BANK Q & A -8

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71.

Which market involves transactions in paper assets issued by banks to depositors who are willing to leave their money on deposit for a specified period of time?

[A] Gilt repo market
[B] Sterling certificates of deposit market
[C] Primary market
[D] Secondary market

Hide Answer

Correct Answer: B [Sterling certificates of deposit market]
Notes:
Sterling certificates of deposit market involves transactions in paper assets issued by banks, building societies and finance houses to depositors who are willing to leave their money on deposit for a specified period of time.

72.In which year does Reserve Bank of India introduced the concept of classification of money into M1, M2, M3 and so on?

[A] 1956
[B] 1961
[C] 1977
[D] 1998

Hide Answer

Correct Answer: C [1977]
Notes:
The measures of money supply in India are classified into four categories M1, M2, M3 and M4 along with M0. This classification was introduced in April 1977.

73.Which among the following are known as Narrow Money?

[A] M1 and M2
[B] M2 and M3
[C] M3 and M4
[D] M1 and M2

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Correct Answer: A [M1 and M2]
Notes:
M1 and M2 are collectively known as Narrow Money.

74.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

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Correct Answer: B [capital markets]
Notes:
Capital markets refer to the places where savings and investments are moved between suppliers of capital and those who are in need of capital.

75.In which markets, transactions are done through computers and telephone without any specific location?

[A] over the counter markets
[B] past counter market
[C] Future counter market
[D] Capital counter market

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Correct Answer: A [over the counter markets]
Notes:
Over-the-counter (OTC) or off-exchange trading is done directly between two parties, without the supervision of an exchange. It is contrasted with exchange trading, which occurs via exchanges.

76.What is an Indian depository receipt?

[A] A deposit account with a public sector bank.
[B] A depository account with any of the depositories in India.
[C] An instrument in the form of depository receipt.
[D] An instrument in the form of deposit receipt issued by Indian depositories.

Hide Answer

Correct Answer: A [A deposit account with a public sector bank.]
Notes:
Indian Depository Receipt (IDR) is a financial instrument denominated in Indian Rupees in the form of a depository receipt. The benefit of the underlying shares (like bonus, dividends etc.) would accrue to the depository receipt holders in India.

77.In which of the following NBFCs, institutional investors can be sponsored by commercial banks and NBFCs?

[A] Loan Companies
[B] IFC
[C] Systemically Important Core Investment Company
[D] Infrastructure Debt Fund

Hide Answer

Correct Answer: D [Infrastructure Debt Fund]
Notes:
IDFs are investment vehicles which can be sponsored by commercial banks and NBFCs in India in which domestic/offshore institutional investors, specially insurance and pension funds can invest through units and bonds issued by the IDFs.

78.Which of the following statements is/are correct?

[A] NBFCs does not hold a banking license.
[B] NBFC can issue Demand Drafts like banks.
[C] Both 1 and 2 are correct
[D] Neither of them are correct

Hide Answer

Correct Answer: A [NBFCs does not hold a banking license.]
Notes:
NBFC cannot accept demand deposits while NBFC cannot issue Demand Drafts like banks.

79.With reference to the Micro Finance Institutions, which of the following statements is correct?

[A] At present, MFl obtain finance from banks according to RBI guidelines
[B] MFIs provide small scale credit to low income households and small informal businesses
[C] Both 1 and 2
[D] Neither 1 nor 2

Hide Answer

Correct Answer: B [MFIs provide small scale credit to low income households and small informal businesses]
Notes:
Micro finance institutions provide small scale credit to low income households and small informal businesses.

80.For an NBFC-MFI, the tenure of the loan must not to be less than how many months?

[A] 12 months
[B] 24 months
[C] 18 months
[D] 36 months

Hide Answer

Correct Answer: B [24 months]
Notes:
For an NBFC-MFI, the tenure of the loan must not to be less than 24 months.

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