321. The real interest rate:
A. is the nominal interest rate + inflation.
B. greater than the nominal interest rate when inflation is greater than0.
C. is the interest rate expressed in current dollar terms.
D. is the inflation adjusted interest rate.
Answer
D. is the inflation adjusted interest rate.
322. The nominal interest rate indicates that:
A. people care only about the number of dollars.
B. people care about what dollars can buy.
C. people want compensated only for inflation.
D. people only require the opportunity cost as payment when lending.
Answer
B. people care about what dollars can buy.
323. The commercial paper issued with low interest rate thus the commercial paper is categorized as
A. payables rating
B. commercial rating
C. poor credit rating
D. better credit rating
Answer
D. better credit rating
324. The maximum maturity days of holding commercial paper are
A. 170 days
B. 270 days
C. 120 days
D. 5 days
Answer
B. 270 days
325. In borrowing and lending of federal funds, the federal funds rate is result of function between
A. assets and liability
B. cost and marketing
C. supply and demand
D. income and expense
Answer
C. supply and demand
326. The demand for heavy loans can cause
A. excess funds for banks
B. deficiencies for banks
C. organized reservation
D. competitive reservations
Answer
B. deficiencies for banks
327. In primary markets, first time issued shares to be publicly traded in stock markets is considered as
A. traded offering
B. public markets
C. issuance offering
D. initial public offering
Answer
D. initial public offering
328. Transaction cost of trading of financial instruments in centralized market is classified as
A. flexible costs
B. low transaction costs
C. high transaction costs
D. constant costs
Answer
B. low transaction costs
329. Stocks or shares that are sold to investors without transacting through financial institutions are classified as
A. direct transfer
B. indirect transfer
C. global transfer
D. pension transfer
Answer
A. direct transfer
330. Type of financial security which have linked payoff to another issued security is classified as
A. linked security
B. derivative security
C. payable security
D. non-issuing security
Answer
B. derivative security
331. In primary markets, property of shares which made it easy to sell newly issued security isconsidered as
A. increased liquidity
B. decreased liquidity
C. money flow
D. large funds
Answer
A. increased liquidity
332. Liquidity status of certificate of deposit which is more negotiable is considered as
A. certified liquidity
B. term liquidity
C. more liquid
D. less liquid
Answer
C. more liquid
333. 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
D. better credit rating
334. Maximum maturity days of holding commercial paper are
A. 170 days
B. 270 days
C. 120 days
D. 5 days
Answer
B. 270 days
335. In borrowing and lending of federal funds, federal funds rate is result of function between
A. assets and liability
B. cost and marketing
C. supply and demand
D. income and expense
Answer
C. supply and demand
336. A “hybrid” fund is one that:
A. invests in both bonds and stocks
B. started as a closed-end investment company, but changed to a mutual fund
C. has different “loads” for different classes of investors in the fund
D. can serve as an investment vehicle, but also provides check-writing privileges.
Answer
C. has different “loads” for different classes of investors in the fund
337. The first mutual fund was established in the:
A. 1890s
B. 1920s
C. 1940s
D. 1960s
Answer
D. 1960s
338. A mutual fund that invests solely in stocks would be categorized as a/an:
A. bond fund
B. fixed income fund
C. money market fund
D. equity fund
Answer
B. fixed income fund
339. A large number (about 25%) of long-term mutual funds are ___ funds, buying securities in proportions similar to those of a major stock index.
A. small cap
B. large cap
C. fixed income
D. index
Answer
D. index
340. The bulk of the nation’s money supply is created within the private banking system and is sometimes called:
A. inside money
B. net money
C. base money
D. outside money
Answer
B. net money
341. A type of bank account designed to compete with money market mutual funds, and having limited check-writing services, is known as:
A. wholesale CDs
B. demand deposit
C. repurchase agreement
D. NOW account
Answer
A. wholesale CDs
342. ___ would encompass fees received by the bank, but not revenues comingfrom interest charges on loans.
A. Net interest margin
B. Spread
C. Non interest income
D. Non interest expense
Answer
B. Spread
343. Another name used for a bank income statement is:
A. report of income
B. statement of retained earnings
C. overhead efficiency report
D. report of condition
Answer
D. report of condition
344. Which of the following is an advantage to investors of an open-end mutual fund?
A. Once all the shares have been sold, the investor does not have to put in more money.
B. The investors can sell their shares in the over-the-counter market with low transaction fees.
C. The fund agrees to redeem shares at any time.
D. The market value of the fund’s shares may be higher than the value of the assets held by the fund.
Answer
C. The fund agrees to redeem shares at any time.
345. In ___ Securities share bond debentures are offered to the public for subscription for raising capital or fund.
A. Prime Securities
B. Public Securities
C. Preferred Securities
D. Primary Securities
Answer
A. Prime Securities
346. The agreement which incurs the transaction between two parties and promise held that secondparty will sell security at specific maturity is classified as
A. repurchasing commercial notes
B. repurchase bills
C. purchase agreement
D. reverse repurchase agreement
Answer
D. reverse repurchase agreement
347. Which among the following was set up by RBI in 1988 jointly with public sector banks and all India Financial Institutions to develop the money market & provide liquidity to money market instruments as sequel to Vaghul Working Group recommendations?
A. Discount and Finance House of India Ltd (DFHI)
B. Central Depository Services (India) Limited (CDSL)
C. Financial Intelligence Unit India (FIU-I
Answer
A. Discount and Finance House of India Ltd (DFHI)
348. Which among the following is correct regarding BPLR or bench mark prime lending rate?
A. It is lowest interest rate below PLR charged by a bank from the best customer of the financial year
B. It is highest interest rate above PLR charged by a bank from the any customer of the financial year
C. Both (a) & (b)
D. None of the above
Answer
A. It is lowest interest rate below PLR charged by a bank from the best customer of the financial year
349. Which among the following coined the term “Second generation Reforms”?
A. World Bank
B. International Monetary Fund
C. Reserve bank of India
D. SBI
Answer
B. International Monetary Fund
350. The commercial paper issued with low interest rate thus the commercial paper are categorized as
A. payables rating
B. commercial rating
C. poor credit rating
D. better credit rating
Answer
D. better credit rating
351. ADR Stands for:
A. Asset Depository Receipt
B. Asian Depository Receipt
C. American Depository Receipt
D. Adjustable Depository Receipt
Answer
C. American Depository Receipt
352. SEBI operates to fulfill the needs of these three groups, choose the one which is not in those three:
A. the issuers of securities
B. the police
C. the investors
D. the market intermediaries
Answer
B. the police
353. The largest industry group receiving venture capital funding is
A. computer software.
B. medical/health.
C. computer hardware.
D. none of the above.
Answer
D. none of the above.
354. The source of venture capital funding has
A. shifted from wealthy individuals to pension funds and corporations.
B. shifted from pension funds and corporations to wealthy individuals.
C. decreased since 1990.
D. none of the above.
Answer
A. shifted from wealthy individuals to pension funds and corporations.
355. A typical venture capital firm has a ___ number of investors who eachcontribute a ___ amount of money to the fund.
A. large; small
B. small; large
C. large; large
D. small; small
Answer
B. small; large
356. Most automobile financing is provided by
A. commercial banks.
B. thrifts.
C. finance companies owned by automobile companies.
D. finance companies owned by real estate brokers.
Answer
C. finance companies owned by automobile companies.
357. Finance companies
A. are money market intermediaries.
B. borrow in large amounts, but lend in small amounts.
C. are virtually unregulat
Answer
D.
358. Business finance companies provide specialized forms of credit to businesses by making loans and purchasing accounts receivable at a discount; this provision of credit is called
A. discounting.
B. factoring.
C. refinancing
D. sparking.
Answer
B. factoring.
359. Which one of the following is a regarded as classic venture capital?
A. MBO finance
B. Early stage
C. Institutional
D. Corporate
Answer
B. Early stage
360. Which agency regulates and supervises NBFCs?
A. Finance Ministry
B. SEBI
C. RBI
D. Respective state government
Answer
C. RBI
