Tuesday, 5 July 2016

Banking and Financial Awareness for SBI / IBPS Exams

1. Nowadays we frequently read news items about “Derivatives” as used in the world of finance and money market. Which of the following statement(s) correctly describes what a derivative is and how it affects money/finance markets? 
I. Derivatives enable individuals and companies to insure themselves against financial risk. II.Derivatives are like fixed deposits in a bank and are the safest way to invest one’s idle money  lying in a bank. 
III.Derivatives are the financial instruments which were used in India even during the British Raj.
Only III
Only II
Only I
All of the above

2. Prior to the establishment of the Reserve Bank of India, the Government banking business was conduct by?
Bank of India
Central Bank of India
National Bank of India
Imperial Bank of India

3. Which of the following is not a general credit control measure?
bank rate
variable reserve ratios
open market operations
regulation of margin requirements on advances against agricultural commodities

4. Which one of the following is/are implication(s) of large inflow of foreign exchange into the country? 
I. It makes monetary management difficult for RBI. 
II.It creates money supply, asset bubbles and inflation. 
III.It weakens the competitiveness of Indian exports.
Only I
Only II
Only III
All of the above

5. In India, which of the following agency is responsible for announcing the Foreign Trade Policy?
Foreign Ministry
Ministry of Commerce and Industry

6. Many a time we read a term MSS in relation to banking transactions. What is the full form of MSS?
Money Stabilization Scheme
Market Stabilization Scheme
Maturity and Standardization Service
Money Stabilization Service

7. RBI’s open market operation transactions are carried out with a view to regulate?
Liquidity in the economy
Prices of essential commodities
All of the above

8. Open market operations, one of the measures taken by RBI in order to control credit expansion in the economy means?
Sale or purchase of Govt. securities
Issuance of different types of bonds
Auction of gold
None of the above

9. The bank rate means?
Rate of interest charged by commercial banks from borrowers
Rate of interest at which commercial banks discounted bills of their borrowers
Rate of interest allowed by commercial banks on their deposits
Rate at which RBI purchases or re-discounts bills of exchange of commercial banks

10. What is an Indian Depository Receipt?
A deposit account with a Public Sector Bank
A deposit account with any of depositories in India
A denominated in Indian currency and are issued by a domestic depository and the underlying equity shares are secured with a custodian
None of the above


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