Industries and finance - MCQs with answers

Industries and finance - MCQs with answers


1. Which of the following is not included under the money market?

a. RBI
b. Commercial banks
c. SEBI
d. None of the above

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ANSWER: c. SEBI

Money market includes RBI, commercial banks and other financial institutions. SEBI belongs to capital market.



2. Consider the following statements and identify the right ones.

i. Call money market is a short term market
ii. Money can be borrowed for not less than a week

a. I only
b. ii only
c. both
d. none

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ANSWER: a. I only

It is a very short term market, also known as overnight market as money can be borrowed or lent for a day.



3. Consider the following statements and identify the right ones.

i. Treasury bills are used by government to get long term loans
ii. The maturity period of a treasury bill in India ranges from 14 days to 365 days

a. i only
b. ii only
c. both
d. none

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ANSWER: b. ii only

Treasury bills are used by government to get short term loans



4. Who discounts the treasury bills?

a. RBI
b. Commercial banks
c. SEBI
d. Finance Ministry

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ANSWER: a. RBI

RBI as an agent of the Government of India discounts the treasury bills.



5. Consider the following statements and identify the right ones.

i. Treasury bills can be issued by all the states
ii. They are not used for OMO

a. i only
b. ii only
c. both
d. none

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ANSWER: d. none

Treasury bills cannot be issued by the states. They are used by the RBI for open market operations.



6. Consider the following statements and identify the right ones.

i. Trading of treasury bills is not allowed in the market
ii. The ad hoc treasury bills have been replaced by Ways and Mean Advances System

a. i only
b. ii only
c. both
d. none

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ANSWER: b. ii only

Trading of treasury bills is allowed in the market.



7. Consider the following statements and identify the right ones.

i. Commercial bills are not tradable in market
ii. It is raised by the payer and accepted for payment by the payee on some future date

a. I only
b. ii only
c. both
d. none

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ANSWER: d. none

Commercial bills are raised by the payee and accepted for payment by the payer on some future date. They are tradable in market.



8. Consider the following statements and identify the right ones.

i. The certificate of deposits are issued at a discount to the face value
ii. The issuing institution can repurchase it before maturity period.

a. i only
b. ii only
c. both
d. none

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ANSWER: a. I only

The issuing institution cannot repurchase it before maturity period.



9. Which of the following is a criterion for issuing commercial paper market?

i. It should be a listed company
ii. It should have a working capital of 5 crores at least

a. i only
b. ii only
c. i and ii
d. None

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ANSWER: c. I and ii

Commercial papers are short term borrowing instruments that are used by corporates.



10. Consider the following statements and identify the right ones.

i. The Money Market Mutual Fund aims at providing investment opportunities to small investors to enter into markets
ii. Banks can get their bills rediscounted directly by DFHI

a. i only
b. ii only
c. both
d. none

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ANSWER: c. both

The DFHI was set up in 1988 to provide investment opportunities to small investors to enter into markets.



11. The market for transaction of government securities is called

a. Gilt-edged market
b. Industrial securities market
c. Call money market
d. None of the above

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ANSWER: a. Gilt-edged market

The market for transaction of government securities is called gilt-edged market.



12. Consider the following statements and identify the right ones.

i. In debentures, maturity period is pre-decided.
ii. Companies cant issue debentures.

a. i only
b. ii only
c. both
d. none

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ANSWER: a. I only

Companies can issue debentures to raise capital and in debentures, maturity period and interest rate too is pre-decided.



13. Consider the following statements and identify the right ones.

i. NBFCs can accept demand deposits
ii. Deposit insurance facility of DICGC is available for NBFC depositors.

a. i only
b. ii only
c. both
d. none

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ANSWER: d. none

NBFCs cannot accept demand deposits. Deposit insurance facility of DICGC is not available for NBFC depositors.



14. Consider the following statements and identify the right ones.

i. The RBI registers and regulates brokers and sub-brokers working in the securities market.
ii. RBI also prevents insider trading in the securities market.

a. i only
b. ii only
c. both
d. none

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ANSWER: d. none

The SEBI registers and regulates brokers and sub-brokers working in the securities market. SEBI also prevents insider trading in the securities market.



15. Consider the following statements and identify the right ones.

i. SEBI was given a statutory status on the recommendation of Narasimhan Committee
ii. The chairman and members are appointed by the government and RBI

a. i only
b. ii only
c. both
d. none

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ANSWER: c. both

SEBI regulates stock markets and other markets in the country.


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