is mentioned on the certificate
36.
What is the minimum amount at which Commercial Paper can be issued?
A.
The minimum amount for Commercial Papers is 5 lakhs.
B.
The minimum amount for Commercial Papers is 5 Crores.
C.
The minimum amount for Commercial Papers is 1 lakh.
D.
The minimum amount for Commercial Papers is 1 Crore.
Answer»
A. The minimum amount for Commercial Papers is 5 lakhs.
37.
What is the maximum and minimum maturity of Certificate of Deposit issued by financial
Institutions?
A.
Certificate of deposit issued by financial Institutions are for 1 year to 3 years.
B.
Certificate of deposit issued by financial Institutions are for 7 days to 364 days.
C.
Certificate of deposit issued by financial Institutions are for 15 days to 90 days.
D.
None of these.
Answer»
B. Certificate of deposit issued by financial Institutions are for 7 days to 364 days.
38.
What is the minimum amount at which Certificate of Deposit can be issued?
A.
The minimum amount for Commercial Papers is 5 lakhs.
B.
The minimum amount for Commercial Papers is 5 Crores.
C.
The minimum amount for Commercial Papers is 1 lakh.
D.
The minimum amount for Commercial Papers is 1 Crore.
Answer»
C. The minimum amount for Commercial Papers is 1 lakh.
39.
Which of the following is considered to be more secure instrument?
A.
Cheque
B.
Draft
C.
Commercial Paper
D.
Hundi
Answer»
B. Draft
40.
What is the maximum validity of a cheque?
A.
90 days
B.
30 days
C.
60 days
D.
180 days
Answer»
A. 90 days
41.
Which is not a type of cheque?
A.
Mutilated Cheque
B.
Stale Cheque
C.
Crossed Cheque
D.
Promissory Cheque
Answer»
D. Promissory Cheque
42.
Which is a type of crossing in a cheque?
A.
Negotiable Crossing
B.
Special Crossing
C.
Level Crossing
D.
Named Crossing
Answer»
B. Special Crossing
43.
Which of the following act defines a Cheque?
A.
RBI Act 1934
B.
Negotiable Instrument Act 1881
C.
Banking Regulation Act 1949
D.
Companies Act 2013
Answer»
B. Negotiable Instrument Act 1881
44.
Commercial Bill is a type of_____.
A.
Promissory Note
B.
Cheque
C.
Stamp
D.
Bill of exchange
Answer»
D. Bill of exchange
45.
Which among the following is/are correct regarding Money Market?
A.
Money Market is a market for short-term funds.
B.
Maturity in this market ranging from overnight to one year.
C.
The basic function of money market is to provide efficient liquidity position for commercial banks, financial institution, Mutual funds, insurance companies, corporate etc.
D.
Maturity in this market is above one year.
Answer»
B. Maturity in this market ranging from overnight to one year.
46.
Which among the following is/are correct regarding Call Money?
A.
It is the money lent/borrowed for maximum period of 14 days
B.
No Collateral is required in Call Money transaction
C.
It is the money lent/borrowed for maximum period of 30 days
D.
Banks borrow primarily from the inter-bank (call money) market
Answer»
A. It is the money lent/borrowed for maximum period of 14 days
47.
What is the maximum duration for which term money can be lent/borrowed in money market?
A.
1 day
B.
15 days
C.
30 days
D.
1 year
Answer»
D. 1 year
48.
What is the minimum duration for which term money can be lent/borrowed in money market?
A.
1 day
B.
15 days
C.
30 days
D.
1 year
Answer»
B. 15 days
49.
How many Scheduled Commercial Banks are there in India?
A.
81
B.
89
C.
93
D.
97
Answer»
C. 93
Chapter: Indian Capital Market
50.
What is an Indian depository receipt?
A.
A deposit account with a public sector bank.
B.
It is a depository account with any of the depositories in India.
C.
An instrument in the form of depository receipt created by an Indian depository against underlying equity shares of the issuing company.
D.
None of the above is correct.
Answer»
A. A deposit account with a public sector bank.
51.
Capital market regulator is:
A.
R B I
B.
I R D A
C.
N S E
D.
B S E
Answer»
D. B S E
52.
Which of the following organisations provides a guarantee to the exporters?
A.
Exim Bank
B.
Export Credit Guarantee Corporation (E C G C)
C.
Director General Foreign Trade
D.
Reserve Bank of India
Answer»
B. Export Credit Guarantee Corporation (E C G C)
53.
The financial Market where debt and stocks are traded and maturity period is more than a year is
classified as:
A.
Shorter term Markets
B.
Capital Markets
C.
Counter Markets
D.
Long-term Markets
Answer»
B. Capital Markets
54.
The market in which new Securities are issued by the Corporations to raise funds are called:
A.
Primary Markets
B.
Secondary Markets
C.
Gross Markets
D.
Proceeds Markets
Answer»
A. Primary Markets
55.
Which type of preference Shares can be converted into equity?
A.
Redeemable Bonds
B.
Convertible Bonds
C.
Non- Convertible Bonds
D.
All of the above
Answer»
B. Convertible Bonds
56.
Which is not one of the development steps taken for Capital Market?
A.
Open Outcry
B.
Book Building
C.
Establishing SEBI
D.
Screen Based Trading
Answer»
A. Open Outcry
57.
Which of the following is least risky:
A.
Equity
B.
Corporate Bonds
C.
Treasury Bills
D.
Certificate of Deposits
Answer»
C. Treasury Bills
58.
Which security holders will receive arrears of the non- payment of dividends by the Company during
the loss?
A.
Cumulative Preference Share Holders
B.
Non- Cumulative Preference Share Holders
C.
Convertible Preference Share Holder
D.
Ordinary Equity Holders
Answer»
A. Cumulative Preference Share Holders
59.
What is the simple example of Stock Index in India:
A.
NSE
B.
Sensex
C.
BSE
D.
SEBI
Answer»
B. Sensex
60.
The amount which is paid at the time of maturity of the bond is equal to:
A.
Face Value
B.
Yield
C.
Coupon
D.
Discounted Price
Answer»
A. Face Value
61.
Which one of the following agencies in the Indian Capital market has authority to regulate the Mutual
fund markets in India?
A.
IRDA
B.
SEBI
C.
RBI
D.
IBPS
Answer»
C. RBI
62.
In capital market the major suppliers of trading Instruments are:
A.
Government and corporations
B.
Liquid Corporations
C.
Instrumental Corporations
D.
Manufacturing Corporations
Answer»
A. Government and corporations
63.
In primary markets, the property of shares which made it easy to sell newly issued security is
concerned as:
A.
Increased Liquidity
B.
Decreased Liquidity
C.
Money Flow
D.
Large Funds
Answer»
A. Increased Liquidity
64.
The transaction costs of trading of financial Instruments in centralized market is classified as:
A.
Flexible Costs
B.
Low transaction Costs
C.
High Transaction Costs
D.
Constant Costs
Answer»
B. Low transaction Costs
65.
In primary market, the first time issued shares to be publicly traded, in stock market is considered as:
A.
Traded Offering
B.
Public Markets
C.
Issuance Offering
D.
Initial Public Offering
Answer»
D. Initial Public Offering
66.
The exchange markets and over the counter markets are considered as two types of:
A.
Floating market
B.
Risky market
C.
Secondary market
D.
Primary market
Answer»
C. Secondary market
67.
The bonds that are backed by cash flow from project and are sold to finance particular project are
classified as:
A.
Finance Bonds
B.
Revenue Bonds
C.
Financing Bonds
D.
Project Bonds
Answer»
B. Revenue Bonds
68.
The Component of Capital Market are:
A.
Equity Market
B.
Debt Market
C.
Derivative Market
D.
All of the above
Answer»
D. All of the above
69.
There are ___________ categories of Industrial Security Market.
A.
1
B.
2
C.
3
D.
4
Answer»
B. 2
70.
Who controls the capital market in India?
A.
SEBI
B.
RBI
C.
IRDA
D.
NABARD
Answer»
A. SEBI
71.
Which of the following words does not belong to the stock exchange?
A.
KPO
B.
NAV
C.
NSE
D.
IPO
Answer»
A. KPO
72.
Which term most accurately describes selling shares at a higher price than the price at which they were
bought?
A.
Loss
B.
Profit
C.
Asset
D.
Dividend
Answer»
B. Profit
73.
How many companies are included in the SENSEX?
A.
50
B.
111
C.
30
D.
None
Answer»
C. 30
74.
Which of the following statements is true?
A.
SEBI was established in 1988
B.
The Harshad Mehta share scandal happened in 1992
C.
Unit Trust of India was established in 1954
D.
SEBI is not a constitutional body
Answer»
C. Unit Trust of India was established in 1954
Chapter: Foreign Exchange Market
75.
Maintaining a foreign currency account is helpful to
A.
Avoid transaction cost.
B.
Avoid exchange risk.
C.
Avoid both transaction cost and exchange risk.
D.
Avoid exchange risk and domestic currency depreciation
Answer»
C. Avoid both transaction cost and exchange risk.
76.
India’s foreign exchange rate system is?
A.
Free float
B.
Managed float
C.
Fixed
D.
Fixed target of band
Answer»
B. Managed float
77.
Hedging transaction is indicated by
A.
Transactions in odd amounts
B.
Presentation of documentary support
C.
Frequency of such transactions
D.
None of the above
Answer»
D. None of the above
78.
The acronym SWIFT stands for
A.
Safety Width in Financial Transactions.
B.
Society for Worldwide International Financial Telecommunication.
C.
Society for Worldwide Interbank Financial Telecommunication.
D.
Swift Worldwide Information for Financial Transaction.
Answer»
C. Society for Worldwide Interbank Financial Telecommunication.
79.
Indirect rate in foreign exchange means
A.
The rate quoted with the units of home currency kept fixed.
B.
The rate quoted with units of foreign currency kept fixed.
C.
The rate quoted in terms of a third currency.
D.
None of the above.
Answer»
A. The rate quoted with the units of home currency kept fixed.
80.
The exchange rate is
A.
The price of one currency relative to gold.
B.
The value of a currency relative to inflation.
C.
The change in the value of money over time.
D.
The price of one currency relative to another.
Answer»
D. The price of one currency relative to another.
81.
India is facing continuous deficit in its balance of payments. In the foreign exchange market rupee is
expected to
A.
Depreciate.
B.
Appreciate.
C.
Show no specific tendency.
D.
Depreciate against currencies of the countries with positive balance of payment and appreciate
Answer»
A. Depreciate.
82.
The effect of speculation on exchange rate is
A.
It causes violent fluctuations in exchange rate.
B.
It aggravates the market trends.
C.
Either or both of A and B.
D.
Neither A nor B.
Answer»
C. Either or both of A and B.
83.
The demand for domestic currency in the foreign exchange market is indicated by the following
transactions in balance of payment.
A.
Export of goods and services
B.
Import of goods and services.
C.
Export of goods and services and capital inflows.
D.
Import of goods and services and capital outflows.
Answer»
C. Export of goods and services and capital inflows.
84.
If PPP holds
A.
The nominal exchange rate will not change.
B.
The real exchange rate will not change.
C.
Both real and nominal exchange rates will not change.
D.
Both real and nominal exchange will move together
Answer»
B. The real exchange rate will not change.
85.
A spot transaction in the foreign exchange market involves the
A.
Exchange of exports and imports at a specified future date.
B.
Exchange of bank deposits at a specified future date.
C.
Immediate (within two days) exchange of exports and imports.
D.
Immediate (within two days) exchange of bank deposits.
Answer»
D. Immediate (within two days) exchange of bank deposits.
86.
Forward exchange rates
A.
Involve the immediate exchange of bank deposits.
B.
Involve the exchange of bank deposits at some specified future date.
C.
Involve the immediate exchange of imports and exports.
D.
None of the above.
Answer»
B. Involve the exchange of bank deposits at some specified future date.
87.
When the value of the British pound changes from $1.50 to $1.25, the pound has ________ and the dollar
has ________.
A.
appreciated; appreciated
B.
depreciated; appreciated
C.
appreciated; depreciated
D.
depreciated; depreciated
Answer»
B. depreciated; appreciated
88.
The foreign exchange market
A.
Is organized as an over-the-counter market in which several hundred dealers stand ready to buy and sell deposits denominated in foreign currencies.
B.
Is very competitive.
C.
Functions no differently from a centralized market.
D.
All of the above.
Answer»
D. All of the above.
89.
In the long run, ________ affect the exchange rate.
A.
relative price levels
B.
tariffs and quotas
C.
productivity
D.
All of the above.
Answer»
D. All of the above.
90.
Exchange rates are determined in
A.
The money market.
B.
The foreign exchange market.
C.
The stock market.
D.
The capital market.
Answer»
B. The foreign exchange market.
91.
The immediate (two-day) exchange of one currency for another is a
A.
Forward transaction.
B.
Spot transaction.
C.
Money transaction.
D.
Exchange transaction.
Answer»
B. Spot transaction.
92.
An agreement to exchange dollar bank deposits for euro bank deposits in one month is a
A.
Spot transaction.
B.
Future transaction.
C.
Forward transaction.
D.
Monthly transaction.
Answer»
C. Forward transaction.
93.
In the foreign exchange market, if the interest rate on foreign deposits increases, holding everything else
constant,
A.
The expected return schedule for foreign deposits shifts to the right.
B.
The dollar depreciates.
C.
The foreign currency appreciates.
D.
All of the above.
Answer»
D. All of the above.
94.
Although market trades are said to involve the buying and selling of currencies, most trades involve the
buying and selling of
A.
Bank deposits denominated in different currencies.
B.
SDRs.
C.
Go
Answer»
A. Bank deposits denominated in different currencies.
95.
Higher tariffs and quotas cause a country’s currency to _____ in the _____ run.
A.
depreciate; short
B.
appreciate; short
C.
depreciate; long
D.
appreciate; long
Answer»
D. appreciate; long
96.
Lower tariffs and quotas cause a country’s currency to _____ in the _____ run.
A.
depreciate; short
B.
appreciate; short
C.
depreciate; long
D.
appreciate; long
Answer»
C. depreciate; long
97.
Anything that increases the demand for foreign goods relative to domestic goods tends to _____ the domestic currency because domestic goods will only continue to sell well if the value of the domestic currency is _____.
A.
depreciate; lower
B.
depreciate; higher
C.
appreciate; lower
D.
appreciate; higher
Answer»
A. depreciate; lower
98.
If a factor increases the demand for _____ goods relative to _____ goods, the domestic currency will
appreciate.
A.
foreign; domestic
B.
foreign; foreign
C.
domestic; domestic
D.
domestic; foreign
Answer»
D. domestic; foreign
99.
An increase in productivity in a country will cause its currency to _____ because it can produce goods at a
_____ price.
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