Banking Awareness Quiz – Set 47

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. An Asset Reconstruction Company(ARC) in India is associated with __________
   A. UCPDC
   B. DICGC
   C. NPA
   D. None of the Above
   
   Answer & Explanation

   C. NPA
   Explanation:
   Asset Reconstruction Company (ARC) also known as Securitization company in India helps to unlock the value of non-performing assets(NPA) in banks through Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002.ARC is regulated by RBI as a Non Banking Financial Company(NBFC).
   
   
2. __________ refers borrowers ability to meet immediate liabilities.
   A. Current Ratio
   B. Gearing Ratio
   C. Acid-Test Ratio
   D. None of the Above
   
   Answer & Explanation

   C. Acid-Test Ratio
   Explanation:
   The Acid-test or quick ratio or liquidity ratio is the ratio of cash and other liquid resources of a company in comparison to its current liabilities.
   
   
   
3. Government Securities are trade able instruments issued by the Central Government or the State Governments can be classified into ______types.
   A. 2
   B. 4
   C. 3
   D. None of the Above
   
   Answer & Explanation

   A. 2
   Explanation:
   Securities are short term (one year,Ex-Treasury bills) or long term (one year or more, Ex- Dated Government Securities)
   
   
4. Treasury bills or T-bills are money market instruments, issued by the GOI and are presently issued in ________
   A. 91 day
   B. 182 day
   C. 364 day.
   D. All of the Above
   
   Answer & Explanation

   D. All of the Above
   Explanation:
   Treasury bills are are short term debt instruments issued by the Government of India. They are also known as zero coupon securities and pay no interest. There are no treasury bills issued by State Governments.
   
   
5. __________ short term instrument, have the generic character of T-bills but are issued for maturities less than 91 days.
   A. Dated Government Securities
   B. State Development Loans(SDL)
   C. Cash Management Bills(CMBs)
   D. All of the Above
   
   Answer & Explanation

   C. Cash Management Bills(CMBs)
   Explanation:
   Cash Management Bill (CMB) is the most flexible instrument for a Central Bank because it can be issued when needed, allowing the Central Bank to have lower cash balances and issue fewer long-term notes.
   
   
6. Which of the following is/are Money Market Instrument(s)?
   A. Commercial Paper
   B. Certificate of Deposit
   C. Collateralized Borrowing and Lending Obligations (CBLO)
   D. All of the Above
   
   Answer & Explanation

   D. All of the Above
   Explanation:
   Money market instruments include call money, repos, Treasury bills, Commercial Paper, Certificate of Deposit and Collateralized Borrowing and Lending Obligations (CBLO). It helps the Government, business units and other organizations to meet their short-term requirement.
   
   
   
7. Money Market is regulated by?
   A. RBI
   B. SEBI
   C. IRDAI
   D. NOne of the Above
   
   Answer & Explanation

   A. RBI
   Explanation:
   Indian Money Market consists of RBI, Commercial Banks, NBFCs and financial institutions like LIC, GIC etc., It provides a market for credit instruments such as bills of exchange, promissory notes, commercial paper etc.,
   
   
   
8. Which of the following is mainly used by the banks in order to meet their temporary requirement of Cash on a daily basis?
   A. Commercial Paper
   B. Certificate of Deposit
   C. Collateralized Borrowing and Lending Obligations (CBLO)
   D. Call Money
   
   Answer & Explanation

   D. Call Money
   Explanation:
   Call money market is a market for uncollateralized lending and borrowing of funds. This market is predominantly overnight and is open for participation only to scheduled commercial banks and the primary dealers.
   
   
   
9. Commercial Papers can be issued for maturities between a minimum of 7 days and a maximum up to _______ from the date of issue.
   A. Two years
   B. Three years
   C. Four years
   D. One year
   
   Answer & Explanation

   D. One year
   Explanation:
   Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note by the Companies.
   
   
10. ___________ is a voluntary market body for the bond, money and derivatives markets.
    A. RBI
    B. SEBI
    C. IRDAI
    D. FIMMDA
    
    Answer & Explanation

    D. FIMMDA
    Explanation:
    Fixed Income Money Market and Derivatives Association of India (FIMMDA) was incorporated as a Company under section 25 of the Companies Act,1956 on June 3rd, 1998. FIMMDA includes Nationalized Banks, State Bank of India and its associate banks. It also includes private sector banks such as ICICI, HDFC etc.,