Banking Awareness Quiz Set – 41

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 institution that assists wealthy individuals, corporations, and governments in raising capital by underwriting and/or acting as the client’s agent in the issuance of securities?
   A. Narrorw Bank
   B. Investment Bank
   C. Merchant Bank
   D. Virtual Bank
   
   Answer & Explanation

   B. Investment Bank
   Explanation:An investment bank may also assist companies with mergers and acquisitions and may provide support services in market making and trading of various securities. The primary services include: Corporate finance, M&A, equity research, sales & trading, and asset management. They can earn profit by charging fees and commissions for providing these services and other kinds of financial and business advice.
   
   
2. It is not a separate legal entity of the parent company and liability wise there is no limit to the parent company’s liability.
   A. Subsidiary
   B. Branch
   C. Kiosk
   D. None of these
   
   Answer & Explanation

   B. Branch
   Explanation:*Recent: RBI has permitted to Foreign Banks to change from branch mode to the wholly owned Subsidiaries.
   
   
3. A bank which is not included in second schedule and is not eligible for loan from RBI is called as _________.
   A. Scheduled Bank
   B. Non-Scheduled Bank
   C. SBI
   D. None of these
   
   Answer & Explanation

   B. Non-Scheduled Bank
   Explanation:Non-schedule banks are those banks whose total paid up capital is less than Rs 5 lakh and RBI has no specific control over these banks. These banks are not included in the second schedule of RBI Act, 1934.
   
   
4. Which of the following is a ratio that shows the efficiency of a company’s management by comparing operating expense to net sales?
   A. Operating Ratio
   B. Capital Adequacy Ratio
   C. Gearing Ratio
   D. None of these
   
   Answer & Explanation

   A. Operating Ratio
   Explanation:Operating ratios show the essential connections between income statement and balance sheet items. Operating ratios include operating cash flow to sales ratio, operating expenses to gross margin ratio, operating expenses to sales ratio, operating performance ratio, and hundreds such others.
   
   
5. Fixed Interest Government Securities traded on Stock Exchanges do not include Treasury bills are known as
   A. Collateral Security
   B. Equity Securities
   C. Gilt Edged Securities
   D. Foreign Securities
   
   Answer & Explanation

   C. Gilt Edged Securities
   Explanation:Government securities, also called the gilt edged securities or G-secs, are not only free from default risk but also provide reasonable returns and, therefore, offer the most suitable investment opportunity to provident funds.
   
   
6. ___________ is usually used to stabilize the value of a currency.
   A. Fixed Currency
   B. Currency Peg
   C. Currency War
   D. None of these
   
   Answer & Explanation

   B. Currency Peg
   Explanation:When a country has a pegged currency it typically means that the country wants to maintain a steady exchange rate to help build stable trade relations. If a country’s currency is constantly fluctuating relative to major currencies, it discourages potential trade partners who are worried about unfavorable changes in exchange rates. For example, oil-rich countries like Saudi Arabia and Venezuela have their currencies pegged to the US dollar as the US is a major oil importer (Dollarization).
   
   
7. DIPP is the nodal agency in the field of foreign investments in India. What is the full form of DIPP?
   A. Department of Industry Policy and Promotion
   B. Department of Innovation Policy and Promotion
   C. Department of Industrial Policy and Promotion
   D. Department of Industrial Policy and Partnership
   
   Answer & Explanation

   C. Department of Industrial Policy and Promotion
   Explanation:It is working under the Ministry of Commerce and Industry, Government of India. This department is responsible for formulation and implementation of promotional and developmental measures for growth of the industrial sector, keeping in view the national priorities and socio-economic objectives.
   
   
8. Types of loans granted by banks for purchase of white goods are
   A. Consumer Durable Loans
   B. White Loans
   C. Consortium loans
   D. None of these
   
   Answer & Explanation

   A. Consumer Durable Loans
   Explanation:Consumer Durable loan is a finance option for purchase of household items like Washing Machines, Refrigerators etc.
   
   
9. The letter ‘R’ denotes which word in the term IFRS?
   A. Restructuring
   B. Reporting
   C. Recognizing
   D. Remote
   
   Answer & Explanation

   B. Reporting
   Explanation:International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) that is becoming the global standard for the preparation of public company financial statements.
   
   
10. Monetary policy is administrated by which Bank?
    A. RBI
    B. SEBI
    C. SBI
    D. OBC
    
    Answer & Explanation

    A. RBI
    Explanation:Monetary policy is the method by which monetary authority of a country, normally a central bank(RBI) controls the supply of money in the economy by its control over interest rates in order to maintain price stability and achieve high economic growth.