LIC AAO Mains 2019- Financial and Insurance Market Questions

Dear Aspirants,

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. A market is a broad term describing any marketplace where trading of securities including equities, bonds, currencies, and derivatives occur. What is the name of that market?

Equity Market

Export Market

Financial Market

Stock Market

Money Market

Solution:

A sovereign bond is a debt security issued by a national government. Sovereign bonds can be denominated in a foreign currency or the government's own domestic currency; the ability to issue bonds denominated in domestic currency tends to be a luxury that most governments do not enjoy.

Q2. A _______________ bond is a bond issued by a national government, generally with a promise to pay periodic interest payments called coupon payments and to repay the face value on the maturity date.

State Bond

Debenture

Corporate Bond

Sovereign Bond

Solution:

Q3. What is/are the main functions of Financial Market?

It provides facilities for interaction between the investors and the borrowers.

It provides pricing information resulting from the interaction between buyers and sellers in the market when they trade the financial assets.

It provides security to dealings in financial assets.

It ensures liquidity by providing a mechanism for an investor to sell the financial assets.

All of the above options are main functions of Financial Market

Solution:

Main functions of Financial Market:-
(a) It provides facilities for interaction between the investors and the borrowers.
(b) It provides pricing information resulting from the interaction between buyers and sellers in the market when they trade the financial assets.
(c) It provides security to dealings in financial assets.
(d) It ensures liquidity by providing a mechanism for an investor to sell the financial assets.
(e) It ensures low cost of transactions and information.

Q4. Which market comprises the "complex of institutions" and mechanism through which intermediate term funds and long term funds are pooled and made available to business, government and individuals?

Share Market

Security Market

Capital Market

Money Market

Bond Market

Solution:

The capital market is a market for financial investments that are direct or indirect claims to capital. The capital market comprises the complex of institutions and mechanism through which intermediate term funds and long term funds are pooled and made available to business, government and individuals.

Q5. A __________________ market is a component of financial market where short-term borrowing can be issued.

Share Market

Security Market

Capital Market

Money Market

Bond Market

Solution:

A money market is a component of financial market where short-term borrowing can be issued. This market includes assets that deal with short-term borrowing, lending, buying and selling. A capital market is a component of a financial market that allows long-term trading of debt and equity-backed securities.

Q6. OTC is done directly between two parties, without the supervision of an exchange. What is the full form of OTC?

Over-to-counter

Over-the-centre

Over-the-council

Over-the-counter

Over-term-counter

Solution:

Over-the-counter (OTC) or off-exchange trading is done directly between two parties, without the supervision of an exchange. It is contrasted with exchange trading, which occurs via exchanges. A stock exchange has the benefit of facilitating liquidity, providing transparency, and maintaining the current market price.

Q7. Name the instrument, which is a paper or electronic obligation that enables the issuing party to raise funds by promising to repay a lender in accordance with terms of a contract?

Stock instrument

Debt instrument

Common instrument

Share instrument

Convertible instrument

Solution:

A debt instrument is a paper or electronic obligation that enables the issuing party to raise funds by promising to repay a lender in accordance with terms of a contract. Types of debt instruments include notes, bonds, debentures, certificates, mortgages, leases or other agreements between a lender and a borrower.

Q8. How many major segments does financial market has?

four

two

five

three

one

Solution:

A financial market consists of two major segments:
(a) Money Market and
(b) Capital Market

Q9. __________________ market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the Stock Exchange.

Secondary Market

Security Market

Capital Market

Money Market

Bond Market

Solution:

Secondary market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the Stock Exchange. Majority of the trading is done in the secondary market. Secondary market comprises of equity markets and the debt markets. The secondary market enables participants who hold securities to adjust their holdings in response to changes in their assessment of risk and return. They also sell securities for cash to meet their liquidity needs.

Q10. What is the important objective of money market?

The money market doesn’t only help in the storage of short-term surplus funds but also helps in lowering short term deficits.

They help the central bank in regulating liquidity in the economy.

Money markets help short-term fund users to fulfill their needs at reasonable costs.

The money market helps in the development of the capital market, trade and industry.

All of the above

Solution:

Important Objectives Served By a Money Market-
The money market doesn’t only help in the storage of short-term surplus funds but also helps in lowering short term deficits.
They help the central bank in regulating liquidity in the economy.
Money markets help short-term fund users to fulfill their needs at reasonable costs.
The money market helps in the development of the capital market, trade and industry.
To help design effective monetary policies.
To facilitate streamlined functioning of commercial banks.

Q11. Who is present Chairman-Cum-Managing Director of Oriental Insurance Company Limited (OICL)?

TL Alamelu

AV Girija Kumar

Girish Radhakrishnan

Tajinder Mukherjee

Atul Sahai

Solution:

Shri A. V. Girija Kumar is present Chairman-Cum-Managing Director of Oriental Insurance Company Limited (OICL).

Q12. NIC (National Insurance Company Limited) is India’s oldest general insurance Company. It was incorporated on-

27th December 1956

02nd December 1949

21st December 1935

17th December 1920

05th December 1906

Solution:

NIC (National Insurance Company Ltd.) is India’s oldest general insurance Company. It was incorporated in Kolkata on 5th December, 1906 to fulfil the nationalist aspiration for Swaraj. 66 years later, after nationalisation it was merged along with 21 foreign and 11 Indian companies to form National Insurance Company Ltd, one of the 4 subsidiaries of the Govt. owned General Insurance Corporation of India.

Q13. In 2003 all shares of Oriental Insurance Company Limited held by the General Insurance Corporation of India have been transferred to-

LIC

IRDAI

Central Government

RBI

Finance Ministry

Solution:

The Oriental Insurance Company Ltd was incorporated at Bombay on 12th September 1947. The Company was a wholly owned subsidiary of the Oriental Government Security Life Assurance Company Ltd and was formed to carry out General Insurance business. The Company was a subsidiary of Life Insurance Corporation of India from 1956 to 1973 ( till the General Insurance Business was nationalized in the country). In 2003 all shares of our company held by the General Insurance Corporation of India have been transferred to Central Government.

Q14. Who is present Chairman-Cum-Managing Director of National Insurance Company Limited?

Tajinder Mukherjee

AV Girija Kumar

Girish Radhakrishnan

TL Alamelu

Atul Sahai

Solution:

Tajinder Mukherjee is present Chairman-Cum-Managing Director of National Insurance Company Limited.

Q15. Where is the Head Office of Oriental Insurance Company Limited?

Hyderabad

Chennai

Mumbai