Banking Awareness Quiz Set – 31

Hello Aspirants. Welcome to Banking Awareness Quiz in AffairsCloud.com. Here we are creating quiz covering important questions which are common for all the bank exams and other competitive exams.

1. Which of the following is a financial ratio which gives an idea or a measure of a company’s ability to meet its financial losses.
   A. Credit Ratio
   B. Interest Ratio
   C. Leverage Ratio
   D. None of these
   
   Answer & Explanation

   C. Leverage Ratio
   Explanation: The financial leverage ratio measure the overall debt load of a company and compare it with the assets or equity. This shows how much of the company assets belong to the shareholders rather than creditors. 
   
   
2. Security which one offers for taking an advance or loan from someone is known as _______.
   A. Collateral
   B. Mortgage
   C. Pledge
   D. None of these
   
   Answer & Explanation

   B. Mortgage
   Explanation: It is a way for a smaller regional bank to lend mortgages to its customers without having to worry about whether the customers have the assets to cover the loan. The bank acts as a middleman between the home buyer and the investment markets.
   
   
3. When financial institutions and banks undertake activities related to banking like investment, issue of debit and credit card etc. it is called as _________
   A. Retail Banking
   B. Offshore Banking
   C. Virtual Banking
   D. Universal Banking
   
   Answer & Explanation

   D. Universal Banking
   Explanation: A universal bank is a bank which offers commercial bank functions plus other functions such as Merchant Banking, Mutual Funds, Factoring, Credit cards, Housing Finance, Auto loans, Retail loans, Insurance, etc.
   
   
4. A bond that is sold at good discount as it has no coupon is
   A. Premium Bond
   B. One-coupon Bond
   C. Zero coupon Bond
   D. None of these
   
   Answer & Explanation

   C. Zero coupon Bond
   Explanation: A zero-coupon bond is a bond that makes no periodic interest payments and is sold at a deep discount from face value. The buyer of the bond receives a return by the gradual appreciation of the security, which is redeemed at face value on a specified maturity date.
   
   
5. A right of the creditors to retain possession of all goods given in security to him by the debtor for any outstanding debt is ________.
   A. General Lien
   B. Particular Lien
   C. Specific Lien
   D. None of these
   
   Answer & Explanation

   A. General Lien
   Explanation: A General Lien is a right to retain the goods and securities belonging to the borrower for all dues payable by him. The creditor has no right to sell the goods even though he retains possession thereof. The creditor may only retain the goods/property till the realization of the debt.
   
   
6. Where the name of the endorsee or transferee appears on the instrument while making endorsement.
   A. Endorsement in Full
   B. Blank Endorsement
   C. Conditional Endorsement
   D. Partial Endorsement
   
   Answer & Explanation

   A. Endorsement in Full
   Explanation: Special or full endorsement is that which contains not only the name of the endorser but also the name of the endorse. The effect of special endorsement is that the endorse must endorse it again if he wants to transfer the property in the cheque to somebody else.
   
   
7. A type of banking in which various types of financial services like accepting bills arising out of trade, arranging and providing underwriting, providing advice, information or assistance on starting new business, acquisitions, mergers etc. are provided is called as
   A. Offshore Banking
   B. Investment Banking
   C. Merchant Banking
   D. Commercial Banking
   
   Answer & Explanation

   C. Merchant Banking
   Explanation: Merchant Banking is a combination of Banking and consultancy services. It provides consultancy to its clients for financial, marketing, managerial and legal matters. Consultancy means to provide advice, guidance and service for a fee.
   
   
8. Who imposes moratorium on operations of a bank if the affairs of the bank are not conducted as per banking norms.
   A. SEBI
   B. RBI
   C. IRDA
   D. NABARD
   
   Answer & Explanation

   B. RBI
   Explanation:It is a temporary delay. For instance a delay in the payment of debt, if too many people are unable to repay loans, the government may declare that no one is legally obligated to make debt service payments for a period of six months. Similarly, if a company is having a difficult year, it may declare a moratorium on research and development funding for two years in order to save money. 
   
   
9. It focuses on providing for financial needs of industry and institutional clients.
   A. Retail Banking
   B. Narrow Banking
   C. Offshore Banking
   D. Wholesale Banking
   
   Answer & Explanation

   D. Wholesale Banking
   Explanation: Wholesale Banking is in which banking services are offered only to government agencies, pension funds, other institutional customers and to corporations with strong balance sheets and sound income statements.
   
   
10. The dilution or selling of the government stake in public sector undertakings is known as
    A. Privatization
    B. Investment
    C. Disinvestment
    D. None of these
    
    Answer & Explanation

    C. Disinvestment
    Explanation:Disinvestment means to sell off certain assets such as a manufacturing plant, a division or subsidiary, or product line.