Banking and Financial Institutions MCQs

Question 1

Gresham's law operates when

Accepted Answer

When it is transient

Answer

When there is a developed banking system

Answer

The people have full faith in the government

Answer

The demand for money is dominated by the supply

Question 2

Which of the following is not the plastic money?

Accepted Answer

Cheque

Answer

Smart Card

Answer

Debit Card

Answer

Credit Card

Question 3

Which one of the following statement is incorrect?

Accepted Answer

Banks generally grant long-term loans to industries

Answer

A bank interacts directly with customers, but NBFI interacts with banks and governments

Answer

Credit creation is one of the primary functions of commercial bank in India

Answer

To purchase and sell securities is also one of the function of scheduled bank

Question 4

Which of the following best define an open-funded mutual fund?

Accepted Answer

It has units available for sale and repurchase at all times

Answer

It has an option to invest in any kind of security

Answer

It does not have a NAV

Answer

It has fixed fund size

Question 5

Match the following. List-I List-II a. RBI 1. To provide medium and long-term credit to industrial concerns b. ICICI 2. Banker's bank c. IFCI 3. To provide term finance to industry d. IDBI 4. Underwriting institution

Accepted Answer

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

Answer

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

Answer

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

Answer

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

Question 6

India become a member of world bank-

Accepted Answer

1945

Answer

1950

Answer

1975

Answer

1980

Question 7

How does shadow banking differ from commercial banking? 1. While commercial banks are tightly regulated, shadow banking is not well regulated. 2. Shadow banking cannot create money. 3. While liabilities of commercial banks are insured, shadow banking liabilities are not insured. 4. While commercial banks access to central bank liquidity in the times of distress, shadow banking does not have such resource. Select the correct answer:

Accepted Answer

1, 2, 3, and 4

Answer

1 only

Answer

1 and 2 only

Answer

2, 3 and 4 only

Question 8

Debenture holders of a company are its:

Accepted Answer

Creditors

Answer

Owners

Answer

Debtors

Answer

Directors

Question 9

For which of the following reason/s, RBI is the lender of the last resort to scheduled commercial banks?

Accepted Answer

RBI meets directly or indirectly all their reasonable demands for financial accommodation subject to certain terms and conditions which constitute its discount rate policy

Answer

The parties can approach RBI when their limits are exhausted

Answer

They are not able to get loans from other banks

Answer

All of the above