money supply, banking & financial institutions section 1 MCQ Questions & Answers Detailed Explanation

Question : 1

Consider the following statements:

1. Increase in deposit rate results in higher savings
2. Increase in deposit rate results in fall in credit off takes
3. Increase in deposit rate results in increase in investment

a) 1 & 3

b) 1 & 2

c) 1, 2, 3

d) Only 1

Question : 2

What are “Futures”?

a) Securities or commodities sold or bought with the assumption of delivery at a later stage

b) Particular types and quantities of securities and com-modities bought for selling at higher prices

c) Shares and debentures bought at a cheaper rate and sold later at high rates

d) None of these

Question : 3

For which of the following, the Reserve Bank of India has stipulated a maximum Capital Adequacy Requirements in India?

a) Private Sector Banks

b) Local Area Banks

c) Banks that Undertake Insurance Business.

d) Scheduled Commercial Banks

Question : 4

‘Green Banking’ means :

a) Banks financing farmers

b) Banks financing proenvironmental projects

c) Banks financing agriculture

d) Banks financing irrigation projects

Question : 5

Consider the following statements. The function of commercial banks in India includes

1. Purchase and sale of shares and securities on behalf of customers.
2. Acting as executors and trustees of wills.

a) Only 2

b) Neither 1 nor 2

c) Both 1 and 2

d) Only 1

Question : 6

Full convertibility of a rupeee means

a) repayment of loans in terms of rupees

b) determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply

c) purchase of foreign exchange for rupees freely

d) payment for imports in terms of ruppes