banking, security market & insurance section 2 MCQ Questions & Answers Detailed Explanation

Question : 1

When the RBI wants to inject liquidity into the economy, it may adopt the following :

1. Buy the government securities from the banks.
2. Enter into reverse repo operations
3. Raise cash Reserve Ratio
4. Reduce SLR.

a) 1, 2 and 4 only

b) 1 and 4 only

c) 1 only

d) 1, 2, 3 and 4

Question : 2

Paper currency first started in India in

a) 1601

b) 1542

c) 1861

d) 1880

Question : 3

Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)?

1. It decides the RBI’s benchmark interest rates.
2. It is a 12-member body including the Governor of RBI and is reconstituted every year.
3. It functions under the chairmanship of the Union Finance Minister.

a) 3 only

b) 1 and 2 only

c) 1 only

d) 2 and 3 only

Question : 4

Which of the following is not true when the interest rate in the economy goes up?

a) Cost of production increases

b) Lending decreases

c) Saving increases

d) Return on capital increases

Question : 5

Bank rate means

a) Rate of Profit of banking institution

b) Interest rate charged by Scheduled Banks

c) Interest rate charged by money lenders

d) Official rate of interest charged by Central Bank

Question : 6

Who is the new Chairman of Life Insurance Corporation of India?

a) Thomas Matthew

b) D.K. Malhotra

c) S.K. Roy

d) V.K. Sharma