81.Which of the following contracts involves future exchange of assets at a specified price?
[A] future contract
[B] forward contract
[C] Present contract
[D] Spot contract
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Correct Answer: B [forward contract]
Notes:
A forward contract is a private agreement between two parties giving the buyer an obligation to purchase an asset (and the seller an obligation to sell an asset) at a set price at a future point in time.
82.Which of the following is best described as selling a synthetic asset and simultaneously buying the actual asset?
[A] Arbitrage
[B] Diversifying
[C] Speculating
[D] Hedging
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Correct Answer: A [Arbitrage]
Notes:
Arbitrage is the simultaneous purchase and sale of an asset to profit from an imbalance in the price. It is a trade that profits by exploiting the price differences of identical or similar financial instruments on different markets or in different forms.
83.Which of the following indicates the wealth of a person?
[A] Bank balance
[B] Capital
[C] Net worth
[D] Assets
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Correct Answer: C [Net worth]
Notes:
Net worth is the value of all the non-financial and financial assets owned by an institutional unit or sector minus the value of all its outstanding liabilities.
84.Loan disbursed by an NBFC-MFI to a borrower with urban and semi-urban household income should not exceed how much amount?
[A] Rs.1,00,000
[B] Rs. 1,60,000
[C] Rs. 2,60,000
[D] Rs.1,50,000
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Correct Answer: B [Rs. 1,60,000]
Notes:
Loan disbursed by an NBFC-MFI to a borrower with urban and semi-urban household income should not exceed ₹ 1,60,000
85.Core Investment Company holds not less than 90 per cent of its net assets in the form of investment in which of the following?
[A] equity shares
[B] preference shares
[C] bonds
[D] all of the above
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Correct Answer: D [all of the above]
Notes:
Core Investment Company (CIC) is a non-banking financial company carrying on the business of acquisition of shares and securities and which (a) holds not less than 90 per cent of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies,
86.What should be the minimum net worth of a company to get registered as Infrastructure Finance Company?
[A] Rs 250 crore
[B] Rs 350 crore
[C] Rs 300 crore
[D] Rs 100 crore
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Correct Answer: C [Rs 300 crore]
Notes:
As per RBI, any non-banking financial company can be registered as an Infrastructure Finance Company, subject to the company must have a minimum net worth of Rs 300 Crore.
87.Which of the following is/are the type of IDFs?
[A] IDF-MF
[B] IDF-NBFC
[C] Both 1 and 2
[D] Neither 1 nor 2
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Correct Answer: C [Both 1 and 2]
Notes:
There are two types of IDFs: IDF-MFs and IDF-NBFCs. IDF-MFs can be sponsored by banks and NBFCs. Whereas IDF-NBFCs can be sponsored by banks and Infrastructure Finance companies.
88.Which of the following is the benefit of credit-rating to investors?
[A] Safeguard against bankruptcy
[B] Saving of resources
[C] Credibility of issues
[D] All of the above
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Correct Answer: D [All of the above]
Notes:
Saving of resources, Safeguard against bankruptcy and Credibility of issues are all benefits of credit-rating to investors.
89.Which of the following is regarded as the fourth element of the financial system?
[A] Financial institutions
[B] Financial instruments
[C] Financial services
[D] Financial markets
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Correct Answer: C [Financial services]
Notes:
Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, etc.
90.Who guides debenture trustess to enhance their disclosures for listed debt securities to protect investor interest?
[A] Government
[B] RBI
[C] SEBI
[D] None of the above
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Correct Answer: C [SEBI]
Notes:
SEBI gides debenture trustees to enhance their disclosures for listed debt securities to protect investor interest. Debentures are not secured by physical assets or collateral and any fallout could lead to a crisis.
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