Banking and Financial Institutions MCQ Questions and Solutions with Explanations

Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9 Section 10 Section 11

81.
Match the items of List-I with those in List-II and select the correct answer.

List-I List-II

a. Bank Rate Policy 1. Involving the shortening of the currency of bills eligible for rediscount

b. Credit Rationing 2. Involving the Purchase and sale of securities in the open market

c. Variable Reserve System 3. Involving the alteration of discount rate

d. Open Market Operations 4. Involving the variation of the minimum reserves

A. a-3, b-1, c-2, d-4

B. a-1, b-2, c-3, d-4

C. a-4, b-2, c-1, d-3

D. a-3, b-1, c-4, d-2

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82.
Why a retail investor is recommended to invest through a mutual fund in a stock exchange?
1. Mutual funds invest funds in a diversified portfolio of securities, thus reducing the risk of the investor.
2. Mutual funds are managed by financial experts.
3. Mutual funds promise high returns to the investors of the fund.

A. 3 only

B. 2 and 3 only

C. 1 and 2 only

D. 1, 2 and 3

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83.
Which of the statements are correct in context of forward markets?

A. Forward markets facilitate the exchange of forward and futures contracts, setting the price of a delivered asset or financial instrument

B. Forward contract pricing is based on the difference in interest rates between two currencies being traded, particularly within FX. Otherwise, it would be based on the yield curve

C. Forward contracts differ from futures because they are customizable on offer size and maturity date, while the other tends to be standardized

D. All of the above

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84.
Application from investors are to be received by mutual funds only at the

A. head office or branch offices of the mutual fund

B. designated RTAs

C. official points of acceptance

D. designated banks

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85.
Suppose Party A has a right to buy USD 6,000 from Party B, 1 month down the line, at Rs. 46 = 1 USD (US Dollar).However, after 1 month Party A does not exercise the right. This is possible in which contract?

A. Swap

B. Futures

C. Forward

D. Options

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86.
Which of the following discounts the treasury bills?

A. RBI

B. Commercial banks

C. SEBI

D. Finance Ministry

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87.
Reserve Bank of India is

A. an extension wing of Ministry of Finance, Government of India

B. a body corporate, having perpetual succession and a common seal

C. an institution owned by Indian Banks Association

D. a private sector bank

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88.
In terms of Section 24 of the RBI Act, 1934, RBI may issue bank notes for the maximum denomination of:

A. Rs. 500

B. Rs. 5000

C. Rs. 10000

D. Rs. 1000

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89.
Defective electrical wiring that may lead to fire is an example of

A. pure risk

B. non-diversifiable risk

C. speculative risk

D. physical hazard

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90.
Which of the following Insurance is best suited to risk?

A. High frequency and low loss everity

B. Low frequency and high loss severity

C. Minimum frequency and no loss severity

D. High frequency and high loss severity

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1 2 3 4 5 6 7 8 9 10

List-I	List-II
a. Bank Rate Policy	1. Involving the shortening of the currency of bills eligible for rediscount
b. Credit Rationing	2. Involving the Purchase and sale of securities in the open market
c. Variable Reserve System	3. Involving the alteration of discount rate
d. Open Market Operations	4. Involving the variation of the minimum reserves

Banking and Financial Institutions MCQ Questions and Solutions with Explanations | Commerce

Answer & Solution

Answer & Solution

83. Which of the statements are correct in context of forward markets?

Answer & Solution

84. Application from investors are to be received by mutual funds only at the

Answer & Solution

85. Suppose Party A has a right to buy USD 6,000 from Party B, 1 month down the line, at Rs. 46 = 1 USD (US Dollar).However, after 1 month Party A does not exercise the right. This is possible in which contract?

Answer & Solution

86. Which of the following discounts the treasury bills?

Answer & Solution

87. Reserve Bank of India is

Answer & Solution

88. In terms of Section 24 of the RBI Act, 1934, RBI may issue bank notes for the maximum denomination of:

Answer & Solution

89. Defective electrical wiring that may lead to fire is an example of

Answer & Solution

90. Which of the following Insurance is best suited to risk?

Answer & Solution

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83.
Which of the statements are correct in context of forward markets?

84.
Application from investors are to be received by mutual funds only at the

85.
Suppose Party A has a right to buy USD 6,000 from Party B, 1 month down the line, at Rs. 46 = 1 USD (US Dollar).However, after 1 month Party A does not exercise the right. This is possible in which contract?

86.
Which of the following discounts the treasury bills?

87.
Reserve Bank of India is

88.
In terms of Section 24 of the RBI Act, 1934, RBI may issue bank notes for the maximum denomination of:

89.
Defective electrical wiring that may lead to fire is an example of

90.
Which of the following Insurance is best suited to risk?