banking, security market & insurance section 3 MCQ Questions & Answers Detailed Explanation
MOST IMPORTANT indian economy mcq - 5 EXERCISES
The following question based on Banking, Security Market & Insurance topic of indian economy mcq
- Fiat money is a term used for Gold coins
- Currency Deposit Ratio is the proportion of the total deposits commercial banks keep as reserves.
(a) Both 1 and 2
(b) 2 only
(c) 1 only
(d) Neither 1 nor 2
The correct answers to the above question in:
Answer: (d)
Currency notes and coins are called fiat money. They don’t have intrinsic value like a gold or silver coin. The currency-deposit ratio measures the relationship between the cash people have on hand and what they have in their accounts.
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Question : 1
In case of Small Finance Banks (SFB), the loan size and investment limit exposure to single
a) 15 per cent of capital funds
b) 10 per cent of capital funds
c) 15 per cent of total advances
d) 10 per cent of total advances
Answer »Answer: (b)
The maximum loan size and investment limit exposure to a single and group obligor would be restricted to 10 per cent and 15 per cent of its capital funds, respectively.
Question : 2
The last six characters of the alphanumeric IFSC printed on the cheque helps in identifying the
a) Bank name
b) Type of account
c) Bank branch
d) Business or profession
Answer »Answer: (c)
The IFSC is an 11-character code with the first four alphabetic characters representing the bank name, and the last six characters (usually numeric, but can be alphabetic) representing the branch.
Question : 3
If all the banks in an economy are nationalized and converted into a monopoly bank, the total deposits
a) will neither increase nor decrease
b) will increase
c) will decrease
d) None of the above
Answer »Answer: (a)
It will remain the same, because banks do not increase the national income. So it remains the same immaterial whether banks are there or not.
Question : 4
Non - performing assets in commercial banks means
a) loans in which interest or principal amount is not recovered.
b) capital assets not in use.
c) bank deposits which are not invested.
d) low - interest rate loans.
Answer »Answer: (a)
According to Indian Reserve Bank. Non performing assets in commercial bank means the loans in which interest or principal amount is not recovered.
Question : 5
Consider the following statements in regard to devaluation and depreciation of a currency:
- Devaluation is an activity conducted by central government whereas depreciation happens due to market forces.
- In both the devaluation and depreciation currency loses value against other currencies in a floating currency exchange market.
a) Both 1 and 2
b) 2 only
c) 1 only
d) Neither 1 nor 2
Answer »Answer: (c)
Devaluation happens in countries with a fixed exchange rate. In a fixed-rate economy, the government decides what its currency should be worth compared with that of other countries.
The exchange rate can change only when the government decides to change it. If a government decides to make its currency less valuable, the change is called devaluation. Depreciation happens in countries with a floating exchange rate.
A floating exchange rate means that the global investment market determines the value of a country’s currency.
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banking, security market & insurance section 1
banking, security market & insurance section 2
banking, security market & insurance section 3
banking, security market & insurance section 4
banking, security market & insurance section 5
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