Unit 1: Indian Financial System: Multiple Choice Questions
Unit 1: Indian Financial System: Multiple Choice Questions
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
13) When did the National Bank of Agriculture and Rural Development establish?
a) July, 1982
b) July, 1969
c) June, 1951
d) June, 1961
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
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
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 KEY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
c b b c b c d b b c d a a c a d c a a b
12) 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.
13) 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.
14) 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 KEY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
a a b c d a c a d c d a b c b a d b b d
4) 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
5) 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
7) 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
9) 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
11) 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
12) 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
14) 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
15) 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
16) 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
17) 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
18) 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 KEY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
a e b b a b a c a b a c a a b d c b d b
7) 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 against countries
with negative balance of payment.
9) 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.
13) 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
18) 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.
19) 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.
20) 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) gold.
d) ECUs.
ANSWER KEY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
C b d c a d a c c b d b b d d b b c d a
a) Only 1
b) Only 2
c) Both
d) None
5) A non-banking institution that has a principal business of receiving deposits under any scheme or
arrangement in one lump sum or in installments by way of contributions is known as?
a) Principal non-banking company
b) Residential non-banking company
c) Residuary non-banking company
d) Optional non-banking company
8) Which of the following does not have any roles in regulation of NBFCs?
a) National Housing Bank
b) Reserve Bank of India
c) SIDBI
d) Ministry of Corporate Affairs
9) NBFCs are required to accept public deposit for a maximum period of ___ months?
a) 36 months
b) 48 months
c) 60 months
d) 120 months
10) For a company to register as a NBFC it should have a minimum net owned fund of _____.
a) Rs 25 lakh
b) Rs 1 crores
c) Rs 2 crores
d) Rs 5 crores
14) Where a lessee does not expect to purchase a leased asset, the asset must be depreciated across:
a) its useful life;
b) the full economic life of the asset;
c) a period not exceeding 5 years;
d) the shorter of the lease term or 20 years.
15) The minimum lease payment is defined as including all of the following components except:
a) a bargain purchase option;
b) a guaranteed residual value;
c) the lease payments occurring over the lease term;
d) contingent rentals.
16) A sale and leaseback transaction involve the sale of an asset that is then leased back to the:
a) acquiring entity;
b) lessor;
c) original owner;
d) purchaser.
19) A merchant bank is a financial institution conducting money market activities and:
a) Lending
b) Underwriting and financial advice
c) Investment service
d) All of the above
ANSWER KEY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
c a b d c d d c c c d c c a d c a b d b
4) The primary objective of IDBl is to -------- Regulate and Supervise the working of other financial
institutions like lFCI, SFCs, UTI.
a) Co-ordinate
b) Control
c) Planning
d) None of these
14) Which of the following activities can be granted loan under MUDRA Yojana?
a) purchase of Transport Vehicle
b) Food Products Sector
c) Textile Products Sector
d) Agricultural Loans
15) Which of the following cannot grant loans under MUDRA Yojana?
a) Private Sector Banks
b) Micro Finance Institutions
c) Non-Banking Finance Companies
d) Payments Bank
16) Which of the following statements related to Bharatiya Mahila Bank are true?
1. M.B.N. Rao panel prepared a blue print for Bharatiya Mahila Bank
2. The bank is operating exclusively for women
3. The Bank has been allocated with an initial capital of Rs. 1000 Crores.
4. Nirbhaya Fund was administered by Bharatiya Mahila Bank
a) 1,3
b) 1,2,3
c) 1,3,4
d) All
17) Small Industries Development Bank of India (SIDBI) was established in:
a) 1986
b) 1987
c) 1988
d) 1989
ANSWER KEY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
c a a a d d a b b c b c b d d a d d c b
2) Which one of the following is the main objective of Unit Trust of India?
a) To mobilize the savings of high income groups.
b) To mobilize the savings to low and high-income groups.
c) To mobilize the savings of corporates.
d) To mobilize the savings of low and middle-income groups.
3) In which of the following cities is the headquarters of the Unit Trust of India located?
a) Kolkata
b) Mumbai
c) New Delhi
d) Chennai
8) The punch line of the advertisement of which of the following organization is “Jindagi ke sath bhi
Jindagi ke bad bhi”?
a) New India Assurance
b) General Insurance Corporation
c) ICICI Prudential
d) Life Insurance Corporation of India
9) The central office of the Life Insurance Corporation of India (LIC) is located at
a) New Delhi
b) Chennai
c) Pune
d) Mumbai
10) Which of the following was the parent company of New India Assurance?
a) LIC
b) GIC
c) Oriental Insurance Co. Ltd.
d) United India Insurance
12) Which is the sole reinsurance company in the Indian insurance market?
a) United India Insurance Company Limited
b) General Insurance Corporation of India
c) New India Assurance Company Limited
d) The Oriental Insurance Company
13) Employees’ Provident Funds Appellate Tribunal was constituted under Section ....... the this act.
a) 7D
b) 6A
c) 7C
d) 6D
14) The chairman and members of Central Board constituted under Employees Provident Fund are
appointed by
a) Central Government
b) State Government
c) Supreme Court
d) None of the above
15) Which of the following features did or will the Pensions Act 2005 introduce?
a) Reduction in maximum statutory indexation of pensions from 5% to 2.5%.
b) New Pensions Regulator.
c) Minimum Funding Requirement.
d) Pension Protection Fund.
17) What do we call the arrangement where the employee agrees to redirect the top slice of earnings into the
pension scheme?
a) Salary exchange.
b) Additional Voluntary Contribution.
c) Unapproved pension scheme.
d) Salary sacrifice.
ANSWER KEY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
b d b d b b c d d b d b a a d a d d d b
5) The Board may take measures to undertake inspection of any book, or register, or other document or
record of,
a) all public companies
b) only listed companies
c) only unlisted companies
d) all listed public companies and public companies which intend to get listed
6) It shall be open to SEBI to inspect at all reasonable times books of accounts and other documents to be
maintained by the Stock Exchanges for periods
a) Not less than five years
b) Not exceeding five years
c) Not less than seven years
d) Not exceeding seven years
7) Any expenditure incurred in connection with such audit shall be payable by …………….. to the
Comptroller and Auditor-General of India.
a) RBI
b) Central Govt
c) SEBI
9) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 applies only to companies
a) True
b) False
10) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 regulations shall apply to the listed entity who has listed
a) Specified securities listed on SME Exchange
b) Indian depository receipts
c) Non-convertible debt securities
d) All of the above
15) Legislation gives which body the power to specify a code of conduct for surveyors and loss assessors?
a) Institute of Insurance and Risk Management.
b) Insurance Regulatory and Development Authority.
c) Life Insurance Council.
d) Securities and Exchange Board of India.
16) Which of the following words does not belong to the stock exchange?
a) NAVB
b) NSEC
c) IPOD
d) KPO
20) Which of the following statement is NOT correct about the SEBI?
a) At present it is a non statutory body
b) At present it is a statutory body
c) It got statutory powers by an ordinance in 1992
d) SEBI is managed by 6 members
ANSWER KEY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
b d b c d b c b b d b b c c b d c c c a
…………………………….THANKS…………….………………