money supply, banking & financial institutions section 6 MCQ Questions & Answers Detailed Explanation

Question : 1

Which of the following are part of the money supply?

1. Cash and deposits of public
2. Bonds held by public
3. Shares held by public

a) (i) & (ii) only

b) (ii) & (iii) only

c) (i) only

d) All of the above

Question : 2

Which of the following statements are true regarding the “Partial Credit Guarantee Scheme” launched in the 2019-20 budget?

1. It is applicable to all govt. and private banks both
2. NBFCs assets will be purchased by banks
3. It will help in resolving the problem of asset-liability mismatch of NBFCs
4. It will help in handling liquidity issues of NBFCs

a) (ii) & (iii) only

b) (ii), (iii) & (iv) only

c) (i) only

d) All of the above

Question : 3

Which of the following statements are true regarding the SARFAESI Act 2002?

1. It is applicable to banks and NBFCs both
2. It allows selling of the security in case of secured lending

a) (ii) only

b) Both (i) & (ii)

c) (i) only

d) Neither (i) nor (ii)

Question : 4

Bank rate refers to:

a) the rate at which banks lend to its prime borrowers

b) the rate at which banks rediscount bills with RBI

c) the maximum rate that banks can pay for deposit

d) the rate of interest charged on inter-bank transactions

Question : 5

Consider the following statements regarding NonBanking Finance Companies (NBFCs):

1. NBFCs can also engage in Micro-Finance Activities.
2. Housing-finance companies form a distinct subgroup of the NBFCs.
3. The deposit insurance facility of the Deposit Insurance and Credit Guarantee Corporation is not available for NBFC depositors.

a) 1 and 3

b) Only 1

c) All of there

d) None of these

Question : 6

Which among the following is not correct?

a) Floating exchange rate breeds uncertainties and speculation

b) The system of floating exchange rate requires comprehensive government intervention

c) Economic and political factors and value judgments influence the choice of the exchange rate system

d) Floating exchange rate system works on market mechanism