Banking and Financial Institutions MCQs

Question 1

Banking on telephone service includes: (i) Automatic balance voice out (ii) Inquiry all term deposit account (iii) Direct cash withdrawl (iv) Utility bill payment (v) Voice out last five transactions

Accepted Answer

(i), (ii), (iv) and (v)

Answer

(i), (ii), (iii) and (v)

Answer

(ii), (iii), (iv) and (v)

Answer

(i), (ii), (iii), (iv) and (v)

Question 2

Read the following statements and choose the correct option:
Statement-I: Small Industry Development Bank of India (SIDBI) was set up as a wholly owned subsidiary of RBI.
Statement-II: SIDBI has taken over the responsibility of administering small industry development fund managed by IDBI.

Accepted Answer

(II) is correct

Answer

(I) is correct

Answer

(I) and (II) are correct

Answer

(I) and (II) are wrong

Question 3

Which of the statements given below is/are correct regarding "bear market"?
1. It refers to fall in the value of investments
2. Investors rush to buy stocks instead of selling
3. Unemployment levels may rise

Accepted Answer

1 and 3 only

Answer

1 only

Answer

2 and 3 only

Answer

1, 2 and 3

Question 4

Consider the following:
1. Allowing convertibility of rupee at the market rate in the current account
2. Nationalization of general insurance business
3. Establishment of IDBI
4. Nationalization of life insurance business
5. Capital adequacy norms for commercial banks
Arrange the events in the ascending order of their occurrence.

Accepted Answer

4, 3, 2, 1, 5

Answer

1, 2, 3, 4, 5

Answer

4, 5, 3, 2, 1

Answer

1, 5, 2, 3, 4

Question 5

Consider the following statements.
1. Transfer and transmission of shares are the same thing.
2. 'Stag' is a speculative person who applies for shares in a new issue expected to be over subscribed to make profit by selling such shares at a premium.
3. Stock is a bundle of fully paid shares put together for convenience.
Which of the statement(s) given above is/are correct?

Accepted Answer

Both 2 and 3

Answer

Both 1 and 2

Answer

Only 3

Answer

Only 2

Question 6

Which of the following can be taken as the main functions of financial markets? 1. Price determination 2. Funds mobilization 3. Liquidity at a low cost 4. Risk sharing 5. Capital formation

Accepted Answer

1, 2, 3, 4 and 5

Answer

1, 2 and 4

Answer

1, 2 and 3

Answer

2, 3, 4 and 5

Question 7

Match the following. List-I List-II a. Financial instruments 1. Organised and unorganised b. Financial market 2. Intermediaries and non-intermediaries c. Financial institutions 3. Unorganised financial system d. Indigenous bankers 4. Facilitate transfer of funds

Accepted Answer

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

Answer

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

Answer

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

Answer

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

Question 8

Assertion (A): The Central Bank of the country is responsible to maintain stability of the monetary standard which involves currency circulation. Reason (R): The Central Bank is the only authorised entity to do so.

Accepted Answer

(A) is true, but (R) is false

Answer

Both (A) and (R) are true

Answer

Both (A) and (R) are false

Answer

(R) is true, but (A) is false

Question 9

Match the following. List-I List-II a. Rate at which RBI gives loans to commercial banks by discounting bills 1. Reverse Repo rate b. Rate at which RBI borrows from commercial banks 2. Repo rate 3. Prime lending rate

Accepted Answer

a-2, b-1

Answer

a-3, b-1

Answer

a-1, b-2

Answer

a-3, b-2

List-I	List-II
a. Financial instruments	1. Organised and unorganised
b. Financial market	2. Intermediaries and non-intermediaries
c. Financial institutions	3. Unorganised financial system
d. Indigenous bankers	4. Facilitate transfer of funds

List-I	List-II
a. Rate at which RBI gives loans to commercial banks by discounting bills	1. Reverse Repo rate
b. Rate at which RBI borrows from commercial banks	2. Repo rate
	3. Prime lending rate