Banking Awareness Test for IBPS, RBI, SBI, NABARD & other Bank Examinations - Set 8

1)   How many government coin mints are there in India?

a. 2
b. 3
c. 4
d. 5
Answer  Explanation 

ANSWER: 4

Explanation:
The India Government Mint operates four mints in the country for the production of coins: Mumbai, Maharashtra. Kolkata, West Bengal.

2)   Commercial paper issued with low interest rate thus commercial paper are categorized as

a. payables rating
b. commercial rating
c. poor credit rating
d. better credit rating
Answer  Explanation 

ANSWER: better credit rating

Explanation:
Commercial paper is usually sold at a discount from face value and generally carries lower interest repayment rates than bonds due to the shorter maturities of commercial paper.

3)   Which of the following is issued by RBI?

a. Currency notes
b. Coins
c. Both 1 and 2
d. None of the above
Answer  Explanation 

ANSWER: Currency notes

Explanation:
Currency notes are issued by RBI. The Government of India issues metallic coins in India.

4)   Which of the following is known as broad money?

a. M3
b. M1
c. M2
d. M4
Answer  Explanation 

ANSWER: M3

Explanation:
M3 is known as broad money as more items are included in this measure when compared to M1 which is known as narrow money.

5)   Money market where debt and stocks are traded and maturity period is more than a year is classified as which of the following?

a. shorter term markets
b. capital markets
c. counter markets
d. long-term markets
Answer  Explanation 

ANSWER: capital markets

Explanation:
Capital markets refer to the places where savings and investments are moved between suppliers of capital and those who are in need of capital.

6)   What is cross-border exchange?

a. Trading of foreign currency in India.
b. Hawala transactions
c. Unauthorised remittance of the Indian rupee.
d. The trading of the Indian rupee in exchange for other currencies/ goods.
Answer  Explanation 

ANSWER: The trading of the Indian rupee in exchange for other currencies/ goods.

Explanation:
Cross-border trade (CBT) is the exchange of goods or services between two countries. It is the trading of the Indian rupee in exchange for other currencies/ goods.

7)   In which of the following, investable capital for non-financial companies is available?

a. Insurance markets
b. Public markets
c. Financial companies
d. Capital market
Answer  Explanation 

ANSWER: Capital market

Explanation:
A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold.

8)   Which among the following NBFC are not excluded from the Ombudsman scheme for NBFC?

a. Deposit accepting NBFCs
b. NBFC-IFC
c. Core Investment Company
d. IDF-NBFC
Answer  Explanation 

ANSWER: Deposit accepting NBFCs

Explanation:
The following NBFCs are excluded from the ambit of the Scheme: Non-banking Financial Company – Infrastructure Finance Company (NBFC-IFC), Core Investment Company (CIC), Infrastructure Debt Fund – Non-banking Financial Company (IDF-NBFC) and NBFC under liquidation

9)   Non–Banking Financial Companies (NBFC) are registered under which act?

a. Companies Act, 1970
b. Companies Act, 1956
c. Companies Act, 1967
d. Companies Act, 1958
Answer  Explanation 

ANSWER: Companies Act, 1956

Explanation:
A Non Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 of India, engaged in the business of loans and advances, acquisition of shares, stock, bonds, hire-purchase insurance business or chit-fund business.

10)   Which of the following NBFCs are engaged in the principal business of financing physical assets?

a. Investment Company
b. Loan Companies
c. Asset Finance Company
d. Infrastructure Finance Company
Answer  Explanation 

ANSWER: Asset Finance Company

Explanation:
The Asset Finance Company is the financial institution engaged in the principal business of financing physical assets that correspond to productive/economic activity such as machinery, automobile, tractors, material handling equipment, power generators, etc.

11)   What is the minimum net owned fund requirement for NBFCs?

a. Rs 200 lakh
b. Rs 250 lakh
c. Rs 25 lakh
d. Rs 100 lakh
Answer  Explanation 

ANSWER: Rs 200 lakh

Explanation:
The minimum capital requirements of NBFC incorporated before April 21, 1999 is 25 lakhs. After April 1999, the limit is increased to 200 lakhs.

12)   Which of the following is true about NBFC?

a. NBFC cannot accept demand deposits
b. NBFCs cannot issue cheques drawn on itself
c. Deposit insurance facility of DICGC is not available to depositors of NBFCs
d. All are true
Answer  Explanation 

ANSWER: All are true

Explanation:
All the three points mentioned above are true. These points differentiate NBFC and banks

13)   A company based IDF is regulated by which of the following?

a. SEBI
b. RBI
c. SBI
d. None of the above
Answer  Explanation 

ANSWER: RBI

Explanation:
Infrastructure Debt Funds (IDFs) can be set up either as a Trust or as a Company. A company based IDF would normally be an NBFC regulated by the Reserve Bank.

14)   What should br the CRAR for NBFCs as sponsors of IDF-MF?

a. 15%
b. 20%
c. 25%
d. 35%
Answer  Explanation 

ANSWER: 15%

Explanation:
NBFCs sponsoring IDF-MFs are required to comply with a minimum Net Owned Funds (NOF) of Rs.300 crore and Capital to Risk Weighted Assets (CRAR) of 15%.

15)   Which of the following is not a fee‐based financial service?

a. Corporate counseling
b. Profit management
c. Lease financing
d. Issue management
Answer  Explanation 

ANSWER: Lease financing

Explanation:
Lease financing is one of the important sources of medium- and long-term financing where the owner of an asset gives another person, the right to use that asset against periodical payments. It is not a fee‐based financial service.

16)   Which of the following helps managers track the issues that arise in a project and prioritize a response to them?

a. Issue tracker
b. Issue list
c. Track list
d. Issue builder
Answer  Explanation 

ANSWER: Issue list

Explanation:
An issue log is a simple list or spreadsheet that helps managers track the issues that arise in a project and prioritize a response to them. An issue is any roadblock or unintended impact that directly affects your project’s timeline and or performance.

17)   Which of the following is a long-term, unsecured debt instrument with a lower claim on assets and income than other classes of debt?

a. Trustee bond
b. Income bond
c. A junk bond
d. A subordinated debenture
Answer  Explanation 

ANSWER: A subordinated debenture

Explanation:
A subordinated debenture is a long-term, unsecured debt instrument with a lower claim on assets and income than other classes of debt.

18)   Which of the following is a statistic that measures how the returns of two risky assets move together?

a. Correlation
b. Standard deviation
c. Variance
d. None of the above
Answer  Explanation 

ANSWER: Correlation

Explanation:
Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient.

19)   When making repayments on a lease, the profit and loss account will contain which items relevant to the lease?

a. Neither interest or instalment charges
b. Instalment charges only
c. Interest and instalment charges
d. Interest only
Answer  Explanation 

ANSWER: Interest only

Explanation:
When making repayments on a lease, the profit and loss account will contain interest relevant to the lease.

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