banking, security market & insurance section 4 Practice Questions Answers Test with Solutions & More Shortcuts

Question : 21

Which of the following terms is not a financial term?

a) RTGS

b) Core banking solution

c) Investment

d) All the above

Answer: (d)

All the above given terms are not a financial term. RTGS (Real Time Gross Settlement) is fund transfer system, core banking solutions like treasury and investment are all processes not financial term.

Question : 22 [UBI-PO 2016]

Bank deposits are insured by DICGS for a maximum amount of .................. per depositor per bank.

a) Rs.2,00,000

b) Rs.5,00,000

c) No limit

d) Rs.1,00,000

Answer: (d)

Each depositor in a bank is insured up to a maximum of Rs.1,00,000 (Rupees One Lakh) for both principal and interest amount held by him in the same capacity and same right as on the date on liquidation/  cancellation of bank’s licence or the date on which the scheme of amalgamation/merger/ reconstruction comes into force.

Question : 23

An economy with very low rate of interest and where economic agents expect the interest rate to rise in future and consequently bond prices to fall, causing capital loss in the economy is going through a situation known as

a) Slow down in the economy

b) Double dip recession

c) Hyperinflation

d) Liquidity trap

Answer: (d)

A liquidity trap is a situation in which injections of cash into the private banking system by a central bank fail to lower interest rates and hence fail to stimulate economic growth.

A liquidity trap is caused when people hoard cash because they expect interest to rise in future, an adverse event such as deflation, insufficient aggregate demand, or war.

Question : 24 [UGC-2016]

SLR can be defined as—

a) $SLR = \text"ER + IS - CAB"/\text"L"$

b) $SLR = \text"ER + IS - CAB"/\text"L"$

c) $SLR = \text"ER + I - CB"/\text"L"$

d) $SLR = \text"L + CB - ER"/\text"IS"$

Answer: (a)

The ratio of liquid assets to net demand and time liability is called statutory Liquidity Ratio (SLR).

SLR Rate = $\text"Liquid Assets"/\text"Demand + Time Liabilities"$× 100

Question : 25 [UKPCS (Pre) 2016]

The financial instrument, through which Indian companies can raise money from overseas market in Rupees, is known as

a) Overseas Bonds

b) Gold Bonds

c) Masala Bonds

d) RBI Bonds

Answer: (c)

IMPORTANT indian economy mcq EXERCISES

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1296 banking security market insurance MCQ section 4 question answer with explanation pdf

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