LIC AAO Mains 2019- Financial and Insurance Market Questions | 25th June

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LIC AAO Mains 2019- Financial and Insurance Market Questions | 25th June

LIC AAO Mains 2019- Financial and Insurance Market Questions

As we know, LIC has released both the vacancies of AAO (Assistant Administrative Officer) & ADO (Apprentice Development Officer). Insurance Market & Financial Awareness is a newly introduced section which will be asked in both the exams. LIC AAO mains 2019 is scheduled to be held on 28th June. While LIC ADO Prelims 2019 is scheduled to be held on 6th & 13th July. Here is a quiz on Insurance Market & Financial Awareness being provided by Adda247 for free to let you practice the best of latest pattern Questions for LIC examination for sure shot selection.





Q1. Prithvi, Agni, Jal, Akash, Sabki Suraksha Hamare Paas is the slogan of-
General Insurance Corporation of India
Oriental Insurance Company Limited
United India Insurance Company
New India Assurance Company Limited
National Insurance Company Limited
Solution:
Prithvi, Agni, Jal, Akash, Sabki Suraksha Hamare Paas is the slogan of Oriental Insurance Company Limited (OICL).
Q2. What is the tagline of Bajaj Allianz Life Insurance Company Limited?
Prithvi, Agni, Jal, Akash, Sabki Suraksha Hamare Paas
Zimmedari ka humsafar
You click, we cover
Karo Zyada ka Iraada
Jiyo Befiqar
Solution:
The tagline of Bajaj Allianz Life Insurance Company Limited is "Jiyo Befiqar".
Q3. The General Insurance Council has been constituted under section 64C of the Insurance Act, 1938 by-
IRDAI
Government of India
Finance Ministry
NABARD
LIC
Solution:
The General Insurance Council has been constituted under section 64C of the Insurance Act, 1938 since 2001 by the Insurance Regulatory and Development Authority of India (IRDAI). The General Insurance Council is an important link between the Insurance Regulatory and Development Authority of India and the non-Life insurance industry. It also pushes for the Industry’s issues with the Government. While the Council plays the role envisaged for it by the Insurance Act, it also facilitates overall growth for the industry in a fair and equitable manner in the interest of all stake holders.
Q4. Name the insurance that is refers to liability insurance that is in excess of specified other policies and also potentially primary insurance for losses not covered by the other policies.
Life Insurance
Travel Insurance
Motor Insurance
Umbrella Insurance
Flood Insurance
Solution:
Umbrella insurance refers to liability insurance that is in excess of specified other policies and also potentially primary insurance for losses not covered by the other policies.
Q5. Where is the head office of General Insurance Council?
Pune
Chennai
Mumbai
New Delhi
Kolkata
Solution:
The Head Office of General Insurance Council is in Mumbai.
Q6. A forward contract is a customized contract between two parties, where settlement takes place on a specific date in future at a price agreed today. What is/are the main features of forward contracts?
They are bilateral contracts and hence exposed to counter-party risk.
Each contract is custom designed, and hence is unique in terms of contract size, expiration date and the asset type and quality.
The contract price is generally not available in public domain.
The contract has to be settled by delivery of the asset on expiration date.
All of the above are main features of forward contracts
Solution:
A forward contract is a customized contract between two parties, where settlement takes place on a specific date in future at a price agreed today. The main features of forward contracts are:-
They are bilateral contracts and hence exposed to counter-party risk.
Each contract is custom designed, and hence is unique in terms of contract size, expiration date and the asset type and quality.
The contract price is generally not available in public domain.
The contract has to be settled by delivery of the asset on expiration date.
In case the party wishes to reverse the contract, it has to compulsorily go to the same counter party, which being in a monopoly situation can command the price it wants.
Q7. A _________________________ is an agreement between two parties to exchange cash flows on a determined date or in many cases multiple dates.
Deal
Options
Futures
Swap
Forward
Solution:
A swap is an agreement between two parties to exchange cash flows on a determined date or in many cases multiple dates. Typically, one party agrees to pay a fixed rate while the other party pays a floating rate. For example, when trading commodities the first party, an airline company relying of kerosene, agrees to pay a fixed price for a pre-determined quantity of this commodity. The other party, a bank, agrees to pay the sport price for the commodity. Hereby the airline company is insured of a price it will pay for its commodity. A rise in the price of the commodity is in this case paid by the bank. Should the price fall the difference will be paid to the bank.
Q8. Globally, operations in the foreign exchange market started in a major way after the breakdown of the Bretton Woods system in-
1957
1962
1971
1984
1995
Solution:
Globally, operations in the foreign exchange market started in a major way after the breakdown of the Bretton Woods system in 1971, which also marked the beginning of floating exchange rate regimes in several countries. Over the years, the foreign exchange market has emerged as the largest market in the world.
Q9. The SEBI is the regulatory authority established under Section ___________________ of SEBI Act 1992 to protect the interests of the investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith and incidental thereto.
section 10
section 3
section 18
section 30
section 5
Solution:
The SEBI is the regulatory authority established under Section 3 of SEBI Act 1992 to protect the interests of the investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith and incidental thereto.
Q10. What is primary market?
The primary market is where securities are created
The primary market is commonly referred to as the stock market.
The primary market are listed on the stock exchange for the purpose of trading.
All of the above
None of the given options is true
Solution:
The primary market is where securities are created. It’s in this market that firms float new stocks and bonds to the public for the first time. An initial public offering (IPO) is an example of a primary market.
Q11. Issues made by an Indian company in primary market can be classified as-
Public Issue
Right Issue
Bonus Issue
Issue of IDR
All of the above
Solution:
An IPO occurs when a private company issues stock to the public for the first time. Various types of issues made by the Indian companies/corporation are a Public issue, Offer for Sale, Right Issue, Bonus Issue, Issue of IDR, etc.
Q12. IDR is a financial instrument denominated in Indian Rupees in the form of a depository receipt. What is the full form of IDR?
Indian Depository Receipt
Indian Depository Revenue
Indian Demand Receipt
Indian Depository Risk
International Depository Ratio
Solution:
Indian Depository Receipt (IDR) is a financial instrument denominated in Indian Rupees in the form of a depository receipt. The IDR is a specific Indian version of the similar global depository receipts.
Q13. Unit Trust of India was the first mutual fund set up in India in-
1981
1949
1956
1963
1969
Solution:
Unit Trust of India was the first mutual fund set up in India in the year 1963. In late 1980s, Government allowed public sector banks and institutions to set up mutual funds. In the year 1992, Securities and Exchange Board of India (SEBI) Act was passed. The objectives of SEBI are– to protect the interest of investors in securities and to promote the development of and to regulate the securities market.
Q14. Pursuant to the Vaghul Working Group recommendation for setting up an institution to provide enhanced liquidity to the money market instruments, the RBI set up the DFHI, jointly with public sector banks and the all-India financial institutions. What is the full form of DFHI?
Dis­count and Finance House of Institute
Dis­count and Finance House of India
Dis­count and Fully Home of India
Division and Finance House of India
Department and Finance House of India
Solution:
Pursuant to the Vaghul Working Group recommendation for setting up an institution to provide enhanced liquidity to the money market instruments, the RBI set up the Dis­count and Finance House of India (DFHI) jointly with public sector banks and the all-India financial institutions.
Q15. ______________________ is a mechanism for pooling money by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document.
Stock
Equity
Mutual fund
Share
Debenture
Solution:
Mutual fund is a mechanism for pooling money by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is diversified because all stocks may not move in the same direction in the same proportion at the same time.
               



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