361. Which of the following statements is/are correct? 1. NBFCs does not hold a banking license. 2. NBFC can issue Demand Drafts like banks.
A. Only 1
B. Only 2
C. Both
D. None
Answer
A. Only 1
362. Consider the following statements 1. Chit Funds are type of NBFC 2. All NBFCs are ruled by RBI 3. RBI said any purchase of a stake of 26% or more in a company, or a change in more than 30% of its directors, would need the central bank’s permission. Which of the above statements is/are correct?
A. 1,2
B. 2,3
C. 1,3
D. All
Answer
C. 1,3
363. Which of the following NBFC converted itself into a commercial Bank?
A. Tata Finance
B. Reliance Capital Trust
C. Birla Mutual
D. Kotak Mahindra
Answer
D. Kotak Mahindra
364. Indian Banks Association (IBA) has a common networking system for sharing the ATM facilities in Mumbai, which is known as
A. ATM Network
B. Shared Payment Network System
C. Cash Network
D. None of these
Answer
B. Shared Payment Network System
365. Markets in which derivatives are traded are classified as
A. assets backed market
B. cash flow backed markets
C. mortgage backed markets
D. derivative securities markets
Answer
D. derivative securities markets
366. Consider buying of put option, probability that a buyer would have negative payoff increases with the
A. increase in stock price
B. decrease in stock price
C. increase in maturity duration
D. decrease in maturity duration
Answer
A. increase in stock price
367. Price of an option is subtracted form time value of option to calculate
A. book value index
B. market index
C. intrinsic value
D. extrinsic value
Answer
C. intrinsic value
368. If intrinsic value of an option is $450 and price of an option is $560 then time value of anoption is
A. $110
B. $1,010
C. $450.00
D. $560
Answer
A. $110
369. Type of swaps in which fixed payments of interest are exchanged by two counterparties for floating payments of interest are called
A. float-fixed swaps
B. interest rate swaps
C. indexed swaps
D. counter party swaps
Answer
B. interest rate swaps
370. Type of bonds that pay coupon interest are classified as
A. forward bond
B. payment bonds
C. coupon bond
D. interest bonds
Answer
C. coupon bond
371. For given change in interest rates, percentage change in present value of bond is classified as
A. price sensitivity
B. yield sensitivity
C. maturity sensitivity
D. premium sensitivity
Answer
A. price sensitivity
372. Type of bond whose present value is lesser than that of its face value is classified as
A. discount bond
B. premium bond
C. coupon bond
D. interest bonds
Answer
A. discount bond
373. For an investment, weighted average time to maturity is considered as
A. premium time
B. standard time
C. mean time
D. duration
Answer
D. duration
374. Bonds that does not pay any interest rate are considered as
A. interest free bond
B. zero coupon bond
C. price less coupon bond
D. useless price bonds
Answer
B. zero coupon bond
375. Which of the following is not a characteristic feature of venture capital firms?
A. Funding just one or a small number of firms.
B. Holding equity in the firms that are funded.
C. Having a long-term investment horizon.
D. Providing advice and assistance to the firms that are funded.
Answer
A. Funding just one or a small number of firms.
376. Which of the following is a characteristic feature of venture capital firms?
A. Developing a portfolio of companies.
B. Holding debt in the firms that are funded.
C. Allowing firms to use the funds as they see fit.
D. Having a short-term investment horizon.
Answer
A. Developing a portfolio of companies.
377. ___ is a link between savers & borrowers, helps to establish a link between savers &investors
A. Marketing
B. Financial market
C. Money market
D. None of these
Answer
B. Financial market
378. Which of the following is the function of financial market?
A. Mobilization of savings
B. Price fixation
C. Provide liquidity to financial assets
D. All of the above
Answer
D. All of the above
379. ___ is the organisations, institutions that provide long term funds.
A. Capital market
B. Money market
C. Primary market
D. Secondary market
Answer
A. Capital market
380. When securities are allotted to institutional investors & some selected individuals isreferred to as ___
A. Initial public offer
B. Offer through prospectus
C. Private placement
D. Offer for sale
Answer
C. Private placement
381. Stock exchange is known as ___ market for securities.
A. Primary market
B. Secondary market
C. Capital market
D. None of the above
Answer
B. Secondary market
382. ___ is a market for lending & borrowing of short term funds.
A. Money market
B. Primary market
C. Capital market
D. All of the above
Answer
A. Money market
383. ___ is also called zero coupon bond.
A. Trade bills
B. Call money
C. Treasury bills
D. Commercial papers
Answer
C. Treasury bills
384. Which of the following are the instruments of money market?
A. Call money
B. Certificate of deposits
C. Trade bills
D. All of the above
Answer
A. Call money
385. The short term financial instruments traded in money market is commonly called
A. Call money
B. Certificate of deposits
C. Trade bills
D. Commercial Paper
Answer
D. Commercial Paper
386. Which of the following statements is not true with regard to money market?
A. It involves low market risk.
B. It is situated at specific locations.
C. Deals in unsecured and short-term debt instruments.
D. The instruments traded are highly liquid.
Answer
B. It is situated at specific locations.
387. Which of the following statements is not true with regard to Treasury bills?
A. Are issued in the form of a promissory note.
B. They are highly liquid and have assured yield
C. They carry high risk of default.
D. They are available for a minimum amount of Rs. 25,000 and in multiples thereof.
Answer
C. They carry high risk of default.
388. Which of the following statements is not true with regard to Commercial paper?
A. Is a long-term unsecured promissory note with a fixed maturity period.
B. It usually has a maturity period of 15 days to one year.
C. It is sold at a discount and redeemed at par.
D. Companies use this instrument for bridge financing.
Answer
A. Is a long-term unsecured promissory note with a fixed maturity period.
389. Which of the following statements is not true with regard to Call money?
A. It is short-term finance repayable on demand.
B. Its maturity period ranges from one day to fifteen days.
C. There is a direct relationship between call rates and other short-term money market instruments.
D. It is used for inter-bank transactions.
Answer
C. There is a direct relationship between call rates and other short-term money market instruments.
390. Which of the following statements is not true with regard to capital market?
A. The funds are raised for a short period of time.
B. Both debt and equity funds can be raised.
C. It is classified into two types.
D. All of the above
Answer
A. The funds are raised for a short period of time.
391. Which of the following statements is not true with regard to primary market?
A. Is also known as the old issues market.
B. It facilitates the transfer of investible funds from savers to entrepreneurs.
C. It deals with new securities being issued for the first time.
D. It facilitates the transfer of investible funds from savers to entrepreneurs.
Answer
A. Is also known as the old issues market.
392. Which of the following statements is not true with regard to stock exchange?
A. It provides a platform for buying and selling of new securities.
B. It curbs the marketability of the securities.
C. By providing a ready market, it extends liquidity to the securities.
D. It provides a platform for buying and selling of old securities.`
Answer
B. It curbs the marketability of the securities.
393. Which of the following is not a protective function of stock exchange?
A. Prohibition of fraudulent and unfair trade practices.
B. Controlling insider trading.
C. Regulation of takeover bids by companies.
D. Promotion of fair practices and code of conduct in securities market.
Answer
C. Regulation of takeover bids by companies.
394. Raj Enterprises wishes to invest Rs. 1,10,000 in treasury bills. What is the maximumnumber of treasury bills it can buy with this fund?
A. 6
B. 7
C. 4
D. 2
Answer
C. 4
395. Which of the following statements is true with regard to financial markets?
A. They link the households which save funds and business firms which invest these funds.
B. They work as an intermediary between the savers and the investors by mobilising funds between them.
C. They allocate funds available for investment into their most productive investment opportunity.
D. All of the above
Answer
D. All of the above
396. The allocated function is performed by
A. Financial market
B. Capital market
C. Money market
D. All of the above
Answer
D. All of the above
397. It is a market for short-term funds which deals in monetary assets whose period ofmaturity is up to one year.
A. Primary market
B. Secondary market
C. Capital market
D. Money market
Answer
B. Secondary market
398. It is an instrument of short-term borrowing by the Government of India maturing in lessthan one year.
A. Commercial bill
B. Treasury bill
C. Call money
D. None of the above
Answer
C. Call money
399. Who issues a treasury bill?
A. Any nationalised bank
B. Any private sector bank
C. Reserve Bank of India
D. All of the above
Answer
A. Any nationalised bank
400. Suppose an investor purchases a 91 days Treasury bill with a face value of Rs. 2,00,000 for Rs. 1,92,000. By holding the bill until the maturity date, the investor receives Rs. 2,00,000. What is the amount of interest received by him?
A. Rs. 8,000
B. Rs. 80,000
C. Rs. 3,92,000
D. Rs. 2,00,000
Answer
B. Rs. 80,000
