Practice Test

Q1) Development financial institution were established to ________. Show Answer

Q2) Money market faces shortage of funds due to ______. Show Answer

Q3) Individual investors have lost confidence in the capital market due to ______. Show Answer

Q4) Financial markets includes ______ distinct markets. Show Answer

Q5) Money Market is a market for lending and borrowing of _____ funds. Show Answer

Q6) The financial system of the country is responsible for ______ of funds. Show Answer

Q7) ______ is the only avtive money market centre in India. Show Answer

Q8) Central Bank has the ______ of cash reserve of commercial Bank in the country. Show Answer

Q9) The Central Bank acts as a ______ of cash reserve of commercial Bank in the country. Show Answer

Q10) ______ is the apex body of the monetary and banking system of Commercial Banks in the country. Show Answer

Q11) Bank rate is _____ measure of credit control. Show Answer

Q12) Reserve Bank of India was established in _______. Show Answer

Q13) The operation of direct buying and selling of securities by central bank in the money market is called_______. Show Answer

Q14) ______ account is opened by businessmen, corporate bodies, etc. Show Answer

Q15) ______ is a primary function of commercial banks. Show Answer

Q16) Every loan creates______. Show Answer

Q17) Enactment of the Co-operative Credit Societies Act ______. Show Answer

Q18) _______ was the 1st Development Financial Institution to be established in 1948. Show Answer

Q19) DFHI was set up on the recommendation of the _______ committee. Show Answer

Q20) The activities of unorganized money market are largely confined to the ______ areas. Show Answer

Q21) ________ important source of funds in unbanked areas which provide loans directly to agriculture, trade and industry. Show Answer

Q22) _______ charge high rate of interest to the people. Show Answer

Q23) ______ short term instrument issued by the RBI on behalf of the government to meet temporary liquidity shortfalls. Show Answer

Q24) Deposit from ____ account can be withdrawn without any notice. Show Answer

Q25) _____ is a primary function of commercial banks. Show Answer

Q26) Every loan creates a _____. Show Answer

Q27) Facility of E-banking is provided through _____. Show Answer

Q28) Saving banks account is suitable for people from ____ class. Show Answer

Q29) Commercial banks create ______. Show Answer

Q30) The account in which the specific amount is deposits per month regularly is known as ____ Show Answer

Q31) The account in which certain amount of money is deposited every month regularly for a fixed duration is _____. Show Answer

Q32) ________ may be defined as a ‘dealer in credit’. Show Answer

Q33) A bank is an institution which deals in money and ________. Show Answer

Q34) Method of withdrawing money without going to the bank is by _____ Show Answer

Q35) The account in which a certain amount of money is deposited every month regularly for a fixed duration is called as ______ Show Answer

Q36) ________ Deposit gets maximum rate of interest. Show Answer

Q37) Demat account facility is useful for ________ Show Answer

Q38) Banking Regulation Act was passed in the year ________ Show Answer

Q39) Commercial bank is an institution which operated for _______ Show Answer

Q40) Commercial Banks accepts _______ from the public and extends loans to the public Show Answer

Q41) In the year 1969 ______ banks were nationalized. Show Answer

Q42) In the year 1980 ________ banks were nationalized Show Answer

Q43) Central Bank has the ____ of note issue. Show Answer

Q44) The Central Bank acts as a ____ of cash reserves of commercial banks in the country. Show Answer

Q45) Bank rate is also called as _____ rate. Show Answer

Q46) Reserve Bank of India was established in ____ Show Answer

Q47) ____ is the apex body of the monetary and banking system of the nation’s economy. Show Answer

Q48) Bank rate is ____ measure of credit control. Show Answer

Q49) Central Bank is the ____ of bank credit. Show Answer

Q50) ________ has a power of issuing currency notes Show Answer

Q51) Coins are issued by _______ Show Answer

Q52) _________ is the lender of last resort. Show Answer

Q53) The central bank in USA is known as _________ Show Answer

Q54) Central Bank also performs commercial banking business. Show Answer

Q55) The main objective of a Central Bank is to earn profit. Show Answer

Q56) Bank rate is the selective credit control measure used by the Central Bank of the country. Show Answer

Q57) Regulation of consumer credit is a quantitative credit control measure of Central Bank. Show Answer

Q58) Credit rating is quantitative credit control measure of Central Bank. Show Answer

Q59) The ‘Central Bank’ works as friend, philosopher and guide commercial bank. Show Answer

Q60) Central bank is the apex financial institution of the banking system of the country. Show Answer

Q61) The RBI was nationalized in the year 1935 Show Answer

Q62) RBI does not issues One Rupee note but only distributes it Show Answer

Q63) The central Bank works as a bankers Bank Show Answer

Q64) Central Bank works as a bank of people Show Answer

Q65) Central Bank accepts deposits from the public Show Answer

Q66) Commercial Banks accepts deposits from the government Show Answer

Q67) OMO simultaneously affects all the bank Show Answer

Q68) Non Banking functions are flexible and are increasing in nature Show Answer

Q69) Central bank maintains the exchange rate fixed by the government Show Answer

Q70) Frequent variation in the Bank Rate is not possible Show Answer

Q71) Central bank formulate the monetary policy of a country Show Answer

Q72) Central bank and commercial bank are one and the same Show Answer

Q73) Central bank keeps a part of deposit for security Show Answer

Q74) Variable Reserve Ratio can achieve the desired results almost immediately Show Answer

Q75) Commercial banks are the backbone of modern economy. Show Answer

Q76) The saving bank deposit can be opened with a small amount. Show Answer

Q77) Credit money is created by the central bank of a country. Show Answer

Q78) There is no difference between primary deposit and secondary deposit of a commercial bank. Show Answer

Q79) Commercial banks play an important role in economic development. Show Answer

Q80) Commercial banks are non profit making organisation. Show Answer

Q81) Interest is more on saving deposits. Show Answer

Q82) Accepting deposits is the only primary function of commercial banks. Show Answer

Q83) Commercial banks cannot give interest on deposits Show Answer

Q84) Interest is more on savings deposits: Show Answer

Q85) Low interest is given on fixed deposits Show Answer

Q86) Financial markets operate through.
i. banks
ii. non-banking financial institutions
iii. brokers
iv. discount houses Show Answer

Q87) Financial markets include these distinct markets:
i. Money market
ii. Capital market
iii. Insurance market
iv. Cash market Show Answer

Q88) Money market instruments are:
i. highly liquid
ii. less risky
iii. cheap
iv. easily marketable Show Answer

Q89) Money market in India are located at:
i. Mumbai
ii. Delhi
iii. Pune
iv. Kolkata Show Answer

Q90) RBI Acts as a banker to the:
i. Government
ii. Commercial banks
iii. Post offices
iv. Foreign banks Show Answer

Q91) The qualitative method used by RBI to regulate the purpose of credit includes:
i. Credit rationing
ii. Moral suasion
iii. Fixing margin requirements
iv. Increasing CRR Show Answer

Q92) RBI acts as a:
i. Clearing house
ii. Lender of last resort
iii. Foreign bank
iv. Co-operative bank Show Answer

Q93) Commercial banks can be classified as:
i. Public sector banks
ii. Private sector banks
iii. Regional Rural Banks
iv. Foreign banks Show Answer

Q94) Demand deposits are in the form of:
i. Savings account
ii. Current account
iii. Fixed deposit
iv. Recurring deposit Show Answer

Q95) The primary deposits of banks are:
i. Demand deposits
ii. Time deposits
iii. Foreign deposits
iv. Local deposits Show Answer

Q96) Role of money market is:
i. Liquidity management
ii. Growth of trade and industry
iii. Portfolio management
iv. Equilibrating mechanism Show Answer

Q97) This is not an ancillary function of the commercial bank
i. Demat facility
ii. Internet banking
iii. Safe deposit lockers
iv. Accepting deposits Show Answer

Q98) Identify the problems faced by the money market.
i. Existence of uniformity in rates of interest
ii. Seasonal fluctuations
iii. Lack of financial inclusion
iv. Immediate technological up-gradation Show Answer

Q99) Industrial securities market is divided into:
i. Primary market
ii. Secondary market
iii. Tertiary market
iv. Private market Show Answer

Q100) Role of capital market is:
i. Providing equity capital
ii. Mobilizing short-term savings
iii. Facilitating integration
iv. Enabling quick valuation Show Answer

Q101) Identify the reform introduced in the capital market.
i. Establishment of SEBI
ii. Introduction of computerized SBTS
iii. Allowing issue of ADRs and GDRs
iv. Introduction of demat account Show Answer

Q102) Assertion (A): Finance is categorized as personal finance, corporate finance and public finance.
Reasoning (R): Finance includes funds needed by individuals, business houses and the Government. Show Answer

Q103)
Assertion (A): Foreign exchange management and control is undertaken by commercial banks.
Reasoning (R): RBI has to maintain the official rate of exchange of rupee and ensure its stability. Show Answer

Q104)
Assertion (A): Fixed deposits carry a high rate of interest.
Reasoning (R): Fixed deposit refers to a deposit wherein the customer deposit fixed amount at regular intervals for a specified period of time. Show Answer

Q105) Assertion (A): Secondary deposits or 'derivative deposits' are created out of loans by banks.
Reasoning (R): After meeting the reserve requirements, balance amount is used for giving loans. Show Answer

Q106) Assertion (A): DFIs have diversified their operations with the advent of globalization.
Reasoning (R): DFIs help in the development of industry, agriculture and other key sectors. Show Answer

Q107) Assertion (A): Money market economizes use of cash.
Reasoning (R): Money market deals with financial instruments that are close substitutes of money. Show Answer

Q108) Assertion (A): The unorganized sector of the money market lacks transparency.
Reasoning (R): Activities of the unorganized sector are largely confined to rural areas. Show Answer

Q109) Assertion (A): Government securities market deals in government and semi-government securities.
Reasoning (R): Government securities carry a fluctuating rate of interest. Show Answer

Q110) Assertion (A): Regional stock exchanges have witnessed a sharp decline in the volume of trade.
Reasoning (R): Investors prefer to trade in securities listed in premier stock exchanges like BSE, NSE etc. Show Answer

Q111) Assertion (A): NSE, the leading stock exchange in India was established in 1992.
Reasoning (R): SEBI was established in 1988 but given statutory powers in 1992. Show Answer

Q112) ______ is the backbone of an economy. Show Answer

Q113) Money market is a market for __________ money. Show Answer

Q114) The money market in India is __________ by nature. Show Answer

Q115) __________ is the only active money market centre in India with money flowing in from all parts of the country. Show Answer

Q116) RBI was nationalized on __________. Show Answer

Q117) RBI has the sole right to issue currency notes of all denominations, except __________ note and coins. Show Answer

Q118) RBI is required to maintain minimum gold and foreign exchange reserves of __________ as per the Minimum Reserves System of 1957. Show Answer

Q119) __________ acts as a custodian of the country’s foreign exchange reserves. Show Answer

Q120) __________ means withdraws in excess of the balance in the account. Show Answer

Q121) __________ account is usually opened by businessmen, corporations, industrial houses, trusts etc. Show Answer

Q122) Compared to all other deposits, __________ deposits carry a high rate of interest. Show Answer

Q123) _________ supplement the efforts of commercial banks by meeting the credit needs of the local population. Show Answer

Q124) _________ was the first development financial institution in the country established in 1948. Show Answer

Q125) Discount and Finance House of India (DFHI) is jointly owned by _________, public sector banks and financial institutions to impart liquidity to money market instruments. Show Answer

Q126) _________ mostly operate in Kerala and Tamil Nadu. Show Answer

Q127) Money market provides reasonable access for meeting _________ financial need of the borrowers. Show Answer

Q128) Monetary policy is implemented by the _________. Show Answer

Q129) Repos and Reverse repos were introduced under the _________. Show Answer

Q130) _________ market functions through stock exchange. Show Answer

Q131) __________ consist of merchant banks, mutual funds, leasing companies, venture capital companies etc. Show Answer

Q132) _________ has been introduced since 1996 to facilitate easy purchase and sale of shares. Show Answer