Banking and Financial Awareness for SBI / IBPS Exams

1. As per the reports published in various journals and newspapers the ‘small borrowers’ in rural areas still prefer to take informal route for their credit needs. Which of the following is the ‘informal route’ of credit in financial sector?
(a) Credit cards 
(b) Loan against gold from financial institute 
(c) Debit cards 
(d) Money lender

2. What is meant by ‘Underwriting’ the term frequently used in financial sector?
(a) Under valuation of the assets 
(b) The Act of taking on a risk
(c) Giving a Guarantee that a loan will not become a bad loan 
(d) None of the above 

3. As we have noticed many banks of Indian origin are opening offices/branches in foreign countries. Why is this trend emerging at a very fast pace?
I. These Banks wish to provide banking facilities to foreigners as banking facilities are not    plenty in many foreign countries. India wants to take an advantage of the situation.
II.These banks wish to help Indian firms to acquire funds at internationally competitive rates. 
III. These banks wish to promote trade and investment between India and other countries.
(a) Only I
(b) Only II
(c) Only III
(d) Only II and III

4. Many economists, bankers and researchers in India often advocate that banks should equip themselves for new challenges. These challenges are in which of the following shapes/forms?
I. As India economy is getting increasingly integrated with the rest of the world the demand of the Corporate banking is likely to change in terms of size, composition of services and also the quality.
II. The growing foreign trade in India will have to be financed by the local banks.
III. Foreigners are habitual of the comforts provided by the technology. India has to do a lot in this reference.
(a) Only I is correct
(b) Only II is correct 
(c) Only III is correct 
(d) All of the above 

5. Which of the following is not a banking/finance related term?
(a) Credit warp 
(b) EMI
(c) Held to Maturity 
(d) Diffusion

6. Which of the following is the correct definition of the term commercial papers?
I. It is nothing but the popular name of the Judicial stamp papers used to register financial transactions.
II. It is one of the instrument through which Corporates raise debt from the market.
III. It is the name of the ‘Certificate of Deposits’ provided by the Banks to its retail customers.
(a) Only I
(b) Only II
(c) Only III
(d) Both I and II

7. Many a times we read in the newspapers a term ‘Hot Money’. Which of the following is the correct definition of Hot Money?
I. This is the fund which is dumped into a county to get the advantage of a favourable interest rate and hence brings higher returns.
II. This is the fund which is provided by a bank in US $ at very short notice and at a very high rate of interest and for a longer period of repayment.
III. This is the fund which is pushed into market through Hawala or some other such illegal methods and sometimes referred also as Black Money.
(a) Only I is correct
(b) Only I and II are correct 
(c) Only III is correct 
(d) Both I and III are true 

8. The real return to the investor sometimes gets reduced due to sudden rise in the prices of the commodities. This phenomenon in financial market is known as..........?
(a) Market risk 
(b) Inflation risk 
(c) Credit risk 
(d) Diversification of funds

9. As per the reports in the leading newspapers Securities and Exchange Board of India (SEBI) has asked the Mutual Fund industry to stop ‘Misselling’ their schemes to investors. What is ‘Misselling’ of products?
I. Misselling takes place when mutual funds are sold without telling the likely returns.
II. When agents sell the products without telling investors what are the risks involved in investing in mutual funds.
III. When agents invest somebody’s money in mutual funds without their knowledge, it is called misselling.
(a) Only I
(b) Only II
(c) Only III
(d) All of the above 

10. As per the newspaper reports outsourcing has become a profitable business in India and Countries like China are trying to learn about it from India. What are the main factors which has/have helped India in attaining this position?
I. Availability of skilled manpower in abundance.
II. Knowledge of English language.
(a) Only I
(b) Only II
(c) Both I and II
(d) None of the above

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