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3RD
SEMESTER
ASSIGNMENTS
FINANCE
SCDL
ASSIGNMENTS
CAPITAL MARKET -AMITA
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?Correct Answer Securities Contract Regulation ActYour Answer Securities Contract Regulation Act
Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?Correct Answer A net connection , A registered account with a broker and a demat account , Bank
payment gateway or online banking facilityYour Answer A registered account with a broker and a demat account , Bank payment gateway or online
banking facility , A net connection
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
True/FalseQuestion Sweat equity shares are shares issued by company to employees or directors to discount.Correct Answer TrueYour Answer True
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and commercial paper.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under various SEBI regulations how many brokers suspended?Correct Answer 8Your Answer 8
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till approval of trustees
and offer document has been filed with the board , With each offer document pay filing fees , Offerdocument to contain disclosures
Your Answer With each offer document pay filing fees , Offer document to contain disclosures
Match The FollowingQuestion Correct Answer Your Answer
Charge card Form of plastic money Member establishment
Warning Bulletin Authenticity test Authenticity test
Credit information company SBI, HDFC bank SBI, HDFC bank
Credit card issuing company Visa/Master Card Visa/Master Card
Multiple Choice Single Answer
Question Who forms the Asset management company (AMC)?Correct Answer Group of trusteesYour Answer Group of trustees
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion Under which regulation is reporting mandatory in respect of acquisitions arising out of firm
allot meant in public issues and rights issues etc?Correct Answer Regulation (3) 4Your Answer Regulation (3) 4
True/FalseQuestion Book building is a process whereby the price is determined on the basis of actual demand as
evident from the offers given by the various institutional investors and underwriters.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The Money market mutual funds (MMMFs) can invest the funds in which of these securities?Correct Answer Call/notice moneyYour Answer Call/notice money
Multiple Choice Multiple AnswerQuestion What is the information to be placed before the board of directors as per the Kumarmangalam
report?Correct Answer Annual operating plans , Capital budgets , Quarterly resultsYour Answer Annual operating plans , Capital budgets , Quarterly results
True/FalseQuestion Bidder cannot revise his bids.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What are ESOP's ?Correct Answer One of the methods of giving part ownership of the company to the employees ,
Employees can take part in the prosperity of the company , Is a reward and linked with the increase in theprices of the shares
Your Answer Is a reward and linked with the increase in the prices of the shares , One of the methods ofgiving part ownership of the company to the employees , Employees can take part in the prosperity of thecompany
Match The FollowingQuestion Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Should effectively participate ingeneral body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders and debenture holdersLook into defaults to depositors creditors shareholders and debenture holders
Reasons of failures of corporate governance in spite of norms Superficial commitment to vision, missionand values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision making process Assisting theboard in decision making process
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB controlled
by Indians promoters
Select The BlankQuestion While structuring the deal the entrepreneur seeks ________.Correct Answer Voting controlYour Answer Goodwill
True/FalseQuestion DRR is treated as part of general reserve for consideration of bonus issue of proposals.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills , Experience
Multiple Choice Multiple AnswerQuestion What precautions are to be taken with respect to delivery instruction slip ?Correct Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account idYour Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account id
True/FalseQuestion Reliance group has added over 10000 crores in market capital.Correct Answer TrueYour Answer False
Select The BlankQuestion An acquirer who holds 15% or more but less than 75% of voting' rights can acquire such
additional shares as would entitle him to exercise more than ________ of voting rights in an financial year.Correct Answer 0.05Your Answer 0.2
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCH
Your Answer FITSCH
Select The BlankQuestion The appointment of a ________ is mandatory in a offer process.Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public issue as regards to
its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion To make a public announcement the acquirer has to appoint :-Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is a more contemporary definition of corporate governance?Correct Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountabilityYour Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountability
Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in compliance of SEBI
regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock exchanges at least 4 days
before the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days , Annual disclosures
Your Answer Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Select The BlankQuestion The merger of GTB and UTI was called off due to intervention of ________Correct Answer SEBI and RBIYour Answer SEBI and RBI
Select The BlankQuestion The Merchant banker will incorporate in the letter of offer the comments made by SEBI and
then send within ________ days from the date of PA to all shareholders whose names appear in the registerof the company.
Correct Answer 45Your Answer 45
Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?Correct Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in
opinion of boardYour Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in opinion
of board
True/FalseQuestion The public cannot give their complaints or comments on the issuer company or others
connected with the issue to SEBI.Correct Answer FalseYour Answer False
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer No stamp duty , Reduction in paperless work , Reduction in transaction costYour Answer Reduction in paperless work , Reduction in transaction cost , Holds funds in an account
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchangesYour Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchanges
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large corporates to issue
certificate of deposits.Correct Answer FalseYour Answer True
Select The BlankQuestion Directors should not be member of more than________ committees.Correct Answer 10Your Answer 10
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities separately for each client.Correct Answer FalseYour Answer False
Capital Market_2
- 1 -
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion Information technology, communication and entertainment represent ________
stocks.Correct Answer ICEYour Answer ICE
True/FalseQuestion The public cannot give their complaints or comments on the issuer company or
others connected with the issue to SEBI.Correct Answer FalseYour Answer True
True/FalseQuestion In order to dematerialize the securities one has to fill DRF.Correct Answer TrueYour Answer True
Select The BlankQuestion In case of an IPO of any security of issue size of Rs________ or more security shall
be issued only in demat form.Correct Answer 10 croresYour Answer 10 crores
Multiple Choice Multiple AnswerQuestion What are the obligations of a company in a share buy back?Correct Answer The offer letter should contain true, factual and material information and should
not be misleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of the closureof the offer.
Your Answer The offer letter should contain true, factual and material information and shouldnot be misleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of the closureof the offer.
Select The BlankQuestion The DP opens investor account in the system and gives an account number also
known as ________.Correct Answer BO IDYour Answer BO ID
Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many times of the net
owned funds?Correct Answer 4 timesYour Answer 4 times
Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Degree of popularity of the industry , Overall economic condition , Demand
and supply capitalYour Answer Overall economic condition , Demand and supply capital , Degree of popularity of
the industry
Match The Following
Capital Market_2
- 2 -
Question Correct Answer Your Answer
Portfolio Collection of assets Collection of assets
Factors influencing portfolio decisions Business and Market risks Business and Market risks
Code of conduct- Portfolio Manager Observe high standard of integrity and fairness Observe highstandard of integrity and fairness
SEBI Regulations Portfolio Manager must fulfill the capital adequacy norms To make timelydecision regarding sale and purchase of securities
Multiple Choice Multiple AnswerQuestion What are the major factors influencing portfolio decisions?Correct Answer Investor characteristics , Liquidity needs and tax considerations , Investment
and interest rate riskYour Answer Investor characteristics , Liquidity needs and tax considerations , Investment and
interest rate risk
Multiple Choice Single AnswerQuestion The refinance made available to any HFC is not to be more than :-Correct Answer 60% of its outstanding housing loansYour Answer 60% of its outstanding housing loans
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?Correct Answer Securities Contract Regulation ActYour Answer Securities Contract Regulation Act
Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?Correct Answer A net connection , A registered account with a broker and a demat account , Bank
payment gateway or online banking facilityYour Answer A registered account with a broker and a demat account , Bank payment gateway or online
banking facility , A net connection
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
True/FalseQuestion Sweat equity shares are shares issued by company to employees or directors to discount.Correct Answer TrueYour Answer True
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and commercial paper.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under various SEBI regulations how many brokers suspended?Correct Answer 8Your Answer 8
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till approval of trustees
and offer document has been filed with the board , With each offer document pay filing fees , Offerdocument to contain disclosures
Your Answer With each offer document pay filing fees , Offer document to contain disclosures
Match The FollowingQuestion Correct Answer Your Answer
Charge card Form of plastic money Member establishment
Warning Bulletin Authenticity test Authenticity test
Credit information company SBI, HDFC bank SBI, HDFC bank
Credit card issuing company Visa/Master Card Visa/Master Card
Multiple Choice Single AnswerQuestion Who forms the Asset management company (AMC)?Correct Answer Group of trustees
Your Answer Group of trustees
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion Under which regulation is reporting mandatory in respect of acquisitions arising out of firm
allot meant in public issues and rights issues etc?Correct Answer Regulation (3) 4Your Answer Regulation (3) 4
True/FalseQuestion Book building is a process whereby the price is determined on the basis of actual demand as
evident from the offers given by the various institutional investors and underwriters.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The Money market mutual funds (MMMFs) can invest the funds in which of these securities?Correct Answer Call/notice moneyYour Answer Call/notice money
Multiple Choice Multiple AnswerQuestion What is the information to be placed before the board of directors as per the Kumarmangalam
report?Correct Answer Annual operating plans , Capital budgets , Quarterly resultsYour Answer Annual operating plans , Capital budgets , Quarterly results
True/FalseQuestion Bidder cannot revise his bids.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What are ESOP's ?Correct Answer One of the methods of giving part ownership of the company to the employees ,
Employees can take part in the prosperity of the company , Is a reward and linked with the increase in theprices of the shares
Your Answer Is a reward and linked with the increase in the prices of the shares , One of the methods ofgiving part ownership of the company to the employees , Employees can take part in the prosperity of thecompany
Match The FollowingQuestion Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Should effectively participate ingeneral body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders and debenture holdersLook into defaults to depositors creditors shareholders and debenture holders
Reasons of failures of corporate governance in spite of norms Superficial commitment to vision, missionand values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision making process Assisting theboard in decision making process
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB controlled
by Indians promoters
Select The BlankQuestion While structuring the deal the entrepreneur seeks ________.Correct Answer Voting controlYour Answer Goodwill
True/FalseQuestion DRR is treated as part of general reserve for consideration of bonus issue of proposals.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills , Experience
Multiple Choice Multiple AnswerQuestion What precautions are to be taken with respect to delivery instruction slip ?Correct Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account idYour Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account id
True/FalseQuestion Reliance group has added over 10000 crores in market capital.Correct Answer TrueYour Answer False
Select The BlankQuestion An acquirer who holds 15% or more but less than 75% of voting' rights can acquire such
additional shares as would entitle him to exercise more than ________ of voting rights in an financial year.Correct Answer 0.05Your Answer 0.2
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer FITSCH
Select The Blank
Question The appointment of a ________ is mandatory in a offer process.Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public issue as regards to
its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion To make a public announcement the acquirer has to appoint :-Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is a more contemporary definition of corporate governance?Correct Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountabilityYour Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountability
Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in compliance of SEBI
regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock exchanges at least 4 days
before the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days , Annual disclosures
Your Answer Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Select The BlankQuestion The merger of GTB and UTI was called off due to intervention of ________Correct Answer SEBI and RBIYour Answer SEBI and RBI
Select The BlankQuestion The Merchant banker will incorporate in the letter of offer the comments made by SEBI and
then send within ________ days from the date of PA to all shareholders whose names appear in the registerof the company.
Correct Answer 45Your Answer 45
Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?
Correct Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as inopinion of board
Your Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in opinionof board
True/FalseQuestion The public cannot give their complaints or comments on the issuer company or others
connected with the issue to SEBI.Correct Answer FalseYour Answer False
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer No stamp duty , Reduction in paperless work , Reduction in transaction costYour Answer Reduction in paperless work , Reduction in transaction cost , Holds funds in an account
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchangesYour Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchanges
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large corporates to issue
certificate of deposits.Correct Answer FalseYour Answer True
Select The BlankQuestion Directors should not be member of more than________ committees.Correct Answer 10Your Answer 10
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities separately for each client.Correct Answer FalseYour Answer False
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion What was the objective of setting up the Securities Trading
corporation of India Ltd?Correct Answer To promote secondary market in government securities
Your Answer To strengthen the capital markets
Multiple Choice Multiple AnswerQuestion What are the salient features of Hire Purchase ?
Correct Answer Finance company purchases the equipment supplier and lets iton hire , During the contract hirer can opt for an early repaymentand purchase the asset , Hirer may be required to make downpayment
Your Answer During the contract hirer can opt for an early repayment andpurchase the asset , Hirer may be required to make downpayment , Finance company purchases the equipment supplierand lets it on hire
True/FalseQuestion A mutual fund shall not invest more than 10% of is NAV in equity
shares in cases of open ended schemes.Correct Answer True
Your Answer True
Select The BlankQuestion ________ are a kind of portfolio schemes.
Correct Answer Mutual funds
Your Answer Mutual funds
Multiple Choice Single AnswerQuestion Who takes risk at the time of investment ?
Correct Answer Investor
Your Answer Investor
True/FalseQuestion MIBOR is a security. Derivatives based on this interest rate have
legal recognition under SCRA.Correct Answer False
Your Answer True
Select The BlankQuestion It is the responsibility of the ________ to ensure the timely
refunds and allotments of the securities.Correct Answer Lead managers
Your Answer Lead managers
True/FalseQuestion A credit card is a payment mechanism which enables the holder
to buy goods and services on credit.Correct Answer True
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Looses the rights to vote Non voting shares Non voting shares
Book building Bharati Televentures Bharati Televentures
Depository Bank of securities Bank of securities
First to introduce rollingsettlements in the country
NSE NSE
Select The BlankQuestion Final prospectus in the book building p________ess is to be filed
with the ROC.Correct Answer ROC
Your Answer ROC
Select The BlankQuestion A company with highly rated instrument has the opportunity to
________ by quoting less interest rates.Correct Answer Reduce the cost of borrowing
Your Answer Reduce the cost of borrowing
True/FalseQuestion Book building is a process whereby the price is determined on
the basis of actual demand as evident from the offers given bythe various institutional investors and underwriters.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies
by NHB?Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any
appointment of auditorsYour Answer Minimum paid up capital 1 crore , At least 2 directors , At least
50% loans in long term nature
Multiple Choice Single AnswerQuestion A portfolio manager could undertake the following on behalf of
his clients :-Correct Answer Hedging and arbitrage transactions
Your Answer Hedging and arbitrage transactions
Multiple Choice Multiple AnswerQuestion How is price determined in an open offer?
Correct Answer Negotiated price , Price paid by acquirer , Average weekly highlow of closing share of the target company
Your Answer Negotiated price , Price paid by acquirer , Average weekly highlow of closing share of the target company
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?
Correct Answer Sound General knowledge , Analytical ability and marketingskills , Experience
Your Answer Experience , Sound General knowledge , Analytical ability andmarketing skills
Multiple Choice Single AnswerQuestion Renewal of portfolio fund on maturity shall be deemed as a fresh
placement for a minimum period of :-Correct Answer 1 year
Your Answer 2 years
True/FalseQuestion In order to dematerialize the securities one has to fill DRF.
Correct Answer True
Your Answer True
Select The Blank
Question One of the process of book building is that the issuer appoints a________ also known as the book runner.
Correct Answer Lead manager
Your Answer Lead manager
Select The BlankQuestion The process of securitisation involves transfer of assets to a
person specially created called as ________.Correct Answer Special purpose vehicle
Your Answer Trust
True/FalseQuestion A custodian can transfer beneficial ownership legally.
Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Apart from the portfolio management fees what percentage of
returns can the portfolio manager share from their client'sprofits?
Correct Answer 0
Your Answer 0
True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities
purchased under the buy back arrangement to be extinguishedand physically destroyed.
Correct Answer False
Your Answer False
Select The BlankQuestion BSE introduced an equity stock index known as ________.
Correct Answer SENSEX
Your Answer SENSEX
Multiple Choice Multiple AnswerQuestion As per the recommendations of the Kumarmangalam Birla
committee report who are the key components of an auditcommittee.
Correct Answer Board , Internal auditor , External auditor
Your Answer Board , Internal auditor , External auditor
Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20
000 crores?Correct Answer Infosys , Satyam , Wipro
Your Answer Infosys , Satyam , Wipro
Multiple Choice Multiple AnswerQuestion What are the obligations of a company in a share buy back?
Correct Answer The offer letter should contain true, factual and materialinformation and should not be misleading. , The company mustpay the consideration only by the way of cash , The companyshould not issue any fresh securities including bonus shares tillthe date of the closure of the offer.
Your Answer The offer letter should contain true, factual and materialinformation and should not be misleading. , The company mustpay the consideration only by the way of cash , The companyshould not issue any fresh securities including bonus shares tillthe date of the closure of the offer.
Multiple Choice Multiple AnswerQuestion What are the different kinds of stock exchanges in India?
Correct Answer Voluntary non profit making organizations , Joint stockcompanies limited by shares , Joint stock companies Limited byguarantee
Your Answer Voluntary non profit making organizations , Joint stockcompanies limited by shares , Private limited companies
Multiple Choice Multiple AnswerQuestion Companies are not allowed to buy back securities :-
Correct Answer Through any/ own subsidiary company , Through any/group ofinvestment company , If default subsists in respect ofrepayments of deposits, term loans to any financial institutionsand redemption of preference shares or debentures
Your Answer Through any/ own subsidiary company , Through any/group ofinvestment company , If default subsists in respect ofrepayments of deposits, term loans to any financial institutionsand redemption of preference shares or debentures
True/FalseQuestion The depository can legally transfer beneficial ownership.
Correct Answer True
Your Answer True
Select The BlankQuestion For issues upto Rs. 50 crores the number of lead managers will
not exceed ________.Correct Answer 2
Your Answer 4
Match The FollowingQuestion Correct Answer Your Answer
Ready forward transaction(Repo)
Interbank sale andrepurchase of securities
Operations in call moneymarkets
Commercial paper Means of raising shortterm debt by companies
Means of raising short termdebt by companies
STCI Operations in call moneymarkets
Launched in fiscal 2004-05
Market stabilsation Bonds Launched in fiscal 2004-05
Interbank sale andrepurchase of securities
True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their
trustees and asset management companies.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion What is the time frame to submit a report to SEBI for acquisition
transactions arising out of firm allotment in public issues rightissues etc?
Correct Answer 21 days
Your Answer 21 days
True/FalseQuestion The acquirer is required to appoint a merchant banker before
making a PA.Correct Answer True
Your Answer True
Select The BlankQuestion The right to buy is called ________.
Correct Answer Call option
Your Answer Call option
Multiple Choice Single AnswerQuestion Upto what percentage has the RBI permitted the banks to invest
in the capital market ?Correct Answer 0.05
Your Answer 0.05
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital
markets?Correct Answer Establishment of NSE
Your Answer Opening of Indian Capital Markets to FII's
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making
an public issue as regards to its net worth?Correct Answer Net worth of the company should not be less than 1 crore
Your Answer Net worth of the company should not be less than 1 crore
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were
debarred?Correct Answer 1
Your Answer 3
Select The BlankQuestion Among the closed schemes, 4 long term assurance schemes
were launched with a return ranging between ________.Correct Answer 13 - 14%
Your Answer 15 - 16%
Multiple Choice Multiple AnswerQuestion What are the major factors influencing portfolio decisions?
Correct Answer Investor characteristics , Liquidity needs and tax considerations ,Investment and interest rate risk
Your Answer Investor characteristics , Liquidity needs and tax considerations ,Investment and interest rate risk
Multiple Choice Single AnswerQuestion What was the percentage of public offering under the IPOs
through the book building method ?Correct Answer 0.1
Your Answer 0.25
Multiple Choice Multiple AnswerQuestion What are the main features of commercial paper?
Correct Answer Short term financial instrument , Negotiable and transferableinstrument , Companies issue it for raising short term debt
Your Answer Short term financial instrument , Negotiable and transferableinstrument , Companies issue it for raising short term debt
Select The BlankQuestion A ________ can legally transfer beneficial ownership.
Correct Answer Depository
Your Answer Depository
Multiple Choice Multiple AnswerQuestion The setting up of NSE consists of:-
Correct Answer Set up by IDBI , Equity paid up capital of Rs25 crores , Startedoperations in June 1994
Your Answer Equity paid up capital of Rs25 crores , Started operations inJune 1994 , There is a trading floor in this exchange
Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?
Correct Answer Securities Contract Regulation Act
Your Answer Securities And Exchange Board of India
1
Multiple Choice Single AnswerQuestion What was the objective of setting up the Securities Trading corporation of India Ltd?
CorrectAnswer
To promote secondary market in government securities
Your Answer To strengthen the capital markets
Multiple Choice Multiple AnswerQuestion What are the salient features of Hire Purchase ?
CorrectAnswer
Finance company purchases the equipment supplier and lets it on hire , During thecontract hirer can opt for an early repayment and purchase the asset , Hirer may berequired to make down payment
Your Answer During the contract hirer can opt for an early repayment and purchase the asset , Hirermay be required to make down payment , Finance company purchases the equipmentsupplier and lets it on hire
True/FalseQuestion A mutual fund shall not invest more than 10% of is NAV in equity shares in cases of open
ended schemes.Correct
AnswerTrue
Your Answer True
Select The BlankQuestion ________ are a kind of portfolio schemes.
CorrectAnswer
Mutual funds
Your Answer Mutual funds
Multiple Choice Single AnswerQuestion Who takes risk at the time of investment ?
CorrectAnswer
Investor
Your Answer Investor
True/FalseQuestion MIBOR is a security. Derivatives based on this interest rate have legal recognition under
SCRA.Correct
AnswerFalse
Your Answer True
Select The BlankQuestion It is the responsibility of the ________ to ensure the timely refunds and allotments of the
securities.Correct
AnswerLead managers
Your Answer Lead managers
2
True/FalseQuestion A credit card is a payment mechanism which enables the holder to buy goods and
services on credit.Correct
AnswerTrue
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Looses the rights to vote Non voting shares Non voting shares
Book building Bharati Televentures Bharati Televentures
Depository Bank of securities Bank of securities
First to introduce rollingsettlements in the country
NSE NSE
Select The BlankQuestion Final prospectus in the book building p________ess is to be filed with the ROC.
CorrectAnswer
ROC
Your Answer ROC
Select The BlankQuestion A company with highly rated instrument has the opportunity to ________ by quoting less
interest rates.Correct
AnswerReduce the cost of borrowing
Your Answer Reduce the cost of borrowing
True/FalseQuestion Book building is a process whereby the price is determined on the basis of actual demand
as evident from the offers given by the various institutional investors and underwriters.Correct
AnswerTrue
Your Answer True
Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies by NHB?
CorrectAnswer
Minimum paid up capital 1 crore , At least 2 directors , Any appointment of auditors
Your Answer Minimum paid up capital 1 crore , At least 2 directors , At least 50% loans in long termnature
Multiple Choice Single AnswerQuestion A portfolio manager could undertake the following on behalf of his clients :-
3
CorrectAnswer
Hedging and arbitrage transactions
Your Answer Hedging and arbitrage transactions
Multiple Choice Multiple AnswerQuestion How is price determined in an open offer?
CorrectAnswer
Negotiated price , Price paid by acquirer , Average weekly high low of closing share of thetarget company
Your Answer Negotiated price , Price paid by acquirer , Average weekly high low of closing share of thetarget company
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?
CorrectAnswer
Sound General knowledge , Analytical ability and marketing skills , Experience
Your Answer Experience , Sound General knowledge , Analytical ability and marketing skills
Multiple Choice Single AnswerQuestion Renewal of portfolio fund on maturity shall be deemed as a fresh placement for a
minimum period of :-Correct
Answer1 year
Your Answer 2 years
True/FalseQuestion In order to dematerialize the securities one has to fill DRF.
CorrectAnswer
True
Your Answer True
Select The BlankQuestion One of the process of book building is that the issuer appoints a ________ also known as
the book runner.Correct
AnswerLead manager
Your Answer Lead manager
Select The BlankQuestion The process of securitisation involves transfer of assets to a person specially created
called as ________.Correct
AnswerSpecial purpose vehicle
Your Answer Trust
True/FalseQuestion A custodian can transfer beneficial ownership legally.
CorrectAnswer
False
4
Your Answer False
Multiple Choice Single AnswerQuestion Apart from the portfolio management fees what percentage of returns can the portfolio
manager share from their client's profits?Correct
Answer0
Your Answer 0
True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities purchased under the buy
back arrangement to be extinguished and physically destroyed.Correct
AnswerFalse
Your Answer False
Select The BlankQuestion BSE introduced an equity stock index known as ________.
CorrectAnswer
SENSEX
Your Answer SENSEX
Multiple Choice Multiple AnswerQuestion As per the recommendations of the Kumarmangalam Birla committee report who are the
key components of an audit committee.Correct
AnswerBoard , Internal auditor , External auditor
Your Answer Board , Internal auditor , External auditor
Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20 000 crores?
CorrectAnswer
Infosys , Satyam , Wipro
Your Answer Infosys , Satyam , Wipro
Multiple Choice Multiple AnswerQuestion What are the obligations of a company in a share buy back?
CorrectAnswer
The offer letter should contain true, factual and material information and should not bemisleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of theclosure of the offer.
Your Answer The offer letter should contain true, factual and material information and should not bemisleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of theclosure of the offer.
Multiple Choice Multiple AnswerQuestion What are the different kinds of stock exchanges in India?
5
CorrectAnswer
Voluntary non profit making organizations , Joint stock companies limited by shares ,Joint stock companies Limited by guarantee
Your Answer Voluntary non profit making organizations , Joint stock companies limited by shares ,Private limited companies
Multiple Choice Multiple AnswerQuestion Companies are not allowed to buy back securities :-
CorrectAnswer
Through any/ own subsidiary company , Through any/group of investment company , Ifdefault subsists in respect of repayments of deposits, term loans to any financialinstitutions and redemption of preference shares or debentures
Your Answer Through any/ own subsidiary company , Through any/group of investment company , Ifdefault subsists in respect of repayments of deposits, term loans to any financialinstitutions and redemption of preference shares or debentures
True/FalseQuestion The depository can legally transfer beneficial ownership.
CorrectAnswer
True
Your Answer True
Select The BlankQuestion For issues upto Rs. 50 crores the number of lead managers will not exceed ________.
CorrectAnswer
2
Your Answer 4
Match The FollowingQuestion Correct Answer Your Answer
Ready forward transaction (Repo) Interbank sale and repurchase ofsecurities
Operations in call money markets
Commercial paper Means of raising short term debtby companies
Means of raising short term debtby companies
STCI Operations in call money markets Launched in fiscal 2004-05
Market stabilsation Bonds Launched in fiscal 2004-05 Interbank sale and repurchase ofsecurities
True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their trustees and asset
management companies.Correct
AnswerFalse
Your Answer False
Multiple Choice Single AnswerQuestion What is the time frame to submit a report to SEBI for acquisition transactions arising out
of firm allotment in public issues right issues etc?Correct
Answer21 days
6
Your Answer 21 days
True/FalseQuestion The acquirer is required to appoint a merchant banker before making a PA.
CorrectAnswer
True
Your Answer True
Select The BlankQuestion The right to buy is called ________.
CorrectAnswer
Call option
Your Answer Call option
Multiple Choice Single AnswerQuestion Upto what percentage has the RBI permitted the banks to invest in the capital market ?
CorrectAnswer
0.05
Your Answer 0.05
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?
CorrectAnswer
Establishment of NSE
Your Answer Opening of Indian Capital Markets to FII's
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public issue as regards
to its net worth?Correct
AnswerNet worth of the company should not be less than 1 crore
Your Answer Net worth of the company should not be less than 1 crore
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?
CorrectAnswer
1
Your Answer 3
Select The BlankQuestion Among the closed schemes, 4 long term assurance schemes were launched with a return
ranging between ________.Correct
Answer13 - 14%
Your Answer 15 - 16%
7
Multiple Choice Multiple AnswerQuestion What are the major factors influencing portfolio decisions?
CorrectAnswer
Investor characteristics , Liquidity needs and tax considerations , Investment and interestrate risk
Your Answer Investor characteristics , Liquidity needs and tax considerations , Investment and interestrate risk
Multiple Choice Single AnswerQuestion What was the percentage of public offering under the IPOs through the book building
method ?Correct
Answer0.1
Your Answer 0.25
Multiple Choice Multiple AnswerQuestion What are the main features of commercial paper?
CorrectAnswer
Short term financial instrument , Negotiable and transferable instrument , Companiesissue it for raising short term debt
Your Answer Short term financial instrument , Negotiable and transferable instrument , Companiesissue it for raising short term debt
Select The BlankQuestion A ________ can legally transfer beneficial ownership.
CorrectAnswer
Depository
Your Answer Depository
Multiple Choice Multiple Answer
Question The setting up of NSE consists of:-
CorrectAnswer
Set up by IDBI , Equity paid up capital of Rs25 crores , Started operations in June 1994
Your Answer Equity paid up capital of Rs25 crores , Started operations in June 1994 , There is atrading floor in this exchange
Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?
CorrectAnswer
Securities Contract Regulation Act
Your Answer Securities And Exchange Board of India
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer Crisil
True/FalseQuestion The acquirer is required to appoint a merchant banker before making a PA.
8
Correct Answer TrueYour Answer True
Select The BlankQuestion Hire Purchase transactions are liable to ________.Correct Answer Sales taxYour Answer Sales tax
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills , Experience
Multiple Choice Single AnswerQuestion What is Discretionary Portfolio management service ?Correct Answer Client gives his money for investment to the portfolio manager and leaves it to him to
make all the investment decisions.Your Answer Client gives his money for investment to the portfolio manager and leaves it to him to
make all the investment decisions.
True/FalseQuestion Depositary facilitates transfers without having to handle money.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what amount is expected to be paid
from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores
Multiple Choice Multiple AnswerQuestion The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number of investors who have
common financial goal , Issue units to investor which represent right in assets , Investments in mutualfunds may be in the form of stock, bond, money market securitiesYour Answer A trust that pools in savings and funds from large number of investors who have common
financial goal , Issue units to investor which represent right in assets , Investments in mutual funds maybe in the form of stock, bond, money market securities
True/FalseQuestion If the credit rating is obtained from two different agencies in case of issue of debt
instruments, all the ratings need not be disclosed in the document.Correct Answer FalseYour Answer True
Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any litigation connected with ________.Correct Answer Securities markets
9
Your Answer Clients
Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?Correct Answer Knowledge and information about various aspects of capital markets , Ability to
evaluate and analyze , Update the knowledgeYour Answer Knowledge and information about various aspects of capital markets , Ability to evaluate
and analyze , Update the knowledge
Multiple Choice Multiple AnswerQuestion Describe the stock lending mechanism:-Correct Answer Involves two parties one who is willing to lend and other who wishes to borrow
securities at market related rates , Lender is assured of getting equivalent the relevant securities byNSSCL on the settlement date , Lender gets benefit of reasonable return called lending feeYour Answer Involves two parties one who is willing to lend and other who wishes to borrow securities
at market related rates , Lender gets benefit of reasonable return called lending fee
Multiple Choice Multiple AnswerQuestion What are the limitations of refinance facility?Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds of HFC's , Not to
exceed 15 % of NOF of NHBYour Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds of HFC's , Not to
exceed 15 % of NOF of NHB
Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what period from the date of passing
the resolution?Correct Answer 12 monthsYour Answer 12 months
Match The FollowingQuestion Correct Answer Your Answer
10 HDFC foreign currency deal Global investors pumping funds in India Specific Funds
0.57 FII current free float sensex company FII free float stock NIFTY companies
0.45 FII free float stock NIFTY companies FII's total free float sex and NIFTY
$ 476 mn Global investors pumping funds in India Specific Funds HDFC foreign currency deal
Multiple Choice Single AnswerQuestion When did the trading in foreign currency options start in India?Correct Answer 37809Your Answer 37829
Multiple Choice Single AnswerQuestion What is the main objective of credit appraisal ?Correct Answer Assess the repayment capacityYour Answer Assess the age of the person borrowing
True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their trustees and asset management
companies.Correct Answer FalseYour Answer False
Select The Blank
10
Question In the L & T reliance case, Reliance was fined ________.Correct Answer Rs. 5 lacsYour Answer Rs. 5 lacs
Select The BlankQuestion Recently many banks have started issuing ________ which could also be used as a debit card.Correct Answer ATM cardYour Answer ATM card
Select The BlankQuestion A ________ means any persons connected with a company and who is reasonably having
access to unpublished price sensitive information.Correct Answer InsiderYour Answer Insider
Select The BlankQuestion SENSEX is calculated using ________ method.Correct Answer Market capitalizationYour Answer Weighted
Match The FollowingQuestion Correct Answer Your Answer
Share buy back is a way of Returning surplus cash to the shareholders Returning surplus cash to theshareholders
Dutch Auction Price of the Buy back is done by the shareholders Price of the Buy back is done by theshareholders
Open market purchases No minimum price stipulation No minimum price stipulation
Companies holding more than 90% equity Can be delisted Can be delisted
True/FalseQuestion The public cannot give their complaints or comments on the issuer company or others
connected with the issue to SEBI.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities separately for each client.Correct Answer FalseYour Answer True
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large corporates to issue
certificate of deposits.Correct Answer FalseYour Answer True
True/FalseQuestion Book building is a process whereby the price is determined on the basis of actual demand as
evident from the offers given by the various institutional investors and underwriters.
11
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What is the system of rolling settlement prevalent in the USA ?Correct Answer Transaction + 3Your Answer Transaction + 3
Multiple Choice Single AnswerQuestion What is the most important objective for an investor?Correct Answer Protection of the value of the investmentYour Answer Profit maximization
Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's issued by RBI :-Correct Answer All the NBFC's must register with RBI , Without the registration certificate no company
can undertake activities of NBFC , All companies must be liquid assets equal to 15% of depositsYour Answer All the NBFC's must register with RBI , Without the registration certificate no company can
undertake activities of NBFC , All companies must be liquid assets equal to 15% of deposits
Multiple Choice Single AnswerQuestion What do you mean by venture capital?Correct Answer Providing seed, start up capital and first stage financingYour Answer Providing seed, start up capital and first stage financing
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Opening of Indian Capital Markets to FII's
Select The BlankQuestion The continuing growth in ________ was one of the factors that contributed to the growth of
credit rating.Correct Answer Information technologyYour Answer Information technology
Select The BlankQuestion In case of a public issue by a listed company participation by promoters in the proposed
issues in excess of the required minimum percentage shall also be looked in for a period of ________.Correct Answer 1 yearYour Answer 3 years
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his client.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring , Communication through the net ,
Operate in stock market privately through home or officeYour Answer Screen based trading in place of traditional ring , Communication through the net ,
Operate in stock market privately through home or office
Select The BlankQuestion The Kumarmangalam Birla report stressed on the importance of ________ with respect to
AGM's.Correct Answer Proxy voting / ballot systemsYour Answer Proxy voting / ballot systems
12
True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities purchased under the buy
back arrangement to be extinguished and physically destroyed.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint debenture trustee , Debenture
redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint debenture trustee , Debenture
redemption reserve to be created
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity , Must disclose investment
strategyYour Answer VCF's must be registered , Cannot carry out another activity , Must disclose investment
strategy
Multiple Choice Single AnswerQuestion What is the minimum number of days for which the bid should remain open in book building?Correct Answer 5 daysYour Answer 7 days
Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many times of the net owned
funds?Correct Answer 4 timesYour Answer 4 times
Select The BlankQuestion With the introduction of ________ accounts the complaints about allotment have surely gone
down.Correct Answer DEMATYour Answer DEMAT
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion The buy back of shares by Indian corporates has been very successful in India.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion What percentage of funds should be invested in unlisted companies?Correct Answer 0.74Your Answer 0.76
Select The BlankQuestion When one decides to have the shares in an electronic form one has to approach ________.Correct Answer DPYour Answer SEBI
True/FalseQuestion The issue price for placement portion and net offer to public are not the same.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Overall economic condition , Demand and supply capital , Degree of popularity of the
industryYour Answer Overall economic condition , Degree of popularity of the industry , High profitability is
one of the criteria
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
Multiple Choice Single AnswerQuestion What is the main objective of credit appraisal ?Correct Answer Assess the repayment capacityYour Answer Assess the repayment capacity
True/FalseQuestion Mutual funds can do investments in any security issued by way of private placement by an
associate or group company of the sponsor.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What are participatory notes?Correct Answer Instruments used by foreign funds , Instruments used but investors not register with
SEBI , Investors interested in taking exposure in Indian securitiesYour Answer Instruments used but investors not register with SEBI , Investors interested in taking
exposure in Indian securities
True/FalseQuestion Employee stock option scheme granted to the employee is transferable.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion Briefly describe the SEBI guidelines for the merchant bankers :-Correct Answer Should have an authorization from SEBI , Expertise good financial standing and high
degree of professional integrity , Company abides by the various requirements relating to disclosers, listingof instruments etc
Your Answer Should have an authorization from SEBI , Expertise good financial standing and highdegree of professional integrity , Company abides by the various requirements relating to disclosers, listingof instruments etc
Select The BlankQuestion In 2001 a case of rigging and short selling based insider trading was noticed in the case of
proposed merger of ________.Correct Answer UTI Bank with GTBYour Answer UTI Bank with GTB
True/FalseQuestion The lease agreement provides for a transfer of ownership to the lessee either at the end of the
period or during the period of lease.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What are the eligibility norms for a listed company for making a public issue?Correct Answer If the issue size is less than five times pre issue net worth , If the issue size is more than
or equal to five times pre issue networth then the listed company to take book building route , 60% of issuesize to be allotted to QIB's
Your Answer If the issue size is less than five times pre issue net worth , If the issue size is more than orequal to five times pre issue networth then the listed company to take book building route , 60% of issuesize to be allotted to QIB's
Multiple Choice Multiple AnswerQuestion Where is the difference in buying and selling dematerialized shares ?Correct Answer Process of delivery , Receipt of securities , Pledging the sharesYour Answer Process of delivery , Receipt of securities , Pledging the shares , Sale of shares
Multiple Choice Multiple AnswerQuestion When is the public announcement required to be made?Correct Answer In case of indirect acquisition or change in control, the PA shall be made by acquirer
within 3 months of conummation of such acquisition , The offer prices in such case shall be determinedwith reference to date of public announcement
Your Answer The offer prices in such case shall be determined with reference to date of publicannouncement , PA shall be made by the target company , In case of indirect acquisition or change incontrol, the PA shall be made by acquirer within 3 months of conummation of such acquisition
Multiple Choice Multiple AnswerQuestion What are the main features of commercial paper?Correct Answer Short term financial instrument , Negotiable and transferable instrument , Companies
issue it for raising short term debtYour Answer Short term financial instrument , Negotiable and transferable instrument , Companies issue
it for raising short term debt
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$18 bn
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Match The FollowingQuestion Correct Answer Your Answer
Share buy back is a way of Returning surplus cash to the shareholders Siphoning of excess cash by thepromoters
Dutch Auction Price of the Buy back is done by the shareholders No minimum price stipulation
Open market purchases No minimum price stipulation Returning surplus cash to the shareholders
Companies holding more than 90% equity Can be delisted Have to consider buy back
Multiple Choice Multiple AnswerQuestion The following are some of the procedures of converting physical holding into electronic form :-Correct Answer Surrender certificates to DP , DP intimates request to depositary , DP submits the
certificates to registrarYour Answer DP intimates request to depositary , DP submits the certificates to registrar , The pledgee
has to confirm the request through his her DP
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what amount is expected to be paid
from the primary market during this year?Correct Answer 15000 croresYour Answer 25000 crores
Multiple Choice Multiple AnswerQuestion The setting up of NSE consists of:-Correct Answer Set up by IDBI , Equity paid up capital of Rs25 crores , Started operations in June 1994Your Answer Set up by IDBI , Equity paid up capital of Rs25 crores , Started operations in June 1994
Multiple Choice Single AnswerQuestion What is issued by mutual funds?Correct Answer UnitsYour Answer Units
Select The BlankQuestion AA rated companies can raise ________ of its net worth.Correct Answer 2.5 timesYour Answer 1.5 times
True/FalseQuestion Constant change would be one of the reasons for failure of corporate governance.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Upto what percentage has the RBI permitted the banks to invest in the capital market ?Correct Answer 0.05Your Answer 0.05
Multiple Choice Single AnswerQuestion For a VCF to be registered with SEBI what is the registration fee ?Correct Answer 5 lacsYour Answer 5 lacs
Select The BlankQuestion ________ are a kind of portfolio schemes.Correct Answer Mutual fundsYour Answer Mutual funds
Select The BlankQuestion Markets have moved away from Badla system to ________ .Correct Answer Derivatives TradingYour Answer Mutual Funds Trading
True/FalseQuestion Bidder cannot revise his bids.Correct Answer FalseYour Answer True
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his client.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?Correct Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in
opinion of boardYour Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in opinion
of board , Government regulations
Select The BlankQuestion The service charge is levied for allowing subscribers for entry into or exit from mutual schemes
is called as ________.Correct Answer LoadYour Answer AMC
Multiple Choice Multiple AnswerQuestion What are the obligations of a company in a share buy back?Correct Answer The offer letter should contain true, factual and material information and should not be
misleading. , The company must pay the consideration only by the way of cash , The company should notissue any fresh securities including bonus shares till the date of the closure of the offer.
Your Answer The offer letter should contain true, factual and material information and should not bemisleading. , The company must pay the consideration only by the way of cash
Multiple Choice Single AnswerQuestion How much percentage of company's revenue would be accounted for by the business with new
name?Correct Answer 0.5Your Answer 0.3
Select The BlankQuestion It is the responsibility of the ________ to ensure the timely refunds and allotments of the
securities.
Correct Answer Lead managersYour Answer Lead managers
Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any litigation connected with ________.Correct Answer Securities marketsYour Answer Securities markets
Multiple Choice Single AnswerQuestion Crisil's AAA rating stands for :-Correct Answer Highest safetyYour Answer Highest safety
True/FalseQuestion Amendment to SCRA will facilitate derivatives trading in interest rate futures and options if
there is an underlying asset.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What is the main advantage of a rolling settlement?Correct Answer Quicker paymentsYour Answer Quicker payments
Multiple Choice Single AnswerQuestion What is the minimum offer an acquirer can make ?Correct Answer Min 20%Your Answer Min 15 %
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public issue as regards to
its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should be more than 5 crores
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Match The FollowingQuestion Correct Answer Your Answer
Portfolio Collection of assets Collection of assets
Factors influencing portfolio decisions Business and Market risks To make timely decision regarding saleand purchase of securities
Code of conduct- Portfolio Manager Observe high standard of integrity and fairness Observe high standardof integrity and fairness
SEBI Regulations Portfolio Manager must fulfill the capital adequacy norms Portfolio Manager must fulfillthe capital adequacy norms
Multiple Choice Single Answer
Question Who suffered heavy losses during bad times of stock markets?Correct Answer Small investorsYour Answer Small investors
True/FalseQuestion The acquirer is required to appoint a merchant banker before making a PA.Correct Answer TrueYour Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?Correct Answer Securities Contract Regulation ActYour Answer Securities Contract Regulation Act
Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?Correct Answer A net connection , A registered account with a broker and a demat account , Bank
payment gateway or online banking facilityYour Answer A registered account with a broker and a demat account , Bank payment gateway or online
banking facility , A net connection
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
True/FalseQuestion Sweat equity shares are shares issued by company to employees or directors to discount.Correct Answer TrueYour Answer True
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and commercial paper.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under various SEBI regulations how many brokers suspended?Correct Answer 8Your Answer 8
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till approval of trustees
and offer document has been filed with the board , With each offer document pay filing fees , Offerdocument to contain disclosures
Your Answer With each offer document pay filing fees , Offer document to contain disclosures
Match The FollowingQuestion Correct Answer Your Answer
Charge card Form of plastic money Member establishment
Warning Bulletin Authenticity test Authenticity test
Credit information company SBI, HDFC bank SBI, HDFC bank
Credit card issuing company Visa/Master Card Visa/Master Card
Multiple Choice Single AnswerQuestion Who forms the Asset management company (AMC)?Correct Answer Group of trustees
Your Answer Group of trustees
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion Under which regulation is reporting mandatory in respect of acquisitions arising out of firm
allot meant in public issues and rights issues etc?Correct Answer Regulation (3) 4Your Answer Regulation (3) 4
True/FalseQuestion Book building is a process whereby the price is determined on the basis of actual demand as
evident from the offers given by the various institutional investors and underwriters.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The Money market mutual funds (MMMFs) can invest the funds in which of these securities?Correct Answer Call/notice moneyYour Answer Call/notice money
Multiple Choice Multiple AnswerQuestion What is the information to be placed before the board of directors as per the Kumarmangalam
report?Correct Answer Annual operating plans , Capital budgets , Quarterly resultsYour Answer Annual operating plans , Capital budgets , Quarterly results
True/FalseQuestion Bidder cannot revise his bids.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What are ESOP's ?Correct Answer One of the methods of giving part ownership of the company to the employees ,
Employees can take part in the prosperity of the company , Is a reward and linked with the increase in theprices of the shares
Your Answer Is a reward and linked with the increase in the prices of the shares , One of the methods ofgiving part ownership of the company to the employees , Employees can take part in the prosperity of thecompany
Match The FollowingQuestion Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Should effectively participate ingeneral body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders and debenture holdersLook into defaults to depositors creditors shareholders and debenture holders
Reasons of failures of corporate governance in spite of norms Superficial commitment to vision, missionand values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision making process Assisting theboard in decision making process
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB controlled
by Indians promoters
Select The BlankQuestion While structuring the deal the entrepreneur seeks ________.Correct Answer Voting controlYour Answer Goodwill
True/FalseQuestion DRR is treated as part of general reserve for consideration of bonus issue of proposals.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills , Experience
Multiple Choice Multiple AnswerQuestion What precautions are to be taken with respect to delivery instruction slip ?Correct Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account idYour Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account id
True/FalseQuestion Reliance group has added over 10000 crores in market capital.Correct Answer TrueYour Answer False
Select The BlankQuestion An acquirer who holds 15% or more but less than 75% of voting' rights can acquire such
additional shares as would entitle him to exercise more than ________ of voting rights in an financial year.Correct Answer 0.05Your Answer 0.2
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer FITSCH
Select The Blank
Question The appointment of a ________ is mandatory in a offer process.Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public issue as regards to
its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion To make a public announcement the acquirer has to appoint :-Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is a more contemporary definition of corporate governance?Correct Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountabilityYour Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountability
Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in compliance of SEBI
regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock exchanges at least 4 days
before the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days , Annual disclosures
Your Answer Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Select The BlankQuestion The merger of GTB and UTI was called off due to intervention of ________Correct Answer SEBI and RBIYour Answer SEBI and RBI
Select The BlankQuestion The Merchant banker will incorporate in the letter of offer the comments made by SEBI and
then send within ________ days from the date of PA to all shareholders whose names appear in the registerof the company.
Correct Answer 45Your Answer 45
Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?
Correct Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as inopinion of board
Your Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in opinionof board
True/FalseQuestion The public cannot give their complaints or comments on the issuer company or others
connected with the issue to SEBI.Correct Answer FalseYour Answer False
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer No stamp duty , Reduction in paperless work , Reduction in transaction costYour Answer Reduction in paperless work , Reduction in transaction cost , Holds funds in an account
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchangesYour Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchanges
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large corporates to issue
certificate of deposits.Correct Answer FalseYour Answer True
Select The BlankQuestion Directors should not be member of more than________ committees.Correct Answer 10Your Answer 10
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities separately for each client.Correct Answer FalseYour Answer False
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?Correct Answer Securities Contract Regulation ActYour Answer Securities Contract Regulation Act
Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?Correct Answer A net connection , A registered account with a broker and a demat account , Bank
payment gateway or online banking facilityYour Answer A registered account with a broker and a demat account , Bank payment gateway or online
banking facility , A net connection
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
True/FalseQuestion Sweat equity shares are shares issued by company to employees or directors to discount.Correct Answer TrueYour Answer True
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and commercial paper.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under various SEBI regulations how many brokers suspended?Correct Answer 8Your Answer 8
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till approval of trustees
and offer document has been filed with the board , With each offer document pay filing fees , Offerdocument to contain disclosures
Your Answer With each offer document pay filing fees , Offer document to contain disclosures
Match The FollowingQuestion Correct Answer Your Answer
Charge card Form of plastic money Member establishment
Warning Bulletin Authenticity test Authenticity test
Credit information company SBI, HDFC bank SBI, HDFC bank
Credit card issuing company Visa/Master Card Visa/Master Card
Multiple Choice Single AnswerQuestion Who forms the Asset management company (AMC)?Correct Answer Group of trustees
Your Answer Group of trustees
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion Under which regulation is reporting mandatory in respect of acquisitions arising out of firm
allot meant in public issues and rights issues etc?Correct Answer Regulation (3) 4Your Answer Regulation (3) 4
True/FalseQuestion Book building is a process whereby the price is determined on the basis of actual demand as
evident from the offers given by the various institutional investors and underwriters.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The Money market mutual funds (MMMFs) can invest the funds in which of these securities?Correct Answer Call/notice moneyYour Answer Call/notice money
Multiple Choice Multiple AnswerQuestion What is the information to be placed before the board of directors as per the Kumarmangalam
report?Correct Answer Annual operating plans , Capital budgets , Quarterly resultsYour Answer Annual operating plans , Capital budgets , Quarterly results
True/FalseQuestion Bidder cannot revise his bids.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What are ESOP's ?Correct Answer One of the methods of giving part ownership of the company to the employees ,
Employees can take part in the prosperity of the company , Is a reward and linked with the increase in theprices of the shares
Your Answer Is a reward and linked with the increase in the prices of the shares , One of the methods ofgiving part ownership of the company to the employees , Employees can take part in the prosperity of thecompany
Match The FollowingQuestion Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Should effectively participate ingeneral body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders and debenture holdersLook into defaults to depositors creditors shareholders and debenture holders
Reasons of failures of corporate governance in spite of norms Superficial commitment to vision, missionand values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision making process Assisting theboard in decision making process
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB controlled
by Indians promoters
Select The BlankQuestion While structuring the deal the entrepreneur seeks ________.Correct Answer Voting controlYour Answer Goodwill
True/FalseQuestion DRR is treated as part of general reserve for consideration of bonus issue of proposals.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills , Experience
Multiple Choice Multiple AnswerQuestion What precautions are to be taken with respect to delivery instruction slip ?Correct Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account idYour Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account id
True/FalseQuestion Reliance group has added over 10000 crores in market capital.Correct Answer TrueYour Answer False
Select The BlankQuestion An acquirer who holds 15% or more but less than 75% of voting' rights can acquire such
additional shares as would entitle him to exercise more than ________ of voting rights in an financial year.Correct Answer 0.05Your Answer 0.2
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer FITSCH
Select The Blank
Question The appointment of a ________ is mandatory in a offer process.Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public issue as regards to
its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion To make a public announcement the acquirer has to appoint :-Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is a more contemporary definition of corporate governance?Correct Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountabilityYour Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountability
Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in compliance of SEBI
regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock exchanges at least 4 days
before the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days , Annual disclosures
Your Answer Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Select The BlankQuestion The merger of GTB and UTI was called off due to intervention of ________Correct Answer SEBI and RBIYour Answer SEBI and RBI
Select The BlankQuestion The Merchant banker will incorporate in the letter of offer the comments made by SEBI and
then send within ________ days from the date of PA to all shareholders whose names appear in the registerof the company.
Correct Answer 45Your Answer 45
Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?
Correct Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as inopinion of board
Your Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in opinionof board
True/FalseQuestion The public cannot give their complaints or comments on the issuer company or others
connected with the issue to SEBI.Correct Answer FalseYour Answer False
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer No stamp duty , Reduction in paperless work , Reduction in transaction costYour Answer Reduction in paperless work , Reduction in transaction cost , Holds funds in an account
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchangesYour Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchanges
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large corporates to issue
certificate of deposits.Correct Answer FalseYour Answer True
Select The BlankQuestion Directors should not be member of more than________ committees.Correct Answer 10Your Answer 10
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities separately for each client.Correct Answer FalseYour Answer False
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?Correct Answer Securities Contract Regulation ActYour Answer Securities Contract Regulation Act
Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?Correct Answer A net connection , A registered account with a broker and a demat account , Bank
payment gateway or online banking facilityYour Answer A registered account with a broker and a demat account , Bank payment gateway or online
banking facility , A net connection
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
True/FalseQuestion Sweat equity shares are shares issued by company to employees or directors to discount.Correct Answer TrueYour Answer True
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and commercial paper.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under various SEBI regulations how many brokers suspended?Correct Answer 8Your Answer 8
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till approval of trustees
and offer document has been filed with the board , With each offer document pay filing fees , Offerdocument to contain disclosures
Your Answer With each offer document pay filing fees , Offer document to contain disclosures
Match The FollowingQuestion Correct Answer Your Answer
Charge card Form of plastic money Member establishment
Warning Bulletin Authenticity test Authenticity test
Credit information company SBI, HDFC bank SBI, HDFC bank
Credit card issuing company Visa/Master Card Visa/Master Card
Multiple Choice Single AnswerQuestion Who forms the Asset management company (AMC)?Correct Answer Group of trustees
Your Answer Group of trustees
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion Under which regulation is reporting mandatory in respect of acquisitions arising out of firm
allot meant in public issues and rights issues etc?Correct Answer Regulation (3) 4Your Answer Regulation (3) 4
True/FalseQuestion Book building is a process whereby the price is determined on the basis of actual demand as
evident from the offers given by the various institutional investors and underwriters.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The Money market mutual funds (MMMFs) can invest the funds in which of these securities?Correct Answer Call/notice moneyYour Answer Call/notice money
Multiple Choice Multiple AnswerQuestion What is the information to be placed before the board of directors as per the Kumarmangalam
report?Correct Answer Annual operating plans , Capital budgets , Quarterly resultsYour Answer Annual operating plans , Capital budgets , Quarterly results
True/FalseQuestion Bidder cannot revise his bids.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What are ESOP's ?Correct Answer One of the methods of giving part ownership of the company to the employees ,
Employees can take part in the prosperity of the company , Is a reward and linked with the increase in theprices of the shares
Your Answer Is a reward and linked with the increase in the prices of the shares , One of the methods ofgiving part ownership of the company to the employees , Employees can take part in the prosperity of thecompany
Match The FollowingQuestion Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Should effectively participate ingeneral body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders and debenture holdersLook into defaults to depositors creditors shareholders and debenture holders
Reasons of failures of corporate governance in spite of norms Superficial commitment to vision, missionand values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision making process Assisting theboard in decision making process
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB controlled
by Indians promoters
Select The BlankQuestion While structuring the deal the entrepreneur seeks ________.Correct Answer Voting controlYour Answer Goodwill
True/FalseQuestion DRR is treated as part of general reserve for consideration of bonus issue of proposals.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills , Experience
Multiple Choice Multiple AnswerQuestion What precautions are to be taken with respect to delivery instruction slip ?Correct Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account idYour Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account id
True/FalseQuestion Reliance group has added over 10000 crores in market capital.Correct Answer TrueYour Answer False
Select The BlankQuestion An acquirer who holds 15% or more but less than 75% of voting' rights can acquire such
additional shares as would entitle him to exercise more than ________ of voting rights in an financial year.Correct Answer 0.05Your Answer 0.2
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer FITSCH
Select The Blank
Question The appointment of a ________ is mandatory in a offer process.Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public issue as regards to
its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion To make a public announcement the acquirer has to appoint :-Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is a more contemporary definition of corporate governance?Correct Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountabilityYour Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountability
Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in compliance of SEBI
regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock exchanges at least 4 days
before the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days , Annual disclosures
Your Answer Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Select The BlankQuestion The merger of GTB and UTI was called off due to intervention of ________Correct Answer SEBI and RBIYour Answer SEBI and RBI
Select The BlankQuestion The Merchant banker will incorporate in the letter of offer the comments made by SEBI and
then send within ________ days from the date of PA to all shareholders whose names appear in the registerof the company.
Correct Answer 45Your Answer 45
Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?
Correct Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as inopinion of board
Your Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in opinionof board
True/FalseQuestion The public cannot give their complaints or comments on the issuer company or others
connected with the issue to SEBI.Correct Answer FalseYour Answer False
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer No stamp duty , Reduction in paperless work , Reduction in transaction costYour Answer Reduction in paperless work , Reduction in transaction cost , Holds funds in an account
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchangesYour Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchanges
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large corporates to issue
certificate of deposits.Correct Answer FalseYour Answer True
Select The BlankQuestion Directors should not be member of more than________ committees.Correct Answer 10Your Answer 10
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities separately for each client.Correct Answer FalseYour Answer False
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?Correct Answer Securities Contract Regulation ActYour Answer Securities Contract Regulation Act
Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?Correct Answer A net connection , A registered account with a broker and a demat account , Bank
payment gateway or online banking facilityYour Answer A registered account with a broker and a demat account , Bank payment gateway or online
banking facility , A net connection
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
True/FalseQuestion Sweat equity shares are shares issued by company to employees or directors to discount.Correct Answer TrueYour Answer True
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and commercial paper.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under various SEBI regulations how many brokers suspended?Correct Answer 8Your Answer 8
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till approval of trustees
and offer document has been filed with the board , With each offer document pay filing fees , Offerdocument to contain disclosures
Your Answer With each offer document pay filing fees , Offer document to contain disclosures
Match The FollowingQuestion Correct Answer Your Answer
Charge card Form of plastic money Member establishment
Warning Bulletin Authenticity test Authenticity test
Credit information company SBI, HDFC bank SBI, HDFC bank
Credit card issuing company Visa/Master Card Visa/Master Card
Multiple Choice Single AnswerQuestion Who forms the Asset management company (AMC)?Correct Answer Group of trustees
Your Answer Group of trustees
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion Under which regulation is reporting mandatory in respect of acquisitions arising out of firm
allot meant in public issues and rights issues etc?Correct Answer Regulation (3) 4Your Answer Regulation (3) 4
True/FalseQuestion Book building is a process whereby the price is determined on the basis of actual demand as
evident from the offers given by the various institutional investors and underwriters.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The Money market mutual funds (MMMFs) can invest the funds in which of these securities?Correct Answer Call/notice moneyYour Answer Call/notice money
Multiple Choice Multiple AnswerQuestion What is the information to be placed before the board of directors as per the Kumarmangalam
report?Correct Answer Annual operating plans , Capital budgets , Quarterly resultsYour Answer Annual operating plans , Capital budgets , Quarterly results
True/FalseQuestion Bidder cannot revise his bids.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What are ESOP's ?Correct Answer One of the methods of giving part ownership of the company to the employees ,
Employees can take part in the prosperity of the company , Is a reward and linked with the increase in theprices of the shares
Your Answer Is a reward and linked with the increase in the prices of the shares , One of the methods ofgiving part ownership of the company to the employees , Employees can take part in the prosperity of thecompany
Match The FollowingQuestion Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Should effectively participate ingeneral body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders and debenture holdersLook into defaults to depositors creditors shareholders and debenture holders
Reasons of failures of corporate governance in spite of norms Superficial commitment to vision, missionand values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision making process Assisting theboard in decision making process
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB controlled
by Indians promoters
Select The BlankQuestion While structuring the deal the entrepreneur seeks ________.Correct Answer Voting controlYour Answer Goodwill
True/FalseQuestion DRR is treated as part of general reserve for consideration of bonus issue of proposals.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills , Experience
Multiple Choice Multiple AnswerQuestion What precautions are to be taken with respect to delivery instruction slip ?Correct Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account idYour Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account id
True/FalseQuestion Reliance group has added over 10000 crores in market capital.Correct Answer TrueYour Answer False
Select The BlankQuestion An acquirer who holds 15% or more but less than 75% of voting' rights can acquire such
additional shares as would entitle him to exercise more than ________ of voting rights in an financial year.Correct Answer 0.05Your Answer 0.2
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer FITSCH
Select The Blank
Question The appointment of a ________ is mandatory in a offer process.Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public issue as regards to
its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion To make a public announcement the acquirer has to appoint :-Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is a more contemporary definition of corporate governance?Correct Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountabilityYour Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountability
Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in compliance of SEBI
regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock exchanges at least 4 days
before the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days , Annual disclosures
Your Answer Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Select The BlankQuestion The merger of GTB and UTI was called off due to intervention of ________Correct Answer SEBI and RBIYour Answer SEBI and RBI
Select The BlankQuestion The Merchant banker will incorporate in the letter of offer the comments made by SEBI and
then send within ________ days from the date of PA to all shareholders whose names appear in the registerof the company.
Correct Answer 45Your Answer 45
Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?
Correct Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as inopinion of board
Your Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in opinionof board
True/FalseQuestion The public cannot give their complaints or comments on the issuer company or others
connected with the issue to SEBI.Correct Answer FalseYour Answer False
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer No stamp duty , Reduction in paperless work , Reduction in transaction costYour Answer Reduction in paperless work , Reduction in transaction cost , Holds funds in an account
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchangesYour Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchanges
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large corporates to issue
certificate of deposits.Correct Answer FalseYour Answer True
Select The BlankQuestion Directors should not be member of more than________ committees.Correct Answer 10Your Answer 10
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities separately for each client.Correct Answer FalseYour Answer False
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion Information technology, communication and entertainment represent ________
stocks.Correct Answer ICEYour Answer ICE
True/FalseQuestion The public cannot give their complaints or comments on the issuer company or others
connected with the issue to SEBI.Correct Answer FalseYour Answer True
Select The BlankQuestion The right to buy is called ________.Correct Answer Call optionYour Answer Call option
Multiple Choice Single AnswerQuestion What percentage of funds should be invested in unlisted companies?Correct Answer 0.74Your Answer 0.74
Multiple Choice Single AnswerQuestion Who is responsible to get the securities listed on all the stock exchanges?Correct Answer Merchant bankerYour Answer SEBI
Select The BlankQuestion A mutual fund scheme shall not invest more than ________ of its NAV in unrated
debt by a single issuer.Correct Answer 0.1Your Answer 0.1
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
True/FalseQuestion The depository can legally transfer beneficial ownership.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Since when have the Indian Stock markets risen ?Correct Answer 37775Your Answer 38200
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till approval of
trustees and offer document has been filed with the board , With each offer document pay filingfees , Offer document to contain disclosures
Your Answer The Asset management company shall not launch any scheme till approval oftrustees and offer document has been filed with the board , With each offer document pay filingfees , Offer document to contain disclosures
Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer Must disclose investment strategy , VCF's must be registered , Cannot carry
out another activityYour Answer VCF's must be registered , Cannot carry out another activity , Must disclose
investment strategy
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and
commercial paper.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion When can the American style option exercised?Correct Answer On or before the expiry dateYour Answer On or before the expiry date
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his client.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion What is the estimated figure of credit card defaults in India?Correct Answer 800 croresYour Answer 800 crores
True/FalseQuestion Depositary facilitates transfers without having to handle money.Correct Answer FalseYour Answer False
Select The BlankQuestion AA rated companies can raise ________ of its net worth.Correct Answer 2.5 timesYour Answer 2 times
Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring , Communication through the
net , Operate in stock market privately through home or officeYour Answer Screen based trading in place of traditional ring , Communication through the net ,
Operate in stock market privately through home or office
Multiple Choice Multiple AnswerQuestion What are the eligibility norms for an unlisted company for making a public issue?Correct Answer Pre issue net worth not less than 1 crores in the last 3 years , Track record of
distributable profits for at least 3 years , Issue size shall not exceed five times of its pre issue networth
Your Answer Issue size shall not exceed five times of its pre issue net worth , Pre issue networth not less than 1 crores in the last 3 years , Track record of distributable profits for at least 3years
Select The BlankQuestion Markets have moved away from Badla system to ________ .Correct Answer Derivatives TradingYour Answer Derivatives Trading
Multiple Choice Multiple AnswerQuestion During the budget 2003 - 04, Finance Minister made some announcements which he
hopes will make investors think in terms of returning to stock market :-Correct Answer No capital gains tax on investment made in equity after 1/3/03 held for 1 year ,
Removal of income tax on dividends in the hands of receiverYour Answer No capital gains tax on investment made in equity after 1/3/03 held for 1 year ,
Removal of income tax on dividends in the hands of receiver , Investors income tax on dividendreduced to 12.5%
Multiple Choice Single AnswerQuestion How many members are appointed by the central government?Correct Answer 2Your Answer 2
Multiple Choice Multiple AnswerQuestion Which acts were amended to remove some of the hurdles to corporatisation and
demutualisation of stock exchanges?Correct Answer SCRA , Depository ActYour Answer SCRA , Depository Act
Match The FollowingQuestion Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Should effectively participatein general body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders anddebenture holders Look into defaults to depositors creditors shareholders and debenture holders
Reasons of failures of corporate governance in spite of norms Superficial commitment to vision,mission and values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision making processDecision making
Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20 000 crores?Correct Answer Infosys , Satyam , WiproYour Answer Infosys , Satyam , Wipro
Multiple Choice Multiple AnswerQuestion What does SEBI do with its power ?Correct Answer Cancel certificate issued to custodian , Inspect books of DP , issuers or
beneficiary owners , Investigate an acquirerYour Answer Cancel certificate issued to custodian , Inspect books of DP , issuers or
beneficiary owners , Investigate an acquirer
True/FalseQuestion Amendment to SCRA will facilitate derivatives trading in interest rate futures and
options if there is an underlying asset.Correct Answer TrueYour Answer True
True/FalseQuestion In order to dematerialize the securities one has to fill DRF.Correct Answer TrueYour Answer True
Select The BlankQuestion In case of an IPO of any security of issue size of Rs________ or more security shall
be issued only in demat form.Correct Answer 10 croresYour Answer 10 crores
Multiple Choice Multiple AnswerQuestion What are the obligations of a company in a share buy back?Correct Answer The offer letter should contain true, factual and material information and should
not be misleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of the closureof the offer.
Your Answer The offer letter should contain true, factual and material information and shouldnot be misleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of the closureof the offer.
Select The BlankQuestion The DP opens investor account in the system and gives an account number also
known as ________.Correct Answer BO IDYour Answer BO ID
Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many times of the net
owned funds?Correct Answer 4 timesYour Answer 4 times
Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Overall economic condition , Demand and supply capital , Degree of popularity
of the industryYour Answer Overall economic condition , Demand and supply capital , Degree of popularity of
the industry
Match The FollowingQuestion Correct Answer Your Answer
Portfolio Collection of assets Collection of assets
Factors influencing portfolio decisions Business and Market risks Business and Market risks
Code of conduct- Portfolio Manager Observe high standard of integrity and fairness Observe highstandard of integrity and fairness
SEBI Regulations Portfolio Manager must fulfill the capital adequacy norms To make timelydecision regarding sale and purchase of securities
Multiple Choice Multiple AnswerQuestion What are the major factors influencing portfolio decisions?Correct Answer Investor characteristics , Liquidity needs and tax considerations , Investment
and interest rate riskYour Answer Investor characteristics , Liquidity needs and tax considerations , Investment and
interest rate risk
Multiple Choice Single AnswerQuestion The refinance made available to any HFC is not to be more than :-Correct Answer 60% of its outstanding housing loansYour Answer 60% of its outstanding housing loans
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large corporates to
issue certificate of deposits.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
Multiple Choice Multiple AnswerQuestion What is dematerialization ?Correct Answer Physical certificates converted into electronic from , Credited into investors
account with his/ her DPYour Answer Physical certificates converted into electronic from , Credited into investors
account with his/ her DP , Selling shares
Select The BlankQuestion ________ is in the form of a usance promissory note payable after 45 days from the
date of issue.Correct Answer Certificate of DepositYour Answer Certificate of Deposit
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion What is the amount of net worth accompany should have for opting for an IPO ?Correct Answer 1 Crore
Your Answer 1 Crore
Select The BlankQuestion The process of securitisation involves transfer of assets to a person specially created
called as ________.Correct Answer Special purpose vehicleYour Answer Special purpose vehicle
True/FalseQuestion A mutual fund shall not invest more than 10% of is NAV in equity shares in cases of
open ended schemes.Correct Answer TrueYour Answer False
Multiple Choice Single AnswerQuestion What is a put option?Correct Answer Right to sellYour Answer Right to sell
True/FalseQuestion Venture capital finance is risk finance for entrepreneurial growth oriented companies.Correct Answer TrueYour Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Who can change the composition of securities?Correct Answer Fund managerYour Answer Fund manager
True/FalseQuestion Employee stock option scheme granted to the employee is transferable.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's issued by RBI :-Correct Answer All the NBFC's must register with RBI , Without the registration certificate no
company can undertake activities of NBFC , All companies must be liquid assets equal to 15% ofdeposits
Your Answer All the NBFC's must register with RBI , Without the registration certificate nocompany can undertake activities of NBFC , All companies must be liquid assets equal to 15% ofdeposits
True/FalseQuestion Transactions that involve substantial payment towards goodwill, brand equity or
intellectual property must be placed before the board of directors as per the recommendations ofthe Kumarmangalam Birla report.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Deposits can be accepted for a maximum period of :-Correct Answer 5 yearsYour Answer 10 years
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Single AnswerQuestion Since when have the Indian Stock markets risen ?Correct Answer 37775Your Answer 37775
Multiple Choice Single AnswerQuestion In the wake of boom of which sector the Indian mutual fund launched various sector
specific schemes?Correct Answer SoftwareYour Answer Software
Select The Blank
Question In 2001 a case of rigging and short selling based insider trading was noticed in thecase of proposed merger of ________.
Correct Answer UTI Bank with GTBYour Answer OBC with GTB
Select The BlankQuestion ________ are a kind of portfolio schemes.Correct Answer Mutual fundsYour Answer Mutual funds
Select The BlankQuestion ________ are a kind of portfolio schemes.Correct Answer Mutual fundsYour Answer Mutual funds
Multiple Choice Single AnswerQuestion What is equipment leasing ?Correct Answer Contractual agreement where the lessor of equipment transfers the right to use
the equipment to the lesseeYour Answer Contractual agreement where the lessor of equipment transfers the right to use
the equipment to the lessee
Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Overall economic condition , Demand and supply capital , Degree of popularity
of the industryYour Answer Overall economic condition , Demand and supply capital , Degree of popularity of
the industry
True/FalseQuestion Mergers and amalgamations of companies are also covered under the SEBI
regulations 1997.Correct Answer FalseYour Answer False
Select The BlankQuestion The DP opens investor account in the system and gives an account number also
known as ________.Correct Answer BO IDYour Answer BO ID
True/FalseQuestion Constant change would be one of the reasons for failure of corporate governance.Correct Answer TrueYour Answer False
Select The BlankQuestion In case of an IPO of any security of issue size of Rs________ or more security shall
be issued only in demat form.Correct Answer 10 croresYour Answer 10 crores
True/FalseQuestion The company opting for an IPO should have net worth of at least Rs 1 crore in each
of the preceding two years.Correct Answer True
Your Answer False
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the depository ,
Maintain the investor's holdings in an electronic form , Effect settlement of securities traded onexchanges
Your Answer Enable surrender and withdrawal of securities to and from the depository ,Maintain the investor's holdings in an electronic form , Effect settlement of securities traded onexchanges
Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity , Must disclose
investment strategyYour Answer VCF's must be registered , Cannot carry out another activity , Must disclose
investment strategy
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
Match The FollowingQuestion Correct Answer Your Answer
Castrol FY 2003 - 03 Dividend Rs145 crores FY 2003 - 03 Dividend Rs145 crores
MS Verma committee Dual Flotation Dual Flotation
Hero Honda FY 2003 - 03 Dividend Rs187 crores FY 2003 - 03 Dividend Rs187 crores
VSNL FY 2003 - 03 Dividend Rs172 crores FY 2003 - 03 Dividend Rs172 crores
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion When did the trading in foreign currency options start in India?Correct Answer 37809Your Answer 37829
Multiple Choice Multiple AnswerQuestion What is dematerialization ?Correct Answer Credited into investors account with his/ her DP , Physical certificates
converted into electronic fromYour Answer Physical certificates converted into electronic from , Credited into investors
account with his/ her DP
Select The BlankQuestion No mutual fund under all its schemes should own more than ________ of any
company's paid up capital carrying voting rights.Correct Answer 0.1
Your Answer 0.3
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills , Experience
Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring , Communication through the
net , Operate in stock market privately through home or officeYour Answer Screen based trading in place of traditional ring , Communication through the net ,
Operate in stock market privately through home or office
Multiple Choice Single AnswerQuestion If the unlisted company does not satisfy the criteria of net worth profitability and issue
size how can it come out with a public issue?Correct Answer Through book building processYour Answer Through book building process
Multiple Choice Single AnswerQuestion Which is the favorite destination for venture funds?Correct Answer BPOYour Answer BPO
Multiple Choice Multiple AnswerQuestion Who issues participatory notes?Correct Answer Associates of India based foreign brokerages , Domestic institutional
brokeragesYour Answer Associates of India based foreign brokerages , Domestic institutional brokerages
Multiple Choice Single AnswerQuestion For a VCF to be registered with SEBI what is the registration fee ?Correct Answer 5 lacsYour Answer 5 lacs
Match The FollowingQuestion Correct Answer Your Answer
Ready forward transaction (Repo) Interbank sale and repurchase of securities Interbank sale andrepurchase of securities
Commercial paper Means of raising short term debt by companies Means of raising short termdebt by companies
STCI Operations in call money markets Operations in call money markets
Market stabilsation Bonds Launched in fiscal 2004-05 Launched in fiscal 2004-05
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and
commercial paper.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies by NHB?Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of
auditorsYour Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of
auditors
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer False
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till approval of
trustees and offer document has been filed with the board , With each offer document pay filingfees , Offer document to contain disclosures
Your Answer The Asset management company shall not launch any scheme till approval oftrustees and offer document has been filed with the board , With each offer document pay filingfees , Offer document to contain disclosures
Multiple Choice Single AnswerQuestion What is the limit for aggregate investment of FII's NRI's and OCB's?Correct Answer 0.3Your Answer 0.25
True/FalseQuestion Acquisition finance, which provide funding for acquiring another company are often
closely held or fairly owned.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what amount is expected to
be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores
Select The BlankQuestion The acquirer is required to make the PA within ________ working days of entering
into an agreement to acquire shares or deciding to acquire share's voting rights of targetcompany.
Correct Answer 4Your Answer 4
Multiple Choice Single AnswerQuestion What is the objective of public announcement?Correct Answer Ensure that the shareholders of the target company are aware of the exit
opportunity available to themYour Answer Ensure that the shareholders of the target company are aware of the exit
opportunity available to them
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his client.Correct Answer FalseYour Answer False
True/FalseQuestion If the credit rating is obtained from two different agencies in case of issue of debt
instruments, all the ratings need not be disclosed in the document.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promoters
Select The BlankQuestion When one decides to have the shares in an electronic form one has to approach
________.Correct Answer DPYour Answer DP
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Who can change the composition of securities?Correct Answer Fund managerYour Answer Fund manager
True/FalseQuestion Employee stock option scheme granted to the employee is transferable.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's issued by RBI :-Correct Answer Without the registration certificate no company can undertake activities of
NBFC , All companies must be liquid assets equal to 15% of deposits , All the NBFC's mustregister with RBI
Your Answer All the NBFC's must register with RBI , Without the registration certificate nocompany can undertake activities of NBFC , All companies must be liquid assets equal to 15% ofdeposits
True/FalseQuestion Transactions that involve substantial payment towards goodwill, brand equity or
intellectual property must be placed before the board of directors as per the recommendations ofthe Kumarmangalam Birla report.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Deposits can be accepted for a maximum period of :-Correct Answer 5 yearsYour Answer 10 years
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Single AnswerQuestion Since when have the Indian Stock markets risen ?Correct Answer 37775Your Answer 37775
Multiple Choice Single AnswerQuestion In the wake of boom of which sector the Indian mutual fund launched various sector
specific schemes?Correct Answer SoftwareYour Answer Software
Select The Blank
Question In 2001 a case of rigging and short selling based insider trading was noticed in thecase of proposed merger of ________.
Correct Answer UTI Bank with GTBYour Answer OBC with GTB
Select The BlankQuestion ________ are a kind of portfolio schemes.Correct Answer Mutual fundsYour Answer Mutual funds
Select The BlankQuestion ________ are a kind of portfolio schemes.Correct Answer Mutual fundsYour Answer Mutual funds
Multiple Choice Single AnswerQuestion What is equipment leasing ?Correct Answer Contractual agreement where the lessor of equipment transfers the right to use
the equipment to the lesseeYour Answer Contractual agreement where the lessor of equipment transfers the right to use
the equipment to the lessee
Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Overall economic condition , Demand and supply capital , Degree of popularity
of the industryYour Answer Overall economic condition , Demand and supply capital , Degree of popularity of
the industry
True/FalseQuestion Mergers and amalgamations of companies are also covered under the SEBI
regulations 1997.Correct Answer FalseYour Answer False
Select The BlankQuestion No mutual fund under all its schemes should own more than ________ of any
company's paid up capital carrying voting rights.Correct Answer 0.1Your Answer 0.3
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills , Experience
Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring , Communication through the
net , Operate in stock market privately through home or officeYour Answer Screen based trading in place of traditional ring , Communication through the net ,
Operate in stock market privately through home or office
Multiple Choice Single AnswerQuestion If the unlisted company does not satisfy the criteria of net worth profitability and issue
size how can it come out with a public issue?
Correct Answer Through book building processYour Answer Through book building process
Multiple Choice Single AnswerQuestion Which is the favorite destination for venture funds?Correct Answer BPOYour Answer BPO
Multiple Choice Multiple AnswerQuestion Who issues participatory notes?Correct Answer Associates of India based foreign brokerages , Domestic institutional
brokeragesYour Answer Associates of India based foreign brokerages , Domestic institutional brokerages
Multiple Choice Single AnswerQuestion For a VCF to be registered with SEBI what is the registration fee ?Correct Answer 5 lacsYour Answer 5 lacs
Match The FollowingQuestion Correct Answer Your Answer
Ready forward transaction (Repo) Interbank sale and repurchase of securities Interbank sale andrepurchase of securities
Commercial paper Means of raising short term debt by companies Means of raising short termdebt by companies
STCI Operations in call money markets Operations in call money markets
Market stabilsation Bonds Launched in fiscal 2004-05 Launched in fiscal 2004-05
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and
commercial paper.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies by NHB?Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of
auditorsYour Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of
auditors
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer False
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till approval of
trustees and offer document has been filed with the board , With each offer document pay filingfees , Offer document to contain disclosures
Your Answer The Asset management company shall not launch any scheme till approval oftrustees and offer document has been filed with the board , With each offer document pay filingfees , Offer document to contain disclosures
Multiple Choice Single AnswerQuestion What is the limit for aggregate investment of FII's NRI's and OCB's?Correct Answer 0.3Your Answer 0.25
True/FalseQuestion Acquisition finance, which provide funding for acquiring another company are often
closely held or fairly owned.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what amount is expected to
be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores
Select The BlankQuestion The acquirer is required to make the PA within ________ working days of entering
into an agreement to acquire shares or deciding to acquire share's voting rights of targetcompany.
Correct Answer 4Your Answer 4
Multiple Choice Single AnswerQuestion What is the objective of public announcement?Correct Answer Ensure that the shareholders of the target company are aware of the exit
opportunity available to themYour Answer Ensure that the shareholders of the target company are aware of the exit
opportunity available to them
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his client.Correct Answer FalseYour Answer False
True/FalseQuestion If the credit rating is obtained from two different agencies in case of issue of debt
instruments, all the ratings need not be disclosed in the document.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promoters
Select The BlankQuestion When one decides to have the shares in an electronic form one has to approach
________.
Correct Answer DPYour Answer DP
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion The NSE Nifty index comprises of ________companies.Correct Answer 50Your Answer 50
Match The FollowingQuestion Correct Answer Your Answer
0.1 Government decided to pay dividend Government decided to pay dividend
0.15 MF cannot invest as percentage of NAV in debt instrument issued by singleissuer MF cannot invest as percentage of NAV in debt instrument issued by singleissuer
Annual statement of accounts of MF To be audited by auditor To be audited byauditor
Rs. 8000 crores Current shortfall in UTI schemes Current shortfall in UTIschemes
Select The BlankQuestion Hire Purchase transactions are liable to ________.Correct Answer Sales taxYour Answer Sales tax
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital
markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Multiple AnswerQuestion What are the major factors influencing portfolio decisions?Correct Answer Investor characteristics , Liquidity needs and tax
considerations , Investment and interest rate riskYour Answer Investor characteristics , Liquidity needs and tax
considerations , Investment and interest rate risk
Select The BlankQuestion The portfolio manager has to place the funds of all their clients
in a separate account to be maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
True/FalseQuestion ISIN is a unique identification number for security.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term
instruments
Your Answer Market for long term funds and investments in long terminstruments
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what
amount is expected to be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital
market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Multiple AnswerQuestion The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number of
investors who have common financial goal , Issue units to investor whichrepresent right in assets , Investments in mutual funds may be in the form ofstock, bond, money market securitiesYour Answer A trust that pools in savings and funds from large number of
investors who have common financial goal , Issue units to investor whichrepresent right in assets , Investments in mutual funds may be in the form ofstock, bond, money market securities
Multiple Choice Multiple AnswerQuestion Companies are not allowed to buy back securities :-Correct Answer Through any/ own subsidiary company , Through any/group of
investment company , If default subsists in respect of repayments of deposits,term loans to any financial institutions and redemption of preference shares ordebenturesYour Answer Through any/ own subsidiary company , Through any/group of
investment company , If default subsists in respect of repayments of deposits,term loans to any financial institutions and redemption of preference shares ordebentures
Multiple Choice Multiple AnswerQuestion Briefly describe the SEBI guidelines for the merchant bankers :-Correct Answer Should have an authorization from SEBI , Expertise good
financial standing and high degree of professional integrity , Company abides bythe various requirements relating to disclosers, listing of instruments etcYour Answer Should have an authorization from SEBI , Expertise good
financial standing and high degree of professional integrity , Company abides bythe various requirements relating to disclosers, listing of instruments etc
Multiple Choice Single AnswerQuestion What is issued by mutual funds?Correct Answer UnitsYour Answer Units
Multiple Choice Multiple AnswerQuestion During the budget 2003 - 04, Finance Minister made some
announcements which he hopes will make investors think in terms of returning tostock market :-
Correct Answer No capital gains tax on investment made in equity after1/3/03 held for 1 year , Removal of income tax on dividends in the hands ofreceiverYour Answer Removal of income tax on dividends in the hands of receiver ,
Investors income tax on dividend reduced to 12.5% , No capital gains tax oninvestment made in equity after 1/3/03 held for 1 year
Select The BlankQuestion The merchant bankers should act as ________ of the investor's money
and put a lot of responsibility on them.Correct Answer CustodianYour Answer Custodian
True/FalseQuestion Reliance group has added over 10000 crores in market capital.Correct Answer TrueYour Answer True
Select The BlankQuestion BSE introduced an equity stock index known as ________.Correct Answer SENSEXYour Answer SENSEX
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in
India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20 000
crores?Correct Answer Infosys , Satyam , WiproYour Answer Infosys , Satyam , Wipro
Multiple Choice Single AnswerQuestion Since when have the Indian Stock markets risen ?Correct Answer 37775Your Answer 37834
Multiple Choice Single AnswerQuestion What is the time frame to submit a report to SEBI for acquisition
transactions arising out of firm allotment in public issues right issues etc?Correct Answer 21 daysYour Answer 21 days
Select The BlankQuestion The portfolio manager has to place the funds of all their clients
in a separate account to be maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion What is government's move towards Stock Exchanges ?Correct Answer DemutulisationYour Answer Dematerialization
Multiple Choice Multiple AnswerQuestion As per the recommendations of the Kumarmangalam Birla committee
report who are the key components of an audit committee.Correct Answer External auditor , Board , Internal auditorYour Answer Board , Internal auditor , External auditor
True/FalseQuestion SEBI can investigate and inspect books of accounts and records of
insiders.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing
skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing
skills , Experience
Multiple Choice Single AnswerQuestion What is the objective of a credit information company?Correct Answer To ascertain the credit worthiness of
individuals/organizations and make the data available to all banksYour Answer To ascertain the credit worthiness of individuals/organizations
and make the data available to all banks
True/FalseQuestion Transactions that involve substantial payment towards goodwill,
brand equity or intellectual property must be placed before the board ofdirectors as per the recommendations of the Kumarmangalam Birla report.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What is the amount of net worth accompany should have for opting
for an IPO ?Correct Answer 1 CroreYour Answer 1 Crore
True/FalseQuestion A credit card is a payment mechanism which enables the holder to
buy goods and services on credit.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion When are VCF's entitled to get its units listed on stock exchange?Correct Answer After expiration of 3 years form date of issuance of unitsYour Answer After expiration of 3 years form date of issuance of units
True/FalseQuestion Book building is a process whereby the price is determined on the
basis of actual demand as evident from the offers given by the variousinstitutional investors and underwriters.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion A portfolio manager could undertake the following on behalf of his
clients :-Correct Answer Hedging and arbitrage transactionsYour Answer Hedging and arbitrage transactions
Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint
debenture trustee , Debenture redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint debenture
trustee , Debenture redemption reserve to be created
Select The BlankQuestion ________ are a kind of portfolio schemes.Correct Answer Mutual fundsYour Answer Mutual funds
Match The FollowingQuestion Correct Answer Your Answer
Portfolio Collection of assets Collection of assets
Factors influencing portfolio decisions Business and Market risks Business andMarket risks
Code of conduct- Portfolio Manager Observe high standard of integrity andfairness Observe high standard of integrity and fairness
SEBI Regulations Portfolio Manager must fulfill the capital adequacy normsPortfolio Manager must fulfill the capital adequacy norms
Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in
compliance of SEBI regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock
exchanges at least 4 days before the date , Any person holding more than 15% butless than 75% voting rights shall be disclosed with 2 days , Annual disclosuresYour Answer Details of proposed acquisition need to be filed with Stock
exchanges at least 4 days before the date , Any person holding more than 15% butless than 75% voting rights shall be disclosed with 2 days , Annual disclosures
Multiple Choice Multiple AnswerQuestion What are the requirements regarding promoter's contribution and
lock in?Correct Answer In case of IPO, promoters have to necessarily offer at least
20% of the post issue capital , In case of listed company promoters shallparticipate either to extent of 20% of proposed or post issue , In case of anyissue of capital the minimum contribution shall be locked in for a period of 3yearsYour Answer In case of IPO, promoters have to necessarily offer at least 20%
of the post issue capital , In case of listed company promoters shallparticipate either to extent of 20% of proposed or post issue , In case of anyissue of capital the minimum contribution shall be locked in for a period of 3years
True/FalseQuestion Constant change would be one of the reasons for failure of
corporate governance.Correct Answer TrueYour Answer True
Select The BlankQuestion Final prospectus in the book building p________ess is to be filed
with the ROC.Correct Answer ROCYour Answer ROC
Multiple Choice Single AnswerQuestion Who forms the Asset management company (AMC)?Correct Answer Group of trusteesYour Answer Group of trustees
True/FalseQuestion Employee stock option scheme granted to the employee is
transferable.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion How many companies are there to do business of credit rating?Correct Answer 4Your Answer 4
Multiple Choice Multiple AnswerQuestion What are the general obligations of mutual fund ?Correct Answer Every AMC should maintain proper books of accounts ,
Financial year for all schemes to end as on March 31 each year , Every mutualfund shall have the annual statements audited by auditorYour Answer Every AMC should maintain proper books of accounts , Financial
year for all schemes to end as on March 31 each year , Every mutual fund shallhave the annual statements audited by auditor
Select The BlankQuestion Recently, SEBI has allowed buy back of shares upto ________% of the
total shares without requirement of a special resolutionCorrect Answer 10Your Answer 10
Select The BlankQuestion Directors should not be member of more than________ committees.Correct Answer 10Your Answer 10
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer Crisil
True/FalseQuestion The acquirer is required to appoint a merchant banker before making
a PA.Correct Answer TrueYour Answer True
Select The BlankQuestion Hire Purchase transactions are liable to ________.Correct Answer Sales taxYour Answer Sales tax
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term
instrumentsYour Answer Market for long term funds and investments in long term
instruments
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing
skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing
skills , Experience
Multiple Choice Single AnswerQuestion What is Discretionary Portfolio management service ?Correct Answer Client gives his money for investment to the portfolio
manager and leaves it to him to make all the investment decisions.Your Answer Client gives his money for investment to the portfolio manager
and leaves it to him to make all the investment decisions.
True/FalseQuestion Depositary facilitates transfers without having to handle money.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital
market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what
amount is expected to be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores
Multiple Choice Multiple Answer
Question The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number of
investors who have common financial goal , Issue units to investor whichrepresent right in assets , Investments in mutual funds may be in the form ofstock, bond, money market securitiesYour Answer A trust that pools in savings and funds from large number of
investors who have common financial goal , Issue units to investor whichrepresent right in assets , Investments in mutual funds may be in the form ofstock, bond, money market securities
True/FalseQuestion If the credit rating is obtained from two different agencies in
case of issue of debt instruments, all the ratings need not be disclosed in thedocument.Correct Answer FalseYour Answer True
Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any litigation
connected with ________.Correct Answer Securities marketsYour Answer Clients
Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?Correct Answer Knowledge and information about various aspects of capital
markets , Ability to evaluate and analyze , Update the knowledgeYour Answer Knowledge and information about various aspects of capital
markets , Ability to evaluate and analyze , Update the knowledge
Multiple Choice Multiple AnswerQuestion Describe the stock lending mechanism:-Correct Answer Involves two parties one who is willing to lend and other who
wishes to borrow securities at market related rates , Lender is assured ofgetting equivalent the relevant securities by NSSCL on the settlement date ,Lender gets benefit of reasonable return called lending feeYour Answer Involves two parties one who is willing to lend and other who
wishes to borrow securities at market related rates , Lender gets benefit ofreasonable return called lending fee
Multiple Choice Multiple AnswerQuestion What are the limitations of refinance facility?Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan
funds of HFC's , Not to exceed 15 % of NOF of NHBYour Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan
funds of HFC's , Not to exceed 15 % of NOF of NHB
Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what period
from the date of passing the resolution?Correct Answer 12 monthsYour Answer 12 months
Match The FollowingQuestion Correct Answer Your Answer
10 HDFC foreign currency deal Global investors pumping funds in India SpecificFunds
0.57 FII current free float sensex company FII free float stock NIFTY companies
0.45 FII free float stock NIFTY companies FII's total free float sex and NIFTY
$ 476 mn Global investors pumping funds in India Specific Funds HDFC foreigncurrency deal
Multiple Choice Single AnswerQuestion When did the trading in foreign currency options start in India?Correct Answer 37809Your Answer 37829
Multiple Choice Single AnswerQuestion What is the main objective of credit appraisal ?Correct Answer Assess the repayment capacityYour Answer Assess the age of the person borrowing
True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their
trustees and asset management companies.Correct Answer FalseYour Answer False
Select The BlankQuestion In the L & T reliance case, Reliance was fined ________.Correct Answer Rs. 5 lacsYour Answer Rs. 5 lacs
Select The BlankQuestion Recently many banks have started issuing ________ which could also
be used as a debit card.Correct Answer ATM cardYour Answer ATM card
Select The BlankQuestion A ________ means any persons connected with a company and who is
reasonably having access to unpublished price sensitive information.Correct Answer InsiderYour Answer Insider
Select The BlankQuestion SENSEX is calculated using ________ method.Correct Answer Market capitalizationYour Answer Weighted
Match The FollowingQuestion Correct Answer Your Answer
Share buy back is a way of Returning surplus cash to the shareholders Returningsurplus cash to the shareholders
Dutch Auction Price of the Buy back is done by the shareholders Price of the Buyback is done by the shareholders
Open market purchases No minimum price stipulation No minimum price stipulation
Companies holding more than 90% equity Can be delisted Can be delisted
True/FalseQuestion The public cannot give their complaints or comments on the issuer
company or others connected with the issue to SEBI.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase
securities separately for each client.Correct Answer FalseYour Answer True
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and
large corporates to issue certificate of deposits.Correct Answer FalseYour Answer True
True/FalseQuestion Book building is a process whereby the price is determined on the
basis of actual demand as evident from the offers given by the variousinstitutional investors and underwriters.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What is the system of rolling settlement prevalent in the USA ?Correct Answer Transaction + 3Your Answer Transaction + 3
Multiple Choice Single AnswerQuestion What is the most important objective for an investor?Correct Answer Protection of the value of the investmentYour Answer Profit maximization
Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's
issued by RBI :-Correct Answer All the NBFC's must register with RBI , Without the
registration certificate no company can undertake activities of NBFC , Allcompanies must be liquid assets equal to 15% of depositsYour Answer All the NBFC's must register with RBI , Without the registration
certificate no company can undertake activities of NBFC , All companies must beliquid assets equal to 15% of deposits
Multiple Choice Single Answer
Question What do you mean by venture capital?Correct Answer Providing seed, start up capital and first stage financingYour Answer Providing seed, start up capital and first stage financing
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital
markets?Correct Answer Establishment of NSEYour Answer Opening of Indian Capital Markets to FII's
Select The BlankQuestion The continuing growth in ________ was one of the factors that
contributed to the growth of credit rating.Correct Answer Information technologyYour Answer Information technology
Select The BlankQuestion In case of a public issue by a listed company participation by
promoters in the proposed issues in excess of the required minimum percentageshall also be looked in for a period of ________.Correct Answer 1 yearYour Answer 3 years
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his
client.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring ,
Communication through the net , Operate in stock market privately through homeor officeYour Answer Screen based trading in place of traditional ring ,
Communication through the net , Operate in stock market privately through homeor office
Select The BlankQuestion The Kumarmangalam Birla report stressed on the importance of
________ with respect to AGM's.Correct Answer Proxy voting / ballot systemsYour Answer Proxy voting / ballot systems
True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities
purchased under the buy back arrangement to be extinguished and physicallydestroyed.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint
debenture trustee , Debenture redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint debenture
trustee , Debenture redemption reserve to be created
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in
India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity
, Must disclose investment strategyYour Answer VCF's must be registered , Cannot carry out another activity ,
Must disclose investment strategy
Multiple Choice Single AnswerQuestion What is the minimum number of days for which the bid should remain
open in book building?Correct Answer 5 daysYour Answer 7 days
Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many
times of the net owned funds?Correct Answer 4 timesYour Answer 4 times
Select The BlankQuestion With the introduction of ________ accounts the complaints about
allotment have surely gone down.Correct Answer DEMATYour Answer DEMAT
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?Correct Answer Securities Contract Regulation ActYour Answer Securities Contract Regulation Act
Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?Correct Answer A net connection , A registered account with a broker and a demat account , Bank
payment gateway or online banking facilityYour Answer A registered account with a broker and a demat account , Bank payment gateway or online
banking facility , A net connection
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
True/FalseQuestion Sweat equity shares are shares issued by company to employees or directors to discount.Correct Answer TrueYour Answer True
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and commercial paper.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under various SEBI regulations how many brokers suspended?Correct Answer 8Your Answer 8
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till approval of trustees
and offer document has been filed with the board , With each offer document pay filing fees , Offerdocument to contain disclosures
Your Answer With each offer document pay filing fees , Offer document to contain disclosures
Match The FollowingQuestion Correct Answer Your Answer
Charge card Form of plastic money Member establishment
Warning Bulletin Authenticity test Authenticity test
Credit information company SBI, HDFC bank SBI, HDFC bank
Credit card issuing company Visa/Master Card Visa/Master Card
Multiple Choice Single AnswerQuestion Who forms the Asset management company (AMC)?Correct Answer Group of trustees
Your Answer Group of trustees
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion Under which regulation is reporting mandatory in respect of acquisitions arising out of firm
allot meant in public issues and rights issues etc?Correct Answer Regulation (3) 4Your Answer Regulation (3) 4
True/FalseQuestion Book building is a process whereby the price is determined on the basis of actual demand as
evident from the offers given by the various institutional investors and underwriters.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The Money market mutual funds (MMMFs) can invest the funds in which of these securities?Correct Answer Call/notice moneyYour Answer Call/notice money
Multiple Choice Multiple AnswerQuestion What is the information to be placed before the board of directors as per the Kumarmangalam
report?Correct Answer Annual operating plans , Capital budgets , Quarterly resultsYour Answer Annual operating plans , Capital budgets , Quarterly results
True/FalseQuestion Bidder cannot revise his bids.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What are ESOP's ?Correct Answer One of the methods of giving part ownership of the company to the employees ,
Employees can take part in the prosperity of the company , Is a reward and linked with the increase in theprices of the shares
Your Answer Is a reward and linked with the increase in the prices of the shares , One of the methods ofgiving part ownership of the company to the employees , Employees can take part in the prosperity of thecompany
Match The FollowingQuestion Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Should effectively participate ingeneral body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders and debenture holdersLook into defaults to depositors creditors shareholders and debenture holders
Reasons of failures of corporate governance in spite of norms Superficial commitment to vision, missionand values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision making process Assisting theboard in decision making process
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB controlled
by Indians promoters
Select The BlankQuestion While structuring the deal the entrepreneur seeks ________.Correct Answer Voting controlYour Answer Goodwill
True/FalseQuestion DRR is treated as part of general reserve for consideration of bonus issue of proposals.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills , Experience
Multiple Choice Multiple AnswerQuestion What precautions are to be taken with respect to delivery instruction slip ?Correct Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account idYour Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account id
True/FalseQuestion Reliance group has added over 10000 crores in market capital.Correct Answer TrueYour Answer False
Select The BlankQuestion An acquirer who holds 15% or more but less than 75% of voting' rights can acquire such
additional shares as would entitle him to exercise more than ________ of voting rights in an financial year.Correct Answer 0.05Your Answer 0.2
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer FITSCH
Select The Blank
Question The appointment of a ________ is mandatory in a offer process.Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public issue as regards to
its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion To make a public announcement the acquirer has to appoint :-Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is a more contemporary definition of corporate governance?Correct Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountabilityYour Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountability
Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in compliance of SEBI
regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock exchanges at least 4 days
before the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days , Annual disclosures
Your Answer Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Select The BlankQuestion The merger of GTB and UTI was called off due to intervention of ________Correct Answer SEBI and RBIYour Answer SEBI and RBI
Select The BlankQuestion The Merchant banker will incorporate in the letter of offer the comments made by SEBI and
then send within ________ days from the date of PA to all shareholders whose names appear in the registerof the company.
Correct Answer 45Your Answer 45
Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?
Correct Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as inopinion of board
Your Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in opinionof board
True/FalseQuestion The public cannot give their complaints or comments on the issuer company or others
connected with the issue to SEBI.Correct Answer FalseYour Answer False
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer No stamp duty , Reduction in paperless work , Reduction in transaction costYour Answer Reduction in paperless work , Reduction in transaction cost , Holds funds in an account
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchangesYour Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchanges
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large corporates to issue
certificate of deposits.Correct Answer FalseYour Answer True
Select The BlankQuestion Directors should not be member of more than________ committees.Correct Answer 10Your Answer 10
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities separately for each client.Correct Answer FalseYour Answer False
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his
client.Correct Answer False
Your Answer True
True/FalseQuestion A mutual fund shall not invest more than 10% of is NAV in equity
shares in cases of open ended schemes.Correct Answer True
Your Answer True
True/FalseQuestion Reliance group has added over 10000 crores in market capital.
Correct Answer True
Your Answer False
Select The BlankQuestion Most of the deals struck on the fist day of foreign currency
options were of ________ maturity.Correct Answer 1 year
Your Answer 5 years
Multiple Choice Multiple AnswerQuestion Explain the important achievements of SEBI :-
Correct Answer Takeover code formulated , Proper disclosure to investorsthrough prospectus mandatory , Guidelines for merchant banker
Your Answer Takeover code formulated , Proper disclosure to investorsthrough prospectus mandatory , Guidelines for merchant banker
Multiple Choice Multiple AnswerQuestion What are participatory notes?
Correct Answer Instruments used by foreign funds , Instruments used butinvestors not register with SEBI , Investors interested in takingexposure in Indian securities
Your Answer Instruments used by foreign funds , Instruments used butinvestors not register with SEBI , Investors interested in takingexposure in Indian securities
Select The BlankQuestion Directors should not be member of more than________
committees.Correct Answer 10
Your Answer 7
Multiple Choice Single AnswerQuestion Who forms the Asset management company (AMC)?
Correct Answer Group of trustees
Your Answer Group of trustees
Multiple Choice Single AnswerQuestion What is the main objective of the promoting Discount and
finance house of India (DFHI) ?Correct Answer Increasing transactions of money market assets
Your Answer Increasing transactions of money market assets
Multiple Choice Single AnswerQuestion What is the amount of net tangible assets, company should have
to make an IPO?Correct Answer 3 crores
Your Answer 5crores
Select The BlankQuestion No mutual fund under all its schemes should own more than
________ of any company's paid up capital carrying votingrights.
Correct Answer 0.1
Your Answer 0.3
Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what
period from the date of passing the resolution?Correct Answer 12 months
Your Answer 12 months
Select The BlankQuestion In case of a public issue by a listed company participation by
promoters in the proposed issues in excess of the required
minimum percentage shall also be looked in for a period of________.
Correct Answer 1 year
Your Answer 3 years
Multiple Choice Multiple AnswerQuestion What is the procedure to make a public announcement ?
Correct Answer Acquirer to appoint a Merchant Banker , PA to be made throughMerchant Banker , PA to be made within four working days ofentering an agreement to acquire shares
Your Answer Acquirer to appoint a Merchant Banker , PA to be made throughMerchant Banker , PA to be made within four working days ofentering an agreement to acquire shares
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what
amount is expected to be paid from the primary market duringthis year?
Correct Answer 15000 crores
Your Answer 25000 crores
Multiple Choice Multiple AnswerQuestion Companies are not allowed to buy back securities :-
Correct Answer Through any/ own subsidiary company , Through any/group ofinvestment company , If default subsists in respect ofrepayments of deposits, term loans to any financial institutionsand redemption of preference shares or debentures
Your Answer Through any/ own subsidiary company , Through any/group ofinvestment company , If default subsists in respect ofrepayments of deposits, term loans to any financial institutionsand redemption of preference shares or debentures
Match The FollowingQuestion Correct Answer Your Answer
ESPS Stock option method Stock option method
Sweat equity Share issue forconsideration other thancash
Share issue forconsideration other thancash
Stock lending mechanism Introduced by SEBI in1997
Introduced by SEBI in1997
ESOP Recipe to makeemployees millionaires
Recipe to make employeesmillionaires
True/FalseQuestion The public cannot give their complaints or comments on the
issuer company or others connected with the issue to SEBI.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion What is the status of Stock exchanges today?
Correct Answer Joint stock companies
Your Answer Joint stock companies
Multiple Choice Single AnswerQuestion Since when have the Indian Stock markets risen ?
Correct Answer 37775
Your Answer 38200
Multiple Choice Multiple AnswerQuestion What are the objectives of NHB?
Correct Answer To promote, establish, aid in promotion and support of housingfinance institutions , To make loans advances or render anyother form of financial assistance to focusing finance institutions, To guarantee financial obligations
Your Answer To promote, establish, aid in promotion and support of housingfinance institutions , To make loans advances or render anyother form of financial assistance to focusing finance institutions, To guarantee financial obligations
Multiple Choice Single AnswerQuestion Apart from the portfolio management fees what percentage of
returns can the portfolio manager share from their client'sprofits?
Correct Answer 0
Your Answer 0
Multiple Choice Single AnswerQuestion What is the percentage of restriction on HFC's disbursement on
project lending for refinance ?Correct Answer 0.3
Your Answer 0.3
Select The BlankQuestion Markets have moved away from Badla system to ________ .
Correct Answer Derivatives Trading
Your Answer Mutual Funds Trading
True/FalseQuestion MIBOR is a security. Derivatives based on this interest rate have
legal recognition under SCRA.Correct Answer False
Your Answer False
True/FalseQuestion The buy back of shares by Indian corporates has been very
successful in India.Correct Answer False
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
0.1 Government decided topay dividend
NAV
0.15 MF cannot invest aspercentage of NAV in debtinstrument issued bysingle issuer
MF cannot invest aspercentage of NAV in debtinstrument issued by singleissuer
Annual statement ofaccounts of MF
To be audited by auditor To be audited by auditor
Rs. 8000 crores Current shortfall in UTIschemes
Current shortfall in UTIschemes
Multiple Choice Single AnswerQuestion What is government's move towards Stock Exchanges ?
Correct Answer Demutulisation
Your Answer Dematerialization
Multiple Choice Single AnswerQuestion How much should be the minimum post issue capital of the
company?Correct Answer 10 crores
Your Answer 10 crores
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?
Correct Answer Enable surrender and withdrawal of securities to and from thedepository , Maintain the investor's holdings in an electronic form, Effect settlement of securities traded on exchanges
Your Answer Enable surrender and withdrawal of securities to and from thedepository , Maintain the investor's holdings in an electronic form, Effect settlement of securities traded on exchanges
True/FalseQuestion A portfolio manager need not necessarily sell or purchase
securities separately for each client.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion For a VCF to be registered with SEBI what is the registration fee
?Correct Answer 5 lacs
Your Answer 5 lacs
Select The BlankQuestion The VCs to flourish requires a well developed ________.
Correct Answer Capital market
Your Answer Long term funds
Multiple Choice Multiple AnswerQuestion What should be done if the address of investor changes?
Correct Answer Inform DP and update records , Inform different companies
Your Answer Inform DP and update records , Inform different companies
Multiple Choice Single AnswerQuestion When did the concept of corporate governance evolve?
Correct Answer During the watergate scandal
Your Answer During the watergate scandal
Multiple Choice Single AnswerQuestion How many times Refinance cannot exceed net owned funds of
Housing finance companies?Correct Answer 5 times
Your Answer 5 times
True/FalseQuestion Money market mutual funds are not permitted to invest in
treasury bills and commercial paper.Correct Answer False
Your Answer False
Select The BlankQuestion In case of an IPO of any security of issue size of Rs________ or
more security shall be issued only in demat form.Correct Answer 10 crores
Your Answer 1 crore
True/FalseQuestion The issue price for placement portion and net offer to public are
not the same.Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion What are the salient features of Hire Purchase ?
Correct Answer Finance company purchases the equipment supplier and lets iton hire , During the contract hirer can opt for an early repaymentand purchase the asset , Hirer may be required to make downpayment
Your Answer Finance company purchases the equipment supplier and lets iton hire , During the contract hirer can opt for an early repaymentand purchase the asset , Hirer may be required to make downpayment
Multiple Choice Multiple AnswerQuestion What is Sweat equity ?
Correct Answer Equity shares issued by the company to the employees , Issuedto directors at a discount , For consideration other than cash forproviding now
Your Answer Equity shares issued by the company to the employees , Issuedto directors at a discount , For consideration other than cash forproviding now
Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20
000 crores?Correct Answer Infosys , Satyam , Wipro
Your Answer Infosys , Wipro , IBM
True/FalseQuestion February UTI sought permission of SEBI to close 7 assured
plans prematurely.Correct Answer True
Your Answer True
Select The BlankQuestion The service charge is levied for allowing subscribers for entry
into or exit from mutual schemes is called as ________.Correct Answer Load
Your Answer Load
Select The BlankQuestion ________ is an international credit rating company.
Correct Answer FITSCH
Your Answer FITSCH
Select The BlankQuestion The NSE Nifty index comprises of ________companies.
Correct Answer 50
Your Answer 50
Select The BlankQuestion For an approval of HFC one of the norms is that the promoter's
contribution has to be minimum ________ of paid up capital.Correct Answer 0.3
Your Answer 0.3
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion The liability of the underwriters in the MS shoes case was
estimated to be ________.Correct Answer Rs. 500 crores
Your Answer Rs. 500 crores
Select The BlankQuestion Largest deal struck on Day 1 of foreign currency option got
underway in India was of ________.Correct Answer Standard Chartered Bank
Your Answer ICICI Bank
True/FalseQuestion If the credit rating is obtained from two different agencies in case
of issue of debt instruments, all the ratings need not be disclosedin the document.
Correct Answer False
Your Answer True
True/FalseQuestion Venture capital finance is risk finance for entrepreneurial growth
oriented companies.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?
Correct Answer Knowledge and information about various aspects of capitalmarkets , Ability to evaluate and analyze , Update the knowledge
Your Answer Knowledge and information about various aspects of capitalmarkets , Ability to evaluate and analyze , Update the knowledge
Multiple Choice Multiple AnswerQuestion The following are some of the procedures of converting physical
holding into electronic form :-Correct Answer Surrender certificates to DP , DP intimates request to depositary
, DP submits the certificates to registrarYour Answer Surrender certificates to DP , DP intimates request to depositary
, DP submits the certificates to registrar
Select The BlankQuestion The continuing growth in ________ was one of the factors that
contributed to the growth of credit rating.Correct Answer Information technology
Your Answer Information technology
True/FalseQuestion At the inception of the hire purchases transaction the finance
company records the hire purchase installment receivable ascurrent asset.
Correct Answer True
Your Answer False
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture
in India ?Correct Answer Reliance Industries
Your Answer Reliance Industries
Select The BlankQuestion When one decides to have the shares in an electronic form one
has to approach ________.Correct Answer DP
Your Answer DP
True/FalseQuestion The depository can legally transfer beneficial ownership.
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion What is issued by mutual funds?
Correct Answer Units
Your Answer Units
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?
Correct Answer Sound General knowledge , Analytical ability and marketing
skills , Experience
Your Answer Analytical ability and marketing skills , Experience , High risktaking capacity
Multiple Choice Multiple AnswerQuestion Who can buy or sell securities on containing the certificate of
registration?Correct Answer Underwriter , Merchant banker , Investment advisor
Your Answer Merchant banker , Investment advisor , RBI
Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-
Correct Answer Must disclose investment strategy , VCF's must be registered ,Cannot carry out another activity
Your Answer VCF's must be registered , Cannot carry out another activity ,Must disclose investment strategy
True/FalseQuestion DRR is treated as part of general reserve for consideration of
bonus issue of proposals.Correct Answer True
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
1995 MS shoes scam MS shoes scam
9/1/2001 SENSEX touched low of2600
UTI GTB merger
4/1/2001 Tata finance scam cameto light
Tata finance scam came tolight
11/1/2001 Reliance sale of 10.5%stake in L&T to grasim
Reliance sale of 10.5%stake in L&T to grasim
Multiple Choice Single AnswerQuestion What is the underwriter paid ?
Correct Answer Commission
Your Answer Commission
Multiple Choice Single Answer
Question How is a share buy back a useful mechanism in preventinghostile takeovers?
Correct Answer Share buyback reduces the floating stock in the market therebyreducing the scope for a raider to acquire enough stock to gainmanagement control.
Your Answer Share buyback reduces the floating stock in the market therebyreducing the scope for a raider to acquire enough stock to gainmanagement control.
Select The BlankQuestion The process of securitisation involves transfer of assets to a
person specially created called as ________.Correct Answer Special purpose vehicle
Your Answer Special purpose vehicle
Multiple Choice Multiple AnswerQuestion Describe E-trading :-
Correct Answer Screen based trading in place of traditional ring , Communicationthrough the net , Operate in stock market privately through homeor office
Your Answer Screen based trading in place of traditional ring , Communicationthrough the net , Operate in stock market privately through homeor office
Multiple Choice Single AnswerQuestion If the unlisted company does not satisfy the criteria of net worth
profitability and issue size how can it come out with a publicissue?
Correct Answer Through book building process
Your Answer Merchant bankers
Multiple Choice Multiple AnswerQuestion Who issues participatory notes?
Correct Answer Associates of India based foreign brokerages , Domesticinstitutional brokerages
Your Answer Associates of India based foreign brokerages , Domesticinstitutional brokerages , Banks for a second or pari passucharge in case of debt instruments
Multiple Choice Single AnswerQuestion What is equipment leasing ?
Correct Answer Contractual agreement where the lessor of equipment transfersthe right to use the equipment to the lessee
Your Answer Contractual agreement where the lessor of equipment transfersthe right to use the equipment to the lessee
Multiple Choice Single AnswerQuestion Renewal of portfolio fund on maturity shall be deemed as a fresh
placement for a minimum period of :-Correct Answer 1 year
Your Answer 1 year
Multiple Choice Multiple AnswerQuestion What are the likely costs incurred by a credit card issuing bank?
Correct Answer Membership fees to visa/MasterCard , Marketing cost ,Administrative cost and cost of bad debts
Your Answer Membership fees to visa/MasterCard , Marketing cost ,Administrative cost and cost of bad debts
Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?
Correct Answer Statutory approvals refused , Sole acquirer being person died ,Circumstances as in opinion of board
Your Answer Statutory approvals refused , Sole acquirer being person died ,Circumstances as in opinion of board
Multiple Choice Single AnswerQuestion How many points the sensex went up in January 2000 during the
ketan parekh scam?Correct Answer 700 points
Your Answer 700 points
Multiple Choice Multiple AnswerQuestion What are ESOP's ?
Correct Answer Employees can take part in the prosperity of the company , Is areward and linked with the increase in the prices of the shares ,One of the methods of giving part ownership of the company tothe employees
Your Answer One of the methods of giving part ownership of the company tothe employees , Employees can take part in the prosperity of thecompany
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion What are the obligations of a company in a share buy back?
Correct Answer The offer letter should contain true, factual and materialinformation and should not be misleading. , The company mustpay the consideration only by the way of cash , The companyshould not issue any fresh securities including bonus shares tillthe date of the closure of the offer.
Your Answer The shares have to be delisted from the exchange aftercompletion of the buy back , The offer letter should contain true,factual and material information and should not be misleading. ,The company should not issue any fresh securities includingbonus shares till the date of the closure of the offer.
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?
Correct Answer Market for long term funds and investments in long terminstruments
Your Answer Investment in equities
Multiple Choice Multiple AnswerQuestion What are the limitations of refinance facility?
Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loanfunds of HFC's , Not to exceed 15 % of NOF of NHB
Your Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loanfunds of HFC's , Not to exceed 15 % of NOF of NHB
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital
markets?Correct Answer Establishment of NSE
Your Answer Establishment of regional stock exchanges
True/FalseQuestion Acquisition finance, which provide funding for acquiring another
company are often closely held or fairly owned.Correct Answer True
Your Answer True
Select The BlankQuestion In the L & T reliance case, Reliance was fined ________.
Correct Answer Rs. 5 lacs
Your Answer Rs. 5 lacs
Multiple Choice Multiple Answer
Question What is the information to be placed before the board ofdirectors as per the Kumarmangalam report?
Correct Answer Annual operating plans , Capital budgets , Quarterly results
Your Answer Annual operating plans , Capital budgets , Quarterly results
Select The BlankQuestion ________ are a kind of portfolio schemes.
Correct Answer Mutual funds
Your Answer Mutual funds
Multiple Choice Multiple AnswerQuestion What does SEBI do with its power ?
Correct Answer Cancel certificate issued to custodian , Inspect books of DP ,issuers or beneficiary owners , Investigate an acquirer
Your Answer Cancel certificate issued to custodian , Inspect books of DP ,issuers or beneficiary owners , Investigate an acquirer
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making
an public issue as regards to its net worth?Correct Answer Net worth of the company should not be less than 1 crore
Your Answer Net worth of the company should not be less than 1 crore
Multiple Choice Multiple AnswerQuestion The features of mutual Fund are :-
Correct Answer A trust that pools in savings and funds from large number ofinvestors who have common financial goal , Issue units toinvestor which represent right in assets , Investments in mutualfunds may be in the form of stock, bond, money marketsecurities
Your Answer A trust that pools in savings and funds from large number ofinvestors who have common financial goal , Issue units toinvestor which represent right in assets , Investments in mutualfunds may be in the form of stock, bond, money marketsecurities
Multiple Choice Single AnswerQuestion Who suffered heavy losses during bad times of stock markets?
Correct Answer Small investors
Your Answer Large investors
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital
market?Correct Answer US$14 bn
Your Answer US$18 bn
Multiple Choice Single AnswerQuestion The capital Adequacy ratio for NBFC's has been fixed at :-
Correct Answer 0.12
Your Answer 0.1
Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?
Correct Answer A net connection , A registered account with a broker and ademat account , Bank payment gateway or online banking facility
Your Answer Bank payment gateway or online banking facility , A netconnection , A registered account with a broker and a demataccount
Select The BlankQuestion A significant portion of the investment through the participatory
notes is managed by ________ entities.Correct Answer 114
Your Answer 135
Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?
Correct Answer Credit rating , Maturity more than 18 months appoint debenturetrustee , Debenture redemption reserve to be created
Your Answer Credit rating , Maturity more than 18 months appoint debenturetrustee , Debenture redemption reserve to be created
Select The BlankQuestion Hire Purchase transactions are liable to ________.
Correct Answer Sales tax
Your Answer Sales tax
Multiple Choice Multiple AnswerQuestion What are the features of a Certificate of deposit?
Correct Answer It is a document title to a time deposit , Freely negotiable andmarketable , Can be issued only by commercial banks
Your Answer It is a document title to a time deposit , Freely negotiable andmarketable , Can be issued only by commercial banks
Select The BlankQuestion ________ is in the form of a usance promissory note payable
after 45 days from the date of issue.Correct Answer Certificate of Deposit
Your Answer Certificate of Deposit
Multiple Choice Single AnswerQuestion Who was the first to introduce rolling settlement in India?
Correct Answer NSE
Your Answer NSDL
Multiple Choice Single AnswerQuestion In the wake of boom of which sector the Indian mutual fund
launched various sector specific schemes?Correct Answer Software
Your Answer Software
Multiple Choice Single AnswerQuestion What is the most important objective for an investor?
Correct Answer Protection of the value of the investment
Your Answer Profit maximization
CAPITAL MARKET -AMITA
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?Correct Answer Securities Contract Regulation ActYour Answer Securities Contract Regulation Act
Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?Correct Answer A net connection , A registered account with a broker and a demat
account , Bank payment gateway or online banking facility
Your Answer A registered account with a broker and a demat account , Bank paymentgateway or online banking facility , A net connection
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
True/FalseQuestion Sweat equity shares are shares issued by company to employees or directors
to discount.Correct Answer TrueYour Answer True
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and
commercial paper.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under various SEBI regulations how many brokers suspended?Correct Answer 8Your Answer 8
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till
approval of trustees and offer document has been filed with the board , With each offerdocument pay filing fees , Offer document to contain disclosures
Your Answer With each offer document pay filing fees , Offer document to containdisclosures
Match The FollowingQuestion Correct Answer Your Answer
Charge card Form of plastic money Member establishment
Warning Bulletin Authenticity test Authenticity test
Credit information company SBI, HDFC bank SBI, HDFC bank
Credit card issuing company Visa/Master Card Visa/Master Card
Multiple Choice Single Answer
Question Who forms the Asset management company (AMC)?Correct Answer Group of trusteesYour Answer Group of trustees
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate
account to be maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion Under which regulation is reporting mandatory in respect of acquisitions
arising out of firm allot meant in public issues and rights issues etc?Correct Answer Regulation (3) 4Your Answer Regulation (3) 4
True/FalseQuestion Book building is a process whereby the price is determined on the basis of
actual demand as evident from the offers given by the various institutional investors andunderwriters.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The Money market mutual funds (MMMFs) can invest the funds in which of
these securities?Correct Answer Call/notice moneyYour Answer Call/notice money
Multiple Choice Multiple AnswerQuestion What is the information to be placed before the board of directors as per the
Kumarmangalam report?Correct Answer Annual operating plans , Capital budgets , Quarterly resultsYour Answer Annual operating plans , Capital budgets , Quarterly results
True/FalseQuestion Bidder cannot revise his bids.Correct Answer FalseYour Answer True
Multiple Choice Multiple Answer
Question What are ESOP's ?Correct Answer One of the methods of giving part ownership of the company to the
employees , Employees can take part in the prosperity of the company , Is a reward andlinked with the increase in the prices of the shares
Your Answer Is a reward and linked with the increase in the prices of the shares , Oneof the methods of giving part ownership of the company to the employees , Employeescan take part in the prosperity of the company
Match The FollowingQuestion Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Should effectivelyparticipate in general body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders anddebenture holders Look into defaults to depositors creditors shareholders and debentureholders
Reasons of failures of corporate governance in spite of norms Superficial commitment tovision, mission and values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision makingprocess Assisting the board in decision making process
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by
NRI , OCB controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI ,
OCB controlled by Indians promoters
Select The BlankQuestion While structuring the deal the entrepreneur seeks ________.Correct Answer Voting controlYour Answer Goodwill
True/FalseQuestion DRR is treated as part of general reserve for consideration of bonus issue of
proposals.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?
Correct Answer Sound General knowledge , Analytical ability and marketing skills ,Experience
Your Answer Sound General knowledge , Analytical ability and marketing skills ,Experience
Multiple Choice Multiple AnswerQuestion What precautions are to be taken with respect to delivery instruction slip ?Correct Answer DIS numbers are pre printed , Account number to be stamped ,
Investor should fill in target account idYour Answer DIS numbers are pre printed , Account number to be stamped , Investor
should fill in target account id
True/FalseQuestion Reliance group has added over 10000 crores in market capital.Correct Answer TrueYour Answer False
Select The BlankQuestion An acquirer who holds 15% or more but less than 75% of voting' rights can
acquire such additional shares as would entitle him to exercise more than ________ ofvoting rights in an financial year.
Correct Answer 0.05Your Answer 0.2
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer FITSCH
Select The BlankQuestion The appointment of a ________ is mandatory in a offer process.Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public
issue as regards to its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate
account to be maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion To make a public announcement the acquirer has to appoint :-Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is a more contemporary definition of corporate governance?Correct Answer Corporate Governance is all about promoting corporate fairness,
transparency and accountabilityYour Answer Corporate Governance is all about promoting corporate fairness,
transparency and accountability
Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in
compliance of SEBI regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock exchanges
at least 4 days before the date , Any person holding more than 15% but less than 75%voting rights shall be disclosed with 2 days , Annual disclosures
Your Answer Any person holding more than 15% but less than 75% voting rights shallbe disclosed with 2 days
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Select The BlankQuestion The merger of GTB and UTI was called off due to intervention of ________Correct Answer SEBI and RBIYour Answer SEBI and RBI
Select The BlankQuestion The Merchant banker will incorporate in the letter of offer the comments
made by SEBI and then send within ________ days from the date of PA to allshareholders whose names appear in the register of the company.
Correct Answer 45Your Answer 45
Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?Correct Answer Statutory approvals refused , Sole acquirer being person died ,
Circumstances as in opinion of boardYour Answer Statutory approvals refused , Sole acquirer being person died ,
Circumstances as in opinion of board
True/False
Question The public cannot give their complaints or comments on the issuer companyor others connected with the issue to SEBI.
Correct Answer FalseYour Answer False
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer No stamp duty , Reduction in paperless work , Reduction in
transaction costYour Answer Reduction in paperless work , Reduction in transaction cost , Holds
funds in an account
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the
depository , Maintain the investor's holdings in an electronic form , Effect settlement ofsecurities traded on exchanges
Your Answer Enable surrender and withdrawal of securities to and from the depository, Maintain the investor's holdings in an electronic form , Effect settlement of securitiestraded on exchanges
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large
corporates to issue certificate of deposits.Correct Answer FalseYour Answer True
Select The BlankQuestion Directors should not be member of more than________ committees.Correct Answer 10Your Answer 10
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities
separately for each client.Correct Answer FalseYour Answer False
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his client.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion What is a call option?Correct Answer Right to buyYour Answer Right to buy
Select The BlankQuestion For an approval of HFC one of the norms is that the promoter's contribution has to be minimum
________ of paid up capital.Correct Answer 0.3Your Answer 0.3
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion What is the time frame stipulated by SEBI for members intending to avail of the buy back
offer?Correct Answer Minimum 15 days and not exceeding 30 daysYour Answer Minimum 15 days and not exceeding 30 days
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promotersYour Answer Ensure participatory notes not misused by NRI , OCB controlled by Indians promoters ,
Issue participatory notes by FII to non regulated entities
Multiple Choice Single AnswerQuestion What is government's move towards Stock Exchanges ?Correct Answer DemutulisationYour Answer Demutulisation
Multiple Choice Single AnswerQuestion What is the main objective of credit appraisal ?Correct Answer Assess the repayment capacityYour Answer Assess the installment being paid
Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies by NHB?Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of auditorsYour Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of auditors
True/FalseQuestion A bidder can request for a transaction registration slip as the proof of his having entered the
bid.
Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What are the major factors influencing portfolio decisions?Correct Answer Investment and interest rate risk , Investor characteristics , Liquidity needs and tax
considerationsYour Answer Investor characteristics , Liquidity needs and tax considerations , Investment and interest
rate risk
True/FalseQuestion Acquisition finance, which provide funding for acquiring another company are often closely
held or fairly owned.Correct Answer TrueYour Answer True
Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any litigation connected with ________.Correct Answer Securities marketsYour Answer Securities markets
Select The BlankQuestion In February 2004, UTI sought permission of SEBI to prematurely close ________ schemes.Correct Answer 7Your Answer 8
True/FalseQuestion At the inception of the hire purchases transaction the finance company records the hire
purchase installment receivable as current asset.Correct Answer TrueYour Answer True
Select The BlankQuestion The company intending to buy back their shares must open a ________ account as per SEBI
regulations.Correct Answer EscrowYour Answer Escrow
Match The FollowingQuestion Correct Answer Your Answer
Rs. 8000 crores Current shortfall in UTI schemes Current shortfall in UTI schemes
0.1 Government decided to pay dividend Government decided to pay dividend
0.15 MF cannot invest as percentage of NAV in debt instrument issued by single issuer MF cannot investas percentage of NAV in debt instrument issued by single issuer
Annual statement of accounts of MF To be audited by auditor To be audited by auditor
Select The BlankQuestion The right to buy is called ________.Correct Answer Call optionYour Answer Call option
True/FalseQuestion The buy back of shares by Indian corporates has been very successful in India.Correct Answer FalseYour Answer True
True/FalseQuestion In order to dematerialize the securities one has to fill DRF.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint debenture trustee , Debenture
redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint debenture trustee , Debenture
redemption reserve to be created
Multiple Choice Single AnswerQuestion Since when have the Indian Stock markets risen ?Correct Answer 37775Your Answer 38200
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer True
Select The BlankQuestion The VCs to flourish requires a well developed ________.Correct Answer Capital marketYour Answer Capital market
Match The FollowingQuestion Correct Answer Your Answer
Rematerialisation RRF RRF
NSE Settlement cycle T + 3 Settlement cycle T + 3
RBI Gilt securities mobilization Gilt securities mobilization
Non corporate benefit Bonus Bonus
Select The BlankQuestion In 2001 a case of rigging and short selling based insider trading was noticed in the case of
proposed merger of ________.Correct Answer UTI Bank with GTBYour Answer UTI Bank with GTB
Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer Reduction in paperless work , Reduction in transaction cost , No stamp dutyYour Answer No stamp duty , Reduction in paperless work , Reduction in transaction cost
Select The Blank
Question For issues upto Rs. 50 crores the number of lead managers will not exceed ________.Correct Answer 2Your Answer 2
Multiple Choice Single AnswerQuestion How is a share buy back a useful mechanism in preventing hostile takeovers?Correct Answer Share buyback reduces the floating stock in the market thereby reducing the scope for a
raider to acquire enough stock to gain management control.Your Answer Share buyback reduces the floating stock in the market thereby reducing the scope for a
raider to acquire enough stock to gain management control.
Multiple Choice Multiple AnswerQuestion To open a DP account, following things are required :-Correct Answer Proof of identity , Proof of address , PhotographYour Answer Proof of identity , Proof of address , Photograph
Multiple Choice Single AnswerQuestion What is the objective of a credit information company?Correct Answer To ascertain the credit worthiness of individuals/organizations and make the data
available to all banksYour Answer To ascertain the credit worthiness of individuals/organizations and make the data available
to all banks
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills , Experience
True/FalseQuestion Mutual funds can do investments in any security issued by way of private placement by an
associate or group company of the sponsor.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in compliance of SEBI
regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock exchanges at least 4 days
before the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days , Annual disclosures
Your Answer Details of proposed acquisition need to be filed with Stock exchanges at least 4 daysbefore the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days , Annual disclosures
True/FalseQuestion Book building is a process whereby the price is determined on the basis of actual demand as
evident from the offers given by the various institutional investors and underwriters.Correct Answer TrueYour Answer True
True/False
Question Transactions that involve substantial payment towards goodwill, brand equity or intellectualproperty must be placed before the board of directors as per the recommendations of the KumarmangalamBirla report.
Correct Answer TrueYour Answer True
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Multiple AnswerQuestion Which acts were amended to remove some of the hurdles to corporatisation and
demutualisation of stock exchanges?Correct Answer SCRA , Depository ActYour Answer SCRA
Multiple Choice Multiple AnswerQuestion What are the stages in the process of book building broadly divided into?Correct Answer Syndicate formation , Issue processYour Answer Syndicate formation , Issue process
Multiple Choice Multiple AnswerQuestion What are the eligibility norms for an unlisted company for making a public issue?Correct Answer Pre issue net worth not less than 1 crores in the last 3 years , Track record of
distributable profits for at least 3 years , Issue size shall not exceed five times of its pre issue net worthYour Answer Pre issue net worth not less than 1 crores in the last 3 years , Track record of distributable
profits for at least 3 years , Issue size shall not exceed five times of its pre issue net worth
Multiple Choice Single AnswerQuestion What is the most common complaint of the investors?Correct Answer Non receipt of refund orders and allotment adviseYour Answer Non receipt of refund orders and allotment advise
Multiple Choice Single AnswerQuestion What is a more contemporary definition of corporate governance?Correct Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountabilityYour Answer To conduct business in accordance with the shareholders interest while conforming to the
local laws and customs
Multiple Choice Multiple AnswerQuestion What are the eligibility norms for a listed company for making a public issue?Correct Answer If the issue size is less than five times pre issue net worth , If the issue size is more than
or equal to five times pre issue networth then the listed company to take book building route , 60% of issuesize to be allotted to QIB's
Your Answer If the issue size is less than five times pre issue net worth , If the issue size is more than orequal to five times pre issue networth then the listed company to take book building route , 60% of issuesize to be allotted to QIB's
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public issue as regards to
its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
Multiple Choice Single AnswerQuestion What is the underwriter paid ?Correct Answer CommissionYour Answer Commission
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer Crisil
True/FalseQuestion The acquirer is required to appoint a merchant banker before making a PA.Correct Answer TrueYour Answer True
Select The BlankQuestion Hire Purchase transactions are liable to ________.Correct Answer Sales taxYour Answer Sales tax
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills , Experience
Multiple Choice Single AnswerQuestion What is Discretionary Portfolio management service ?Correct Answer Client gives his money for investment to the portfolio manager and leaves it to
him to make all the investment decisions.Your Answer Client gives his money for investment to the portfolio manager and leaves it to
him to make all the investment decisions.
True/FalseQuestion Depositary facilitates transfers without having to handle money.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what amount is expected to
be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores
Multiple Choice Multiple AnswerQuestion The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number of investors who
have common financial goal , Issue units to investor which represent right in assets , Investmentsin mutual funds may be in the form of stock, bond, money market securities
Your Answer A trust that pools in savings and funds from large number of investors who havecommon financial goal , Issue units to investor which represent right in assets , Investments inmutual funds may be in the form of stock, bond, money market securities
True/FalseQuestion If the credit rating is obtained from two different agencies in case of issue of debt
instruments, all the ratings need not be disclosed in the document.Correct Answer FalseYour Answer True
Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any litigation connected with
________.Correct Answer Securities marketsYour Answer Clients
Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?Correct Answer Knowledge and information about various aspects of capital markets , Ability to
evaluate and analyze , Update the knowledgeYour Answer Knowledge and information about various aspects of capital markets , Ability to
evaluate and analyze , Update the knowledge
Multiple Choice Multiple AnswerQuestion Describe the stock lending mechanism:-Correct Answer Involves two parties one who is willing to lend and other who wishes to borrow
securities at market related rates , Lender is assured of getting equivalent the relevant securitiesby NSSCL on the settlement date , Lender gets benefit of reasonable return called lending fee
Your Answer Involves two parties one who is willing to lend and other who wishes to borrowsecurities at market related rates , Lender gets benefit of reasonable return called lending fee
Multiple Choice Multiple AnswerQuestion What are the limitations of refinance facility?Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds of HFC's
, Not to exceed 15 % of NOF of NHBYour Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds of HFC's ,
Not to exceed 15 % of NOF of NHB
Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what period from the date
of passing the resolution?Correct Answer 12 monthsYour Answer 12 months
Match The FollowingQuestion Correct Answer Your Answer
10 HDFC foreign currency deal Global investors pumping funds in India Specific Funds
0.57 FII current free float sensex company FII free float stock NIFTY companies
0.45 FII free float stock NIFTY companies FII's total free float sex and NIFTY
$ 476 mn Global investors pumping funds in India Specific Funds HDFC foreign currency deal
Multiple Choice Single AnswerQuestion When did the trading in foreign currency options start in India?Correct Answer 37809Your Answer 37829
Multiple Choice Single AnswerQuestion What is the main objective of credit appraisal ?Correct Answer Assess the repayment capacityYour Answer Assess the age of the person borrowing
True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their trustees and asset
management companies.Correct Answer FalseYour Answer False
Select The BlankQuestion In the L & T reliance case, Reliance was fined ________.Correct Answer Rs. 5 lacsYour Answer Rs. 5 lacs
Select The BlankQuestion Recently many banks have started issuing ________ which could also be used as a
debit card.Correct Answer ATM cardYour Answer ATM card
Select The BlankQuestion A ________ means any persons connected with a company and who is reasonably
having access to unpublished price sensitive information.Correct Answer InsiderYour Answer Insider
Select The BlankQuestion SENSEX is calculated using ________ method.Correct Answer Market capitalizationYour Answer Weighted
Match The FollowingQuestion Correct Answer Your Answer
Share buy back is a way of Returning surplus cash to the shareholders Returning surplus cash tothe shareholders
Dutch Auction Price of the Buy back is done by the shareholders Price of the Buy back is done bythe shareholders
Open market purchases No minimum price stipulation No minimum price stipulation
Companies holding more than 90% equity Can be delisted Can be delisted
True/FalseQuestion The public cannot give their complaints or comments on the issuer company or
others connected with the issue to SEBI.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities separately for
each client.Correct Answer FalseYour Answer True
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large corporates to
issue certificate of deposits.Correct Answer FalseYour Answer True
True/FalseQuestion Book building is a process whereby the price is determined on the basis of actual
demand as evident from the offers given by the various institutional investors and underwriters.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What is the system of rolling settlement prevalent in the USA ?Correct Answer Transaction + 3Your Answer Transaction + 3
Multiple Choice Single AnswerQuestion What is the most important objective for an investor?Correct Answer Protection of the value of the investmentYour Answer Profit maximization
Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's issued by RBI :-Correct Answer All the NBFC's must register with RBI , Without the registration certificate no
company can undertake activities of NBFC , All companies must be liquid assets equal to 15% ofdeposits
Your Answer All the NBFC's must register with RBI , Without the registration certificate nocompany can undertake activities of NBFC , All companies must be liquid assets equal to 15% ofdeposits
Multiple Choice Single AnswerQuestion What do you mean by venture capital?Correct Answer Providing seed, start up capital and first stage financingYour Answer Providing seed, start up capital and first stage financing
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Opening of Indian Capital Markets to FII's
Select The Blank
Question The continuing growth in ________ was one of the factors that contributed to thegrowth of credit rating.
Correct Answer Information technologyYour Answer Information technology
Select The BlankQuestion In case of a public issue by a listed company participation by promoters in the
proposed issues in excess of the required minimum percentage shall also be looked in for aperiod of ________.
Correct Answer 1 yearYour Answer 3 years
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his client.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring , Communication through the
net , Operate in stock market privately through home or officeYour Answer Screen based trading in place of traditional ring , Communication through the net
, Operate in stock market privately through home or office
Select The BlankQuestion The Kumarmangalam Birla report stressed on the importance of ________ with
respect to AGM's.Correct Answer Proxy voting / ballot systemsYour Answer Proxy voting / ballot systems
True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities purchased under the
buy back arrangement to be extinguished and physically destroyed.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint debenture trustee ,
Debenture redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint debenture trustee ,
Debenture redemption reserve to be created
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity , Must disclose
investment strategyYour Answer VCF's must be registered , Cannot carry out another activity , Must disclose
investment strategy
Multiple Choice Single Answer
Question What is the minimum number of days for which the bid should remain open in bookbuilding?
Correct Answer 5 daysYour Answer 7 days
Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many times of the net
owned funds?Correct Answer 4 timesYour Answer 4 times
Select The BlankQuestion With the introduction of ________ accounts the complaints about allotment have
surely gone down.Correct Answer DEMATYour Answer DEMAT
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion Information technology, communication and entertainment represent ________
stocks.Correct Answer ICEYour Answer ICE
True/FalseQuestion The public cannot give their complaints or comments on the issuer company or
others connected with the issue to SEBI.Correct Answer FalseYour Answer True
True/FalseQuestion In order to dematerialize the securities one has to fill DRF.Correct Answer TrueYour Answer True
Select The BlankQuestion In case of an IPO of any security of issue size of Rs________ or more security shall
be issued only in demat form.Correct Answer 10 croresYour Answer 10 crores
Multiple Choice Multiple AnswerQuestion What are the obligations of a company in a share buy back?Correct Answer The offer letter should contain true, factual and material information and should
not be misleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of the closureof the offer.
Your Answer The offer letter should contain true, factual and material information and shouldnot be misleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of the closureof the offer.
Select The BlankQuestion The DP opens investor account in the system and gives an account number also
known as ________.
Correct Answer BO IDYour Answer BO ID
Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many times of the net
owned funds?Correct Answer 4 timesYour Answer 4 times
Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Degree of popularity of the industry , Overall economic condition , Demand
and supply capitalYour Answer Overall economic condition , Demand and supply capital , Degree of popularity of
the industry
Match The FollowingQuestion Correct Answer Your Answer
Portfolio Collection of assets Collection of assets
Factors influencing portfolio decisions Business and Market risks Business and Market risks
Code of conduct- Portfolio Manager Observe high standard of integrity and fairness Observe highstandard of integrity and fairness
SEBI Regulations Portfolio Manager must fulfill the capital adequacy norms To make timelydecision regarding sale and purchase of securities
Multiple Choice Multiple AnswerQuestion What are the major factors influencing portfolio decisions?Correct Answer Investor characteristics , Liquidity needs and tax considerations , Investment
and interest rate riskYour Answer Investor characteristics , Liquidity needs and tax considerations , Investment and
interest rate risk
Multiple Choice Single AnswerQuestion The refinance made available to any HFC is not to be more than :-Correct Answer 60% of its outstanding housing loansYour Answer 60% of its outstanding housing loans
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion Information technology, communication and entertainment represent
________ stocks.Correct Answer ICEYour Answer ICE
True/FalseQuestion The public cannot give their complaints or comments on the issuer
company or others connected with the issue to SEBI.
Correct Answer FalseYour Answer True
Select The BlankQuestion The right to buy is called ________.Correct Answer Call optionYour Answer Call option
Multiple Choice Single AnswerQuestion What percentage of funds should be invested in unlisted companies?Correct Answer 0.74Your Answer 0.74
Multiple Choice Single AnswerQuestion Who is responsible to get the securities listed on all the stock
exchanges?Correct Answer Merchant bankerYour Answer SEBI
Select The BlankQuestion A mutual fund scheme shall not invest more than ________ of its
NAV in unrated debt by a single issuer.Correct Answer 0.1Your Answer 0.1
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital
market?Correct Answer US$14 bnYour Answer US$14 bn
True/FalseQuestion The depository can legally transfer beneficial ownership.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Since when have the Indian Stock markets risen ?Correct Answer 37775Your Answer 38200
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any
scheme till approval of trustees and offer document has been filed with the board, With each offer document pay filing fees , Offer document to contain disclosures
Your Answer The Asset management company shall not launch any schemetill approval of trustees and offer document has been filed with the board , Witheach offer document pay filing fees , Offer document to contain disclosures
Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer Must disclose investment strategy , VCF's must be registered ,
Cannot carry out another activityYour Answer VCF's must be registered , Cannot carry out another activity ,
Must disclose investment strategy
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury
bills and commercial paper.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion When can the American style option exercised?Correct Answer On or before the expiry dateYour Answer On or before the expiry date
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his client.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion What is the estimated figure of credit card defaults in India?Correct Answer 800 croresYour Answer 800 crores
True/FalseQuestion Depositary facilitates transfers without having to handle money.Correct Answer FalseYour Answer False
Select The BlankQuestion AA rated companies can raise ________ of its net worth.Correct Answer 2.5 timesYour Answer 2 times
Multiple Choice Multiple AnswerQuestion Describe E-trading :-
Correct Answer Screen based trading in place of traditional ring ,Communication through the net , Operate in stock market privately through homeor office
Your Answer Screen based trading in place of traditional ring , Communicationthrough the net , Operate in stock market privately through home or office
Multiple Choice Multiple AnswerQuestion What are the eligibility norms for an unlisted company for making a
public issue?Correct Answer Pre issue net worth not less than 1 crores in the last 3 years ,
Track record of distributable profits for at least 3 years , Issue size shall notexceed five times of its pre issue net worth
Your Answer Issue size shall not exceed five times of its pre issue net worth ,Pre issue net worth not less than 1 crores in the last 3 years , Track record ofdistributable profits for at least 3 years
Select The BlankQuestion Markets have moved away from Badla system to ________ .Correct Answer Derivatives TradingYour Answer Derivatives Trading
Multiple Choice Multiple AnswerQuestion During the budget 2003 - 04, Finance Minister made some
announcements which he hopes will make investors think in terms of returning tostock market :-
Correct Answer No capital gains tax on investment made in equity after 1/3/03held for 1 year , Removal of income tax on dividends in the hands of receiver
Your Answer No capital gains tax on investment made in equity after 1/3/03held for 1 year , Removal of income tax on dividends in the hands of receiver ,Investors income tax on dividend reduced to 12.5%
Multiple Choice Single AnswerQuestion How many members are appointed by the central government?Correct Answer 2Your Answer 2
Multiple Choice Multiple AnswerQuestion Which acts were amended to remove some of the hurdles to
corporatisation and demutualisation of stock exchanges?Correct Answer SCRA , Depository ActYour Answer SCRA , Depository Act
Match The FollowingQuestion Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Shouldeffectively participate in general body meetings
Objective of Audit committee Look into defaults to depositors creditorsshareholders and debenture holders Look into defaults to depositors creditorsshareholders and debenture holders
Reasons of failures of corporate governance in spite of norms Superficialcommitment to vision, mission and values Superficial commitment to vision,mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decisionmaking process Decision making
Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20 000
crores?Correct Answer Infosys , Satyam , WiproYour Answer Infosys , Satyam , Wipro
Multiple Choice Multiple AnswerQuestion What does SEBI do with its power ?Correct Answer Cancel certificate issued to custodian , Inspect books of DP ,
issuers or beneficiary owners , Investigate an acquirerYour Answer Cancel certificate issued to custodian , Inspect books of DP ,
issuers or beneficiary owners , Investigate an acquirer
True/FalseQuestion Amendment to SCRA will facilitate derivatives trading in interest rate
futures and options if there is an underlying asset.Correct Answer TrueYour Answer True
True/FalseQuestion In order to dematerialize the securities one has to fill DRF.Correct Answer TrueYour Answer True
Select The BlankQuestion In case of an IPO of any security of issue size of Rs________ or
more security shall be issued only in demat form.Correct Answer 10 croresYour Answer 10 crores
Multiple Choice Multiple Answer
Question What are the obligations of a company in a share buy back?Correct Answer The offer letter should contain true, factual and material
information and should not be misleading. , The company must pay theconsideration only by the way of cash , The company should not issue any freshsecurities including bonus shares till the date of the closure of the offer.
Your Answer The offer letter should contain true, factual and materialinformation and should not be misleading. , The company must pay theconsideration only by the way of cash , The company should not issue any freshsecurities including bonus shares till the date of the closure of the offer.
Select The BlankQuestion The DP opens investor account in the system and gives an account
number also known as ________.Correct Answer BO IDYour Answer BO ID
Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how
many times of the net owned funds?Correct Answer 4 timesYour Answer 4 times
Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Overall economic condition , Demand and supply capital ,
Degree of popularity of the industryYour Answer Overall economic condition , Demand and supply capital ,
Degree of popularity of the industry
Match The FollowingQuestion Correct Answer Your Answer
Portfolio Collection of assets Collection of assets
Factors influencing portfolio decisions Business and Market risks Business andMarket risks
Code of conduct- Portfolio Manager Observe high standard of integrity andfairness Observe high standard of integrity and fairness
SEBI Regulations Portfolio Manager must fulfill the capital adequacy norms Tomake timely decision regarding sale and purchase of securities
Multiple Choice Multiple AnswerQuestion What are the major factors influencing portfolio decisions?
Correct Answer Investor characteristics , Liquidity needs and taxconsiderations , Investment and interest rate risk
Your Answer Investor characteristics , Liquidity needs and tax considerations ,Investment and interest rate risk
Multiple Choice Single AnswerQuestion The refinance made available to any HFC is not to be more than :-Correct Answer 60% of its outstanding housing loansYour Answer 60% of its outstanding housing loans
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and
large corporates to issue certificate of deposits.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term
instrumentsYour Answer Market for long term funds and investments in long term
instruments
Multiple Choice Multiple AnswerQuestion What is dematerialization ?Correct Answer Physical certificates converted into electronic from , Credited
into investors account with his/ her DPYour Answer Physical certificates converted into electronic from , Credited into
investors account with his/ her DP , Selling shares
Select The BlankQuestion ________ is in the form of a usance promissory note payable after
45 days from the date of issue.Correct Answer Certificate of DepositYour Answer Certificate of Deposit
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in
India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion What is the amount of net worth accompany should have for opting
for an IPO ?Correct Answer 1 CroreYour Answer 1 Crore
Select The BlankQuestion The process of securitisation involves transfer of assets to a person
specially created called as ________.Correct Answer Special purpose vehicleYour Answer Special purpose vehicle
True/FalseQuestion A mutual fund shall not invest more than 10% of is NAV in equity
shares in cases of open ended schemes.Correct Answer TrueYour Answer False
Multiple Choice Single AnswerQuestion What is a put option?Correct Answer Right to sellYour Answer Right to sell
True/FalseQuestion Venture capital finance is risk finance for entrepreneurial growth
oriented companies.Correct Answer TrueYour Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Who can change the composition of securities?Correct Answer Fund managerYour Answer Fund manager
True/FalseQuestion Employee stock option scheme granted to the employee is
transferable.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's
issued by RBI :-
Correct Answer Without the registration certificate no company can undertakeactivities of NBFC , All companies must be liquid assets equal to 15% of deposits, All the NBFC's must register with RBI
Your Answer All the NBFC's must register with RBI , Without the registrationcertificate no company can undertake activities of NBFC , All companies must beliquid assets equal to 15% of deposits
True/FalseQuestion Transactions that involve substantial payment towards goodwill,
brand equity or intellectual property must be placed before the board of directorsas per the recommendations of the Kumarmangalam Birla report.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Deposits can be accepted for a maximum period of :-Correct Answer 5 yearsYour Answer 10 years
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in
India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Single AnswerQuestion Since when have the Indian Stock markets risen ?Correct Answer 37775Your Answer 37775
Multiple Choice Single AnswerQuestion In the wake of boom of which sector the Indian mutual fund launched
various sector specific schemes?Correct Answer SoftwareYour Answer Software
Select The BlankQuestion In 2001 a case of rigging and short selling based insider trading was
noticed in the case of proposed merger of ________.Correct Answer UTI Bank with GTBYour Answer OBC with GTB
Select The BlankQuestion ________ are a kind of portfolio schemes.Correct Answer Mutual fundsYour Answer Mutual funds
Select The BlankQuestion ________ are a kind of portfolio schemes.Correct Answer Mutual fundsYour Answer Mutual funds
Multiple Choice Single AnswerQuestion What is equipment leasing ?Correct Answer Contractual agreement where the lessor of equipment
transfers the right to use the equipment to the lesseeYour Answer Contractual agreement where the lessor of equipment transfers
the right to use the equipment to the lessee
Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Overall economic condition , Demand and supply capital ,
Degree of popularity of the industryYour Answer Overall economic condition , Demand and supply capital ,
Degree of popularity of the industry
True/FalseQuestion Mergers and amalgamations of companies are also covered under
the SEBI regulations 1997.Correct Answer FalseYour Answer False
Select The BlankQuestion No mutual fund under all its schemes should own more than
________ of any company's paid up capital carrying voting rights.Correct Answer 0.1Your Answer 0.3
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing
skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills
, Experience
Multiple Choice Multiple AnswerQuestion Describe E-trading :-
Correct Answer Screen based trading in place of traditional ring ,Communication through the net , Operate in stock market privately through homeor office
Your Answer Screen based trading in place of traditional ring , Communicationthrough the net , Operate in stock market privately through home or office
Multiple Choice Single AnswerQuestion If the unlisted company does not satisfy the criteria of net worth
profitability and issue size how can it come out with a public issue?Correct Answer Through book building processYour Answer Through book building process
Multiple Choice Single AnswerQuestion Which is the favorite destination for venture funds?Correct Answer BPOYour Answer BPO
Multiple Choice Multiple AnswerQuestion Who issues participatory notes?Correct Answer Associates of India based foreign brokerages , Domestic
institutional brokeragesYour Answer Associates of India based foreign brokerages , Domestic
institutional brokerages
Multiple Choice Single AnswerQuestion For a VCF to be registered with SEBI what is the registration fee ?Correct Answer 5 lacsYour Answer 5 lacs
Match The FollowingQuestion Correct Answer Your Answer
Ready forward transaction (Repo) Interbank sale and repurchase of securitiesInterbank sale and repurchase of securities
Commercial paper Means of raising short term debt by companies Means ofraising short term debt by companies
STCI Operations in call money markets Operations in call money markets
Market stabilsation Bonds Launched in fiscal 2004-05 Launched in fiscal 2004-05
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury
bills and commercial paper.
Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies by
NHB?Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any
appointment of auditorsYour Answer Minimum paid up capital 1 crore , At least 2 directors , Any
appointment of auditors
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer False
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any
scheme till approval of trustees and offer document has been filed with the board, With each offer document pay filing fees , Offer document to contain disclosures
Your Answer The Asset management company shall not launch any schemetill approval of trustees and offer document has been filed with the board , Witheach offer document pay filing fees , Offer document to contain disclosures
Multiple Choice Single AnswerQuestion What is the limit for aggregate investment of FII's NRI's and OCB's?Correct Answer 0.3Your Answer 0.25
True/FalseQuestion Acquisition finance, which provide funding for acquiring another
company are often closely held or fairly owned.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what
amount is expected to be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores
Select The BlankQuestion The acquirer is required to make the PA within ________ working
days of entering into an agreement to acquire shares or deciding to acquireshare's voting rights of target company.
Correct Answer 4Your Answer 4
Multiple Choice Single AnswerQuestion What is the objective of public announcement?Correct Answer Ensure that the shareholders of the target company are aware
of the exit opportunity available to themYour Answer Ensure that the shareholders of the target company are aware of
the exit opportunity available to them
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his client.Correct Answer FalseYour Answer False
True/FalseQuestion If the credit rating is obtained from two different agencies in case of
issue of debt instruments, all the ratings need not be disclosed in the document.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerLIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Who can change the composition of securities?Correct Answer Fund managerYour Answer Fund manager
True/FalseQuestion Employee stock option scheme granted to the employee is
transferable.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's
issued by RBI :-Correct Answer All the NBFC's must register with RBI , Without the registration
certificate no company can undertake activities of NBFC , All companies must beliquid assets equal to 15% of deposits
Your Answer All the NBFC's must register with RBI , Without the registrationcertificate no company can undertake activities of NBFC , All companies must beliquid assets equal to 15% of deposits
True/False
Question Transactions that involve substantial payment towards goodwill,brand equity or intellectual property must be placed before the board of directorsas per the recommendations of the Kumarmangalam Birla report.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Deposits can be accepted for a maximum period of :-Correct Answer 5 yearsYour Answer 10 years
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in
India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Single AnswerQuestion Since when have the Indian Stock markets risen ?Correct Answer 37775Your Answer 37775
Multiple Choice Single AnswerQuestion In the wake of boom of which sector the Indian mutual fund launched
various sector specific schemes?Correct Answer SoftwareYour Answer Software
Select The BlankQuestion In 2001 a case of rigging and short selling based insider trading was
noticed in the case of proposed merger of ________.Correct Answer UTI Bank with GTBYour Answer OBC with GTB
Select The BlankQuestion ________ are a kind of portfolio schemes.Correct Answer Mutual fundsYour Answer Mutual funds
Select The BlankQuestion ________ are a kind of portfolio schemes.
Correct Answer Mutual fundsYour Answer Mutual funds
Multiple Choice Single AnswerQuestion What is equipment leasing ?Correct Answer Contractual agreement where the lessor of equipment
transfers the right to use the equipment to the lesseeYour Answer Contractual agreement where the lessor of equipment transfers
the right to use the equipment to the lessee
Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Overall economic condition , Demand and supply capital ,
Degree of popularity of the industryYour Answer Overall economic condition , Demand and supply capital ,
Degree of popularity of the industry
True/FalseQuestion Mergers and amalgamations of companies are also covered under
the SEBI regulations 1997.Correct Answer FalseYour Answer False
Select The BlankQuestion The DP opens investor account in the system and gives an account
number also known as ________.Correct Answer BO IDYour Answer BO ID
True/FalseQuestion Constant change would be one of the reasons for failure of corporate
governance.Correct Answer TrueYour Answer False
Select The BlankQuestion In case of an IPO of any security of issue size of Rs________ or
more security shall be issued only in demat form.Correct Answer 10 croresYour Answer 10 crores
True/FalseQuestion The company opting for an IPO should have net worth of at least Rs
1 crore in each of the preceding two years.Correct Answer TrueYour Answer False
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the
depository , Maintain the investor's holdings in an electronic form , Effectsettlement of securities traded on exchanges
Your Answer Enable surrender and withdrawal of securities to and from thedepository , Maintain the investor's holdings in an electronic form , Effectsettlement of securities traded on exchanges
Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity ,
Must disclose investment strategyYour Answer VCF's must be registered , Cannot carry out another activity ,
Must disclose investment strategy
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term
instrumentsYour Answer Market for long term funds and investments in long term
instruments
Match The FollowingQuestion Correct Answer Your Answer
Castrol FY 2003 - 03 Dividend Rs145 crores FY 2003 - 03 Dividend Rs145crores
MS Verma committee Dual Flotation Dual Flotation
Hero Honda FY 2003 - 03 Dividend Rs187 crores FY 2003 - 03 Dividend Rs187crores
VSNL FY 2003 - 03 Dividend Rs172 crores FY 2003 - 03 Dividend Rs172 crores
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital
market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion When did the trading in foreign currency options start in India?
Correct Answer 37809Your Answer 37829
Multiple Choice Multiple AnswerQuestion What is dematerialization ?Correct Answer Credited into investors account with his/ her DP , Physical
certificates converted into electronic fromYour Answer Physical certificates converted into electronic from , Credited into
investors account with his/ her DP
Select The BlankQuestion No mutual fund under all its schemes should own more than
________ of any company's paid up capital carrying voting rights.Correct Answer 0.1Your Answer 0.3
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing
skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills
, Experience
Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring ,
Communication through the net , Operate in stock market privately through homeor office
Your Answer Screen based trading in place of traditional ring , Communicationthrough the net , Operate in stock market privately through home or office
Multiple Choice Single AnswerQuestion If the unlisted company does not satisfy the criteria of net worth
profitability and issue size how can it come out with a public issue?Correct Answer Through book building processYour Answer Through book building process
Multiple Choice Single AnswerQuestion Which is the favorite destination for venture funds?Correct Answer BPOYour Answer BPO
Multiple Choice Multiple AnswerQuestion Who issues participatory notes?Correct Answer Associates of India based foreign brokerages , Domestic
institutional brokerages
Your Answer Associates of India based foreign brokerages , Domesticinstitutional brokerages
Multiple Choice Single AnswerQuestion For a VCF to be registered with SEBI what is the registration fee ?Correct Answer 5 lacsYour Answer 5 lacs
Match The FollowingQuestion Correct Answer Your Answer
Ready forward transaction (Repo) Interbank sale and repurchase of securitiesInterbank sale and repurchase of securities
Commercial paper Means of raising short term debt by companies Means ofraising short term debt by companies
STCI Operations in call money markets Operations in call money markets
Market stabilsation Bonds Launched in fiscal 2004-05 Launched in fiscal 2004-05
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury
bills and commercial paper.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies by
NHB?Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any
appointment of auditorsYour Answer Minimum paid up capital 1 crore , At least 2 directors , Any
appointment of auditors
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer False
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any
scheme till approval of trustees and offer document has been filed with the board, With each offer document pay filing fees , Offer document to contain disclosures
Your Answer The Asset management company shall not launch any schemetill approval of trustees and offer document has been filed with the board , Witheach offer document pay filing fees , Offer document to contain disclosures
Multiple Choice Single AnswerQuestion What is the limit for aggregate investment of FII's NRI's and OCB's?Correct Answer 0.3Your Answer 0.25
True/FalseQuestion Acquisition finance, which provide funding for acquiring another
company are often closely held or fairly owned.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what
amount is expected to be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores
Select The BlankQuestion The acquirer is required to make the PA within ________ working
days of entering into an agreement to acquire shares or deciding to acquireshare's voting rights of target company.
Correct Answer 4Your Answer 4
Multiple Choice Single AnswerQuestion What is the objective of public announcement?Correct Answer Ensure that the shareholders of the target company are aware
of the exit opportunity available to themYour Answer Ensure that the shareholders of the target company are aware of
the exit opportunity available to them
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his client.Correct Answer FalseYour Answer False
True/FalseQuestion If the credit rating is obtained from two different agencies in case of
issue of debt instruments, all the ratings need not be disclosed in the document.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not
misused by NRI , OCB controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused
by NRI , OCB controlled by Indians promoters
Select The BlankQuestion When one decides to have the shares in an electronic form one has
to approach ________.Correct Answer DPYour Answer DP
Question How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not
misused by NRI , OCB controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused
by NRI , OCB controlled by Indians promoters
Select The BlankQuestion When one decides to have the shares in an electronic form one has
to approach ________.Correct Answer DPYour Answer DP
CAPITAL MARKET -AMITA
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?Correct Answer Securities Contract Regulation ActYour Answer Securities Contract Regulation Act
Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?Correct Answer A net connection , A registered account with a broker and a demat
account , Bank payment gateway or online banking facilityYour Answer A registered account with a broker and a demat account , Bank payment
gateway or online banking facility , A net connection
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
True/FalseQuestion Sweat equity shares are shares issued by company to employees or directors
to discount.Correct Answer TrueYour Answer True
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and
commercial paper.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under various SEBI regulations how many brokers suspended?Correct Answer 8Your Answer 8
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till
approval of trustees and offer document has been filed with the board , With each offerdocument pay filing fees , Offer document to contain disclosures
Your Answer With each offer document pay filing fees , Offer document to containdisclosures
Match The FollowingQuestion Correct Answer Your Answer
Charge card Form of plastic money Member establishment
Warning Bulletin Authenticity test Authenticity test
Credit information company SBI, HDFC bank SBI, HDFC bank
Credit card issuing company Visa/Master Card Visa/Master Card
Multiple Choice Single AnswerQuestion Who forms the Asset management company (AMC)?Correct Answer Group of trusteesYour Answer Group of trustees
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate
account to be maintained by them with ________.Correct Answer Scheduled Commercial Bank
Your Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion Under which regulation is reporting mandatory in respect of acquisitions
arising out of firm allot meant in public issues and rights issues etc?Correct Answer Regulation (3) 4Your Answer Regulation (3) 4
True/FalseQuestion Book building is a process whereby the price is determined on the basis of
actual demand as evident from the offers given by the various institutional investors andunderwriters.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The Money market mutual funds (MMMFs) can invest the funds in which of
these securities?Correct Answer Call/notice moneyYour Answer Call/notice money
Multiple Choice Multiple AnswerQuestion What is the information to be placed before the board of directors as per the
Kumarmangalam report?Correct Answer Annual operating plans , Capital budgets , Quarterly resultsYour Answer Annual operating plans , Capital budgets , Quarterly results
True/FalseQuestion Bidder cannot revise his bids.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What are ESOP's ?Correct Answer One of the methods of giving part ownership of the company to the
employees , Employees can take part in the prosperity of the company , Is a reward andlinked with the increase in the prices of the shares
Your Answer Is a reward and linked with the increase in the prices of the shares , Oneof the methods of giving part ownership of the company to the employees , Employeescan take part in the prosperity of the company
Match The FollowingQuestion Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Should effectivelyparticipate in general body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders anddebenture holders Look into defaults to depositors creditors shareholders and debentureholders
Reasons of failures of corporate governance in spite of norms Superficial commitment tovision, mission and values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision makingprocess Assisting the board in decision making process
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by
NRI , OCB controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI ,
OCB controlled by Indians promoters
Select The BlankQuestion While structuring the deal the entrepreneur seeks ________.Correct Answer Voting controlYour Answer Goodwill
True/FalseQuestion DRR is treated as part of general reserve for consideration of bonus issue of
proposals.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills ,
ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills ,
Experience
Multiple Choice Multiple AnswerQuestion What precautions are to be taken with respect to delivery instruction slip ?Correct Answer DIS numbers are pre printed , Account number to be stamped ,
Investor should fill in target account id
Your Answer DIS numbers are pre printed , Account number to be stamped , Investorshould fill in target account id
True/FalseQuestion Reliance group has added over 10000 crores in market capital.Correct Answer TrueYour Answer False
Select The BlankQuestion An acquirer who holds 15% or more but less than 75% of voting' rights can
acquire such additional shares as would entitle him to exercise more than ________ ofvoting rights in an financial year.
Correct Answer 0.05Your Answer 0.2
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer FITSCH
Select The BlankQuestion The appointment of a ________ is mandatory in a offer process.Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public
issue as regards to its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate
account to be maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion To make a public announcement the acquirer has to appoint :-Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is a more contemporary definition of corporate governance?Correct Answer Corporate Governance is all about promoting corporate fairness,
transparency and accountability
Your Answer Corporate Governance is all about promoting corporate fairness,transparency and accountability
Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in
compliance of SEBI regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock exchanges
at least 4 days before the date , Any person holding more than 15% but less than 75%voting rights shall be disclosed with 2 days , Annual disclosures
Your Answer Any person holding more than 15% but less than 75% voting rights shallbe disclosed with 2 days
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Select The BlankQuestion The merger of GTB and UTI was called off due to intervention of ________Correct Answer SEBI and RBIYour Answer SEBI and RBI
Select The BlankQuestion The Merchant banker will incorporate in the letter of offer the comments
made by SEBI and then send within ________ days from the date of PA to allshareholders whose names appear in the register of the company.
Correct Answer 45Your Answer 45
Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?Correct Answer Statutory approvals refused , Sole acquirer being person died ,
Circumstances as in opinion of boardYour Answer Statutory approvals refused , Sole acquirer being person died ,
Circumstances as in opinion of board
True/FalseQuestion The public cannot give their complaints or comments on the issuer company
or others connected with the issue to SEBI.Correct Answer FalseYour Answer False
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer No stamp duty , Reduction in paperless work , Reduction in
transaction costYour Answer Reduction in paperless work , Reduction in transaction cost , Holds
funds in an account
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the
depository , Maintain the investor's holdings in an electronic form , Effect settlement ofsecurities traded on exchanges
Your Answer Enable surrender and withdrawal of securities to and from the depository, Maintain the investor's holdings in an electronic form , Effect settlement of securitiestraded on exchanges
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large
corporates to issue certificate of deposits.Correct Answer FalseYour Answer True
Select The BlankQuestion Directors should not be member of more than________ committees.Correct Answer 10Your Answer 10
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities
separately for each client.Correct Answer FalseYour Answer False
CAPITAL MARKET -AMITA
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?Correct Answer Securities Contract Regulation ActYour Answer Securities Contract Regulation Act
Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?Correct Answer A net connection , A registered account with a broker and a demat
account , Bank payment gateway or online banking facilityYour Answer A registered account with a broker and a demat account , Bank payment
gateway or online banking facility , A net connection
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
True/FalseQuestion Sweat equity shares are shares issued by company to employees or directors
to discount.Correct Answer TrueYour Answer True
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and
commercial paper.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under various SEBI regulations how many brokers suspended?Correct Answer 8Your Answer 8
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till
approval of trustees and offer document has been filed with the board , With each offerdocument pay filing fees , Offer document to contain disclosures
Your Answer With each offer document pay filing fees , Offer document to containdisclosures
Match The Following
Question Correct Answer Your Answer
Charge card Form of plastic money Member establishment
Warning Bulletin Authenticity test Authenticity test
Credit information company SBI, HDFC bank SBI, HDFC bank
Credit card issuing company Visa/Master Card Visa/Master Card
Multiple Choice Single AnswerQuestion Who forms the Asset management company (AMC)?Correct Answer Group of trusteesYour Answer Group of trustees
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate
account to be maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion Under which regulation is reporting mandatory in respect of acquisitions
arising out of firm allot meant in public issues and rights issues etc?Correct Answer Regulation (3) 4Your Answer Regulation (3) 4
True/FalseQuestion Book building is a process whereby the price is determined on the basis of
actual demand as evident from the offers given by the various institutional investors andunderwriters.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The Money market mutual funds (MMMFs) can invest the funds in which of
these securities?Correct Answer Call/notice moneyYour Answer Call/notice money
Multiple Choice Multiple AnswerQuestion What is the information to be placed before the board of directors as per the
Kumarmangalam report?Correct Answer Annual operating plans , Capital budgets , Quarterly resultsYour Answer Annual operating plans , Capital budgets , Quarterly results
True/FalseQuestion Bidder cannot revise his bids.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What are ESOP's ?Correct Answer One of the methods of giving part ownership of the company to the
employees , Employees can take part in the prosperity of the company , Is a reward andlinked with the increase in the prices of the shares
Your Answer Is a reward and linked with the increase in the prices of the shares , Oneof the methods of giving part ownership of the company to the employees , Employeescan take part in the prosperity of the company
Match The FollowingQuestion Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Should effectivelyparticipate in general body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders anddebenture holders Look into defaults to depositors creditors shareholders and debentureholders
Reasons of failures of corporate governance in spite of norms Superficial commitment tovision, mission and values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision makingprocess Assisting the board in decision making process
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by
NRI , OCB controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI ,
OCB controlled by Indians promoters
Select The BlankQuestion While structuring the deal the entrepreneur seeks ________.
Correct Answer Voting controlYour Answer Goodwill
True/FalseQuestion DRR is treated as part of general reserve for consideration of bonus issue of
proposals.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills ,
ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills ,
Experience
Multiple Choice Multiple AnswerQuestion What precautions are to be taken with respect to delivery instruction slip ?Correct Answer DIS numbers are pre printed , Account number to be stamped ,
Investor should fill in target account idYour Answer DIS numbers are pre printed , Account number to be stamped , Investor
should fill in target account id
True/FalseQuestion Reliance group has added over 10000 crores in market capital.Correct Answer TrueYour Answer False
Select The BlankQuestion An acquirer who holds 15% or more but less than 75% of voting' rights can
acquire such additional shares as would entitle him to exercise more than ________ ofvoting rights in an financial year.
Correct Answer 0.05Your Answer 0.2
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer FITSCH
Select The BlankQuestion The appointment of a ________ is mandatory in a offer process.Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single Answer
Question What is the eligibility norm for an unlisted company for making an publicissue as regards to its net worth?
Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate
account to be maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion To make a public announcement the acquirer has to appoint :-Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is a more contemporary definition of corporate governance?Correct Answer Corporate Governance is all about promoting corporate fairness,
transparency and accountabilityYour Answer Corporate Governance is all about promoting corporate fairness,
transparency and accountability
Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in
compliance of SEBI regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock exchanges
at least 4 days before the date , Any person holding more than 15% but less than 75%voting rights shall be disclosed with 2 days , Annual disclosures
Your Answer Any person holding more than 15% but less than 75% voting rights shallbe disclosed with 2 days
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Select The BlankQuestion The merger of GTB and UTI was called off due to intervention of ________Correct Answer SEBI and RBIYour Answer SEBI and RBI
Select The BlankQuestion The Merchant banker will incorporate in the letter of offer the comments
made by SEBI and then send within ________ days from the date of PA to allshareholders whose names appear in the register of the company.
Correct Answer 45Your Answer 45
Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?Correct Answer Statutory approvals refused , Sole acquirer being person died ,
Circumstances as in opinion of boardYour Answer Statutory approvals refused , Sole acquirer being person died ,
Circumstances as in opinion of board
True/FalseQuestion The public cannot give their complaints or comments on the issuer company
or others connected with the issue to SEBI.Correct Answer FalseYour Answer False
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer No stamp duty , Reduction in paperless work , Reduction in
transaction costYour Answer Reduction in paperless work , Reduction in transaction cost , Holds
funds in an account
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the
depository , Maintain the investor's holdings in an electronic form , Effect settlement ofsecurities traded on exchanges
Your Answer Enable surrender and withdrawal of securities to and from the depository, Maintain the investor's holdings in an electronic form , Effect settlement of securitiestraded on exchanges
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large
corporates to issue certificate of deposits.Correct Answer FalseYour Answer True
Select The BlankQuestion Directors should not be member of more than________ committees.Correct Answer 10
Your Answer 10
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities
separately for each client.Correct Answer FalseYour Answer False
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer Crisil
True/FalseQuestion The acquirer is required to appoint a merchant banker before making a PA.Correct Answer TrueYour Answer True
Select The BlankQuestion Hire Purchase transactions are liable to ________.Correct Answer Sales taxYour Answer Sales tax
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills ,
Experience
Your Answer Sound General knowledge , Analytical ability and marketing skills ,Experience
Multiple Choice Single AnswerQuestion What is Discretionary Portfolio management service ?Correct Answer Client gives his money for investment to the portfolio manager and
leaves it to him to make all the investment decisions.Your Answer Client gives his money for investment to the portfolio manager and
leaves it to him to make all the investment decisions.
True/FalseQuestion Depositary facilitates transfers without having to handle money.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what amount is
expected to be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores
Multiple Choice Multiple AnswerQuestion The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number of investors
who have common financial goal , Issue units to investor which represent right in assets ,Investments in mutual funds may be in the form of stock, bond, money market securities
Your Answer A trust that pools in savings and funds from large number of investorswho have common financial goal , Issue units to investor which represent right in assets ,Investments in mutual funds may be in the form of stock, bond, money market securities
True/FalseQuestion If the credit rating is obtained from two different agencies in case of issue of
debt instruments, all the ratings need not be disclosed in the document.Correct Answer FalseYour Answer True
Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any litigation
connected with ________.Correct Answer Securities marketsYour Answer Clients
Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?Correct Answer Knowledge and information about various aspects of capital markets ,
Ability to evaluate and analyze , Update the knowledgeYour Answer Knowledge and information about various aspects of capital markets ,
Ability to evaluate and analyze , Update the knowledge
Multiple Choice Multiple AnswerQuestion Describe the stock lending mechanism:-Correct Answer Involves two parties one who is willing to lend and other who wishes
to borrow securities at market related rates , Lender is assured of getting equivalent therelevant securities by NSSCL on the settlement date , Lender gets benefit of reasonablereturn called lending fee
Your Answer Involves two parties one who is willing to lend and other who wishes toborrow securities at market related rates , Lender gets benefit of reasonable return calledlending fee
Multiple Choice Multiple AnswerQuestion What are the limitations of refinance facility?Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds
of HFC's , Not to exceed 15 % of NOF of NHBYour Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds of
HFC's , Not to exceed 15 % of NOF of NHB
Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what period from
the date of passing the resolution?Correct Answer 12 monthsYour Answer 12 months
Match The FollowingQuestion Correct Answer Your Answer
10 HDFC foreign currency deal Global investors pumping funds in India Specific Funds
0.57 FII current free float sensex company FII free float stock NIFTY companies
0.45 FII free float stock NIFTY companies FII's total free float sex and NIFTY
$ 476 mn Global investors pumping funds in India Specific Funds HDFC foreigncurrency deal
Multiple Choice Single AnswerQuestion When did the trading in foreign currency options start in India?
Correct Answer 37809Your Answer 37829
Multiple Choice Single AnswerQuestion What is the main objective of credit appraisal ?Correct Answer Assess the repayment capacityYour Answer Assess the age of the person borrowing
True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their trustees and
asset management companies.Correct Answer FalseYour Answer False
Select The BlankQuestion In the L & T reliance case, Reliance was fined ________.Correct Answer Rs. 5 lacsYour Answer Rs. 5 lacs
Select The BlankQuestion Recently many banks have started issuing ________ which could also be
used as a debit card.Correct Answer ATM cardYour Answer ATM card
Select The BlankQuestion A ________ means any persons connected with a company and who is
reasonably having access to unpublished price sensitive information.Correct Answer InsiderYour Answer Insider
Select The BlankQuestion SENSEX is calculated using ________ method.Correct Answer Market capitalizationYour Answer Weighted
Match The FollowingQuestion Correct Answer Your Answer
Share buy back is a way of Returning surplus cash to the shareholders Returning surpluscash to the shareholders
Dutch Auction Price of the Buy back is done by the shareholders Price of the Buy back isdone by the shareholders
Open market purchases No minimum price stipulation No minimum price stipulation
Companies holding more than 90% equity Can be delisted Can be delisted
True/FalseQuestion The public cannot give their complaints or comments on the issuer company
or others connected with the issue to SEBI.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities
separately for each client.Correct Answer FalseYour Answer True
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large
corporates to issue certificate of deposits.Correct Answer FalseYour Answer True
True/FalseQuestion Book building is a process whereby the price is determined on the basis of
actual demand as evident from the offers given by the various institutional investors andunderwriters.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What is the system of rolling settlement prevalent in the USA ?Correct Answer Transaction + 3Your Answer Transaction + 3
Multiple Choice Single AnswerQuestion What is the most important objective for an investor?Correct Answer Protection of the value of the investmentYour Answer Profit maximization
Multiple Choice Multiple Answer
Question The following are some of the regulations governing the NBFC's issued byRBI :-
Correct Answer All the NBFC's must register with RBI , Without the registrationcertificate no company can undertake activities of NBFC , All companies must be liquidassets equal to 15% of deposits
Your Answer All the NBFC's must register with RBI , Without the registrationcertificate no company can undertake activities of NBFC , All companies must be liquidassets equal to 15% of deposits
Multiple Choice Single AnswerQuestion What do you mean by venture capital?Correct Answer Providing seed, start up capital and first stage financingYour Answer Providing seed, start up capital and first stage financing
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Opening of Indian Capital Markets to FII's
Select The BlankQuestion The continuing growth in ________ was one of the factors that contributed to
the growth of credit rating.Correct Answer Information technologyYour Answer Information technology
Select The BlankQuestion In case of a public issue by a listed company participation by promoters in
the proposed issues in excess of the required minimum percentage shall also be looked infor a period of ________.
Correct Answer 1 yearYour Answer 3 years
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his client.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring , Communication
through the net , Operate in stock market privately through home or officeYour Answer Screen based trading in place of traditional ring , Communication
through the net , Operate in stock market privately through home or office
Select The Blank
Question The Kumarmangalam Birla report stressed on the importance of ________with respect to AGM's.
Correct Answer Proxy voting / ballot systemsYour Answer Proxy voting / ballot systems
True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities purchased
under the buy back arrangement to be extinguished and physically destroyed.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint debenture
trustee , Debenture redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint debenture trustee ,
Debenture redemption reserve to be created
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity , Must
disclose investment strategyYour Answer VCF's must be registered , Cannot carry out another activity , Must
disclose investment strategy
Multiple Choice Single AnswerQuestion What is the minimum number of days for which the bid should remain open
in book building?Correct Answer 5 daysYour Answer 7 days
Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many times
of the net owned funds?Correct Answer 4 timesYour Answer 4 times
Select The BlankQuestion With the introduction of ________ accounts the complaints about allotment
have surely gone down.Correct Answer DEMAT
Your Answer DEMATLIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer Crisil
True/FalseQuestion The acquirer is required to appoint a merchant banker before making a PA.Correct Answer TrueYour Answer True
Select The BlankQuestion Hire Purchase transactions are liable to ________.Correct Answer Sales taxYour Answer Sales tax
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills ,
ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills ,
Experience
Multiple Choice Single AnswerQuestion What is Discretionary Portfolio management service ?Correct Answer Client gives his money for investment to the portfolio manager and
leaves it to him to make all the investment decisions.Your Answer Client gives his money for investment to the portfolio manager and
leaves it to him to make all the investment decisions.
True/FalseQuestion Depositary facilitates transfers without having to handle money.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what amount is
expected to be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores
Multiple Choice Multiple AnswerQuestion The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number of investors
who have common financial goal , Issue units to investor which represent right in assets ,Investments in mutual funds may be in the form of stock, bond, money market securities
Your Answer A trust that pools in savings and funds from large number of investorswho have common financial goal , Issue units to investor which represent right in assets ,Investments in mutual funds may be in the form of stock, bond, money market securities
True/FalseQuestion If the credit rating is obtained from two different agencies in case of issue of
debt instruments, all the ratings need not be disclosed in the document.Correct Answer FalseYour Answer True
Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any litigation
connected with ________.Correct Answer Securities marketsYour Answer Clients
Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?Correct Answer Knowledge and information about various aspects of capital markets ,
Ability to evaluate and analyze , Update the knowledgeYour Answer Knowledge and information about various aspects of capital markets ,
Ability to evaluate and analyze , Update the knowledge
Multiple Choice Multiple AnswerQuestion Describe the stock lending mechanism:-Correct Answer Involves two parties one who is willing to lend and other who wishes
to borrow securities at market related rates , Lender is assured of getting equivalent therelevant securities by NSSCL on the settlement date , Lender gets benefit of reasonablereturn called lending fee
Your Answer Involves two parties one who is willing to lend and other who wishes toborrow securities at market related rates , Lender gets benefit of reasonable return calledlending fee
Multiple Choice Multiple Answer
Question What are the limitations of refinance facility?Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds
of HFC's , Not to exceed 15 % of NOF of NHBYour Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds of
HFC's , Not to exceed 15 % of NOF of NHB
Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what period from
the date of passing the resolution?Correct Answer 12 monthsYour Answer 12 months
Match The FollowingQuestion Correct Answer Your Answer
10 HDFC foreign currency deal Global investors pumping funds in India Specific Funds
0.57 FII current free float sensex company FII free float stock NIFTY companies
0.45 FII free float stock NIFTY companies FII's total free float sex and NIFTY
$ 476 mn Global investors pumping funds in India Specific Funds HDFC foreigncurrency deal
Multiple Choice Single AnswerQuestion When did the trading in foreign currency options start in India?Correct Answer 37809Your Answer 37829
Multiple Choice Single AnswerQuestion What is the main objective of credit appraisal ?Correct Answer Assess the repayment capacityYour Answer Assess the age of the person borrowing
True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their trustees and
asset management companies.Correct Answer FalseYour Answer False
Select The BlankQuestion In the L & T reliance case, Reliance was fined ________.Correct Answer Rs. 5 lacsYour Answer Rs. 5 lacs
Select The BlankQuestion Recently many banks have started issuing ________ which could also be
used as a debit card.Correct Answer ATM cardYour Answer ATM card
Select The BlankQuestion A ________ means any persons connected with a company and who is
reasonably having access to unpublished price sensitive information.Correct Answer InsiderYour Answer Insider
Select The BlankQuestion SENSEX is calculated using ________ method.Correct Answer Market capitalizationYour Answer Weighted
Match The FollowingQuestion Correct Answer Your Answer
Share buy back is a way of Returning surplus cash to the shareholders Returning surpluscash to the shareholders
Dutch Auction Price of the Buy back is done by the shareholders Price of the Buy back isdone by the shareholders
Open market purchases No minimum price stipulation No minimum price stipulation
Companies holding more than 90% equity Can be delisted Can be delisted
True/FalseQuestion The public cannot give their complaints or comments on the issuer company
or others connected with the issue to SEBI.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities
separately for each client.Correct Answer False
Your Answer True
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large
corporates to issue certificate of deposits.Correct Answer FalseYour Answer True
True/FalseQuestion Book building is a process whereby the price is determined on the basis of
actual demand as evident from the offers given by the various institutional investors andunderwriters.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What is the system of rolling settlement prevalent in the USA ?Correct Answer Transaction + 3Your Answer Transaction + 3
Multiple Choice Single AnswerQuestion What is the most important objective for an investor?Correct Answer Protection of the value of the investmentYour Answer Profit maximization
Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's issued by
RBI :-Correct Answer All the NBFC's must register with RBI , Without the registration
certificate no company can undertake activities of NBFC , All companies must be liquidassets equal to 15% of deposits
Your Answer All the NBFC's must register with RBI , Without the registrationcertificate no company can undertake activities of NBFC , All companies must be liquidassets equal to 15% of deposits
Multiple Choice Single AnswerQuestion What do you mean by venture capital?Correct Answer Providing seed, start up capital and first stage financingYour Answer Providing seed, start up capital and first stage financing
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Opening of Indian Capital Markets to FII's
Select The Blank
Question The continuing growth in ________ was one of the factors that contributed tothe growth of credit rating.
Correct Answer Information technologyYour Answer Information technology
Select The BlankQuestion In case of a public issue by a listed company participation by promoters in
the proposed issues in excess of the required minimum percentage shall also be looked infor a period of ________.
Correct Answer 1 yearYour Answer 3 years
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his client.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring , Communication
through the net , Operate in stock market privately through home or officeYour Answer Screen based trading in place of traditional ring , Communication
through the net , Operate in stock market privately through home or office
Select The BlankQuestion The Kumarmangalam Birla report stressed on the importance of ________
with respect to AGM's.Correct Answer Proxy voting / ballot systemsYour Answer Proxy voting / ballot systems
True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities purchased
under the buy back arrangement to be extinguished and physically destroyed.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint debenture
trustee , Debenture redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint debenture trustee ,
Debenture redemption reserve to be created
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance Industries
Your Answer Reliance Industries
Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity , Must
disclose investment strategyYour Answer VCF's must be registered , Cannot carry out another activity , Must
disclose investment strategy
Multiple Choice Single AnswerQuestion What is the minimum number of days for which the bid should remain open
in book building?Correct Answer 5 daysYour Answer 7 days
Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many times
of the net owned funds?Correct Answer 4 timesYour Answer 4 times
Select The BlankQuestion With the introduction of ________ accounts the complaints about allotment
have surely gone down.Correct Answer DEMATYour Answer DEMATLIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?Correct Answer Securities Contract Regulation ActYour Answer Securities Contract Regulation Act
Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?Correct Answer A net connection , A registered account with a broker and a demat
account , Bank payment gateway or online banking facilityYour Answer A registered account with a broker and a demat account , Bank payment
gateway or online banking facility , A net connection
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
True/False
Question Sweat equity shares are shares issued by company to employees or directorsto discount.
Correct Answer TrueYour Answer True
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and
commercial paper.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under various SEBI regulations how many brokers suspended?Correct Answer 8Your Answer 8
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till
approval of trustees and offer document has been filed with the board , With each offerdocument pay filing fees , Offer document to contain disclosures
Your Answer With each offer document pay filing fees , Offer document to containdisclosures
Match The FollowingQuestion Correct Answer Your Answer
Charge card Form of plastic money Member establishment
Warning Bulletin Authenticity test Authenticity test
Credit information company SBI, HDFC bank SBI, HDFC bank
Credit card issuing company Visa/Master Card Visa/Master Card
Multiple Choice Single AnswerQuestion Who forms the Asset management company (AMC)?Correct Answer Group of trusteesYour Answer Group of trustees
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate
account to be maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion Under which regulation is reporting mandatory in respect of acquisitions
arising out of firm allot meant in public issues and rights issues etc?Correct Answer Regulation (3) 4Your Answer Regulation (3) 4
True/FalseQuestion Book building is a process whereby the price is determined on the basis of
actual demand as evident from the offers given by the various institutional investors andunderwriters.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The Money market mutual funds (MMMFs) can invest the funds in which of
these securities?Correct Answer Call/notice moneyYour Answer Call/notice money
Multiple Choice Multiple AnswerQuestion What is the information to be placed before the board of directors as per the
Kumarmangalam report?Correct Answer Annual operating plans , Capital budgets , Quarterly resultsYour Answer Annual operating plans , Capital budgets , Quarterly results
True/FalseQuestion Bidder cannot revise his bids.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What are ESOP's ?Correct Answer One of the methods of giving part ownership of the company to the
employees , Employees can take part in the prosperity of the company , Is a reward andlinked with the increase in the prices of the shares
Your Answer Is a reward and linked with the increase in the prices of the shares , Oneof the methods of giving part ownership of the company to the employees , Employeescan take part in the prosperity of the company
Match The Following
Question Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Should effectivelyparticipate in general body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders anddebenture holders Look into defaults to depositors creditors shareholders and debentureholders
Reasons of failures of corporate governance in spite of norms Superficial commitment tovision, mission and values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision makingprocess Assisting the board in decision making process
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by
NRI , OCB controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI ,
OCB controlled by Indians promoters
Select The BlankQuestion While structuring the deal the entrepreneur seeks ________.Correct Answer Voting controlYour Answer Goodwill
True/FalseQuestion DRR is treated as part of general reserve for consideration of bonus issue of
proposals.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills ,
ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills ,
Experience
Multiple Choice Multiple AnswerQuestion What precautions are to be taken with respect to delivery instruction slip ?Correct Answer DIS numbers are pre printed , Account number to be stamped ,
Investor should fill in target account id
Your Answer DIS numbers are pre printed , Account number to be stamped , Investorshould fill in target account id
True/FalseQuestion Reliance group has added over 10000 crores in market capital.Correct Answer TrueYour Answer False
Select The BlankQuestion An acquirer who holds 15% or more but less than 75% of voting' rights can
acquire such additional shares as would entitle him to exercise more than ________ ofvoting rights in an financial year.
Correct Answer 0.05Your Answer 0.2
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer FITSCH
Select The BlankQuestion The appointment of a ________ is mandatory in a offer process.Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public
issue as regards to its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate
account to be maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion To make a public announcement the acquirer has to appoint :-Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is a more contemporary definition of corporate governance?Correct Answer Corporate Governance is all about promoting corporate fairness,
transparency and accountability
Your Answer Corporate Governance is all about promoting corporate fairness,transparency and accountability
Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in
compliance of SEBI regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock exchanges
at least 4 days before the date , Any person holding more than 15% but less than 75%voting rights shall be disclosed with 2 days , Annual disclosures
Your Answer Any person holding more than 15% but less than 75% voting rights shallbe disclosed with 2 days
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Select The BlankQuestion The merger of GTB and UTI was called off due to intervention of ________Correct Answer SEBI and RBIYour Answer SEBI and RBI
Select The BlankQuestion The Merchant banker will incorporate in the letter of offer the comments
made by SEBI and then send within ________ days from the date of PA to allshareholders whose names appear in the register of the company.
Correct Answer 45Your Answer 45
Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?Correct Answer Statutory approvals refused , Sole acquirer being person died ,
Circumstances as in opinion of boardYour Answer Statutory approvals refused , Sole acquirer being person died ,
Circumstances as in opinion of board
True/FalseQuestion The public cannot give their complaints or comments on the issuer company
or others connected with the issue to SEBI.Correct Answer FalseYour Answer False
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer No stamp duty , Reduction in paperless work , Reduction in
transaction costYour Answer Reduction in paperless work , Reduction in transaction cost , Holds
funds in an account
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the
depository , Maintain the investor's holdings in an electronic form , Effect settlement ofsecurities traded on exchanges
Your Answer Enable surrender and withdrawal of securities to and from the depository, Maintain the investor's holdings in an electronic form , Effect settlement of securitiestraded on exchanges
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large
corporates to issue certificate of deposits.Correct Answer FalseYour Answer True
Select The BlankQuestion Directors should not be member of more than________ committees.Correct Answer 10Your Answer 10
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities
separately for each client.Correct Answer FalseYour Answer False
Multiple Choice Single Answer
Question What was the objective of setting up the Securities Trading corporation ofIndia Ltd?
Correct Answer To promote secondary market in government securities
Your Answer To strengthen the capital markets
Multiple Choice Multiple AnswerQuestion What are the salient features of Hire Purchase ?
Correct Answer Finance company purchases the equipment supplier and lets it on hire ,During the contract hirer can opt for an early repayment and purchase theasset , Hirer may be required to make down payment
Your Answer During the contract hirer can opt for an early repayment and purchase theasset , Hirer may be required to make down payment , Finance companypurchases the equipment supplier and lets it on hire
True/FalseQuestion A mutual fund shall not invest more than 10% of is NAV in equity shares in
cases of open ended schemes.Correct Answer True
Your Answer True
Select The BlankQuestion ________ are a kind of portfolio schemes.
Correct Answer Mutual funds
Your Answer Mutual funds
Multiple Choice Single AnswerQuestion Who takes risk at the time of investment ?
Correct Answer Investor
Your Answer Investor
True/FalseQuestion MIBOR is a security. Derivatives based on this interest rate have legal
recognition under SCRA.Correct Answer False
Your Answer True
Select The BlankQuestion It is the responsibility of the ________ to ensure the timely refunds and
allotments of the securities.Correct Answer Lead managers
Your Answer Lead managers
True/FalseQuestion A credit card is a payment mechanism which enables the holder to buy
goods and services on credit.Correct Answer True
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Looses the rights to vote Non voting shares Non voting shares
Book building Bharati Televentures Bharati Televentures
Depository Bank of securities Bank of securities
First to introduce rollingsettlements in the country
NSE NSE
Select The BlankQuestion Final prospectus in the book building p________ess is to be filed with the
ROC.Correct Answer ROC
Your Answer ROC
Select The BlankQuestion A company with highly rated instrument has the opportunity to ________
by quoting less interest rates.Correct Answer Reduce the cost of borrowing
Your Answer Reduce the cost of borrowing
True/FalseQuestion Book building is a process whereby the price is determined on the basis of
actual demand as evident from the offers given by the various institutionalinvestors and underwriters.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies by NHB?
Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment ofauditors
Your Answer Minimum paid up capital 1 crore , At least 2 directors , At least 50% loansin long term nature
Multiple Choice Single AnswerQuestion A portfolio manager could undertake the following on behalf of his clients :-
Correct Answer Hedging and arbitrage transactions
Your Answer Hedging and arbitrage transactions
Multiple Choice Multiple AnswerQuestion How is price determined in an open offer?
Correct Answer Negotiated price , Price paid by acquirer , Average weekly high low ofclosing share of the target company
Your Answer Negotiated price , Price paid by acquirer , Average weekly high low ofclosing share of the target company
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?
Correct Answer Sound General knowledge , Analytical ability and marketing skills ,Experience
Your Answer Experience , Sound General knowledge , Analytical ability and marketingskills
Multiple Choice Single AnswerQuestion Renewal of portfolio fund on maturity shall be deemed as a fresh
placement for a minimum period of :-Correct Answer 1 year
Your Answer 2 years
True/FalseQuestion In order to dematerialize the securities one has to fill DRF.
Correct Answer True
Your Answer True
Select The BlankQuestion One of the process of book building is that the issuer appoints a ________
also known as the book runner.Correct Answer Lead manager
Your Answer Lead manager
Select The BlankQuestion The process of securitisation involves transfer of assets to a person
specially created called as ________.Correct Answer Special purpose vehicle
Your Answer Trust
True/FalseQuestion A custodian can transfer beneficial ownership legally.
Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Apart from the portfolio management fees what percentage of returns can
the portfolio manager share from their client's profits?Correct Answer 0
Your Answer 0
True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities
purchased under the buy back arrangement to be extinguished andphysically destroyed.
Correct Answer False
Your Answer False
Select The BlankQuestion BSE introduced an equity stock index known as ________.
Correct Answer SENSEX
Your Answer SENSEX
Multiple Choice Multiple AnswerQuestion As per the recommendations of the Kumarmangalam Birla committee
report who are the key components of an audit committee.Correct Answer Board , Internal auditor , External auditor
Your Answer Board , Internal auditor , External auditor
Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20 000 crores?
Correct Answer Infosys , Satyam , Wipro
Your Answer Infosys , Satyam , Wipro
Multiple Choice Multiple AnswerQuestion What are the obligations of a company in a share buy back?
Correct Answer The offer letter should contain true, factual and material information andshould not be misleading. , The company must pay the consideration onlyby the way of cash , The company should not issue any fresh securitiesincluding bonus shares till the date of the closure of the offer.
Your Answer The offer letter should contain true, factual and material information andshould not be misleading. , The company must pay the consideration onlyby the way of cash , The company should not issue any fresh securitiesincluding bonus shares till the date of the closure of the offer.
Multiple Choice Multiple AnswerQuestion What are the different kinds of stock exchanges in India?
Correct Answer Voluntary non profit making organizations , Joint stock companies limitedby shares , Joint stock companies Limited by guarantee
Your Answer Voluntary non profit making organizations , Joint stock companies limitedby shares , Private limited companies
Multiple Choice Multiple AnswerQuestion Companies are not allowed to buy back securities :-
Correct Answer Through any/ own subsidiary company , Through any/group of investmentcompany , If default subsists in respect of repayments of deposits, termloans to any financial institutions and redemption of preference shares ordebentures
Your Answer Through any/ own subsidiary company , Through any/group of investmentcompany , If default subsists in respect of repayments of deposits, termloans to any financial institutions and redemption of preference shares ordebentures
True/FalseQuestion The depository can legally transfer beneficial ownership.
Correct Answer True
Your Answer True
Select The BlankQuestion For issues upto Rs. 50 crores the number of lead managers will not
exceed ________.Correct Answer 2
Your Answer 4
Match The Following
Question Correct Answer Your Answer
Ready forward transaction(Repo)
Interbank sale andrepurchase of securities
Operations in call moneymarkets
Commercial paper Means of raising short termdebt by companies
Means of raising short termdebt by companies
STCI Operations in call moneymarkets
Launched in fiscal 2004-05
Market stabilsation Bonds Launched in fiscal 2004-05 Interbank sale and repurchaseof securities
True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their trustees and
asset management companies.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion What is the time frame to submit a report to SEBI for acquisition
transactions arising out of firm allotment in public issues right issues etc?Correct Answer 21 days
Your Answer 21 days
True/FalseQuestion The acquirer is required to appoint a merchant banker before making a
PA.Correct Answer True
Your Answer True
Select The BlankQuestion The right to buy is called ________.
Correct Answer Call option
Your Answer Call option
Multiple Choice Single AnswerQuestion Upto what percentage has the RBI permitted the banks to invest in the
capital market ?Correct Answer 0.05
Your Answer 0.05
Multiple Choice Single Answer
Question What was the turning point in the working of Indian capital markets?
Correct Answer Establishment of NSE
Your Answer Opening of Indian Capital Markets to FII's
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public
issue as regards to its net worth?Correct Answer Net worth of the company should not be less than 1 crore
Your Answer Net worth of the company should not be less than 1 crore
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?
Correct Answer 1
Your Answer 3
Select The BlankQuestion Among the closed schemes, 4 long term assurance schemes were
launched with a return ranging between ________.Correct Answer 13 - 14%
Your Answer 15 - 16%
Multiple Choice Multiple AnswerQuestion What are the major factors influencing portfolio decisions?
Correct Answer Investor characteristics , Liquidity needs and tax considerations ,Investment and interest rate risk
Your Answer Investor characteristics , Liquidity needs and tax considerations ,Investment and interest rate risk
Multiple Choice Single AnswerQuestion What was the percentage of public offering under the IPOs through the
book building method ?Correct Answer 0.1
Your Answer 0.25
Multiple Choice Multiple AnswerQuestion What are the main features of commercial paper?
Correct Answer Short term financial instrument , Negotiable and transferable instrument ,Companies issue it for raising short term debt
Your Answer Short term financial instrument , Negotiable and transferable instrument ,Companies issue it for raising short term debt
Select The BlankQuestion A ________ can legally transfer beneficial ownership.
Correct Answer Depository
Your Answer Depository
Multiple Choice Multiple AnswerQuestion The setting up of NSE consists of:-
Correct Answer Set up by IDBI , Equity paid up capital of Rs25 crores , Started operationsin June 1994
Your Answer Equity paid up capital of Rs25 crores , Started operations in June 1994 ,There is a trading floor in this exchange
Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?
Correct Answer Securities Contract Regulation Act
Your Answer Securities And Exchange Board of India
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion Information technology, communication and entertainment represent ________
stocks.Correct Answer ICEYour Answer ICE
True/FalseQuestion The public cannot give their complaints or comments on the issuer company or others
connected with the issue to SEBI.Correct Answer FalseYour Answer True
Select The BlankQuestion The right to buy is called ________.Correct Answer Call optionYour Answer Call option
Multiple Choice Single AnswerQuestion What percentage of funds should be invested in unlisted companies?Correct Answer 0.74Your Answer 0.74
Multiple Choice Single AnswerQuestion Who is responsible to get the securities listed on all the stock exchanges?Correct Answer Merchant bankerYour Answer SEBI
Select The BlankQuestion A mutual fund scheme shall not invest more than ________ of its NAV in unrated
debt by a single issuer.Correct Answer 0.1Your Answer 0.1
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
True/FalseQuestion The depository can legally transfer beneficial ownership.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Since when have the Indian Stock markets risen ?Correct Answer 37775Your Answer 38200
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till approval of
trustees and offer document has been filed with the board , With each offer document pay filingfees , Offer document to contain disclosures
Capital Market_20
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Your Answer The Asset management company shall not launch any scheme till approval oftrustees and offer document has been filed with the board , With each offer document pay filingfees , Offer document to contain disclosures
Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer Must disclose investment strategy , VCF's must be registered , Cannot carry
out another activityYour Answer VCF's must be registered , Cannot carry out another activity , Must disclose
investment strategy
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and
commercial paper.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion When can the American style option exercised?Correct Answer On or before the expiry dateYour Answer On or before the expiry date
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his client.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion What is the estimated figure of credit card defaults in India?Correct Answer 800 croresYour Answer 800 crores
True/FalseQuestion Depositary facilitates transfers without having to handle money.Correct Answer FalseYour Answer False
Select The BlankQuestion AA rated companies can raise ________ of its net worth.Correct Answer 2.5 timesYour Answer 2 times
Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring , Communication through the
net , Operate in stock market privately through home or officeYour Answer Screen based trading in place of traditional ring , Communication through the net ,
Operate in stock market privately through home or office
Multiple Choice Multiple AnswerQuestion What are the eligibility norms for an unlisted company for making a public issue?Correct Answer Pre issue net worth not less than 1 crores in the last 3 years , Track record of
distributable profits for at least 3 years , Issue size shall not exceed five times of its pre issue networth
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Your Answer Issue size shall not exceed five times of its pre issue net worth , Pre issue networth not less than 1 crores in the last 3 years , Track record of distributable profits for at least 3years
Select The BlankQuestion Markets have moved away from Badla system to ________ .Correct Answer Derivatives TradingYour Answer Derivatives Trading
Multiple Choice Multiple AnswerQuestion During the budget 2003 - 04, Finance Minister made some announcements which he
hopes will make investors think in terms of returning to stock market :-Correct Answer No capital gains tax on investment made in equity after 1/3/03 held for 1 year ,
Removal of income tax on dividends in the hands of receiverYour Answer No capital gains tax on investment made in equity after 1/3/03 held for 1 year ,
Removal of income tax on dividends in the hands of receiver , Investors income tax on dividendreduced to 12.5%
Multiple Choice Single AnswerQuestion How many members are appointed by the central government?Correct Answer 2Your Answer 2
Multiple Choice Multiple AnswerQuestion Which acts were amended to remove some of the hurdles to corporatisation and
demutualisation of stock exchanges?Correct Answer SCRA , Depository ActYour Answer SCRA , Depository Act
Match The FollowingQuestion Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Should effectively participatein general body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders anddebenture holders Look into defaults to depositors creditors shareholders and debenture holders
Reasons of failures of corporate governance in spite of norms Superficial commitment to vision,mission and values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision making processDecision making
Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20 000 crores?Correct Answer Infosys , Satyam , WiproYour Answer Infosys , Satyam , Wipro
Multiple Choice Multiple AnswerQuestion What does SEBI do with its power ?Correct Answer Cancel certificate issued to custodian , Inspect books of DP , issuers or
beneficiary owners , Investigate an acquirerYour Answer Cancel certificate issued to custodian , Inspect books of DP , issuers or
beneficiary owners , Investigate an acquirer
Capital Market_20
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True/FalseQuestion Amendment to SCRA will facilitate derivatives trading in interest rate futures and
options if there is an underlying asset.Correct Answer TrueYour Answer True
True/FalseQuestion In order to dematerialize the securities one has to fill DRF.Correct Answer TrueYour Answer True
Select The BlankQuestion In case of an IPO of any security of issue size of Rs________ or more security shall
be issued only in demat form.Correct Answer 10 croresYour Answer 10 crores
Multiple Choice Multiple AnswerQuestion What are the obligations of a company in a share buy back?Correct Answer The offer letter should contain true, factual and material information and should
not be misleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of the closureof the offer.
Your Answer The offer letter should contain true, factual and material information and shouldnot be misleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of the closureof the offer.
Select The BlankQuestion The DP opens investor account in the system and gives an account number also
known as ________.Correct Answer BO IDYour Answer BO ID
Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many times of the net
owned funds?Correct Answer 4 timesYour Answer 4 times
Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Overall economic condition , Demand and supply capital , Degree of popularity
of the industryYour Answer Overall economic condition , Demand and supply capital , Degree of popularity of
the industry
Match The FollowingQuestion Correct Answer Your Answer
Portfolio Collection of assets Collection of assets
Factors influencing portfolio decisions Business and Market risks Business and Market risks
Capital Market_20
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Code of conduct- Portfolio Manager Observe high standard of integrity and fairness Observe highstandard of integrity and fairness
SEBI Regulations Portfolio Manager must fulfill the capital adequacy norms To make timelydecision regarding sale and purchase of securities
Multiple Choice Multiple AnswerQuestion What are the major factors influencing portfolio decisions?Correct Answer Investor characteristics , Liquidity needs and tax considerations , Investment
and interest rate riskYour Answer Investor characteristics , Liquidity needs and tax considerations , Investment and
interest rate risk
Multiple Choice Single AnswerQuestion The refinance made available to any HFC is not to be more than :-Correct Answer 60% of its outstanding housing loansYour Answer 60% of its outstanding housing loans
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large corporates to
issue certificate of deposits.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
Multiple Choice Multiple AnswerQuestion What is dematerialization ?Correct Answer Physical certificates converted into electronic from , Credited into investors
account with his/ her DPYour Answer Physical certificates converted into electronic from , Credited into investors
account with his/ her DP , Selling shares
Select The BlankQuestion ________ is in the form of a usance promissory note payable after 45 days from the
date of issue.Correct Answer Certificate of DepositYour Answer Certificate of Deposit
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion What is the amount of net worth accompany should have for opting for an IPO ?Correct Answer 1 Crore
Capital Market_20
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Your Answer 1 Crore
Select The BlankQuestion The process of securitisation involves transfer of assets to a person specially created
called as ________.Correct Answer Special purpose vehicleYour Answer Special purpose vehicle
True/FalseQuestion A mutual fund shall not invest more than 10% of is NAV in equity shares in cases of
open ended schemes.Correct Answer TrueYour Answer False
Multiple Choice Single AnswerQuestion What is a put option?Correct Answer Right to sellYour Answer Right to sell
True/FalseQuestion Venture capital finance is risk finance for entrepreneurial growth oriented companies.Correct Answer TrueYour Answer True
Capital Market_21
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Who can change the composition of securities?Correct Answer Fund managerYour Answer Fund manager
True/FalseQuestion Employee stock option scheme granted to the employee is transferable.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's issued by RBI :-Correct Answer All the NBFC's must register with RBI , Without the registration certificate no
company can undertake activities of NBFC , All companies must be liquid assets equal to 15% ofdeposits
Your Answer All the NBFC's must register with RBI , Without the registration certificate nocompany can undertake activities of NBFC , All companies must be liquid assets equal to 15% ofdeposits
True/FalseQuestion Transactions that involve substantial payment towards goodwill, brand equity or
intellectual property must be placed before the board of directors as per the recommendations ofthe Kumarmangalam Birla report.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Deposits can be accepted for a maximum period of :-Correct Answer 5 yearsYour Answer 10 years
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Single AnswerQuestion Since when have the Indian Stock markets risen ?Correct Answer 37775Your Answer 37775
Multiple Choice Single AnswerQuestion In the wake of boom of which sector the Indian mutual fund launched various sector
specific schemes?Correct Answer SoftwareYour Answer Software
Select The Blank
Capital Market_21
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Question In 2001 a case of rigging and short selling based insider trading was noticed in thecase of proposed merger of ________.
Correct Answer UTI Bank with GTBYour Answer OBC with GTB
Select The BlankQuestion ________ are a kind of portfolio schemes.Correct Answer Mutual fundsYour Answer Mutual funds
Select The BlankQuestion ________ are a kind of portfolio schemes.Correct Answer Mutual fundsYour Answer Mutual funds
Multiple Choice Single AnswerQuestion What is equipment leasing ?Correct Answer Contractual agreement where the lessor of equipment transfers the right to use
the equipment to the lesseeYour Answer Contractual agreement where the lessor of equipment transfers the right to use
the equipment to the lessee
Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Overall economic condition , Demand and supply capital , Degree of popularity
of the industryYour Answer Overall economic condition , Demand and supply capital , Degree of popularity of
the industry
True/FalseQuestion Mergers and amalgamations of companies are also covered under the SEBI
regulations 1997.Correct Answer FalseYour Answer False
Select The BlankQuestion The DP opens investor account in the system and gives an account number also
known as ________.Correct Answer BO IDYour Answer BO ID
True/FalseQuestion Constant change would be one of the reasons for failure of corporate governance.Correct Answer TrueYour Answer False
Select The BlankQuestion In case of an IPO of any security of issue size of Rs________ or more security shall
be issued only in demat form.Correct Answer 10 croresYour Answer 10 crores
True/FalseQuestion The company opting for an IPO should have net worth of at least Rs 1 crore in each
of the preceding two years.Correct Answer True
Capital Market_21
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Your Answer False
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the depository ,
Maintain the investor's holdings in an electronic form , Effect settlement of securities traded onexchanges
Your Answer Enable surrender and withdrawal of securities to and from the depository ,Maintain the investor's holdings in an electronic form , Effect settlement of securities traded onexchanges
Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity , Must disclose
investment strategyYour Answer VCF's must be registered , Cannot carry out another activity , Must disclose
investment strategy
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
Match The FollowingQuestion Correct Answer Your Answer
Castrol FY 2003 - 03 Dividend Rs145 crores FY 2003 - 03 Dividend Rs145 crores
MS Verma committee Dual Flotation Dual Flotation
Hero Honda FY 2003 - 03 Dividend Rs187 crores FY 2003 - 03 Dividend Rs187 crores
VSNL FY 2003 - 03 Dividend Rs172 crores FY 2003 - 03 Dividend Rs172 crores
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion When did the trading in foreign currency options start in India?Correct Answer 37809Your Answer 37829
Multiple Choice Multiple AnswerQuestion What is dematerialization ?Correct Answer Credited into investors account with his/ her DP , Physical certificates
converted into electronic fromYour Answer Physical certificates converted into electronic from , Credited into investors
account with his/ her DP
Select The BlankQuestion No mutual fund under all its schemes should own more than ________ of any
company's paid up capital carrying voting rights.Correct Answer 0.1
Capital Market_21
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Your Answer 0.3
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills , Experience
Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring , Communication through the
net , Operate in stock market privately through home or officeYour Answer Screen based trading in place of traditional ring , Communication through the net ,
Operate in stock market privately through home or office
Multiple Choice Single AnswerQuestion If the unlisted company does not satisfy the criteria of net worth profitability and issue
size how can it come out with a public issue?Correct Answer Through book building processYour Answer Through book building process
Multiple Choice Single AnswerQuestion Which is the favorite destination for venture funds?Correct Answer BPOYour Answer BPO
Multiple Choice Multiple AnswerQuestion Who issues participatory notes?Correct Answer Associates of India based foreign brokerages , Domestic institutional
brokeragesYour Answer Associates of India based foreign brokerages , Domestic institutional brokerages
Multiple Choice Single AnswerQuestion For a VCF to be registered with SEBI what is the registration fee ?Correct Answer 5 lacsYour Answer 5 lacs
Match The FollowingQuestion Correct Answer Your Answer
Ready forward transaction (Repo) Interbank sale and repurchase of securities Interbank sale andrepurchase of securities
Commercial paper Means of raising short term debt by companies Means of raising short termdebt by companies
STCI Operations in call money markets Operations in call money markets
Market stabilsation Bonds Launched in fiscal 2004-05 Launched in fiscal 2004-05
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and
commercial paper.Correct Answer FalseYour Answer False
Capital Market_21
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Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies by NHB?Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of
auditorsYour Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of
auditors
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer False
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till approval of
trustees and offer document has been filed with the board , With each offer document pay filingfees , Offer document to contain disclosures
Your Answer The Asset management company shall not launch any scheme till approval oftrustees and offer document has been filed with the board , With each offer document pay filingfees , Offer document to contain disclosures
Multiple Choice Single AnswerQuestion What is the limit for aggregate investment of FII's NRI's and OCB's?Correct Answer 0.3Your Answer 0.25
True/FalseQuestion Acquisition finance, which provide funding for acquiring another company are often
closely held or fairly owned.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what amount is expected to
be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores
Select The BlankQuestion The acquirer is required to make the PA within ________ working days of entering
into an agreement to acquire shares or deciding to acquire share's voting rights of targetcompany.
Correct Answer 4Your Answer 4
Multiple Choice Single AnswerQuestion What is the objective of public announcement?Correct Answer Ensure that the shareholders of the target company are aware of the exit
opportunity available to themYour Answer Ensure that the shareholders of the target company are aware of the exit
opportunity available to them
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his client.Correct Answer FalseYour Answer False
Capital Market_21
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True/FalseQuestion If the credit rating is obtained from two different agencies in case of issue of debt
instruments, all the ratings need not be disclosed in the document.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promoters
Select The BlankQuestion When one decides to have the shares in an electronic form one has to approach
________.Correct Answer DPYour Answer DP
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer Crisil
True/FalseQuestion The acquirer is required to appoint a merchant banker before making
a PA.Correct Answer TrueYour Answer True
Select The BlankQuestion Hire Purchase transactions are liable to ________.Correct Answer Sales taxYour Answer Sales tax
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term
instrumentsYour Answer Market for long term funds and investments in long term
instruments
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing
skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing
skills , Experience
Multiple Choice Single AnswerQuestion What is Discretionary Portfolio management service ?Correct Answer Client gives his money for investment to the portfolio
manager and leaves it to him to make all the investment decisions.Your Answer Client gives his money for investment to the portfolio manager
and leaves it to him to make all the investment decisions.
True/FalseQuestion Depositary facilitates transfers without having to handle money.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital
market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what
amount is expected to be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores
Multiple Choice Multiple Answer
Question The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number of
investors who have common financial goal , Issue units to investor whichrepresent right in assets , Investments in mutual funds may be in the form ofstock, bond, money market securitiesYour Answer A trust that pools in savings and funds from large number of
investors who have common financial goal , Issue units to investor whichrepresent right in assets , Investments in mutual funds may be in the form ofstock, bond, money market securities
True/FalseQuestion If the credit rating is obtained from two different agencies in
case of issue of debt instruments, all the ratings need not be disclosed in thedocument.Correct Answer FalseYour Answer True
Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any litigation
connected with ________.Correct Answer Securities marketsYour Answer Clients
Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?Correct Answer Knowledge and information about various aspects of capital
markets , Ability to evaluate and analyze , Update the knowledgeYour Answer Knowledge and information about various aspects of capital
markets , Ability to evaluate and analyze , Update the knowledge
Multiple Choice Multiple AnswerQuestion Describe the stock lending mechanism:-Correct Answer Involves two parties one who is willing to lend and other who
wishes to borrow securities at market related rates , Lender is assured ofgetting equivalent the relevant securities by NSSCL on the settlement date ,Lender gets benefit of reasonable return called lending feeYour Answer Involves two parties one who is willing to lend and other who
wishes to borrow securities at market related rates , Lender gets benefit ofreasonable return called lending fee
Multiple Choice Multiple AnswerQuestion What are the limitations of refinance facility?Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan
funds of HFC's , Not to exceed 15 % of NOF of NHBYour Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan
funds of HFC's , Not to exceed 15 % of NOF of NHB
Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what period
from the date of passing the resolution?Correct Answer 12 monthsYour Answer 12 months
Match The FollowingQuestion Correct Answer Your Answer
10 HDFC foreign currency deal Global investors pumping funds in India SpecificFunds
0.57 FII current free float sensex company FII free float stock NIFTY companies
0.45 FII free float stock NIFTY companies FII's total free float sex and NIFTY
$ 476 mn Global investors pumping funds in India Specific Funds HDFC foreigncurrency deal
Multiple Choice Single AnswerQuestion When did the trading in foreign currency options start in India?Correct Answer 37809Your Answer 37829
Multiple Choice Single AnswerQuestion What is the main objective of credit appraisal ?Correct Answer Assess the repayment capacityYour Answer Assess the age of the person borrowing
True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their
trustees and asset management companies.Correct Answer FalseYour Answer False
Select The BlankQuestion In the L & T reliance case, Reliance was fined ________.Correct Answer Rs. 5 lacsYour Answer Rs. 5 lacs
Select The BlankQuestion Recently many banks have started issuing ________ which could also
be used as a debit card.Correct Answer ATM cardYour Answer ATM card
Select The BlankQuestion A ________ means any persons connected with a company and who is
reasonably having access to unpublished price sensitive information.Correct Answer InsiderYour Answer Insider
Select The BlankQuestion SENSEX is calculated using ________ method.Correct Answer Market capitalizationYour Answer Weighted
Match The FollowingQuestion Correct Answer Your Answer
Share buy back is a way of Returning surplus cash to the shareholders Returningsurplus cash to the shareholders
Dutch Auction Price of the Buy back is done by the shareholders Price of the Buyback is done by the shareholders
Open market purchases No minimum price stipulation No minimum price stipulation
Companies holding more than 90% equity Can be delisted Can be delisted
True/FalseQuestion The public cannot give their complaints or comments on the issuer
company or others connected with the issue to SEBI.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase
securities separately for each client.Correct Answer FalseYour Answer True
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and
large corporates to issue certificate of deposits.Correct Answer FalseYour Answer True
True/FalseQuestion Book building is a process whereby the price is determined on the
basis of actual demand as evident from the offers given by the variousinstitutional investors and underwriters.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What is the system of rolling settlement prevalent in the USA ?Correct Answer Transaction + 3Your Answer Transaction + 3
Multiple Choice Single AnswerQuestion What is the most important objective for an investor?Correct Answer Protection of the value of the investmentYour Answer Profit maximization
Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's
issued by RBI :-Correct Answer All the NBFC's must register with RBI , Without the
registration certificate no company can undertake activities of NBFC , Allcompanies must be liquid assets equal to 15% of depositsYour Answer All the NBFC's must register with RBI , Without the registration
certificate no company can undertake activities of NBFC , All companies must beliquid assets equal to 15% of deposits
Multiple Choice Single Answer
Question What do you mean by venture capital?Correct Answer Providing seed, start up capital and first stage financingYour Answer Providing seed, start up capital and first stage financing
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital
markets?Correct Answer Establishment of NSEYour Answer Opening of Indian Capital Markets to FII's
Select The BlankQuestion The continuing growth in ________ was one of the factors that
contributed to the growth of credit rating.Correct Answer Information technologyYour Answer Information technology
Select The BlankQuestion In case of a public issue by a listed company participation by
promoters in the proposed issues in excess of the required minimum percentageshall also be looked in for a period of ________.Correct Answer 1 yearYour Answer 3 years
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his
client.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring ,
Communication through the net , Operate in stock market privately through homeor officeYour Answer Screen based trading in place of traditional ring ,
Communication through the net , Operate in stock market privately through homeor office
Select The BlankQuestion The Kumarmangalam Birla report stressed on the importance of
________ with respect to AGM's.Correct Answer Proxy voting / ballot systemsYour Answer Proxy voting / ballot systems
True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities
purchased under the buy back arrangement to be extinguished and physicallydestroyed.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint
debenture trustee , Debenture redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint debenture
trustee , Debenture redemption reserve to be created
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in
India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity
, Must disclose investment strategyYour Answer VCF's must be registered , Cannot carry out another activity ,
Must disclose investment strategy
Multiple Choice Single AnswerQuestion What is the minimum number of days for which the bid should remain
open in book building?Correct Answer 5 daysYour Answer 7 days
Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many
times of the net owned funds?Correct Answer 4 timesYour Answer 4 times
Select The BlankQuestion With the introduction of ________ accounts the complaints about
allotment have surely gone down.Correct Answer DEMATYour Answer DEMAT
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer Crisil
True/FalseQuestion The acquirer is required to appoint a merchant banker before making
a PA.Correct Answer TrueYour Answer True
Select The BlankQuestion Hire Purchase transactions are liable to ________.Correct Answer Sales taxYour Answer Sales tax
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term
instrumentsYour Answer Market for long term funds and investments in long term
instruments
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing
skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing
skills , Experience
Multiple Choice Single AnswerQuestion What is Discretionary Portfolio management service ?Correct Answer Client gives his money for investment to the portfolio
manager and leaves it to him to make all the investment decisions.Your Answer Client gives his money for investment to the portfolio manager
and leaves it to him to make all the investment decisions.
True/FalseQuestion Depositary facilitates transfers without having to handle money.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital
market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what
amount is expected to be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores
Multiple Choice Multiple Answer
Question The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number of
investors who have common financial goal , Issue units to investor whichrepresent right in assets , Investments in mutual funds may be in the form ofstock, bond, money market securitiesYour Answer A trust that pools in savings and funds from large number of
investors who have common financial goal , Issue units to investor whichrepresent right in assets , Investments in mutual funds may be in the form ofstock, bond, money market securities
True/FalseQuestion If the credit rating is obtained from two different agencies in
case of issue of debt instruments, all the ratings need not be disclosed in thedocument.Correct Answer FalseYour Answer True
Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any litigation
connected with ________.Correct Answer Securities marketsYour Answer Clients
Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?Correct Answer Knowledge and information about various aspects of capital
markets , Ability to evaluate and analyze , Update the knowledgeYour Answer Knowledge and information about various aspects of capital
markets , Ability to evaluate and analyze , Update the knowledge
Multiple Choice Multiple AnswerQuestion Describe the stock lending mechanism:-Correct Answer Involves two parties one who is willing to lend and other who
wishes to borrow securities at market related rates , Lender is assured ofgetting equivalent the relevant securities by NSSCL on the settlement date ,Lender gets benefit of reasonable return called lending feeYour Answer Involves two parties one who is willing to lend and other who
wishes to borrow securities at market related rates , Lender gets benefit ofreasonable return called lending fee
Multiple Choice Multiple AnswerQuestion What are the limitations of refinance facility?Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan
funds of HFC's , Not to exceed 15 % of NOF of NHBYour Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan
funds of HFC's , Not to exceed 15 % of NOF of NHB
Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what period
from the date of passing the resolution?Correct Answer 12 monthsYour Answer 12 months
Match The FollowingQuestion Correct Answer Your Answer
10 HDFC foreign currency deal Global investors pumping funds in India SpecificFunds
0.57 FII current free float sensex company FII free float stock NIFTY companies
0.45 FII free float stock NIFTY companies FII's total free float sex and NIFTY
$ 476 mn Global investors pumping funds in India Specific Funds HDFC foreigncurrency deal
Multiple Choice Single AnswerQuestion When did the trading in foreign currency options start in India?Correct Answer 37809Your Answer 37829
Multiple Choice Single AnswerQuestion What is the main objective of credit appraisal ?Correct Answer Assess the repayment capacityYour Answer Assess the age of the person borrowing
True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their
trustees and asset management companies.Correct Answer FalseYour Answer False
Select The BlankQuestion In the L & T reliance case, Reliance was fined ________.Correct Answer Rs. 5 lacsYour Answer Rs. 5 lacs
Select The BlankQuestion Recently many banks have started issuing ________ which could also
be used as a debit card.Correct Answer ATM cardYour Answer ATM card
Select The BlankQuestion A ________ means any persons connected with a company and who is
reasonably having access to unpublished price sensitive information.Correct Answer InsiderYour Answer Insider
Select The BlankQuestion SENSEX is calculated using ________ method.Correct Answer Market capitalizationYour Answer Weighted
Match The FollowingQuestion Correct Answer Your Answer
Share buy back is a way of Returning surplus cash to the shareholders Returningsurplus cash to the shareholders
Dutch Auction Price of the Buy back is done by the shareholders Price of the Buyback is done by the shareholders
Open market purchases No minimum price stipulation No minimum price stipulation
Companies holding more than 90% equity Can be delisted Can be delisted
True/FalseQuestion The public cannot give their complaints or comments on the issuer
company or others connected with the issue to SEBI.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase
securities separately for each client.Correct Answer FalseYour Answer True
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and
large corporates to issue certificate of deposits.Correct Answer FalseYour Answer True
True/FalseQuestion Book building is a process whereby the price is determined on the
basis of actual demand as evident from the offers given by the variousinstitutional investors and underwriters.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What is the system of rolling settlement prevalent in the USA ?Correct Answer Transaction + 3Your Answer Transaction + 3
Multiple Choice Single AnswerQuestion What is the most important objective for an investor?Correct Answer Protection of the value of the investmentYour Answer Profit maximization
Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's
issued by RBI :-Correct Answer All the NBFC's must register with RBI , Without the
registration certificate no company can undertake activities of NBFC , Allcompanies must be liquid assets equal to 15% of depositsYour Answer All the NBFC's must register with RBI , Without the registration
certificate no company can undertake activities of NBFC , All companies must beliquid assets equal to 15% of deposits
Multiple Choice Single Answer
Question What do you mean by venture capital?Correct Answer Providing seed, start up capital and first stage financingYour Answer Providing seed, start up capital and first stage financing
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital
markets?Correct Answer Establishment of NSEYour Answer Opening of Indian Capital Markets to FII's
Select The BlankQuestion The continuing growth in ________ was one of the factors that
contributed to the growth of credit rating.Correct Answer Information technologyYour Answer Information technology
Select The BlankQuestion In case of a public issue by a listed company participation by
promoters in the proposed issues in excess of the required minimum percentageshall also be looked in for a period of ________.Correct Answer 1 yearYour Answer 3 years
True/FalseQuestion A portfolio manager has to assure a guaranteed return to his
client.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring ,
Communication through the net , Operate in stock market privately through homeor officeYour Answer Screen based trading in place of traditional ring ,
Communication through the net , Operate in stock market privately through homeor office
Select The BlankQuestion The Kumarmangalam Birla report stressed on the importance of
________ with respect to AGM's.Correct Answer Proxy voting / ballot systemsYour Answer Proxy voting / ballot systems
True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities
purchased under the buy back arrangement to be extinguished and physicallydestroyed.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint
debenture trustee , Debenture redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint debenture
trustee , Debenture redemption reserve to be created
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in
India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity
, Must disclose investment strategyYour Answer VCF's must be registered , Cannot carry out another activity ,
Must disclose investment strategy
Multiple Choice Single AnswerQuestion What is the minimum number of days for which the bid should remain
open in book building?Correct Answer 5 daysYour Answer 7 days
Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many
times of the net owned funds?Correct Answer 4 timesYour Answer 4 times
Select The BlankQuestion With the introduction of ________ accounts the complaints about
allotment have surely gone down.Correct Answer DEMATYour Answer DEMAT
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion Information technology, communication and entertainment represent ________
stocks.Correct Answer ICEYour Answer ICE
True/FalseQuestion The public cannot give their complaints or comments on the issuer company or
others connected with the issue to SEBI.Correct Answer FalseYour Answer True
True/FalseQuestion In order to dematerialize the securities one has to fill DRF.Correct Answer TrueYour Answer True
Select The BlankQuestion In case of an IPO of any security of issue size of Rs________ or more security shall
be issued only in demat form.Correct Answer 10 croresYour Answer 10 crores
Multiple Choice Multiple AnswerQuestion What are the obligations of a company in a share buy back?Correct Answer The offer letter should contain true, factual and material information and should
not be misleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of the closureof the offer.
Your Answer The offer letter should contain true, factual and material information and shouldnot be misleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of the closureof the offer.
Select The BlankQuestion The DP opens investor account in the system and gives an account number also
known as ________.Correct Answer BO IDYour Answer BO ID
Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many times of the net
owned funds?Correct Answer 4 timesYour Answer 4 times
Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Degree of popularity of the industry , Overall economic condition , Demand
and supply capitalYour Answer Overall economic condition , Demand and supply capital , Degree of popularity of
the industry
Match The Following
Question Correct Answer Your Answer
Portfolio Collection of assets Collection of assets
Factors influencing portfolio decisions Business and Market risks Business and Market risks
Code of conduct- Portfolio Manager Observe high standard of integrity and fairness Observe highstandard of integrity and fairness
SEBI Regulations Portfolio Manager must fulfill the capital adequacy norms To make timelydecision regarding sale and purchase of securities
Multiple Choice Multiple AnswerQuestion What are the major factors influencing portfolio decisions?Correct Answer Investor characteristics , Liquidity needs and tax considerations , Investment
and interest rate riskYour Answer Investor characteristics , Liquidity needs and tax considerations , Investment and
interest rate risk
Multiple Choice Single AnswerQuestion The refinance made available to any HFC is not to be more than :-Correct Answer 60% of its outstanding housing loansYour Answer 60% of its outstanding housing loans
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?Correct Answer Securities Contract Regulation ActYour Answer Securities Contract Regulation Act
Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?Correct Answer A net connection , A registered account with a broker and a demat account , Bank
payment gateway or online banking facilityYour Answer A registered account with a broker and a demat account , Bank payment gateway or online
banking facility , A net connection
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments
True/FalseQuestion Sweat equity shares are shares issued by company to employees or directors to discount.Correct Answer TrueYour Answer True
True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and commercial paper.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under various SEBI regulations how many brokers suspended?Correct Answer 8Your Answer 8
Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till approval of trustees
and offer document has been filed with the board , With each offer document pay filing fees , Offerdocument to contain disclosures
Your Answer With each offer document pay filing fees , Offer document to contain disclosures
Match The FollowingQuestion Correct Answer Your Answer
Charge card Form of plastic money Member establishment
Warning Bulletin Authenticity test Authenticity test
Credit information company SBI, HDFC bank SBI, HDFC bank
Credit card issuing company Visa/Master Card Visa/Master Card
Multiple Choice Single AnswerQuestion Who forms the Asset management company (AMC)?Correct Answer Group of trustees
Your Answer Group of trustees
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion Under which regulation is reporting mandatory in respect of acquisitions arising out of firm
allot meant in public issues and rights issues etc?Correct Answer Regulation (3) 4Your Answer Regulation (3) 4
True/FalseQuestion Book building is a process whereby the price is determined on the basis of actual demand as
evident from the offers given by the various institutional investors and underwriters.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The Money market mutual funds (MMMFs) can invest the funds in which of these securities?Correct Answer Call/notice moneyYour Answer Call/notice money
Multiple Choice Multiple AnswerQuestion What is the information to be placed before the board of directors as per the Kumarmangalam
report?Correct Answer Annual operating plans , Capital budgets , Quarterly resultsYour Answer Annual operating plans , Capital budgets , Quarterly results
True/FalseQuestion Bidder cannot revise his bids.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What are ESOP's ?Correct Answer One of the methods of giving part ownership of the company to the employees ,
Employees can take part in the prosperity of the company , Is a reward and linked with the increase in theprices of the shares
Your Answer Is a reward and linked with the increase in the prices of the shares , One of the methods ofgiving part ownership of the company to the employees , Employees can take part in the prosperity of thecompany
Match The FollowingQuestion Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Should effectively participate ingeneral body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders and debenture holdersLook into defaults to depositors creditors shareholders and debenture holders
Reasons of failures of corporate governance in spite of norms Superficial commitment to vision, missionand values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision making process Assisting theboard in decision making process
Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB controlled
by Indians promoters
Select The BlankQuestion While structuring the deal the entrepreneur seeks ________.Correct Answer Voting controlYour Answer Goodwill
True/FalseQuestion DRR is treated as part of general reserve for consideration of bonus issue of proposals.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills , Experience
Multiple Choice Multiple AnswerQuestion What precautions are to be taken with respect to delivery instruction slip ?Correct Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account idYour Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account id
True/FalseQuestion Reliance group has added over 10000 crores in market capital.Correct Answer TrueYour Answer False
Select The BlankQuestion An acquirer who holds 15% or more but less than 75% of voting' rights can acquire such
additional shares as would entitle him to exercise more than ________ of voting rights in an financial year.Correct Answer 0.05Your Answer 0.2
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer FITSCH
Select The Blank
Question The appointment of a ________ is mandatory in a offer process.Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public issue as regards to
its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore
Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank
Multiple Choice Single AnswerQuestion To make a public announcement the acquirer has to appoint :-Correct Answer Merchant BankerYour Answer Merchant Banker
Multiple Choice Single AnswerQuestion What is a more contemporary definition of corporate governance?Correct Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountabilityYour Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountability
Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in compliance of SEBI
regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock exchanges at least 4 days
before the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days , Annual disclosures
Your Answer Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Select The BlankQuestion The merger of GTB and UTI was called off due to intervention of ________Correct Answer SEBI and RBIYour Answer SEBI and RBI
Select The BlankQuestion The Merchant banker will incorporate in the letter of offer the comments made by SEBI and
then send within ________ days from the date of PA to all shareholders whose names appear in the registerof the company.
Correct Answer 45Your Answer 45
Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?
Correct Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as inopinion of board
Your Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in opinionof board
True/FalseQuestion The public cannot give their complaints or comments on the issuer company or others
connected with the issue to SEBI.Correct Answer FalseYour Answer False
True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer No stamp duty , Reduction in paperless work , Reduction in transaction costYour Answer Reduction in paperless work , Reduction in transaction cost , Holds funds in an account
Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchangesYour Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchanges
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large corporates to issue
certificate of deposits.Correct Answer FalseYour Answer True
Select The BlankQuestion Directors should not be member of more than________ committees.Correct Answer 10Your Answer 10
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities separately for each client.Correct Answer FalseYour Answer False
Capital Market_26CM LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer Crisil
True/FalseQuestion The acquirer is required to appoint a merchant banker before
making a PA.Correct Answer TrueYour Answer True
Select The BlankQuestion Hire Purchase transactions are liable to ________.Correct Answer Sales taxYour Answer Sales tax
Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term
instrumentsYour Answer Market for long term funds and investments in long term
instruments
Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and
marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing
skills , Experience
Multiple Choice Single AnswerQuestion What is Discretionary Portfolio management service ?Correct Answer Client gives his money for investment to the portfolio
manager and leaves it to him to make all the investment decisions.Your Answer Client gives his money for investment to the portfolio
manager and leaves it to him to make all the investment decisions.
True/FalseQuestion Depositary facilitates transfers without having to handle money.Correct Answer False
Page 1
Capital Market_26Your Answer True
Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital
market?Correct Answer US$14 bnYour Answer US$14 bn
Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what
amount is expected to be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores
Multiple Choice Multiple AnswerQuestion The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number
of investors who have common financial goal , Issue units to investor whichrepresent right in assets , Investments in mutual funds may be in the form ofstock, bond, money market securitiesYour Answer A trust that pools in savings and funds from large number of
investors who have common financial goal , Issue units to investor whichrepresent right in assets , Investments in mutual funds may be in the form ofstock, bond, money market securities
True/FalseQuestion If the credit rating is obtained from two different agencies in case
of issue of debt instruments, all the ratings need not be disclosed in thedocument.Correct Answer FalseYour Answer True
Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any
litigation connected with ________.Correct Answer Securities marketsYour Answer Clients
Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?Correct Answer Knowledge and information about various aspects of
capital markets , Ability to evaluate and analyze , Update the knowledgePage 2
Capital Market_26Your Answer Knowledge and information about various aspects of capital
markets , Ability to evaluate and analyze , Update the knowledge
Multiple Choice Multiple AnswerQuestion Describe the stock lending mechanism:-Correct Answer Involves two parties one who is willing to lend and other
who wishes to borrow securities at market related rates , Lender is assured ofgetting equivalent the relevant securities by NSSCL on the settlement date ,Lender gets benefit of reasonable return called lending feeYour Answer Involves two parties one who is willing to lend and other who
wishes to borrow securities at market related rates , Lender gets benefit ofreasonable return called lending fee
Multiple Choice Multiple AnswerQuestion What are the limitations of refinance facility?Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total
Loan funds of HFC's , Not to exceed 15 % of NOF of NHBYour Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan
funds of HFC's , Not to exceed 15 % of NOF of NHB
Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what
period from the date of passing the resolution?Correct Answer 12 monthsYour Answer 12 months
Match The FollowingQuestion Correct Answer Your Answer
10 HDFC foreign currency deal Global investors pumping funds in IndiaSpecific Funds
0.57 FII current free float sensex company FII free float stock NIFTYcompanies
0.45 FII free float stock NIFTY companies FII's total free float sex and NIFTY
$ 476 mn Global investors pumping funds in India Specific Funds HDFCforeign currency deal
Multiple Choice Single AnswerPage 3
Capital Market_26Question When did the trading in foreign currency options start in India?Correct Answer 37809Your Answer 37829
Multiple Choice Single AnswerQuestion What is the main objective of credit appraisal ?Correct Answer Assess the repayment capacityYour Answer Assess the age of the person borrowing
True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their
trustees and asset management companies.Correct Answer FalseYour Answer False
Select The BlankQuestion In the L & T reliance case, Reliance was fined ________.Correct Answer Rs. 5 lacsYour Answer Rs. 5 lacs
Select The BlankQuestion Recently many banks have started issuing ________ which
could also be used as a debit card.Correct Answer ATM cardYour Answer ATM card
Select The BlankQuestion A ________ means any persons connected with a company and
who is reasonably having access to unpublished price sensitive information.Correct Answer InsiderYour Answer Insider
Select The BlankQuestion SENSEX is calculated using ________ method.Correct Answer Market capitalizationYour Answer Weighted
Match The FollowingQuestion Correct Answer Your Answer
Share buy back is a way of Returning surplus cash to the shareholdersReturning surplus cash to the shareholders
Page 4
Capital Market_26
Dutch Auction Price of the Buy back is done by the shareholders Price of theBuy back is done by the shareholders
Open market purchases No minimum price stipulation No minimum pricestipulation
Companies holding more than 90% equity Can be delisted Can be delisted
True/FalseQuestion The public cannot give their complaints or comments on the issuer
company or others connected with the issue to SEBI.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1
True/FalseQuestion A portfolio manager need not necessarily sell or purchase
securities separately for each client.Correct Answer FalseYour Answer True
True/FalseQuestion RBI has permitted all commercial banks, financial institutions and
large corporates to issue certificate of deposits.Correct Answer FalseYour Answer True
True/FalseQuestion Book building is a process whereby the price is determined on the
basis of actual demand as evident from the offers given by the variousinstitutional investors and underwriters.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What is the system of rolling settlement prevalent in the USA ?
Page 5
Capital Market_26Correct Answer Transaction + 3Your Answer Transaction + 3
Multiple Choice Single AnswerQuestion What is the most important objective for an investor?Correct Answer Protection of the value of the investmentYour Answer Profit maximization
Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's
issued by RBI :-Correct Answer All the NBFC's must register with RBI , Without the
registration certificate no company can undertake activities of NBFC , Allcompanies must be liquid assets equal to 15% of depositsYour Answer All the NBFC's must register with RBI , Without the
registration certificate no company can undertake activities of NBFC , Allcompanies must be liquid assets equal to 15% of deposits
Multiple Choice Single AnswerQuestion What do you mean by venture capital?Correct Answer Providing seed, start up capital and first stage financingYour Answer Providing seed, start up capital and first stage financing
Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital
markets?Correct Answer Establishment of NSEYour Answer Opening of Indian Capital Markets to FII's
Select The BlankQuestion The continuing growth in ________ was one of the factors that
contributed to the growth of credit rating.Correct Answer Information technologyYour Answer Information technology
Select The BlankQuestion In case of a public issue by a listed company participation by
promoters in the proposed issues in excess of the required minimumpercentage shall also be looked in for a period of ________.Correct Answer 1 yearYour Answer 3 years
Page 6
Capital Market_26True/FalseQuestion A portfolio manager has to assure a guaranteed return to his
client.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring ,
Communication through the net , Operate in stock market privately throughhome or officeYour Answer Screen based trading in place of traditional ring ,
Communication through the net , Operate in stock market privately throughhome or office
Select The BlankQuestion The Kumarmangalam Birla report stressed on the importance of
________ with respect to AGM's.Correct Answer Proxy voting / ballot systemsYour Answer Proxy voting / ballot systems
True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities
purchased under the buy back arrangement to be extinguished and physicallydestroyed.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint
debenture trustee , Debenture redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint
debenture trustee , Debenture redemption reserve to be created
Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture
in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries
Multiple Choice Multiple AnswerPage 7
Capital Market_26Question Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another
activity , Must disclose investment strategyYour Answer VCF's must be registered , Cannot carry out another activity ,
Must disclose investment strategy
Multiple Choice Single AnswerQuestion What is the minimum number of days for which the bid should
remain open in book building?Correct Answer 5 daysYour Answer 7 days
Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how
many times of the net owned funds?Correct Answer 4 timesYour Answer 4 times
Select The BlankQuestion With the introduction of ________ accounts the complaints
about allotment have surely gone down.Correct Answer DEMATYour Answer DEMAT
Page 8
ASSIGNMENTS
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has
changed its name to ________ effective from October 1992.Correct Answer SCICI Ltd
Your Answer SCICI Ltd
Multiple Choice Multiple AnswerQuestion IFC provides financial assistance :-
Correct Answer Through loans , Through purchase of shares , For economicdevelopment
Your Answer Largely as aid , Through loans
Select The BlankQuestion Period of Holiday Insurance is ________.
Correct Answer Six months or less
Your Answer Six months or less
Multiple Choice Multiple AnswerQuestion From time to time RBI has issued :-
Correct Answer Straight coupon bonds , Inflation linked bonds , Zero couponbonds
Your Answer Straight coupon bonds , Inflation linked bonds , Zero couponbonds
Multiple Choice Multiple AnswerQuestion R B I issues currency notes against the security of:-
Correct Answer Gold bullion , Foreign securities , GOI securities
Your Answer Gold bullion , Foreign securities , GOI securities
Multiple Choice Single AnswerQuestion The type of banking involving a small number of Large
Customers viz.Corporates & multinationals is :-Correct Answer Wholesale Banking
Your Answer Wholesale Banking
True/False
Question NABARD is an apex institution in the field of Integrated RuralDevelopment.
Correct Answer True
Your Answer True
Select The BlankQuestion The ________ are buy and hold investors and almost never
trade on their investments.Correct Answer Provident Funds
Your Answer Mutual Funds
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-
Correct Answer New Projects , Renovation , Modernisation
Your Answer New Projects , Renovation , Modernisation
Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the
obligation to contribute further premium by :-Correct Answer Surrendering the policy , Converting it into paid up policy ,
Assigning it in the open marketYour Answer Surrendering the policy , Converting it into paid up policy ,
Assigning it in the open market
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-
Correct Answer By lending at 0% interest. , For periods up to ten years , Byborrowing from IBRD
Your Answer By borrowing from IBRD , By lending at 0% interest. , Forperiods up to ten years
Multiple Choice Single AnswerQuestion Financial institutions deal in :-
Correct Answer Financial assets
Your Answer Financial assets
Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-
Correct Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Your Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Multiple Choice Single AnswerQuestion Treasury bills are issued by :-
Correct Answer RBI
Your Answer RBI
True/FalseQuestion The bids for T-Bills are on price/interest basis.
Correct Answer True
Your Answer True
True/FalseQuestion No TDS is deducted on Interest paid on CDs.
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-
Correct Answer Government regulation and control
Your Answer Government regulation and control
Multiple Choice Multiple AnswerQuestion Mutual fund has main entities like :-
Correct Answer Sponsor , Trust , Asset Management company
Your Answer Sponsor , Trust , Asset Management company
Multiple Choice Multiple AnswerQuestion Prominent Institutional Investors are :-
Correct Answer Foreign Investors(FIIs) , Corporate Treasuries , Mutual Funds
Your Answer Foreign Investors(FIIs) , Corporate Treasuries , Mutual Funds
Multiple Choice Single AnswerQuestion A record of the holdings of GOI dated securities of each holder
is contained in :-
Correct Answer SGL pass book
Your Answer SGL pass book
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-
Correct Answer Indigenous bankers
Your Answer Indigenous bankers
Multiple Choice Single AnswerQuestion SIDCs & SIICs are under the control of :-
Correct Answer State Governments
Your Answer State Governments
True/FalseQuestion PFC has been persuading State Governments restructuring of
their power sector to make them viable.Correct Answer True
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Advances Loans/cash credits Loans/cash credits
Cash withdrawal facility ATM ATM
Remittances MT/DD/TT/EFT MT/DD/TT/EFT
Government business Collection of taxes Collection of taxes
Select The BlankQuestion GIC raises funds to meet claims from ________.
Correct Answer Premium collected
Your Answer Premium collected
Select The BlankQuestion The CRAFICARD recommended the establishment of
________.
Correct Answer NABARD
Your Answer NABARD
Multiple Choice Multiple AnswerQuestion The objective NEF Scheme of SIDBI is to provide equity support
to :-Correct Answer New Units in tiny Sector , New Units in Small Sector , Existing
units in tiny & small scale sectorYour Answer New Units in tiny Sector , New Units in Small Sector , Existing
units in tiny & small scale sector
Multiple Choice Single AnswerQuestion Which of the following institution was set up as a subsidy of RBI
in 1964?Correct Answer IDBI
Your Answer IDBI
Select The BlankQuestion Kisan Vikas Patra are issued through ________.
Correct Answer Post Offices
Your Answer Post Offices
Multiple Choice Single AnswerQuestion DFHI was incorporated under the :-
Correct Answer Companies Act, 1956
Your Answer Companies Act, 1956
Multiple Choice Single AnswerQuestion Which one of the following is not a deposit account?
Correct Answer Cash Credit account
Your Answer Cash Certificate
True/FalseQuestion CP is a usance promissory note hence it can be negotiated by
endorsement & delivery.Correct Answer True
Your Answer False
Select The BlankQuestion The ________ meet the long and medium term credit needs of
agriculture.Correct Answer Land Development Banks
Your Answer Regional Rural Banks
Multiple Choice Single AnswerQuestion Zero Coupon Bonds are issued at a :-
Correct Answer Discount to face value
Your Answer Discount to face value
True/FalseQuestion NABARD provides Refinance for Marketing of Crops.
Correct Answer True
Your Answer False
True/FalseQuestion The Capital of NABARD is subscribed by World Bank.
Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion Soft Loan Scheme for modernisation is provided by :-
Correct Answer IFCI , ICICI , SIDBI
Your Answer ICICI
True/FalseQuestion In case of T-Bills potential investors have to put in competitive
bids.Correct Answer True
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Development financialinstitutions
IFCI IFCI
Organised sector Banking System Banking System
Unorganised sector Indigenous banks Indigenous banks
Mutual funds UTI UTI
True/FalseQuestion Non bank financial institutions undertake fund and non fund
based activities.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Instruments issued by DFIs and Banks carry :-
Correct Answer Highest credit ratings
Your Answer Highest credit ratings
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-
Correct Answer SIDF
Your Answer SIDF
True/FalseQuestion Amongst others, ICICI also provided long and medium term
loans or equity finance.Correct Answer True
Your Answer True
Select The BlankQuestion Interest on advances is generally calculated on ________
products.Correct Answer Daily
Your Answer Fortnightly
Select The BlankQuestion The ________ has been accredited by RBI as a Primary Dealer
in Governemt Securities.Correct Answer STCI
Your Answer GIC
Select The BlankQuestion ________ is merely an asset created out of book entries.
Correct Answer SDR
Your Answer SDR
Multiple Choice Single AnswerQuestion Development Financial Institutions provide finance to the needy
Correct Answer Corporates & govt. institutions
Your Answer Corporates & govt. institutions
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion SIDBI provides :-
Correct Answer Refinance , Rediscounting of Bills , Financial support to SSIDC
Your Answer Refinance , Rediscounting of Bills , Financial support to SSIDC
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution
of Chemical Fertilisers.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Which of the following services is not provided by Commercial
banks?Correct Answer Deposit Insurance
Your Answer Deposit Insurance
Multiple Choice Single AnswerQuestion IDBI has helped in the establishment of :-
Correct Answer EXIM Bank
Your Answer IFCI
Select The BlankQuestion DFIs are the second largest issuer of ________ after the Govt
and Sovereign bodies.Correct Answer Debt instruments
Your Answer Debt instruments
True/FalseQuestion A Cheque is a Negotiable Instrument.
Correct Answer True
Your Answer True
True/False
Question State loans are much less liquid than GOI Securities.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion IIBI (formerly known as IRBI )undertakes :-
Correct Answer Merchant Banking activities , Lease or hire purchase finance ,Consultancy & managerial services
Your Answer Merchant Banking activities , Lease or hire purchase finance ,Consultancy & managerial services
True/FalseQuestion Development financial institutions primarily lend to Agriculture
sector.Correct Answer False
Your Answer False
True/FalseQuestion Banks do not invest in the GOI securities .
Correct Answer False
Your Answer False
Select The BlankQuestion NABARDs Criteria for Refinance covers Technical ________ of
the project.Correct Answer Feasibility
Your Answer Feasibility
True/FalseQuestion IMF discourages excessive use of its resources by imposing a
surcharge on large loans.Correct Answer True
Your Answer True
Select The BlankQuestion As a banker to the Government, RBI accepts Government
deposits at ________% interest.Correct Answer 0
Your Answer 0
Select The BlankQuestion HDFCs loans were linked up with________.
Correct Answer Planned Savings
Your Answer Planned Savings
Multiple Choice Multiple AnswerQuestion Other than Tourism, International funds remittances comprise of
:-Correct Answer Donations/Charity , Payments of Salaries , Payments of Royalty
Your Answer Donations/Charity , Payments of Royalty
Multiple Choice Single AnswerQuestion PFC is committed to the integrated development of :-
Correct Answer Power
Your Answer Power
Multiple Choice Single AnswerQuestion A major part of the credit of SFCs went to :-
Correct Answer SSI units
Your Answer SSI units
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-
Correct Answer Over one year
Your Answer Over one year
Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme for
modernisation is also undertaken by IDBI.Correct Answer ICICI
Your Answer ICICI
True/FalseQuestion A Bill of Exchange is negotiable.
Correct Answer True
Your Answer True
Select The BlankQuestion NHB at present has a ________ Capital of Rs. 350 crores.
Correct Answer Paid-up
Your Answer Paid-up
Select The BlankQuestion The term ________ refers to the act of a bank extending finance
to the seller against a letter of credit.Correct Answer Negotiation
Your Answer Negotiation
True/FalseQuestion Under MIGA the World bank offers various forms of Political
Insurance.Correct Answer True
Your Answer True
Select The BlankQuestion The loans under________ are based on Poverty Reduction
Strategy Paper.Correct Answer PRGF
Your Answer PRGF
Multiple Choice Multiple AnswerQuestion The general insurance business can be :-
Correct Answer Marine insurance , Fire insurance , Miscellaneous
Your Answer Marine insurance , Fire insurance , Miscellaneous
Multiple Choice Single AnswerQuestion FIs can be classified into two categories depending on the basis
of incorporation and :-Correct Answer Operation
Your Answer Size
Multiple Choice Multiple Answer
Question The main objective of ICICI was :-
Correct Answer To augment export finance in India , To channelise WorldBank's funds to industries in India , To help in building up aCapital Market in India
Your Answer To augment export finance in India , To help in building up aCapital Market in India , To aid Rural Development in India
Multiple Choice Single AnswerQuestion SIDCs & SIICs give loans ,guarantees & :-
Correct Answer Lease finance
Your Answer Lease finance
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-
Correct Answer Corporates
Your Answer Corporates
True/FalseQuestion SCICI is a member of the OTCEI.
Correct Answer True
Your Answer True
Select The BlankQuestion The extent of powers enjoyed by a branch depends on the size
of its ________.Correct Answer Business
Your Answer Business
True/FalseQuestion Gramin banks are State Owned Banks.
Correct Answer True
Your Answer False
True/FalseQuestion NIDHIS are Trading Organisations.
Correct Answer False
Your Answer True
Multiple Choice Single AnswerQuestion Corporate Debentures are :-
Correct Answer Long term debt instruments
Your Answer Long term debt instruments
Multiple Choice Multiple AnswerQuestion Credit Information report is also known as :-
Correct Answer Credit report , Banker's report , Confidential report
Your Answer Credit report , Banker's report , Confidential report
Match The FollowingQuestion Correct Answer Your Answer
Largest borrower in theworld
IBRD IBRD
International MonetaryCooperation
IMF IMF
Prevention of crises CCL CCL
Political insurance MIGA MIGA
Multiple Choice Single AnswerQuestion The apex institution in the field of Industrial Development is :-
Correct Answer IDBI
Your Answer IDBI
Multiple Choice Single AnswerQuestion Bills Rediscounting Scheme of IDBI was introduced in the year
:-Correct Answer 1965
Your Answer 1965
Select The BlankQuestion Development financial institutions have been established to
cater to ________ of the industrial sector.Correct Answer Long term financial needs
Your Answer Long term financial needs
Select The BlankQuestion The ________ was set up to help corrections in BOP
maladjustments.Correct Answer IMF
Your Answer UNO
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-
Correct Answer Financial commitment , Voting power , Drawing power
Your Answer Financial commitment , Voting power , Drawing power
Multiple Choice Multiple AnswerQuestion Functions of R.O. of a bank include :-
Correct Answer Inspection/audit , Control on branches , Grant loans/advances
Your Answer Control on branches , Grant loans/advances , Pay interest ondeposits
Multiple Choice Single AnswerQuestion IDBI introduced Automatic Refinance Scheme in the year :-
Correct Answer 1978
Your Answer 1975
Select The BlankQuestion The ________ is the apex institution in the field of foreign trade
in India.Correct Answer EXIM bank
Your Answer EXIM bank
Multiple Choice Multiple AnswerQuestion SFCs provide finance to :-
Correct Answer Corporates , Partnerships , Proprietary firms
Your Answer Corporates , Partnerships , Proprietary firms
Match The Following
Question Correct Answer Your Answer
Aquaculture ,BrackishWater
Fisheries Fisheries
Ploughing, weeding,transplantation
Seasonal AgriculturalOperations
Irrigation & Drainage
Market Yards, Storage &Warehousing
Agricultural Marketing Agricultural Marketing
Hill ,Tribal Areadevelopment
Area Development Area Development
Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables member
countries to :-Correct Answer Rebuild resources , Stabilise currencies , Pay for imports
Your Answer Rebuild resources , Stabilise currencies , Pay for imports
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion NABARD provides short term refinance for procurement
activities also.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Tourism promotes :-
Correct Answer Credit Card Business , International remittances , Travellers'Cheques
Your Answer Credit Card Business , International remittances , Travellers'Cheques
True/FalseQuestion HDFC was set up by NHB.
Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion IMF articles were amended in 1978 to legalise the :-
Correct Answer Floating exchange rates
Your Answer Special drawing rights
Select The BlankQuestion Syndication involves ________ sanction.
Correct Answer In principle
Your Answer In principle
Multiple Choice Single AnswerQuestion The organised financial system includes :-
Correct Answer Commercial banks
Your Answer Commercial banks
Match The Following
Question Correct Answer Your Answer
CRR Primary reserverequirement
Prevention of speculativehoarding in
Bankers Bank Controlling the reserves ofcommercial banks
Controlling the reserves ofcommercial banks
Exchange control FEMA FEMA
OMO Government securities Secondary reserverequirement
Multiple Choice Multiple AnswerQuestion The prominent Bond issuing PSU are :-
Correct Answer MTNL , NTPC , SAIL
Your Answer MTNL , NTPC , SAIL
Select The BlankQuestion The Premium of ________ is obtained through obligatory
reinsurance premium.Correct Answer GIC
Your Answer GIC
Select The BlankQuestion The ________ does not collect Savings from the Public.
Correct Answer NIICO Ltd.
Your Answer NIICO Ltd.
Multiple Choice Single AnswerQuestion Development Financial institutions include :-
Correct Answer State financial institutions
Your Answer State financial institutions
Match The FollowingQuestion Correct Answer Your Answer
Money MarketInstruments
CP, T- Bills CP, T- Bills
Negotaible Instruments Bills of exchange,Cheques
Bills of exchange,Cheques
GOI securities ZCB, ILBonds ZCB, ILBonds
Long Term Debtinstruments
PSU Bonds PSU Bonds
Select The BlankQuestion NABARD took over the functions of ACD, RPCC of RBI &
________.Correct Answer ARDC
Your Answer ARDC
Select The BlankQuestion The price in financial markets is known as ________.
Correct Answer Rate of interest
Your Answer Rate of interest
True/FalseQuestion Banks lend to corporates directly.
Correct Answer True
Your Answer True
True/FalseQuestion Banks authorised to deal in foreign exchange are known as
Authorised Dealers.Correct Answer False
Your Answer False
True/FalseQuestion Under open market operation RBI conducts buying /selling
shares/debentures of blue chip companies.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Initial Quantum of resources of IMF were contributed by
members according to :-Correct Answer Quotas fixed for members
Your Answer Quotas fixed for members
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-
Correct Answer RBI
Your Answer RBI
Multiple Choice Multiple AnswerQuestion ECGC Board comprises of Directors representing :-
Correct Answer Government , Banking/Insurance , Trade/Industry
Your Answer Government
Multiple Choice Single AnswerQuestion A record of the holdings of GOI dated securities of each holder
is contained in :-Correct Answer SGL pass book
Your Answer SGL pass book
Multiple Choice Multiple AnswerQuestion Which of the following statements are not prepared on a daily
basis in branch?Correct Answer Cash Book , Trial Balance , P/L statement
Your Answer Cash Book , Trial Balance , P/L statement
Multiple Choice Single AnswerQuestion Size of the Quota depended upon :-
Correct Answer GNP
Your Answer GNP
Multiple Choice Multiple AnswerQuestion DICGC does not insure the deposits :-
Correct Answer Of foreign Governments , Of State Cooperative Banks , Of theCentral Government
Your Answer Of foreign Governments , Of State Cooperative Banks , Of theCentral Government
Select The BlankQuestion Financial markets are the centres that provide facilities for
buying and selling of ________.
Correct Answer Financial claims and services
Your Answer Goods and services
Multiple Choice Multiple AnswerQuestion Agricultural Finance Consultancy Ltd(AFC) activities cover :-
Correct Answer Regional /Sectoral planning , Benchmark Surveys , Pre-feasibility studies
Your Answer Pre-feasibility studies , Regional /Sectoral planning , BenchmarkSurveys
Select The BlankQuestion In a Bank, the investment decisions are taken at ________
level.Correct Answer Head Office
Your Answer Head Office
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.
Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion IRBI was set up with a focus on :-
Correct Answer Sick Units
Your Answer Sick Units
Multiple Choice Single AnswerQuestion SFCs suffer from a very high ratio of: -
Correct Answer Overdues
Your Answer Overdues
Multiple Choice Multiple AnswerQuestion Functions of NIDHIs include :-
Correct Answer Accepting Deposits , Granting loans , Encourage thrift
Your Answer Accepting Deposits , Granting loans , Speculation
Multiple Choice Multiple Answer
Question R B I conducts monetary control by way of O M O in :-
Correct Answer Treasury bills , State /central Government Securities
Your Answer Treasury bills , State /central Government Securities
Multiple Choice Single AnswerQuestion The foreign currency account maintained by an authorised
dealer with its correspondent abroad is :-Correct Answer Nostro Account
Your Answer Nostro Account
Select The BlankQuestion Mutual Funds provide the benefits of ________.
Correct Answer Portfolio management
Your Answer Bulk investment
Select The BlankQuestion An ________ letter of credit cannot be canceled by the buyer
without the seller's consent.Correct Answer Irrevocable
Your Answer Irrevocable
Multiple Choice Single AnswerQuestion The primary sources of IMF resources are :-
Correct Answer Quotas
Your Answer Quotas
Multiple Choice Multiple AnswerQuestion The unorganised financial system comprises of :-
Correct Answer Money lenders , Indigenous bankers , Lending pawn brokers
Your Answer Indigenous bankers
Multiple Choice Single AnswerQuestion The first long term industrial financing corporation set up in the
country was :-Correct Answer IFCI
Your Answer IFCI
Select The BlankQuestion The HDFC was set up in 1977 by the ________.
Correct Answer ICICI
Your Answer ICICI
Multiple Choice Single AnswerQuestion One of the leading All India FI is :-
Correct Answer SIDBI
Your Answer LIC
True/FalseQuestion Small Savings are source of Capital Receipts for the
Government.Correct Answer True
Your Answer True
True/FalseQuestion The overdraft facility is also known as Cash credit facility.
Correct Answer True
Your Answer False
Multiple Choice Single AnswerQuestion RBI was established under the:-
Correct Answer RBI Act
Your Answer RBI Act
Multiple Choice Multiple AnswerQuestion Duties of an International Banking unit cover :-
Correct Answer Handling foreign currency , Handling Doc. credits , Grantinglines of Credit
Your Answer Handling foreign currency , Handling Doc. credits , Grantinglines of Credit
True/FalseQuestion The currency notes issued by RBI are legal tender everywhere
in India without any limit.
Correct Answer True
Your Answer False
Multiple Choice Multiple AnswerQuestion Post Offices are popular for mobilizing small savings of the
public due to :-Correct Answer Wide network , Tax concessions , Saftey of funds
Your Answer Low returns , Wide network , Saftey of funds
Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute
infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam
LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam
Ltd
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion Agricultural Finance Consultancy Ltd(AFC) activities cover :-
Correct Answer Benchmark Surveys , Pre-feasibility studies , Regional/Sectoral planning
Your Answer Benchmark Surveys , Pre-feasibility studies , Regional/Sectoral planning
Multiple Choice Multiple AnswerQuestion Duties of an International Banking unit cover :-
Correct Answer Handling foreign currency , Handling Doc. credits , Grantinglines of Credit
Your Answer Handling foreign currency , Handling Doc. credits , Grantinglines of Credit
Select The BlankQuestion The ________ is the apex institution in the field of foreign
trade in India.Correct Answer EXIM bank
Your Answer FEDAI
True/FalseQuestion The Capital of NABARD is subscribed by World Bank.
Correct Answer False
Your Answer True
True/FalseQuestion NABARD does not provide Refinance for stocking &
distribution of Chemical Fertilisers.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion PFC is committed to the integrated development of :-
Correct Answer Power
Your Answer Power
True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural
Development.
Correct Answer True
Your Answer False
Match The FollowingQuestion Correct Answer Your Answer
Insurance of allemployees of a Firm
Group Insurance Group Insurance
Premium Throughout Life Whole Life Whole Life
Fixed Period Insurance Endowment Endowment
Insurance of oceanCargo
Marine Insurance Marine Insurance
Select The BlankQuestion DFIs are the second largest issuer of ________ after the
Govt and Sovereign bodies.Correct Answer Debt instruments
Your Answer Debt instruments
True/FalseQuestion Mortgage Loans are loans against property.
Correct Answer True
Your Answer True
Select The BlankQuestion An ________ letter of credit cannot be canceled by the buyer
without the seller's consent.Correct Answer Irrevocable
Your Answer Revocable
Multiple Choice Single AnswerQuestion Liabilities of Insurance Cos are mostly :-
Correct Answer Long term
Your Answer Long term
Select The BlankQuestion As a banker to the Government, RBI accepts Government
deposits at ________% interest.
Correct Answer 0
Your Answer 0.05
Multiple Choice Single AnswerQuestion Bills Rediscounting Scheme of IDBI was introduced in the
year :-Correct Answer 1965
Your Answer 1975
Multiple Choice Single AnswerQuestion DFHI was incorporated under the :-
Correct Answer Companies Act, 1956
Your Answer Banking Regulation Act,1949
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-
Correct Answer Government regulation and control
Your Answer Government regulation and control
Multiple Choice Single AnswerQuestion Financial institutions deal in :-
Correct Answer Financial assets
Your Answer Financial assets
Multiple Choice Single AnswerQuestion The first development Bank of India, established in 1948 was
:-Correct Answer IFCI
Your Answer IFCI
True/FalseQuestion Non bank financial institutions undertake fund and non fund
based activities.Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Under Project Finance Scheme IDBI provides assistance for:-
Correct Answer New Projects , Renovation , Modernisation
Your Answer New Projects , Renovation , Modernisation
True/FalseQuestion SCICI is a member of the OTCEI.
Correct Answer True
Your Answer True
Select The BlankQuestion The ________ does not collect Savings from the Public.
Correct Answer NIICO Ltd.
Your Answer NIICO Ltd.
Multiple Choice Single AnswerQuestion IRBI was set up with a focus on :-
Correct Answer Sick Units
Your Answer Sick Units
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-
Correct Answer Over one year
Your Answer Over three years
Multiple Choice Multiple AnswerQuestion Which of the following statements are not prepared on a daily
basis in branch?Correct Answer Cash Book , Trial Balance , P/L statement
Your Answer Audited Balance Sheet , Trial Balance , P/L statement
True/FalseQuestion Banks lend to corporates directly.
Correct Answer True
Your Answer True
True/FalseQuestion Small Savings are source of Capital Receipts for the
Government.Correct Answer True
Your Answer False
Multiple Choice Single AnswerQuestion Treasury Bills are issued by the :-
Correct Answer RBI
Your Answer RBI
Multiple Choice Single AnswerQuestion Account where lump sum investment is made for specific
period is :-Correct Answer Term Deposit account
Your Answer Term Deposit account
Multiple Choice Single AnswerQuestion The apex institution in the field of foreign trade in India is :-
Correct Answer EXIM Bank
Your Answer EXIM Bank
Multiple Choice Multiple AnswerQuestion Basic Life insurance policies include :-
Correct Answer Term insurance , Annuity contracts , Pension plans
Your Answer Term insurance , Annuity contracts , Pension plans
Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme for
modernisation is also undertaken by IDBI.Correct Answer ICICI
Your Answer ICICI
Multiple Choice Multiple AnswerQuestion IIBI (formerly known as IRBI )undertakes :-
Correct Answer Merchant Banking activities , Lease or hire purchase finance ,
Consultancy & managerial services
Your Answer Lease or hire purchase finance , Consultancy & managerialservices , Rural credit activities
Select The BlankQuestion Syndication of Loans Globally does not involve any funds as
it is ________ activity.Correct Answer Non-fund based
Your Answer Non-fund based
Multiple Choice Multiple AnswerQuestion Mutual fund has main entities like :-
Correct Answer Sponsor , Trust , Asset Management company
Your Answer Sponsor , Trust , Asset Management company
Select The BlankQuestion ________ is merely an asset created out of book entries.
Correct Answer SDR
Your Answer EFF
Multiple Choice Multiple AnswerQuestion SFCs provide finance to :-
Correct Answer Corporates , Partnerships , Proprietary firms
Your Answer Corporates , Partnerships , Proprietary firms
Multiple Choice Single AnswerQuestion The type of banking involving a small number of Large
Customers viz.Corporates & multinationals is :-Correct Answer Wholesale Banking
Your Answer Global Banking
Select The BlankQuestion The extent of powers enjoyed by a branch depends on the
size of its ________.Correct Answer Business
Your Answer Business
Multiple Choice Multiple AnswerQuestion Credit Information report is also known as :-
Correct Answer Credit report , Banker's report , Confidential report
Your Answer Credit report , Banker's report , Confidential report
Match The FollowingQuestion Correct Answer Your Answer
Inter Bank Call MoneyMarkets
BRs, Call MoneyReceipts
Currencies
Money MarketInstuments
CP, CD ,T- Bills CP, CD ,T- Bills
Capital MarketInstruments
Shares Shares
Debt Market Instruments GOI Securities ,Bonds Shares
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low
income groups.Correct Answer Weaker sections
Your Answer Weaker sections
True/FalseQuestion Banks authorised to deal in foreign exchange are known as
Authorised Dealers.Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables
member countries to :-Correct Answer Rebuild resources , Stabilise currencies , Pay for imports
Your Answer Rebuild resources , Stabilise currencies , Pay for imports
Select The BlankQuestion The repayment holiday period is also known as ________
period.Correct Answer Moratorium
Your Answer Moratorium
Multiple Choice Single AnswerQuestion A non-scheduled bank does not deal in :-
Correct Answer Foreign Exchange
Your Answer Foreign Exchange
Multiple Choice Multiple AnswerQuestion Prominent Institutional Investors are :-
Correct Answer Foreign Investors(FIIs) , Corporate Treasuries , Mutual Funds
Your Answer Foreign Investors(FIIs) , Corporate Treasuries , Public sectorCompanies
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion SIDBI provides :-
Correct Answer Refinance , Rediscounting of Bills , Financial support to SSIDC
Your Answer Refinance , Rediscounting of Bills , Financial support to SSIDC
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution
of Chemical Fertilisers.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Which of the following services is not provided by Commercial
banks?Correct Answer Deposit Insurance
Your Answer Deposit Insurance
Multiple Choice Single AnswerQuestion IDBI has helped in the establishment of :-
Correct Answer EXIM Bank
Your Answer IFCI
Select The Blank
Question DFIs are the second largest issuer of ________ after the Govtand Sovereign bodies.
Correct Answer Debt instruments
Your Answer Debt instruments
True/FalseQuestion A Cheque is a Negotiable Instrument.
Correct Answer True
Your Answer True
True/FalseQuestion State loans are much less liquid than GOI Securities.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion IIBI (formerly known as IRBI )undertakes :-
Correct Answer Merchant Banking activities , Lease or hire purchase finance ,Consultancy & managerial services
Your Answer Merchant Banking activities , Lease or hire purchase finance ,Consultancy & managerial services
True/FalseQuestion Development financial institutions primarily lend to Agriculture
sector.Correct Answer False
Your Answer False
True/FalseQuestion Banks do not invest in the GOI securities .
Correct Answer False
Your Answer False
Select The BlankQuestion NABARDs Criteria for Refinance covers Technical ________ of
the project.Correct Answer Feasibility
Your Answer Feasibility
True/FalseQuestion IMF discourages excessive use of its resources by imposing a
surcharge on large loans.Correct Answer True
Your Answer True
Select The BlankQuestion As a banker to the Government, RBI accepts Government
deposits at ________% interest.Correct Answer 0
Your Answer 0
Select The BlankQuestion HDFCs loans were linked up with________.
Correct Answer Planned Savings
Your Answer Planned Savings
Multiple Choice Multiple AnswerQuestion Other than Tourism, International funds remittances comprise of
:-Correct Answer Donations/Charity , Payments of Salaries , Payments of Royalty
Your Answer Donations/Charity , Payments of Royalty
Multiple Choice Single AnswerQuestion PFC is committed to the integrated development of :-
Correct Answer Power
Your Answer Power
Multiple Choice Single AnswerQuestion A major part of the credit of SFCs went to :-
Correct Answer SSI units
Your Answer SSI units
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-
Correct Answer Over one year
Your Answer Over one year
Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme for
modernisation is also undertaken by IDBI.Correct Answer ICICI
Your Answer ICICI
True/FalseQuestion A Bill of Exchange is negotiable.
Correct Answer True
Your Answer True
Select The BlankQuestion NHB at present has a ________ Capital of Rs. 350 crores.
Correct Answer Paid-up
Your Answer Paid-up
Select The BlankQuestion The term ________ refers to the act of a bank extending finance
to the seller against a letter of credit.Correct Answer Negotiation
Your Answer Negotiation
True/FalseQuestion Under MIGA the World bank offers various forms of Political
Insurance.Correct Answer True
Your Answer True
Select The BlankQuestion The loans under________ are based on Poverty Reduction
Strategy Paper.Correct Answer PRGF
Your Answer PRGF
Multiple Choice Multiple AnswerQuestion The general insurance business can be :-
Correct Answer Marine insurance , Fire insurance , Miscellaneous
Your Answer Marine insurance , Fire insurance , Miscellaneous
Multiple Choice Single AnswerQuestion FIs can be classified into two categories depending on the basis
of incorporation and :-Correct Answer Operation
Your Answer Size
Multiple Choice Multiple AnswerQuestion The main objective of ICICI was :-
Correct Answer To augment export finance in India , To channelise WorldBank's funds to industries in India , To help in building up aCapital Market in India
Your Answer To augment export finance in India , To help in building up aCapital Market in India , To aid Rural Development in India
Multiple Choice Single AnswerQuestion SIDCs & SIICs give loans ,guarantees & :-
Correct Answer Lease finance
Your Answer Lease finance
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-
Correct Answer Corporates
Your Answer Corporates
True/FalseQuestion SCICI is a member of the OTCEI.
Correct Answer True
Your Answer True
Select The BlankQuestion The extent of powers enjoyed by a branch depends on the size
of its ________.Correct Answer Business
Your Answer Business
True/FalseQuestion Gramin banks are State Owned Banks.
Correct Answer True
Your Answer False
True/FalseQuestion NIDHIS are Trading Organisations.
Correct Answer False
Your Answer True
Multiple Choice Single AnswerQuestion Corporate Debentures are :-
Correct Answer Long term debt instruments
Your Answer Long term debt instruments
Multiple Choice Multiple AnswerQuestion Credit Information report is also known as :-
Correct Answer Credit report , Banker's report , Confidential report
Your Answer Credit report , Banker's report , Confidential report
Match The FollowingQuestion Correct Answer Your Answer
Largest borrower in theworld
IBRD IBRD
International MonetaryCooperation
IMF IMF
Prevention of crises CCL CCL
Political insurance MIGA MIGA
Multiple Choice Single AnswerQuestion The apex institution in the field of Industrial Development is :-
Correct Answer IDBI
Your Answer IDBI
Multiple Choice Single AnswerQuestion Bills Rediscounting Scheme of IDBI was introduced in the year
:-Correct Answer 1965
Your Answer 1965
Select The BlankQuestion Development financial institutions have been established to
cater to ________ of the industrial sector.Correct Answer Long term financial needs
Your Answer Long term financial needs
Select The BlankQuestion The ________ was set up to help corrections in BOP
maladjustments.Correct Answer IMF
Your Answer UNO
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-
Correct Answer Financial commitment , Voting power , Drawing power
Your Answer Financial commitment , Voting power , Drawing power
Multiple Choice Multiple AnswerQuestion Functions of R.O. of a bank include :-
Correct Answer Inspection/audit , Control on branches , Grant loans/advances
Your Answer Control on branches , Grant loans/advances , Pay interest ondeposits
Multiple Choice Single AnswerQuestion IDBI introduced Automatic Refinance Scheme in the year :-
Correct Answer 1978
Your Answer 1975
Select The BlankQuestion The ________ is the apex institution in the field of foreign trade
in India.
Correct Answer EXIM bank
Your Answer EXIM bank
Multiple Choice Multiple AnswerQuestion SFCs provide finance to :-
Correct Answer Corporates , Partnerships , Proprietary firms
Your Answer Corporates , Partnerships , Proprietary firms
Match The FollowingQuestion Correct Answer Your Answer
Aquaculture ,BrackishWater
Fisheries Fisheries
Ploughing, weeding,transplantation
Seasonal AgriculturalOperations
Irrigation & Drainage
Market Yards, Storage &Warehousing
Agricultural Marketing Agricultural Marketing
Hill ,Tribal Areadevelopment
Area Development Area Development
Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables member
countries to :-Correct Answer Rebuild resources , Stabilise currencies , Pay for imports
Your Answer Rebuild resources , Stabilise currencies , Pay for imports
Multiple Choice Multiple AnswerQuestion Agricultural Finance Consultancy Ltd(AFC) activities cover :-
Correct Answer Benchmark Surveys , Pre-feasibility studies , Regional /Sectoral planning
Your Answer Benchmark Surveys , Pre-feasibility studies , Regional /Sectoral planning
Multiple Choice Multiple AnswerQuestion Duties of an International Banking unit cover :-
Correct Answer Handling foreign currency , Handling Doc. credits , Granting lines of Credit
Your Answer Handling foreign currency , Handling Doc. credits , Granting lines of Credit
Select The BlankQuestion The ________ is the apex institution in the field of foreign trade in India.
Correct Answer EXIM bank
Your Answer FEDAI
True/FalseQuestion The Capital of NABARD is subscribed by World Bank.
Correct Answer False
Your Answer True
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution of
Chemical Fertilisers.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion PFC is committed to the integrated development of :-
Correct Answer Power
Your Answer Power
True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural
Development.Correct Answer True
Your Answer False
Match The FollowingQuestion Correct Answer Your Answer
Insurance of all employees ofa Firm
Group Insurance Group Insurance
Premium Throughout Life Whole Life Whole Life
Fixed Period Insurance Endowment Endowment
Insurance of ocean Cargo Marine Insurance Marine Insurance
Select The BlankQuestion DFIs are the second largest issuer of ________ after the Govt and
Sovereign bodies.
Correct Answer Debt instruments
Your Answer Debt instruments
True/FalseQuestion Mortgage Loans are loans against property.
Correct Answer True
Your Answer True
Select The BlankQuestion An ________ letter of credit cannot be canceled by the buyer without the
seller's consent.Correct Answer Irrevocable
Your Answer Revocable
Multiple Choice Single AnswerQuestion Liabilities of Insurance Cos are mostly :-
Correct Answer Long term
Your Answer Long term
Select The BlankQuestion As a banker to the Government, RBI accepts Government deposits at
________% interest.Correct Answer 0
Your Answer 0.05
Multiple Choice Single AnswerQuestion Bills Rediscounting Scheme of IDBI was introduced in the year :-
Correct Answer 1965
Your Answer 1975
Multiple Choice Single AnswerQuestion DFHI was incorporated under the :-
Correct Answer Companies Act, 1956
Your Answer Banking Regulation Act,1949
Multiple Choice Single Answer
Question The underdeveloped markets are characterised by :-
Correct Answer Government regulation and control
Your Answer Government regulation and control
Multiple Choice Single AnswerQuestion Financial institutions deal in :-
Correct Answer Financial assets
Your Answer Financial assets
Multiple Choice Single AnswerQuestion The first development Bank of India, established in 1948 was :-
Correct Answer IFCI
Your Answer IFCI
True/FalseQuestion Non bank financial institutions undertake fund and non fund based
activities.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-
Correct Answer New Projects , Renovation , Modernisation
Your Answer New Projects , Renovation , Modernisation
True/FalseQuestion SCICI is a member of the OTCEI.
Correct Answer True
Your Answer True
Select The BlankQuestion The ________ does not collect Savings from the Public.
Correct Answer NIICO Ltd.
Your Answer NIICO Ltd.
Multiple Choice Single AnswerQuestion IRBI was set up with a focus on :-
Correct Answer Sick Units
Your Answer Sick Units
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-
Correct Answer Over one year
Your Answer Over three years
Multiple Choice Multiple AnswerQuestion Which of the following statements are not prepared on a daily basis in
branch?Correct Answer Cash Book , Trial Balance , P/L statement
Your Answer Audited Balance Sheet , Trial Balance , P/L statement
True/FalseQuestion Banks lend to corporates directly.
Correct Answer True
Your Answer True
True/FalseQuestion Small Savings are source of Capital Receipts for the Government.
Correct Answer True
Your Answer False
Multiple Choice Single AnswerQuestion Treasury Bills are issued by the :-
Correct Answer RBI
Your Answer RBI
Multiple Choice Single AnswerQuestion Account where lump sum investment is made for specific period is :-
Correct Answer Term Deposit account
Your Answer Term Deposit account
Multiple Choice Single AnswerQuestion The apex institution in the field of foreign trade in India is :-
Correct Answer EXIM Bank
Your Answer EXIM Bank
Multiple Choice Multiple AnswerQuestion Basic Life insurance policies include :-
Correct Answer Term insurance , Annuity contracts , Pension plans
Your Answer Term insurance , Annuity contracts , Pension plans
Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme for modernisation
is also undertaken by IDBI.Correct Answer ICICI
Your Answer ICICI
Multiple Choice Multiple AnswerQuestion IIBI (formerly known as IRBI )undertakes :-
Correct Answer Merchant Banking activities , Lease or hire purchase finance , Consultancy& managerial services
Your Answer Lease or hire purchase finance , Consultancy & managerial services ,Rural credit activities
Select The BlankQuestion Syndication of Loans Globally does not involve any funds as it is ________
activity.Correct Answer Non-fund based
Your Answer Non-fund based
Multiple Choice Multiple AnswerQuestion Mutual fund has main entities like :-
Correct Answer Sponsor , Trust , Asset Management company
Your Answer Sponsor , Trust , Asset Management company
Select The BlankQuestion ________ is merely an asset created out of book entries.
Correct Answer SDR
Your Answer EFF
Multiple Choice Multiple AnswerQuestion SFCs provide finance to :-
Correct Answer Corporates , Partnerships , Proprietary firms
Your Answer Corporates , Partnerships , Proprietary firms
Multiple Choice Single AnswerQuestion The type of banking involving a small number of Large Customers
viz.Corporates & multinationals is :-Correct Answer Wholesale Banking
Your Answer Global Banking
Select The BlankQuestion The extent of powers enjoyed by a branch depends on the size of its
________.Correct Answer Business
Your Answer Business
Multiple Choice Multiple AnswerQuestion Credit Information report is also known as :-
Correct Answer Credit report , Banker's report , Confidential report
Your Answer Credit report , Banker's report , Confidential report
Match The FollowingQuestion Correct Answer Your Answer
Inter Bank Call MoneyMarkets
BRs, Call Money Receipts Currencies
Money Market Instuments CP, CD ,T- Bills CP, CD ,T- Bills
Capital Market Instruments Shares Shares
Debt Market Instruments GOI Securities ,Bonds Shares
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income groups.
Correct Answer Weaker sections
Your Answer Weaker sections
True/FalseQuestion Banks authorised to deal in foreign exchange are known as Authorised
Dealers.Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables member countries to
:-Correct Answer Rebuild resources , Stabilise currencies , Pay for imports
Your Answer Rebuild resources , Stabilise currencies , Pay for imports
Select The BlankQuestion The repayment holiday period is also known as ________ period.
Correct Answer Moratorium
Your Answer Moratorium
Multiple Choice Single AnswerQuestion A non-scheduled bank does not deal in :-
Correct Answer Foreign Exchange
Your Answer Foreign Exchange
Multiple Choice Multiple AnswerQuestion Prominent Institutional Investors are :-
Correct Answer Foreign Investors(FIIs) , Corporate Treasuries , Mutual Funds
Your Answer Foreign Investors(FIIs) , Corporate Treasuries , Public sector Companies
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has
changed its name to ________ effective from October 1992.Correct Answer SCICI Ltd
Your Answer SCICI Ltd
Multiple Choice Multiple AnswerQuestion IFC provides financial assistance :-
Correct Answer Through loans , Through purchase of shares , For economicdevelopment
Your Answer Largely as aid , Through loans
Select The BlankQuestion Period of Holiday Insurance is ________.
Correct Answer Six months or less
Your Answer Six months or less
Multiple Choice Multiple AnswerQuestion From time to time RBI has issued :-
Correct Answer Straight coupon bonds , Inflation linked bonds , Zero couponbonds
Your Answer Straight coupon bonds , Inflation linked bonds , Zero couponbonds
Multiple Choice Multiple AnswerQuestion R B I issues currency notes against the security of:-
Correct Answer Gold bullion , Foreign securities , GOI securities
Your Answer Gold bullion , Foreign securities , GOI securities
Multiple Choice Single AnswerQuestion The type of banking involving a small number of Large
Customers viz.Corporates & multinationals is :-Correct Answer Wholesale Banking
Your Answer Wholesale Banking
True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural
Development.Correct Answer True
Your Answer True
Select The BlankQuestion The ________ are buy and hold investors and almost never
trade on their investments.Correct Answer Provident Funds
Your Answer Mutual Funds
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-
Correct Answer New Projects , Renovation , Modernisation
Your Answer New Projects , Renovation , Modernisation
Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the
obligation to contribute further premium by :-Correct Answer Surrendering the policy , Converting it into paid up policy ,
Assigning it in the open marketYour Answer Surrendering the policy , Converting it into paid up policy ,
Assigning it in the open market
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-
Correct Answer By lending at 0% interest. , For periods up to ten years , Byborrowing from IBRD
Your Answer By borrowing from IBRD , By lending at 0% interest. , Forperiods up to ten years
Multiple Choice Single AnswerQuestion Financial institutions deal in :-
Correct Answer Financial assets
Your Answer Financial assets
Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-
Correct Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Your Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Multiple Choice Single AnswerQuestion Treasury bills are issued by :-
Correct Answer RBI
Your Answer RBI
True/FalseQuestion The bids for T-Bills are on price/interest basis.
Correct Answer True
Your Answer True
True/FalseQuestion No TDS is deducted on Interest paid on CDs.
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-
Correct Answer Government regulation and control
Your Answer Government regulation and control
Multiple Choice Multiple AnswerQuestion Mutual fund has main entities like :-
Correct Answer Sponsor , Trust , Asset Management company
Your Answer Sponsor , Trust , Asset Management company
Multiple Choice Multiple AnswerQuestion Prominent Institutional Investors are :-
Correct Answer Foreign Investors(FIIs) , Corporate Treasuries , Mutual Funds
Your Answer Foreign Investors(FIIs) , Corporate Treasuries , Mutual Funds
Multiple Choice Single AnswerQuestion A record of the holdings of GOI dated securities of each holder
is contained in :-
Correct Answer SGL pass book
Your Answer SGL pass book
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-
Correct Answer Indigenous bankers
Your Answer Indigenous bankers
Multiple Choice Single AnswerQuestion SIDCs & SIICs are under the control of :-
Correct Answer State Governments
Your Answer State Governments
True/FalseQuestion PFC has been persuading State Governments restructuring of
their power sector to make them viable.Correct Answer True
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Advances Loans/cash credits Loans/cash credits
Cash withdrawal facility ATM ATM
Remittances MT/DD/TT/EFT MT/DD/TT/EFT
Government business Collection of taxes Collection of taxes
Select The BlankQuestion GIC raises funds to meet claims from ________.
Correct Answer Premium collected
Your Answer Premium collected
Select The BlankQuestion The CRAFICARD recommended the establishment of
________.
Correct Answer NABARD
Your Answer NABARD
Multiple Choice Multiple AnswerQuestion The objective NEF Scheme of SIDBI is to provide equity support
to :-Correct Answer New Units in tiny Sector , New Units in Small Sector , Existing
units in tiny & small scale sectorYour Answer New Units in tiny Sector , New Units in Small Sector , Existing
units in tiny & small scale sector
Multiple Choice Single AnswerQuestion Which of the following institution was set up as a subsidy of RBI
in 1964?Correct Answer IDBI
Your Answer IDBI
Select The BlankQuestion Kisan Vikas Patra are issued through ________.
Correct Answer Post Offices
Your Answer Post Offices
Multiple Choice Single AnswerQuestion DFHI was incorporated under the :-
Correct Answer Companies Act, 1956
Your Answer Companies Act, 1956
Multiple Choice Single AnswerQuestion Which one of the following is not a deposit account?
Correct Answer Cash Credit account
Your Answer Cash Certificate
True/FalseQuestion CP is a usance promissory note hence it can be negotiated by
endorsement & delivery.Correct Answer True
Your Answer False
Select The BlankQuestion The ________ meet the long and medium term credit needs of
agriculture.Correct Answer Land Development Banks
Your Answer Regional Rural Banks
Multiple Choice Single AnswerQuestion Zero Coupon Bonds are issued at a :-
Correct Answer Discount to face value
Your Answer Discount to face value
True/FalseQuestion NABARD provides Refinance for Marketing of Crops.
Correct Answer True
Your Answer False
True/FalseQuestion The Capital of NABARD is subscribed by World Bank.
Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion Soft Loan Scheme for modernisation is provided by :-
Correct Answer IFCI , ICICI , SIDBI
Your Answer ICICI
True/FalseQuestion In case of T-Bills potential investors have to put in competitive
bids.Correct Answer True
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Development financialinstitutions
IFCI IFCI
Organised sector Banking System Banking System
Unorganised sector Indigenous banks Indigenous banks
Mutual funds UTI UTI
True/FalseQuestion Non bank financial institutions undertake fund and non fund
based activities.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Instruments issued by DFIs and Banks carry :-
Correct Answer Highest credit ratings
Your Answer Highest credit ratings
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-
Correct Answer SIDF
Your Answer SIDF
True/FalseQuestion Amongst others, ICICI also provided long and medium term
loans or equity finance.Correct Answer True
Your Answer True
Select The BlankQuestion Interest on advances is generally calculated on ________
products.Correct Answer Daily
Your Answer Fortnightly
Select The BlankQuestion The ________ has been accredited by RBI as a Primary Dealer
in Governemt Securities.Correct Answer STCI
Your Answer GIC
Select The BlankQuestion ________ is merely an asset created out of book entries.
Correct Answer SDR
Your Answer SDR
Multiple Choice Single AnswerQuestion Development Financial Institutions provide finance to the needy
Correct Answer Corporates & govt. institutions
Your Answer Corporates & govt. institutions
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion NABARD provides short term refinance for procurement
activities also.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Tourism promotes :-
Correct Answer Credit Card Business , International remittances , Travellers'Cheques
Your Answer Credit Card Business , International remittances , Travellers'Cheques
True/FalseQuestion HDFC was set up by NHB.
Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion IMF articles were amended in 1978 to legalise the :-
Correct Answer Floating exchange rates
Your Answer Special drawing rights
Select The BlankQuestion Syndication involves ________ sanction.
Correct Answer In principle
Your Answer In principle
Multiple Choice Single AnswerQuestion The organised financial system includes :-
Correct Answer Commercial banks
Your Answer Commercial banks
Match The FollowingQuestion Correct Answer Your Answer
CRR Primary reserverequirement
Prevention of speculativehoarding in
Bankers Bank Controlling the reserves ofcommercial banks
Controlling the reserves ofcommercial banks
Exchange control FEMA FEMA
OMO Government securities Secondary reserverequirement
Multiple Choice Multiple AnswerQuestion The prominent Bond issuing PSU are :-
Correct Answer MTNL , NTPC , SAIL
Your Answer MTNL , NTPC , SAIL
Select The BlankQuestion The Premium of ________ is obtained through obligatory
reinsurance premium.Correct Answer GIC
Your Answer GIC
Select The BlankQuestion The ________ does not collect Savings from the Public.
Correct Answer NIICO Ltd.
Your Answer NIICO Ltd.
Multiple Choice Single AnswerQuestion Development Financial institutions include :-
Correct Answer State financial institutions
Your Answer State financial institutions
Match The FollowingQuestion Correct Answer Your Answer
Money MarketInstruments
CP, T- Bills CP, T- Bills
Negotaible Instruments Bills of exchange,Cheques
Bills of exchange,Cheques
GOI securities ZCB, ILBonds ZCB, ILBonds
Long Term Debtinstruments
PSU Bonds PSU Bonds
Select The BlankQuestion NABARD took over the functions of ACD, RPCC of RBI &
________.Correct Answer ARDC
Your Answer ARDC
Select The BlankQuestion The price in financial markets is known as ________.
Correct Answer Rate of interest
Your Answer Rate of interest
True/FalseQuestion Banks lend to corporates directly.
Correct Answer True
Your Answer True
True/FalseQuestion Banks authorised to deal in foreign exchange are known as
Authorised Dealers.Correct Answer False
Your Answer False
True/FalseQuestion Under open market operation RBI conducts buying /selling
shares/debentures of blue chip companies.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Initial Quantum of resources of IMF were contributed by
members according to :-Correct Answer Quotas fixed for members
Your Answer Quotas fixed for members
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-
Correct Answer RBI
Your Answer RBI
Multiple Choice Multiple AnswerQuestion ECGC Board comprises of Directors representing :-
Correct Answer Government , Banking/Insurance , Trade/Industry
Your Answer Government
Multiple Choice Single AnswerQuestion A record of the holdings of GOI dated securities of each holder
is contained in :-Correct Answer SGL pass book
Your Answer SGL pass book
Multiple Choice Multiple AnswerQuestion Which of the following statements are not prepared on a daily
basis in branch?Correct Answer Cash Book , Trial Balance , P/L statement
Your Answer Cash Book , Trial Balance , P/L statement
Multiple Choice Single AnswerQuestion Size of the Quota depended upon :-
Correct Answer GNP
Your Answer GNP
Multiple Choice Multiple AnswerQuestion DICGC does not insure the deposits :-
Correct Answer Of foreign Governments , Of State Cooperative Banks , Of theCentral Government
Your Answer Of foreign Governments , Of State Cooperative Banks , Of theCentral Government
Select The BlankQuestion Financial markets are the centres that provide facilities for
buying and selling of ________.Correct Answer Financial claims and services
Your Answer Goods and services
Multiple Choice Multiple AnswerQuestion Agricultural Finance Consultancy Ltd(AFC) activities cover :-
Correct Answer Regional /Sectoral planning , Benchmark Surveys , Pre-feasibility studies
Your Answer Pre-feasibility studies , Regional /Sectoral planning , BenchmarkSurveys
Select The BlankQuestion In a Bank, the investment decisions are taken at ________
level.Correct Answer Head Office
Your Answer Head Office
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.
Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion IRBI was set up with a focus on :-
Correct Answer Sick Units
Your Answer Sick Units
Multiple Choice Single AnswerQuestion SFCs suffer from a very high ratio of: -
Correct Answer Overdues
Your Answer Overdues
Multiple Choice Multiple AnswerQuestion Functions of NIDHIs include :-
Correct Answer Accepting Deposits , Granting loans , Encourage thrift
Your Answer Accepting Deposits , Granting loans , Speculation
Multiple Choice Multiple AnswerQuestion R B I conducts monetary control by way of O M O in :-
Correct Answer Treasury bills , State /central Government Securities
Your Answer Treasury bills , State /central Government Securities
Multiple Choice Single AnswerQuestion The foreign currency account maintained by an authorised
dealer with its correspondent abroad is :-Correct Answer Nostro Account
Your Answer Nostro Account
Select The BlankQuestion Mutual Funds provide the benefits of ________.
Correct Answer Portfolio management
Your Answer Bulk investment
Select The BlankQuestion An ________ letter of credit cannot be canceled by the buyer
without the seller's consent.Correct Answer Irrevocable
Your Answer Irrevocable
Multiple Choice Single AnswerQuestion The primary sources of IMF resources are :-
Correct Answer Quotas
Your Answer Quotas
Multiple Choice Multiple Answer
Question The unorganised financial system comprises of :-
Correct Answer Money lenders , Indigenous bankers , Lending pawn brokers
Your Answer Indigenous bankers
Multiple Choice Single AnswerQuestion The first long term industrial financing corporation set up in the
country was :-Correct Answer IFCI
Your Answer IFCI
Select The BlankQuestion The HDFC was set up in 1977 by the ________.
Correct Answer ICICI
Your Answer ICICI
Multiple Choice Single AnswerQuestion One of the leading All India FI is :-
Correct Answer SIDBI
Your Answer LIC
True/FalseQuestion Small Savings are source of Capital Receipts for the
Government.Correct Answer True
Your Answer True
True/FalseQuestion The overdraft facility is also known as Cash credit facility.
Correct Answer True
Your Answer False
Multiple Choice Single AnswerQuestion RBI was established under the:-
Correct Answer RBI Act
Your Answer RBI Act
Multiple Choice Multiple AnswerQuestion Duties of an International Banking unit cover :-
Correct Answer Handling foreign currency , Handling Doc. credits , Grantinglines of Credit
Your Answer Handling foreign currency , Handling Doc. credits , Grantinglines of Credit
True/FalseQuestion The currency notes issued by RBI are legal tender everywhere
in India without any limit.Correct Answer True
Your Answer False
Multiple Choice Multiple AnswerQuestion Post Offices are popular for mobilizing small savings of the
public due to :-Correct Answer Wide network , Tax concessions , Saftey of funds
Your Answer Low returns , Wide network , Saftey of funds
Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute
infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam
LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam
Ltd
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion SIDBI provides :-
Correct Answer Refinance , Rediscounting of Bills , Financial support to SSIDC
Your Answer Refinance , Rediscounting of Bills , Financial support to SSIDC
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution
of Chemical Fertilisers.Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question Which of the following services is not provided by Commercialbanks?
Correct Answer Deposit Insurance
Your Answer Deposit Insurance
Multiple Choice Single AnswerQuestion IDBI has helped in the establishment of :-
Correct Answer EXIM Bank
Your Answer IFCI
Select The BlankQuestion DFIs are the second largest issuer of ________ after the Govt
and Sovereign bodies.Correct Answer Debt instruments
Your Answer Debt instruments
True/FalseQuestion A Cheque is a Negotiable Instrument.
Correct Answer True
Your Answer True
True/FalseQuestion State loans are much less liquid than GOI Securities.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion IIBI (formerly known as IRBI )undertakes :-
Correct Answer Merchant Banking activities , Lease or hire purchase finance ,Consultancy & managerial services
Your Answer Merchant Banking activities , Lease or hire purchase finance ,Consultancy & managerial services
True/FalseQuestion Development financial institutions primarily lend to Agriculture
sector.Correct Answer False
Your Answer False
True/FalseQuestion Banks do not invest in the GOI securities .
Correct Answer False
Your Answer False
Select The BlankQuestion NABARDs Criteria for Refinance covers Technical ________ of
the project.Correct Answer Feasibility
Your Answer Feasibility
True/FalseQuestion IMF discourages excessive use of its resources by imposing a
surcharge on large loans.Correct Answer True
Your Answer True
Select The BlankQuestion As a banker to the Government, RBI accepts Government
deposits at ________% interest.Correct Answer 0
Your Answer 0
Select The BlankQuestion HDFCs loans were linked up with________.
Correct Answer Planned Savings
Your Answer Planned Savings
Multiple Choice Multiple AnswerQuestion Other than Tourism, International funds remittances comprise of
:-Correct Answer Donations/Charity , Payments of Salaries , Payments of Royalty
Your Answer Donations/Charity , Payments of Royalty
Multiple Choice Single AnswerQuestion PFC is committed to the integrated development of :-
Correct Answer Power
Your Answer Power
Multiple Choice Single AnswerQuestion A major part of the credit of SFCs went to :-
Correct Answer SSI units
Your Answer SSI units
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-
Correct Answer Over one year
Your Answer Over one year
Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme for
modernisation is also undertaken by IDBI.Correct Answer ICICI
Your Answer ICICI
True/FalseQuestion A Bill of Exchange is negotiable.
Correct Answer True
Your Answer True
Select The BlankQuestion NHB at present has a ________ Capital of Rs. 350 crores.
Correct Answer Paid-up
Your Answer Paid-up
Select The BlankQuestion The term ________ refers to the act of a bank extending finance
to the seller against a letter of credit.Correct Answer Negotiation
Your Answer Negotiation
True/FalseQuestion Under MIGA the World bank offers various forms of Political
Insurance.
Correct Answer True
Your Answer True
Select The BlankQuestion The loans under________ are based on Poverty Reduction
Strategy Paper.Correct Answer PRGF
Your Answer PRGF
Multiple Choice Multiple AnswerQuestion The general insurance business can be :-
Correct Answer Marine insurance , Fire insurance , Miscellaneous
Your Answer Marine insurance , Fire insurance , Miscellaneous
Multiple Choice Single AnswerQuestion FIs can be classified into two categories depending on the basis
of incorporation and :-Correct Answer Operation
Your Answer Size
Multiple Choice Multiple AnswerQuestion The main objective of ICICI was :-
Correct Answer To augment export finance in India , To channelise WorldBank's funds to industries in India , To help in building up aCapital Market in India
Your Answer To augment export finance in India , To help in building up aCapital Market in India , To aid Rural Development in India
Multiple Choice Single AnswerQuestion SIDCs & SIICs give loans ,guarantees & :-
Correct Answer Lease finance
Your Answer Lease finance
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-
Correct Answer Corporates
Your Answer Corporates
True/FalseQuestion SCICI is a member of the OTCEI.
Correct Answer True
Your Answer True
Select The BlankQuestion The extent of powers enjoyed by a branch depends on the size
of its ________.Correct Answer Business
Your Answer Business
True/FalseQuestion Gramin banks are State Owned Banks.
Correct Answer True
Your Answer False
True/FalseQuestion NIDHIS are Trading Organisations.
Correct Answer False
Your Answer True
Multiple Choice Single AnswerQuestion Corporate Debentures are :-
Correct Answer Long term debt instruments
Your Answer Long term debt instruments
Multiple Choice Multiple AnswerQuestion Credit Information report is also known as :-
Correct Answer Credit report , Banker's report , Confidential report
Your Answer Credit report , Banker's report , Confidential report
Match The Following
Question Correct Answer Your Answer
Largest borrower in theworld
IBRD IBRD
International MonetaryCooperation
IMF IMF
Prevention of crises CCL CCL
Political insurance MIGA MIGA
Multiple Choice Single AnswerQuestion The apex institution in the field of Industrial Development is :-
Correct Answer IDBI
Your Answer IDBI
Multiple Choice Single AnswerQuestion Bills Rediscounting Scheme of IDBI was introduced in the year
:-Correct Answer 1965
Your Answer 1965
Select The BlankQuestion Development financial institutions have been established to
cater to ________ of the industrial sector.Correct Answer Long term financial needs
Your Answer Long term financial needs
Select The BlankQuestion The ________ was set up to help corrections in BOP
maladjustments.Correct Answer IMF
Your Answer UNO
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-
Correct Answer Financial commitment , Voting power , Drawing power
Your Answer Financial commitment , Voting power , Drawing power
Multiple Choice Multiple Answer
Question Functions of R.O. of a bank include :-
Correct Answer Inspection/audit , Control on branches , Grant loans/advances
Your Answer Control on branches , Grant loans/advances , Pay interest ondeposits
Multiple Choice Single AnswerQuestion IDBI introduced Automatic Refinance Scheme in the year :-
Correct Answer 1978
Your Answer 1975
Select The BlankQuestion The ________ is the apex institution in the field of foreign trade
in India.Correct Answer EXIM bank
Your Answer EXIM bank
Multiple Choice Multiple AnswerQuestion SFCs provide finance to :-
Correct Answer Corporates , Partnerships , Proprietary firms
Your Answer Corporates , Partnerships , Proprietary firms
Match The FollowingQuestion Correct Answer Your Answer
Aquaculture ,BrackishWater
Fisheries Fisheries
Ploughing, weeding,transplantation
Seasonal AgriculturalOperations
Irrigation & Drainage
Market Yards, Storage &Warehousing
Agricultural Marketing Agricultural Marketing
Hill ,Tribal Areadevelopment
Area Development Area Development
Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables member
countries to :-Correct Answer Rebuild resources , Stabilise currencies , Pay for imports
Your Answer Rebuild resources , Stabilise currencies , Pay for imports
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has changed its name to
________ effective from October 1992.Correct Answer SCICI LtdYour Answer SCICI Ltd
Select The BlankQuestion AFC's membership consists of commercial, cooperative banks and DFIs including
________.Correct Answer EXIM bankYour Answer EXIM bank
Multiple Choice Single AnswerQuestion Financial institutions deal in :-Correct Answer Financial assetsYour Answer Financial assets
Multiple Choice Single AnswerQuestion The lender of the last resort to the market is the :-Correct Answer RBIYour Answer RBI
Select The BlankQuestion One of the objectives of NHB is to augment the ________ resources for the housing
sector.Correct Answer FinancialYour Answer Financial
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-Correct Answer By borrowing from IBRD , By lending at 0% interest. , For periods up to ten
yearsYour Answer By borrowing from IBRD , By lending at 0% interest. , For periods up to ten years
Multiple Choice Single AnswerQuestion A company issues CP to save on :-Correct Answer Interest costYour Answer Interest cost
True/FalseQuestion PFC has been persuading State Governments restructuring of their power sector to
make them viable.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-Correct Answer RBIYour Answer RBI
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.Correct Answer FalseYour Answer True
Multiple Choice Single Answer
Question RBI was established under the:-Correct Answer RBI ActYour Answer RBI Act
Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production as well as:-Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-Correct Answer Financial commitment , Voting power , Drawing powerYour Answer Financial commitment , Voting power , Drawing power
Select The BlankQuestion Period of Holiday Insurance is ________.Correct Answer Six months or lessYour Answer Three years
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-Correct Answer Government regulation and controlYour Answer Government regulation and control
Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-Correct Answer BanksYour Answer Banks
True/FalseQuestion The bids for T-Bills are on price/interest basis.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-Correct Answer Indigenous bankersYour Answer Indigenous bankers
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-Correct Answer Over one yearYour Answer Over one year
Multiple Choice Multiple AnswerQuestion The general insurance business can be :-Correct Answer Marine insurance , Fire insurance , MiscellaneousYour Answer Fire insurance , Miscellaneous , Marine insurance
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution of Chemical
Fertilisers.Correct Answer FalseYour Answer False
Multiple Choice Multiple Answer
Question The unorganised financial system comprises of :-Correct Answer Money lenders , Indigenous bankers , Lending pawn brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers
True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural Development.Correct Answer TrueYour Answer True
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income groups.Correct Answer Weaker sectionsYour Answer Weaker sections
Multiple Choice Single AnswerQuestion Development Financial institutions include :-Correct Answer State financial institutionsYour Answer State financial institutions
Multiple Choice Single AnswerQuestion Money Markets Instruments have a maturity of less than :-Correct Answer One yearYour Answer One year
Select The BlankQuestion The price in financial markets is known as ________.Correct Answer Rate of interestYour Answer Rate of interest
Match The FollowingQuestion Correct Answer Your Answer
Development financial institutions IFCI IFCI
Organised sector Banking System Banking System
Unorganised sector Indigenous banks Indigenous banks
Mutual funds UTI UTI
Select The BlankQuestion The HDFC was set up in 1977 by the ________.Correct Answer ICICIYour Answer ICICI
Multiple Choice Single AnswerQuestion Certificate of deposit is a :-Correct Answer Usance promissory noteYour Answer Term Deposit Receipt
True/FalseQuestion A Bill of Exchange is negotiable.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-Correct Answer CorporatesYour Answer Corporates
Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than the balance is :-Correct Answer OverdraftYour Answer Overdraft
Multiple Choice Multiple AnswerQuestion The loans of finance companies are generally :-Correct Answer At high interest , Unsecured , Based on borrowers worthYour Answer At high interest , Unsecured , Based on borrowers worth
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-Correct Answer SIDFYour Answer SIDF
True/FalseQuestion Issuance of CD attracts reserve requirements.Correct Answer FalseYour Answer False
True/FalseQuestion Banks issue Guarantees on behalf of their clients.Correct Answer TrueYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
NABARD Rural Development Rural Development
AFC Ltd Consultancy Consultancy
HUDCO Housing Housing
NCDC Development of Cooperatives Development of Cooperatives
True/FalseQuestion Under MIGA the World bank offers various forms of Political Insurance.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the obligation to contribute
further premium by :-Correct Answer Surrendering the policy , Converting it into paid up policy , Assigning it in the
open marketYour Answer Surrendering the policy , Converting it into paid up policy , Assigning it in the
open market
Multiple Choice Single Answer
Question The organised financial system includes :-Correct Answer Commercial banksYour Answer Commercial banks
Select The BlankQuestion The term ________ refers to the act of a bank extending finance to the seller against
a letter of credit.Correct Answer NegotiationYour Answer Negotiation
Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-Correct Answer Liaison with RBI , Evolve Policies , Vigilance & ControlYour Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd
Select The BlankQuestion GIC raises funds to meet claims from ________.Correct Answer Premium collectedYour Answer Premium collected
Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-Correct Answer New Projects , Renovation , ModernisationYour Answer New Projects , Renovation , Modernisation
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has changed its name to
________ effective from October 1992.Correct Answer SCICI LtdYour Answer SCICI Ltd
Select The BlankQuestion AFC's membership consists of commercial, cooperative banks and DFIs including
________.Correct Answer EXIM bankYour Answer EXIM bank
Multiple Choice Single AnswerQuestion Financial institutions deal in :-Correct Answer Financial assetsYour Answer Financial assets
Multiple Choice Single AnswerQuestion The lender of the last resort to the market is the :-Correct Answer RBI
Your Answer RBI
Select The BlankQuestion One of the objectives of NHB is to augment the ________ resources for the housing
sector.Correct Answer FinancialYour Answer Financial
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-Correct Answer By borrowing from IBRD , By lending at 0% interest. , For periods up to ten
yearsYour Answer By borrowing from IBRD , By lending at 0% interest. , For periods up to ten years
Multiple Choice Single AnswerQuestion A company issues CP to save on :-Correct Answer Interest costYour Answer Interest cost
True/FalseQuestion PFC has been persuading State Governments restructuring of their power sector to
make them viable.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-Correct Answer RBIYour Answer RBI
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion RBI was established under the:-Correct Answer RBI ActYour Answer RBI Act
Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production as well as:-Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-Correct Answer Financial commitment , Voting power , Drawing powerYour Answer Financial commitment , Voting power , Drawing power
Select The BlankQuestion Period of Holiday Insurance is ________.Correct Answer Six months or lessYour Answer Three years
Multiple Choice Single Answer
Question The underdeveloped markets are characterised by :-Correct Answer Government regulation and controlYour Answer Government regulation and control
Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-Correct Answer BanksYour Answer Banks
True/FalseQuestion The bids for T-Bills are on price/interest basis.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-Correct Answer Indigenous bankersYour Answer Indigenous bankers
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-Correct Answer Over one yearYour Answer Over one year
Multiple Choice Multiple AnswerQuestion The general insurance business can be :-Correct Answer Marine insurance , Fire insurance , MiscellaneousYour Answer Fire insurance , Miscellaneous , Marine insurance
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution of Chemical
Fertilisers.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion The unorganised financial system comprises of :-Correct Answer Money lenders , Indigenous bankers , Lending pawn brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers
True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural Development.Correct Answer TrueYour Answer True
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income groups.Correct Answer Weaker sectionsYour Answer Weaker sections
Multiple Choice Single AnswerQuestion Development Financial institutions include :-Correct Answer State financial institutionsYour Answer State financial institutions
Multiple Choice Single Answer
Question Money Markets Instruments have a maturity of less than :-Correct Answer One yearYour Answer One year
Select The BlankQuestion The price in financial markets is known as ________.Correct Answer Rate of interestYour Answer Rate of interest
Match The FollowingQuestion Correct Answer Your Answer
Development financial institutions IFCI IFCI
Organised sector Banking System Banking System
Unorganised sector Indigenous banks Indigenous banks
Mutual funds UTI UTI
Select The BlankQuestion The HDFC was set up in 1977 by the ________.Correct Answer ICICIYour Answer ICICI
Multiple Choice Single AnswerQuestion Certificate of deposit is a :-Correct Answer Usance promissory noteYour Answer Term Deposit Receipt
True/FalseQuestion A Bill of Exchange is negotiable.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-Correct Answer CorporatesYour Answer Corporates
Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than the balance is :-Correct Answer OverdraftYour Answer Overdraft
Multiple Choice Multiple AnswerQuestion The loans of finance companies are generally :-Correct Answer At high interest , Unsecured , Based on borrowers worthYour Answer At high interest , Unsecured , Based on borrowers worth
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-Correct Answer SIDFYour Answer SIDF
True/FalseQuestion Issuance of CD attracts reserve requirements.Correct Answer FalseYour Answer False
True/FalseQuestion Banks issue Guarantees on behalf of their clients.Correct Answer TrueYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
NABARD Rural Development Rural Development
AFC Ltd Consultancy Consultancy
HUDCO Housing Housing
NCDC Development of Cooperatives Development of Cooperatives
True/FalseQuestion Under MIGA the World bank offers various forms of Political Insurance.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the obligation to contribute
further premium by :-Correct Answer Surrendering the policy , Converting it into paid up policy , Assigning it in the
open marketYour Answer Surrendering the policy , Converting it into paid up policy , Assigning it in the
open market
Multiple Choice Single AnswerQuestion The organised financial system includes :-Correct Answer Commercial banksYour Answer Commercial banks
Select The BlankQuestion The term ________ refers to the act of a bank extending finance to the seller against
a letter of credit.Correct Answer NegotiationYour Answer Negotiation
Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-Correct Answer Liaison with RBI , Evolve Policies , Vigilance & ControlYour Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd
Select The BlankQuestion GIC raises funds to meet claims from ________.Correct Answer Premium collectedYour Answer Premium collected
Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-Correct Answer New Projects , Renovation , ModernisationYour Answer New Projects , Renovation , ModernisationLIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has changed its
name to ________ effective from October 1992.Correct Answer SCICI LtdYour Answer SCICI Ltd
Select The BlankQuestion AFC's membership consists of commercial, cooperative banks and DFIs
including ________.Correct Answer EXIM bankYour Answer EXIM bank
Multiple Choice Single AnswerQuestion Financial institutions deal in :-Correct Answer Financial assetsYour Answer Financial assets
Multiple Choice Single AnswerQuestion The lender of the last resort to the market! is the :-Correct Answer RBIYour Answer RBI
Select The BlankQuestion One of the objectives of NHB is to augment the ________ resources for the
housing sector.Correct Answer FinancialYour Answer Financial
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-Correct Answer By borrowing from IBRD , By lending at 0% interest. , For periods up
to ten years
Your Answer By borrowing from IBRD , By lending at 0% interest. , For periods up toten years
Multiple Choice Single AnswerQuestion A company issues CP to save on :-Correct Answer Interest costYour Answer Interest cost
True/FalseQuestion PFC has been persuading State Governments restructuring of their power
sector to make them viable.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-Correct Answer RBIYour Answer RBI
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion RBI was established under the:-Correct Answer RBI ActYour Answer RBI Act
Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production as well a!
s:-Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-Correct Answer Financial commitment , Voting power , Drawing powerYour Answer Financial commitment , Voting power , Drawing power
Select The BlankQuestion Period of Holiday Insurance is ________.Correct Answer Six months or lessYour Answer Three years
Multiple Choice Single Answer
Question The underdeveloped markets are characterised by :-Correct Answer Government regulation and controlYour Answer Government reg! ulation and control
Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-Correct Answer BanksYour Answer Banks
True/FalseQuestion The bids for T-Bills are on price/interest basis.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-Correct Answer Indigenous bankersYour Answer Indigenous bankers
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-Correct Answer Over one yearYour Answer Over one year
Multiple Choice Multiple Answer
can be :-Correct Answer Marine insurance , Fire insurance , MiscellaneousYour Answer Fire insurance , Miscellaneous , Marine insurance
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution of
Chemical Fertilisers.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion The unorganised financial system comprises of :-Correct Answer Money lenders , Indigenous bankers , Lending pawn brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers
True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural Development.
&nbs! p; Correct Answer TrueYour Answer True
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income groups.Correct Answer Weaker sectionsYour Answer Weaker sections
Multiple Choice Single AnswerQuestion Development Financial institutions include :-Correct Answer State financial institutionsYour Answer State financial institutions
Multiple Choice Single AnswerQuestion Money Markets Instruments have a maturity of less than :-Correct Answer One yearYour Answer One year
Select The BlankQuestion The price in financial markets is known as ________.Correct Answer &n! bsp; Rate of interestYour Answer Rate of interest
Match The FollowingQuestion Correct Answer Your Answer
Development financial institutions IFCI IFCI
Organised sector Banking System Banking System
Unorganised sector Indigenous banks Indigenous banks
Mutual funds UTI UTI
Select The BlankQuestion The HDFC was set up in 1977 by the ________.Correct Answer ICICIYour Answer ICICI
Multiple Choice Single AnswerQuestion Certificate of deposit is a :-Correct Answer Usance promissory noteYour Answer Term Deposit Receipt
True/FalseQuestion A Bill of Exchange is negotiable.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-Correct Answer CorporatesYour Answer Corporates
Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than the balance is
:-Correct Answer OverdraftYour Answer Overdraft
Multiple Choice Multiple AnswerQuestion The loans of finance companies are generally :-Correct Answer At high interest , Unsecured , Based on borrowers worthYour Answer At high interest , Unsecured , Based on borrowers worth
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-
&n! bsp; Correct Answer SIDFYour Answer SIDF
True/FalseQuestion Issuance of CD attracts reserve requirements.Correct Answer FalseYour Answer False
True/FalseQuestion Banks issue Guarantees on behalf of their clients.Correct Answer TrueYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
NABARD Rural Development Rural Development
AFC Ltd Consultancy Consultancy
HUDCO Housing Housing
NCDC Development of Cooperatives Development of Cooperatives
True/FalseQuestion Under MIGA the World bank offers various forms of Political Insurance.
Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the obligation to
contribute further premium by :-Correct Answer Surrendering the policy , Converting it into paid up policy , Assigning
it in the open marketYour Answer Surrendering the policy , Converting it into paid up policy , Assigning it
in the open market
Multiple Choice Single AnswerQuestion The organised financial system includes :-Correct Answer Commercial banksYour Answer Commercial banks
Select The BlankQuestion The term ________ refers to the act of a bank extending finance to the seller
against a letter of credit.Correct Answer NegotiationYour Answer Negotiation
Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-Correct Answer Liaison with RBI , Evolve Policies , Vigilance & ControlYour Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute infrastructure projects
are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd
Select The BlankQuestion GIC raises funds to meet claims from ________.Correct Answer Premium collectedYour Answer Premium collected
!Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-Correct Answer New Projects , Renovation , Modernisation
Your Answer New Projects , Renovation , Modernisation
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Visit your group "SCDL_PGDBA_Finance_2004" on the web.
To unsubscribe from this group, send an email to:[email protected]
Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has changed its name to
________ effective from October 1992.Correct Answer SCICI LtdYour Answer SCICI Ltd
Select The BlankQuestion AFC's membership consists of commercial, cooperative banks and DFIs including
________.Correct Answer EXIM bankYour Answer EXIM bank
Multiple Choice Single AnswerQuestion Financial institutions deal in :-Correct Answer Financial assetsYour Answer Financial assets
Multiple Choice Single AnswerQuestion The lender of the last resort to the market is the :-Correct Answer RBIYour Answer RBI
Select The BlankQuestion One of the objectives of NHB is to augment the ________ resources for the housing
sector.Correct Answer FinancialYour Answer Financial
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-Correct Answer By borrowing from IBRD , By lending at 0% interest. , For periods up to ten
yearsYour Answer By borrowing from IBRD , By lending at 0% interest. , For periods up to ten years
Multiple Choice Single AnswerQuestion A company issues CP to save on :-Correct Answer Interest costYour Answer Interest cost
True/FalseQuestion PFC has been persuading State Governments restructuring of their power sector to
make them viable.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-Correct Answer RBIYour Answer RBI
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion RBI was established under the:-Correct Answer RBI ActYour Answer RBI Act
Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production as well as:-Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-Correct Answer Financial commitment , Voting power , Drawing powerYour Answer Financial commitment , Voting power , Drawing power
Select The BlankQuestion Period of Holiday Insurance is ________.Correct Answer Six months or lessYour Answer Three years
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-Correct Answer Government regulation and controlYour Answer Government regulation and control
Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-Correct Answer BanksYour Answer Banks
True/FalseQuestion The bids for T-Bills are on price/interest basis.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-Correct Answer Indigenous bankersYour Answer Indigenous bankers
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-Correct Answer Over one yearYour Answer Over one year
Multiple Choice Multiple AnswerQuestion The general insurance business can be :-Correct Answer Marine insurance , Fire insurance , MiscellaneousYour Answer Fire insurance , Miscellaneous , Marine insurance
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution of Chemical
Fertilisers.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion The unorganised financial system comprises of :-Correct Answer Money lenders , Indigenous bankers , Lending pawn brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers
True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural Development.Correct Answer TrueYour Answer True
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income groups.Correct Answer Weaker sectionsYour Answer Weaker sections
Multiple Choice Single AnswerQuestion Development Financial institutions include :-Correct Answer State financial institutionsYour Answer State financial institutions
Multiple Choice Single AnswerQuestion Money Markets Instruments have a maturity of less than :-Correct Answer One yearYour Answer One year
Select The BlankQuestion The price in financial markets is known as ________.Correct Answer Rate of interestYour Answer Rate of interest
Match The FollowingQuestion Correct Answer Your Answer
Development financial institutions IFCI IFCI
Organised sector Banking System Banking System
Unorganised sector Indigenous banks Indigenous banks
Mutual funds UTI UTI
Select The BlankQuestion The HDFC was set up in 1977 by the ________.Correct Answer ICICIYour Answer ICICI
Multiple Choice Single AnswerQuestion Certificate of deposit is a :-Correct Answer Usance promissory noteYour Answer Term Deposit Receipt
True/FalseQuestion A Bill of Exchange is negotiable.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-Correct Answer CorporatesYour Answer Corporates
Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than the balance is :-Correct Answer OverdraftYour Answer Overdraft
Multiple Choice Multiple AnswerQuestion The loans of finance companies are generally :-Correct Answer At high interest , Unsecured , Based on borrowers worthYour Answer At high interest , Unsecured , Based on borrowers worth
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-Correct Answer SIDFYour Answer SIDF
True/FalseQuestion Issuance of CD attracts reserve requirements.Correct Answer FalseYour Answer False
True/FalseQuestion Banks issue Guarantees on behalf of their clients.Correct Answer TrueYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
NABARD Rural Development Rural Development
AFC Ltd Consultancy Consultancy
HUDCO Housing Housing
NCDC Development of Cooperatives Development of Cooperatives
True/FalseQuestion Under MIGA the World bank offers various forms of Political Insurance.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the obligation to contribute
further premium by :-Correct Answer Surrendering the policy , Converting it into paid up policy , Assigning it in the
open marketYour Answer Surrendering the policy , Converting it into paid up policy , Assigning it in the
open market
Multiple Choice Single AnswerQuestion The organised financial system includes :-Correct Answer Commercial banksYour Answer Commercial banks
Select The BlankQuestion The term ________ refers to the act of a bank extending finance to the seller against
a letter of credit.Correct Answer NegotiationYour Answer Negotiation
Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-Correct Answer Liaison with RBI , Evolve Policies , Vigilance & ControlYour Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd
Select The BlankQuestion GIC raises funds to meet claims from ________.Correct Answer Premium collectedYour Answer Premium collected
Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-Correct Answer New Projects , Renovation , ModernisationYour Answer New Projects , Renovation , Modernisation
Financial Institution and Banking
Topic PageNoorganised sector 2financial services 2Indian financial system 3commercial banks 4development financial institutions 5insurance companies 5other public sector financial institutions 5post office savings 5mutual funds 5non banking finanical institutions 6Reserve bank of India 9functions of RBI 9banker to the government 10bankers bank 10supervising authority 10exchange control authority 10promoter of financial system 11fiscal and monetary policy 12open market operations 12developmental financial institutions 17industrial finance corporation of India 17Industrial development bank of india - idbi 18industrial credit and investment corporation of india Ltd - icici 19irbi 20sfcs 20sidc and siics 20state small industries development corporation (SSIDC) 21power finance corporation (PFC) 21financial services offered by the corporation 21term loans 21lease financing 22direct discounting of bills 22guarantee services 22loan syndication 22short term loan 22institutional development services 22utility development plans 23financial assistance for power sector studies 23reform and restructuring related studies 23reform and restructuring of SEBs 23OFAP 23export import bank of india 24national bank of agriculture and rural development 24
genesis of NABARD 24ARC 24GOI 24ACD 24CRAFICARD 24types of refinance facilities 26interest rates 26production credits 28financing weavers 28OSAO 29refinance for marketing of crops 29other refinance facilities 30long term loans to state governments 30investment credit ( medium and long term) refinance 31shipping credit and investment company of India (SCICI) 33principal activities 33agricultural finance consultancy ltd (AFC) 34area of specialisation 36surveys and studies 38National co-operative development corporation (NCDC) 38finance and financing 39procedure of santion / disbursal of assistance 40promotional and development role 40marketing 40agricultural inputs 40agro-processing industries 41storage and cold storage 41program for weaker sections 41consumer business 41area based integrated co-operative development project 42national housing bank (NHB) 42housing and urban development corporation (HUDCO) 44housing development finance corporation (HDFC) 44land development banks 45banking sector 49retail banking 49cash credit 50safe custody services for safe keeping of important documents 50acceptance of deposits from non resident indians 51difference between retail banking and wholesale banking 51global banking 51scheduled bank in india 52commercial bank and cooperative bank 52public sector banks 52private sector banks 52bank accounts 53deposit account 53
lump sum investment 54periodic investment 54cash credit 54loan syndication 54repayment period 54bill 55discount 55remittance 55letter of credit 55bank guarantee 56negotiation 56cash reserve ratio 56statutory reserve ratio 57note pertaining to reserve ratio 57clearing operation 57daily product basis 57monthly product basis 58repayment holiday 58credit instruments 59negotiable instruments 59acceptance 59credit report 59syndication 59custodial services 60security 60foreign exchange 60securitisation 60international banking 60international trade 61tourism 61remittance of funds from one place to another place besides tourism 61syndication of loans global for corporate houses 61foreign exchange management 62profile of a bank 62branch banking 62different layers of banking 62duties of an international banking department 63exchange operations 63administrative functions in a bank 63administrative units 64banking business 65Deposit insurance and credit guarantee corporation (DICGC) 66export credit guarantee corporation (ECGC) 67indian money market 73instrument 73comercial paper 74certificates of deposit 75
treasury bills 75short term debentures 75bill of exchange 75long term debt instruments 76government of India dated securities (GOISEC) 76inflation linked bonds 77zero coupon bonds 77state government securities (state loans) 78public sector undertaking bonds (PSU Bonds) 78bonds of public financial institutions (PFI) 78corporate debentures 79Pass through certificates (PTC) 79issuers 79government of India and other sovereign bodies 80banks and development financial institutions 80public sector undertaking (PSU ) 81private sector companies 81government owned or quasi governement non corporate entities 82investors 82banks 83insurance companies 84provident funds 84mutual funds 86trusts 86corporate treasuries 87foreign institutional investors 87securities trading corporation of india (STCI) 88discount and finance house of india 88non banking financial intermediaries 93LIC 93general nature of insurance companies 93instroduction of Life Insurance corporations 93types and structure of insurance plans 94general insurance corporation 96unit trust of india 98provident / pension funds 99post offices 99Non bank financial companies (NBFC) 99investment companies 100loan companies 102chit funds 102NIDHIS 103hire purchase finance companies 104equipment leasing finance companies 104international monetary fund (IMF) 109quotas 109concessional and non concessional lending 113
poverty reduction and growth facility (PRGF) 113stand by arrangments (SBA) 114extended fund facility (EFF) 114supplement reserve facility (SRF) 114contingent credit lines (CCL) 114compensatory financing facility (CFF) 114emergency assistance 114special drawing rights 114the international bank for reconstruction and development 115world bank 115international finance corporation 115international development assiciation (IDA) 116the bank for international settlements 116regional development agencies 116RBI 119non performing assets 120out of order status 121overdue 121income recognition 121reversal of income 122appropriation of recovery in NPA 122NPA 122sub standard Assets 123subtful assets 124loss assets 124account with temporary deficiancies 124upgradation of loan accounts classified as NPA 125account regularised near about the balance sheet date 125agricultural advances 126government guaranteed advances 128restructuring rescheduling of loans 128upgradation of restructured accounts 130corporate debt restructuring (CDR systems) 131CDR 131stand still clause 138category 2 CDR system 139projects under implementation 142assest classification 142income recognition 144provisioning 145availability of security / net worth of borrower / guarantor 145take-out finance 145post shipment supplier credit 145export project finance 146advances under rehabiliation approved by BIFR/TLI 146provisioning norms general 146sub standard Assets 148
leased assets 148advances 150advances covered by CGTSI guarantee 151take-out finance 152reserve for exchange rate fluctuations account (RERFA) 152country risk 153securitisation company (SC) / reconstruction company (RC) 154writing off of NPA 155direct finance to farmers for agricultural purposes 156purchase of agricultural implements and machinery 156development of irrigation potential through 156lending to priority sector 158priority sector advances 161direct finance to farmers for agricultural purposes 161indirect finance to agriculture 163small scale and ancillary industries 166tiny enterprises 166small scale service and business enterprises(SSSBE) 166industrial estates 167KVI sector 167small road and water transport operators (SRWTO) 167retail trade 168small business 168professional and self emplyed persons 168state sponsored organisations for scheduled castes / scheduled tribes 169education 170housing 170compsumption loans 170loans to self help groups (SHG)/NGO/MICROEDIT 170food and agro based processing sector 171software industry 171venture capital 171investments in special bonds 173HUDCO 174NSIC 174NHB 174lines of credit 174bills rediscounting 175deposits in rural infrastructure development (RIDF) 175leasing and hire purchase 175targets for priority sector lending by scheduled commercial banks 177scheduled commercial banks excluding foreign banks 177direct / indirect agricultural lending 177small scale industries 178DRI advances 178Weaker sections 178Targets for foreign banks 178
rural infrastructure developments fund (RIDF ) 180common guidelines for priority sector advances 183application forms 183mode of disbursement of loan 184repayment schedule 184rates of interest 184penal interest 185inspection charges 185insurance against fire and other risks 185other charges 186photographs of borrowers 186discretionary powers 186machinery to look into complants 186amendments 186Chapter – 1 : Overview of Financial markets Meaning and scopeFollowing groups; organized sector and unorganized sector ; financial servicesFinancial systems commercial banks ; development financial institutions ;insurance companies ; other public sector financial institutions ; post officesavings bank ; national bank for agriculture and rural development ; Mutualfunds ; non – banking financial institutions
1 – 5
Chapter – 2 Reserve bank of India – The main functions of RBI are ; Noteissuing authority ; banker to the Government ; Bankers’ Bank ; Supervisingauthority ; Exchange control Authority ; Promoter of Financial System ; Fiscaland Monetary policy ; open market operations ;
9 – 12
Chapter – 3 – Development Financial Institutions – Introduction ; IndustrialFinance Corporation of India ; Industrial development bank of India ;Industrial credit and investment corporation of India ltd., The purpose IRBI ;SFCs ; The SIDCs and SIICs ; Functions ; state small industries developmentcorporations (SSIDCs) Power Finance Corporation (PFC) Financial ServicesOffered by the Corporation ; Lease Financing – Direct Discounting of Bills;;Guarantee Services; Loan Syndication ; short term loan ;
17 – 21
Institutional Development ServicesActing as an instrument for ushering in reforms in the state utilities bothfinancial and technical ; utility development plans ; Financial Assistance forpower sector studies ; Reform & Restructuring related studies ; Reforms &Restructuring of SEBs ; Export import bank of India ; National Bank foragriculture and rural development ; Genesis of NABARDTypes of refinance facilities ; interest rates ; production credits ; Otherrefinance facilities ; investment credit (Medium and long term) Refinance
22 - 31
Shipping credit and investment company of India (SCICI)Agricultural Finance Consultancy Ltd (AFC)Membership ; Organization ; Services ; Area of specialization ; surveys &studies ; crop production ; Forestry ; Irrigation & Drainage ; AgriculturalEngineering ; Horticulture & Plantation ; Fisheries ; Livestock & Dairy ;Agricultural & Livestock Marketing ; Agri-Business & Agro-Industries ; AreaDevelopment Planning ; Agricultural & Rural Credit ; Project Formulation &Appraisal ; Institution Building ;
33 – 37
Social Sector Development ; Remote Sensing Application & ResourcesManagement Centre ; Training & Manpower Development ; RuralInfrastructure ; Surveys and Studies ; National Co-operative DevelopmentCorporation (NCDC) ; Genesis ; Functions ; Organization and Management ;Finance and Financing ; Purposes for which assistance is provided ; Procedureof sanction / disbursal of assistance ; Promotional and development role ;Activities and program ; Marketing ; Agricultural inputs ; Agro- Processingindustries ; Sugar ; Spinning Mill ; Others ; Storage and Cold Storage ; Storage; Cold Storage ; Program for weaker sections ; Consumer business
38 – 41
Are based integrated co-operative development project ; National housing bank(NHB) Role and functions in Housing sector ; Role NHB; Housing and urbandevelopment corporation (HUDCO); Housing development financecorporation (HDFC) ; land development banks ;
42 – 45
Chapter - 4 – Banking Sector – What is bank and what is banking Extendingfinancial assistance to exports on soft terms ; safe custody services for safekeeping of important documents ; acceptance of deposits from non-residentIndians ; difference between retail banking and wholesale banking
49 – 51
What is a schedule bank in India ; What is the difference between acommercial bank and a co-operative bank ; different bank accounts – deposit ;deposit account without withdrawals facility – different categories ;
52 – 53
Different bank accounts – advances and loans ; cash credit loan ; repaymentperiod ; banking terms often used / common banking practices ; discount ;remittance ; letter of credit ; advantage ; Bank guarantee ; example of financialguarantee example of performance guarantee ; letters of credit and bankguarantees play a very important role in international banking statutoryReserve ratio ; Note pertaining to reserve ratio ; clearing operation ; dailyproduct basis ; repayment holiday
54 – 58
Credit instruments ; Negotiable instruments ; acceptance ; credit report ;syndication ; custodial service ; security ; foreign exchange ; securitization ;international banking internal trade tourism ; remittance of funds from oneplace to another place besides tourism / international trade ; Syndication ofloans globally for corporate houses ;
59 -61
Accessing international market for equity / borrowing in the form of ADR /GDR and Ero Bonds Etc., Foreign exchange management ; profile of a bankdifferent layers of banking operations in India in general ; what are the dutiesof an international banking department? Exchange operations administrativefunctions in a bank ; different administrative units in a bank
62 – 63
Typical functions of different administration units of a bank ; at the head officelevel ; banking business vs. other business ; deposit insurance and creditguarantee corporation (DICGC) ; Export credit guarantee corporation (ECGC)
64 – 68
Chapter – 5 Indian Money Market – Indian Money Market ; instruments ;Money market instruments ; commercial paper (CP) certificates of deposit(CD) ; Treasury Bills (T – Bills); long term debt instruments ; government ofIndia dated securities (GOISECs) ; New types of Goisecs ;
73 – 77
State government securities (State Loans) ; Public Sector Undertaking Bonds(PSU Bonds ) ; Bonds of public financial institutions (PFIs) Corporate
78 - 83
debentures ; Pass Through Certificates (PTSs) Issuers ; Government of Indiaand other sovereign bodies ; Banks and development financial instructions ;public sector undertaking (PSUs) private sector companies ; Governmentowned or quasi government non corporate entities ; investors ; banks ; banks ;Insurance companies ; provident funds ; Several factors have contributed to thegrowth of PFs in India ; Mutual funds ; trusts ; corporate treasuries ; foreigninstructional investors ; securities trading corporation of India ltd., (STCI) ;discount and finance house of India;
84 – 89
Chapter – 6 – Non Banking Financial intermediariesLIC ; General Nature of Insurance Companies ; Introduction of Life InsuranceCorporations ; Types and structure of insurance plans ; valuation of life policy; growth of life business and fund ; investment pattern and policy ; generalinsurance corporation ; organization ; types and structure of business; incomeand investment pattern
93 - 97
Unit trust of India and other mutual funds ; provident / pension funds; postoffices ; other non-bank financial companies’ (NBFCs) ; Investmentcompanies ;
98-101
Loans companies chit funds ; nidhis functions ; accepting deposits loan andadvances ; other aspects ; Hire – purchase finance companies ; functions ;installment – credit ; financing of purchase of equipment, vehicles etc. ;purchase of old assets ; consumer credit ; equipment leasing financecompanies;
102 – 105
Chapter – 7 ; International Financing agencies – International monetary Fund(IMF) ; Funding facilities ; Schemes of the IMF funding ; concessional andnon-concessional lending ; IMF Facilities ;
109 – 113
poverty reduction and growth facility ; stand – by arrangement ; extended fundfacility ; supplemental reserve facility ; contingent credit lines ; compensatoryfinancing facility ; emergency assistance ; special drawing rights ; theinternational bank for reconstruction and development ; international financecorporation ; 1956; international development association ; the bank forinternational settlements ; regional development agencies ; European bank forreconstruction and development;
114 – 117
Important regulatory instructions issued by the RBI ; contents ; general ;definitions ; non – performing assets ; year ending march 31 specified period ;out of order status ; overdue ; income recognition ; income recognitions ;income recognition – policy ; reversal of income this will apply to governmentguaranteed accounts also ; appropriation of recovery in NPAs ; interestapplication ; reporting of NPAs; Asset classification ; categories of NPAs ; sub– standard assets ; NPA for a period less than or equal to 18 months ;
119 – 123
Guidance note on asset classifications ; provisioning norms ; doubtful assetsloss assets ; guidelines for classification off assets ; accounts with temporarydeficiencies ; up gradation of loan accounts classified as NPAs ; Accountsregularized near about the balance sheet date ;
124 – 125
Asset classification to be borrower – wise and not facility wise ; ; advancesunder consortium arrangements ; record of recovery of the individual member;accounts where there is a erosion in the value of security ; advances to
126-127
PACs/FSS ceded to commercial banks ; advances against term deposits NSC’sKVP / IVP ; loans with moratorium for payment of interest ; agriculturaladvances;Government guaranteed advances ; restructuring of loans ; upgradation ofrestructured accounts; general ; corporate debt restructuring (CDR System)Background ; objective structure CDR system in the country will have a threetier structure ; cdr standing forum and its core group ; cdr empowered group ;cdr cell ;
128- 134
Other features ; eligibility criteria ; reference to CDR system ; legal basis ;stand – still clause ; additional finance ; exit option ; conversion option ;category 2 cdr system ; accounting treatment for restructured accounts ;
135 – 140
Disclosure ; implementation of the revised guidelines ; projects underimplementation ; asset classification ; category II ; category III ; incomerecognition ; provisioning ; availability of security / net worth of borrower /guarantor ; take – out finance ; post – shipment supplier’s credit
141 – 145
Export project finance ; advances under rehabilitation approved by BIFR / RLI; provisioning norms general ; loss assets ; doubtful assets ; period for whichthe advance has been considered as doubtful ; provisions requirement ;valuation of security for provisioning purposes ; sub-standard assets ; standardassets ; floating provisions ; provisions on leased assets sub – standard assets ;doubtful assets ; period age provisions loss assets ; loss assets ; guidelines forprovisions under special circumstances ; government guaranteed advances
146 – 149
Advances granted under rehabilitation packages approved by BIFR / termlending institutions ; treatment of interest suspense account ; Advancescovered by ECG / DICGC guarantee ; advance covered by CGTSI guarantee ;Take out finance ; reserve for exchange rate fluctuations account (RERFA) ;Provisioning for country risk ; Risk category ; ECGC classification ;Provisioning requirement (per cent)
150 – 153
Provisioning norms for sale of financial assets to securitization company (SC) /Reconstruction company (RC) ; writing off of NPAsAnnexure – II Revelant extract of the list of direct agricultural advances fromthe Master Circular on lending to priority sector – RPCD. Plan.BC. 42A /01.09.01/ 2001-02 dated 11 November, 2002.
154-156
Direct Finance of farmers for Agricultural Purposes ; purchase of agriculturalimplements and machinery ; development of irrigation potential through ;reclamation and loan development schemes ; construction of farm buildingsand structure etc., ; construction and running of storage facilities ; productionand processing of hybrid seeds for crops ; payment of irrigation charges etc., ;other types of direct finance of farmers ; Lending to Priority Sector
156 - 158
Section – 1 – Classification of Priority Sector advances ; Agriculture ; directFinance to Framers for Agricultural Purposes ; Indirect Finance to agriculture ;small scale industries ; small scale and ancillary industries ;
161 – 165
Tiny Enterprises ; small scale service & Business Enterprises (SSSBE’s) ;Indirect finance in the small – scale industrial sector will include credit to ;industrial estates KVI Sector ; Other Activities / Borrowers in the Prioritysector ; Small road & Water Transport operators (SRWTO)
166 - 167
Retail trade – advances granted to small business ; professional & self –employed persons ; state sponsored organizations for scheduled castes /scheduled tribes
168 – 169
Education ; housing ; consumption loans ; loans to self – help groups (SHGs) /NGOs / Microcredit ; Food and agro – based processing sector ; softwareindustry ; venture capital
170 – 171
Section – II ; Certain Types of Funds deployment eligible as priority sectoradvances ; State Financial Corporations (SFCs) / State Industrial DevelopmentCorporations (SIDCs) ; Rural Electrification Corporation (REC) ; Nabard ;Small industries development Bank of India (SIDBI) ; the National industriescorporation ltd., (NSIC) ; National housing bank (NHB) ; Housing & Urbandevelopment corporation (HUDCO) ;
173 - 174
Other investments ; lines of credit ; bills rediscounting ; deposits in ruralinfracture development fund (RIDF) leasing and hire purchase
174 – 175
Section – III – Targets for priority sector lending by scheduled commercialbanks (excluding RRBs) ; Main Targets for all scheduled commercial banksexcluding foreign banks ; sub-targets for all scheduled commercial banksexcluding foreign banks ; Direct / Indirect Agricultura lending
177
Small scale industries ; DRI advances ; weaker sections ; Targets for foreignbanks ; deposit by foreign banks with SIDBI towards shortfall in priority sectorlending ; contribution by banks to rural infrastructure development fund(RIDF)
178 – 181
Section – IV – Common guidelines for priority sector advancesProcessing of applications ; completion of application forms ; issue ofacknowledgement of loan applications ; disposal of applications ; rejection ofproposals ; register of rejected applications ; mode of disbursement of loan ;repayment schedule ; rates of interest
183 – 184
Penal interest ; inspection charges ; insurance against fire and other risks ;banks may waive insurance of assets financed by bank credit in the followingcases;
185
Other charges ; Photographs borrowers; discretionary powers; machinery tolook into complaints ; amendments ; annexure I – general guidelines onpriority sector lending ; general guidelines on priority sector lending
186 -189
For its long term operations NABARD raises funds by :-
a)
b)
c)
d)
Floating Bonds in openmarket
Drawing from the CentralGovt.
Drawing from National Ruralcredit Funds
Borrowing from RRBs
Secured Premium Notes areBonds
.Most of the Indian PS Banks practice retail banking.
True
False
1. Pure NBFI 1. REC
2. Specialised NBFI 2. FFC
3. Film Finance 3. HDFC
4. Rural Electrification 4. Chit Funds
5. UTI
6. NICo Ltd.
Marks : 2
26.facilities
are for economies in transition.
Legally speaking Pass Through Certificates
are and are tradeablefreely.
EXIM Bank canraise resources by:-
a)
b)
c)
Issuing bonds
Borrowing fromRBI
d) Borrowing fromInternationalFinancialInstitutions
Borrowing fromState Govt
1. Gen.Insurance 1. LIC ofIndia Ltd
2. Life Insurance 2. HDFC
3. Mutual fund 3. PPF
4. SmallSavings
4. Chit Funds
5. UTI
6. NICo ofIndia Ltd.
If the Bank allows a finance of Rs 95 against a Bill of Rs 100 the difference of Rs. 5is known as the :-
a)
b)
c)
d)
Discount
Margin
Interest
Commission
41. DFHI was set up with the following objective :-
a)
b)
c)
d)
Executor Trustee Services
To even out imbalances
To provide liquidity
To promote secondary market
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer
Question SIDBI provides :-
Correct Answer Refinance , Rediscounting of Bills , Financial support to SSIDC
Your Answer Refinance , Rediscounting of Bills , Financial support to SSIDC
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution
of Chemical Fertilisers.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Which of the following services is not provided by Commercial
banks?Correct Answer Deposit Insurance
Your Answer Deposit Insurance
Multiple Choice Single AnswerQuestion IDBI has helped in the establishment of :-
Correct Answer EXIM Bank
Your Answer IFCI
Select The BlankQuestion DFIs are the second largest issuer of ________ after the Govt
and Sovereign bodies.Correct Answer Debt instruments
Your Answer Debt instruments
True/FalseQuestion A Cheque is a Negotiable Instrument.
Correct Answer True
Your Answer True
True/FalseQuestion State loans are much less liquid than GOI Securities.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion IIBI (formerly known as IRBI )undertakes :-
Correct Answer Merchant Banking activities , Lease or hire purchase finance ,Consultancy & managerial services
Your Answer Merchant Banking activities , Lease or hire purchase finance ,Consultancy & managerial services
True/FalseQuestion Development financial institutions primarily lend to Agriculture
sector.Correct Answer False
Your Answer False
True/FalseQuestion Banks do not invest in the GOI securities .
Correct Answer False
Your Answer False
Select The BlankQuestion NABARDs Criteria for Refinance covers Technical ________ of
the project.Correct Answer Feasibility
Your Answer Feasibility
True/FalseQuestion IMF discourages excessive use of its resources by imposing a
surcharge on large loans.Correct Answer True
Your Answer True
Select The BlankQuestion As a banker to the Government, RBI accepts Government
deposits at ________% interest.Correct Answer 0
Your Answer 0
Select The BlankQuestion HDFCs loans were linked up with________.
Correct Answer Planned Savings
Your Answer Planned Savings
Multiple Choice Multiple AnswerQuestion Other than Tourism, International funds remittances comprise of
:-Correct Answer Donations/Charity , Payments of Salaries , Payments of Royalty
Your Answer Donations/Charity , Payments of Royalty
Multiple Choice Single AnswerQuestion PFC is committed to the integrated development of :-
Correct Answer Power
Your Answer Power
Multiple Choice Single AnswerQuestion A major part of the credit of SFCs went to :-
Correct Answer SSI units
Your Answer SSI units
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-
Correct Answer Over one year
Your Answer Over one year
Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme for
modernisation is also undertaken by IDBI.Correct Answer ICICI
Your Answer ICICI
True/FalseQuestion A Bill of Exchange is negotiable.
Correct Answer True
Your Answer True
Select The Blank
Question NHB at present has a ________ Capital of Rs. 350 crores.
Correct Answer Paid-up
Your Answer Paid-up
Select The BlankQuestion The term ________ refers to the act of a bank extending finance
to the seller against a letter of credit.Correct Answer Negotiation
Your Answer Negotiation
True/FalseQuestion Under MIGA the World bank offers various forms of Political
Insurance.Correct Answer True
Your Answer True
Select The BlankQuestion The loans under________ are based on Poverty Reduction
Strategy Paper.Correct Answer PRGF
Your Answer PRGF
Multiple Choice Multiple AnswerQuestion The general insurance business can be :-
Correct Answer Marine insurance , Fire insurance , Miscellaneous
Your Answer Marine insurance , Fire insurance , Miscellaneous
Multiple Choice Single AnswerQuestion FIs can be classified into two categories depending on the basis
of incorporation and :-Correct Answer Operation
Your Answer Size
Multiple Choice Multiple AnswerQuestion The main objective of ICICI was :-
Correct Answer To augment export finance in India , To channelise WorldBank's funds to industries in India , To help in building up aCapital Market in India
Your Answer To augment export finance in India , To help in building up aCapital Market in India , To aid Rural Development in India
Multiple Choice Single AnswerQuestion SIDCs & SIICs give loans ,guarantees & :-
Correct Answer Lease finance
Your Answer Lease finance
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-
Correct Answer Corporates
Your Answer Corporates
True/FalseQuestion SCICI is a member of the OTCEI.
Correct Answer True
Your Answer True
Select The BlankQuestion The extent of powers enjoyed by a branch depends on the size
of its ________.Correct Answer Business
Your Answer Business
True/FalseQuestion Gramin banks are State Owned Banks.
Correct Answer True
Your Answer False
True/FalseQuestion NIDHIS are Trading Organisations.
Correct Answer False
Your Answer True
Multiple Choice Single AnswerQuestion Corporate Debentures are :-
Correct Answer Long term debt instruments
Your Answer Long term debt instruments
Multiple Choice Multiple AnswerQuestion Credit Information report is also known as :-
Correct Answer Credit report , Banker's report , Confidential report
Your Answer Credit report , Banker's report , Confidential report
Match The FollowingQuestion Correct Answer Your Answer
Largest borrower in theworld
IBRD IBRD
International MonetaryCooperation
IMF IMF
Prevention of crises CCL CCL
Political insurance MIGA MIGA
Multiple Choice Single AnswerQuestion The apex institution in the field of Industrial Development is :-
Correct Answer IDBI
Your Answer IDBI
Multiple Choice Single AnswerQuestion Bills Rediscounting Scheme of IDBI was introduced in the year
:-Correct Answer 1965
Your Answer 1965
Select The BlankQuestion Development financial institutions have been established to
cater to ________ of the industrial sector.Correct Answer Long term financial needs
Your Answer Long term financial needs
Select The BlankQuestion The ________ was set up to help corrections in BOP
maladjustments.
Correct Answer IMF
Your Answer UNO
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-
Correct Answer Financial commitment , Voting power , Drawing power
Your Answer Financial commitment , Voting power , Drawing power
Multiple Choice Multiple AnswerQuestion Functions of R.O. of a bank include :-
Correct Answer Inspection/audit , Control on branches , Grant loans/advances
Your Answer Control on branches , Grant loans/advances , Pay interest ondeposits
Multiple Choice Single AnswerQuestion IDBI introduced Automatic Refinance Scheme in the year :-
Correct Answer 1978
Your Answer 1975
Select The BlankQuestion The ________ is the apex institution in the field of foreign trade
in India.Correct Answer EXIM bank
Your Answer EXIM bank
Multiple Choice Multiple AnswerQuestion SFCs provide finance to :-
Correct Answer Corporates , Partnerships , Proprietary firms
Your Answer Corporates , Partnerships , Proprietary firms
Match The FollowingQuestion Correct Answer Your Answer
Aquaculture ,BrackishWater
Fisheries Fisheries
Ploughing, weeding,transplantation
Seasonal AgriculturalOperations
Irrigation & Drainage
Market Yards, Storage &Warehousing
Agricultural Marketing Agricultural Marketing
Hill ,Tribal Areadevelopment
Area Development Area Development
Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables member
countries to :-Correct Answer Rebuild resources , Stabilise currencies , Pay for imports
Your Answer Rebuild resources , Stabilise currencies , Pay for imports
Financial Institutions & Banking_6
- 1 -
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion Agricultural Finance Consultancy Ltd(AFC) activities cover :-
Correct Answer Benchmark Surveys , Pre-feasibility studies , Regional /Sectoralplanning
Your Answer Benchmark Surveys , Pre-feasibility studies , Regional /Sectoralplanning
Multiple Choice Multiple AnswerQuestion Duties of an International Banking unit cover :-
Correct Answer Handling foreign currency , Handling Doc. credits , Granting linesof Credit
Your Answer Handling foreign currency , Handling Doc. credits , Granting linesof Credit
Select The BlankQuestion The ________ is the apex institution in the field of foreign trade
in India.Correct Answer EXIM bank
Your Answer FEDAI
True/FalseQuestion The Capital of NABARD is subscribed by World Bank.
Correct Answer False
Your Answer True
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution
of Chemical Fertilisers.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion PFC is committed to the integrated development of :-
Correct Answer Power
Your Answer Power
True/False
Financial Institutions & Banking_6
- 2 -
Question NABARD is an apex institution in the field of Integrated RuralDevelopment.
Correct Answer True
Your Answer False
Match The FollowingQuestion Correct Answer Your Answer
Insurance of allemployees of a Firm
Group Insurance Group Insurance
Premium Throughout Life Whole Life Whole Life
Fixed Period Insurance Endowment Endowment
Insurance of ocean Cargo Marine Insurance Marine Insurance
Select The BlankQuestion DFIs are the second largest issuer of ________ after the Govt
and Sovereign bodies.Correct Answer Debt instruments
Your Answer Debt instruments
True/FalseQuestion Mortgage Loans are loans against property.
Correct Answer True
Your Answer True
Select The BlankQuestion An ________ letter of credit cannot be canceled by the buyer
without the seller's consent.Correct Answer Irrevocable
Your Answer Revocable
Multiple Choice Single AnswerQuestion Liabilities of Insurance Cos are mostly :-
Correct Answer Long term
Your Answer Long term
Select The Blank
Financial Institutions & Banking_6
- 3 -
Question As a banker to the Government, RBI accepts Governmentdeposits at ________% interest.
Correct Answer 0
Your Answer 0.05
Multiple Choice Single AnswerQuestion Bills Rediscounting Scheme of IDBI was introduced in the year :-
Correct Answer 1965
Your Answer 1975
Multiple Choice Single AnswerQuestion DFHI was incorporated under the :-
Correct Answer Companies Act, 1956
Your Answer Banking Regulation Act,1949
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-
Correct Answer Government regulation and control
Your Answer Government regulation and control
Multiple Choice Single AnswerQuestion Financial institutions deal in :-
Correct Answer Financial assets
Your Answer Financial assets
Multiple Choice Single AnswerQuestion The first development Bank of India, established in 1948 was :-
Correct Answer IFCI
Your Answer IFCI
True/FalseQuestion Non bank financial institutions undertake fund and non fund
based activities.Correct Answer True
Your Answer True
Financial Institutions & Banking_6
- 4 -
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-
Correct Answer New Projects , Renovation , Modernisation
Your Answer New Projects , Renovation , Modernisation
True/FalseQuestion SCICI is a member of the OTCEI.
Correct Answer True
Your Answer True
Select The BlankQuestion The ________ does not collect Savings from the Public.
Correct Answer NIICO Ltd.
Your Answer NIICO Ltd.
Multiple Choice Single AnswerQuestion IRBI was set up with a focus on :-
Correct Answer Sick Units
Your Answer Sick Units
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-
Correct Answer Over one year
Your Answer Over three years
Multiple Choice Multiple AnswerQuestion Which of the following statements are not prepared on a daily
basis in branch?Correct Answer Cash Book , Trial Balance , P/L statement
Your Answer Audited Balance Sheet , Trial Balance , P/L statement
True/FalseQuestion Banks lend to corporates directly.
Correct Answer True
Financial Institutions & Banking_6
- 5 -
Your Answer True
True/FalseQuestion Small Savings are source of Capital Receipts for the
Government.Correct Answer True
Your Answer False
Multiple Choice Single AnswerQuestion Treasury Bills are issued by the :-
Correct Answer RBI
Your Answer RBI
Multiple Choice Single AnswerQuestion Account where lump sum investment is made for specific period
is :-Correct Answer Term Deposit account
Your Answer Term Deposit account
Multiple Choice Single AnswerQuestion The apex institution in the field of foreign trade in India is :-
Correct Answer EXIM Bank
Your Answer EXIM Bank
Multiple Choice Multiple AnswerQuestion Basic Life insurance policies include :-
Correct Answer Term insurance , Annuity contracts , Pension plans
Your Answer Term insurance , Annuity contracts , Pension plans
Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme for
modernisation is also undertaken by IDBI.Correct Answer ICICI
Your Answer ICICI
Multiple Choice Multiple AnswerQuestion IIBI (formerly known as IRBI )undertakes :-
Financial Institutions & Banking_6
- 6 -
Correct Answer Merchant Banking activities , Lease or hire purchase finance ,Consultancy & managerial services
Your Answer Lease or hire purchase finance , Consultancy & managerialservices , Rural credit activities
Select The BlankQuestion Syndication of Loans Globally does not involve any funds as it is
________ activity.Correct Answer Non-fund based
Your Answer Non-fund based
Multiple Choice Multiple AnswerQuestion Mutual fund has main entities like :-
Correct Answer Sponsor , Trust , Asset Management company
Your Answer Sponsor , Trust , Asset Management company
Select The BlankQuestion ________ is merely an asset created out of book entries.
Correct Answer SDR
Your Answer EFF
Multiple Choice Multiple AnswerQuestion SFCs provide finance to :-
Correct Answer Corporates , Partnerships , Proprietary firms
Your Answer Corporates , Partnerships , Proprietary firms
Multiple Choice Single AnswerQuestion The type of banking involving a small number of Large
Customers viz.Corporates & multinationals is :-Correct Answer Wholesale Banking
Your Answer Global Banking
Select The BlankQuestion The extent of powers enjoyed by a branch depends on the size
of its ________.Correct Answer Business
Your Answer Business
Financial Institutions & Banking_6
- 7 -
Multiple Choice Multiple AnswerQuestion Credit Information report is also known as :-
Correct Answer Credit report , Banker's report , Confidential report
Your Answer Credit report , Banker's report , Confidential report
Match The FollowingQuestion Correct Answer Your Answer
Inter Bank Call MoneyMarkets
BRs, Call Money Receipts Currencies
Money Market Instuments CP, CD ,T- Bills CP, CD ,T- Bills
Capital MarketInstruments
Shares Shares
Debt Market Instruments GOI Securities ,Bonds Shares
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income
groups.Correct Answer Weaker sections
Your Answer Weaker sections
True/FalseQuestion Banks authorised to deal in foreign exchange are known as
Authorised Dealers.Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables member
countries to :-Correct Answer Rebuild resources , Stabilise currencies , Pay for imports
Your Answer Rebuild resources , Stabilise currencies , Pay for imports
Select The BlankQuestion The repayment holiday period is also known as ________
period.Correct Answer Moratorium
Your Answer Moratorium
Financial Institutions & Banking_6
- 8 -
Multiple Choice Single AnswerQuestion A non-scheduled bank does not deal in :-
Correct Answer Foreign Exchange
Your Answer Foreign Exchange
Multiple Choice Multiple AnswerQuestion Prominent Institutional Investors are :-
Correct Answer Foreign Investors(FIIs) , Corporate Treasuries , Mutual Funds
Your Answer Foreign Investors(FIIs) , Corporate Treasuries , Public sectorCompanies
Financial Institutions & Banking_7
- 1 -
38. Initial Quantum of resources of IMF were contributed by members according to :-
Quotas fixed for membersSDR fixed for membersPopulationWealth of the nation
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Zero Coupon Bonds are issued at a :-
Correct Answer Discount to face value
Your Answer Discount to face value
Select The BlankQuestion An ________ letter of credit cannot be canceled by the buyer
without the seller's consent.Correct Answer Irrevocable
Your Answer Irrevocable
Multiple Choice Single AnswerQuestion Which of the following institution was set up as a subsidy of RBI
in 1964?Correct Answer IDBI
Your Answer IDBI
Select The BlankQuestion HDFCs loans were linked up with________.
Correct Answer Planned Savings
Your Answer Planned Savings
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-
Correct Answer By borrowing from IBRD , By lending at 0% interest. , Forperiods up to ten years
Your Answer By borrowing from IBRD , By lending at 0% interest. , Forperiods up to ten years
True/FalseQuestion HDFC was set up by NHB.
Financial Institutions & Banking_7
- 2 -
Correct Answer False
Your Answer False
True/FalseQuestion IMF discourages excessive use of its resources by imposing a
surcharge on large loans.Correct Answer True
Your Answer False
Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-
Correct Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Your Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Multiple Choice Multiple AnswerQuestion Post Offices are popular for mobilizing small savings of the
public due to :-Correct Answer Wide network , Tax concessions , Saftey of funds
Your Answer Wide network , Tax concessions
True/FalseQuestion In case of T-Bills potential investors have to put in competitive
bids.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion The apex institution in the field of foreign trade in India is :-
Correct Answer EXIM Bank
Your Answer EXIM Bank
Multiple Choice Single AnswerQuestion NABARD was established on the recommendations of :-
Correct Answer CRAFICARD
Your Answer CRAFICARD
Select The Blank
Financial Institutions & Banking_7
- 3 -
Question Period of Holiday Insurance is ________.
Correct Answer Six months or less
Your Answer Six months or less
Multiple Choice Single AnswerQuestion Financial institutions deal in :-
Correct Answer Financial assets
Your Answer Financial assets
Multiple Choice Multiple AnswerQuestion R B I issues currency notes against the security of:-
Correct Answer Gold bullion , Foreign securities , GOI securities
Your Answer Gold bullion , Foreign securities , GOI securities
Select The BlankQuestion AFC's membership consists of commercial, cooperative banks
and DFIs including ________.Correct Answer EXIM bank
Your Answer EXIM bank
Multiple Choice Single AnswerQuestion SIDCs & SIICs give loans ,guarantees & :-
Correct Answer Lease finance
Your Answer Lease finance
Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute
infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd
Your Answer SSN Nigam Ltd , MSR Dev.Corporation , MKV Dev. Corporation.
Select The BlankQuestion SCICI provides domestic & foreign loans for capital equipment
and________ services.Correct Answer Technical
Your Answer Technical
Financial Institutions & Banking_7
- 4 -
Multiple Choice Single AnswerQuestion Certificate of deposit is a :-
Correct Answer Usance promissory note
Your Answer Usance promissory note
True/FalseQuestion Banks authorised to deal in foreign exchange are known as
Authorised Dealers.Correct Answer False
Your Answer False
Select The BlankQuestion The Premium of ________ is obtained through obligatory
reinsurance premium.Correct Answer GIC
Your Answer GIC
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-
Correct Answer Financial commitment , Voting power , Drawing power
Your Answer Financial commitment , Voting power , Drawing power
Multiple Choice Multiple AnswerQuestion The main objective of ICICI was :-
Correct Answer To augment export finance in India , To channelise World Bank'sfunds to industries in India , To help in building up a CapitalMarket in India
Your Answer To augment export finance in India , To channelise World Bank'sfunds to industries in India , To help in building up a CapitalMarket in India
Select The BlankQuestion The HDFC was set up in 1977 by the ________.
Correct Answer ICICI
Your Answer ICICI
Multiple Choice Single Answer
Financial Institutions & Banking_7
- 5 -
Question A company issues CP to save on :-
Correct Answer Interest cost
Your Answer Interest cost
Multiple Choice Multiple AnswerQuestion Duties of an International Banking unit cover :-
Correct Answer Granting lines of Credit , Handling foreign currency , HandlingDoc. credits
Your Answer Handling foreign currency , Handling Doc. credits , Granting linesof Credit
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-
Correct Answer Corporates
Your Answer Corporates
True/FalseQuestion The currency notes issued by RBI are legal tender everywhere in
India without any limit.Correct Answer True
Your Answer True
Select The BlankQuestion The term ________ refers to the act of a bank extending finance
to the seller against a letter of credit.Correct Answer Negotiation
Your Answer Negotiation
True/FalseQuestion NIDHIS are Trading Organisations.
Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion From time to time RBI has issued :-
Correct Answer Straight coupon bonds , Inflation linked bonds , Zero couponbonds
Your Answer Straight coupon bonds , Inflation linked bonds , Zero coupon
Financial Institutions & Banking_7
- 6 -
bonds
Multiple Choice Multiple AnswerQuestion SFCs provide finance to :-
Correct Answer Corporates , Partnerships , Proprietary firms
Your Answer Corporates , Partnerships , Proprietary firms
Multiple Choice Single AnswerQuestion DICGC also provides :-
Correct Answer Security to deposits
Your Answer Guarantee to banks
Match The FollowingQuestion Correct Answer Your Answer
Small Savings Chit Funds Chit Funds
Gen.Insurance NICo of India Ltd. NICo of India Ltd.
Life Insurance LIC of India Ltd LIC of India Ltd
Mutual fund UTI UTI
Select The BlankQuestion Financial markets are the centres that provide facilities for
buying and selling of ________.Correct Answer Financial claims and services
Your Answer Goods and services
Multiple Choice Multiple AnswerQuestion Tourism promotes :-
Correct Answer Credit Card Business , International remittances , Travellers'Cheques
Your Answer Credit Card Business , International remittances , Travellers'Cheques
Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production
as well as:-Correct Answer Crop Planning , Plant Protection , Farm Management
Financial Institutions & Banking_7
- 7 -
Your Answer Crop Planning , Plant Protection , Farm Management
True/FalseQuestion CP is a usance promissory note hence it can be negotiated by
endorsement & delivery.Correct Answer True
Your Answer False
Select The BlankQuestion The extent of powers enjoyed by a branch depends on the size
of its ________.Correct Answer Business
Your Answer Business
True/FalseQuestion Banks lend to corporates directly.
Correct Answer True
Your Answer True
True/FalseQuestion SCICI is a member of the OTCEI.
Correct Answer True
Your Answer True
Select The BlankQuestion In a Bank, the investment decisions are taken at ________ level.
Correct Answer Head Office
Your Answer Head Office
Match The FollowingQuestion Correct Answer Your Answer
NABARD Rural Development Rural Development
AFC Ltd Consultancy Consultancy
HUDCO Housing Housing
Financial Institutions & Banking_7
- 8 -
NCDC Development ofCooperatives
Development ofCooperatives
True/FalseQuestion Banks issue Guarantees on behalf of their clients.
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion NonBanking Financial Companies are :-
Correct Answer Financial institutions
Your Answer Financial institutions
Multiple Choice Single AnswerQuestion A record of the holdings of GOI dated securities of each holder is
contained in :-Correct Answer SGL pass book
Your Answer SGL pass book
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural
Development.Correct Answer True
Your Answer True
Select The BlankQuestion An ________ letter of credit cannot be canceled by the buyer
without the seller's consent.Correct Answer Irrevocable
Your Answer Confirmed
Select The BlankQuestion The ________ of NABARD covers release of refinance without
prior sanction for refinance limit.Correct Answer ARS
Your Answer CFSF
True/FalseQuestion Banks lend to corporates directly.
Correct Answer True
Your Answer True
True/FalseQuestion Non bank financial institutions undertake fund and non fund
based activities.Correct Answer True
Your Answer True
True/FalseQuestion Development financial institutions primarily lend to Agriculture
sector.Correct Answer False
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Development financialinstitutions
IFCI Banking System
Organised sector Banking System IFCI
Unorganised sector Indigenous banks Indigenous banks
Mutual funds UTI UTI
Select The BlankQuestion NHB at present has a ________ Capital of Rs. 350 crores.
Correct Answer Paid-up
Your Answer Paid-up
Select The BlankQuestion Development financial institutions have been established to cater
to ________ of the industrial sector.Correct Answer Long term financial needs
Your Answer Short term financial needs
Select The BlankQuestion General insurance policies are genarally issued for ________
year.Correct Answer One
Your Answer Ten
True/FalseQuestion PFC has been persuading State Governments restructuring of
their power sector to make them viable.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion RBI was established under the:-
Correct Answer RBI Act
Your Answer Banking Regulation Act
Multiple Choice Single AnswerQuestion Development Financial institutions include :-
Correct Answer State financial institutions
Your Answer Commercial banks
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-
Correct Answer Indigenous bankers
Your Answer Money markets
True/FalseQuestion NIDHIS are Trading Organisations.
Correct Answer False
Your Answer True
True/FalseQuestion Banks issue Guarantees on behalf of their clients.
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion The apex institution in the field of Industrial Development is :-
Correct Answer IDBI
Your Answer IDBI
Multiple Choice Single AnswerQuestion Zero Coupon Bonds are issued at a :-
Correct Answer Discount to face value
Your Answer Discount to face value
Multiple Choice Multiple AnswerQuestion SIDBI provides :-
Correct Answer Refinance , Rediscounting of Bills , Financial support to SSIDC
Your Answer Financial support to SSIDC
Multiple Choice Multiple AnswerQuestion R B I conducts monetary control by way of O M O in :-
Correct Answer Treasury bills , State /central Government Securities
Your Answer Treasury bills , Ways and means advances , TOD
Select The BlankQuestion SCICI provides domestic & foreign loans for capital equipment
and________ services.Correct Answer Technical
Your Answer After sales
Multiple Choice Single AnswerQuestion The organised financial system includes :-
Correct Answer Commercial banks
Your Answer Financial companies
True/FalseQuestion The overdraft facility is also known as Cash credit facility.
Correct Answer True
Your Answer True
True/FalseQuestion IDA does not lend to countries that are not in a position to
borrow from IBRD.Correct Answer False
Your Answer True
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-
Correct Answer Government regulation and control
Your Answer Government regulation and control
Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-
Correct Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Your Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Multiple Choice Multiple Answer
Question Agricultural Finance Consultancy Ltd(AFC) activities cover :-
Correct Answer Pre-feasibility studies , Regional /Sectoral planning , BenchmarkSurveys
Your Answer Pre-feasibility studies , Regional /Sectoral planning , BenchmarkSurveys
Multiple Choice Multiple AnswerQuestion Tourism promotes :-
Correct Answer International remittances , Travellers' Cheques , Credit CardBusiness
Your Answer Credit Card Business , International remittances , Travellers'Cheques
Multiple Choice Single AnswerQuestion A record of the holdings of GOI dated securities of each holder is
contained in :-Correct Answer SGL pass book
Your Answer NSE
Select The BlankQuestion The Premium of ________ is obtained through obligatory
reinsurance premium.Correct Answer GIC
Your Answer OF&GICO Ltd.
Multiple Choice Single AnswerQuestion IDBI introduced Automatic Refinance Scheme in the year :-
Correct Answer 1978
Your Answer 1975
Multiple Choice Multiple AnswerQuestion ECGC Board comprises of Directors representing :-
Correct Answer Government , Banking/Insurance , Trade/Industry
Your Answer Government , Banking/Insurance , Trade/Industry
Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by
Correct Answer Banks
Your Answer Banks
Multiple Choice Multiple AnswerQuestion Mutual fund has main entities like :-
Correct Answer Sponsor , Trust , Asset Management company
Your Answer Sponsor , Trust , Asset Management company
Select The BlankQuestion Mutual Funds provide the benefits of ________.
Correct Answer Portfolio management
Your Answer Long term returns
Multiple Choice Multiple AnswerQuestion DFHI was set up jointly by :-
Correct Answer RBI , Banks , All India Fis
Your Answer RBI , All India Fis , SEBI
Match The FollowingQuestion Correct Answer Your Answer
Small Savings Chit Funds HDFC
Gen.Insurance NICo of India Ltd. UTI
Life Insurance LIC of India Ltd LIC of India Ltd
Mutual fund UTI Chit Funds
Multiple Choice Single AnswerQuestion Corporate Debentures are :-
Correct Answer Long term debt instruments
Your Answer Short term deposit receipts
True/FalseQuestion HDFC was set up by NHB.
Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion The loans of finance companies are generally :-
Correct Answer At high interest , Unsecured , Based on borrowers worth
Your Answer At high interest , Unsecured , Based on borrowers worth
Multiple Choice Single AnswerQuestion A record of the holdings of GOI dated securities of each holder is
contained in :-Correct Answer SGL pass book
Your Answer SGL pass book
Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme for
modernisation is also undertaken by IDBI.Correct Answer ICICI
Your Answer HUDCO
Select The BlankQuestion Financial markets are the centres that provide facilities for
buying and selling of ________.Correct Answer Financial claims and services
Your Answer Fixed assets
Select The BlankQuestion As a banker to the Government, RBI accepts Government
deposits at ________% interest.Correct Answer 0
Your Answer 0.05
Multiple Choice Single AnswerQuestion A company issues CP to save on :-
Correct Answer Interest cost
Your Answer Taxes
Select The Blank
Question The price in financial markets is known as ________.
Correct Answer Rate of interest
Your Answer Premium
Multiple Choice Single AnswerQuestion Treasury bills are issued by :-
Correct Answer RBI
Your Answer RBI
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Certificate of deposit is a :-
Correct Answer Usance promissory note
Your Answer Legal Tender
True/FalseQuestion Cancellation of a Guarantee is known as "revocation".
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion IFCI raises its funds by way of :-
Correct Answer Issuing bonds , Borrowing from RBI , Borrowing from IDBI
Your Answer Issuing bonds , Issuing shares
Multiple Choice Single AnswerQuestion Financial institutions deal in :-
Correct Answer Financial assets
Your Answer Financial assets
Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by
Correct Answer Banks
Your Answer Corporates
Match The FollowingQuestion Correct Answer Your Answer
Film Finance FFC Chit Funds
Rural Electrification REC REC
Pure NBFI UTI UTI
Specialised NBFI HDFC HDFC
Multiple Choice Single AnswerQuestion SFCs suffer from a very high ratio of:-
Correct Answer Overdues
Your Answer Overdues
Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute
infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd
Your Answer Konkan Railway Corporation , MSR Dev.Corporation
Multiple Choice Multiple AnswerQuestion EXIM Bank can raise resources by:-
Correct Answer Issuing bonds , Borrowing from RBI , Borrowing fromInternational Financial Institutions
Your Answer Issuing bonds , Borrowing from RBI
Select The BlankQuestion HDFCs loans were linked up with________.
Correct Answer Planned Savings
Your Answer Planned Savings
True/FalseQuestion CPs have to be compulsorily rated.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production
as well as:-Correct Answer Crop Planning , Plant Protection , Farm Management
Your Answer Crop Planning , Plant Protection
Multiple Choice Multiple AnswerQuestion EXIM Bank provides financial assistance to:-
Correct Answer Indian Companies , Commercial Banks , Foreign Governments
Your Answer Investment trusts , Indian Companies
Multiple Choice Multiple AnswerQuestion Credit Information report is also known as :-
Correct Answer Credit report , Banker's report , Confidential report
Your Answer Credit report , Banker's report , Client's Report
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-
Correct Answer RBI
Your Answer RBI
True/FalseQuestion IMF discourages excessive use of its resources by imposing a
surcharge on large loans.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Credit Risk under NEF Scheme of SIDBI is borne by :-
Correct Answer Central Govt & SIDBI
Your Answer SIDBI
Select The BlankQuestion The extent of powers enjoyed by a branch depends on the size
of its ________.Correct Answer Business
Your Answer Deposits
Multiple Choice Single AnswerQuestion FIs can be classified into two categories depending on the basis
of incorporation and :-Correct Answer Operation
Your Answer Operation
Select The Blank
Question Financial markets are the centres that provide facilities forbuying and selling of ________.
Correct Answer Financial claims and services
Your Answer Financial claims and services
Multiple Choice Multiple AnswerQuestion Which of the following statements are not prepared on a daily
basis in branch?Correct Answer Cash Book , Trial Balance , P/L statement
Your Answer Audited Balance Sheet , Trial Balance , P/L statement
Multiple Choice Multiple AnswerQuestion Agricultural Finance Consultancy Ltd(AFC) activities cover :-
Correct Answer Pre-feasibility studies , Regional /Sectoral planning , BenchmarkSurveys
Your Answer Pre-feasibility studies , Regional /Sectoral planning , BenchmarkSurveys
True/FalseQuestion EXIM Bank provides Lines of Credit to other nations for Indian
exports.Correct Answer True
Your Answer True
True/FalseQuestion In case of T-Bills potential investors have to put in competitive
bids.Correct Answer True
Your Answer False
Multiple Choice Single AnswerQuestion Which of the following services is not provided by Commercial
banks?Correct Answer Deposit Insurance
Your Answer Deposit Insurance
True/FalseQuestion NABARD provides Refinance for Marketing of Crops.
Correct Answer True
Your Answer True
Select The BlankQuestion Legally speaking Pass Through Certificates are ________ and
are tradeable freely.Correct Answer Promissory notes
Your Answer Bills of Exchange
Select The BlankQuestion The loans under________ are based on Poverty Reduction
Strategy Paper.Correct Answer PRGF
Your Answer RPFG
Select The BlankQuestion AFC's membership consists of commercial, cooperative banks
and DFIs including ________.Correct Answer EXIM bank
Your Answer EXIM bank
Match The FollowingQuestion Correct Answer Your Answer
Largest borrower in theworld
IBRD MIGA
International MonetaryCooperation
IMF PRGF
Prevention of crises CCL IBRD
Political insurance MIGA CFF
Multiple Choice Single AnswerQuestion Money Markets Instruments have a maturity of less than :-
Correct Answer One year
Your Answer One year
Multiple Choice Single AnswerQuestion The word ' Tranche ' is a French word which means :-
Correct Answer A Slice
Your Answer A Slice
Multiple Choice Multiple AnswerQuestion Basic Life insurance policies include :-
Correct Answer Term insurance , Annuity contracts , Pension plans
Your Answer Term insurance , Annuity contracts , Pension plans
Select The BlankQuestion The department handing ________ in the banks is known as the
Treasury.Correct Answer Investments
Your Answer Cash & currency
True/FalseQuestion State loans are much less liquid than GOI Securities.
Correct Answer True
Your Answer True
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income
groups.Correct Answer Weaker sections
Your Answer Salaried persons
Multiple Choice Multiple AnswerQuestion The objective NEF Scheme of SIDBI is to provide equity support
to :-Correct Answer New Units in tiny Sector , New Units in Small Sector , Existing
units in tiny & small scale sectorYour Answer Existing Large Industrial Units , New Units in tiny Sector , New
Units in Small Sector
Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-
Correct Answer PSUs , Private Sector Cos. , Govt.bodies
Your Answer PSUs , Private Sector Cos. , FIIs
Select The Blank
Question NABARDs Criteria for Refinance covers Technical ________ ofthe project.
Correct Answer Feasibility
Your Answer Viability
Multiple Choice Single AnswerQuestion Treasury Bills are issued by the :-
Correct Answer RBI
Your Answer Central Govt.
True/FalseQuestion The Capital of NABARD is subscribed by World Bank.
Correct Answer False
Your Answer False
Select The BlankQuestion Kisan Vikas Patra are issued through ________.
Correct Answer Post Offices
Your Answer Post Offices
Multiple Choice Single AnswerQuestion NonBanking Financial Companies are :-
Correct Answer Financial institutions
Your Answer Manufacturing units
Multiple Choice Multiple AnswerQuestion The unorganised financial system comprises of :-
Correct Answer Money lenders , Indigenous bankers , Lending pawn brokers
Your Answer Money lenders , Indigenous bankers , Chit funds
True/FalseQuestion Most of the Indian PS Banks practice retail banking.
Correct Answer True
Your Answer True
Select The BlankQuestion Secured Premium Notes are ________.
Correct Answer Debentures
Your Answer Bonds
True/FalseQuestion No TDS is deducted on Interest paid on CDs.
Correct Answer True
Your Answer False
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has changed its
name to ________ effective from October 1992.
Correct Answer SCICI LtdYour Answer SCICI Ltd
Select The BlankQuestion AFC's membership consists of commercial, cooperative banks and DFIs
including ________.
Correct Answer EXIM bankYour Answer EXIM bank
Multiple Choice Single AnswerQuestion Financial institutions deal in :-
Correct Answer Financial assetsYour Answer Financial assets
Multiple Choice Single AnswerQuestion The lender of the last resort to the market! is the :-
Correct Answer RBIYour Answer RBI
Select The BlankQuestion One of the objectives of NHB is to augment the ________ resources for the
housing sector.
Correct Answer FinancialYour Answer Financial
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-
Correct Answer By borrowing from IBRD , By lending at 0% interest. , For periods upto ten years
Your Answer By borrowing from IBRD , By lending at 0% interest. , For periods up toten years
Multiple Choice Single AnswerQuestion A company issues CP to save on :-Correct Answer Interest costYour Answer Interest cost
True/FalseQuestion PFC has been persuading State Governments restructuring of their power
sector to make them viable.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-
Correct Answer RBIYour Answer RBI
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.
Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion RBI was established under the:-
Correct Answer RBI ActYour Answer RBI Act
Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production as well
as:-
Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-
Correct Answer Financial commitment , Voting power , Drawing powerYour Answer Financial commitment , Voting power , Drawing power
Select The BlankQuestion Period of Holiday Insurance is ________.
Correct Answer Six months or lessYour Answer Three years
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-
Correct Answer Government regulation and controlYour Answer Government reg! ulation and control
Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-
Correct Answer BanksYour Answer Banks
True/FalseQuestion The bids for T-Bills are on price/interest basis.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-
Correct Answer Indigenous bankersYour Answer Indigenous bankers
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-
Correct Answer Over one yearYour Answer Over one year
Multiple Choice Multiple AnswerQuestion The general insurance business can be :-
Correct Answer Marine insurance , Fire insurance , MiscellaneousYour Answer Fire insurance , Miscellaneous , Marine insurance
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution of Chemical
Fertilisers.
Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion The unorganised financial system comprises of :-
Correct Answer Money lenders , Indigenous bankers , Lending pawn brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers
True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural Development.
&nbs! p;
Correct Answer TrueYour Answer True
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income groups.
Correct Answer Weaker sectionsYour Answer Weaker sections
Multiple Choice Single AnswerQuestion Development Financial institutions include :-
Correct Answer State financial institutionsYour Answer State financial institutions
Multiple Choice Single AnswerQuestion Money Markets Instruments have a maturity of less than :-
Correct Answer One yearYour Answer One year
Select The BlankQuestion The price in financial markets is known as ________.
Correct Answer &n! bsp; Rate of interestYour Answer Rate of interest
Match The FollowingQuestion Correct Answer Your Answer
Development financial institutions IFCI IFCI
Organised sector Banking System Banking System
Unorganised sector Indigenous banks Indigenous banks
Mutual funds UTI UTI
Select The BlankQuestion The HDFC was set up in 1977 by the ________.
Correct Answer ICICIYour Answer ICICI
Multiple Choice Single AnswerQuestion Certificate of deposit is a :-
Correct Answer Usance promissory noteYour Answer Term Deposit Receipt
True/FalseQuestion A Bill of Exchange is negotiable.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-
Correct Answer CorporatesYour Answer Corporates
Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than the balance
is :-
Correct Answer OverdraftYour Answer Overdraft
Multiple Choice Multiple AnswerQuestion The loans of finance companies are generally :-
Correct Answer At high interest , Unsecured , Based on borrowers worthYour Answer At high interest , Unsecured , Based on borrowers worth
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-
Correct Answer SIDFYour Answer SIDF
True/FalseQuestion Issuance of CD attracts reserve requirements.
Correct Answer FalseYour Answer False
True/FalseQuestion Banks issue Guarantees on behalf of their clients.
Correct Answer TrueYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
NABARD Rural Development Rural Development
AFC Ltd Consultancy Consultancy
HUDCO Housing Housing
NCDC Development of Cooperatives Development of Cooperatives
True/FalseQuestion Under MIGA the World bank offers various forms of Political Insurance.
Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the obligation to
contribute further premium by :-
Correct Answer Surrendering the policy , Converting it into paid up policy , Assigning itin the open market
Your Answer Surrendering the policy , Converting it into paid up policy , Assigning it inthe open market
Multiple Choice Single AnswerQuestion The organised financial system includes :-
Correct Answer Commercial banksYour Answer Commercial banks
Select The BlankQuestion The term ________ refers to the act of a bank extending finance to the
seller against a letter of credit.
Correct Answer NegotiationYour Answer Negotiation
Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-
Correct Answer Liaison with RBI , Evolve Policies , Vigilance & ControlYour Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute infrastructure projects
are :-
Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd
Select The BlankQuestion GIC raises funds to meet claims from ________.
Correct Answer Premium collectedYour Answer Premium collected
!Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-
Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-
Correct Answer New Projects , Renovation , ModernisationYour Answer New Projects , Renovation , Modernisation
Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has changed its
name to ________ effective from October 1992.
Correct Answer SCICI LtdYour Answer SCICI Ltd
Select The BlankQuestion AFC's membership consists of commercial, cooperative banks and DFIs
including ________.
Correct Answer EXIM bankYour Answer EXIM bank
Multiple Choice Single AnswerQuestion Financial institutions deal in :-
Correct Answer Financial assetsYour Answer Financial assets
Multiple Choice Single AnswerQuestion The lender of the last resort to the market is the :-
Correct Answer RBIYour Answer RBI
Select The BlankQuestion One of the objectives of NHB is to augment the ________ resources for the
housing sector.
Correct Answer FinancialYour Answer Financial
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-
Correct Answer By borrowing from IBRD , By lending at 0% interest. , For periods upto ten years
Your Answer By borrowing from IBRD , By lending at 0% interest. , For periods up toten years
Multiple Choice Single AnswerQuestion A company issues CP to save on :-
Correct Answer Interest costYour Answer Interest cost
True/FalseQuestion PFC has been persuading State Governments restructuring of their power
sector to make them viable.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-
Correct Answer RBIYour Answer RBI
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.
Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion RBI was established under the:-
Correct Answer RBI ActYour Answer RBI Act
Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production as well
as:-
Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-
Correct Answer Financial commitment , Voting power , Drawing powerYour Answer Financial commitment , Voting power , Drawing power
Select The BlankQuestion Period of Holiday Insurance is ________.
Correct Answer Six months or lessYour Answer Three years
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-
Correct Answer Government regulation and controlYour Answer Government regulation and control
Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-
Correct Answer BanksYour Answer Banks
True/FalseQuestion The bids for T-Bills are on price/interest basis.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-
Correct Answer Indigenous bankersYour Answer Indigenous bankers
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-
Correct Answer Over one yearYour Answer Over one year
Multiple Choice Multiple AnswerQuestion The general insurance business can be :-
Correct Answer Marine insurance , Fire insurance , MiscellaneousYour Answer Fire insurance , Miscellaneous , Marine insurance
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution of Chemical
Fertilisers.
Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion The unorganised financial system comprises of :-
Correct Answer Money lenders , Indigenous bankers , Lending pawn brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers
True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural Development.
Correct Answer TrueYour Answer True
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income groups.
Correct Answer Weaker sectionsYour Answer Weaker sections
Multiple Choice Single AnswerQuestion Development Financial institutions include :-
Correct Answer State financial institutionsYour Answer State financial institutions
Multiple Choice Single AnswerQuestion Money Markets Instruments have a maturity of less than :-
Correct Answer One yearYour Answer One year
Select The BlankQuestion The price in financial markets is known as ________.
Correct Answer Rate of interestYour Answer Rate of interest
Match The FollowingQuestion Correct Answer Your Answer
Development financial institutions IFCI IFCI
Organised sector Banking System Banking System
Unorganised sector Indigenous banks Indigenous banks
Mutual funds UTI UTI
Select The BlankQuestion The HDFC was set up in 1977 by the ________.
Correct Answer ICICIYour Answer ICICI
Multiple Choice Single AnswerQuestion Certificate of deposit is a :-
Correct Answer Usance promissory noteYour Answer Term Deposit Receipt
True/FalseQuestion A Bill of Exchange is negotiable.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-
Correct Answer CorporatesYour Answer Corporates
Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than the balance
is :-
Correct Answer OverdraftYour Answer Overdraft
Multiple Choice Multiple AnswerQuestion The loans of finance companies are generally :-
Correct Answer At high interest , Unsecured , Based on borrowers worthYour Answer At high interest , Unsecured , Based on borrowers worth
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-
Correct Answer SIDFYour Answer SIDF
True/FalseQuestion Issuance of CD attracts reserve requirements.
Correct Answer FalseYour Answer False
True/FalseQuestion Banks issue Guarantees on behalf of their clients.
Correct Answer TrueYour Answer True
True/FalseQuestion Under MIGA the World bank offers various forms of Political Insurance.
Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the obligation to
contribute further premium by :-
Correct Answer Surrendering the policy , Converting it into paid up policy , Assigning itin the open market
Your Answer Surrendering the policy , Converting it into paid up policy , Assigning it inthe open market
Multiple Choice Single AnswerQuestion The organised financial system includes :-
Correct Answer Commercial banksYour Answer Commercial banks
Select The BlankQuestion The term ________ refers to the act of a bank extending finance to the
seller against a letter of credit.
Correct Answer NegotiationYour Answer Negotiation
Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-
Correct Answer Liaison with RBI , Evolve Policies , Vigilance & ControlYour Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute infrastructure projects
are :-
Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd
Select The BlankQuestion GIC raises funds to meet claims from ________.
Correct Answer Premium collectedYour Answer Premium collected
Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-
Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-
Correct Answer New Projects , Renovation , ModernisationYour Answer New Projects , Renovation , Modernisation
Select The BlankQuestion Kisan Vikas Patra are issued through ________.
Correct Answer Post OfficesYour Answer Post Offices
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-
Correct Answer SIDFYour Answer SIDF
Match The FollowingQuestion Correct Answer Your Answer
Corporates RIL, HPCL RIL, HPCLNGOs CSP, CRY, PLAN CSP, CRY, PLANDFI IDBI, IFCI, ICICI IDBI, IFCI, ICICIPSUs NTPC, NHPC, Coal India NTPC, NHPC, Coal India
Multiple Choice Multiple AnswerQuestion DFHI was set up jointly by :-
Correct Answer RBI , Banks , All India FisYour Answer RBI , Banks , All India Fis , SEBI
Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme for modernisation is
also undertaken by IDBI.
Correct Answer ICICIYour Answer ICICI
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-
Correct Answer Indigenous bankersYour Answer Indigenous bankers
Multiple Choice Single AnswerQuestion Investment on a monthly basis and repayment on due date
is made in :-
Correct Answer Recurring depositYour Answer Term deposit account
Multiple Choice Multiple AnswerQuestion Tourism promotes :-
Correct Answer Credit Card Business , International remittances ,Travellers' Cheques
Your Answer Credit Card Business , International remittances ,Travellers' Cheques
Multiple Choice Single AnswerQuestion A company issues CP to save on :-
Correct Answer Interest costYour Answer Taxes
Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than the balance
is :-
Correct Answer OverdraftYour Answer Overdraft
Select The BlankQuestion AFC's membership consists of commercial, cooperative
banks and DFIs including ________.
Correct Answer EXIM bankYour Answer EXIM bank
Multiple Choice Multiple AnswerQuestion Functions of R.O. do not cover :-
Correct Answer SLR/CRR maintenance , Liaison with RBI/IBA ,Issuing Lending Policy
Your Answer Liaison with RBI/IBA , Issuing Lending Policy
Select The BlankQuestion The ________ of NABARD covers release of refinance
without prior sanction for refinance limit.
Correct Answer ARSYour Answer CFSF
Select The BlankQuestion The ________ regulation makes the banks the largest
investor in the GOI securities.
Correct Answer SLRYour Answer SLR
Multiple Choice Multiple AnswerQuestion Post Offices are popular for mobilizing small savings of
the public due to :-
Correct Answer Wide network , Tax concessions , Saftey of fundsYour Answer Wide network , Tax concessions , Saftey of funds
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.
Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion SIDBI commenced its operations from :-
Correct Answer April 2,1990Your Answer April 2,1990
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-
Correct Answer RBIYour Answer RBI
Multiple Choice Single AnswerQuestion The organised financial system includes :-
Correct Answer Commercial banksYour Answer Financial companies
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-
Correct Answer By borrowing from IBRD , By lending at 0%interest. , For periods up to ten years
Your Answer By borrowing from IBRD , By lending at 0% interest. ,For periods up to ten years
Multiple Choice Multiple AnswerQuestion The prominent Bond issuing PSU are :-
Correct Answer MTNL , NTPC , SAILYour Answer MTNL , NTPC , SAIL
Match The FollowingQuestion Correct Answer Your Answer
Hill ,Tribal Area development Area Development Area Development
Aquaculture , Brackish Water Fisheries Fisheries
Ploughing, weeding, transplantationSeasonal Agricultural Operations Irrigation & Drainage
Market Yards, Storage &Warehousing Agricultural Marketing Agricultural Marketing
True/FalseQuestion Small Savings are source of Capital Receipts for the Government.
Correct Answer TrueYour Answer False
Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables member countries to
:-
Correct Answer Rebuild resources , Stabilise currencies , Pay for importsYour Answer Rebuild resources , Stabilise currencies , Undertake specific projects
Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-
Correct Answer BanksYour Answer Banks
Multiple Choice Single AnswerQuestion IDBI has helped in the establishment of :-
Correct Answer EXIM BankYour Answer ICICI
Select The BlankQuestion NHB at present has a ________ Capital of Rs. 350 crores.
Correct Answer Paid-upYour Answer Paid-up
True/FalseQuestion The Capital of NABARD is subscribed by World Bank.
Correct Answer FalseYour Answer False
Select The BlankQuestion In a Bank, the investment decisions are taken at ________ level.
Correct Answer Head OfficeYour Answer Head Office
Multiple Choice Single AnswerQuestion RBI is also referred to as :-
Correct Answer Apex BankYour Answer Apex Bank
Multiple Choice Multiple AnswerQuestion EXIM Bank can raise resources by:-
Correct Answer Issuing bonds , Borrowing from RBI , Borrowing from InternationalFinancial Institutions
Your Answer Borrowing from RBI , Borrowing from International Financial Institutions
Multiple Choice Single AnswerQuestion PFC is committed to the integrated development of :-
Correct Answer PowerYour Answer Power
True/FalseQuestion PFC has been persuading State Governments restructuring of their power
sector to make them viable.
Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion SIDBI provides :-
Correct Answer Refinance , Rediscounting of Bills , Financial support to SSIDCYour Answer Refinance , Financial support to SSIDC , Cash Credit facilities
True/FalseQuestion Under MIGA the World bank offers various forms of Political Insurance.
Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Other than Tourism, International funds remittances comprise of :-
Correct Answer Donations/Charity , Payments of Salaries , Payments of RoyaltyYour Answer Payments of Royalty , Travel related payments
True/FalseQuestion SCICI is a member of the OTCEI.
Correct Answer TrueYour Answer False
Select The BlankQuestion HDFCs loans were linked up with________.
Correct Answer Planned SavingsYour Answer Planned Savings
True/FalseQuestion A Bill of Exchange is negotiable.
Correct Answer TrueYour Answer True
True/FalseQuestion HDFC was set up by NHB.
Correct Answer FalseYour Answer False
Select The BlankQuestion Mutual Funds provide the benefits of ________.
Correct Answer Portfolio managementYour Answer Portfolio management
True/FalseQuestion In case of T-Bills potential investors have to put in
competitive bids.
Correct Answer TrueYour Answer True
True/FalseQuestion Non bank financial institutions undertake fund and non fund based activities.
Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Functions of R.O. of a bank include :-
Correct Answer Inspection/audit , Control on branches , Grant loans/advancesYour Answer Inspection/audit , Control on branches , Grant loans/advances
Multiple Choice Multiple AnswerQuestion Duties of an International Banking unit cover :-
Correct Answer Handling foreign currency , Handling Doc. credits , Granting lines ofCreditYour Answer Maintaining SLR/CRR , Handling foreign currency , Handling Doc. credits
, Granting lines of Credit
Select The BlankQuestion Secured Premium Notes are ________.
Correct Answer DebenturesYour Answer Debentures
Select The BlankQuestion Syndication involves ________ sanction.
Correct Answer In principleYour Answer Funded
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion Agricultural Finance Consultancy Ltd(AFC) activities cover :-
Correct Answer Benchmark Surveys , Pre-feasibility studies , Regional /Sectoralplanning
Your Answer Benchmark Surveys , Pre-feasibility studies , Regional /Sectoralplanning
Multiple Choice Multiple AnswerQuestion Duties of an International Banking unit cover :-
Correct Answer Handling foreign currency , Handling Doc. credits , Granting linesof Credit
Your Answer Handling foreign currency , Handling Doc. credits , Granting linesof Credit
Select The BlankQuestion The ________ is the apex institution in the field of foreign trade
in India.Correct Answer EXIM bank
Your Answer FEDAI
True/FalseQuestion The Capital of NABARD is subscribed by World Bank.
Correct Answer False
Your Answer True
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution
of Chemical Fertilisers.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion PFC is committed to the integrated development of :-
Correct Answer Power
Your Answer Power
True/False
Question NABARD is an apex institution in the field of Integrated RuralDevelopment.
Correct Answer True
Your Answer False
Match The FollowingQuestion Correct Answer Your Answer
Insurance of allemployees of a Firm
Group Insurance Group Insurance
Premium Throughout Life Whole Life Whole Life
Fixed Period Insurance Endowment Endowment
Insurance of ocean Cargo Marine Insurance Marine Insurance
Select The BlankQuestion DFIs are the second largest issuer of ________ after the Govt
and Sovereign bodies.Correct Answer Debt instruments
Your Answer Debt instruments
True/FalseQuestion Mortgage Loans are loans against property.
Correct Answer True
Your Answer True
Select The BlankQuestion An ________ letter of credit cannot be canceled by the buyer
without the seller's consent.Correct Answer Irrevocable
Your Answer Revocable
Multiple Choice Single AnswerQuestion Liabilities of Insurance Cos are mostly :-
Correct Answer Long term
Your Answer Long term
Select The Blank
Question As a banker to the Government, RBI accepts Governmentdeposits at ________% interest.
Correct Answer 0
Your Answer 0.05
Multiple Choice Single AnswerQuestion Bills Rediscounting Scheme of IDBI was introduced in the year :-
Correct Answer 1965
Your Answer 1975
Multiple Choice Single AnswerQuestion DFHI was incorporated under the :-
Correct Answer Companies Act, 1956
Your Answer Banking Regulation Act,1949
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by : -
Correct Answer Government regulation and control
Your Answer Government regulation and control
Multiple Choice Single AnswerQuestion Financial institutions deal in :-
Correct Answer Financial assets
Your Answer Financial assets
Multiple Choice Single AnswerQuestion The first development Bank of India, established in 1948 was :-
Correct Answer IFCI
Your Answer IFCI
True/FalseQuestion Non bank financial institutions undertake fund and non fund
based activities.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-
Correct Answer New Projects , Renovation , Modernisation
Your Answer New Projects , Renovation , Modernisation
True/FalseQuestion SCICI is a member of the OTCEI.
Correct Answer True
Your Answer True
Select The BlankQuestion The ________ does not collect Savings from the Public.
Correct Answer NIICO Ltd.
Your Answer NIICO Ltd.
Multiple Choice Single AnswerQuestion IRBI was set up with a focus on :-
Correct Answer Sick Units
Your Answer Sick Units
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-
Correct Answer Over one year
Your Answer Over three years
Multiple Choice Multiple AnswerQuestion Which of the following statements are not prepared on a daily
basis in branch?Correct Answer Cash Book , Trial Balance , P/L statement
Your Answer Audited Balance Sheet , Trial Balance , P/L statement
True/FalseQuestion Banks lend to corporates directly.
Correct Answer True
Your Answer True
True/FalseQuestion Small Savings are source of Capital Receipts for the
Government.Correct Answer True
Your Answer False
Multiple Choice Single AnswerQuestion Treasury Bills are issued by the :-
Correct Answer RBI
Your Answer RBI
Multiple Choice Single AnswerQuestion Account where lump sum investment is made for specific period
is :-Correct Answer Term Deposit account
Your Answer Term Deposit account
Multiple Choice Single AnswerQuestion The apex institution in the field of foreign trade in India is :-
Correct Answer EXIM Bank
Your Answer EXIM Bank
Multiple Choice Multiple AnswerQuestion Basic Life insurance policies include :-
Correct Answer Term insurance , Annuity contracts , Pension plans
Your Answer Term insurance , Annuity contracts , Pension plans
Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme for
modernisation is also undertaken by IDBI.Correct Answer ICICI
Your Answer ICICI
Multiple Choice Multiple AnswerQuestion IIBI (formerly known as IRBI )undertakes :-
Correct Answer Merchant Banking activities , Lease or hire purchase finance ,Consultancy & managerial services
Your Answer Lease or hire purchase finance , Consultancy & managerialservices , Rural credit activities
Select The BlankQuestion Syndication of Loans Globally does not involve any funds as it is
________ activity.Correct Answer Non-fund based
Your Answer Non-fund based
Multiple Choice Multiple AnswerQuestion Mutual fund has main entities like :-
Correct Answer Sponsor , Trust , Asset Management company
Your Answer Sponsor , Trust , Asset Management company
Select The BlankQuestion ________ is merely an asset created out of book entries.
Correct Answer SDR
Your Answer EFF
Multiple Choice Multiple AnswerQuestion SFCs provide finance to :-
Correct Answer Corporates , Partnerships , Proprietary firms
Your Answer Corporates , Partnerships , Proprietary firms
Multiple Choice Single AnswerQuestion The type of banking involving a small number of Large
Customers viz.Corporates & multinationals is :-Correct Answer Wholesale Banking
Your Answer Global Banking
Select The BlankQuestion The extent of powers enjoyed by a branch depends on the size
of its ________.Correct Answer Business
Your Answer Business
Multiple Choice Multiple AnswerQuestion Credit Information report is also known as :-
Correct Answer Credit report , Banker's report , Confidential report
Your Answer Credit report , Banker's report , Confidential report
Match The FollowingQuestion Correct Answer Your Answer
Inter Bank Call MoneyMarkets
BRs, Call Money Receipts Currencies
Money Market Instuments CP, CD ,T- Bills CP, CD ,T- Bills
Capital MarketInstruments
Shares Shares
Debt Market Instruments GOI Securities ,Bonds Shares
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income
groups.Correct Answer Weaker sections
Your Answer Weaker sections
True/FalseQuestion Banks authorised to deal in foreign exchange are known as
Authorised Dealers.Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables member
countries to :-Correct Answer Rebuild resources , Stabilise currencies , Pay for imports
Your Answer Rebuild resources , Stabilise currencies , Pay for imports
Select The BlankQuestion The repayment holiday period is also known as ________
period.Correct Answer Moratorium
Your Answer Moratorium
Multiple Choice Single AnswerQuestion A non-scheduled bank does not deal in :-
Correct Answer Foreign Exchange
Your Answer Foreign Exchange
Multiple Choice Multiple AnswerQuestion Prominent Institutional Investors are :-
Correct Answer Foreign Investors(FIIs) , Corporate Treasuries , Mutual Funds
Your Answer Foreign Investors(FIIs) , Corporate Treasuries , Public sectorCompanies
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has
changed its name to ________ effective from October 1992.Correct Answer SCICI LtdYour Answer SCICI Ltd
Select The BlankQuestion AFC's membership consists of commercial, cooperative banks and DFIs
including ________.Correct Answer EXIM bankYour Answer EXIM bank
Multiple Choice Single AnswerQuestion Financial institutions deal in :-Correct Answer Financial assetsYour Answer Financial assets
Multiple Choice Single AnswerQuestion The lender of the last resort to the market! is the :-Correct Answer RBIYour Answer RBI
Select The BlankQuestion One of the objectives of NHB is to augment the ________ resources
for the housing sector.Correct Answer FinancialYour Answer Financial
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-Correct Answer By borrowing from IBRD , By lending at 0% interest. , For
periods up to ten yearsYour Answer By borrowing from IBRD , By lending at 0% interest. , For
periods up to ten years
Multiple Choice Single AnswerQuestion A company issues CP to save on :-Correct Answer Interest costYour Answer Interest cost
True/FalseQuestion PFC has been persuading State Governments restructuring of their
power sector to make them viable.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-Correct Answer RBIYour Answer RBI
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion RBI was established under the:-Correct Answer RBI ActYour Answer RBI Act
Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production as
well a! s:-Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-Correct Answer Financial commitment , Voting power , Drawing powerYour Answer Financial commitment , Voting power , Drawing power
Select The BlankQuestion Period of Holiday Insurance is ________.Correct Answer Six months or lessYour Answer Three years
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-Correct Answer Government regulation and controlYour Answer Government reg! ulation and control
Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-Correct Answer BanksYour Answer Banks
True/FalseQuestion The bids for T-Bills are on price/interest basis.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-Correct Answer Indigenous bankersYour Answer Indigenous bankers
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-Correct Answer Over one yearYour Answer Over one year
Multiple Choice Multiple AnswerQuestion The general insurance business can be :-Correct Answer Marine insurance , Fire insurance , MiscellaneousYour Answer Fire insurance , Miscellaneous , Marine insurance
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution of
Chemical Fertilisers.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion The unorganised financial system comprises of :-Correct Answer Money lenders , Indigenous bankers , Lending pawn brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers
True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural
Development.&nbs! p; Correct Answer TrueYour Answer True
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income groups.Correct Answer Weaker sectionsYour Answer Weaker sections
Multiple Choice Single AnswerQuestion Development Financial institutions include :-Correct Answer State financial institutionsYour Answer State financial institutions
Multiple Choice Single AnswerQuestion Money Markets Instruments have a maturity of less than :-Correct Answer One yearYour Answer One year
Select The BlankQuestion The price in financial markets is known as ________.Correct Answer &n! bsp; Rate of interestYour Answer Rate of interest
Match The FollowingQuestion Correct Answer Your Answer
Development financial institutions IFCI IFCI
Organised sector Banking System Banking System
Unorganised sector Indigenous banks Indigenous banks
Mutual funds UTI UTI
Select The BlankQuestion The HDFC was set up in 1977 by the ________.Correct Answer ICICIYour Answer ICICI
Multiple Choice Single AnswerQuestion Certificate of deposit is a :-Correct Answer Usance promissory noteYour Answer Term Deposit Receipt
True/FalseQuestion A Bill of Exchange is negotiable.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-Correct Answer CorporatesYour Answer Corporates
Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than the
balance is :-Correct Answer OverdraftYour Answer Overdraft
Multiple Choice Multiple AnswerQuestion The loans of finance companies are generally :-Correct Answer At high interest , Unsecured , Based on borrowers worthYour Answer At high interest , Unsecured , Based on borrowers worth
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-
&n! bsp; Correct Answer SIDFYour Answer SIDF
True/FalseQuestion Issuance of CD attracts reserve requirements.Correct Answer FalseYour Answer False
True/FalseQuestion Banks issue Guarantees on behalf of their clients.Correct Answer TrueYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
NABARD Rural Development Rural Development
AFC Ltd Consultancy Consultancy
HUDCO Housing Housing
NCDC Development of Cooperatives Development of Cooperatives
True/FalseQuestion Under MIGA the World bank offers various forms of Political
Insurance.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the
obligation to contribute further premium by :-Correct Answer Surrendering the policy , Converting it into paid up policy ,
Assigning it in the open market
Your Answer Surrendering the policy , Converting it into paid up policy ,Assigning it in the open market
Multiple Choice Single AnswerQuestion The organised financial system includes :-Correct Answer Commercial banksYour Answer Commercial banks
Select The BlankQuestion The term ________ refers to the act of a bank extending finance to
the seller against a letter of credit.Correct Answer NegotiationYour Answer Negotiation
Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-Correct Answer Liaison with RBI , Evolve Policies , Vigilance & ControlYour Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute infrastructure
projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd
Select The BlankQuestion GIC raises funds to meet claims from ________.Correct Answer Premium collectedYour Answer Premium collected!Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-Correct Answer New Projects , Renovation , ModernisationYour Answer New Projects , Renovation , Modernisation
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has changed its name to
________ effective from October 1992.Correct Answer SCICI LtdYour Answer SCICI Ltd
Select The BlankQuestion AFC's membership consists of commercial, cooperative banks and DFIs including
________.Correct Answer EXIM bankYour Answer EXIM bank
Multiple Choice Single AnswerQuestion Financial institutions deal in :-Correct Answer Financial assetsYour Answer Financial assets
Multiple Choice Single AnswerQuestion The lender of the last resort to the market is the :-Correct Answer RBIYour Answer RBI
Select The BlankQuestion One of the objectives of NHB is to augment the ________ resources for the housing
sector.Correct Answer FinancialYour Answer Financial
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-Correct Answer By borrowing from IBRD , By lending at 0% interest. , For periods up to ten
yearsYour Answer By borrowing from IBRD , By lending at 0% interest. , For periods up to ten years
Multiple Choice Single AnswerQuestion A company issues CP to save on :-Correct Answer Interest costYour Answer Interest cost
True/FalseQuestion PFC has been persuading State Governments restructuring of their power sector to
make them viable.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-Correct Answer RBIYour Answer RBI
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion RBI was established under the:-Correct Answer RBI ActYour Answer RBI Act
Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production as well as:-Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-Correct Answer Financial commitment , Voting power , Drawing powerYour Answer Financial commitment , Voting power , Drawing power
Select The BlankQuestion Period of Holiday Insurance is ________.Correct Answer Six months or lessYour Answer Three years
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-Correct Answer Government regulation and controlYour Answer Government regulation and control
Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-Correct Answer BanksYour Answer Banks
True/FalseQuestion The bids for T-Bills are on price/interest basis.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-Correct Answer Indigenous bankersYour Answer Indigenous bankers
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-Correct Answer Over one yearYour Answer Over one year
Multiple Choice Multiple AnswerQuestion The general insurance business can be :-Correct Answer Marine insurance , Fire insurance , MiscellaneousYour Answer Fire insurance , Miscellaneous , Marine insurance
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution of Chemical
Fertilisers.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion The unorganised financial system comprises of :-Correct Answer Money lenders , Indigenous bankers , Lending pawn brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers
True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural Development.Correct Answer TrueYour Answer True
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income groups.Correct Answer Weaker sectionsYour Answer Weaker sections
Multiple Choice Single AnswerQuestion Development Financial institutions include :-Correct Answer State financial institutionsYour Answer State financial institutions
Multiple Choice Single AnswerQuestion Money Markets Instruments have a maturity of less than :-Correct Answer One yearYour Answer One year
Select The BlankQuestion The price in financial markets is known as ________.Correct Answer Rate of interestYour Answer Rate of interest
Match The FollowingQuestion Correct Answer Your Answer
Development financial institutions IFCI IFCI
Organised sector Banking System Banking System
Unorganised sector Indigenous banks Indigenous banks
Mutual funds UTI UTI
Select The BlankQuestion The HDFC was set up in 1977 by the ________.Correct Answer ICICIYour Answer ICICI
Multiple Choice Single AnswerQuestion Certificate of deposit is a :-Correct Answer Usance promissory noteYour Answer Term Deposit Receipt
True/FalseQuestion A Bill of Exchange is negotiable.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-Correct Answer CorporatesYour Answer Corporates
Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than the balance is :-Correct Answer OverdraftYour Answer Overdraft
Multiple Choice Multiple AnswerQuestion The loans of finance companies are generally :-Correct Answer At high interest , Unsecured , Based on borrowers worthYour Answer At high interest , Unsecured , Based on borrowers worth
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-Correct Answer SIDFYour Answer SIDF
True/FalseQuestion Issuance of CD attracts reserve requirements.Correct Answer FalseYour Answer False
True/FalseQuestion Banks issue Guarantees on behalf of their clients.Correct Answer TrueYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
NABARD Rural Development Rural Development
AFC Ltd Consultancy Consultancy
HUDCO Housing Housing
NCDC Development of Cooperatives Development of Cooperatives
True/FalseQuestion Under MIGA the World bank offers various forms of Political Insurance.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the obligation to contribute
further premium by :-Correct Answer Surrendering the policy , Converting it into paid up policy , Assigning it in the
open marketYour Answer Surrendering the policy , Converting it into paid up policy , Assigning it in the
open market
Multiple Choice Single AnswerQuestion The organised financial system includes :-Correct Answer Commercial banksYour Answer Commercial banks
Select The BlankQuestion The term ________ refers to the act of a bank extending finance to the seller against
a letter of credit.Correct Answer NegotiationYour Answer Negotiation
Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-Correct Answer Liaison with RBI , Evolve Policies , Vigilance & ControlYour Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd
Select The BlankQuestion GIC raises funds to meet claims from ________.Correct Answer Premium collectedYour Answer Premium collected
Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-Correct Answer New Projects , Renovation , ModernisationYour Answer New Projects , Renovation , Modernisation
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has changed its name to
________ effective from October 1992.Correct Answer SCICI LtdYour Answer SCICI Ltd
Select The BlankQuestion AFC's membership consists of commercial, cooperative banks and DFIs including
________.Correct Answer EXIM bankYour Answer EXIM bank
Multiple Choice Single AnswerQuestion Financial institutions deal in :-Correct Answer Financial assetsYour Answer Financial assets
Multiple Choice Single AnswerQuestion The lender of the last resort to the market is the :-Correct Answer RBIYour Answer RBI
Select The BlankQuestion One of the objectives of NHB is to augment the ________ resources for the housing
sector.Correct Answer FinancialYour Answer Financial
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-Correct Answer By borrowing from IBRD , By lending at 0% interest. , For periods up to ten
yearsYour Answer By borrowing from IBRD , By lending at 0% interest. , For periods up to ten years
Multiple Choice Single AnswerQuestion A company issues CP to save on :-Correct Answer Interest costYour Answer Interest cost
True/FalseQuestion PFC has been persuading State Governments restructuring of their power sector to
make them viable.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-Correct Answer RBIYour Answer RBI
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion RBI was established under the:-Correct Answer RBI ActYour Answer RBI Act
Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production as well as:-Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-Correct Answer Financial commitment , Voting power , Drawing powerYour Answer Financial commitment , Voting power , Drawing power
Select The BlankQuestion Period of Holiday Insurance is ________.Correct Answer Six months or lessYour Answer Three years
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-Correct Answer Government regulation and controlYour Answer Government regulation and control
Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-Correct Answer BanksYour Answer Banks
True/FalseQuestion The bids for T-Bills are on price/interest basis.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-Correct Answer Indigenous bankersYour Answer Indigenous bankers
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-Correct Answer Over one yearYour Answer Over one year
Multiple Choice Multiple AnswerQuestion The general insurance business can be :-Correct Answer Marine insurance , Fire insurance , MiscellaneousYour Answer Fire insurance , Miscellaneous , Marine insurance
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution of Chemical
Fertilisers.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion The unorganised financial system comprises of :-Correct Answer Money lenders , Indigenous bankers , Lending pawn brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers
True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural Development.Correct Answer TrueYour Answer True
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income groups.Correct Answer Weaker sectionsYour Answer Weaker sections
Multiple Choice Single AnswerQuestion Development Financial institutions include :-Correct Answer State financial institutionsYour Answer State financial institutions
Multiple Choice Single AnswerQuestion Money Markets Instruments have a maturity of less than :-Correct Answer One yearYour Answer One year
Select The BlankQuestion The price in financial markets is known as ________.Correct Answer Rate of interestYour Answer Rate of interest
Match The FollowingQuestion Correct Answer Your Answer
Development financial institutions IFCI IFCI
Organised sector Banking System Banking System
Unorganised sector Indigenous banks Indigenous banks
Mutual funds UTI UTI
Select The BlankQuestion The HDFC was set up in 1977 by the ________.Correct Answer ICICIYour Answer ICICI
Multiple Choice Single AnswerQuestion Certificate of deposit is a :-Correct Answer Usance promissory noteYour Answer Term Deposit Receipt
True/FalseQuestion A Bill of Exchange is negotiable.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-Correct Answer CorporatesYour Answer Corporates
Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than the balance is :-Correct Answer OverdraftYour Answer Overdraft
Multiple Choice Multiple AnswerQuestion The loans of finance companies are generally :-Correct Answer At high interest , Unsecured , Based on borrowers worthYour Answer At high interest , Unsecured , Based on borrowers worth
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-Correct Answer SIDFYour Answer SIDF
True/FalseQuestion Issuance of CD attracts reserve requirements.Correct Answer FalseYour Answer False
True/FalseQuestion Banks issue Guarantees on behalf of their clients.Correct Answer TrueYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
NABARD Rural Development Rural Development
AFC Ltd Consultancy Consultancy
HUDCO Housing Housing
NCDC Development of Cooperatives Development of Cooperatives
True/FalseQuestion Under MIGA the World bank offers various forms of Political Insurance.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the obligation to contribute
further premium by :-Correct Answer Surrendering the policy , Converting it into paid up policy , Assigning it in the
open marketYour Answer Surrendering the policy , Converting it into paid up policy , Assigning it in the
open market
Multiple Choice Single AnswerQuestion The organised financial system includes :-Correct Answer Commercial banksYour Answer Commercial banks
Select The BlankQuestion The term ________ refers to the act of a bank extending finance to the seller against
a letter of credit.Correct Answer NegotiationYour Answer Negotiation
Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-Correct Answer Liaison with RBI , Evolve Policies , Vigilance & ControlYour Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd
Select The BlankQuestion GIC raises funds to meet claims from ________.Correct Answer Premium collectedYour Answer Premium collected
Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-Correct Answer New Projects , Renovation , ModernisationYour Answer New Projects , Renovation , Modernisation
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has changed its name to
________ effective from October 1992.Correct Answer SCICI LtdYour Answer SCICI Ltd
Select The BlankQuestion AFC's membership consists of commercial, cooperative banks and DFIs including
________.Correct Answer EXIM bankYour Answer EXIM bank
Multiple Choice Single AnswerQuestion Financial institutions deal in :-Correct Answer Financial assetsYour Answer Financial assets
Multiple Choice Single AnswerQuestion The lender of the last resort to the market is the :-Correct Answer RBIYour Answer RBI
Select The BlankQuestion One of the objectives of NHB is to augment the ________ resources for the housing
sector.Correct Answer FinancialYour Answer Financial
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-Correct Answer By borrowing from IBRD , By lending at 0% interest. , For periods up to ten
yearsYour Answer By borrowing from IBRD , By lending at 0% interest. , For periods up to ten years
Multiple Choice Single AnswerQuestion A company issues CP to save on :-Correct Answer Interest costYour Answer Interest cost
True/FalseQuestion PFC has been persuading State Governments restructuring of their power sector to
make them viable.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-Correct Answer RBIYour Answer RBI
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion RBI was established under the:-Correct Answer RBI ActYour Answer RBI Act
Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production as well as:-Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-Correct Answer Financial commitment , Voting power , Drawing powerYour Answer Financial commitment , Voting power , Drawing power
Select The BlankQuestion Period of Holiday Insurance is ________.Correct Answer Six months or lessYour Answer Three years
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-Correct Answer Government regulation and controlYour Answer Government regulation and control
Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-Correct Answer BanksYour Answer Banks
True/FalseQuestion The bids for T-Bills are on price/interest basis.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-Correct Answer Indigenous bankersYour Answer Indigenous bankers
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-Correct Answer Over one yearYour Answer Over one year
Multiple Choice Multiple AnswerQuestion The general insurance business can be :-Correct Answer Marine insurance , Fire insurance , MiscellaneousYour Answer Fire insurance , Miscellaneous , Marine insurance
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution of Chemical
Fertilisers.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion The unorganised financial system comprises of :-Correct Answer Money lenders , Indigenous bankers , Lending pawn brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers
True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural Development.Correct Answer TrueYour Answer True
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income groups.Correct Answer Weaker sectionsYour Answer Weaker sections
Multiple Choice Single AnswerQuestion Development Financial institutions include :-Correct Answer State financial institutionsYour Answer State financial institutions
Multiple Choice Single AnswerQuestion Money Markets Instruments have a maturity of less than :-Correct Answer One yearYour Answer One year
Select The BlankQuestion The price in financial markets is known as ________.Correct Answer Rate of interestYour Answer Rate of interest
Match The FollowingQuestion Correct Answer Your Answer
Development financial institutions IFCI IFCI
Organised sector Banking System Banking System
Unorganised sector Indigenous banks Indigenous banks
Mutual funds UTI UTI
Select The BlankQuestion The HDFC was set up in 1977 by the ________.Correct Answer ICICIYour Answer ICICI
Multiple Choice Single AnswerQuestion Certificate of deposit is a :-Correct Answer Usance promissory noteYour Answer Term Deposit Receipt
True/FalseQuestion A Bill of Exchange is negotiable.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-Correct Answer CorporatesYour Answer Corporates
Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than the balance is :-Correct Answer OverdraftYour Answer Overdraft
Multiple Choice Multiple AnswerQuestion The loans of finance companies are generally :-Correct Answer At high interest , Unsecured , Based on borrowers worthYour Answer At high interest , Unsecured , Based on borrowers worth
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-Correct Answer SIDFYour Answer SIDF
True/FalseQuestion Issuance of CD attracts reserve requirements.Correct Answer FalseYour Answer False
True/FalseQuestion Banks issue Guarantees on behalf of their clients.Correct Answer TrueYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
NABARD Rural Development Rural Development
AFC Ltd Consultancy Consultancy
HUDCO Housing Housing
NCDC Development of Cooperatives Development of Cooperatives
True/FalseQuestion Under MIGA the World bank offers various forms of Political Insurance.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the obligation to contribute
further premium by :-Correct Answer Surrendering the policy , Converting it into paid up policy , Assigning it in the
open marketYour Answer Surrendering the policy , Converting it into paid up policy , Assigning it in the
open market
Multiple Choice Single AnswerQuestion The organised financial system includes :-Correct Answer Commercial banksYour Answer Commercial banks
Select The BlankQuestion The term ________ refers to the act of a bank extending finance to the seller against
a letter of credit.Correct Answer NegotiationYour Answer Negotiation
Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-Correct Answer Liaison with RBI , Evolve Policies , Vigilance & ControlYour Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd
Select The BlankQuestion GIC raises funds to meet claims from ________.Correct Answer Premium collectedYour Answer Premium collected
Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-Correct Answer New Projects , Renovation , ModernisationYour Answer New Projects , Renovation , Modernisation
Select The BlankQuestion Kisan Vikas Patra are issued through ________.Correct Answer Post OfficesYour Answer Post Offices
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-Correct Answer SIDFYour Answer SIDF
Match The FollowingQuestion Correct Answer Your Answer
Corporates RIL, HPCL RIL, HPCL
NGOs CASP, CRY, PLAN CASP, CRY, PLAN
DFI IDBI, IFCI, ICICI IDBI, IFCI, ICICI
PSUs NTPC, NHPC, Coal India NTPC, NHPC, Coal India
Multiple Choice Multiple AnswerQuestion DFHI was set up jointly by :-Correct Answer RBI , Banks , All India FisYour Answer RBI , Banks , All India Fis , SEBI
Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme
for modernisation is also undertaken by IDBI.Correct Answer ICICIYour Answer ICICI
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-Correct Answer Indigenous bankersYour Answer Indigenous bankers
Multiple Choice Single AnswerQuestion Investment on a monthly basis and repayment on due date
is made in :-Correct Answer Recurring depositYour Answer Term deposit account
Multiple Choice Multiple AnswerQuestion Tourism promotes :-Correct Answer Credit Card Business , International remittances ,
Travellers' ChequesYour Answer Credit Card Business , International remittances ,
Travellers' Cheques
Multiple Choice Single AnswerQuestion A company issues CP to save on :-Correct Answer Interest costYour Answer Taxes
Multiple Choice Single Answer
Question A current account where the customer can withdraw morethan the balance is :-Correct Answer OverdraftYour Answer Overdraft
Select The BlankQuestion AFC's membership consists of commercial, cooperative
banks and DFIs including ________.Correct Answer EXIM bankYour Answer EXIM bank
Multiple Choice Multiple AnswerQuestion Functions of R.O. do not cover :-Correct Answer SLR/CRR maintenance , Liaison with RBI/IBA ,
Issuing Lending PolicyYour Answer Liaison with RBI/IBA , Issuing Lending Policy
Select The BlankQuestion The ________ of NABARD covers release of refinance
without prior sanction for refinance limit.Correct Answer ARSYour Answer CFSF
Select The BlankQuestion The ________ regulation makes the banks the largest
investor in the GOI securities.Correct Answer SLRYour Answer SLR
Multiple Choice Multiple AnswerQuestion Post Offices are popular for mobilizing small savings of
the public due to :-Correct Answer Wide network , Tax concessions , Saftey of fundsYour Answer Wide network , Tax concessions , Saftey of funds
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion SIDBI commenced its operations from :-Correct Answer April 2,1990Your Answer April 2,1990
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-Correct Answer RBIYour Answer RBI
Multiple Choice Single AnswerQuestion The organised financial system includes :-Correct Answer Commercial banksYour Answer Financial companies
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-
Correct Answer By borrowing from IBRD , By lending at 0%interest. , For periods up to ten yearsYour Answer By borrowing from IBRD , By lending at 0% interest. ,
For periods up to ten years
Multiple Choice Multiple AnswerQuestion The prominent Bond issuing PSU are :-Correct Answer MTNL , NTPC , SAILYour Answer MTNL , NTPC , SAIL
Match The FollowingQuestion Correct Answer Your Answer
Hill ,Tribal Area development Area Development Area Development
Aquaculture ,Brackish Water Fisheries Fisheries
Ploughing, weeding, transplantation Seasonal Agricultural OperationsIrrigation & Drainage
Market Yards, Storage & Warehousing Agricultural MarketingAgricultural Marketing
True/FalseQuestion Small Savings are source of Capital Receipts for the
Government.Correct Answer TrueYour Answer False
Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables
member countries to :-Correct Answer Rebuild resources , Stabilise currencies , Pay for
importsYour Answer Rebuild resources , Stabilise currencies , Undertake
specific projects
Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-Correct Answer BanksYour Answer Banks
Multiple Choice Single AnswerQuestion IDBI has helped in the establishment of :-Correct Answer EXIM BankYour Answer ICICI
Select The BlankQuestion NHB at present has a ________ Capital of Rs. 350 crores.Correct Answer Paid-upYour Answer Paid-up
True/FalseQuestion The Capital of NABARD is subscribed by World Bank.Correct Answer FalseYour Answer False
Select The BlankQuestion In a Bank, the investment decisions are taken at
________ level.Correct Answer Head OfficeYour Answer Head Office
Multiple Choice Single AnswerQuestion RBI is also referred to as :-Correct Answer Apex BankYour Answer Apex Bank
Multiple Choice Multiple AnswerQuestion EXIM Bank can raise resources by:-Correct Answer Issuing bonds , Borrowing from RBI , Borrowing
from International Financial InstitutionsYour Answer Borrowing from RBI , Borrowing from International
Financial Institutions
Multiple Choice Single AnswerQuestion PFC is committed to the integrated development of :-Correct Answer PowerYour Answer Power
True/FalseQuestion PFC has been persuading State Governments restructuring
of their power sector to make them viable.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion SIDBI provides :-Correct Answer Refinance , Rediscounting of Bills , Financial
support to SSIDCYour Answer Refinance , Financial support to SSIDC , Cash Credit
facilities
True/FalseQuestion Under MIGA the World bank offers various forms of
Political Insurance.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Other than Tourism, International funds remittances
comprise of :-Correct Answer Donations/Charity , Payments of Salaries ,
Payments of RoyaltyYour Answer Payments of Royalty , Travel related payments
True/FalseQuestion SCICI is a member of the OTCEI.Correct Answer TrueYour Answer False
Select The BlankQuestion HDFCs loans were linked up with________.
Correct Answer Planned SavingsYour Answer Planned Savings
True/FalseQuestion A Bill of Exchange is negotiable.Correct Answer TrueYour Answer True
True/FalseQuestion HDFC was set up by NHB.Correct Answer FalseYour Answer False
Select The BlankQuestion Mutual Funds provide the benefits of ________.Correct Answer Portfolio managementYour Answer Portfolio management
True/FalseQuestion In case of T-Bills potential investors have to put in
competitive bids.Correct Answer TrueYour Answer True
True/FalseQuestion Non bank financial institutions undertake fund and non
fund based activities.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Functions of R.O. of a bank include :-Correct Answer Inspection/audit , Control on branches , Grant
loans/advancesYour Answer Inspection/audit , Control on branches , Grant
loans/advances
Multiple Choice Multiple AnswerQuestion Duties of an International Banking unit cover :-Correct Answer Handling foreign currency , Handling Doc.
credits , Granting lines of CreditYour Answer Maintaining SLR/CRR , Handling foreign currency ,
Handling Doc. credits , Granting lines of Credit
Select The BlankQuestion Secured Premium Notes are ________.Correct Answer DebenturesYour Answer Debentures
Select The BlankQuestion Syndication involves ________ sanction.Correct Answer In principleYour Answer Funded
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion Agricultural Finance Consultancy Ltd(AFC) activities cover :-
Correct Answer Benchmark Surveys , Pre-feasibility studies , Regional /Sectoralplanning
Your Answer Benchmark Surveys , Pre-feasibility studies , Regional /Sectoralplanning
Multiple Choice Multiple AnswerQuestion Duties of an International Banking unit cover :-
Correct Answer Handling foreign currency , Handling Doc. credits , Granting linesof Credit
Your Answer Handling foreign currency , Handling Doc. credits , Granting linesof Credit
Select The BlankQuestion The ________ is the apex institution in the field of foreign trade
in India.Correct Answer EXIM bank
Your Answer FEDAI
True/FalseQuestion The Capital of NABARD is subscribed by World Bank.
Correct Answer False
Your Answer True
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution
of Chemical Fertilisers.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion PFC is committed to the integrated development of :-
Correct Answer Power
Your Answer Power
True/False
Question NABARD is an apex institution in the field of Integrated RuralDevelopment.
Correct Answer True
Your Answer False
Match The FollowingQuestion Correct Answer Your Answer
Insurance of allemployees of a Firm
Group Insurance Group Insurance
Premium Throughout Life Whole Life Whole Life
Fixed Period Insurance Endowment Endowment
Insurance of ocean Cargo Marine Insurance Marine Insurance
Select The BlankQuestion DFIs are the second largest issuer of ________ after the Govt
and Sovereign bodies.Correct Answer Debt instruments
Your Answer Debt instruments
True/FalseQuestion Mortgage Loans are loans against property.
Correct Answer True
Your Answer True
Select The BlankQuestion An ________ letter of credit cannot be canceled by the buyer
without the seller's consent.Correct Answer Irrevocable
Your Answer Revocable
Multiple Choice Single AnswerQuestion Liabilities of Insurance Cos are mostly :-
Correct Answer Long term
Your Answer Long term
Select The Blank
Question As a banker to the Government, RBI accepts Governmentdeposits at ________% interest.
Correct Answer 0
Your Answer 0.05
Multiple Choice Single AnswerQuestion Bills Rediscounting Scheme of IDBI was introduced in the year :-
Correct Answer 1965
Your Answer 1975
Multiple Choice Single AnswerQuestion DFHI was incorporated under the :-
Correct Answer Companies Act, 1956
Your Answer Banking Regulation Act,1949
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by : -
Correct Answer Government regulation and control
Your Answer Government regulation and control
Multiple Choice Single AnswerQuestion Financial institutions deal in :-
Correct Answer Financial assets
Your Answer Financial assets
Multiple Choice Single AnswerQuestion The first development Bank of India, established in 1948 was :-
Correct Answer IFCI
Your Answer IFCI
True/FalseQuestion Non bank financial institutions undertake fund and non fund
based activities.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-
Correct Answer New Projects , Renovation , Modernisation
Your Answer New Projects , Renovation , Modernisation
True/FalseQuestion SCICI is a member of the OTCEI.
Correct Answer True
Your Answer True
Select The BlankQuestion The ________ does not collect Savings from the Public.
Correct Answer NIICO Ltd.
Your Answer NIICO Ltd.
Multiple Choice Single AnswerQuestion IRBI was set up with a focus on :-
Correct Answer Sick Units
Your Answer Sick Units
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-
Correct Answer Over one year
Your Answer Over three years
Multiple Choice Multiple AnswerQuestion Which of the following statements are not prepared on a daily
basis in branch?Correct Answer Cash Book , Trial Balance , P/L statement
Your Answer Audited Balance Sheet , Trial Balance , P/L statement
True/FalseQuestion Banks lend to corporates directly.
Correct Answer True
Your Answer True
True/FalseQuestion Small Savings are source of Capital Receipts for the
Government.Correct Answer True
Your Answer False
Multiple Choice Single AnswerQuestion Treasury Bills are issued by the :-
Correct Answer RBI
Your Answer RBI
Multiple Choice Single AnswerQuestion Account where lump sum investment is made for specific period
is :-Correct Answer Term Deposit account
Your Answer Term Deposit account
Multiple Choice Single AnswerQuestion The apex institution in the field of foreign trade in India is :-
Correct Answer EXIM Bank
Your Answer EXIM Bank
Multiple Choice Multiple AnswerQuestion Basic Life insurance policies include :-
Correct Answer Term insurance , Annuity contracts , Pension plans
Your Answer Term insurance , Annuity contracts , Pension plans
Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme for
modernisation is also undertaken by IDBI.Correct Answer ICICI
Your Answer ICICI
Multiple Choice Multiple AnswerQuestion IIBI (formerly known as IRBI )undertakes :-
Correct Answer Merchant Banking activities , Lease or hire purchase finance ,Consultancy & managerial services
Your Answer Lease or hire purchase finance , Consultancy & managerialservices , Rural credit activities
Select The BlankQuestion Syndication of Loans Globally does not involve any funds as it is
________ activity.Correct Answer Non-fund based
Your Answer Non-fund based
Multiple Choice Multiple AnswerQuestion Mutual fund has main entities like :-
Correct Answer Sponsor , Trust , Asset Management company
Your Answer Sponsor , Trust , Asset Management company
Select The BlankQuestion ________ is merely an asset created out of book entries.
Correct Answer SDR
Your Answer EFF
Multiple Choice Multiple AnswerQuestion SFCs provide finance to :-
Correct Answer Corporates , Partnerships , Proprietary firms
Your Answer Corporates , Partnerships , Proprietary firms
Multiple Choice Single AnswerQuestion The type of banking involving a small number of Large
Customers viz.Corporates & multinationals is :-Correct Answer Wholesale Banking
Your Answer Global Banking
Select The BlankQuestion The extent of powers enjoyed by a branch depends on the size
of its ________.Correct Answer Business
Your Answer Business
Multiple Choice Multiple AnswerQuestion Credit Information report is also known as :-
Correct Answer Credit report , Banker's report , Confidential report
Your Answer Credit report , Banker's report , Confidential report
Match The FollowingQuestion Correct Answer Your Answer
Inter Bank Call MoneyMarkets
BRs, Call Money Receipts Currencies
Money Market Instuments CP, CD ,T- Bills CP, CD ,T- Bills
Capital MarketInstruments
Shares Shares
Debt Market Instruments GOI Securities ,Bonds Shares
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income
groups.Correct Answer Weaker sections
Your Answer Weaker sections
True/FalseQuestion Banks authorised to deal in foreign exchange are known as
Authorised Dealers.Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables member
countries to :-Correct Answer Rebuild resources , Stabilise currencies , Pay for imports
Your Answer Rebuild resources , Stabilise currencies , Pay for imports
Select The BlankQuestion The repayment holiday period is also known as ________
period.Correct Answer Moratorium
Your Answer Moratorium
Multiple Choice Single AnswerQuestion A non-scheduled bank does not deal in :-
Correct Answer Foreign Exchange
Your Answer Foreign Exchange
Multiple Choice Multiple AnswerQuestion Prominent Institutional Investors are :-
Correct Answer Foreign Investors(FIIs) , Corporate Treasuries , Mutual Funds
Your Answer Foreign Investors(FIIs) , Corporate Treasuries , Public sectorCompanies
Financial Institutions & Banking_18LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has
changed its name to ________ effective from October 1992.Correct Answer SCICI LtdYour Answer SCICI Ltd
Select The BlankQuestion AFC's membership consists of commercial, cooperative banks and
DFIs including ________.Correct Answer EXIM bankYour Answer EXIM bank
Multiple Choice Single AnswerQuestion Financial institutions deal in :-Correct Answer Financial assetsYour Answer Financial assets
Multiple Choice Single AnswerQuestion The lender of the last resort to the market! is the :-Correct Answer RBIYour Answer RBI
Select The BlankQuestion One of the objectives of NHB is to augment the ________
resources for the housing sector.Correct Answer FinancialYour Answer Financial
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-Correct Answer By borrowing from IBRD , By lending at 0% interest. , For
periods up to ten yearsYour Answer By borrowing from IBRD , By lending at 0% interest. , For
periods up to ten years
Multiple Choice Single AnswerQuestion A company issues CP to save on :-Correct Answer Interest costYour Answer Interest cost
Page 1
Financial Institutions & Banking_18True/FalseQuestion PFC has been persuading State Governments restructuring of
their power sector to make them viable.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-Correct Answer RBIYour Answer RBI
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion RBI was established under the:-Correct Answer RBI ActYour Answer RBI Act
Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production
as well a! s:-Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management
Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-Correct Answer Financial commitment , Voting power , Drawing powerYour Answer Financial commitment , Voting power , Drawing power
Select The BlankQuestion Period of Holiday Insurance is ________.Correct Answer Six months or lessYour Answer Three years
Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-Correct Answer Government regulation and controlYour Answer Government reg! ulation and control
Page 2
Financial Institutions & Banking_18Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-Correct Answer BanksYour Answer Banks
True/FalseQuestion The bids for T-Bills are on price/interest basis.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-Correct Answer Indigenous bankersYour Answer Indigenous bankers
Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-Correct Answer Over one yearYour Answer Over one year
Multiple Choice Multiple AnswerQuestion The general insurance business can be :-Correct Answer Marine insurance , Fire insurance , MiscellaneousYour Answer Fire insurance , Miscellaneous , Marine insurance
True/FalseQuestion NABARD does not provide Refinance for stocking & distribution of
Chemical Fertilisers.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion The unorganised financial system comprises of :-Correct Answer Money lenders , Indigenous bankers , Lending pawn
brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers
True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural
Development.&nbs! p; Correct Answer TrueYour Answer True
Page 3
Financial Institutions & Banking_18
Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income
groups.Correct Answer Weaker sectionsYour Answer Weaker sections
Multiple Choice Single AnswerQuestion Development Financial institutions include :-Correct Answer State financial institutionsYour Answer State financial institutions
Multiple Choice Single AnswerQuestion Money Markets Instruments have a maturity of less than :-Correct Answer One yearYour Answer One year
Select The BlankQuestion The price in financial markets is known as ________.Correct Answer &n! bsp; Rate of interestYour Answer Rate of interest
Match The FollowingQuestion Correct Answer Your Answer
Development financial institutions IFCI IFCI
Organised sector Banking System Banking System
Unorganised sector Indigenous banks Indigenous banks
Mutual funds UTI UTI
Select The BlankQuestion The HDFC was set up in 1977 by the ________.Correct Answer ICICIYour Answer ICICI
Multiple Choice Single AnswerQuestion Certificate of deposit is a :-Correct Answer Usance promissory note
Page 4
Financial Institutions & Banking_18Your Answer Term Deposit Receipt
True/FalseQuestion A Bill of Exchange is negotiable.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-Correct Answer CorporatesYour Answer Corporates
Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than
the balance is :-Correct Answer OverdraftYour Answer Overdraft
Multiple Choice Multiple AnswerQuestion The loans of finance companies are generally :-Correct Answer At high interest , Unsecured , Based on borrowers worthYour Answer At high interest , Unsecured , Based on borrowers worth
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-
&n! bsp; Correct Answer SIDFYour Answer SIDF
True/FalseQuestion Issuance of CD attracts reserve requirements.Correct Answer FalseYour Answer False
True/FalseQuestion Banks issue Guarantees on behalf of their clients.Correct Answer TrueYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
NABARD Rural Development Rural DevelopmentPage 5
Financial Institutions & Banking_18
AFC Ltd Consultancy Consultancy
HUDCO Housing Housing
NCDC Development of Cooperatives Development of Cooperatives
True/FalseQuestion Under MIGA the World bank offers various forms of Political
Insurance.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the
obligation to contribute further premium by :-Correct Answer Surrendering the policy , Converting it into paid up policy ,
Assigning it in the open marketYour Answer Surrendering the policy , Converting it into paid up policy ,
Assigning it in the open market
Multiple Choice Single AnswerQuestion The organised financial system includes :-Correct Answer Commercial banksYour Answer Commercial banks
Select The BlankQuestion The term ________ refers to the act of a bank extending finance
to the seller against a letter of credit.Correct Answer NegotiationYour Answer Negotiation
Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-Correct Answer Liaison with RBI , Evolve Policies , Vigilance & ControlYour Answer Liaison with RBI , Evolve Policies , Vigilance & Control
Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute
infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN
Page 6
Financial Institutions & Banking_18Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam
Ltd
Select The BlankQuestion GIC raises funds to meet claims from ________.Correct Answer Premium collectedYour Answer Premium collected!Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies
Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-Correct Answer New Projects , Renovation , ModernisationYour Answer New Projects , Renovation , Modernisation
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Page 7
Financial Institution and Banking
Topic PageNoorganised sector 2financial services 2Indian financial system 3commercial banks 4development financial institutions 5insurance companies 5other public sector financial institutions 5post office savings 5mutual funds 5non banking finanical institutions 6Reserve bank of India 9functions of RBI 9banker to the government 10bankers bank 10supervising authority 10exchange control authority 10promoter of financial system 11fiscal and monetary policy 12open market operations 12developmental financial institutions 17industrial finance corporation of India 17Industrial development bank of india - idbi 18industrial credit and investment corporation of india Ltd - icici 19irbi 20sfcs 20sidc and siics 20state small industries development corporation (SSIDC) 21power finance corporation (PFC) 21financial services offered by the corporation 21term loans 21lease financing 22direct discounting of bills 22guarantee services 22loan syndication 22short term loan 22institutional development services 22utility development plans 23financial assistance for power sector studies 23reform and restructuring related studies 23reform and restructuring of SEBs 23OFAP 23export import bank of india 24national bank of agriculture and rural development 24genesis of NABARD 24ARC 24GOI 24ACD 24CRAFICARD 24types of refinance facilities 26interest rates 26production credits 28financing weavers 28OSAO 29
refinance for marketing of crops 29other refinance facilities 30long term loans to state governments 30investment credit ( medium and long term) refinance 31shipping credit and investment company of India (SCICI) 33principal activities 33agricultural finance consultancy ltd (AFC) 34area of specialisation 36surveys and studies 38National co-operative development corporation (NCDC) 38finance and financing 39procedure of santion / disbursal of assistance 40promotional and development role 40marketing 40agricultural inputs 40agro-processing industries 41storage and cold storage 41program for weaker sections 41consumer business 41area based integrated co-operative development project 42national housing bank (NHB) 42housing and urban development corporation (HUDCO) 44housing development finance corporation (HDFC) 44land development banks 45banking sector 49retail banking 49cash credit 50safe custody services for safe keeping of important documents 50acceptance of deposits from non resident indians 51difference between retail banking and wholesale banking 51global banking 51scheduled bank in india 52commercial bank and cooperative bank 52public sector banks 52private sector banks 52bank accounts 53deposit account 53lump sum investment 54periodic investment 54cash credit 54loan syndication 54repayment period 54bill 55discount 55remittance 55letter of credit 55bank guarantee 56negotiation 56cash reserve ratio 56statutory reserve ratio 57note pertaining to reserve ratio 57clearing operation 57daily product basis 57monthly product basis 58repayment holiday 58credit instruments 59
negotiable instruments 59acceptance 59credit report 59syndication 59custodial services 60security 60foreign exchange 60securitisation 60international banking 60international trade 61tourism 61remittance of funds from one place to another place besides tourism 61syndication of loans global for corporate houses 61foreign exchange management 62profile of a bank 62branch banking 62different layers of banking 62duties of an international banking department 63exchange operations 63administrative functions in a bank 63administrative units 64banking business 65Deposit insurance and credit guarantee corporation (DICGC) 66export credit guarantee corporation (ECGC) 67indian money market 73instrument 73comercial paper 74certificates of deposit 75treasury bills 75short term debentures 75bill of exchange 75long term debt instruments 76government of India dated securities (GOISEC) 76inflation linked bonds 77zero coupon bonds 77state government securities (state loans) 78public sector undertaking bonds (PSU Bonds) 78bonds of public financial institutions (PFI) 78corporate debentures 79Pass through certificates (PTC) 79issuers 79government of India and other sovereign bodies 80banks and development financial institutions 80public sector undertaking (PSU ) 81private sector companies 81government owned or quasi governement non corporate entities 82investors 82banks 83insurance companies 84provident funds 84mutual funds 86trusts 86corporate treasuries 87foreign institutional investors 87securities trading corporation of india (STCI) 88discount and finance house of india 88
non banking financial intermediaries 93LIC 93general nature of insurance companies 93instroduction of Life Insurance corporations 93types and structure of insurance plans 94general insurance corporation 96unit trust of india 98provident / pension funds 99post offices 99Non bank financial companies (NBFC) 99investment companies 100loan companies 102chit funds 102NIDHIS 103hire purchase finance companies 104equipment leasing finance companies 104international monetary fund (IMF) 109quotas 109concessional and non concessional lending 113poverty reduction and growth facility (PRGF) 113stand by arrangments (SBA) 114extended fund facility (EFF) 114supplement reserve facility (SRF) 114contingent credit lines (CCL) 114compensatory financing facility (CFF) 114emergency assistance 114special drawing rights 114the international bank for reconstruction and development 115world bank 115international finance corporation 115international development assiciation (IDA) 116the bank for international settlements 116regional development agencies 116RBI 119non performing assets 120out of order status 121overdue 121income recognition 121reversal of income 122appropriation of recovery in NPA 122NPA 122sub standard Assets 123subtful assets 124loss assets 124account with temporary deficiancies 124upgradation of loan accounts classified as NPA 125account regularised near about the balance sheet date 125agricultural advances 126government guaranteed advances 128restructuring rescheduling of loans 128upgradation of restructured accounts 130corporate debt restructuring (CDR systems) 131CDR 131stand still clause 138category 2 CDR system 139projects under implementation 142
assest classification 142income recognition 144provisioning 145availability of security / net worth of borrower / guarantor 145take-out finance 145post shipment supplier credit 145export project finance 146advances under rehabiliation approved by BIFR/TLI 146provisioning norms general 146sub standard Assets 148leased assets 148advances 150advances covered by CGTSI guarantee 151take-out finance 152reserve for exchange rate fluctuations account (RERFA) 152country risk 153securitisation company (SC) / reconstruction company (RC) 154writing off of NPA 155direct finance to farmers for agricultural purposes 156purchase of agricultural implements and machinery 156development of irrigation potential through 156lending to priority sector 158priority sector advances 161direct finance to farmers for agricultural purposes 161indirect finance to agriculture 163small scale and ancillary industries 166tiny enterprises 166small scale service and business enterprises(SSSBE) 166industrial estates 167KVI sector 167small road and water transport operators (SRWTO) 167retail trade 168small business 168professional and self emplyed persons 168state sponsored organisations for scheduled castes / scheduled tribes169education 170housing 170compsumption loans 170loans to self help groups (SHG)/NGO/MICROEDIT 170food and agro based processing sector 171software industry 171venture capital 171investments in special bonds 173HUDCO 174NSIC 174NHB 174lines of credit 174bills rediscounting 175deposits in rural infrastructure development (RIDF) 175leasing and hire purchase 175targets for priority sector lending by scheduled commercial banks 177scheduled commercial banks excluding foreign banks 177direct / indirect agricultural lending 177small scale industries 178DRI advances 178Weaker sections 178
Targets for foreign banks 178rural infrastructure developments fund (RIDF ) 180common guidelines for priority sector advances 183application forms 183mode of disbursement of loan 184repayment schedule 184rates of interest 184penal interest 185inspection charges 185insurance against fire and other risks 185other charges 186photographs of borrowers 186discretionary powers 186machinery to look into complants 186amendments 186
Financial Institutions & Banking_20Select The BlankQuestion Kisan Vikas Patra are issued through ________.Correct Answer Post OfficesYour Answer Post Offices
Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-Correct Answer SIDFYour Answer SIDF
Match The FollowingQuestion Correct Answer Your Answer
Corporates RIL, HPCL RIL, HPCL
NGOs CASP, CRY, PLAN CASP, CRY, PLAN
DFI IDBI, IFCI, ICICI IDBI, IFCI, ICICI
PSUs NTPC, NHPC, Coal India NTPC, NHPC, Coal India
Multiple Choice Multiple AnswerQuestion DFHI was set up jointly by :-Correct Answer RBI , Banks , All India FisYour Answer RBI , Banks , All India Fis , SEBI
Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme
for modernisation is also undertaken by IDBI.Correct Answer ICICIYour Answer ICICI
Multiple Choice Single AnswerQuestion The unorganised financial system includes :-Correct Answer Indigenous bankersYour Answer Indigenous bankers
Multiple Choice Single AnswerQuestion Investment on a monthly basis and repayment on due date
is made in :-Correct Answer Recurring deposit
Page 1
Financial Institutions & Banking_20Your Answer Term deposit account
Multiple Choice Multiple AnswerQuestion Tourism promotes :-Correct Answer Credit Card Business , International remittances ,
Travellers' ChequesYour Answer Credit Card Business , International remittances ,
Travellers' Cheques
Multiple Choice Single AnswerQuestion A company issues CP to save on :-Correct Answer Interest costYour Answer Taxes
Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more
than the balance is :-Correct Answer OverdraftYour Answer Overdraft
Select The BlankQuestion AFC's membership consists of commercial, cooperative
banks and DFIs including ________.Correct Answer EXIM bankYour Answer EXIM bank
Multiple Choice Multiple AnswerQuestion Functions of R.O. do not cover :-Correct Answer SLR/CRR maintenance , Liaison with RBI/IBA ,
Issuing Lending PolicyYour Answer Liaison with RBI/IBA , Issuing Lending Policy
Select The BlankQuestion The ________ of NABARD covers release of refinance
without prior sanction for refinance limit.Correct Answer ARSYour Answer CFSF
Select The BlankQuestion The ________ regulation makes the banks the largest
investor in the GOI securities.Correct Answer SLR
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Financial Institutions & Banking_20Your Answer SLR
Multiple Choice Multiple AnswerQuestion Post Offices are popular for mobilizing small savings of
the public due to :-Correct Answer Wide network , Tax concessions , Saftey of fundsYour Answer Wide network , Tax concessions , Saftey of funds
True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion SIDBI commenced its operations from :-Correct Answer April 2,1990Your Answer April 2,1990
Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-Correct Answer RBIYour Answer RBI
Multiple Choice Single AnswerQuestion The organised financial system includes :-Correct Answer Commercial banksYour Answer Financial companies
Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-Correct Answer By borrowing from IBRD , By lending at 0%
interest. , For periods up to ten yearsYour Answer By borrowing from IBRD , By lending at 0% interest. ,
For periods up to ten years
Multiple Choice Multiple AnswerQuestion The prominent Bond issuing PSU are :-Correct Answer MTNL , NTPC , SAILYour Answer MTNL , NTPC , SAIL
Match The FollowingQuestion Correct Answer Your Answer
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Financial Institutions & Banking_20
Hill ,Tribal Area development Area Development Area Development
Aquaculture ,Brackish Water Fisheries Fisheries
Ploughing, weeding, transplantation Seasonal Agricultural OperationsIrrigation & Drainage
Market Yards, Storage & Warehousing Agricultural MarketingAgricultural Marketing
True/FalseQuestion Small Savings are source of Capital Receipts for the
Government.Correct Answer TrueYour Answer False
Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables
member countries to :-Correct Answer Rebuild resources , Stabilise currencies , Pay for
importsYour Answer Rebuild resources , Stabilise currencies , Undertake
specific projects
Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-Correct Answer BanksYour Answer Banks
Multiple Choice Single AnswerQuestion IDBI has helped in the establishment of :-Correct Answer EXIM BankYour Answer ICICI
Select The BlankQuestion NHB at present has a ________ Capital of Rs. 350 crores.Correct Answer Paid-upYour Answer Paid-up
True/FalsePage 4
Financial Institutions & Banking_20Question The Capital of NABARD is subscribed by World Bank.Correct Answer FalseYour Answer False
Select The BlankQuestion In a Bank, the investment decisions are taken at
________ level.Correct Answer Head OfficeYour Answer Head Office
Multiple Choice Single AnswerQuestion RBI is also referred to as :-Correct Answer Apex BankYour Answer Apex Bank
Multiple Choice Multiple AnswerQuestion EXIM Bank can raise resources by:-Correct Answer Issuing bonds , Borrowing from RBI , Borrowing
from International Financial InstitutionsYour Answer Borrowing from RBI , Borrowing from International
Financial Institutions
Multiple Choice Single AnswerQuestion PFC is committed to the integrated development of :-Correct Answer PowerYour Answer Power
True/FalseQuestion PFC has been persuading State Governments restructuring
of their power sector to make them viable.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion SIDBI provides :-Correct Answer Refinance , Rediscounting of Bills , Financial
support to SSIDCYour Answer Refinance , Financial support to SSIDC , Cash Credit
facilities
True/FalseQuestion Under MIGA the World bank offers various forms of
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Financial Institutions & Banking_20Political Insurance.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Other than Tourism, International funds remittances
comprise of :-Correct Answer Donations/Charity , Payments of Salaries ,
Payments of RoyaltyYour Answer Payments of Royalty , Travel related payments
True/FalseQuestion SCICI is a member of the OTCEI.Correct Answer TrueYour Answer False
Select The BlankQuestion HDFCs loans were linked up with________.Correct Answer Planned SavingsYour Answer Planned Savings
True/FalseQuestion A Bill of Exchange is negotiable.Correct Answer TrueYour Answer True
True/FalseQuestion HDFC was set up by NHB.Correct Answer FalseYour Answer False
Select The BlankQuestion Mutual Funds provide the benefits of ________.Correct Answer Portfolio managementYour Answer Portfolio management
True/FalseQuestion In case of T-Bills potential investors have to put in
competitive bids.Correct Answer TrueYour Answer True
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Financial Institutions & Banking_20True/FalseQuestion Non bank financial institutions undertake fund and non
fund based activities.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Functions of R.O. of a bank include :-Correct Answer Inspection/audit , Control on branches , Grant
loans/advancesYour Answer Inspection/audit , Control on branches , Grant
loans/advances
Multiple Choice Multiple AnswerQuestion Duties of an International Banking unit cover :-Correct Answer Handling foreign currency , Handling Doc.
credits , Granting lines of CreditYour Answer Maintaining SLR/CRR , Handling foreign currency ,
Handling Doc. credits , Granting lines of Credit
Select The BlankQuestion Secured Premium Notes are ________.Correct Answer DebenturesYour Answer Debentures
Select The BlankQuestion Syndication involves ________ sanction.Correct Answer In principleYour Answer Funded
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ASSIGNMENTS
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Match The FollowingQuestion Correct Answer Your Answer
Project Financing Help improving Corporate Return on Equity Industrial FinanceCorporation of India
Finance in international financial markets Issue of Euro bonds Issue of Euro bonds
International financial institutions World Bank Increasing emphasis on the Privateinitiative
Policy of Liberalisation, Privatisation and Globalisation Increasing emphasis on thePrivate initiative Help improving Corporate Return on Equity
Multiple Choice Multiple AnswerQuestion The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance SheetYour Answer Profit and Loss Account , Auditors report , Balance Sheet
Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Management problems
Select The BlankQuestion The Project Cycle should be in the ________ orderCorrect Answer Identification of Project - Project Appraisal - Negotiations for loansYour Answer Identification of Project - Project Appraisal - Negotiations for loans
True/FalseQuestion Change in the project concept itself may lead to cost and time overrun.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The industrial concern earned profits by increasing the sales volume under
the :-Correct Answer Sales conceptYour Answer Marketing concept
True/FalseQuestion Cost and time overrun of the project may lead to loss on account of lost
market opportunities.
Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Management qualities includes :-Correct Answer Honesty , Financial resources , InitiativeYour Answer Honesty , Initiative , Too ambitious promoters
Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial
RelationshipYour Answer Linear Relationship , Chain ratio Relationship , Exponential Relationship
True/FalseQuestion Financial analysis based on accounting ratios will give mis-leading results if
the effects of changes in price level are not taken into account.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-Correct Answer To find out the uses of loans raised by the business , To indicate the
financial strength and weakness of the business , To help to understand the changes inassets as well as asset sources which are not revealed by the income statement
Your Answer To indicate the financial strength and weakness of the business , To helpto understand the changes in assets as well as asset sources which are not revealed by theincome statement , Helps to prepare financial statements
True/FalseQuestion The maximum Seed Capital assistance provided by IDBI under the project
will be restricted to 50% of the required promoter's contribution or Rs. 50 lakhswhichever is lower.
Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspectYour Answer Strategic perspective , Time span , Finance cost aspect , Social aspect
Multiple Choice Single AnswerQuestion Strategic Position and Action Evaluation Model :-Correct Answer Is an approach to hammer out an appropriate strategic posture for a
firm and its individual businessYour Answer Which is highly respected for the sophistication, maturity and quality in
its planning systems
Multiple Choice Single AnswerQuestion The Projects which are undertaken to manufacture certain products which are
being used as raw material by the existing units is known as :-Correct Answer Backward Integration ProjectsYour Answer Backward Integration Projects
Multiple Choice Multiple AnswerQuestion Technical appraisal is basically concerned with :-Correct Answer Technology , Layout of the plant , Design of the plantYour Answer Technology , Layout of the plant , Design of the plant
True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from Pollution
Control Authorities before setting up any project.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors should be
considered :-Correct Answer Proximity to raw materials and markets , Availability of infrastructure
, Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of infrastructure ,
Government policies and other factors
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future
benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
Select The BlankQuestion Longer the duration of production cycle, higher the requirement of
________.Correct Answer Working capitalYour Answer Working capital
Select The BlankQuestion Inflow of funds may not necessarily result in ________.
Correct Answer Inflow of cashYour Answer Inflow of cash
Multiple Choice Single AnswerQuestion Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Select The BlankQuestion Details regarding Administrative / controlling office comes under the
________ category.Correct Answer GeneralYour Answer Project organisation
Multiple Choice Multiple AnswerQuestion Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Quick ratio
Select The BlankQuestion Depreciation is sometimes treated as ________ funds.Correct Answer SourceYour Answer Source
Multiple Choice Single AnswerQuestion Miscellaneous fixed assets includes :-Correct Answer CablesYour Answer Cables
Multiple Choice Single AnswerQuestion In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high growth
rateYour Answer Products which enjoy a high market share as well as a high growth rate
Select The BlankQuestion ________ is a current liability.Correct Answer Trade creditYour Answer Unsecured loans
Match The FollowingQuestion Correct Answer Your Answer
Econometric method Mathematical representation of economic relationship Suitable forforecasting the demand for intermediate products
Primary source of data Market survey Market survey
Secondary source of data Collected in some other context Collected in some othercontext
Leading indicators Variables that change faster than others Mathematical representationof economic relationship
Multiple Choice Multiple AnswerQuestion Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured
borrowingYour Answer Depreciation , Increase in secured borrowing
True/FalseQuestion The construction of National Golden Quadrilateral can be recognised as
Project.Correct Answer TrueYour Answer True
True/FalseQuestion The cost factors of the product mixed is also taken into account to arrive at
cost at various levels of production and its cost impact of the manufacturing.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Capital Issue expenses include :-Correct Answer Brokerage fees to registrarsYour Answer Market research expenses
Select The BlankQuestion Having decided on the location and product, the promoter takes into account
the ________ that is to be adopted for producing the product.Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology
Multiple Choice Single AnswerQuestion Past trend method of Commercial appraisal technique is :-Correct Answer Adopted as a guide depending on the consumption pattern of the
society as a wholeYour Answer A list of industries wherein the product is used is made and quantity and
volume is arrived at
Multiple Choice Multiple Answer
Question Management category of Visit report consists of :-Correct Answer Managing Director , Institutional nominees , Committees of the boardYour Answer Managing Director , Electrical engineers , Committees of the board
Multiple Choice Single AnswerQuestion Sanctioned bank limits is categorised under :-Correct Answer Working capitalYour Answer Production, Sales and Profitability
Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix analyses products in terms of :-Correct Answer Business strength and Industrial AttractivenessYour Answer Business strength and Industrial Attractiveness
Multiple Choice Multiple AnswerQuestion Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability , Sales trends
Multiple Choice Single AnswerQuestion Cost of overheads include :-Correct Answer Cost of repairs and maintenanceYour Answer Cost of repairs and maintenance
Multiple Choice Multiple AnswerQuestion External sources of cash are as follows :-Correct Answer Issue of new shares , Long term loans , Short term borrowingsYour Answer Issue of new shares , Long term loans , Short term borrowings
Select The BlankQuestion The company having ________, is appropriate for the strategic posture of
Conservative under the SPACE approach.Correct Answer Limited competitive advantage, belonging to a not so attractive
industry but enjoying financial strength and operating in a relatively stable environmentYour Answer High financial strength, high industrial strength, enjoying a competitive
advantage and belonging to an attractive industry, operating in a relatively stableenvironmental conditions
True/FalseQuestion Sensitivity analysis consists of assessing the degree of risk.Correct Answer TrueYour Answer True
True/FalseQuestion A high debt equity ratio may indicate that the financial stake of the creditors
is more than that of the owners.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The cost of Plant and Machinery includes :-Correct Answer Cost of stores and sparesYour Answer Building and civil construction
Select The BlankQuestion The basic difference between the feasibility study report and ________ is the
level of accuracy and degree of detail.Correct Answer Detailed Project reportYour Answer Audit report
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion The sources of long term and medium term finance are :-
Correct Answer Public deposit , Equity shares
Your Answer Equity shares , Bridge loan , Working capital loan
Multiple Choice Multiple AnswerQuestion Disposition of funds includes :-
Correct Answer Increase in working capital , Preliminary expenses , Dividend
Your Answer Increase in working capital , Dividend , Preliminary expenseswritten off
Select The BlankQuestion The company having ________, is appropriate for the strategic
posture of Conservative under the SPACE approach.Correct Answer Limited competitive advantage, belonging to a not so attractive
industry but enjoying financial strength and operating in arelatively stable environment
Your Answer Limited financial strength, enjoying competitive advantage,belonging to attractive industry and operating in a relativelyvolatile environment
Select The BlankQuestion A market survey generally is a ________ survey.
Correct Answer Sample
Your Answer Sample
Multiple Choice Single AnswerQuestion The ratio which covers those assets which can be converted into
cash immediately is known as :-Correct Answer Quick ratio
Your Answer Quick ratio
Multiple Choice Single AnswerQuestion Delay in arrival of domestic/foreign machinery and technicians
may lead to :-Correct Answer Cost and time overrun
Your Answer Cost and time overrun
Multiple Choice Multiple AnswerQuestion Casual methods of Demand forecasting consists of :-
Correct Answer Consumption-level method , Econometric method
Your Answer Consumption-level method , Econometric method
Select The BlankQuestion Having decided on the location and product, the promoter takes
into account the ________ that is to be adopted for producingthe product.
Correct Answer Manufacturing process and technology
Your Answer Manufacturing process and technology
Multiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-
Correct Answer To find out the uses of loans raised by the business , To indicatethe financial strength and weakness of the business , To help tounderstand the changes in assets as well as asset sourceswhich are not revealed by the income statement
Your Answer To find out the uses of loans raised by the business , To help tounderstand the changes in assets as well as asset sourceswhich are not revealed by the income statement , Helps toprepare financial statements
Multiple Choice Multiple AnswerQuestion The data for ratio analysis is obtained from :-
Correct Answer Profit and Loss Account , Balance Sheet
Your Answer Profit and Loss Account , Balance Sheet , Cash flow statement
Select The BlankQuestion ________ in assets involves outflow of funds.
Correct Answer Increase
Your Answer Increase
Multiple Choice Single AnswerQuestion Technology, design, layout of the plant as well as inputs and
infrastructural facilities are to be considered under :-Correct Answer Technical appraisal
Your Answer Technical appraisal
True/FalseQuestion The Detailed Project report must indicate the gestation period of
the project.Correct Answer True
Your Answer False
True/FalseQuestion Interest and Dividend are to be considered while calculating
Operating ratio.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Short supplies of materials may lead to :-
Correct Answer Cost and time overrun
Your Answer Cost and time overrun
True/FalseQuestion Ratio should be computed on the basis of inter-related figures
which have a cause and effect relationship.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost
is known as :-Correct Answer Finance cost aspect
Your Answer Finance cost aspect
Select The BlankQuestion More accurate the estimation of the level of current assets and
current liabilities, more accurate will be estimation of therequirement of ________.
Correct Answer Working capital
Your Answer Working capital
Multiple Choice Single AnswerQuestion The rate of discount which would equate the present value of
investments to the present value of benefits over the life of the
project is known as :-
Correct Answer Internal rate of return
Your Answer Net Present value
Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while
assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensation
Your Answer Environmental factors , Risk involved , Political issues
Match The FollowingQuestion Correct Answer Your Answer
Private investment Power generation Nearness to market
Project Time -bound Time -bound
Programme Not necessarily timebound
Not necessarily time bound
Foreign direct investment Machine tools Power generation
True/FalseQuestion The advantage of secondary sources of data is that it is readily
and economically available.Correct Answer True
Your Answer False
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed
as :-Correct Answer Strategic perspective
Your Answer Strategic perspective
Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions
viz.:Correct Answer Strategic perspective , Time span , Finance cost aspect
Your Answer Strategic perspective , Time span , Finance cost aspect
True/False
Question A project is unique and no two projects are similar.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The sources of cash are :-
Correct Answer Cash from operations , Sale of machinery , Issue of new shares
Your Answer Cash from operations , Sale of machinery , Issue of new shares
Multiple Choice Single AnswerQuestion Profit is the result of customer satisfaction, indeed customer
delight under the :-Correct Answer Marketing concept
Your Answer Marketing concept
Multiple Choice Multiple AnswerQuestion Management qualities includes :-
Correct Answer Honesty , Financial resources , Initiative
Your Answer Honesty , Financial resources , Initiative
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-
Correct Answer That it involves current outlay of funds in expectation of futurebenefits
Your Answer That it involves current outlay of funds in expectation of futurebenefits
Select The BlankQuestion ________ is the summary of cash book or Receipts and
Payments statement.Correct Answer Cash flow statement
Your Answer Cash flow statement
Select The BlankQuestion Under the SPACE Model, Customer loyalty is determined under
the ________ dimension.Correct Answer Company's competitive advantage
Your Answer Company's competitive advantage
True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation in
the terms of Business strength and Industry Attractiveness.Correct Answer False
Your Answer False
Select The BlankQuestion A smaller unit into which the overall requirement of capital of a
company is sub-divided is termed as ________.Correct Answer Share
Your Answer Share
Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify
substantial commitment of funds where there is :-Correct Answer Strong Business Strength and high Industry attractiveness ,
Average Business strength and high Industry attractivenessYour Answer Average Business Strength and Medium Industry Attractiveness
, Average Business strength and high Industry attractiveness ,Average Business Strength and Low Industry attractiveness
Multiple Choice Single AnswerQuestion The ratio which indicates the ability of the company to meet
current obligations is termed as :-Correct Answer Current ratio
Your Answer Current ratio
True/FalseQuestion The General Electric Company incorporated in the USA, is highly
respected for the sophistication, maturity and quality in itsplanning systems.
Correct Answer True
Your Answer False
Select The BlankQuestion Inflow of funds may not necessarily result in ________.
Correct Answer Inflow of cash
Your Answer Outflow of cash
Match The Following
Question Correct Answer Your Answer
Current ratio Liquidity ratio Current liability
Debt-Equity ratio Solvency ratio Debt
External liabilities Debt Relationship between NetProfit after taxes and totalshareholders funds
Shareholders funds Equity Equity
True/FalseQuestion There is a need for studying Project finance both for the lenders
as well as the borrowers as both of them have equal stake inmaking the Project a success.
Correct Answer True
Your Answer True
Select The BlankQuestion Sometimes the term ________ is interpreted as cash equivalent
i.e. cash and marketable securities.Correct Answer Fund
Your Answer Investment
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to
as :-Correct Answer Project finance
Your Answer Balance Sheet
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Management aspects includes :-
Correct Answer Determination , Organisation Building , Person / system oriented
Your Answer Determination , Organisation Building , Person / system oriented
Select The BlankQuestion Depreciation is sometimes treated as ________ funds.
Correct Answer Source
Your Answer Source
True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from
Pollution Control Authorities before setting up any project.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion In BCG Matrix "QUESTION MARKS" indicate :-
Correct Answer Products which have high growth potential but low market share
Your Answer Products which have high growth potential but low market share
True/FalseQuestion Production line diagrams show the organisation structure of the
project along with information on location, personnel required forvarious departments, and their inter-relationship.
Correct Answer False
Your Answer True
PROJECT FINANCE
Multiple Choice Multiple Answer
Question The objectives of the funds flow statement is as follows :-
Correct Answer To help to understand the changes in assets as well as asset sourceswhich are not revealed by the income statement , To find out the uses of loans raised bythe business , To indicate the financial strength and weakness of the business
Your Answer To find out the uses of loans raised by the business , To help tounderstand the changes in assets as well as asset sources which are not revealed bythe income statement , Helps to prepare financial statements
Select The Blank
Question Inflow of funds may not necessarily result in ________.
Correct Answer Inflow of cashYour Answer Inflow of cash
Multiple Choice Single Answer
Question Every project involves financial outlay which can be referred to as :-
Correct Answer Project financeYour Answer Project finance
True/False
Question The Detailed Project report spells out the modus operandi for theimplementation of the Project and the realization of the Project objectives.
Correct Answer TrueYour Answer True
Select The Blank
Question As the plant capacity increase, the investment cost unit capacity ________.
Correct Answer DecreasesYour Answer Decreases
Multiple Choice Multiple Answer
Question Internal sources of funds are :-
Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill writtenoff
Your Answer Funds from operation , Loss on sale of fixed assets
Multiple Choice Single Answer
Question End use method of Commercial appraisal technique is :-
Correct Answer A list of industries wherein the product is used is made and quantityand volume is arrived at
Your Answer A list of industries wherein the product is used is made and quantity andvolume is arrived at
Multiple Choice Multiple Answer
Question The applications of cash are :-
Correct Answer Purchase of fixed assets , Payment of long term loans
Your Answer Purchase of fixed assets , Payment of long term loans
True/False
Question In small scale organisation, requirement of working capital is quite high dueto high amount of overheads, high buying costs and high selling cost.
Correct Answer TrueYour Answer True
Qnt. Correct Your AnsProject Manager Finance Manager Finance ManagerGeneral category of Projectreport
Location of factory Location of factory
Cost aspect of the project Consultancy fees Consultancy feesFinancing plan Unsecured Unsecured
Select The Blank
Question Longer the duration of production cycle, higher the requirement of ________.
Correct Answer Working capitalYour Answer Working capital
Multiple Choice Single Answer
Question Sanctioned bank limits is categorised under :-
Correct Answer Working capitalYour Answer Production, Sales and Profitability
Select The Blank
Question Cost of fencing comes under the ________ category of the Project report.
Correct Answer Land and site developmentYour Answer Land and site development
True/False
Question Trend projection method is the important technique for forecasting demand.
Correct Answer TrueYour Answer True
True/False
Question The emphasis of a finance manager should be on taking a synergistic view ofthe project rather than looking at it only from the financial aspects.
Correct Answer TrueYour Answer True
Select The Blank
Question ________ in assets involves outflow of funds.
Correct Answer IncreaseYour Answer Increase
Select The Blank
Question The basic difference between the feasibility study report and ________ is thelevel of accuracy and degree of detail.
Correct Answer Detailed Project reportYour Answer Detailed Project report
Multiple Choice Single Answer
Question Delays in infrastructure Development by State Agencies may lead to :-
Correct Answer Cost and time overrunYour Answer Cost and time overrun
Select The Blank
Question Location of the factory comes under the ________ category of the Projectreport.
Correct Answer General
Your Answer General
Multiple Choice Multiple Answer
Question Financing plans consists of :-
Correct Answer Share capital , Term loans , Internal accrualsYour Answer Share capital , Term loans , Internal accruals
Multiple Choice Single Answer
Question Infrastructural projects include :-
Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
True/False
Question Market potential should be determined under the Marketing aspect of theProject report.
Correct Answer TrueYour Answer True
Select The Blank
Question ________ tries to have what the customer will want- where, when, in whatform and at what price.
Correct Answer MarketingYour Answer Marketing
Multiple Choice Single Answer
Question A project objective which states What "achieving it " would cost is known as:-
Correct Answer Finance cost aspectYour Answer Strategic perspective
Multiple Choice Single Answer
Question A project objective which states "What' is to be viewed" is termed as :-
Correct Answer Strategic perspectiveYour Answer Social aspect
True/False
Question Nominal maximum capacity is the capacity that is technically attainable andthis corresponds to the supplier's guaranteed capacity.
Correct Answer TrueYour Answer True
Select The Blank
Question In order to meet the cost of large project, the technique of ________ hasbeen developed so that the financial commitment and risks associated with a project areshared between the project sponsor and the lending institutions.
Correct Answer Limited recourse financingYour Answer Long term financing
Multiple Choice Single Answer
Question The basic characteristic of a project is :-
Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
Multiple Choice Single Answer
Question Past trend method of Commercial appraisal technique is :-
Correct Answer Adopted as a guide depending on the consumption pattern of thesociety as a whole
Your Answer Adopted as a guide depending on the consumption pattern of the societyas a whole
Multiple Choice Single Answer
Question The norms for providing open areas have to be strictly followed for safety oflabour and allow sufficient space for outflow of effluents safely in case of :-
Correct Answer Chemical unitYour Answer Chemical unit
Multiple Choice Single Answer
Question Short supplies of materials may lead to :-
Correct Answer Cost and time overrunYour Answer Cost and time overrun
Select The Blank
Question Investors who invest in the debentures of the company are the ________ ofthe company.
Correct Answer CreditorsYour Answer Creditors
Match The Following
QuestionCorrect AnswerYour Answer
Private investment Power generationProject Time-boundProgramme Not necessarily time boundForeign directinvestment
Machine tools
Multiple Choice Multiple Answer
Question As per the GE's Stop Light Matrix, Products may justify substantialcommitment of funds where there is :-
Correct Answer Strong Business Strength and high Industry attractiveness , AverageBusiness strength and high Industry attractiveness
Your Answer Strong Business Strength and high Industry attractiveness , AverageBusiness strength and high Industry attractiveness
Multiple Choice Multiple Answer
Question Management qualities includes :-
Correct Answer Honesty , Financial resources , InitiativeYour Answer Honesty , Financial resources , Initiative
Multiple Choice Single Answer
Question The industrial concern earned profits by increasing the sales volume underthe :-
Correct Answer Sales conceptYour Answer Sales concept
True/False
Question The 'BCG Matrix 'analysis various products of the organisation in the termsof Business strength and Industry Attractiveness.
Correct Answer FalseYour Answer False
Select The Blank
Question Detailed Project Report is generally prepared from a ________ report withadditional information.
Correct Answer FeasibilityYour Answer Feasibility
Multiple Choice Single Answer
Question Delay in arrival of domestic/foreign machinery and technicians may lead to :-
Correct Answer Cost and time overrunYour Answer Cost and time overrun
True/False
Question Miscellaneous expenditure is written on the asset side of the Balance sheet.
Correct Answer TrueYour Answer True
Multiple Choice Multiple Answer
Question General category of the Project report consists of :-
Correct Answer Name of the Industrial concern , Proposed product , Location of thefactory
Your Answer Name of the Industrial concern , Proposed product , Location of thefactory
Multiple Choice Single Answer
Question A Project is a temporary endeavor to achieve some specific objectives withina :-
Correct Answer Predefined timeYour Answer Predefined time
Multiple Choice Multiple Answer
Question While choosing the location for a project, the following factors should beconsidered :-
Correct Answer Proximity to raw materials and markets , Availability of infrastructure ,Government policies and other factors
Your Answer Proximity to raw materials and markets , Availability of infrastructure ,Government policies and other factors
Multiple Choice Multiple Answer
Question The sources of long term and medium term finance are :-
Correct Answer Equity shares , Public depositYour Answer Equity shares , Public deposit
Multiple Choice Single Answer
Question The cost which change in the same proportion in which the level ofproduction changes is known as :-
Correct Answer Variable costYour Answer Variable cost
Multiple Choice Single Answer
Question The second phase of the technical appraisal which focuses upon appraisingthe likely technical gaps consists of :-
Correct Answer Problems faced during the Construction and Project implementationYour Answer Problems faced during the Construction and Project implementation
Multiple Choice Single Answer
Question The third phase of the technical appraisal which focuses upon appraising thelikely technical gaps consists of :-
Correct Answer Problems pertaining to the period when the project is in operationYour Answer Problems pertaining to the period when the project is in operation
True/FalseQuestion In the BCG Matrix, the key term of Cash Cows require further commitment
of funds.
Correct Answer FalseYour Answer False
Select The BlankQuestion In the GE's Stop Light Matrix, when ________ situation prevails , Products
call for divestment.
Correct Answer Average Business Strength and Low Industry attractivenessYour Answer Average Business Strength and Low Industry attractiveness
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-
Correct Answer That it involves current outlay of funds in expectation of futurebenefits
Your Answer That it involves current outlay of funds in expectation of future benefits
Select The BlankQuestion ________ tries to have what the customer will want- where, when, in what
form and at what price.Correct Answer MarketingYour Answer Finance
Multiple Choice Single AnswerQuestion Financial aspect of Detailed Project report includes :-
Correct Answer Fixation of means of financial structureYour Answer Fixation of means of financial structure
Multiple Choice Single AnswerQuestion A project can be regarded as the sum of the activities directed towards a :-
Correct Answer Specific resultYour Answer Specific result
Multiple Choice Single AnswerQuestion Sewerage and drainage cost of the project is categorised under :-
Correct Answer Building costYour Answer Building cost
Multiple Choice Single AnswerQuestion The BCG Product Portfolio Matrix :-
Correct Answer Is a tool for strategic ( product ) planning and resource allocationYour Answer Is a tool for strategic ( product ) planning and resource allocation
Multiple Choice Single AnswerQuestion End use method of Commercial appraisal technique is :-
Correct Answer A list of industries wherein the product is used is made and quantityand volume is arrived at
Your Answer A list of industries wherein the product is used is made and quantity andvolume is arrived at
Select The BlankQuestion ________ capital represents permanent capital.
Correct Answer EquityYour Answer Debentures
Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-
Correct Answer Linear Relationship , Exponential Relationship , PolynomialRelationship
Your Answer Linear Relationship , Exponential Relationship , Polynomial Relationship
Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any one of the
following basic strategic postures :-
Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture
Select The BlankQuestion ________ in liabilities involves inflow of funds.
Correct Answer IncreaseYour Answer Cash
Select The BlankQuestion ________ occupies a unique position in the macro economic development
which helps in induction of new technology and facilitates, greater efficiency as well ashigher productivity.
Correct Answer InvestmentYour Answer Investment
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-
Correct Answer Project financeYour Answer Project finance
True/FalseQuestion Financial analysis based on accounting ratios will give mis-leading results if
the effects of changes in price level are not taken into account.
Correct Answer TrueYour Answer True
Select The BlankQuestion Excessive expenditures on foreign technicians leads to ________.
Correct Answer Cost and time overrunYour Answer Management problems
Multiple Choice Single AnswerQuestion Appointments made at senior level during the half-year is categorised under
:-Correct Answer Organisation and managementYour Answer Organisation and management
Multiple Choice Single AnswerQuestion Infrastructural projects include :-
Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may lead to :-
Correct Answer Cost and time overrunYour Answer Cost and time overrun
Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify substantial
commitment of funds where there is :-
Correct Answer Strong Business Strength and high Industry attractiveness , AverageBusiness strength and high Industry attractiveness
Your Answer Strong Business Strength and high Industry attractiveness , AverageBusiness strength and high Industry attractiveness
Multiple Choice Single AnswerQuestion The cost of Plant and Machinery may be adjusted for a possible increase
known as :-
Correct Answer EscalationYour Answer Inflation
Multiple Choice Multiple AnswerQuestion Demand technique forecasting of Commercial appraisal includes :-
Correct Answer Future demand of the product , Proper survey of the product , Futureavailability and supply of the product
Your Answer Future demand of the product , Proper survey of the product , Futureavailability and supply of the product
Multiple Choice Single AnswerQuestion The BCG product Portfolio Matrix, General Electric Stop Light Matrix and
Strategic Position and Action Evaluation Model are considered to be highly relevant as :-
Correct Answer Portfolio Planning ToolsYour Answer Portfolio Planning Tools
Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity ________.
Correct Answer DecreasesYour Answer Decreases
Multiple Choice Multiple AnswerQuestion The applications of cash are :-
Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Issue of new machinery
True/FalseQuestion A high debt equity ratio may indicate that the financial stake of the creditors
is more than that of the owners.
Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out of :-
Correct Answer Cash Profits , Shares , DebenturesYour Answer Cash Profits , Shares , Debentures
True/FalseQuestion Ratio analysis is a technique of planning and control.
Correct Answer FalseYour Answer False
True/FalseQuestion Miscellaneous expenditure is written on the asset side of the Balance sheet.
Correct Answer TrueYour Answer False
Select The BlankQuestion Cost of fencing comes under the ________ category of the Project report.
Correct Answer Land and site developmentYour Answer Land and site development
Multiple Choice Single AnswerQuestion The ratio which covers those assets which can be converted into cash
immediately is known as :-
Correct Answer Quick ratioYour Answer Quick ratio
Multiple Choice Single AnswerQuestion The Projects which are undertaken to manufacture certain products which
are being used as raw material by the existing units is known as :-
Correct Answer Backward Integration ProjectsYour Answer Backward Integration Projects
Select The BlankQuestion Retained earnings indicates that whatever profits are earned by the
company are not distributed by it by way of ________ but are kept aside for use in futurefor expansion or other purpose.
Correct Answer DividendYour Answer Dividend
Multiple Choice Multiple AnswerQuestion Time Series Projection Methods of Demand forecasting consists of :-
Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method
True/FalseQuestion Unlike financial projections, there cannot be any fixed, well-recognised or
structure formula/steps for management evaluation/appraisal.
Correct Answer TrueYour Answer True
True/FalseQuestion Production line diagrams show the organisation structure of the project
along with information on location, personnel required for various departments, and theirinter-relationship.
Correct Answer FalseYour Answer False
Select The BlankQuestion ________ is a current asset
Correct Answer Book debtsYour Answer Trade credit
True/FalseQuestion For computing Interest coverage ratio, Profit after Interest and taxes are
taken into account.
Correct Answer FalseYour Answer True
Select The BlankQuestion Details regarding Internal accruals comes under the ________ category of
Project report.
Correct Answer Financing planYour Answer Cost aspect
Multiple Choice Multiple AnswerQuestion Management category of Visit report consists of :-
Correct Answer Managing Director , Institutional nominees , Committees of the boardYour Answer Managing Director , Institutional nominees , Committees of the board
True/FalseQuestion Nominal maximum capacity is the capacity that is technically attainable and
this corresponds to the supplier's guaranteed capacity.
Correct Answer TrueYour Answer False
Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential reserve of cash is
termed as :-
Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets
Multiple Choice Multiple AnswerQuestion The following are the sources of funds :-
Correct Answer Operating Profit , Non operating IncomeYour Answer Operating Profit , Dividends
True/FalseQuestion Change in the project concept itself may lead to cost and time overrun.
Correct Answer TrueYour Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Borrower's contribution towards Working capital is known as :-Correct Answer Margin moneyYour Answer Margin money
Multiple Choice Multiple AnswerQuestion Building cost consists of :-Correct Answer Factory building , Auxiliary buildings , Administrative blockYour Answer Factory building , Auxiliary buildings , Administrative block
Multiple Choice Single AnswerQuestion In BCG Matrix " CASH COWS" indicate :-Correct Answer Products which have high market share but low growth potentialYour Answer Products which have high market share but low growth potential
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Marketing aspects includes :-Correct Answer Demand forecasting , Promotion , DistributionYour Answer Demand forecasting , Promotion , Distribution
Multiple Choice Single AnswerQuestion Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a projectYour Answer The total of all items of outlay associated with a project
True/FalseQuestion In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of
working capital may be high.Correct Answer TrueYour Answer True
True/FalseQuestion Name of the finance manager comes under the Project organisation category of the Project
report.Correct Answer TrueYour Answer True
True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities
before setting up any project.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspectYour Answer Strategic perspective , Time span , Finance cost aspect
Match The FollowingQuestion Correct Answer Your Answer
Management problems Lack of exposure Lack of exposure
Management Quality Initiative Initiative
Management Perception Aspiration level/ conservative Aspiration level/ conservative
Organisational Climate Person oriented Person oriented
Multiple Choice Single AnswerQuestion Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Multiple Choice Single AnswerQuestion BCG Product Portfolio Matrix analyses products on the basis of :-Correct Answer Relative Market share and Industry Growth rateYour Answer Relative Market share and Industry Growth rate
Select The BlankQuestion ________ profitability reduces the strain on working capital.Correct Answer HighYour Answer Stable
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing Project finance financing are
:-Correct Answer Environmental factors , Risk involved , Managerial compensationYour Answer Environmental factors , Risk involved , Managerial compensation
Multiple Choice Single AnswerQuestion "Fly by night" operator mentality is a :-Correct Answer Management qualityYour Answer Management quality
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity ________.Correct Answer DecreasesYour Answer Increases
Multiple Choice Multiple AnswerQuestion Debt Service coverage ratio may be considered to be one of the most important ratios
calculated by the :-Correct Answer Bankers , Financial InstitutionsYour Answer Shareholders , Bankers , Financial Institutions
Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspect
Your Answer Finance cost aspect
True/FalseQuestion A project is unique and no two projects are similar.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Limitations of fund flow statement are :-Correct Answer It does not provide any new information but only rearranges the various facts , It does
not consider non-fund transactionsYour Answer It does not provide any new information but only rearranges the various facts , It does not
consider non-fund transactions , It does not help in determining future requirement of funds
Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses upon appraising the likely technical
gaps consists of :-Correct Answer Problems pertaining to the period when the project is in operationYour Answer Problems pertaining to the period when the project is in operation
Multiple Choice Single AnswerQuestion Receivables is categorised under :-Correct Answer Current assets and liabilitiesYour Answer Current assets and liabilities
Multiple Choice Single AnswerQuestion It is said that a second rate project in the hands of first rate management is better than a first
rate project in the hands of :-Correct Answer Second rate managementYour Answer Second rate management
Select The BlankQuestion The company having ________, is appropriate for the strategic posture of Defensive under the
SPACE approach.Correct Answer Lacks both competitive advantage as well as financial strength and belongs to a not so
attractive industry, operating in an unstable environmentYour Answer Lacks both competitive advantage as well as financial strength and belongs to a not so
attractive industry, operating in an unstable environment
Select The BlankQuestion Excessive expenditures on foreign technicians leads to ________.Correct Answer Cost and time overrunYour Answer Profit maximisation
True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation in the terms of Business
strength and Industry Attractiveness.Correct Answer FalseYour Answer False
Select The BlankQuestion Having decided on the location and product, the promoter takes into account the ________ that
is to be adopted for producing the product.Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology
Multiple Choice Multiple AnswerQuestion Financial and economic aspect of the Visit report consists of :-Correct Answer Company's financial year , Impact of Government policies on company operations ,
Comments on the last published accountsYour Answer Company's financial year , Impact of Government policies on company operations ,
Comments on the last published accounts
True/FalseQuestion Sensitivity analysis consists of assessing the degree of risk.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out of :-Correct Answer Cash Profits , Shares , DebenturesYour Answer Cash Profits , Shares , Debentures
True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline
of a Product Life Cycle.Correct Answer TrueYour Answer True
True/FalseQuestion The construction of National Golden Quadrilateral can be recognised as Project.Correct Answer TrueYour Answer True
Select The BlankQuestion Under the SPACE Model, Customer loyalty is determined under the ________ dimension.Correct Answer Company's competitive advantageYour Answer Company's competitive advantage
True/FalseQuestion The cost factors of the product mixed is also taken into account to arrive at cost at various
levels of production and its cost impact of the manufacturing.Correct Answer TrueYour Answer True
True/FalseQuestion The emphasis of a finance manager should be on taking a synergistic view of the project rather
than looking at it only from the financial aspects.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Miscellaneous fixed assets includes :-Correct Answer CablesYour Answer Cables
Multiple Choice Multiple Answer
Question In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirementYour Answer Quality standards , Raw material requirement , Power / telecom facilities
Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial RelationshipYour Answer Linear Relationship , Exponential Relationship , Polynomial Relationship
True/FalseQuestion Market potential should be determined under the Marketing aspect of the Project report.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Ratio analysis is a widely used tool of :-Correct Answer Financial analysisYour Answer Financial analysis
Multiple Choice Single AnswerQuestion Preoperative expenses includes :-Correct Answer Bank guaranteesYour Answer Bank guarantees
Select The BlankQuestion A Project has a ________ represented by growth, maturity and decay.Correct Answer Life cycleYour Answer Life cycle
True/FalseQuestion If the organisation is a trading organisation, the requirement of working capital will be on the
lower side.Correct Answer FalseYour Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion In the BCG Matrix, the key term of Cash Cows require further commitment
of funds.Correct Answer FalseYour Answer False
Select The BlankQuestion In the GE's Stop Light Matrix, when ________ situation prevails , Products
call for divestment.Correct Answer Average Business Strength and Low Industry attractivenessYour Answer Average Business Strength and Low Industry attractiveness
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future
benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
Select The BlankQuestion ________ tries to have what the customer will want- where, when, in what
form and at what price.Correct Answer MarketingYour Answer Finance
Multiple Choice Single AnswerQuestion Financial aspect of Detailed Project report includes :-Correct Answer Fixation of means of financial structureYour Answer Fixation of means of financial structure
Multiple Choice Single AnswerQuestion A project can be regarded as the sum of the activities directed towards a :-Correct Answer Specific resultYour Answer Specific result
Multiple Choice Single AnswerQuestion Sewerage and drainage cost of the project is categorised under :-Correct Answer Building costYour Answer Building cost
Multiple Choice Single AnswerQuestion The BCG Product Portfolio Matrix :-Correct Answer Is a tool for strategic ( product ) planning and resource allocationYour Answer Is a tool for strategic ( product ) planning and resource allocation
Multiple Choice Single AnswerQuestion End use method of Commercial appraisal technique is :-Correct Answer A list of industries wherein the product is used is made and quantity
and volume is arrived atYour Answer A list of industries wherein the product is used is made and quantity and
volume is arrived at
Select The BlankQuestion ________ capital represents permanent capital.Correct Answer EquityYour Answer Debentures
Match The FollowingQuestion Correct Answer Your Answer
Export market technique of Commercial appraisal Government provides ampleencouragement Government provides ample encouragement
Demand Technique forecasting of Commercial appraisal Future demand of the productFuture demand of the product
Past trend method of Commercial appraisal Adopted as a guide depending on theconsumption pattern of the society as a whole Adopted as a guide depending on theconsumption pattern of the society as a whole
End use method of Commercial appraisal A list of industries wherein the product is usedis made and quantity and volume is arrived at A list of industries wherein the product isused is made and quantity and volume is arrived at
Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial
RelationshipYour Answer Linear Relationship , Exponential Relationship , Polynomial
Relationship
Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any one of the
following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture
Select The BlankQuestion ________ in liabilities involves inflow of funds.Correct Answer Increase
Your Answer Cash
Select The BlankQuestion ________ occupies a unique position in the macro economic development
which helps in induction of new technology and facilitates, greater efficiency as well ashigher productivity.
Correct Answer InvestmentYour Answer Investment
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
True/FalseQuestion Financial analysis based on accounting ratios will give mis-leading results if
the effects of changes in price level are not taken into account.Correct Answer TrueYour Answer True
Select The BlankQuestion Excessive expenditures on foreign technicians leads to ________.Correct Answer Cost and time overrunYour Answer Management problems
Multiple Choice Single AnswerQuestion Appointments made at senior level during the half-year is categorised under
:-Correct Answer Organisation and managementYour Answer Organisation and management
Multiple Choice Single AnswerQuestion Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify substantial
commitment of funds where there is :-Correct Answer Strong Business Strength and high Industry attractiveness , Average
Business strength and high Industry attractiveness
Your Answer Strong Business Strength and high Industry attractiveness , AverageBusiness strength and high Industry attractiveness
Match The FollowingQuestion Correct Answer Your Answer
Source of funds Depreciation Equity capital
Fixed assets Building Building
Current assets Debtors Investment
Current liability Trade credit Debtors
Multiple Choice Single AnswerQuestion The cost of Plant and Machinery may be adjusted for a possible increase
known as :-Correct Answer EscalationYour Answer Inflation
Multiple Choice Multiple AnswerQuestion Demand technique forecasting of Commercial appraisal includes :-Correct Answer Future demand of the product , Proper survey of the product , Future
availability and supply of the productYour Answer Future demand of the product , Proper survey of the product , Future
availability and supply of the product
Multiple Choice Single AnswerQuestion The BCG product Portfolio Matrix, General Electric Stop Light Matrix and
Strategic Position and Action Evaluation Model are considered to be highly relevant as :-Correct Answer Portfolio Planning ToolsYour Answer Portfolio Planning Tools
Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity ________.Correct Answer DecreasesYour Answer Decreases
Multiple Choice Multiple AnswerQuestion The applications of cash are :-Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Issue of new machinery
True/False
Question A high debt equity ratio may indicate that the financial stake of the creditorsis more than that of the owners.
Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out of :-Correct Answer Cash Profits , Shares , DebenturesYour Answer Cash Profits , Shares , Debentures
True/FalseQuestion Ratio analysis is a technique of planning and control.Correct Answer FalseYour Answer False
True/FalseQuestion Miscellaneous expenditure is written on the asset side of the Balance sheet.Correct Answer TrueYour Answer False
Select The BlankQuestion Cost of fencing comes under the ________ category of the Project report.Correct Answer Land and site developmentYour Answer Land and site development
Multiple Choice Single AnswerQuestion The ratio which covers those assets which can be converted into cash
immediately is known as :-Correct Answer Quick ratioYour Answer Quick ratio
Multiple Choice Single AnswerQuestion The Projects which are undertaken to manufacture certain products which are
being used as raw material by the existing units is known as :-Correct Answer Backward Integration ProjectsYour Answer Backward Integration Projects
Select The BlankQuestion Retained earnings indicates that whatever profits are earned by the company
are not distributed by it by way of ________ but are kept aside for use in future forexpansion or other purpose.
Correct Answer DividendYour Answer Dividend
Multiple Choice Multiple AnswerQuestion Time Series Projection Methods of Demand forecasting consists of :-
Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method
True/FalseQuestion Unlike financial projections, there cannot be any fixed, well-recognised or
structure formula/steps for management evaluation/appraisal.Correct Answer TrueYour Answer True
True/FalseQuestion Production line diagrams show the organisation structure of the project along
with information on location, personnel required for various departments, and their inter-relationship.
Correct Answer FalseYour Answer False
Select The BlankQuestion ________ is a current assetCorrect Answer Book debtsYour Answer Trade credit
True/FalseQuestion For computing Interest coverage ratio, Profit after Interest and taxes are taken
into account.Correct Answer FalseYour Answer True
Select The BlankQuestion Details regarding Internal accruals comes under the ________ category of
Project report.Correct Answer Financing planYour Answer Cost aspect
Multiple Choice Multiple AnswerQuestion Management category of Visit report consists of :-Correct Answer Managing Director , Institutional nominees , Committees of the boardYour Answer Managing Director , Institutional nominees , Committees of the board
True/FalseQuestion Nominal maximum capacity is the capacity that is technically attainable and
this corresponds to the supplier's guaranteed capacity.Correct Answer TrueYour Answer False
Multiple Choice Single Answer
Question The ratio that roughly measures the company's potential reserve of cash istermed as :-
Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets
Multiple Choice Multiple AnswerQuestion The following are the sources of funds :-Correct Answer Operating Profit , Non operating IncomeYour Answer Operating Profit , Dividends
True/FalseQuestion Change in the project concept itself may lead to cost and time overrun.Correct Answer TrueYour Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion 1 The advantage of secondary sources of data is that it is readily and
economically available.Correct Answer TrueYour Answer True
True/FalseQuestion2 In small scale organisation, requirement of working capital is quite high due
to high amount of overheads, high buying costs and high selling cost.Correct Answer TrueYour Answer True
True/FalseQuestion3 Banks and Financial Institutions, world-wide, are now financing projects
with strategies and terms that would have been hard to believe/imagine just a few yearsback.
Correct Answer TrueYour Answer True
Select The BlankQuestion 4 ________ is a current assetCorrect Answer Book debtsYour Answer Furniture
Multiple Choice Multiple AnswerQuestion 5 Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial
Relationship
Your Answer Linear Relationship , Exponential Relationship , PolynomialRelationship
Multiple Choice Single AnswerQuestion 6 Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Management problems
Multiple Choice Single AnswerQuestion 7 Technical aspect of detailed project report includes :-Correct Answer Detailed Project EngineeringYour Answer Detailed Project Engineering
Multiple Choice Multiple AnswerQuestion 8 Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured
borrowingYour Answer Preliminary expenses written off , Increase in secured borrowing
Multiple Choice Single AnswerQuestion 9 Delay in arrival of domestic/foreign machinery and technicians may lead to
:-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Select The BlankQuestion 10 A smaller unit into which the overall requirement of capital of a company
is sub-divided is termed as ________.Correct Answer ShareYour Answer Share
Multiple Choice Single AnswerQuestion11 A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective
Multiple Choice Single AnswerQuestion 12 Sewerage and drainage cost of the project is categorised under :-Correct Answer Building costYour Answer Building cost
Multiple Choice Multiple AnswerQuestion13 Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written
offYour Answer Funds from operation , Goodwill written off
Multiple Choice Multiple AnswerQuestion14 In the Detailed Project Report, Management aspects includes :-Correct Answer Determination , Organisation Building , Person / system orientedYour Answer Determination , Organisation Building , Person / system oriented
Select The BlankQuestion15 Short term finance is normally for a period upto ________ year.Correct Answer OneYour Answer One
True/FalseQuestion16 Current assets includes stock-in-process.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion17 The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future
benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
Multiple Choice Multiple AnswerQuestion18 Time Series Projection Methods of Demand forecasting consists of :-Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method
Select The BlankQuestion 19 ________ is a current liability.Correct Answer Trade creditYour Answer Trade credit
True/FalseQuestion20 Managerial problems in a project are the most pervasive.Correct Answer TrueYour Answer True
Select The BlankQuestion21 Longer the duration of production cycle, higher the requirement of
________.Correct Answer Working capitalYour Answer Working capital
Select The BlankQuestion22 Retained earnings is a source of ________ finance.Correct Answer Internal
Your Answer Short term
Select The BlankQuestion23 ________ is the summary of cash book or Receipts and Payments
statement.Correct Answer Cash flow statementYour Answer Trial balance
True/FalseQuestion24 In the BCG Matrix, the key term of Cash Cows require further
commitment of funds.Correct Answer FalseYour Answer True
True/FalseQuestion25 Cost and time overrun of the project may lead to loss on account of lost
market opportunities.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion26 A project objective which states What "achieving it " would cost is known
as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect
Multiple Choice Multiple AnswerQuestion27 Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric methodYour Answer Consumption-level method , Econometric method
Multiple Choice Single AnswerQuestion 28 In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high growth
rateYour Answer Products which enjoy a high market share as well as a high growth rate
Multiple Choice Single AnswerQuestion 29 Psychographic market appraisal answers to :-Correct Answer Why they buy?Your Answer Why they buy?
True/FalseQuestion30 Production line diagrams show the organisation structure of the project
along with information on location, personnel required for various departments, and theirinter-relationship.
Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion31 While choosing the location for a project, the following factors should be
considered :-Correct Answer Proximity to raw materials and markets , Availability of infrastructure
, Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of infrastructure ,
Government policies and other factors
Multiple Choice Single AnswerQuestion32 The cost which change in the same proportion in which the level of
production changes is known as :-Correct Answer Variable costYour Answer Variable cost
Select The BlankQuestion33 Goods purchased on credit ________ in flow of funds.Correct Answer Does not resultYour Answer Decreases
Multiple Choice Multiple AnswerQuestion34 Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Quick ratio
Multiple Choice Single AnswerQuestion35 Appointments made at senior level during the half-year is categorised
under :-Correct Answer Organisation and managementYour Answer Organisation and management
Multiple Choice Single AnswerQuestion36 Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a projectYour Answer The total of all items of outlay associated with a project
Multiple Choice Multiple AnswerQuestion37 Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability , Sales trends
Match The FollowingQuestion38 Correct Answer Your Answer
Source of funds Depreciation Equity capital
Fixed assets Building Building
Current assets Debtors Debtors
Current liability Trade credit Trade credit
Multiple Choice Single AnswerQuestion39 Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Multiple Choice Multiple AnswerQuestion 40 General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location of the
factoryYour Answer Name of the Industrial concern , Proposed product , Location of the
factory
Multiple Choice Multiple AnswerQuestion 41 The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance SheetYour Answer Profit and Loss Account , Balance Sheet
Multiple Choice Single AnswerQuestion42 Short supplies of materials may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Multiple Choice Multiple AnswerQuestion43 After the SPACE chart is constructed, we would normally get any one of
the following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture
Select The BlankQuestion 44 ________ occupies a unique position in the macro economic development
which helps in induction of new technology and facilitates, greater efficiency as well ashigher productivity.
Correct Answer InvestmentYour Answer Marketing
Multiple Choice Single AnswerQuestion45 Infrastructural projects include :-
Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Select The BlankQuestion46 Name and designation of the chief executive comes under the ________
category.Correct Answer GeneralYour Answer General
Match The FollowingQuestion47 Correct Answer Your Answer
Private investment Power generation Machine tools
Project Time -bound Time -bound
Programme Not necessarily time bound Not necessarily time bound
Foreign direct investment Machine tools Power generation
Project Finance _15
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-
Correct Answer To help to understand the changes in assets as well as assetsources which are not revealed by the income statement , Tofind out the uses of loans raised by the business , To indicate thefinancial strength and weakness of the business
Your Answer To find out the uses of loans raised by the business , To help tounderstand the changes in assets as well as asset sourceswhich are not revealed by the income statement , Helps toprepare financial statements
Select The BlankQuestion Inflow of funds may not necessarily result in ________.
Correct Answer Inflow of cash
Your Answer Inflow of cash
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to
as :-Correct Answer Project finance
Your Answer Project finance
True/FalseQuestion The Detailed Project report spells out the modus operandi for the
implementation of the Project and the realization of the Projectobjectives.
Correct Answer True
Your Answer True
Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity
________.Correct Answer Decreases
Your Answer Decreases
Multiple Choice Multiple AnswerQuestion Internal sources of funds are :-
Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwillwritten off
Project Finance _15
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Your Answer Funds from operation , Loss on sale of fixed assets
Multiple Choice Single AnswerQuestion End use method of Commercial appraisal technique is :-
Correct Answer A list of industries wherein the product is used is made andquantity and volume is arrived at
Your Answer A list of industries wherein the product is used is made andquantity and volume is arrived at
Multiple Choice Multiple AnswerQuestion The applications of cash are :-
Correct Answer Purchase of fixed assets , Payment of long term loans
Your Answer Purchase of fixed assets , Payment of long term loans
True/FalseQuestion In small scale organisation, requirement of working capital is
quite high due to high amount of overheads, high buying costsand high selling cost.
Correct Answer True
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Project organisation Finance manager Finance manager
General category ofProject report
Location of factory Location of factory
Cost aspect of the projectreport
Consultancy fees Consultancy fees
Financing plan Unsecured loans Unsecured loans
Select The BlankQuestion Longer the duration of production cycle, higher the requirement
of ________.Correct Answer Working capital
Your Answer Working capital
Multiple Choice Single AnswerQuestion Sanctioned bank limits is categorised under :-
Project Finance _15
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Correct Answer Working capital
Your Answer Production, Sales and Profitability
Select The BlankQuestion Cost of fencing comes under the ________ category of the
Project report.Correct Answer Land and site development
Your Answer Land and site development
True/FalseQuestion Trend projection method is the important technique for
forecasting demand.Correct Answer True
Your Answer True
True/FalseQuestion The emphasis of a finance manager should be on taking a
synergistic view of the project rather than looking at it only fromthe financial aspects.
Correct Answer True
Your Answer True
Select The BlankQuestion ________ in assets involves outflow of funds.
Correct Answer Increase
Your Answer Increase
Select The BlankQuestion The basic difference between the feasibility study report and
________ is the level of accuracy and degree of detail.Correct Answer Detailed Project report
Your Answer Detailed Project report
Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may
lead to :-Correct Answer Cost and time overrun
Your Answer Cost and time overrun
Project Finance _15
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Select The BlankQuestion Location of the factory comes under the ________ category of
the Project report.Correct Answer General
Your Answer General
Multiple Choice Multiple AnswerQuestion Financing plans consists of :-
Correct Answer Share capital , Term loans , Internal accruals
Your Answer Share capital , Term loans , Internal accruals
Multiple Choice Single AnswerQuestion Infrastructural projects include :-
Correct Answer Power Generation and Distribution
Your Answer Power Generation and Distribution
True/FalseQuestion Market potential should be determined under the Marketing
aspect of the Project report.Correct Answer True
Your Answer True
Select The BlankQuestion ________ tries to have what the customer will want- where,
when, in what form and at what price.Correct Answer Marketing
Your Answer Marketing
Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost
is known as :-Correct Answer Finance cost aspect
Your Answer Strategic perspective
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed
as :-
Project Finance _15
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Correct Answer Strategic perspective
Your Answer Social aspect
True/FalseQuestion Nominal maximum capacity is the capacity that is technically
attainable and this corresponds to the supplier's guaranteedcapacity.
Correct Answer True
Your Answer True
Select The BlankQuestion In order to meet the cost of large project, the technique of
________ has been developed so that the financial commitmentand risks associated with a project are shared between theproject sponsor and the lending institutions.
Correct Answer Limited recourse financing
Your Answer Long term financing
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-
Correct Answer That it involves current outlay of funds in expectation of futurebenefits
Your Answer That it involves current outlay of funds in expectation of futurebenefits
Multiple Choice Single AnswerQuestion Past trend method of Commercial appraisal technique is :-
Correct Answer Adopted as a guide depending on the consumption pattern of thesociety as a whole
Your Answer Adopted as a guide depending on the consumption pattern of thesociety as a whole
Multiple Choice Single AnswerQuestion The norms for providing open areas have to be strictly followed
for safety of labour and allow sufficient space for outflow ofeffluents safely in case of :-
Correct Answer Chemical unit
Your Answer Chemical unit
Multiple Choice Single AnswerQuestion Short supplies of materials may lead to :-
Project Finance _15
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Correct Answer Cost and time overrun
Your Answer Cost and time overrun
Select The BlankQuestion Investors who invest in the debentures of the company are the
________ of the company.Correct Answer Creditors
Your Answer Creditors
Match The FollowingQuestion Correct Answer Your Answer
Private investment Power generation Power generation
Project Time -bound Time -bound
Programme Not necessarily timebound
Not necessarily time bound
Foreign direct investment Machine tools Machine tools
Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify
substantial commitment of funds where there is :-Correct Answer Strong Business Strength and high Industry attractiveness ,
Average Business strength and high Industry attractivenessYour Answer Strong Business Strength and high Industry attractiveness ,
Average Business strength and high Industry attractiveness
Multiple Choice Multiple AnswerQuestion Management qualities includes :-
Correct Answer Honesty , Financial resources , Initiative
Your Answer Honesty , Financial resources , Initiative
Multiple Choice Single AnswerQuestion The industrial concern earned profits by increasing the sales
volume under the :-Correct Answer Sales concept
Your Answer Sales concept
True/False
Project Finance _15
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Question The 'BCG Matrix 'analysis various products of the organisation inthe terms of Business strength and Industry Attractiveness.
Correct Answer False
Your Answer False
Select The BlankQuestion Detailed Project Report is generally prepared from a ________
report with additional information.Correct Answer Feasibility
Your Answer Feasibility
Multiple Choice Single AnswerQuestion Delay in arrival of domestic/foreign machinery and technicians
may lead to :-Correct Answer Cost and time overrun
Your Answer Cost and time overrun
True/FalseQuestion Miscellaneous expenditure is written on the asset side of the
Balance sheet.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion General category of the Project report consists of :-
Correct Answer Name of the Industrial concern , Proposed product , Location ofthe factory
Your Answer Name of the Industrial concern , Proposed product , Location ofthe factory
Multiple Choice Single AnswerQuestion A Project is a temporary endeavor to achieve some specific
objectives within a :-Correct Answer Predefined time
Your Answer Predefined time
Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors
should be considered :-Correct Answer Proximity to raw materials and markets , Availability of
infrastructure , Government policies and other factors
Project Finance _15
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Your Answer Proximity to raw materials and markets , Availability ofinfrastructure , Government policies and other factors
Multiple Choice Multiple AnswerQuestion The sources of long term and medium term finance are :-
Correct Answer Equity shares , Public deposit
Your Answer Equity shares , Public deposit
Multiple Choice Single AnswerQuestion The cost which change in the same proportion in which the level
of production changes is known as :-Correct Answer Variable cost
Your Answer Variable cost
Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon
appraising the likely technical gaps consists of :-Correct Answer Problems faced during the Construction and Project
implementationYour Answer Problems faced during the Construction and Project
implementation
Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses upon
appraising the likely technical gaps consists of :-Correct Answer Problems pertaining to the period when the project is in
operationYour Answer Problems pertaining to the period when the project is in
operation
Project Finance _16
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion Depreciation is sometimes treated as ________ funds.
Correct Answer Source
Your Answer Source
Multiple Choice Multiple AnswerQuestion External sources of cash are as follows :-
Correct Answer Issue of new shares , Long term loans , Short termborrowings
Your Answer Long term loans , Short term borrowings , Issue of newshares
Multiple Choice Single AnswerQuestion In BCG Matrix " CASH COWS" indicate :-
Correct Answer Products which have high market share but low growthpotential
Your Answer Products which have high market share but low growthpotential
Select The BlankQuestion ________ tries to have what the customer will want- where,
when, in what form and at what price.Correct Answer Marketing
Your Answer Marketing
Multiple Choice Multiple AnswerQuestion Financial and economic aspect of the Visit report consists of
:-Correct Answer Company's financial year , Impact of Government policies
on company operations , Comments on the last publishedaccounts
Your Answer Company's financial year , Impact of Government policieson company operations , Comments on the last publishedaccounts
True/FalseQuestion Ratio should be computed on the basis of inter-related
figures which have a cause and effect relationship.
Project Finance _16
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Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Preoperative expenses includes :-
Correct Answer Bank guarantees
Your Answer Bank guarantees
Select The BlankQuestion Retained earnings is a source of ________ finance.
Correct Answer Internal
Your Answer Internal
Select The BlankQuestion ________ profitability reduces the strain on working capital.
Correct Answer High
Your Answer High
Multiple Choice Multiple AnswerQuestion The data for ratio analysis is obtained from :-
Correct Answer Profit and Loss Account , Balance Sheet
Your Answer Profit and Loss Account , Balance Sheet
True/FalseQuestion Cost under-estimation at the project preparation and
evaluation stage leads to cost and time over run.Correct Answer True
Your Answer False
Multiple Choice Single AnswerQuestion Cost of laying roads comes under :-
Correct Answer Land and site cost
Your Answer Preoperative cost
Project Finance _16
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Multiple Choice Multiple AnswerQuestion Ratios relating to working capital are :-
Correct Answer Current ratio , Internal measure , Quick ratio
Your Answer Current ratio , Internal measure , Quick ratio
True/FalseQuestion A project is unique and no two projects are similar.
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Borrower's contribution towards Working capital is known
as :-Correct Answer Margin money
Your Answer Margin money
Multiple Choice Multiple AnswerQuestion General category of the Project report consists of :-
Correct Answer Name of the Industrial concern , Proposed product ,Location of the factory
Your Answer Name of the Industrial concern , Proposed product ,Location of the factory
Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following
dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspect
Your Answer Time span , Finance cost aspect , Strategic perspective
Multiple Choice Single AnswerQuestion Cost of overheads include :-
Correct Answer Cost of repairs and maintenance
Your Answer Cost of repairs and maintenance
Multiple Choice Single AnswerQuestion Short supplies of materials may lead to :-
Project Finance _16
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Correct Answer Cost and time overrun
Your Answer Cost and time overrun
True/FalseQuestion Unlike financial projections, there cannot be any fixed,
well-recognised or structure formula/steps for managementevaluation/appraisal.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Management qualities includes :-
Correct Answer Honesty , Financial resources , Initiative
Your Answer Honesty , Financial resources , Initiative
Match The FollowingQuestion Correct Answer Your Answer
Preliminary and capitalissue expenses
Brokerage andcommission
Foundation and erectioncharges
Land and sitedevelopment cost
Cost of laying roads Brokerage andcommission
Building cost Cost of factory building Cost of factory building
Plant and machinerycost
Foundation anderection charges
Cost of laying roads
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-
Correct Answer That it involves current outlay of funds in expectation offuture benefits
Your Answer That it involves current outlay of funds in expectation offuture benefits
Select The BlankQuestion ________ capital represents permanent capital.
Correct Answer Equity
Your Answer Equity
Project Finance _16
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Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify
substantial commitment of funds where there is :-Correct Answer Strong Business Strength and high Industry attractiveness ,
Average Business strength and high Industry attractivenessYour Answer Strong Business Strength and high Industry attractiveness ,
Average Business strength and high Industry attractiveness
Multiple Choice Single AnswerQuestion The entire life of the project is taken into account under
Correct Answer Average rate of return method
Your Answer Pay back method
Select The BlankQuestion ________ in liabilities involves inflow of funds.
Correct Answer Increase
Your Answer Increase
Multiple Choice Single AnswerQuestion BCG Product Portfolio Matrix analyses products on the
basis of :-Correct Answer Relative Market share and Industry Growth rate
Your Answer Relative Market share and Industry Growth rate
True/FalseQuestion A high debt equity ratio may indicate that the financial stake
of the creditors is more than that of the owners.Correct Answer True
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Project Financing Help improvingCorporate Return onEquity
Help improvingCorporate Return onEquity
Finance in internationalfinancial markets
Issue of Euro bonds World Bank
Project Finance _16
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International financialinstitutions
World Bank Issue of Euro bonds
Policy of Liberalisation,Privatisation andGlobalisation
Increasing emphasis onthe Private initiative
Increasing emphasis onthe Private initiative
True/FalseQuestion Land and site development comes under the cost aspect of
the Project report.Correct Answer True
Your Answer True
Select The BlankQuestion In order to meet the cost of large project, the technique of
________ has been developed so that the financialcommitment and risks associated with a project are sharedbetween the project sponsor and the lending institutions.
Correct Answer Limited recourse financing
Your Answer Limited recourse financing
Multiple Choice Multiple AnswerQuestion Debt Service coverage ratio may be considered to be one of
the most important ratios calculated by the :-Correct Answer Bankers , Financial Institutions
Your Answer Bankers , Financial Institutions
True/FalseQuestion Debt Equity ratio is a 'Solvency ratio'.
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Technical aspect of detailed project report includes :-
Correct Answer Detailed Project Engineering
Your Answer Detailed Project Engineering
True/False
Project Finance _16
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Question Cost and time overrun of the project may lead to loss onaccount of lost market opportunities.
Correct Answer True
Your Answer True
Select The BlankQuestion A smaller unit into which the overall requirement of capital
of a company is sub-divided is termed as ________.Correct Answer Share
Your Answer Share
True/FalseQuestion There is a need for studying Project finance both for the
lenders as well as the borrowers as both of them have equalstake in making the Project a success.
Correct Answer True
Your Answer True
Select The BlankQuestion ________ in assets involves outflow of funds.
Correct Answer Increase
Your Answer Increase
Multiple Choice Multiple AnswerQuestion Production and sales aspect of Visit report consists of :-
Correct Answer Utilisation of installed capacity , Input availability , Salestrends
Your Answer Utilisation of installed capacity , Input availability , Salestrends
Multiple Choice Single AnswerQuestion The rate of discount which would equate the present value
of investments to the present value of benefits over the lifeof the project is known as :-
Correct Answer Internal rate of return
Your Answer Internal rate of return
Select The Blank
Project Finance _16
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Question ________ is a current asset
Correct Answer Book debts
Your Answer Book debts
Multiple Choice Multiple AnswerQuestion Building cost consists of :-
Correct Answer Factory building , Auxiliary buildings , Administrativeblock
Your Answer Factory building , Auxiliary buildings , Administrativeblock
True/FalseQuestion Nominal maximum capacity is the capacity that is
technically attainable and this corresponds to the supplier'sguaranteed capacity.
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion In the Cash flow statement, the sources of funds include
Correct Answer Share Issue
Your Answer Share Issue
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be
financed out of :-Correct Answer Cash Profits , Shares , Debentures
Your Answer Cash Profits , Shares , Debentures
Select The BlankQuestion Inflow of funds may not necessarily result in ________.
Correct Answer Inflow of cash
Your Answer Inflow of cash
Project Finance _17
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Borrower's contribution towards Working capital is known as :-Correct Answer Margin moneyYour Answer Margin money
Multiple Choice Multiple AnswerQuestion Building cost consists of :-Correct Answer Factory building , Auxiliary buildings , Administrative blockYour Answer Factory building , Auxiliary buildings , Administrative block
Multiple Choice Single AnswerQuestion In BCG Matrix " CASH COWS" indicate :-Correct Answer Products which have high market share but low growth potentialYour Answer Products which have high market share but low growth potential
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Marketing aspects includes :-Correct Answer Demand forecasting , Promotion , DistributionYour Answer Demand forecasting , Promotion , Distribution
Multiple Choice Single AnswerQuestion Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a projectYour Answer The total of all items of outlay associated with a project
True/FalseQuestion In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of
working capital may be high.Correct Answer TrueYour Answer True
True/FalseQuestion Name of the finance manager comes under the Project organisation category of the Project
report.Correct Answer TrueYour Answer True
True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities
before setting up any project.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspectYour Answer Strategic perspective , Time span , Finance cost aspect
Match The FollowingQuestion Correct Answer Your Answer
Management problems Lack of exposure Lack of exposure
Management Quality Initiative Initiative
Project Finance _17
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Management Perception Aspiration level/ conservative Aspiration level/ conservative
Organisational Climate Person oriented Person oriented
Multiple Choice Single AnswerQuestion Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Multiple Choice Single AnswerQuestion BCG Product Portfolio Matrix analyses products on the basis of :-Correct Answer Relative Market share and Industry Growth rateYour Answer Relative Market share and Industry Growth rate
Select The BlankQuestion ________ profitability reduces the strain on working capital.Correct Answer HighYour Answer Stable
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing Project finance financing are
:-Correct Answer Environmental factors , Risk involved , Managerial compensationYour Answer Environmental factors , Risk involved , Managerial compensation
Multiple Choice Single AnswerQuestion "Fly by night" operator mentality is a :-Correct Answer Management qualityYour Answer Management quality
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity ________.Correct Answer DecreasesYour Answer Increases
Multiple Choice Multiple AnswerQuestion Debt Service coverage ratio may be considered to be one of the most important ratios
calculated by the :-Correct Answer Bankers , Financial InstitutionsYour Answer Shareholders , Bankers , Financial Institutions
Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspect
Project Finance _17
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Your Answer Finance cost aspect
True/FalseQuestion A project is unique and no two projects are similar.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Limitations of fund flow statement are :-Correct Answer It does not provide any new information but only rearranges the various facts , It does
not consider non-fund transactionsYour Answer It does not provide any new information but only rearranges the various facts , It does not
consider non-fund transactions , It does not help in determining future requirement of funds
Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses upon appraising the likely technical
gaps consists of :-Correct Answer Problems pertaining to the period when the project is in operationYour Answer Problems pertaining to the period when the project is in operation
Multiple Choice Single AnswerQuestion Receivables is categorised under :-Correct Answer Current assets and liabilitiesYour Answer Current assets and liabilities
Multiple Choice Single AnswerQuestion It is said that a second rate project in the hands of first rate management is better than a first
rate project in the hands of :-Correct Answer Second rate managementYour Answer Second rate management
Select The BlankQuestion The company having ________, is appropriate for the strategic posture of Defensive under the
SPACE approach.Correct Answer Lacks both competitive advantage as well as financial strength and belongs to a not so
attractive industry, operating in an unstable environmentYour Answer Lacks both competitive advantage as well as financial strength and belongs to a not so
attractive industry, operating in an unstable environment
Select The BlankQuestion Excessive expenditures on foreign technicians leads to ________.Correct Answer Cost and time overrunYour Answer Profit maximisation
True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation in the terms of Business
strength and Industry Attractiveness.Correct Answer FalseYour Answer False
Select The BlankQuestion Having decided on the location and product, the promoter takes into account the ________ that
is to be adopted for producing the product.Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology
Project Finance _17
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Multiple Choice Multiple AnswerQuestion Financial and economic aspect of the Visit report consists of :-Correct Answer Company's financial year , Impact of Government policies on company operations ,
Comments on the last published accountsYour Answer Company's financial year , Impact of Government policies on company operations ,
Comments on the last published accounts
True/FalseQuestion Sensitivity analysis consists of assessing the degree of risk.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out of :-Correct Answer Cash Profits , Shares , DebenturesYour Answer Cash Profits , Shares , Debentures
True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline
of a Product Life Cycle.Correct Answer TrueYour Answer True
True/FalseQuestion The construction of National Golden Quadrilateral can be recognised as Project.Correct Answer TrueYour Answer True
Select The BlankQuestion Under the SPACE Model, Customer loyalty is determined under the ________ dimension.Correct Answer Company's competitive advantageYour Answer Company's competitive advantage
True/FalseQuestion The cost factors of the product mixed is also taken into account to arrive at cost at various
levels of production and its cost impact of the manufacturing.Correct Answer TrueYour Answer True
True/FalseQuestion The emphasis of a finance manager should be on taking a synergistic view of the project rather
than looking at it only from the financial aspects.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Miscellaneous fixed assets includes :-Correct Answer CablesYour Answer Cables
Multiple Choice Multiple Answer
Project Finance _17
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Question In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirementYour Answer Quality standards , Raw material requirement , Power / telecom facilities
Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial RelationshipYour Answer Linear Relationship , Exponential Relationship , Polynomial Relationship
True/FalseQuestion Market potential should be determined under the Marketing aspect of the Project report.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Ratio analysis is a widely used tool of :-Correct Answer Financial analysisYour Answer Financial analysis
Multiple Choice Single AnswerQuestion Preoperative expenses includes :-Correct Answer Bank guaranteesYour Answer Bank guarantees
Select The BlankQuestion A Project has a ________ represented by growth, maturity and decay.Correct Answer Life cycleYour Answer Life cycle
True/FalseQuestion If the organisation is a trading organisation, the requirement of working capital will be on the
lower side.Correct Answer FalseYour Answer True
Project Finance _18
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion The sources of long term and medium term finance are :-
Correct Answer Public deposit , Equity shares
Your Answer Equity shares , Bridge loan , Working capital loan
Multiple Choice Multiple AnswerQuestion Disposition of funds includes :-
Correct Answer Increase in working capital , Preliminary expenses , Dividend
Your Answer Increase in working capital , Dividend , Preliminary expenseswritten off
Select The BlankQuestion The company having ________, is appropriate for the strategic
posture of Conservative under the SPACE approach.Correct Answer Limited competitive advantage, belonging to a not so attractive
industry but enjoying financial strength and operating in arelatively stable environment
Your Answer Limited financial strength, enjoying competitive advantage,belonging to attractive industry and operating in a relativelyvolatile environment
Select The BlankQuestion A market survey generally is a ________ survey.
Correct Answer Sample
Your Answer Sample
Multiple Choice Single AnswerQuestion The ratio which covers those assets which can be converted into
cash immediately is known as :-Correct Answer Quick ratio
Your Answer Quick ratio
Multiple Choice Single AnswerQuestion Delay in arrival of domestic/foreign machinery and technicians
may lead to :-Correct Answer Cost and time overrun
Your Answer Cost and time overrun
Project Finance _18
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Multiple Choice Multiple AnswerQuestion Casual methods of Demand forecasting consists of :-
Correct Answer Consumption-level method , Econometric method
Your Answer Consumption-level method , Econometric method
Select The BlankQuestion Having decided on the location and product, the promoter takes
into account the ________ that is to be adopted for producingthe product.
Correct Answer Manufacturing process and technology
Your Answer Manufacturing process and technology
Multiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-
Correct Answer To find out the uses of loans raised by the business , To indicatethe financial strength and weakness of the business , To help tounderstand the changes in assets as well as asset sourceswhich are not revealed by the income statement
Your Answer To find out the uses of loans raised by the business , To help tounderstand the changes in assets as well as asset sourceswhich are not revealed by the income statement , Helps toprepare financial statements
Multiple Choice Multiple AnswerQuestion The data for ratio analysis is obtained from :-
Correct Answer Profit and Loss Account , Balance Sheet
Your Answer Profit and Loss Account , Balance Sheet , Cash flow statement
Select The BlankQuestion ________ in assets involves outflow of funds.
Correct Answer Increase
Your Answer Increase
Multiple Choice Single AnswerQuestion Technology, design, layout of the plant as well as inputs and
infrastructural facilities are to be considered under :-Correct Answer Technical appraisal
Your Answer Technical appraisal
Project Finance _18
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True/FalseQuestion The Detailed Project report must indicate the gestation period of
the project.Correct Answer True
Your Answer False
True/FalseQuestion Interest and Dividend are to be considered while calculating
Operating ratio.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Short supplies of materials may lead to :-
Correct Answer Cost and time overrun
Your Answer Cost and time overrun
True/FalseQuestion Ratio should be computed on the basis of inter-related figures
which have a cause and effect relationship.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost
is known as :-Correct Answer Finance cost aspect
Your Answer Finance cost aspect
Select The BlankQuestion More accurate the estimation of the level of current assets and
current liabilities, more accurate will be estimation of therequirement of ________.
Correct Answer Working capital
Your Answer Working capital
Multiple Choice Single AnswerQuestion The rate of discount which would equate the present value of
investments to the present value of benefits over the life of the
Project Finance _18
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project is known as :-
Correct Answer Internal rate of return
Your Answer Net Present value
Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while
assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensation
Your Answer Environmental factors , Risk involved , Political issues
Match The FollowingQuestion Correct Answer Your Answer
Private investment Power generation Nearness to market
Project Time -bound Time -bound
Programme Not necessarily timebound
Not necessarily time bound
Foreign direct investment Machine tools Power generation
True/FalseQuestion The advantage of secondary sources of data is that it is readily
and economically available.Correct Answer True
Your Answer False
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed
as :-Correct Answer Strategic perspective
Your Answer Strategic perspective
Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions
viz.:Correct Answer Strategic perspective , Time span , Finance cost aspect
Your Answer Strategic perspective , Time span , Finance cost aspect
True/False
Project Finance _18
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Question A project is unique and no two projects are similar.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The sources of cash are :-
Correct Answer Cash from operations , Sale of machinery , Issue of new shares
Your Answer Cash from operations , Sale of machinery , Issue of new shares
Multiple Choice Single AnswerQuestion Profit is the result of customer satisfaction, indeed customer
delight under the :-Correct Answer Marketing concept
Your Answer Marketing concept
Multiple Choice Multiple AnswerQuestion Management qualities includes :-
Correct Answer Honesty , Financial resources , Initiative
Your Answer Honesty , Financial resources , Initiative
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-
Correct Answer That it involves current outlay of funds in expectation of futurebenefits
Your Answer That it involves current outlay of funds in expectation of futurebenefits
Select The BlankQuestion ________ is the summary of cash book or Receipts and
Payments statement.Correct Answer Cash flow statement
Your Answer Cash flow statement
Select The BlankQuestion Under the SPACE Model, Customer loyalty is determined under
the ________ dimension.Correct Answer Company's competitive advantage
Your Answer Company's competitive advantage
Project Finance _18
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True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation in
the terms of Business strength and Industry Attractiveness.Correct Answer False
Your Answer False
Select The BlankQuestion A smaller unit into which the overall requirement of capital of a
company is sub-divided is termed as ________.Correct Answer Share
Your Answer Share
Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify
substantial commitment of funds where there is :-Correct Answer Strong Business Strength and high Industry attractiveness ,
Average Business strength and high Industry attractivenessYour Answer Average Business Strength and Medium Industry Attractiveness
, Average Business strength and high Industry attractiveness ,Average Business Strength and Low Industry attractiveness
Multiple Choice Single AnswerQuestion The ratio which indicates the ability of the company to meet
current obligations is termed as :-Correct Answer Current ratio
Your Answer Current ratio
True/FalseQuestion The General Electric Company incorporated in the USA, is highly
respected for the sophistication, maturity and quality in itsplanning systems.
Correct Answer True
Your Answer False
Select The BlankQuestion Inflow of funds may not necessarily result in ________.
Correct Answer Inflow of cash
Your Answer Outflow of cash
Match The Following
Project Finance _18
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Question Correct Answer Your Answer
Current ratio Liquidity ratio Current liability
Debt-Equity ratio Solvency ratio Debt
External liabilities Debt Relationship between NetProfit after taxes and totalshareholders funds
Shareholders funds Equity Equity
True/FalseQuestion There is a need for studying Project finance both for the lenders
as well as the borrowers as both of them have equal stake inmaking the Project a success.
Correct Answer True
Your Answer True
Select The BlankQuestion Sometimes the term ________ is interpreted as cash equivalent
i.e. cash and marketable securities.Correct Answer Fund
Your Answer Investment
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to
as :-Correct Answer Project finance
Your Answer Balance Sheet
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Management aspects includes :-
Correct Answer Determination , Organisation Building , Person / system oriented
Your Answer Determination , Organisation Building , Person / system oriented
Select The BlankQuestion Depreciation is sometimes treated as ________ funds.
Correct Answer Source
Your Answer Source
Project Finance _18
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True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from
Pollution Control Authorities before setting up any project.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion In BCG Matrix "QUESTION MARKS" indicate :-
Correct Answer Products which have high growth potential but low market share
Your Answer Products which have high growth potential but low market share
True/FalseQuestion Production line diagrams show the organisation structure of the
project along with information on location, personnel required forvarious departments, and their inter-relationship.
Correct Answer False
Your Answer True
Project Finance _19
- 1 -
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion ________ is a current liability.Correct Answer Trade creditYour Answer Trade credit
Multiple Choice Multiple AnswerQuestion Marketing category of the Project report consists of :-Correct Answer Target market , Market potential , Pricing policyYour Answer Target market , Market potential , Pricing policy
Select The BlankQuestion Under the SPACE Model, Customer loyalty is determined under the ________
dimension.Correct Answer Company's competitive advantageYour Answer Company's competitive advantage
Multiple Choice Single AnswerQuestion Sources of funds include :-Correct Answer Increase in secured borrowingYour Answer Increase in secured borrowing
True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from Pollution Control
Authorities before setting up any project.Correct Answer TrueYour Answer False
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective
Select The BlankQuestion ________ tries to have what the customer will want- where, when, in what form and at
what price.Correct Answer MarketingYour Answer Marketing
True/FalseQuestion Debt Service Coverage Ratio is one of the most important ratios calculated by the
bankers or financial institutions giving long term finance to the organisation.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Management qualities includes :-Correct Answer Honesty , Financial resources , InitiativeYour Answer Honesty , Financial resources , Initiative
Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon appraising the likely
technical gaps consists of :-Correct Answer Problems faced during the Construction and Project implementationYour Answer Problems faced during the Construction and Project implementation
Project Finance _19
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True/FalseQuestion A project is unique and no two projects are similar.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Land and site development cost includes cost of :-Correct Answer GatesYour Answer Gates
Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect
Select The BlankQuestion ________ in assets involves outflow of funds.Correct Answer IncreaseYour Answer Increase
Match The FollowingQuestion Correct Answer Your Answer
Management problems Lack of exposure Lack of exposure
Management Quality Initiative Initiative
Management Perception Aspiration level/ conservative Aspiration level/ conservative
Organisational Climate Person oriented Person oriented
Match The FollowingQuestion Correct Answer Your Answer
Source of funds Depreciation Equity capital
Fixed assets Building Building
Current assets Debtors Debtors
Current liability Trade credit Trade credit
Multiple Choice Single AnswerQuestion Disposal of fixed assets is categorised under :-Correct Answer MiscellaneousYour Answer Miscellaneous
True/FalseQuestion The emphasis of a finance manager should be on taking a synergistic view of the
project rather than looking at it only from the financial aspects.Correct Answer TrueYour Answer True
Project Finance _19
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Multiple Choice Single AnswerQuestion Geographic market appraisal answers to :-Correct Answer Where do the customers live?Your Answer Where do the customers live?
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Select The BlankQuestion ________ occupies a unique position in the macro economic development which
helps in induction of new technology and facilitates, greater efficiency as well as higherproductivity.
Correct Answer InvestmentYour Answer Production
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
Multiple Choice Single AnswerQuestion Pre-operative expenses include :-Correct Answer Interest on deferred paymentsYour Answer Interest on deferred payments
Multiple Choice Multiple AnswerQuestion Advantages of fund flow statement are :-Correct Answer It determines financial consequences of the business operations , It enables
the firm to plan its financial resources properly , It helps as a reliable guide for the futurerequirement of funds
Your Answer It determines financial consequences of the business operations , It considersnon-fund transactions , It enables the firm to plan its financial resources properly
True/FalseQuestion Managerial problems in a project are the most pervasive.Correct Answer TrueYour Answer True
True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are generally during the stage of
Decline of a Product Life Cycle.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The applications of cash are :-Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Payment of long term loans , Issue of new machinery
True/FalseQuestion Debt Equity ratio is a 'Solvency ratio'.Correct Answer TrueYour Answer True
Project Finance _19
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True/FalseQuestion Current assets includes stock-in-process.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspectYour Answer Strategic perspective , Time span , Finance cost aspect
Multiple Choice Single AnswerQuestion Liabilities side of Balance sheet includes :-Correct Answer Unsecured loansYour Answer Unsecured loans
Multiple Choice Single AnswerQuestion The rate of discount which would equate the present value of investments to the
present value of benefits over the life of the project is known as :-Correct Answer Internal rate of returnYour Answer Internal rate of return
Select The BlankQuestion A Project has a ________ represented by growth, maturity and decay.Correct Answer Life cycleYour Answer Life cycle
Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any one of the following
basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture
Select The BlankQuestion ________ is the summary of cash book or Receipts and Payments statement.Correct Answer Cash flow statementYour Answer Cash flow statement
Multiple Choice Single AnswerQuestion The point at which the unit neither earns profit nor incurs loss is known as :-Correct Answer Break Even PointYour Answer Break Even Point
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Marketing aspects includes :-Correct Answer Demand forecasting , Promotion , DistributionYour Answer Demand forecasting , Promotion , Distribution
Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing Project finance
financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensationYour Answer Environmental factors , Risk involved , Managerial compensation
Multiple Choice Multiple AnswerQuestion Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric method
Project Finance _19
- 5 -
Your Answer Consumption-level method , Econometric method
Select The BlankQuestion Under ________ method, the forecasts are modified in the light of observed errors.Correct Answer Exponential smoothingYour Answer Exponential smoothing
Multiple Choice Multiple AnswerQuestion Provision for tax can be treated as :-Correct Answer Item of current liabilities , Added back to the profit as per profit and loss
account to arrive at operating profitsYour Answer Added back to the profit as per profit and loss account to arrive at operating
profits , Item of current assets , Item of working capital
Select The BlankQuestion Retained earnings indicates that whatever profits are earned by the company are not
distributed by it by way of ________ but are kept aside for use in future for expansion or otherpurpose.
Correct Answer DividendYour Answer Dividend
Multiple Choice Single AnswerQuestion Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential reserve of cash is termed as
:-Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets
Select The BlankQuestion Name and designation of the chief executive comes under the ________ category.Correct Answer GeneralYour Answer General
Multiple Choice Single AnswerQuestion Miscellaneous fixed assets includes :-Correct Answer CablesYour Answer Cables
Multiple Choice Single AnswerQuestion In the Cash flow statement, the sources of funds includeCorrect Answer Share IssueYour Answer Share Issue
Project Finance _20
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion Land and site development comes under the cost aspect of the Project report.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Location of the factory comes under the :-Correct Answer General categoryYour Answer General category
Match The FollowingQuestion Correct Answer Your Answer
Project appraisal It is the evaluation of project from technical, market, financial, economic andsocial perspective before committing funds for investment It is a preliminary assessment of theproject idea to determine whether or not the investment opportunity is promising
Program It is large in scope, is activity oriented and is not necessarily time bound It is large inscope, is activity oriented and is not necessarily time bound
Project It is one-shot, time-limited, goal oriented, major undertaking requiring the commitment ofvaried skills and resources It deals with the impact of the investment project on people and theirlives
Pre-feasibility study It is a preliminary assessment of the project idea to determine whether or notthe investment opportunity is promising It is one-shot, time-limited, goal oriented, majorundertaking requiring the commitment of varied skills and resources
Multiple Choice Single AnswerQuestion The sources of funding have expanded from banks, insurance companies and
multilateral agencies to include the :-Correct Answer Capital marketYour Answer Debt market
Multiple Choice Single AnswerQuestion Cost of overheads include :-Correct Answer Cost of repairs and maintenanceYour Answer Cost of electricity
True/FalseQuestion The Detailed Project report spells out the modus operandi for the implementation of
the Project and the realization of the Project objectives.Correct Answer TrueYour Answer True
True/FalseQuestion Debt Service means payment of installments and interest against an amount
borrowed as per terms of loan.Correct Answer TrueYour Answer True
True/False
Project Finance _20
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Question The ratios of one organisation compared with the ratios of the same organisation istermed as inter-firm comparison.
Correct Answer FalseYour Answer False
Select The BlankQuestion Depreciation is sometimes treated as ________ funds.Correct Answer SourceYour Answer Application
Select The BlankQuestion Excessive expenditures on foreign technicians leads to ________.Correct Answer Cost and time overrunYour Answer Management problems
Multiple Choice Multiple AnswerQuestion The Key terms used in the BCG Product Portfolio matrix are :-Correct Answer Stars , Question marksYour Answer Stars , Question marks , Invest
True/FalseQuestion Sensitivity analysis consists of assessing the degree of risk.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance SheetYour Answer Profit and Loss Account , Auditors report , Balance Sheet
Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial RelationshipYour Answer Linear Relationship , Chain ratio Relationship , Exponential Relationship
Multiple Choice Single AnswerQuestion Delay in arrival of domestic/foreign machinery and technicians may lead to :-Correct Answer Cost and time overrunYour Answer Profit maximisation
Multiple Choice Single AnswerQuestion Past trend method of Commercial appraisal technique is :-Correct Answer Adopted as a guide depending on the consumption pattern of the society as a
wholeYour Answer Adopted as a guide depending on the consumption pattern of the society as a
whole
Multiple Choice Multiple AnswerQuestion Limitations of fund flow statement are :-Correct Answer It does not provide any new information but only rearranges the various facts ,
It does not consider non-fund transactionsYour Answer It does not consider non-fund transactions , It does not help in determining future
requirement of funds , It does not provide any new information but only rearranges the variousfacts
Select The Blank
Project Finance _20
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Question As the plant capacity increase, the investment cost unit capacity ________.Correct Answer DecreasesYour Answer Increases
Multiple Choice Single AnswerQuestion Preoperative expenses includes :-Correct Answer Bank guaranteesYour Answer Brokerage on capital issue
Multiple Choice Single AnswerQuestion Short supplies of materials may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Select The BlankQuestion In order to meet the cost of large project, the technique of ________ has been
developed so that the financial commitment and risks associated with a project are sharedbetween the project sponsor and the lending institutions.
Correct Answer Limited recourse financingYour Answer Limited recourse financing
True/FalseQuestion For computing Interest coverage ratio, Profit after Interest and taxes are taken into
account.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion The ratio which covers those assets which can be converted into cash immediately is
known as :-Correct Answer Quick ratioYour Answer Current ratio
Multiple Choice Multiple AnswerQuestion Management category of Visit report consists of :-Correct Answer Managing Director , Institutional nominees , Committees of the boardYour Answer Managing Director , Electrical engineers , Institutional nominees
Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix analyses products in terms of :-Correct Answer Business strength and Industrial AttractivenessYour Answer Relative Market share and Industry Growth rate
Multiple Choice Single AnswerQuestion The basic document for facilitating Project financing is the :-Correct Answer Detailed Project reportYour Answer Detailed Project report
Select The BlankQuestion The ________ market is longer the order of the day since this is an era of
professionalization and specialised services are available at cost.Correct Answer MonopolisticYour Answer Monopolistic
True/False
Project Finance _20
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Question Ratio should be computed on the basis of inter-related figures which have a causeand effect relationship.
Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Demand technique forecasting of Commercial appraisal includes :-Correct Answer Future demand of the product , Proper survey of the product , Future
availability and supply of the productYour Answer Future demand of the product , Export market , Future availability and supply of
the product
Select The BlankQuestion Having decided on the location and product, the promoter takes into account the
________ that is to be adopted for producing the product.Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology
Multiple Choice Multiple AnswerQuestion Time Series Projection Methods of Demand forecasting consists of :-Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method
Select The BlankQuestion More accurate the estimation of the level of current assets and current liabilities, more
accurate will be estimation of the requirement of ________.Correct Answer Working capitalYour Answer Working capital
Multiple Choice Multiple AnswerQuestion Defaults category of the Project report may be in respect of :-Correct Answer Term loans , Principal , InterestYour Answer Term loans , Principal , Interest
Match The FollowingQuestion Correct Answer Your Answer
General functional layout Present the general relationship between equipment buildings and civilworks The plan of work concerning installation as well as initial operation
Location Broad area such as city, industrial belt etc. The diagrams indicating the flow of materials,utilities, final product, by-products and emission
Site Specific piece of land where the project would be set up Broad area such as city, industrialbelt etc.
Plant layout Physical layout of the factory Specific piece of land where the project would be set up
True/FalseQuestion If the organisation is a trading organisation, the requirement of working capital will be
on the lower side.Correct Answer FalseYour Answer True
Select The Blank
Project Finance _20
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Question Cost of fencing comes under the ________ category of the Project report.Correct Answer Land and site developmentYour Answer Building cost
Multiple Choice Multiple AnswerQuestion Disposition of funds includes :-Correct Answer Increase in working capital , Preliminary expenses , DividendYour Answer Increase in working capital , Preliminary expenses , Preliminary expenses written
off
Multiple Choice Multiple AnswerQuestion Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowingYour Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing ,
Preliminary expenses
Multiple Choice Single AnswerQuestion The Projects which are undertaken to manufacture certain products which are being
used as raw material by the existing units is known as :-Correct Answer Backward Integration ProjectsYour Answer Backward Integration Projects
Select The BlankQuestion In the GE's Stop Light Matrix, when ________ situation prevails , Products call for
divestment.Correct Answer Average Business Strength and Low Industry attractivenessYour Answer Weak Business strength and high Industry attractiveness
Select The BlankQuestion Investors who invest in the debentures of the company are the ________ of the
company.Correct Answer CreditorsYour Answer Creditors
Multiple Choice Multiple AnswerQuestion Debt Service coverage ratio may be considered to be one of the most important ratios
calculated by the :-Correct Answer Bankers , Financial InstitutionsYour Answer Shareholders , Bankers , Creditors
Multiple Choice Single AnswerQuestion Dissentions among the promoters is a :-Correct Answer Management problemYour Answer Management perception
Select The BlankQuestion Goods purchased on credit ________ in flow of funds.Correct Answer Does not resultYour Answer Does not result
True/FalseQuestion The secondary data is collected through market survey, specific for the project being
appraised.Correct Answer FalseYour Answer False
Project Finance _20
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Multiple Choice Single AnswerQuestion Profit is the result of customer satisfaction, indeed customer delight under the :-Correct Answer Marketing conceptYour Answer Marketing concept
Multiple Choice Multiple AnswerQuestion Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written offYour Answer Funds from operation , Goodwill written off , Funds from long term loans
Project Finance _21
- 1 -
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out of :-Correct Answer Debentures , Cash Profits , SharesYour Answer Debentures , Cash Profits , Shares
Multiple Choice Multiple AnswerQuestion The sources of long term and medium term finance are :-Correct Answer Equity shares , Public depositYour Answer Equity shares , Bridge loan , Public deposit
Multiple Choice Single AnswerQuestion The emphasis of the Banks and Financial institutions particularly in India has shifted
from 'Sanctions', 'Disbursements' and 'Security-orientation' to 'Recovery/Recycling' and :-Correct Answer Activity orientationYour Answer Activity orientation
Multiple Choice Single AnswerQuestion Technology, design, layout of the plant as well as inputs and infrastructural facilities
are to be considered under :-Correct Answer Technical appraisalYour Answer Financial appraisal
Select The BlankQuestion Detailed Project Report is generally prepared from a ________ report with additional
information.Correct Answer FeasibilityYour Answer Feasibility
True/FalseQuestion A high debt equity ratio may indicate that the financial stake of the creditors is more
than that of the owners.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The formula for Break Even Point is :-Correct Answer Fixed cost / ( Sales Price - Variables)Your Answer (Profit after tax +Depreciation + Interest)/ Interest
Multiple Choice Single AnswerQuestion Receivables is categorised under :-Correct Answer Current assets and liabilitiesYour Answer Material inputs and utilities
Multiple Choice Multiple AnswerQuestion Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Internal measure
Select The BlankQuestion Longer the duration of production cycle, higher the requirement of ________.Correct Answer Working capitalYour Answer Fixed assets
Project Finance _21
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Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Management aspects includes :-Correct Answer Determination , Organisation Building , Person / system orientedYour Answer Organisation Building , Person / system oriented , Promoter's equity / stake
True/FalseQuestion Financial analysis based on accounting ratios will give mis-leading results if the
effects of changes in price level are not taken into account.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirementYour Answer Plant capacity , Quality standards , Raw material requirement
Select The BlankQuestion Inflow of funds may not necessarily result in ________.Correct Answer Inflow of cashYour Answer Decrease in funds
Multiple Choice Multiple AnswerQuestion Building cost consists of :-Correct Answer Factory building , Auxiliary buildings , Administrative blockYour Answer cost of development , Factory building , Auxiliary buildings
Match The FollowingQuestion Correct Answer Your Answer
Increase in current liabilities Decreases working capital Stability of funds
Increase in liabilities Inflow of funds Inflow of funds
Decrease in liabilities Outflow of funds Increases working capital
Increase in current assets Increases working capital Outflow of funds
Select The BlankQuestion Sometimes the term ________ is interpreted as cash equivalent i.e. cash and
marketable securities.Correct Answer FundYour Answer Fund
True/FalseQuestion Name of the finance manager comes under the Project organisation category of the
Project report.Correct Answer TrueYour Answer False
True/FalseQuestion Change in the project concept itself may lead to cost and time overrun.Correct Answer TrueYour Answer True
True/False
Project Finance _21
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Question The maximum Seed Capital assistance provided by IDBI under the project will berestricted to 50% of the required promoter's contribution or Rs. 50 lakhs whichever is lower.
Correct Answer FalseYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
Project organisation Finance manager Completion date of the project
General category of Project report Location of factory Reasons for cost escalations
Cost aspect of the project report Consultancy fees Finance manager
Financing plan Unsecured loans Location of factory
True/FalseQuestion Trend projection method is the important technique for forecasting demand.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability
Multiple Choice Multiple AnswerQuestion The sources of cash are :-Correct Answer Cash from operations , Sale of machinery , Issue of new sharesYour Answer Purchase of fixed assets , Cash from operations , Sale of machinery
Multiple Choice Multiple AnswerQuestion External sources of cash are as follows :-Correct Answer Issue of new shares , Long term loans , Short term borrowingsYour Answer Issue of new shares , Long term loans , Short term borrowings
True/FalseQuestion Production line diagrams show the organisation structure of the project along with
information on location, personnel required for various departments, and their inter-relationship.Correct Answer FalseYour Answer True
Select The BlankQuestion ________ is a current assetCorrect Answer Book debtsYour Answer Book debts
Select The BlankQuestion The company having ________, is appropriate for the strategic posture of Defensive
under the SPACE approach.Correct Answer Lacks both competitive advantage as well as financial strength and belongs to
a not so attractive industry, operating in an unstable environmentYour Answer High financial strength, high industrial strength, enjoying a competitive advantage
and belonging to an attractive industry, operating in a relatively stable environmental conditions
Project Finance _21
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Multiple Choice Single AnswerQuestion Management aspect of detailed project report includesCorrect Answer Organisation structureYour Answer Demand forecasting
Select The BlankQuestion ________ profitability reduces the strain on working capital.Correct Answer HighYour Answer High
Multiple Choice Multiple AnswerQuestion The following are the sources of funds :-Correct Answer Operating Profit , Non operating IncomeYour Answer Operating Profit , Operating Loss , Non operating Income
Multiple Choice Single AnswerQuestion The cash flow of all the years during the expected life of the project are discounted at
a pre-determined cut off rate and :-Correct Answer Net Present value is obtainedYour Answer Internal rate of return is obtained
Multiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-Correct Answer To find out the uses of loans raised by the business , To indicate the financial
strength and weakness of the business , To help to understand the changes in assets as well asasset sources which are not revealed by the income statement
Your Answer To find out the uses of loans raised by the business , To indicate the financialstrength and weakness of the business , To help to understand the changes in assets as well asasset sources which are not revealed by the income statement
Multiple Choice Single AnswerQuestion Cost of materials include :-Correct Answer Cost of components and consumable storesYour Answer Cost of electricity
True/FalseQuestion The Detailed Project report must indicate the gestation period of the project.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Strategic Position and Action Evaluation Model :-Correct Answer Is an approach to hammer out an appropriate strategic posture for a firm and
its individual businessYour Answer Which is highly respected for the sophistication, maturity and quality in its
planning systems
Select The BlankQuestion Location of the factory comes under the ________ category of the Project report.Correct Answer GeneralYour Answer General
Select The BlankQuestion Retained earnings is a source of ________ finance.Correct Answer InternalYour Answer Internal
Project Finance _21
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Multiple Choice Multiple AnswerQuestion General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location of the factoryYour Answer Name of the Industrial concern , Proposed product , Location of the factory
Select The BlankQuestion Short term finance is normally for a period upto ________ year.Correct Answer OneYour Answer Two
Multiple Choice Single AnswerQuestion Appointments made at senior level during the half-year is categorised under :-Correct Answer Organisation and managementYour Answer Current assets and liabilities
Select The BlankQuestion Commission outstanding is ________ of funds.Correct Answer ApplicationYour Answer Application
Multiple Choice Single AnswerQuestion The statement which shows the movement of cash into and out of firm's kittie is
known as :-Correct Answer Cash flow statementYour Answer Profit and Loss statement
Multiple Choice Single AnswerQuestion Cost of utilities include :-Correct Answer Cost of electricityYour Answer Cost of components and consumable stores
Multiple Choice Single AnswerQuestion Marketing aspect of Detailed Project report includes :-Correct Answer Demand forecastingYour Answer Detailed Project Engineering
True/FalseQuestion In both the extreme situations of trade cycles i.e. Inflation and depression,
requirement of working capital may be high.Correct Answer TrueYour Answer False
Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors should be considered :-Correct Answer Proximity to raw materials and markets , Availability of infrastructure ,
Government policies and other factorsYour Answer Proximity to raw materials and markets , Plant capacity , Availability of
infrastructure
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion For computing Interest coverage ratio, Profit after Interest and
taxes are taken into account.Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion The sources of long term and medium term finance are :-
Correct Answer Equity shares , Public deposit
Your Answer Working capital loan , Equity shares
Multiple Choice Single AnswerQuestion Infrastructural projects include :-
Correct Answer Power Generation and Distribution
Your Answer Power Generation and Distribution
True/FalseQuestion Debt Service means payment of installments and interest
against an amount borrowed as per terms of loan.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Sewerage and drainage cost of the project is categorised under
:-Correct Answer Building cost
Your Answer Land and site cost
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed
as :-Correct Answer Strategic perspective
Your Answer Strategic perspective
Multiple Choice Single AnswerQuestion End use method of Commercial appraisal technique is :-
Correct Answer A list of industries wherein the product is used is made andquantity and volume is arrived at
Your Answer A method based on the assumption that the behavior of thevariables would continue in similar/same direction andmagnitude, as in the past
Select The BlankQuestion Longer the duration of production cycle, higher the requirement
of ________.Correct Answer Working capital
Your Answer Equity financing
True/FalseQuestion There is a need for studying Project finance both for the lenders
as well as the borrowers as both of them have equal stake inmaking the Project a success.
Correct Answer True
Your Answer True
Select The BlankQuestion Details regarding Bridge finance comes under the ________
category of Project report.Correct Answer Financing plan
Your Answer Cost aspect
Multiple Choice Single AnswerQuestion Cost of utilities include :-
Correct Answer Cost of electricity
Your Answer Cost of insurance
Select The BlankQuestion A market survey generally is a ________ survey.
Correct Answer Sample
Your Answer Census
Multiple Choice Multiple AnswerQuestion The applications of cash are :-
Correct Answer Purchase of fixed assets , Payment of long term loans
Your Answer Purchase of fixed assets , Payment of long term loans
Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may
lead to :-Correct Answer Cost and time overrun
Your Answer Cost and time overrun
Select The BlankQuestion Position regarding requirement and training of operational staff
comes under the ________ category of Project report.Correct Answer Project organisation
Your Answer General category
Select The BlankQuestion ________ is the summary of cash book or Receipts and
Payments statement.Correct Answer Cash flow statement
Your Answer Fund flow statement
Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions
viz.:Correct Answer Strategic perspective , Time span , Finance cost aspect
Your Answer Strategic perspective , Finance cost aspect
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-
Correct Answer That it involves current outlay of funds in expectation of futurebenefits
Your Answer That it is for an indefinite period of time
True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from
Pollution Control Authorities before setting up any project.Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Time Series Projection Methods of Demand forecasting consistsof :-
Correct Answer Trend Projection method , Moving Averages method
Your Answer Consumption-level method , Econometric method
Multiple Choice Single AnswerQuestion Delay in arrival of domestic/foreign machinery and technicians
may lead to :-Correct Answer Cost and time overrun
Your Answer Profit maximisation
True/FalseQuestion Debt Equity ratio is a 'Solvency ratio'.
Correct Answer True
Your Answer True
Select The BlankQuestion Having decided on the location and product, the promoter takes
into account the ________ that is to be adopted for producingthe product.
Correct Answer Manufacturing process and technology
Your Answer Size of the plant
Select The BlankQuestion ________ in assets involves outflow of funds.
Correct Answer Increase
Your Answer Increase
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Marketing aspects includes :-
Correct Answer Demand forecasting , Promotion , Distribution
Your Answer Cost / Time overruns , Promotion
Match The FollowingQuestion Correct Answer Your Answer
Increase in currentliabilities
Decreases working capital Decreases working capital
Increase in liabilities Inflow of funds Cash flow analysis
Decrease in liabilities Outflow of funds Increases working capital
Increase in current assets Increases working capital Outflow of funds
Select The BlankQuestion In order to meet the cost of large project, the technique of
________ has been developed so that the financial commitmentand risks associated with a project are shared between theproject sponsor and the lending institutions.
Correct Answer Limited recourse financing
Your Answer Limited recourse financing
Select The BlankQuestion Short term finance is normally for a period upto ________ year.
Correct Answer One
Your Answer One
Select The BlankQuestion ________ tries to have what the customer will want- where,
when, in what form and at what price.Correct Answer Marketing
Your Answer Selling
True/FalseQuestion Nominal maximum capacity is the capacity that is technically
attainable and this corresponds to the supplier's guaranteedcapacity.
Correct Answer True
Your Answer True
Select The BlankQuestion Commission outstanding is ________ of funds.
Correct Answer Application
Your Answer Application
Multiple Choice Single AnswerQuestion Profit is the result of customer satisfaction, indeed customer
delight under the :-
Correct Answer Marketing concept
Your Answer Profitability concept
True/FalseQuestion The secondary data is collected through market survey, specific
for the project being appraised.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion The method for evaluating the profitability of industrial projects
whose object is to ascertain the period required for recoveringthe entire investment made in a project is known as :-
Correct Answer Pay back method
Your Answer Pay back method
Multiple Choice Single AnswerQuestion Technical aspect of detailed project report includes :-
Correct Answer Detailed Project Engineering
Your Answer Fixation of means of financial structure
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to
as :-Correct Answer Project finance
Your Answer Project finance
Multiple Choice Multiple AnswerQuestion Provision for tax can be treated as :-
Correct Answer Item of current liabilities , Added back to the profit as per profitand loss account to arrive at operating profits
Your Answer Item of current liabilities , Added back to the profit as per profitand loss account to arrive at operating profits
True/FalseQuestion Trend projection method is the important technique for
forecasting demand.Correct Answer True
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Organisation andManagement
Strikes/lay-offs/lockoutsetc.
Sanctioned bank limit
Material inputs and utilities Stock of raw material Stock of raw material
Working capital Sanctioned bank limit Finished goods
Marketing Pricing policy Receivables
True/FalseQuestion Cost under-estimation at the project preparation and evaluation
stage leads to cost and time over run.Correct Answer True
Your Answer True
True/FalseQuestion In small scale organisation, requirement of working capital is
quite high due to high amount of overheads, high buying costsand high selling cost.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Financial and economic aspect of the Visit report consists of :-
Correct Answer Company's financial year , Impact of Government policies oncompany operations , Comments on the last published accounts
Your Answer Company's financial year
Multiple Choice Single AnswerQuestion The formula for Break Even Point is :-
Correct Answer Fixed cost / ( Sales Price - Variables)
Your Answer Fixed cost / ( Sales Price - Variables)
Multiple Choice Single AnswerQuestion Sanctioned bank limits is categorised under :-
Correct Answer Working capital
Your Answer Production, Sales and Profitability
Select The BlankQuestion Goods purchased on credit ________ in flow of funds.
Correct Answer Does not result
Your Answer Does not result
Multiple Choice Single AnswerQuestion The assets held by a business which can be converted in the
form of cash or used during the course of normal operations istermed as :-
Correct Answer Current assets
Your Answer Current assets
True/FalseQuestion The Detailed Project report spells out the modus operandi for the
implementation of the Project and the realization of the Projectobjectives.
Correct Answer True
Your Answer True
Project Finance _2
- 1 -
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Short supplies of materials may lead to :-
Correct Answer Cost and time overrun
Your Answer Sales rise
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-
Correct Answer That it involves current outlay of funds in expectation of futurebenefits
Your Answer That it involves current outlay of funds in expectation of futurebenefits
Multiple Choice Multiple AnswerQuestion The Key terms used in the BCG Product Portfolio matrix are :-
Correct Answer Stars , Question marks
Your Answer Stars , Question marks
Multiple Choice Multiple AnswerQuestion The data for ratio analysis is obtained from :-
Correct Answer Profit and Loss Account , Balance Sheet
Your Answer Profit and Loss Account , Auditors report
Match The FollowingQuestion Correct Answer Your Answer
Technical aspect ofdetailed project report
Detailed ProjectEngineering
Transport
Financial aspect ofDetailed Project report
Profitability Detailed ProjectEngineering
Marketing aspect ofDetailed Project report
Distribution Conservativeness
Management aspect ofdetailed project report
Conservativeness Distribution
True/FalseQuestion Nominal maximum capacity is the capacity that is technically
attainable and this corresponds to the supplier's guaranteedcapacity.
Project Finance _2
- 2 -
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Marketing aspect of Detailed Project report includes :-
Correct Answer Demand forecasting
Your Answer Demand forecasting
True/FalseQuestion In the BCG Matrix, the key term of Cash Cows require further
commitment of funds.Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion Disposition of funds includes :-
Correct Answer Increase in working capital , Preliminary expenses , Dividend
Your Answer Increase in working capital , Preliminary expenses
Match The FollowingQuestion Correct Answer Your Answer
Project appraisal It is the evaluation ofproject from technical,market, financial,economic and socialperspective beforecommitting funds forinvestment
It is a preliminaryassessment of the projectidea to determine whetheror not the investmentopportunity is promising
Program It is large in scope, isactivity oriented and is notnecessarily time bound
It deals with the impact ofthe investment project onpeople and their lives
Project It is one-shot, time-limited,goal oriented, majorundertaking requiring thecommitment of variedskills and resources
It involves the allocation ofresources amongcompeting projects
Pre-feasibility study It is a preliminaryassessment of the projectidea to determine whetheror not the investmentopportunity is promising
It is large in scope, isactivity oriented and is notnecessarily time bound
Project Finance _2
- 3 -
True/FalseQuestion Change in the project concept itself may lead to cost and time
overrun.Correct Answer True
Your Answer True
True/FalseQuestion Land and site development comes under the cost aspect of the
Project report.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion It is said that a second rate project in the hands of first rate
management is better than a first rate project in the hands of :-Correct Answer Second rate management
Your Answer Second rate management
Select The BlankQuestion Location of the factory comes under the ________ category of
the Project report.Correct Answer General
Your Answer Cost aspect
True/FalseQuestion Production line diagrams show the organisation structure of the
project along with information on location, personnel required forvarious departments, and their inter-relationship.
Correct Answer False
Your Answer True
Select The BlankQuestion The Project Cycle should be in the ________ order
Correct Answer Identification of Project - Project Appraisal - Negotiations forloans
Your Answer Procurement of Goods/services - Project Appraisal - Monitoringof operations on completion
Multiple Choice Single AnswerQuestion Cost of materials include :-
Project Finance _2
- 4 -
Correct Answer Cost of components and consumable stores
Your Answer Cost of components and consumable stores
Multiple Choice Multiple AnswerQuestion Financing plans consists of :-
Correct Answer Share capital , Term loans , Internal accruals
Your Answer Share capital , Term loans
True/FalseQuestion The Detailed Project report must indicate the gestation period of
the project.Correct Answer True
Your Answer True
Select The BlankQuestion Having decided on the location and product, the promoter takes
into account the ________ that is to be adopted for producingthe product.
Correct Answer Manufacturing process and technology
Your Answer Size of the plant
Multiple Choice Single AnswerQuestion The cost of Plant and Machinery may be adjusted for a possible
increase known as :-Correct Answer Escalation
Your Answer Escalation
Select The BlankQuestion Depreciation is sometimes treated as ________ funds.
Correct Answer Source
Your Answer No flow
Select The BlankQuestion ________ is that scarce input which financial resources alone
cannot mobilise.Correct Answer Management
Your Answer Sales
Project Finance _2
- 5 -
Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses upon
appraising the likely technical gaps consists of :-Correct Answer Problems pertaining to the period when the project is in
operationYour Answer Problems pertaining to the period when the project is in
operation
Select The BlankQuestion Retained earnings is a source of ________ finance.
Correct Answer Internal
Your Answer Short term
Multiple Choice Single AnswerQuestion In BCG Matrix "QUESTION MARKS" indicate :-
Correct Answer Products which have high growth potential but low market share
Your Answer Products which enjoy a high market share as well as a highgrowth rate
Select The BlankQuestion ________ capital represents permanent capital.
Correct Answer Equity
Your Answer Equity
Multiple Choice Single AnswerQuestion Demographic market appraisal answers to
Correct Answer Who they are?
Your Answer When they buy?
Select The BlankQuestion ________ is a current liability.
Correct Answer Trade credit
Your Answer Trade credit
True/FalseQuestion The construction of National Golden Quadrilateral can be
recognised as Project.
Project Finance _2
- 6 -
Correct Answer True
Your Answer True
Select The BlankQuestion Cost of fencing comes under the ________ category of the
Project report.Correct Answer Land and site development
Your Answer Building cost
Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors
should be considered :-Correct Answer Proximity to raw materials and markets , Availability of
infrastructure , Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of
infrastructure , Government policies and other factors
Multiple Choice Single AnswerQuestion The norms for providing open areas have to be strictly followed
for safety of labour and allow sufficient space for outflow ofeffluents safely in case of :-
Correct Answer Chemical unit
Your Answer Chemical unit
True/FalseQuestion Name of the finance manager comes under the Project
organisation category of the Project report.Correct Answer True
Your Answer True
True/FalseQuestion Delay in recruitment of staff may lead to cost and time overrun
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Miscellaneous fixed assets includes :-
Correct Answer Cables
Your Answer Plant and machinery
Project Finance _2
- 7 -
Select The BlankQuestion Name and designation of the chief executive comes under the
________ category.Correct Answer General
Your Answer Project organisation
Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while
assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensation
Your Answer Environmental factors , Risk involved , Managerial compensation
Multiple Choice Multiple AnswerQuestion Sources of funds includes :-
Correct Answer Depreciation , Preliminary expenses written off , Increase insecured borrowing
Your Answer Preliminary expenses written off , Increase in secured borrowing
Multiple Choice Multiple AnswerQuestion Technical appraisal is basically concerned with :-
Correct Answer Technology , Layout of the plant , Design of the plant
Your Answer Technology , Layout of the plant , Production costs
Multiple Choice Multiple AnswerQuestion Production and sales aspect of Visit report consists of :-
Correct Answer Utilisation of installed capacity , Input availability , Sales trends
Your Answer Utilisation of installed capacity , Input availability
Select The BlankQuestion ________ is a current asset
Correct Answer Book debts
Your Answer Book debts
Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon
appraising the likely technical gaps consists of :-
Project Finance _2
- 8 -
Correct Answer Problems faced during the Construction and Projectimplementation
Your Answer Problems faced during the Construction and Projectimplementation
Multiple Choice Multiple AnswerQuestion The following are the sources of funds :-
Correct Answer Operating Profit , Non operating Income
Your Answer Operating Profit , Non operating Income , Dividends
True/FalseQuestion A high debt equity ratio may indicate that the financial stake of
the creditors is more than that of the owners.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Management qualities includes :-
Correct Answer Honesty , Financial resources , Initiative
Your Answer Honesty , Financial resources , Initiative
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be
financed out of :-Correct Answer Cash Profits , Shares , Debentures
Your Answer Cash Profits , Shares
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Short supplies of materials may lead to :-
Correct Answer Cost and time overrun
Your Answer Sales rise
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-
Correct Answer That it involves current outlay of funds in expectation of futurebenefits
Your Answer That it involves current outlay of funds in expectation of futurebenefits
Multiple Choice Multiple AnswerQuestion The Key terms used in the BCG Product Portfolio matrix are :-
Correct Answer Stars , Question marks
Your Answer Stars , Question marks
Multiple Choice Multiple AnswerQuestion The data for ratio analysis is obtained from :-
Correct Answer Profit and Loss Account , Balance Sheet
Your Answer Profit and Loss Account , Auditors report
Match The FollowingQuestion Correct Answer Your Answer
Technical aspect ofdetailed project report
Detailed ProjectEngineering
Transport
Financial aspect ofDetailed Project report
Profitability Detailed ProjectEngineering
Marketing aspect ofDetailed Project report
Distribution Conservativeness
Management aspect ofdetailed project report
Conservativeness Distribution
True/FalseQuestion Nominal maximum capacity is the capacity that is technically
attainable and this corresponds to the supplier's guaranteedcapacity.
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Marketing aspect of Detailed Project report includes :-
Correct Answer Demand forecasting
Your Answer Demand forecasting
True/FalseQuestion In the BCG Matrix, the key term of Cash Cows require further
commitment of funds.Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion Disposition of funds includes :-
Correct Answer Increase in working capital , Preliminary expenses , Dividend
Your Answer Increase in working capital , Preliminary expenses
Match The FollowingQuestion Correct Answer Your Answer
Project appraisal It is the evaluation ofproject from technical,market, financial,economic and socialperspective beforecommitting funds forinvestment
It is a preliminaryassessment of the projectidea to determine whetheror not the investmentopportunity is promising
Program It is large in scope, isactivity oriented and is notnecessarily time bound
It deals with the impact ofthe investment project onpeople and their lives
Project It is one-shot, time-limited,goal oriented, majorundertaking requiring thecommitment of variedskills and resources
It involves the allocation ofresources amongcompeting projects
Pre-feasibility study It is a preliminaryassessment of the projectidea to determine whetheror not the investmentopportunity is promising
It is large in scope, isactivity oriented and is notnecessarily time bound
True/FalseQuestion Change in the project concept itself may lead to cost and time
overrun.Correct Answer True
Your Answer True
True/FalseQuestion Land and site development comes under the cost aspect of the
Project report.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion It is said that a second rate project in the hands of first rate
management is better than a first rate project in the hands of :-Correct Answer Second rate management
Your Answer Second rate management
Select The BlankQuestion Location of the factory comes under the ________ category of
the Project report.Correct Answer General
Your Answer Cost aspect
True/FalseQuestion Production line diagrams show the organisation structure of the
project along with information on location, personnel required forvarious departments, and their inter-relationship.
Correct Answer False
Your Answer True
Select The BlankQuestion The Project Cycle should be in the ________ order
Correct Answer Identification of Project - Project Appraisal - Negotiations forloans
Your Answer Procurement of Goods/services - Project Appraisal - Monitoringof operations on completion
Multiple Choice Single AnswerQuestion Cost of materials include :-
Correct Answer Cost of components and consumable stores
Your Answer Cost of components and consumable stores
Multiple Choice Multiple AnswerQuestion Financing plans consists of :-
Correct Answer Share capital , Term loans , Internal accruals
Your Answer Share capital , Term loans
True/FalseQuestion The Detailed Project report must indicate the gestation period of
the project.Correct Answer True
Your Answer True
Select The BlankQuestion Having decided on the location and product, the promoter takes
into account the ________ that is to be adopted for producingthe product.
Correct Answer Manufacturing process and technology
Your Answer Size of the plant
Multiple Choice Single AnswerQuestion The cost of Plant and Machinery may be adjusted for a possible
increase known as :-Correct Answer Escalation
Your Answer Escalation
Select The BlankQuestion Depreciation is sometimes treated as ________ funds.
Correct Answer Source
Your Answer No flow
Select The BlankQuestion ________ is that scarce input which financial resources alone
cannot mobilise.Correct Answer Management
Your Answer Sales
Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses upon
appraising the likely technical gaps consists of :-Correct Answer Problems pertaining to the period when the project is in
operationYour Answer Problems pertaining to the period when the project is in
operation
Select The BlankQuestion Retained earnings is a source of ________ finance.
Correct Answer Internal
Your Answer Short term
Multiple Choice Single AnswerQuestion In BCG Matrix "QUESTION MARKS" indicate :-
Correct Answer Products which have high growth potential but low market share
Your Answer Products which enjoy a high market share as well as a highgrowth rate
Select The BlankQuestion ________ capital represents permanent capital.
Correct Answer Equity
Your Answer Equity
Multiple Choice Single AnswerQuestion Demographic market appraisal answers to
Correct Answer Who they are?
Your Answer When they buy?
Select The BlankQuestion ________ is a current liability.
Correct Answer Trade credit
Your Answer Trade credit
True/FalseQuestion The construction of National Golden Quadrilateral can be
recognised as Project.
Correct Answer True
Your Answer True
Select The BlankQuestion Cost of fencing comes under the ________ category of the
Project report.Correct Answer Land and site development
Your Answer Building cost
Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors
should be considered :-Correct Answer Proximity to raw materials and markets , Availability of
infrastructure , Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of
infrastructure , Government policies and other factors
Multiple Choice Single AnswerQuestion The norms for providing open areas have to be strictly followed
for safety of labour and allow sufficient space for outflow ofeffluents safely in case of :-
Correct Answer Chemical unit
Your Answer Chemical unit
True/FalseQuestion Name of the finance manager comes under the Project
organisation category of the Project report.Correct Answer True
Your Answer True
True/FalseQuestion Delay in recruitment of staff may lead to cost and time overrun
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Miscellaneous fixed assets includes :-
Correct Answer Cables
Your Answer Plant and machinery
Select The BlankQuestion Name and designation of the chief executive comes under the
________ category.Correct Answer General
Your Answer Project organisation
Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while
assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensation
Your Answer Environmental factors , Risk involved , Managerial compensation
Multiple Choice Multiple AnswerQuestion Sources of funds includes :-
Correct Answer Depreciation , Preliminary expenses written off , Increase insecured borrowing
Your Answer Preliminary expenses written off , Increase in secured borrowing
Multiple Choice Multiple AnswerQuestion Technical appraisal is basically concerned with :-
Correct Answer Technology , Layout of the plant , Design of the plant
Your Answer Technology , Layout of the plant , Production costs
Multiple Choice Multiple AnswerQuestion Production and sales aspect of Visit report consists of :-
Correct Answer Utilisation of installed capacity , Input availability , Sales trends
Your Answer Utilisation of installed capacity , Input availability
Select The BlankQuestion ________ is a current asset
Correct Answer Book debts
Your Answer Book debts
Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon
appraising the likely technical gaps consists of :-
Correct Answer Problems faced during the Construction and Projectimplementation
Your Answer Problems faced during the Construction and Projectimplementation
Multiple Choice Multiple AnswerQuestion The following are the sources of funds :-
Correct Answer Operating Profit , Non operating Income
Your Answer Operating Profit , Non operating Income , Dividends
True/FalseQuestion A high debt equity ratio may indicate that the financial stake of
the creditors is more than that of the owners.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Management qualities includes :-
Correct Answer Honesty , Financial resources , Initiative
Your Answer Honesty , Financial resources , Initiative
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be
financed out of :-Correct Answer Cash Profits , Shares , Debentures
Your Answer Cash Profits , Shares
Multiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-
Correct Answer To help to understand the changes in assets as well as asset sourceswhich are not revealed by the income statement , To find out the uses ofloans raised by the business , To indicate the financial strength andweakness of the business
Your Answer To find out the uses of loans raised by the business , To help tounderstand the changes in assets as well as asset sources which are notrevealed by the income statement , Helps to prepare financial statements
Select The BlankQuestion Inflow of funds may not necessarily result in ________.
Correct Answer Inflow of cash
Your Answer Inflow of cash
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-
Correct Answer Project finance
Your Answer Project finance
True/FalseQuestion The Detailed Project report spells out the modus operandi for the
implementation of the Project and the realization of the Project objectives.Correct Answer True
Your Answer True
Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity
________.Correct Answer Decreases
Your Answer Decreases
Multiple Choice Multiple AnswerQuestion Internal sources of funds are :-
Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off
Your Answer Funds from operation , Loss on sale of fixed assets
Multiple Choice Single Answer
Question End use method of Commercial appraisal technique is :-
Correct Answer A list of industries wherein the product is used is made and quantity andvolume is arrived at
Your Answer A list of industries wherein the product is used is made and quantity andvolume is arrived at
Multiple Choice Multiple AnswerQuestion The applications of cash are :-
Correct Answer Purchase of fixed assets , Payment of long term loans
Your Answer Purchase of fixed assets , Payment of long term loans
True/FalseQuestion In small scale organisation, requirement of working capital is quite high
due to high amount of overheads, high buying costs and high selling cost.Correct Answer True
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Project organisation Finance manager Finance manager
General category of Projectreport
Location of factory Location of factory
Cost aspect of the projectreport
Consultancy fees Consultancy fees
Financing plan Unsecured loans Unsecured loans
Select The BlankQuestion Longer the duration of production cycle, higher the requirement of
________.Correct Answer Working capital
Your Answer Working capital
Multiple Choice Single AnswerQuestion Sanctioned bank limits is categorised under :-
Correct Answer Working capital
Your Answer Production, Sales and Profitability
Select The Blank
Question Cost of fencing comes under the ________ category of the Project report.
Correct Answer Land and site development
Your Answer Land and site development
True/FalseQuestion Trend projection method is the important technique for forecasting
demand.Correct Answer True
Your Answer True
True/FalseQuestion The emphasis of a finance manager should be on taking a synergistic view
of the project rather than looking at it only from the financial aspects.Correct Answer True
Your Answer True
Select The BlankQuestion ________ in assets involves outflow of funds.
Correct Answer Increase
Your Answer Increase
Select The BlankQuestion The basic difference between the feasibility study report and ________ is
the level of accuracy and degree of detail.Correct Answer Detailed Project report
Your Answer Detailed Project report
Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may lead to :-
Correct Answer Cost and time overrun
Your Answer Cost and time overrun
Select The BlankQuestion Location of the factory comes under the ________ category of the Project
report.Correct Answer General
Your Answer General
Multiple Choice Multiple AnswerQuestion Financing plans consists of :-
Correct Answer Share capital , Term loans , Internal accruals
Your Answer Share capital , Term loans , Internal accruals
Multiple Choice Single AnswerQuestion Infrastructural projects include :-
Correct Answer Power Generation and Distribution
Your Answer Power Generation and Distribution
True/FalseQuestion Market potential should be determined under the Marketing aspect of the
Project report.Correct Answer True
Your Answer True
Select The BlankQuestion ________ tries to have what the customer will want- where, when, in what
form and at what price.Correct Answer Marketing
Your Answer Marketing
Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is known
as :-Correct Answer Finance cost aspect
Your Answer Strategic perspective
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed as :-
Correct Answer Strategic perspective
Your Answer Social aspect
True/FalseQuestion Nominal maximum capacity is the capacity that is technically attainable
and this corresponds to the supplier's guaranteed capacity.Correct Answer True
Your Answer True
Select The BlankQuestion In order to meet the cost of large project, the technique of ________ has
been developed so that the financial commitment and risks associated witha project are shared between the project sponsor and the lendinginstitutions.
Correct Answer Limited recourse financing
Your Answer Long term financing
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-
Correct Answer That it involves current outlay of funds in expectation of future benefits
Your Answer That it involves current outlay of funds in expectation of future benefits
Multiple Choice Single AnswerQuestion Past trend method of Commercial appraisal technique is :-
Correct Answer Adopted as a guide depending on the consumption pattern of the societyas a whole
Your Answer Adopted as a guide depending on the consumption pattern of the societyas a whole
Multiple Choice Single AnswerQuestion The norms for providing open areas have to be strictly followed for safety
of labour and allow sufficient space for outflow of effluents safely in case of:-
Correct Answer Chemical unit
Your Answer Chemical unit
Multiple Choice Single AnswerQuestion Short supplies of materials may lead to :-
Correct Answer Cost and time overrun
Your Answer Cost and time overrun
Select The BlankQuestion Investors who invest in the debentures of the company are the ________
of the company.Correct Answer Creditors
Your Answer Creditors
Match The FollowingQuestion Correct Answer Your Answer
Private investment Power generation Power generation
Project Time -bound Time -bound
Programme Not necessarily time bound Not necessarily time bound
Foreign direct investment Machine tools Machine tools
Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify substantial
commitment of funds where there is :-Correct Answer Strong Business Strength and high Industry attractiveness , Average
Business strength and high Industry attractivenessYour Answer Strong Business Strength and high Industry attractiveness , Average
Business strength and high Industry attractiveness
Multiple Choice Multiple AnswerQuestion Management qualities includes :-
Correct Answer Honesty , Financial resources , Initiative
Your Answer Honesty , Financial resources , Initiative
Multiple Choice Single AnswerQuestion The industrial concern earned profits by increasing the sales volume under
the :-Correct Answer Sales concept
Your Answer Sales concept
True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation in the terms
of Business strength and Industry Attractiveness.Correct Answer False
Your Answer False
Select The BlankQuestion Detailed Project Report is generally prepared from a ________ report with
additional information.Correct Answer Feasibility
Your Answer Feasibility
Multiple Choice Single AnswerQuestion Delay in arrival of domestic/foreign machinery and technicians may lead to
:-Correct Answer Cost and time overrun
Your Answer Cost and time overrun
True/FalseQuestion Miscellaneous expenditure is written on the asset side of the Balance
sheet.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion General category of the Project report consists of :-
Correct Answer Name of the Industrial concern , Proposed product , Location of the factory
Your Answer Name of the Industrial concern , Proposed product , Location of the factory
Multiple Choice Single AnswerQuestion A Project is a temporary endeavor to achieve some specific objectives
within a :-Correct Answer Predefined time
Your Answer Predefined time
Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors should be
considered :-Correct Answer Proximity to raw materials and markets , Availability of infrastructure ,
Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of infrastructure ,
Government policies and other factors
Multiple Choice Multiple AnswerQuestion The sources of long term and medium term finance are :-
Correct Answer Equity shares , Public deposit
Your Answer Equity shares , Public deposit
Multiple Choice Single AnswerQuestion The cost which change in the same proportion in which the level of
production changes is known as :-
Correct Answer Variable cost
Your Answer Variable cost
Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon
appraising the likely technical gaps consists of :-Correct Answer Problems faced during the Construction and Project implementation
Your Answer Problems faced during the Construction and Project implementation
Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses upon appraising
the likely technical gaps consists of :-Correct Answer Problems pertaining to the period when the project is in operation
Your Answer Problems pertaining to the period when the project is in operation
LIST OF ATTEMPTED QUESTIONS AND ANSWERSLIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion 1 The advantage of secondary sources of data is that it is readily and economically
available.Correct Answer TrueYour Answer True
True/FalseQuestion2 In small scale organisation, requirement of working capital is quite high due to high
amount of overheads, high buying costs and high selling cost.Correct Answer TrueYour Answer True
True/FalseQuestion3 Banks and Financial Institutions, world-wide, are now financing projects with
strategies and terms that would have been hard to believe/imagine just a few years back.Correct Answer TrueYour Answer True
Select The BlankQuestion 4 ________ is a current assetCorrect Answer Book debtsYour Answer Furniture
Multiple Choice Multiple AnswerQuestion 5 Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial RelationshipYour Answer Linear Relationship , Exponential Relationship , Polynomial Relationship
Multiple Choice Single AnswerQuestion 6 Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Management problems
Multiple Choice Single AnswerQuestion 7 Technical aspect of detailed project report includes :-Correct Answer Detailed Project EngineeringYour Answer Detailed Project Engineering
Multiple Choice Multiple AnswerQuestion 8 Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowingYour Answer Preliminary expenses written off , Increase in secured borrowing
Multiple Choice Single AnswerQuestion 9 Delay in arrival of domestic/foreign machinery and technicians may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Select The BlankQuestion 10 A smaller unit into which the overall requirement of capital of a company is sub-
divided is termed as ________.Correct Answer ShareYour Answer Share
Multiple Choice Single AnswerQuestion11 A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective
Multiple Choice Single AnswerQuestion 12 Sewerage and drainage cost of the project is categorised under :-Correct Answer Building costYour Answer Building cost
Multiple Choice Multiple AnswerQuestion13 Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written offYour Answer Funds from operation , Goodwill written off
Multiple Choice Multiple AnswerQuestion14 In the Detailed Project Report, Management aspects includes :-Correct Answer Determination , Organisation Building , Person / system orientedYour Answer Determination , Organisation Building , Person / system oriented
Select The BlankQuestion15 Short term finance is normally for a period upto ________ year.Correct Answer OneYour Answer One
True/FalseQuestion16 Current assets includes stock-in-process.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion17 The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
Multiple Choice Multiple AnswerQuestion18 Time Series Projection Methods of Demand forecasting consists of :-Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method
Select The BlankQuestion 19 ________ is a current liability.Correct Answer Trade creditYour Answer Trade credit
True/FalseQuestion20 Managerial problems in a project are the most pervasive.Correct Answer TrueYour Answer True
Select The BlankQuestion21 Longer the duration of production cycle, higher the requirement of ________.Correct Answer Working capitalYour Answer Working capital
Select The BlankQuestion22 Retained earnings is a source of ________ finance.Correct Answer InternalYour Answer Short term
Select The BlankQuestion23 ________ is the summary of cash book or Receipts and Payments statement.Correct Answer Cash flow statementYour Answer Trial balance
True/FalseQuestion24 In the BCG Matrix, the key term of Cash Cows require further commitment of
funds.Correct Answer FalseYour Answer True
True/FalseQuestion25 Cost and time overrun of the project may lead to loss on account of lost market
opportunities.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion26 A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect
Multiple Choice Multiple AnswerQuestion27 Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric methodYour Answer Consumption-level method , Econometric method
Multiple Choice Single AnswerQuestion 28 In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high growth rate
Your Answer Products which enjoy a high market share as well as a high growth rate
Multiple Choice Single AnswerQuestion 29 Psychographic market appraisal answers to :-Correct Answer Why they buy?Your Answer Why they buy?
True/FalseQuestion30 Production line diagrams show the organisation structure of the project along with
information on location, personnel required for various departments, and their inter-relationship.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion31 While choosing the location for a project, the following factors should be
considered :-Correct Answer Proximity to raw materials and markets , Availability of infrastructure ,
Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of infrastructure ,
Government policies and other factors
Multiple Choice Single AnswerQuestion32 The cost which change in the same proportion in which the level of production
changes is known as :-Correct Answer Variable costYour Answer Variable cost
Select The BlankQuestion33 Goods purchased on credit ________ in flow of funds.Correct Answer Does not resultYour Answer Decreases
Multiple Choice Multiple AnswerQuestion34 Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Quick ratio
Multiple Choice Single AnswerQuestion35 Appointments made at senior level during the half-year is categorised under :-Correct Answer Organisation and managementYour Answer Organisation and management
Multiple Choice Single AnswerQuestion36 Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a projectYour Answer The total of all items of outlay associated with a project
Multiple Choice Multiple AnswerQuestion37 Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability , Sales trends
Match The FollowingQuestion38 Correct Answer Your Answer
Source of funds Depreciation Equity capital
Fixed assets Building Building
Current assets Debtors Debtors
Current liability Trade credit Trade credit
Multiple Choice Single AnswerQuestion39 Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Multiple Choice Multiple AnswerQuestion 40 General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location of the factoryYour Answer Name of the Industrial concern , Proposed product , Location of the factory
Multiple Choice Multiple AnswerQuestion 41 The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance SheetYour Answer Profit and Loss Account , Balance Sheet
Multiple Choice Single AnswerQuestion42 Short supplies of materials may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Multiple Choice Multiple AnswerQuestion43 After the SPACE chart is constructed, we would normally get any one of the
following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture
Select The BlankQuestion 44 ________ occupies a unique position in the macro economic development which
helps in induction of new technology and facilitates, greater efficiency as well as higherproductivity.
Correct Answer InvestmentYour Answer Marketing
Multiple Choice Single AnswerQuestion45 Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Select The BlankQuestion46 Name and designation of the chief executive comes under the ________ category.Correct Answer GeneralYour Answer General
Match The FollowingQuestion47 Correct Answer Your Answer
Private investment Power generation Machine tools
Project Time -bound Time -bound
Programme Not necessarily time bound Not necessarily time bound
Foreign direct investment Machine tools Power generation
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Match The FollowingQuestion Correct Answer Your Answer
Econometric method Mathematicalrepresentation ofeconomic relationship
Mathematicalrepresentation ofeconomic relationship
Primary source of data Market survey Market survey
Secondary source of data Collected in some othercontext
Collected in some othercontext
Leading indicators Variables that changefaster than others
Variables that changefaster than others
Select The BlankQuestion Details regarding Internal accruals comes under the ________
category of Project report.Correct Answer Financing plan
Your Answer Financing plan
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects includes :-
Correct Answer Plant capacity , Quality standards , Raw material requirement
Your Answer Plant capacity , Quality standards , Raw material requirement
Select The BlankQuestion A smaller unit into which the overall requirement of capital of a
company is sub-divided is termed as ________.Correct Answer Share
Your Answer Share
Select The BlankQuestion In order to meet the cost of large project, the technique of
________ has been developed so that the financial commitmentand risks associated with a project are shared between theproject sponsor and the lending institutions.
Correct Answer Limited recourse financing
Your Answer Limited recourse financing
Select The BlankQuestion ________ is a current liability.
Correct Answer Trade credit
Your Answer Trade credit
Select The BlankQuestion ________ is a current asset
Correct Answer Book debts
Your Answer Book debts
Multiple Choice Multiple AnswerQuestion Debt Service coverage ratio may be considered to be one of the
most important ratios calculated by the :-Correct Answer Bankers , Financial Institutions
Your Answer Bankers , Creditors , Financial Institutions
Multiple Choice Multiple AnswerQuestion Ratios relating to working capital are :-
Correct Answer Current ratio , Internal measure , Quick ratio
Your Answer Current ratio , Internal measure , Quick ratio
Multiple Choice Single AnswerQuestion Cost of laying roads comes under :-
Correct Answer Land and site cost
Your Answer Preoperative cost
Multiple Choice Single AnswerQuestion Pre-operative expenses include :-
Correct Answer Interest on deferred payments
Your Answer Market research expenses
True/False
Question The cost factors of the product mixed is also taken into accountto arrive at cost at various levels of production and its costimpact of the manufacturing.
Correct Answer True
Your Answer True
Select The BlankQuestion Retained earnings indicates that whatever profits are earned by
the company are not distributed by it by way of ________ butare kept aside for use in future for expansion or other purpose.
Correct Answer Dividend
Your Answer Dividend
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Management aspects includes :-
Correct Answer Determination , Organisation Building , Person / systemoriented
Your Answer Organisation Building , Person / system oriented , Promoter'sequity / stake
True/FalseQuestion The Detailed Project report spells out the modus operandi for
the implementation of the Project and the realization of theProject objectives.
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix analyses products in terms of
:-Correct Answer Business strength and Industrial Attractiveness
Your Answer Company's competitive advantage and Company's financialstrength
True/FalseQuestion The emphasis of a finance manager should be on taking a
synergistic view of the project rather than looking at it only fromthe financial aspects.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question After the SPACE chart is constructed, we would normally getany one of the following basic strategic postures :-
Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture
Your Answer Aggressive Posture , Competitive Posture , Defensive Posture
True/FalseQuestion The ratios of one organisation compared with the ratios of the
same organisation is termed as inter-firm comparison.Correct Answer False
Your Answer False
Select The BlankQuestion Detailed Project Report is generally prepared from a ________
report with additional information.Correct Answer Feasibility
Your Answer Feasibility
Select The BlankQuestion Under ________ method, the forecasts are modified in the light
of observed errors.Correct Answer Exponential smoothing
Your Answer Cobb Douglas Relationship
Match The FollowingQuestion Correct Answer Your Answer
Source of funds Depreciation Investment
Fixed assets Building Building
Current assets Debtors Debtors
Current liability Trade credit Trade credit
True/FalseQuestion The Detailed Project report must indicate the gestation period of
the project.Correct Answer True
Your Answer True
True/False
Question Delay in recruitment of staff may lead to cost and time overrun
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may
lead to :-Correct Answer Cost and time overrun
Your Answer Cost and time overrun
Multiple Choice Single AnswerQuestion Infrastructural projects include :-
Correct Answer Power Generation and Distribution
Your Answer Power Generation and Distribution
Multiple Choice Single AnswerQuestion The method for evaluating the profitability of industrial projects
whose object is to ascertain the period required for recoveringthe entire investment made in a project is known as :-
Correct Answer Pay back method
Your Answer Pay back method
Select The BlankQuestion ________ in assets involves outflow of funds.
Correct Answer Increase
Your Answer Increase
Multiple Choice Single AnswerQuestion The rate of discount which would equate the present value of
investments to the present value of benefits over the life of theproject is known as :-
Correct Answer Internal rate of return
Your Answer Internal rate of return
Select The BlankQuestion Cost of fencing comes under the ________ category of the
Project report.Correct Answer Land and site development
Your Answer Land and site development
Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential
reserve of cash is termed as :-Correct Answer Net Working capital to total assets
Your Answer Quick ratio
Multiple Choice Single AnswerQuestion The sources of funding have expanded from banks, insurance
companies and multilateral agencies to include the :-Correct Answer Capital market
Your Answer Capital market
True/FalseQuestion Sensitivity analysis consists of assessing the degree of risk.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be
financed out of :-Correct Answer Cash Profits , Shares , Debentures
Your Answer Cash Profits , Shares
Multiple Choice Single AnswerQuestion Sources of funds include :-
Correct Answer Increase in secured borrowing
Your Answer Increase in secured borrowing
True/FalseQuestion Nominal maximum capacity is the capacity that is technically
attainable and this corresponds to the supplier's guaranteedcapacity.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question While choosing the location for a project, the following factorsshould be considered :-
Correct Answer Proximity to raw materials and markets , Availability ofinfrastructure , Government policies and other factors
Your Answer Proximity to raw materials and markets , Availability ofinfrastructure , Government policies and other factors
Multiple Choice Multiple AnswerQuestion Financing plans consists of :-
Correct Answer Share capital , Term loans , Internal accruals
Your Answer Share capital , Term loans , Internal accruals
True/FalseQuestion Ratio should be computed on the basis of inter-related figures
which have a cause and effect relationship.Correct Answer True
Your Answer True
True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are
generally during the stage of Decline of a Product Life Cycle.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-
Correct Answer Linear Relationship , Exponential Relationship , PolynomialRelationship
Your Answer Linear Relationship , Chain ratio Relationship , ExponentialRelationship
Multiple Choice Multiple AnswerQuestion Technical appraisal is basically concerned with :-
Correct Answer Technology , Layout of the plant , Design of the plant
Your Answer Technology , Layout of the plant , Design of the plant
Multiple Choice Single AnswerQuestion Demographic market appraisal answers to
Correct Answer Who they are?
Your Answer Where do the customers live?
Select The BlankQuestion A Project has a ________ represented by growth, maturity and
decay.Correct Answer Life cycle
Your Answer Life cycle
Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions
viz.:Correct Answer Strategic perspective , Time span , Finance cost aspect
Your Answer Strategic perspective , Time span , Social aspect
Multiple Choice Multiple AnswerQuestion Casual methods of Demand forecasting consists of :-
Correct Answer Consumption-level method , Econometric method
Your Answer Trend Projection method , Consumption-level method , MovingAverages method
Multiple Choice Single AnswerQuestion The statement which shows the movement of cash into and out
of firm's kittie is known as :-Correct Answer Cash flow statement
Your Answer Cash flow statement
Multiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-
Correct Answer To help to understand the changes in assets as well as assetsources which are not revealed by the income statement , Tofind out the uses of loans raised by the business , To indicatethe financial strength and weakness of the business
Your Answer To find out the uses of loans raised by the business , To help tounderstand the changes in assets as well as asset sourceswhich are not revealed by the income statement , Helps toprepare financial statements
Select The BlankQuestion Inflow of funds may not necessarily result in ________.
Correct Answer Inflow of cash
Your Answer Inflow of cash
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to
as :-Correct Answer Project finance
Your Answer Project finance
True/FalseQuestion The Detailed Project report spells out the modus operandi for
the implementation of the Project and the realization of theProject objectives.
Correct Answer True
Your Answer True
Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity
________.Correct Answer Decreases
Your Answer Decreases
Multiple Choice Multiple AnswerQuestion Internal sources of funds are :-
Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwillwritten off
Your Answer Funds from operation , Loss on sale of fixed assets
Multiple Choice Single AnswerQuestion End use method of Commercial appraisal technique is :-
Correct Answer A list of industries wherein the product is used is made andquantity and volume is arrived at
Your Answer A list of industries wherein the product is used is made andquantity and volume is arrived at
Multiple Choice Multiple AnswerQuestion The applications of cash are :-
Correct Answer Purchase of fixed assets , Payment of long term loans
Your Answer Purchase of fixed assets , Payment of long term loans
True/FalseQuestion In small scale organisation, requirement of working capital is
quite high due to high amount of overheads, high buying costs
and high selling cost.
Correct Answer True
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Project organisation Finance manager Finance manager
General category ofProject report
Location of factory Location of factory
Cost aspect of the projectreport
Consultancy fees Consultancy fees
Financing plan Unsecured loans Unsecured loans
Select The BlankQuestion Longer the duration of production cycle, higher the requirement
of ________.Correct Answer Working capital
Your Answer Working capital
Multiple Choice Single AnswerQuestion Sanctioned bank limits is categorised under :-
Correct Answer Working capital
Your Answer Production, Sales and Profitability
Select The BlankQuestion Cost of fencing comes under the ________ category of the
Project report.Correct Answer Land and site development
Your Answer Land and site development
True/FalseQuestion Trend projection method is the important technique for
forecasting demand.Correct Answer True
Your Answer True
True/False
Question The emphasis of a finance manager should be on taking asynergistic view of the project rather than looking at it only fromthe financial aspects.
Correct Answer True
Your Answer True
Select The BlankQuestion ________ in assets involves outflow of funds.
Correct Answer Increase
Your Answer Increase
Select The BlankQuestion The basic difference between the feasibility study report and
________ is the level of accuracy and degree of detail.Correct Answer Detailed Project report
Your Answer Detailed Project report
Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may
lead to :-Correct Answer Cost and time overrun
Your Answer Cost and time overrun
Select The BlankQuestion Location of the factory comes under the ________ category of
the Project report.Correct Answer General
Your Answer General
Multiple Choice Multiple AnswerQuestion Financing plans consists of :-
Correct Answer Share capital , Term loans , Internal accruals
Your Answer Share capital , Term loans , Internal accruals
Multiple Choice Single AnswerQuestion Infrastructural projects include :-
Correct Answer Power Generation and Distribution
Your Answer Power Generation and Distribution
True/FalseQuestion Market potential should be determined under the Marketing
aspect of the Project report.Correct Answer True
Your Answer True
Select The BlankQuestion ________ tries to have what the customer will want- where,
when, in what form and at what price.Correct Answer Marketing
Your Answer Marketing
Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost
is known as :-Correct Answer Finance cost aspect
Your Answer Strategic perspective
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is
termed as :-Correct Answer Strategic perspective
Your Answer Social aspect
True/FalseQuestion Nominal maximum capacity is the capacity that is technically
attainable and this corresponds to the supplier's guaranteedcapacity.
Correct Answer True
Your Answer True
Select The BlankQuestion In order to meet the cost of large project, the technique of
________ has been developed so that the financialcommitment and risks associated with a project are sharedbetween the project sponsor and the lending institutions.
Correct Answer Limited recourse financing
Your Answer Long term financing
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-
Correct Answer That it involves current outlay of funds in expectation of futurebenefits
Your Answer That it involves current outlay of funds in expectation of futurebenefits
Multiple Choice Single AnswerQuestion Past trend method of Commercial appraisal technique is :-
Correct Answer Adopted as a guide depending on the consumption pattern ofthe society as a whole
Your Answer Adopted as a guide depending on the consumption pattern ofthe society as a whole
Multiple Choice Single AnswerQuestion The norms for providing open areas have to be strictly followed
for safety of labour and allow sufficient space for outflow ofeffluents safely in case of :-
Correct Answer Chemical unit
Your Answer Chemical unit
Multiple Choice Single AnswerQuestion Short supplies of materials may lead to :-
Correct Answer Cost and time overrun
Your Answer Cost and time overrun
Select The BlankQuestion Investors who invest in the debentures of the company are the
________ of the company.Correct Answer Creditors
Your Answer Creditors
Match The FollowingQuestion Correct Answer Your Answer
Private investment Power generation Power generation
Project Time -bound Time -bound
Programme Not necessarily timebound
Not necessarily timebound
Foreign direct investment Machine tools Machine tools
Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify
substantial commitment of funds where there is :-Correct Answer Strong Business Strength and high Industry attractiveness ,
Average Business strength and high Industry attractivenessYour Answer Strong Business Strength and high Industry attractiveness ,
Average Business strength and high Industry attractiveness
Multiple Choice Multiple AnswerQuestion Management qualities includes :-
Correct Answer Honesty , Financial resources , Initiative
Your Answer Honesty , Financial resources , Initiative
Multiple Choice Single AnswerQuestion The industrial concern earned profits by increasing the sales
volume under the :-Correct Answer Sales concept
Your Answer Sales concept
True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation
in the terms of Business strength and Industry Attractiveness.Correct Answer False
Your Answer False
Select The BlankQuestion Detailed Project Report is generally prepared from a ________
report with additional information.Correct Answer Feasibility
Your Answer Feasibility
Multiple Choice Single AnswerQuestion Delay in arrival of domestic/foreign machinery and technicians
may lead to :-Correct Answer Cost and time overrun
Your Answer Cost and time overrun
True/False
Question Miscellaneous expenditure is written on the asset side of theBalance sheet.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion General category of the Project report consists of :-
Correct Answer Name of the Industrial concern , Proposed product , Location ofthe factory
Your Answer Name of the Industrial concern , Proposed product , Location ofthe factory
Multiple Choice Single AnswerQuestion A Project is a temporary endeavor to achieve some specific
objectives within a :-Correct Answer Predefined time
Your Answer Predefined time
Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors
should be considered :-Correct Answer Proximity to raw materials and markets , Availability of
infrastructure , Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of
infrastructure , Government policies and other factors
Multiple Choice Multiple AnswerQuestion The sources of long term and medium term finance are :-
Correct Answer Equity shares , Public deposit
Your Answer Equity shares , Public deposit
Multiple Choice Single AnswerQuestion The cost which change in the same proportion in which the
level of production changes is known as :-Correct Answer Variable cost
Your Answer Variable cost
Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses
upon appraising the likely technical gaps consists of :-Correct Answer Problems faced during the Construction and Project
implementation
Your Answer Problems faced during the Construction and Projectimplementation
Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses upon
appraising the likely technical gaps consists of :-Correct Answer Problems pertaining to the period when the project is in
operationYour Answer Problems pertaining to the period when the project is in
operation
TopicPgNumber
industrial policy after independence 1project 2investment decisions and resource identification 2foreign direct investment 2location of project 3environmental aspects - a matter of public interest 3object of environmental clearance 4project objective 4project financing - a strategic prespective and models 7BCG product portfolio matrix 7seynive tiles 7SPACE 7relative market share 8STARS 8QUESTION MARKS 8CASH COWS 8DOGS 8GE's stop light matrix 9business strength 10industry attractiveness 10the SPACE model 10dimesion and factor evaluated 11company's competitive advantage 11company's financial strength 11industry strength 11environmental stability 11SPACE modus operandi 11SPACE chart 13THE OUTCOME strategic posture 13postures 13
aggressive posture 14competetive posture 14conservative posture 14defensive posture 14SPACE CHART 15generic strategies and key options 15project finance 17what / why is the need for project financing 19project 21project cycle 23types of project 25new projects 25expansion project 25diversification project 25backward integration projects 25forward integration projects 25modernisation projects 25rehabiliation projects 25short term finance 26long term finance 26bridge loan 26seed money 27seed capital 27technical appraisal 29phase I , II , III 29process / production technology 30project engineering 30competitiveness indicators 30manufacturing process / technology 31technical arrangements 31size of the plant 32product mix 32selection of the plant and machinery 32procurement of plant and machinery 32plant layout 33appraisal - financial 35capital cost of the project 35sources of funds 36financial projections 36ratio analysis 36break even point 36cost of the project 36land and site development 37buildings and civil construction / works 37plant and machinery 38technical know-how and related feeds / charges 38expenses on foregin technicians 38misc fixed assets 38
preliminary expenses 39capital issue expenses 39pre-operative expenses 39provision of contingencies 40margin money for working capital 40initial cash loses 40sources of funds 40sales / production forecast 45cost of production 46discounted cash flow techniques 47pay back method 47average rate of return method 50time value of money - discounting technique 50net present value method 50internal rate of return 51information required for calculation of net present value and IRR 51life of the project 51cash outflow 52cash inflow 52residual or terminal value of the project 52cost of the capital 52cost of convertibe debentures 53cost of working capital 53break even point analysis 53fixed costs 54variable cost 54BEP 54significance / utility of BEP for financial appraisal 55projected cash flow 55sources of funds 56deployment of funds 56cash flows 57cash inflow 58projected balance sheets 58liablities 58assets 58financial indicators 59debt serice coverage ratio 59interest cover ratio 59appraisal - commercial 61demand technique forecasting 61past trend method 61end use method 61export market 61supply depth of competition 62marketing aspects 62appraisal market 66market appraisal 66
demand analysis 67qualitative methods 67time series projection methods 68casual methods 68quantitative methods 68jury or executive opninion method 68delphi method 68time series projection methods 69trend projection method 69exponential smoothing method 69casual methods 69chain ratio method 69consumption level method 69end use method 69appraisal management 73management perception 74management qualities 74organisational climate 74organisational structure form 74management problems 74appraisal environmental 77working capital requirement / fianancing 79working capital 79margin money for working capital 80ratio analysis 82net working capital to total assets 82current ratio 82quick (acid test) ratio 82internal measure 82projected working results 84profitablity projections or estimates of working results 84project implementation 87financing plan 92comments 92project organization 92project scheduling 93additional comments 93capital expenditure and financing 94production sales and profitability 94current assets and liabilities 95material inputs and utilities 95working capital commercial bank borrowing 95organization and management 95visit report 96production and sales 98financial and economic 99financial projections 100key steps in market and demand analysis and their relationships 101
project report 103norms of regulatory authority and Fis 103key business considerations 104detailed project report 106financial aspects 106marketing aspects 106management aspects 106technical aspects 106government policies 106infrastructure 107social cost benefit 107sensitivity analysis 107vegprotein LTS 109basic assumptions underlying financial projections 111depreciation schedule 112
LIST OF ATTEMPTED QUESTIONS ANDANSWERSLIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion 1 The advantage of secondary sources of data is that it is readily and
economically available.Correct Answer TrueYour Answer True
True/FalseQuestion2 In small scale organisation, requirement of working capital is quite
high due to high amount of overheads, high buying costs and high selling cost.Correct Answer TrueYour Answer True
True/FalseQuestion3 Banks and Financial Institutions, world-wide, are now financing
projects with strategies and terms that would have been hard to believe/imagine justa few years back.
Correct Answer TrueYour Answer True
Select The BlankQuestion 4 ________ is a current assetCorrect Answer Book debtsYour Answer Furniture
Multiple Choice Multiple AnswerQuestion 5 Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial
Relationship
Your Answer Linear Relationship , Exponential Relationship , PolynomialRelationship
Multiple Choice Single AnswerQuestion 6 Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Management problems
Multiple Choice Single AnswerQuestion 7 Technical aspect of detailed project report includes :-Correct Answer Detailed Project EngineeringYour Answer Detailed Project Engineering
Multiple Choice Multiple AnswerQuestion 8 Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in
secured borrowingYour Answer Preliminary expenses written off , Increase in secured borrowing
Multiple Choice Single AnswerQuestion 9 Delay in arrival of domestic/foreign machinery and technicians may
lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Select The BlankQuestion 10 A smaller unit into which the overall requirement of capital of a
company is sub-divided is termed as ________.Correct Answer ShareYour Answer Share
Multiple Choice Single AnswerQuestion11 A project objective which states "What' is to be viewed" is termed as
:-Correct Answer Strategic perspectiveYour Answer Strategic perspective
Multiple Choice Single AnswerQuestion 12 Sewerage and drainage cost of the project is categorised under :-Correct Answer Building costYour Answer Building cost
Multiple Choice Multiple AnswerQuestion13 Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill
written off
Your Answer Funds from operation , Goodwill written off
Multiple Choice Multiple AnswerQuestion14 In the Detailed Project Report, Management aspects includes :-Correct Answer Determination , Organisation Building , Person / system orientedYour Answer Determination , Organisation Building , Person / system oriented
Select The BlankQuestion15 Short term finance is normally for a period upto ________ year.Correct Answer OneYour Answer One
True/FalseQuestion16 Current assets includes stock-in-process.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion17 The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future
benefitsYour Answer That it involves current outlay of funds in expectation of future
benefits
Multiple Choice Multiple AnswerQuestion18 Time Series Projection Methods of Demand forecasting consists of :-Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method
Select The BlankQuestion 19 ________ is a current liability.Correct Answer Trade creditYour Answer Trade credit
True/FalseQuestion20 Managerial problems in a project are the most pervasive.Correct Answer TrueYour Answer True
Select The BlankQuestion21 Longer the duration of production cycle, higher the requirement of
________.Correct Answer Working capitalYour Answer Working capital
Select The Blank
Question22 Retained earnings is a source of ________ finance.Correct Answer InternalYour Answer Short term
Select The BlankQuestion23 ________ is the summary of cash book or Receipts and Payments
statement.Correct Answer Cash flow statementYour Answer Trial balance
True/FalseQuestion24 In the BCG Matrix, the key term of Cash Cows require further
commitment of funds.Correct Answer FalseYour Answer True
True/FalseQuestion25 Cost and time overrun of the project may lead to loss on account of
lost market opportunities.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion26 A project objective which states What "achieving it " would cost is
known as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect
Multiple Choice Multiple AnswerQuestion27 Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric methodYour Answer Consumption-level method , Econometric method
Multiple Choice Single AnswerQuestion 28 In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high
growth rateYour Answer Products which enjoy a high market share as well as a high growth
rate
Multiple Choice Single AnswerQuestion 29 Psychographic market appraisal answers to :-Correct Answer Why they buy?Your Answer Why they buy?
True/False
Question30 Production line diagrams show the organisation structure of theproject along with information on location, personnel required for variousdepartments, and their inter-relationship.
Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion31 While choosing the location for a project, the following factors should
be considered :-Correct Answer Proximity to raw materials and markets , Availability of
infrastructure , Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of
infrastructure , Government policies and other factors
Multiple Choice Single AnswerQuestion32 The cost which change in the same proportion in which the level of
production changes is known as :-Correct Answer Variable costYour Answer Variable cost
Select The BlankQuestion33 Goods purchased on credit ________ in flow of funds.Correct Answer Does not resultYour Answer Decreases
Multiple Choice Multiple AnswerQuestion34 Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Quick ratio
Multiple Choice Single AnswerQuestion35 Appointments made at senior level during the half-year is categorised
under :-Correct Answer Organisation and managementYour Answer Organisation and management
Multiple Choice Single AnswerQuestion36 Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a projectYour Answer The total of all items of outlay associated with a project
Multiple Choice Multiple AnswerQuestion37 Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability , Sales trends
Match The FollowingQuestion38 Correct Answer Your Answer
Source of funds Depreciation Equity capital
Fixed assets Building Building
Current assets Debtors Debtors
Current liability Trade credit Trade credit
Multiple Choice Single AnswerQuestion39 Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Multiple Choice Multiple AnswerQuestion 40 General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location of
the factoryYour Answer Name of the Industrial concern , Proposed product , Location of the
factory
Multiple Choice Multiple AnswerQuestion 41 The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance SheetYour Answer Profit and Loss Account , Balance Sheet
Multiple Choice Single AnswerQuestion42 Short supplies of materials may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Multiple Choice Multiple AnswerQuestion43 After the SPACE chart is constructed, we would normally get any one
of the following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture
Select The BlankQuestion 44 ________ occupies a unique position in the macro economic
development which helps in induction of new technology and facilitates, greaterefficiency as well as higher productivity.
Correct Answer InvestmentYour Answer Marketing
Multiple Choice Single AnswerQuestion45 Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Select The BlankQuestion46 Name and designation of the chief executive comes under the
________ category.Correct Answer GeneralYour Answer General
Match The FollowingQuestion47 Correct Answer Your Answer
Private investment Power generation Machine tools
Project Time -bound Time -bound
Programme Not necessarily time bound Not necessarily time bound
Foreign direct investment Machine tools Power generation
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion In the BCG Matrix, the key term of Cash Cows require further
commitment of funds.Correct Answer FalseYour Answer False
Select The BlankQuestion In the GE's Stop Light Matrix, when ________ situation prevails ,
Products call for divestment.Correct Answer Average Business Strength and Low Industry attractivenessYour Answer Average Business Strength and Low Industry attractiveness
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future
benefitsYour Answer That it involves current outlay of funds in expectation of future
benefits
Select The Blank
Question ________ tries to have what the customer will want- where, when, inwhat form and at what price.
Correct Answer MarketingYour Answer Finance
Multiple Choice Single AnswerQuestion Financial aspect of Detailed Project report includes :-Correct Answer Fixation of means of financial structureYour Answer Fixation of means of financial structure
Multiple Choice Single AnswerQuestion A project can be regarded as the sum of the activities directed towards a
:-Correct Answer Specific resultYour Answer Specific result
Multiple Choice Single AnswerQuestion Sewerage and drainage cost of the project is categorised under :-Correct Answer Building costYour Answer Building cost
Multiple Choice Single AnswerQuestion The BCG Product Portfolio Matrix :-Correct Answer Is a tool for strategic ( product ) planning and resource allocationYour Answer Is a tool for strategic ( product ) planning and resource allocation
Multiple Choice Single AnswerQuestion End use method of Commercial appraisal technique is :-Correct Answer A list of industries wherein the product is used is made and
quantity and volume is arrived atYour Answer A list of industries wherein the product is used is made and
quantity and volume is arrived at
Select The BlankQuestion ________ capital represents permanent capital.Correct Answer EquityYour Answer Debentures
Match The FollowingQuestion Correct Answer Your Answer
Export market technique of Commercial appraisal Government provides ampleencouragement Government provides ample encouragement
Demand Technique forecasting of Commercial appraisal Future demand of theproduct Future demand of the product
Past trend method of Commercial appraisal Adopted as a guide depending on theconsumption pattern of the society as a whole Adopted as a guide depending on theconsumption pattern of the society as a whole
End use method of Commercial appraisal A list of industries wherein the product isused is made and quantity and volume is arrived at A list of industries wherein theproduct is used is made and quantity and volume is arrived at
Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial
RelationshipYour Answer Linear Relationship , Exponential Relationship , Polynomial
Relationship
Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any one of
the following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture
Select The BlankQuestion ________ in liabilities involves inflow of funds.Correct Answer IncreaseYour Answer Cash
Select The BlankQuestion ________ occupies a unique position in the macro economic
development which helps in induction of new technology and facilitates, greaterefficiency as well as higher productivity.
Correct Answer InvestmentYour Answer Investment
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
True/FalseQuestion Financial analysis based on accounting ratios will give mis-leading
results if the effects of changes in price level are not taken into account.Correct Answer TrueYour Answer True
Select The BlankQuestion Excessive expenditures on foreign technicians leads to ________.Correct Answer Cost and time overrunYour Answer Management problems
Multiple Choice Single AnswerQuestion Appointments made at senior level during the half-year is categorised
under :-Correct Answer Organisation and managementYour Answer Organisation and management
Multiple Choice Single AnswerQuestion Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify substantial
commitment of funds where there is :-Correct Answer Strong Business Strength and high Industry attractiveness ,
Average Business strength and high Industry attractivenessYour Answer Strong Business Strength and high Industry attractiveness ,
Average Business strength and high Industry attractiveness
Match The FollowingQuestion Correct Answer Your Answer
Source of funds Depreciation Equity capital
Fixed assets Building Building
Current assets Debtors Investment
Current liability Trade credit Debtors
Multiple Choice Single AnswerQuestion The cost of Plant and Machinery may be adjusted for a possible increase
known as :-Correct Answer EscalationYour Answer Inflation
Multiple Choice Multiple AnswerQuestion Demand technique forecasting of Commercial appraisal includes :-Correct Answer Future demand of the product , Proper survey of the product ,
Future availability and supply of the productYour Answer Future demand of the product , Proper survey of the product ,
Future availability and supply of the product
Multiple Choice Single AnswerQuestion The BCG product Portfolio Matrix, General Electric Stop Light Matrix
and Strategic Position and Action Evaluation Model are considered to be highlyrelevant as :-
Correct Answer Portfolio Planning ToolsYour Answer Portfolio Planning Tools
Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity
________.Correct Answer DecreasesYour Answer Decreases
Multiple Choice Multiple AnswerQuestion The applications of cash are :-Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Issue of new machinery
True/FalseQuestion A high debt equity ratio may indicate that the financial stake of the
creditors is more than that of the owners.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out
of :-Correct Answer Cash Profits , Shares , DebenturesYour Answer Cash Profits , Shares , Debentures
True/FalseQuestion Ratio analysis is a technique of planning and control.Correct Answer FalseYour Answer False
True/FalseQuestion Miscellaneous expenditure is written on the asset side of the Balance
sheet.
Correct Answer TrueYour Answer False
Select The BlankQuestion Cost of fencing comes under the ________ category of the Project
report.Correct Answer Land and site developmentYour Answer Land and site development
Multiple Choice Single AnswerQuestion The ratio which covers those assets which can be converted into cash
immediately is known as :-Correct Answer Quick ratioYour Answer Quick ratio
Multiple Choice Single AnswerQuestion The Projects which are undertaken to manufacture certain products
which are being used as raw material by the existing units is known as :-Correct Answer Backward Integration ProjectsYour Answer Backward Integration Projects
Select The BlankQuestion Retained earnings indicates that whatever profits are earned by the
company are not distributed by it by way of ________ but are kept aside for use infuture for expansion or other purpose.
Correct Answer DividendYour Answer Dividend
Multiple Choice Multiple AnswerQuestion Time Series Projection Methods of Demand forecasting consists of :-Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method
True/FalseQuestion Unlike financial projections, there cannot be any fixed, well-recognised
or structure formula/steps for management evaluation/appraisal.Correct Answer TrueYour Answer True
True/FalseQuestion Production line diagrams show the organisation structure of the project
along with information on location, personnel required for various departments,and their inter-relationship.
Correct Answer FalseYour Answer False
Select The BlankQuestion ________ is a current assetCorrect Answer Book debtsYour Answer Trade credit
True/FalseQuestion For computing Interest coverage ratio, Profit after Interest and taxes
are taken into account.Correct Answer FalseYour Answer True
Select The BlankQuestion Details regarding Internal accruals comes under the ________ category
of Project report.Correct Answer Financing planYour Answer Cost aspect
Multiple Choice Multiple AnswerQuestion Management category of Visit report consists of :-Correct Answer Managing Director , Institutional nominees , Committees of the
boardYour Answer Managing Director , Institutional nominees , Committees of the
board
True/FalseQuestion Nominal maximum capacity is the capacity that is technically attainable
and this corresponds to the supplier's guaranteed capacity.Correct Answer TrueYour Answer False
Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential reserve of cash
is termed as :-Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets
Multiple Choice Multiple AnswerQuestion The following are the sources of funds :-Correct Answer Operating Profit , Non operating IncomeYour Answer Operating Profit , Dividends
True/FalseQuestion Change in the project concept itself may lead to cost and time overrun.Correct Answer TrueYour Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERSLIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion 1 The advantage of secondary sources of data is that it is readily and
economically available.Correct Answer TrueYour Answer True
True/FalseQuestion2 In small scale organisation, requirement of working capital is quite
high due to high amount of overheads, high buying costs and high selling cost.Correct Answer TrueYour Answer True
True/FalseQuestion3 Banks and Financial Institutions, world-wide, are now financing
projects with strategies and terms that would have been hard to believe/imagine justa few years back.
Correct Answer TrueYour Answer True
Select The BlankQuestion 4 ________ is a current assetCorrect Answer Book debtsYour Answer Furniture
Multiple Choice Multiple AnswerQuestion 5 Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial
RelationshipYour Answer Linear Relationship , Exponential Relationship , Polynomial
Relationship
Multiple Choice Single AnswerQuestion 6 Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Management problems
Multiple Choice Single AnswerQuestion 7 Technical aspect of detailed project report includes :-Correct Answer Detailed Project EngineeringYour Answer Detailed Project Engineering
Multiple Choice Multiple AnswerQuestion 8 Sources of funds includes :-
Correct Answer Depreciation , Preliminary expenses written off , Increase insecured borrowing
Your Answer Preliminary expenses written off , Increase in secured borrowing
Multiple Choice Single AnswerQuestion 9 Delay in arrival of domestic/foreign machinery and technicians may
lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Select The BlankQuestion 10 A smaller unit into which the overall requirement of capital of a
company is sub-divided is termed as ________.Correct Answer ShareYour Answer Share
Multiple Choice Single AnswerQuestion11 A project objective which states "What' is to be viewed" is termed as
:-Correct Answer Strategic perspectiveYour Answer Strategic perspective
Multiple Choice Single AnswerQuestion 12 Sewerage and drainage cost of the project is categorised under :-Correct Answer Building costYour Answer Building cost
Multiple Choice Multiple AnswerQuestion13 Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill
written offYour Answer Funds from operation , Goodwill written off
Multiple Choice Multiple AnswerQuestion14 In the Detailed Project Report, Management aspects includes :-Correct Answer Determination , Organisation Building , Person / system orientedYour Answer Determination , Organisation Building , Person / system oriented
Select The BlankQuestion15 Short term finance is normally for a period upto ________ year.Correct Answer OneYour Answer One
True/FalseQuestion16 Current assets includes stock-in-process.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion17 The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future
benefitsYour Answer That it involves current outlay of funds in expectation of future
benefits
Multiple Choice Multiple AnswerQuestion18 Time Series Projection Methods of Demand forecasting consists of :-Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method
Select The BlankQuestion 19 ________ is a current liability.Correct Answer Trade creditYour Answer Trade credit
True/FalseQuestion20 Managerial problems in a project are the most pervasive.Correct Answer TrueYour Answer True
Select The BlankQuestion21 Longer the duration of production cycle, higher the requirement of
________.Correct Answer Working capitalYour Answer Working capital
Select The BlankQuestion22 Retained earnings is a source of ________ finance.Correct Answer InternalYour Answer Short term
Select The BlankQuestion23 ________ is the summary of cash book or Receipts and Payments
statement.Correct Answer Cash flow statementYour Answer Trial balance
True/FalseQuestion24 In the BCG Matrix, the key term of Cash Cows require further
commitment of funds.Correct Answer FalseYour Answer True
True/FalseQuestion25 Cost and time overrun of the project may lead to loss on account of
lost market opportunities.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion26 A project objective which states What "achieving it " would cost is
known as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect
Multiple Choice Multiple AnswerQuestion27 Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric methodYour Answer Consumption-level method , Econometric method
Multiple Choice Single AnswerQuestion 28 In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high
growth rateYour Answer Products which enjoy a high market share as well as a high growth
rate
Multiple Choice Single AnswerQuestion 29 Psychographic market appraisal answers to :-Correct Answer Why they buy?Your Answer Why they buy?
True/FalseQuestion30 Production line diagrams show the organisation structure of the
project along with information on location, personnel required for variousdepartments, and their inter-relationship.
Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion31 While choosing the location for a project, the following factors should
be considered :-Correct Answer Proximity to raw materials and markets , Availability of
infrastructure , Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of
infrastructure , Government policies and other factors
Multiple Choice Single Answer
Question32 The cost which change in the same proportion in which the level ofproduction changes is known as :-
Correct Answer Variable costYour Answer Variable cost
Select The BlankQuestion33 Goods purchased on credit ________ in flow of funds.Correct Answer Does not resultYour Answer Decreases
Multiple Choice Multiple AnswerQuestion34 Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Quick ratio
Multiple Choice Single AnswerQuestion35 Appointments made at senior level during the half-year is categorised
under :-Correct Answer Organisation and managementYour Answer Organisation and management
Multiple Choice Single AnswerQuestion36 Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a projectYour Answer The total of all items of outlay associated with a project
Multiple Choice Multiple AnswerQuestion37 Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability , Sales trends
Match The FollowingQuestion38 Correct Answer Your Answer
Source of funds Depreciation Equity capital
Fixed assets Building Building
Current assets Debtors Debtors
Current liability Trade credit Trade credit
Multiple Choice Single AnswerQuestion39 Every project involves financial outlay which can be referred to as :-Correct Answer Project finance
Your Answer Project finance
Multiple Choice Multiple AnswerQuestion 40 General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location of
the factoryYour Answer Name of the Industrial concern , Proposed product , Location of the
factory
Multiple Choice Multiple AnswerQuestion 41 The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance SheetYour Answer Profit and Loss Account , Balance Sheet
Multiple Choice Single AnswerQuestion42 Short supplies of materials may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Multiple Choice Multiple AnswerQuestion43 After the SPACE chart is constructed, we would normally get any one
of the following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture
Select The BlankQuestion 44 ________ occupies a unique position in the macro economic
development which helps in induction of new technology and facilitates, greaterefficiency as well as higher productivity.
Correct Answer InvestmentYour Answer Marketing
Multiple Choice Single AnswerQuestion45 Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Select The BlankQuestion46 Name and designation of the chief executive comes under the
________ category.Correct Answer GeneralYour Answer General
Match The FollowingQuestion47 Correct Answer Your Answer
Private investment Power generation Machine tools
Project Time -bound Time -bound
Programme Not necessarily time bound Not necessarily time bound
Foreign direct investment Machine tools Power generation
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Borrower's contribution towards Working capital is known as :-Correct Answer Margin moneyYour Answer Margin money
Multiple Choice Multiple AnswerQuestion Building cost consists of :-Correct Answer Factory building , Auxiliary buildings , Administrative blockYour Answer Factory building , Auxiliary buildings , Administrative block
Multiple Choice Single AnswerQuestion In BCG Matrix " CASH COWS" indicate :-Correct Answer Products which have high market share but low growth potentialYour Answer Products which have high market share but low growth potential
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Marketing aspects includes :-Correct Answer Demand forecasting , Promotion , DistributionYour Answer Demand forecasting , Promotion , Distribution
Multiple Choice Single AnswerQuestion Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a projectYour Answer The total of all items of outlay associated with a project
True/FalseQuestion In both the extreme situations of trade cycles i.e. Inflation and depression,
requirement of working capital may be high.Correct Answer TrueYour Answer True
True/FalseQuestion Name of the finance manager comes under the Project organisation category
of the Project report.Correct Answer True
Your Answer True
True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from Pollution
Control Authorities before setting up any project.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspectYour Answer Strategic perspective , Time span , Finance cost aspect
Match The FollowingQuestion Correct Answer Your Answer
Management problems Lack of exposure Lack of exposure
Management Quality Initiative Initiative
Management Perception Aspiration level/ conservative Aspiration level/ conservative
Organisational Climate Person oriented Person oriented
Multiple Choice Single AnswerQuestion Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Multiple Choice Single AnswerQuestion BCG Product Portfolio Matrix analyses products on the basis of :-Correct Answer Relative Market share and Industry Growth rateYour Answer Relative Market share and Industry Growth rate
Select The BlankQuestion ________ profitability reduces the strain on working capital.Correct Answer HighYour Answer Stable
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future
benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing Project
finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensationYour Answer Environmental factors , Risk involved , Managerial compensation
Multiple Choice Single AnswerQuestion "Fly by night" operator mentality is a :-Correct Answer Management qualityYour Answer Management quality
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity ________.Correct Answer DecreasesYour Answer Increases
Multiple Choice Multiple AnswerQuestion Debt Service coverage ratio may be considered to be one of the most
important ratios calculated by the :-Correct Answer Bankers , Financial InstitutionsYour Answer Shareholders , Bankers , Financial Institutions
Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is known as
:-Correct Answer Finance cost aspectYour Answer Finance cost aspect
True/FalseQuestion A project is unique and no two projects are similar.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Limitations of fund flow statement are :-Correct Answer It does not provide any new information but only rearranges the
various facts , It does not consider non-fund transactionsYour Answer It does not provide any new information but only rearranges the various
facts , It does not consider non-fund transactions , It does not help in determining futurerequirement of funds
Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses upon appraising the
likely technical gaps consists of :-Correct Answer Problems pertaining to the period when the project is in operationYour Answer Problems pertaining to the period when the project is in operation
Multiple Choice Single AnswerQuestion Receivables is categorised under :-Correct Answer Current assets and liabilitiesYour Answer Current assets and liabilities
Multiple Choice Single AnswerQuestion It is said that a second rate project in the hands of first rate management is
better than a first rate project in the hands of :-Correct Answer Second rate managementYour Answer Second rate management
Select The BlankQuestion The company having ________, is appropriate for the strategic posture of
Defensive under the SPACE approach.Correct Answer Lacks both competitive advantage as well as financial strength and
belongs to a not so attractive industry, operating in an unstable environmentYour Answer Lacks both competitive advantage as well as financial strength and
belongs to a not so attractive industry, operating in an unstable environment
Select The BlankQuestion Excessive expenditures on foreign technicians leads to ________.Correct Answer Cost and time overrunYour Answer Profit maximisation
True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation in the terms
of Business strength and Industry Attractiveness.Correct Answer FalseYour Answer False
Select The BlankQuestion Having decided on the location and product, the promoter takes into account
the ________ that is to be adopted for producing the product.Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology
Multiple Choice Multiple AnswerQuestion Financial and economic aspect of the Visit report consists of :-Correct Answer Company's financial year , Impact of Government policies on
company operations , Comments on the last published accounts
Your Answer Company's financial year , Impact of Government policies on companyoperations , Comments on the last published accounts
True/FalseQuestion Sensitivity analysis consists of assessing the degree of risk.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out of :-Correct Answer Cash Profits , Shares , DebenturesYour Answer Cash Profits , Shares , Debentures
True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are generally during the
stage of Decline of a Product Life Cycle.Correct Answer TrueYour Answer True
True/FalseQuestion The construction of National Golden Quadrilateral can be recognised as
Project.Correct Answer TrueYour Answer True
Select The BlankQuestion Under the SPACE Model, Customer loyalty is determined under the
________ dimension.Correct Answer Company's competitive advantageYour Answer Company's competitive advantage
True/FalseQuestion The cost factors of the product mixed is also taken into account to arrive at
cost at various levels of production and its cost impact of the manufacturing.Correct Answer TrueYour Answer True
True/FalseQuestion The emphasis of a finance manager should be on taking a synergistic view of
the project rather than looking at it only from the financial aspects.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Miscellaneous fixed assets includes :-Correct Answer CablesYour Answer Cables
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirementYour Answer Quality standards , Raw material requirement , Power / telecom facilities
Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial
RelationshipYour Answer Linear Relationship , Exponential Relationship , Polynomial
Relationship
True/FalseQuestion Market potential should be determined under the Marketing aspect of the
Project report.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Ratio analysis is a widely used tool of :-Correct Answer Financial analysisYour Answer Financial analysis
Multiple Choice Single AnswerQuestion Preoperative expenses includes :-Correct Answer Bank guaranteesYour Answer Bank guarantees
Select The BlankQuestion A Project has a ________ represented by growth, maturity and decay.Correct Answer Life cycleYour Answer Life cycle
True/FalseQuestion If the organisation is a trading organisation, the requirement of working
capital will be on the lower side.Correct Answer FalseYour Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion ________ is a current liability.Correct Answer Trade creditYour Answer Trade credit
Multiple Choice Multiple AnswerQuestion Marketing category of the Project report consists of :-Correct Answer Target market , Market potential , Pricing policyYour Answer Target market , Market potential , Pricing policy
Select The BlankQuestion Under the SPACE Model, Customer loyalty is determined under the
________ dimension.Correct Answer Company's competitive advantageYour Answer Company's competitive advantage
Multiple Choice Single AnswerQuestion Sources of funds include :-Correct Answer Increase in secured borrowingYour Answer Increase in secured borrowing
True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from
Pollution Control Authorities before setting up any project.Correct Answer TrueYour Answer False
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed as
:-Correct Answer Strategic perspectiveYour Answer Strategic perspective
Select The BlankQuestion ________ tries to have what the customer will want- where, when, in
what form and at what price.Correct Answer MarketingYour Answer Marketing
True/FalseQuestion Debt Service Coverage Ratio is one of the most important ratios
calculated by the bankers or financial institutions giving long term finance to theorganisation.
Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Management qualities includes :-Correct Answer Honesty , Financial resources , InitiativeYour Answer Honesty , Financial resources , Initiative
Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon
appraising the likely technical gaps consists of :-Correct Answer Problems faced during the Construction and Project
implementationYour Answer Problems faced during the Construction and Project
implementation
True/FalseQuestion A project is unique and no two projects are similar.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Land and site development cost includes cost of :-Correct Answer GatesYour Answer Gates
Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is
known as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect
Select The BlankQuestion ________ in assets involves outflow of funds.Correct Answer IncreaseYour Answer Increase
Match The FollowingQuestion Correct Answer Your Answer
Management problems Lack of exposure Lack of exposure
Management Quality Initiative Initiative
Management Perception Aspiration level/ conservative Aspiration level/conservative
Organisational Climate Person oriented Person oriented
Match The FollowingQuestion Correct Answer Your Answer
Source of funds Depreciation Equity capital
Fixed assets Building Building
Current assets Debtors Debtors
Current liability Trade credit Trade credit
Multiple Choice Single AnswerQuestion Disposal of fixed assets is categorised under :-Correct Answer MiscellaneousYour Answer Miscellaneous
True/FalseQuestion The emphasis of a finance manager should be on taking a
synergistic view of the project rather than looking at it only from the financialaspects.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Geographic market appraisal answers to :-Correct Answer Where do the customers live?Your Answer Where do the customers live?
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Select The BlankQuestion ________ occupies a unique position in the macro economic
development which helps in induction of new technology and facilitates, greaterefficiency as well as higher productivity.
Correct Answer InvestmentYour Answer Production
Multiple Choice Single Answer
Question The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future
benefitsYour Answer That it involves current outlay of funds in expectation of future
benefits
Multiple Choice Single AnswerQuestion Pre-operative expenses include :-Correct Answer Interest on deferred paymentsYour Answer Interest on deferred payments
Multiple Choice Multiple AnswerQuestion Advantages of fund flow statement are :-Correct Answer It determines financial consequences of the business
operations , It enables the firm to plan its financial resources properly , It helps asa reliable guide for the future requirement of funds
Your Answer It determines financial consequences of the business operations, It considers non-fund transactions , It enables the firm to plan its financialresources properly
True/FalseQuestion Managerial problems in a project are the most pervasive.Correct Answer TrueYour Answer True
True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are generally
during the stage of Decline of a Product Life Cycle.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The applications of cash are :-Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Payment of long term loans , Issue of
new machinery
True/FalseQuestion Debt Equity ratio is a 'Solvency ratio'.Correct Answer TrueYour Answer True
True/FalseQuestion Current assets includes stock-in-process.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspectYour Answer Strategic perspective , Time span , Finance cost aspect
Multiple Choice Single AnswerQuestion Liabilities side of Balance sheet includes :-Correct Answer Unsecured loansYour Answer Unsecured loans
Multiple Choice Single AnswerQuestion The rate of discount which would equate the present value of
investments to the present value of benefits over the life of the project is knownas :-
Correct Answer Internal rate of returnYour Answer Internal rate of return
Select The BlankQuestion A Project has a ________ represented by growth, maturity and
decay.Correct Answer Life cycleYour Answer Life cycle
Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any
one of the following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture
Select The BlankQuestion ________ is the summary of cash book or Receipts and Payments
statement.Correct Answer Cash flow statementYour Answer Cash flow statement
Multiple Choice Single AnswerQuestion The point at which the unit neither earns profit nor incurs loss is
known as :-Correct Answer Break Even PointYour Answer Break Even Point
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Marketing aspects includes :-Correct Answer Demand forecasting , Promotion , DistributionYour Answer Demand forecasting , Promotion , Distribution
Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing
Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial
compensationYour Answer Environmental factors , Risk involved , Managerial compensation
Multiple Choice Multiple AnswerQuestion Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric methodYour Answer Consumption-level method , Econometric method
Select The BlankQuestion Under ________ method, the forecasts are modified in the light of
observed errors.Correct Answer Exponential smoothingYour Answer Exponential smoothing
Multiple Choice Multiple AnswerQuestion Provision for tax can be treated as :-Correct Answer Item of current liabilities , Added back to the profit as per profit
and loss account to arrive at operating profitsYour Answer Added back to the profit as per profit and loss account to arrive
at operating profits , Item of current assets , Item of working capital
Select The BlankQuestion Retained earnings indicates that whatever profits are earned by the
company are not distributed by it by way of ________ but are kept aside for usein future for expansion or other purpose.
Correct Answer DividendYour Answer Dividend
Multiple Choice Single AnswerQuestion Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential reserve of
cash is termed as :-Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets
Select The Blank
Question Name and designation of the chief executive comes under the________ category.
Correct Answer GeneralYour Answer General
Multiple Choice Single AnswerQuestion Miscellaneous fixed assets includes :-Correct Answer CablesYour Answer Cables
Multiple Choice Single AnswerQuestion In the Cash flow statement, the sources of funds includeCorrect Answer Share IssueYour Answer Share Issue
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion ________ is a current liability.Correct Answer Trade creditYour Answer Trade credit
Multiple Choice Multiple AnswerQuestion Marketing category of the Project report consists of :-Correct Answer Target market , Market potential , Pricing policyYour Answer Target market , Market potential , Pricing policy
Select The BlankQuestion Under the SPACE Model, Customer loyalty is determined under the
________ dimension.Correct Answer Company's competitive advantageYour Answer Company's competitive advantage
Multiple Choice Single AnswerQuestion Sources of funds include :-Correct Answer Increase in secured borrowingYour Answer Increase in secured borrowing
True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from
Pollution Control Authorities before setting up any project.Correct Answer TrueYour Answer False
Multiple Choice Single Answer
Question A project objective which states "What' is to be viewed" is termed as:-
Correct Answer Strategic perspectiveYour Answer Strategic perspective
Select The BlankQuestion ________ tries to have what the customer will want- where, when, in
what form and at what price.Correct Answer MarketingYour Answer Marketing
True/FalseQuestion Debt Service Coverage Ratio is one of the most important ratios
calculated by the bankers or financial institutions giving long term finance to theorganisation.
Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Management qualities includes :-Correct Answer Honesty , Financial resources , InitiativeYour Answer Honesty , Financial resources , Initiative
Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon
appraising the likely technical gaps consists of :-Correct Answer Problems faced during the Construction and Project
implementationYour Answer Problems faced during the Construction and Project
implementation
True/FalseQuestion A project is unique and no two projects are similar.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Land and site development cost includes cost of :-Correct Answer GatesYour Answer Gates
Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is
known as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect
Select The BlankQuestion ________ in assets involves outflow of funds.Correct Answer IncreaseYour Answer Increase
Match The FollowingQuestion Correct Answer Your Answer
Management problems Lack of exposure Lack of exposure
Management Quality Initiative Initiative
Management Perception Aspiration level/ conservative Aspiration level/conservative
Organisational Climate Person oriented Person oriented
Match The FollowingQuestion Correct Answer Your Answer
Source of funds Depreciation Equity capital
Fixed assets Building Building
Current assets Debtors Debtors
Current liability Trade credit Trade credit
Multiple Choice Single AnswerQuestion Disposal of fixed assets is categorised under :-Correct Answer MiscellaneousYour Answer Miscellaneous
True/FalseQuestion The emphasis of a finance manager should be on taking a
synergistic view of the project rather than looking at it only from the financialaspects.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Geographic market appraisal answers to :-Correct Answer Where do the customers live?
Your Answer Where do the customers live?
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Select The BlankQuestion ________ occupies a unique position in the macro economic
development which helps in induction of new technology and facilitates, greaterefficiency as well as higher productivity.
Correct Answer InvestmentYour Answer Production
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future
benefitsYour Answer That it involves current outlay of funds in expectation of future
benefits
Multiple Choice Single AnswerQuestion Pre-operative expenses include :-Correct Answer Interest on deferred paymentsYour Answer Interest on deferred payments
Multiple Choice Multiple AnswerQuestion Advantages of fund flow statement are :-Correct Answer It determines financial consequences of the business
operations , It enables the firm to plan its financial resources properly , It helps asa reliable guide for the future requirement of funds
Your Answer It determines financial consequences of the business operations, It considers non-fund transactions , It enables the firm to plan its financialresources properly
True/FalseQuestion Managerial problems in a project are the most pervasive.Correct Answer TrueYour Answer True
True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are generally
during the stage of Decline of a Product Life Cycle.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The applications of cash are :-Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Payment of long term loans , Issue of
new machinery
True/FalseQuestion Debt Equity ratio is a 'Solvency ratio'.Correct Answer TrueYour Answer True
True/FalseQuestion Current assets includes stock-in-process.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspectYour Answer Strategic perspective , Time span , Finance cost aspect
Multiple Choice Single AnswerQuestion Liabilities side of Balance sheet includes :-Correct Answer Unsecured loansYour Answer Unsecured loans
Multiple Choice Single AnswerQuestion The rate of discount which would equate the present value of
investments to the present value of benefits over the life of the project is knownas :-
Correct Answer Internal rate of returnYour Answer Internal rate of return
Select The BlankQuestion A Project has a ________ represented by growth, maturity and
decay.Correct Answer Life cycleYour Answer Life cycle
Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any
one of the following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture
Select The Blank
Question ________ is the summary of cash book or Receipts and Paymentsstatement.
Correct Answer Cash flow statementYour Answer Cash flow statement
Multiple Choice Single AnswerQuestion The point at which the unit neither earns profit nor incurs loss is
known as :-Correct Answer Break Even PointYour Answer Break Even Point
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Marketing aspects includes :-Correct Answer Demand forecasting , Promotion , DistributionYour Answer Demand forecasting , Promotion , Distribution
Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing
Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial
compensationYour Answer Environmental factors , Risk involved , Managerial compensation
Multiple Choice Multiple AnswerQuestion Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric methodYour Answer Consumption-level method , Econometric method
Select The BlankQuestion Under ________ method, the forecasts are modified in the light of
observed errors.Correct Answer Exponential smoothingYour Answer Exponential smoothing
Multiple Choice Multiple AnswerQuestion Provision for tax can be treated as :-Correct Answer Item of current liabilities , Added back to the profit as per profit
and loss account to arrive at operating profitsYour Answer Added back to the profit as per profit and loss account to arrive
at operating profits , Item of current assets , Item of working capital
Select The BlankQuestion Retained earnings indicates that whatever profits are earned by the
company are not distributed by it by way of ________ but are kept aside for usein future for expansion or other purpose.
Correct Answer Dividend
Your Answer Dividend
Multiple Choice Single AnswerQuestion Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential reserve of
cash is termed as :-Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets
Select The BlankQuestion Name and designation of the chief executive comes under the
________ category.Correct Answer GeneralYour Answer General
Multiple Choice Single AnswerQuestion Miscellaneous fixed assets includes :-Correct Answer CablesYour Answer Cables
Multiple Choice Single AnswerQuestion In the Cash flow statement, the sources of funds includeCorrect Answer Share IssueYour Answer Share Issue
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion Land and site development comes under the cost aspect of the
Project report.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Location of the factory comes under the :-Correct Answer General categoryYour Answer General category
Match The FollowingQuestion Correct Answer Your Answer
Project appraisal It is the evaluation of project from technical, market, financial,economic and social perspective before committing funds for investment It is apreliminary assessment of the project idea to determine whether or not theinvestment opportunity is promising
Program It is large in scope, is activity oriented and is not necessarily time boundIt is large in scope, is activity oriented and is not necessarily time bound
Project It is one-shot, time-limited, goal oriented, major undertaking requiring thecommitment of varied skills and resources It deals with the impact of theinvestment project on people and their lives
Pre-feasibility study It is a preliminary assessment of the project idea todetermine whether or not the investment opportunity is promising It is one-shot,time-limited, goal oriented, major undertaking requiring the commitment of variedskills and resources
Multiple Choice Single AnswerQuestion The sources of funding have expanded from banks, insurance
companies and multilateral agencies to include the :-Correct Answer Capital marketYour Answer Debt market
Multiple Choice Single AnswerQuestion Cost of overheads include :-Correct Answer Cost of repairs and maintenanceYour Answer Cost of electricity
True/FalseQuestion The Detailed Project report spells out the modus operandi for the
implementation of the Project and the realization of the Project objectives.Correct Answer TrueYour Answer True
True/FalseQuestion Debt Service means payment of installments and interest against an
amount borrowed as per terms of loan.Correct Answer TrueYour Answer True
True/FalseQuestion The ratios of one organisation compared with the ratios of the same
organisation is termed as inter-firm comparison.Correct Answer FalseYour Answer False
Select The BlankQuestion Depreciation is sometimes treated as ________ funds.Correct Answer SourceYour Answer Application
Select The BlankQuestion Excessive expenditures on foreign technicians leads to ________.Correct Answer Cost and time overrunYour Answer Management problems
Multiple Choice Multiple AnswerQuestion The Key terms used in the BCG Product Portfolio matrix are :-Correct Answer Stars , Question marksYour Answer Stars , Question marks , Invest
True/FalseQuestion Sensitivity analysis consists of assessing the degree of risk.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance SheetYour Answer Profit and Loss Account , Auditors report , Balance Sheet
Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial
RelationshipYour Answer Linear Relationship , Chain ratio Relationship , Exponential
Relationship
Multiple Choice Single AnswerQuestion Delay in arrival of domestic/foreign machinery and technicians may
lead to :-Correct Answer Cost and time overrunYour Answer Profit maximisation
Multiple Choice Single AnswerQuestion Past trend method of Commercial appraisal technique is :-Correct Answer Adopted as a guide depending on the consumption pattern of
the society as a wholeYour Answer Adopted as a guide depending on the consumption pattern of the
society as a whole
Multiple Choice Multiple AnswerQuestion Limitations of fund flow statement are :-Correct Answer It does not provide any new information but only rearranges
the various facts , It does not consider non-fund transactionsYour Answer It does not consider non-fund transactions , It does not help in
determining future requirement of funds , It does not provide any new informationbut only rearranges the various facts
Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity
________.Correct Answer DecreasesYour Answer Increases
Multiple Choice Single AnswerQuestion Preoperative expenses includes :-Correct Answer Bank guaranteesYour Answer Brokerage on capital issue
Multiple Choice Single AnswerQuestion Short supplies of materials may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Select The BlankQuestion In order to meet the cost of large project, the technique of ________
has been developed so that the financial commitment and risks associated with aproject are shared between the project sponsor and the lending institutions.
Correct Answer Limited recourse financingYour Answer Limited recourse financing
True/FalseQuestion For computing Interest coverage ratio, Profit after Interest and taxes
are taken into account.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion The ratio which covers those assets which can be converted into
cash immediately is known as :-Correct Answer Quick ratioYour Answer Current ratio
Multiple Choice Multiple AnswerQuestion Management category of Visit report consists of :-
Correct Answer Managing Director , Institutional nominees , Committees of theboard
Your Answer Managing Director , Electrical engineers , Institutional nominees
Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix analyses products in terms of :-Correct Answer Business strength and Industrial AttractivenessYour Answer Relative Market share and Industry Growth rate
Multiple Choice Single AnswerQuestion The basic document for facilitating Project financing is the :-Correct Answer Detailed Project reportYour Answer Detailed Project report
Select The BlankQuestion The ________ market is longer the order of the day since this is an
era of professionalization and specialised services are available at cost.Correct Answer MonopolisticYour Answer Monopolistic
True/FalseQuestion Ratio should be computed on the basis of inter-related figures which
have a cause and effect relationship.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Demand technique forecasting of Commercial appraisal includes :-Correct Answer Future demand of the product , Proper survey of the product ,
Future availability and supply of the productYour Answer Future demand of the product , Export market , Future availability
and supply of the product
Select The BlankQuestion Having decided on the location and product, the promoter takes into
account the ________ that is to be adopted for producing the product.Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology
Multiple Choice Multiple AnswerQuestion Time Series Projection Methods of Demand forecasting consists of :-Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method
Select The Blank
Question More accurate the estimation of the level of current assets andcurrent liabilities, more accurate will be estimation of the requirement of________.
Correct Answer Working capitalYour Answer Working capital
Multiple Choice Multiple AnswerQuestion Defaults category of the Project report may be in respect of :-Correct Answer Term loans , Principal , InterestYour Answer Term loans , Principal , Interest
Match The FollowingQuestion Correct Answer Your Answer
General functional layout Present the general relationship between equipmentbuildings and civil works The plan of work concerning installation as well as initialoperation
Location Broad area such as city, industrial belt etc. The diagrams indicating theflow of materials, utilities, final product, by-products and emission
Site Specific piece of land where the project would be set up Broad area such ascity, industrial belt etc.
Plant layout Physical layout of the factory Specific piece of land where the projectwould be set up
True/FalseQuestion If the organisation is a trading organisation, the requirement of
working capital will be on the lower side.Correct Answer FalseYour Answer True
Select The BlankQuestion Cost of fencing comes under the ________ category of the Project
report.Correct Answer Land and site developmentYour Answer Building cost
Multiple Choice Multiple AnswerQuestion Disposition of funds includes :-Correct Answer Increase in working capital , Preliminary expenses , DividendYour Answer Increase in working capital , Preliminary expenses , Preliminary
expenses written off
Multiple Choice Multiple AnswerQuestion Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in
secured borrowingYour Answer Depreciation , Preliminary expenses written off , Increase in
secured borrowing , Preliminary expenses
Multiple Choice Single AnswerQuestion The Projects which are undertaken to manufacture certain products
which are being used as raw material by the existing units is known as :-Correct Answer Backward Integration ProjectsYour Answer Backward Integration Projects
Select The BlankQuestion In the GE's Stop Light Matrix, when ________ situation prevails ,
Products call for divestment.Correct Answer Average Business Strength and Low Industry attractivenessYour Answer Weak Business strength and high Industry attractiveness
Select The BlankQuestion Investors who invest in the debentures of the company are the
________ of the company.Correct Answer CreditorsYour Answer Creditors
Multiple Choice Multiple AnswerQuestion Debt Service coverage ratio may be considered to be one of the
most important ratios calculated by the :-Correct Answer Bankers , Financial InstitutionsYour Answer Shareholders , Bankers , Creditors
Multiple Choice Single AnswerQuestion Dissentions among the promoters is a :-Correct Answer Management problemYour Answer Management perception
Select The BlankQuestion Goods purchased on credit ________ in flow of funds.Correct Answer Does not resultYour Answer Does not result
True/FalseQuestion The secondary data is collected through market survey, specific for
the project being appraised.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Profit is the result of customer satisfaction, indeed customer delight
under the :-Correct Answer Marketing conceptYour Answer Marketing concept
Multiple Choice Multiple AnswerQuestion Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill
written offYour Answer Funds from operation , Goodwill written off , Funds from long
term loans
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed
out of :-Correct Answer Debentures , Cash Profits , SharesYour Answer Debentures , Cash Profits , Shares
Multiple Choice Multiple AnswerQuestion The sources of long term and medium term finance are :-Correct Answer Equity shares , Public depositYour Answer Equity shares , Bridge loan , Public deposit
Multiple Choice Single AnswerQuestion The emphasis of the Banks and Financial institutions particularly in
India has shifted from 'Sanctions', 'Disbursements' and 'Security-orientation' to'Recovery/Recycling' and :-
Correct Answer Activity orientationYour Answer Activity orientation
Multiple Choice Single AnswerQuestion Technology, design, layout of the plant as well as inputs and
infrastructural facilities are to be considered under :-Correct Answer Technical appraisalYour Answer Financial appraisal
Select The BlankQuestion Detailed Project Report is generally prepared from a ________
report with additional information.Correct Answer FeasibilityYour Answer Feasibility
True/FalseQuestion A high debt equity ratio may indicate that the financial stake of the
creditors is more than that of the owners.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The formula for Break Even Point is :-Correct Answer Fixed cost / ( Sales Price - Variables)Your Answer (Profit after tax +Depreciation + Interest)/ Interest
Multiple Choice Single AnswerQuestion Receivables is categorised under :-Correct Answer Current assets and liabilitiesYour Answer Material inputs and utilities
Multiple Choice Multiple AnswerQuestion Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Internal measure
Select The BlankQuestion Longer the duration of production cycle, higher the requirement of
________.Correct Answer Working capitalYour Answer Fixed assets
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Management aspects includes :-Correct Answer Determination , Organisation Building , Person / system
orientedYour Answer Organisation Building , Person / system oriented , Promoter's
equity / stake
True/FalseQuestion Financial analysis based on accounting ratios will give mis-leading
results if the effects of changes in price level are not taken into account.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirementYour Answer Plant capacity , Quality standards , Raw material requirement
Select The Blank
Question Inflow of funds may not necessarily result in ________.Correct Answer Inflow of cashYour Answer Decrease in funds
Multiple Choice Multiple AnswerQuestion Building cost consists of :-Correct Answer Factory building , Auxiliary buildings , Administrative blockYour Answer cost of development , Factory building , Auxiliary buildings
Match The FollowingQuestion Correct Answer Your Answer
Increase in current liabilities Decreases working capital Stability of funds
Increase in liabilities Inflow of funds Inflow of funds
Decrease in liabilities Outflow of funds Increases working capital
Increase in current assets Increases working capital Outflow of funds
Select The BlankQuestion Sometimes the term ________ is interpreted as cash equivalent i.e.
cash and marketable securities.Correct Answer FundYour Answer Fund
True/FalseQuestion Name of the finance manager comes under the Project organisation
category of the Project report.Correct Answer TrueYour Answer False
True/FalseQuestion Change in the project concept itself may lead to cost and time
overrun.Correct Answer TrueYour Answer True
True/FalseQuestion The maximum Seed Capital assistance provided by IDBI under the
project will be restricted to 50% of the required promoter's contribution or Rs. 50lakhs whichever is lower.
Correct Answer FalseYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
Project organisation Finance manager Completion date of the project
General category of Project report Location of factory Reasons for costescalations
Cost aspect of the project report Consultancy fees Finance manager
Financing plan Unsecured loans Location of factory
True/FalseQuestion Trend projection method is the important technique for forecasting
demand.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability
Multiple Choice Multiple AnswerQuestion The sources of cash are :-Correct Answer Cash from operations , Sale of machinery , Issue of new
sharesYour Answer Purchase of fixed assets , Cash from operations , Sale of
machinery
Multiple Choice Multiple AnswerQuestion External sources of cash are as follows :-Correct Answer Issue of new shares , Long term loans , Short term borrowingsYour Answer Issue of new shares , Long term loans , Short term borrowings
True/FalseQuestion Production line diagrams show the organisation structure of the
project along with information on location, personnel required for variousdepartments, and their inter-relationship.
Correct Answer FalseYour Answer True
Select The BlankQuestion ________ is a current assetCorrect Answer Book debts
Your Answer Book debts
Select The BlankQuestion The company having ________, is appropriate for the strategic
posture of Defensive under the SPACE approach.Correct Answer Lacks both competitive advantage as well as financial strength
and belongs to a not so attractive industry, operating in an unstable environmentYour Answer High financial strength, high industrial strength, enjoying a
competitive advantage and belonging to an attractive industry, operating in arelatively stable environmental conditions
Multiple Choice Single AnswerQuestion Management aspect of detailed project report includesCorrect Answer Organisation structureYour Answer Demand forecasting
Select The BlankQuestion ________ profitability reduces the strain on working capital.Correct Answer HighYour Answer High
Multiple Choice Multiple AnswerQuestion The following are the sources of funds :-Correct Answer Operating Profit , Non operating IncomeYour Answer Operating Profit , Operating Loss , Non operating Income
Multiple Choice Single AnswerQuestion The cash flow of all the years during the expected life of the project
are discounted at a pre-determined cut off rate and :-Correct Answer Net Present value is obtainedYour Answer Internal rate of return is obtained
Multiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-Correct Answer To find out the uses of loans raised by the business , To
indicate the financial strength and weakness of the business , To help tounderstand the changes in assets as well as asset sources which are notrevealed by the income statement
Your Answer To find out the uses of loans raised by the business , To indicatethe financial strength and weakness of the business , To help to understand thechanges in assets as well as asset sources which are not revealed by the incomestatement
Multiple Choice Single AnswerQuestion Cost of materials include :-Correct Answer Cost of components and consumable stores
Your Answer Cost of electricity
True/FalseQuestion The Detailed Project report must indicate the gestation period of the
project.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Strategic Position and Action Evaluation Model :-Correct Answer Is an approach to hammer out an appropriate strategic
posture for a firm and its individual businessYour Answer Which is highly respected for the sophistication, maturity and
quality in its planning systems
Select The BlankQuestion Location of the factory comes under the ________ category of the
Project report.Correct Answer GeneralYour Answer General
Select The BlankQuestion Retained earnings is a source of ________ finance.Correct Answer InternalYour Answer Internal
Multiple Choice Multiple AnswerQuestion General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location
of the factoryYour Answer Name of the Industrial concern , Proposed product , Location of
the factory
Select The BlankQuestion Short term finance is normally for a period upto ________ year.Correct Answer OneYour Answer Two
Multiple Choice Single AnswerQuestion Appointments made at senior level during the half-year is
categorised under :-Correct Answer Organisation and managementYour Answer Current assets and liabilities
Select The BlankQuestion Commission outstanding is ________ of funds.
Correct Answer ApplicationYour Answer Application
Multiple Choice Single AnswerQuestion The statement which shows the movement of cash into and out of
firm's kittie is known as :-Correct Answer Cash flow statementYour Answer Profit and Loss statement
Multiple Choice Single AnswerQuestion Cost of utilities include :-Correct Answer Cost of electricityYour Answer Cost of components and consumable stores
Multiple Choice Single AnswerQuestion Marketing aspect of Detailed Project report includes :-Correct Answer Demand forecastingYour Answer Detailed Project Engineering
True/FalseQuestion In both the extreme situations of trade cycles i.e. Inflation and
depression, requirement of working capital may be high.Correct Answer TrueYour Answer False
Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors should
be considered :-Correct Answer Proximity to raw materials and markets , Availability of
infrastructure , Government policies and other factorsYour Answer Proximity to raw materials and markets , Plant capacity ,
Availability of infrastructure
Project Finance assgn :01: Sushant
True/FalseQuestion Trend projection method is the important technique for
forecasting demand.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The BCG Product Portfolio Matrix :-Correct Answer Is a tool for strategic ( product ) planning and
resource allocation
Your Answer Is a tool for strategic ( product ) planning and resourceallocation
Select The BlankQuestion A market survey generally is a ________ survey.Correct Answer SampleYour Answer Primary
Select The BlankQuestion ________ capital represents permanent capital.Correct Answer EquityYour Answer Equity
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in
expectation of future benefitsYour Answer That it involves current outlay of funds in expectation
of future benefits
True/FalseQuestion Nominal maximum capacity is the capacity that is
technically attainable and this corresponds to the supplier'sguaranteed capacity.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a
projectYour Answer The total of all items of outlay associated with a
project
True/FalseQuestion There is a need for studying Project finance both for the
lenders as well as the borrowers as both of them have equal stake inmaking the Project a success.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Management category of Visit report consists of :-
Correct Answer Managing Director , Institutional nominees ,Committees of the boardYour Answer Managing Director , Institutional nominees ,
Committees of the board
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be
referred to as :-Correct Answer Project financeYour Answer Financial arrangement
True/FalseQuestion Debt service coverage ratio indicates whether cash earned
is sufficient for debt service.Correct Answer TrueYour Answer False
Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while
assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial
compensationYour Answer Environmental factors , Risk involved , Political issues
Multiple Choice Multiple AnswerQuestion The following are the sources of funds :-Correct Answer Operating Profit , Non operating IncomeYour Answer Operating Profit , Non operating Income
Select The BlankQuestion ________ occupies a unique position in the macro
economic development which helps in induction of new technology andfacilitates, greater efficiency as well as higher productivity.Correct Answer InvestmentYour Answer Production
True/FalseQuestion In both the extreme situations of trade cycles i.e. Inflation
and depression, requirement of working capital may be high.Correct Answer TrueYour Answer True
Multiple Choice Multiple Answer
Question In the Detailed Project Report, Marketing aspects includes:-Correct Answer Demand forecasting , Promotion , DistributionYour Answer Demand forecasting , Promotion , Distribution
Multiple Choice Single AnswerQuestion The Projects which are undertaken to manufacture certain
products which require the products of existing units as raw material isknown as :-Correct Answer Forward Integration ProjectsYour Answer Backward Integration Projects
Match The FollowingQuestion Correct Answer Your Answer
Management problems Lack of exposure Lack of exposureManagement Quality Initiative Person orientedManagement Perception Aspiration level/ conservative CorporateOrganisational Climate Person oriented Aspiration level/ conservative
Multiple Choice Multiple AnswerQuestion Demand technique forecasting of Commercial appraisal
includes :-Correct Answer Future demand of the product , Proper survey of the
product , Future availability and supply of the productYour Answer Future demand of the product , Proper survey of the
product , Export market , Future availability and supply of the product
Select The BlankQuestion Details regarding Administrative / controlling office comes
under the ________ category.Correct Answer GeneralYour Answer Cost aspect
Multiple Choice Multiple AnswerQuestion Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off ,
Increase in secured borrowingYour Answer Preliminary expenses written off , Increase in secured
borrowingMultiple Choice Single Answer
Question A project objective which states What "achieving it " wouldcost is known as :-
Correct Answer Finance cost aspectYour Answer Finance cost aspect
Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following
factors should be considered :-Correct Answer Proximity to raw materials and markets , Availability
of infrastructure , Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of
infrastructure , Government policies and other factors
Multiple Choice Single AnswerQuestion The profit earned from operations of the project during life
of the project is known as :-Correct Answer Cash inflowYour Answer Profit after appropriation
Multiple Choice Multiple AnswerQuestion Financial and economic aspect of the Visit report consists
of :-Correct Answer Company's financial year , Impact of Government
policies on company operations , Comments on the last publishedaccountsYour Answer Company's financial year , Impact of Government
policies on company operations , Sales trends
Select The BlankQuestion A Project has a ________ represented by growth,
maturity and decay.Correct Answer Life cycleYour Answer Life cycle
True/FalseQuestion Current assets includes stock-in-process.Correct Answer TrueYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
Export market technique of Commercial appraisal Governmentprovides ample encouragement Government provides ampleencouragement
Demand Technique forecasting of Commercial appraisal Futuredemand of the product A method based on the assumption that thebehaviour of the variables would continue in similar/same directionand magnitude, as in the past
Past trend method of Commercial appraisal Adopted as a guidedepending on the consumption pattern of the society as a wholeAdopted as a guide depending on the consumption pattern of thesociety as a whole
End use method of Commercial appraisal A list of industries whereinthe product is used is made and quantity and volume is arrived at Alist of industries wherein the product is used is made and quantity andvolume is arrived at
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is
termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective
True/FalseQuestion The emphasis of a finance manager should be on taking a
synergistic view of the project rather than looking at it only from thefinancial aspects.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Financing plans consists of :-Correct Answer Share capital , Term loans , Internal accrualsYour Answer Share capital , Term loans , Internal accruals
Multiple Choice Single AnswerQuestion Disposition of funds includes :-Correct Answer Interest on term loansYour Answer Increase in secured borrowing
Multiple Choice Single AnswerQuestion Gross Working Capital means :-Correct Answer Current assetsYour Answer Current assets less Current liabilities
Select The BlankQuestion ________ in assets involves outflow of funds.Correct Answer IncreaseYour Answer Increase
Select The BlankQuestion The Project Cycle should be in the ________ orderCorrect Answer Identification of Project - Project Appraisal -
Negotiations for loansYour Answer Identification of Project - Project Appraisal -
Negotiations for loans
True/FalseQuestion Debt Equity ratio is a 'Solvency ratio'.Correct Answer TrueYour Answer True
Select The BlankQuestion Investors who invest in the debentures of the company
are the ________ of the company.Correct Answer CreditorsYour Answer Creditors
Select The BlankQuestion Longer the duration of production cycle, higher the
requirement of ________.Correct Answer Working capitalYour Answer Working capital
True/FalseQuestion Cost and time overrun of the project may lead to loss on
account of lost market opportunities.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The ratio which indicates the ability of the company to
meet current obligations is termed as :-Correct Answer Current ratioYour Answer Current ratio
Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses
upon appraising the likely technical gaps consists of :-
Correct Answer Problems pertaining to the period when the projectis in operationYour Answer Problems pertaining to the period when the project is
in operation
Multiple Choice Multiple AnswerQuestion Technical appraisal is basically concerned with :-Correct Answer Technology , Layout of the plant , Design of the
plantYour Answer Technology , Layout of the plant , Design of the plant
True/FalseQuestion Market potential should be determined under the
Marketing aspect of the Project report.Correct Answer TrueYour Answer True
Select The BlankQuestion Having decided on the location and product, the promoter
takes into account the ________ that is to be adopted for producingthe product.Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology
Multiple Choice Single AnswerQuestion Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Multiple Choice Single AnswerQuestion BCG Product Portfolio Matrix analyses products on the
basis of :-Correct Answer Relative Market share and Industry Growth rateYour Answer Relative Market share and Industry Growth rate
Multiple Choice Single AnswerQuestion Preliminary expenses include :-Correct Answer Drafting of Memorandum expensesYour Answer Drafting of Memorandum expenses
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion Cost under-estimation at the project preparation and evaluation stage leads to
cost and time over run.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Short supplies of materials may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Match The FollowingQuestion Correct Answer Your Answer
Project organisation Finance manager Completion date of the project
General category of Project report Location of factory Location of factory
Cost aspect of the project report Consultancy fees Reasons for cost escalations
Financing plan Unsecured loans Finance manager
Select The BlankQuestion ________ is a current assetCorrect Answer Book debtsYour Answer Furniture
Multiple Choice Single AnswerQuestion Disposition of funds includes :-Correct Answer Interest on term loansYour Answer Increase in secured borrowing
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out of :-Correct Answer Cash Profits , Shares , DebenturesYour Answer Cash Profits , Commercial Papers
True/FalseQuestion Cost and time overrun of the project may lead to loss on account of lost
market opportunities.Correct Answer TrueYour Answer True
Select The BlankQuestion Commission outstanding is ________ of funds.Correct Answer ApplicationYour Answer No flow
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Multiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-Correct Answer To find out the uses of loans raised by the business , To indicate the
financial strength and weakness of the business , To help to understand the changes inassets as well as asset sources which are not revealed by the income statement
Your Answer To find out the uses of loans raised by the business , To help tounderstand the changes in assets as well as asset sources which are not revealed by theincome statement , Helps to prepare financial statements
Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon appraising
the likely technical gaps consists of :-Correct Answer Problems faced during the Construction and Project implementationYour Answer Problems faced during the Construction and Project implementation
True/FalseQuestion The Detailed Project report spells out the modus operandi for the
implementation of the Project and the realization of the Project objectives.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors should be
considered :-Correct Answer Proximity to raw materials and markets , Availability of infrastructure
, Government policies and other factorsYour Answer Proximity to raw materials and markets , Plant capacity , Availability of
infrastructure
True/FalseQuestion Change in the project concept itself may lead to cost and time overrun.Correct Answer TrueYour Answer True
Select The Blank
Question Name and designation of the chief executive comes under the ________category.
Correct Answer GeneralYour Answer Project organisation
Select The BlankQuestion ________ occupies a unique position in the macro economic development
which helps in induction of new technology and facilitates, greater efficiency as well ashigher productivity.
Correct Answer InvestmentYour Answer Production
Multiple Choice Multiple AnswerQuestion Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written
offYour Answer Funds from operation , Funds from long term loans
Multiple Choice Multiple AnswerQuestion Financing plans consists of :-Correct Answer Share capital , Term loans , Internal accrualsYour Answer Share capital , Term loans , Internal accruals
Multiple Choice Single AnswerQuestion Financial aspect of Detailed Project report includes :-Correct Answer Fixation of means of financial structureYour Answer Fixation of means of financial structure
Select The BlankQuestion ________ is that scarce input which financial resources alone cannot
mobilise.Correct Answer ManagementYour Answer Management
Multiple Choice Single AnswerQuestion A project can be regarded as the sum of the activities directed towards a :-Correct Answer Specific resultYour Answer Specific result
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective
Select The BlankQuestion Short term finance is normally for a period upto ________ year.
Correct Answer OneYour Answer One
Select The BlankQuestion A Project has a ________ represented by growth, maturity and decay.Correct Answer Life cycleYour Answer Life cycle
Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing Project
finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensationYour Answer Environmental factors , Risk involved , Managerial compensation
Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify substantial
commitment of funds where there is :-Correct Answer Strong Business Strength and high Industry attractiveness , Average
Business strength and high Industry attractivenessYour Answer Strong Business Strength and high Industry attractiveness , Average
Business Strength and Medium Industry Attractiveness , Average Business strength andhigh Industry attractiveness
Select The BlankQuestion Longer the duration of production cycle, higher the requirement of
________.Correct Answer Working capitalYour Answer Working capital
Select The BlankQuestion ________ in assets involves outflow of funds.Correct Answer IncreaseYour Answer Increase
True/FalseQuestion For computing Interest coverage ratio, Profit after Interest and taxes are taken
into account.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion The cash flow of all the years during the expected life of the project are
discounted at a pre-determined cut off rate and :-Correct Answer Net Present value is obtainedYour Answer Average rate of return is obtained
Multiple Choice Single AnswerQuestion The ratio which indicates the ability of the company to meet current
obligations is termed as :-Correct Answer Current ratioYour Answer Current ratio
True/FalseQuestion Sensitivity analysis consists of assessing the degree of risk.Correct Answer TrueYour Answer True
True/FalseQuestion In small scale organisation, requirement of working capital is quite high due
to high amount of overheads, high buying costs and high selling cost.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Marketing aspect of Detailed Project report includes :-Correct Answer Demand forecastingYour Answer Demand forecasting
True/FalseQuestion The secondary data is collected through market survey, specific for the
project being appraised.Correct Answer FalseYour Answer True
True/FalseQuestion Debt service coverage ratio indicates whether cash earned is sufficient for
debt service.Correct Answer TrueYour Answer True
Select The BlankQuestion Position regarding requirement and training of operational staff comes under
the ________ category of Project report.Correct Answer Project organisationYour Answer Project organisation
Match The FollowingQuestion Correct Answer Your Answer
Moving into new areas/product lines Diversification Projects Rehabilitation Projects
Suppliers' credit Short term finance Short term finance
Deferred credit Long term finance Long term finance
Setting up new units New Projects Diversification Projects
Select The BlankQuestion Retained earnings indicates that whatever profits are earned by the company
are not distributed by it by way of ________ but are kept aside for use in future forexpansion or other purpose.
Correct Answer DividendYour Answer Dividend
Multiple Choice Single AnswerQuestion The basic document for facilitating Project financing is the :-Correct Answer Detailed Project reportYour Answer Articles of Association
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirementYour Answer Plant capacity , Quality standards , Power / telecom facilities
Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential reserve of cash is
termed as :-Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets
Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix :-Correct Answer Which is highly respected for the sophistication, maturity and quality
in its planning systemsYour Answer Which is highly respected for the sophistication, maturity and quality in
its planning systems
Multiple Choice Single AnswerQuestion Geographic market appraisal answers to :-Correct Answer Where do the customers live?Your Answer Where do the customers live?
Select The BlankQuestion Sometimes the term ________ is interpreted as cash equivalent i.e. cash and
marketable securities.Correct Answer FundYour Answer Fund
Multiple Choice Multiple AnswerQuestion The temporary requirement of working capital can be financed out of :-Correct Answer Inter-corporate Deposits , Commercial PapersYour Answer Inter-corporate Deposits , Commercial Papers
True/FalseQuestion Current assets includes stock-in-process.Correct Answer TrueYour Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Match The FollowingQuestion Correct Answer Your Answer
Project Financing Help improving Corporate Return on Equity Industrial FinanceCorporation of India
Finance in international financial markets Issue of Euro bonds Issue of Euro bonds
International financial institutions World Bank Increasing emphasis on the Privateinitiative
Policy of Liberalisation, Privatisation and Globalisation Increasing emphasis on thePrivate initiative Help improving Corporate Return on Equity
Multiple Choice Multiple AnswerQuestion The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance SheetYour Answer Profit and Loss Account , Auditors report , Balance Sheet
Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Management problems
Select The BlankQuestion The Project Cycle should be in the ________ orderCorrect Answer Identification of Project - Project Appraisal - Negotiations for loansYour Answer Identification of Project - Project Appraisal - Negotiations for loans
True/FalseQuestion Change in the project concept itself may lead to cost and time overrun.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The industrial concern earned profits by increasing the sales volume under
the :-Correct Answer Sales conceptYour Answer Marketing concept
True/FalseQuestion Cost and time overrun of the project may lead to loss on account of lost
market opportunities.
Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion Management qualities includes :-Correct Answer Honesty , Financial resources , InitiativeYour Answer Honesty , Initiative , Too ambitious promoters
Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial
RelationshipYour Answer Linear Relationship , Chain ratio Relationship , Exponential Relationship
True/FalseQuestion Financial analysis based on accounting ratios will give mis-leading results if
the effects of changes in price level are not taken into account.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-Correct Answer To find out the uses of loans raised by the business , To indicate the
financial strength and weakness of the business , To help to understand the changes inassets as well as asset sources which are not revealed by the income statement
Your Answer To indicate the financial strength and weakness of the business , To helpto understand the changes in assets as well as asset sources which are not revealed by theincome statement , Helps to prepare financial statements
True/FalseQuestion The maximum Seed Capital assistance provided by IDBI under the project
will be restricted to 50% of the required promoter's contribution or Rs. 50 lakhswhichever is lower.
Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspectYour Answer Strategic perspective , Time span , Finance cost aspect , Social aspect
Multiple Choice Single AnswerQuestion Strategic Position and Action Evaluation Model :-Correct Answer Is an approach to hammer out an appropriate strategic posture for a
firm and its individual businessYour Answer Which is highly respected for the sophistication, maturity and quality in
its planning systems
Multiple Choice Single AnswerQuestion The Projects which are undertaken to manufacture certain products which are
being used as raw material by the existing units is known as :-Correct Answer Backward Integration ProjectsYour Answer Backward Integration Projects
Multiple Choice Multiple AnswerQuestion Technical appraisal is basically concerned with :-Correct Answer Technology , Layout of the plant , Design of the plantYour Answer Technology , Layout of the plant , Design of the plant
True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from Pollution
Control Authorities before setting up any project.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors should be
considered :-Correct Answer Proximity to raw materials and markets , Availability of infrastructure
, Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of infrastructure ,
Government policies and other factors
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future
benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
Select The BlankQuestion Longer the duration of production cycle, higher the requirement of
________.Correct Answer Working capitalYour Answer Working capital
Select The BlankQuestion Inflow of funds may not necessarily result in ________.
Correct Answer Inflow of cashYour Answer Inflow of cash
Multiple Choice Single AnswerQuestion Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Select The BlankQuestion Details regarding Administrative / controlling office comes under the
________ category.Correct Answer GeneralYour Answer Project organisation
Multiple Choice Multiple AnswerQuestion Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Quick ratio
Select The BlankQuestion Depreciation is sometimes treated as ________ funds.Correct Answer SourceYour Answer Source
Multiple Choice Single AnswerQuestion Miscellaneous fixed assets includes :-Correct Answer CablesYour Answer Cables
Multiple Choice Single AnswerQuestion In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high growth
rateYour Answer Products which enjoy a high market share as well as a high growth rate
Select The BlankQuestion ________ is a current liability.Correct Answer Trade creditYour Answer Unsecured loans
Match The FollowingQuestion Correct Answer Your Answer
Econometric method Mathematical representation of economic relationship Suitable forforecasting the demand for intermediate products
Primary source of data Market survey Market survey
Secondary source of data Collected in some other context Collected in some othercontext
Leading indicators Variables that change faster than others Mathematical representationof economic relationship
Multiple Choice Multiple AnswerQuestion Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured
borrowingYour Answer Depreciation , Increase in secured borrowing
True/FalseQuestion The construction of National Golden Quadrilateral can be recognised as
Project.Correct Answer TrueYour Answer True
True/FalseQuestion The cost factors of the product mixed is also taken into account to arrive at
cost at various levels of production and its cost impact of the manufacturing.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Capital Issue expenses include :-Correct Answer Brokerage fees to registrarsYour Answer Market research expenses
Select The BlankQuestion Having decided on the location and product, the promoter takes into account
the ________ that is to be adopted for producing the product.Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology
Multiple Choice Single AnswerQuestion Past trend method of Commercial appraisal technique is :-Correct Answer Adopted as a guide depending on the consumption pattern of the
society as a wholeYour Answer A list of industries wherein the product is used is made and quantity and
volume is arrived at
Multiple Choice Multiple Answer
Question Management category of Visit report consists of :-Correct Answer Managing Director , Institutional nominees , Committees of the boardYour Answer Managing Director , Electrical engineers , Committees of the board
Multiple Choice Single AnswerQuestion Sanctioned bank limits is categorised under :-Correct Answer Working capitalYour Answer Production, Sales and Profitability
Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix analyses products in terms of :-Correct Answer Business strength and Industrial AttractivenessYour Answer Business strength and Industrial Attractiveness
Multiple Choice Multiple AnswerQuestion Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability , Sales trends
Multiple Choice Single AnswerQuestion Cost of overheads include :-Correct Answer Cost of repairs and maintenanceYour Answer Cost of repairs and maintenance
Multiple Choice Multiple AnswerQuestion External sources of cash are as follows :-Correct Answer Issue of new shares , Long term loans , Short term borrowingsYour Answer Issue of new shares , Long term loans , Short term borrowings
Select The BlankQuestion The company having ________, is appropriate for the strategic posture of
Conservative under the SPACE approach.Correct Answer Limited competitive advantage, belonging to a not so attractive
industry but enjoying financial strength and operating in a relatively stable environmentYour Answer High financial strength, high industrial strength, enjoying a competitive
advantage and belonging to an attractive industry, operating in a relatively stableenvironmental conditions
True/FalseQuestion Sensitivity analysis consists of assessing the degree of risk.Correct Answer TrueYour Answer True
True/FalseQuestion A high debt equity ratio may indicate that the financial stake of the creditors
is more than that of the owners.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion The cost of Plant and Machinery includes :-Correct Answer Cost of stores and sparesYour Answer Building and civil construction
Select The BlankQuestion The basic difference between the feasibility study report and ________ is the
level of accuracy and degree of detail.Correct Answer Detailed Project reportYour Answer Audit report
1
True/FalseQuestion The Detailed Project report spells out the modus operandi for the implementation of the Project
and the realization of the Project objectives.Correct Answer True
Your Answer True
True/FalseQuestion Production line diagrams show the organisation structure of the project along with information on
location, personnel required for various departments, and their inter-relationship.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon appraising the likely technical
gaps consists of :-Correct Answer Problems faced during the Construction and Project implementation
Your Answer Problems faced during the Construction and Project implementation
Multiple Choice Single AnswerQuestion In BCG Matrix "STARS" indicate :-
Correct Answer Products which enjoy a high market share as well as a high growth rate
Your Answer Products which enjoy a high market share as well as a high growth rate
Multiple Choice Multiple AnswerQuestion Management category of Visit report consists of :-
Correct Answer Managing Director , Institutional nominees , Committees of the board
Your Answer Managing Director , Institutional nominees , Committees of the board
Select The BlankQuestion A Project has a ________ represented by growth, maturity and decay.
Correct Answer Life cycle
Your Answer Set of objectives
Multiple Choice Multiple AnswerQuestion Casual methods of Demand forecasting consists of :-
Correct Answer Consumption-level method , Econometric method
Your Answer Consumption-level method
Select The Blank
2
Question Excessive expenditures on foreign technicians leads to ________.
Correct Answer Cost and time overrun
Your Answer Cost and time overrun
Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is known as :-
Correct Answer Finance cost aspect
Your Answer Time span
Multiple Choice Single AnswerQuestion Marketing aspect of Detailed Project report includes :-
Correct Answer Demand forecasting
Your Answer Demand forecasting
Multiple Choice Multiple AnswerQuestion The sources of cash are :-
Correct Answer Sale of machinery , Cash from operations , Issue of new shares
Your Answer Cash from operations , Sale of machinery , Issue of new shares
Multiple Choice Single AnswerQuestion Infrastructural projects include :-
Correct Answer Power Generation and Distribution
Your Answer Industrial machinery
Select The BlankQuestion ________ is the summary of cash book or Receipts and Payments statement.
Correct Answer Cash flow statement
Your Answer Trial balance
Multiple Choice Single AnswerQuestion Receivables is categorised under :-
Correct Answer Current assets and liabilities
Your Answer Current assets and liabilities
True/FalseQuestion A project is unique and no two projects are similar.
Correct Answer True
3
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
End use method of Commercialappraisal
A list of industries wherein the productis used is made and quantity andvolume is arrived at
A list of industries wherein the product isused is made and quantity and volumeis arrived at
Export market technique ofCommercial appraisal
Government provides ampleencouragement
Government provides ampleencouragement
Demand Technique forecasting ofCommercial appraisal
Future demand of the product Future demand of the product
Past trend method of Commercialappraisal
Adopted as a guide depending on theconsumption pattern of the society asa whole
Adopted as a guide depending on theconsumption pattern of the society as awhole
Multiple Choice Single AnswerQuestion A Project is a temporary endeavor to achieve some specific objectives within a :-
Correct Answer Predefined time
Your Answer Predefined time
Select The BlankQuestion ________ in liabilities involves inflow of funds.
Correct Answer Increase
Your Answer Increase
True/FalseQuestion The emphasis of a finance manager should be on taking a synergistic view of the project rather
than looking at it only from the financial aspects.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Cost of utilities include :-
Correct Answer Cost of electricity
Your Answer Cost of electricity
Multiple Choice Multiple AnswerQuestion Marketing category of the Project report consists of :-
Correct Answer Target market , Market potential , Pricing policy
Your Answer Target market , Market potential , Pricing policy
Multiple Choice Single Answer
4
Question In BCG Matrix "QUESTION MARKS" indicate :-
Correct Answer Products which have high growth potential but low market share
Your Answer Products which have high growth potential but low market share
Select The BlankQuestion Location of the factory comes under the ________ category of the Project report.
Correct Answer General
Your Answer General
True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities
before setting up any project.Correct Answer True
Your Answer False
Multiple Choice Single AnswerQuestion Disposition of funds includes :-
Correct Answer Interest on term loans
Your Answer Interest on term loans
Multiple Choice Multiple AnswerQuestion Internal sources of funds are :-
Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off
Your Answer Funds from operation
Select The BlankQuestion Depreciation is sometimes treated as ________ funds.
Correct Answer Source
Your Answer Application
Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where
there is :-Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high
Industry attractivenessYour Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high
Industry attractiveness , Average Business Strength and Low Industry attractiveness
Multiple Choice Multiple AnswerQuestion The sources of long term and medium term finance are :-
Correct Answer Equity shares , Public deposit
5
Your Answer Equity shares , Bridge loan , Working capital loan
True/FalseQuestion The cost factors of the product mixed is also taken into account to arrive at cost at various levels of
production and its cost impact of the manufacturing.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing Project finance financing are :-
Correct Answer Environmental factors , Risk involved , Managerial compensation
Your Answer Environmental factors , Risk involved , Managerial compensation
Multiple Choice Single AnswerQuestion Technical aspect of detailed project report includes :-
Correct Answer Detailed Project Engineering
Your Answer Detailed Project Engineering
Match The FollowingQuestion Correct Answer Your Answer
Technical aspect of detailed projectreport
Detailed Project Engineering Detailed Project Engineering
Financial aspect of Detailed Projectreport
Profitability Profitability
Marketing aspect of Detailed Projectreport
Distribution Distribution
Management aspect of detailed projectreport
Conservativeness Conservativeness
Multiple Choice Multiple AnswerQuestion Advantages of fund flow statement are :-
Correct Answer It determines financial consequences of the business operations , It enables the firm to plan itsfinancial resources properly , It helps as a reliable guide for the future requirement of funds
Your Answer It determines financial consequences of the business operations , It enables the firm to plan itsfinancial resources properly , It helps as a reliable guide for the future requirement of funds
Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any one of the following basic
strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture
Your Answer Aggressive Posture , Competitive Posture , Defensive Posture
Select The Blank
6
Question Details regarding Internal accruals comes under the ________ category of Project report.
Correct Answer Financing plan
Your Answer General category
True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength
and Industry Attractiveness.Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion The applications of cash are :-
Correct Answer Purchase of fixed assets , Payment of long term loans
Your Answer Purchase of fixed assets , Payment of long term loans , Issue of new machinery
Select The BlankQuestion The Project Cycle should be in the ________ order
Correct Answer Identification of Project - Project Appraisal - Negotiations for loans
Your Answer Identification of Project - Project Appraisal - Negotiations for loans
True/FalseQuestion Financial analysis based on accounting ratios will give mis-leading results if the effects of changes
in price level are not taken into account.Correct Answer True
Your Answer True
True/FalseQuestion There is a need for studying Project finance both for the lenders as well as the borrowers as both
of them have equal stake in making the Project a success.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed as :-
Correct Answer Strategic perspective
Your Answer Strategic perspective
True/FalseQuestion Current assets includes stock-in-process.
Correct Answer True
7
Your Answer False
Multiple Choice Multiple AnswerQuestion External sources of cash are as follows :-
Correct Answer Issue of new shares , Long term loans , Short term borrowings
Your Answer Issue of new shares , Depreciation
Multiple Choice Single AnswerQuestion End use method of Commercial appraisal technique is :-
Correct Answer A list of industries wherein the product is used is made and quantity and volume is arrived at
Your Answer A list of industries wherein the product is used is made and quantity and volume is arrived at
Multiple Choice Single AnswerQuestion The Projects which are undertaken for further enhancing/augmenting the existing capacity is
known as :-Correct Answer Expansion Projects
Your Answer Expansion Projects
Select The BlankQuestion Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable
securities.Correct Answer Fund
Your Answer Investment
1
True/FalseQuestion 1 The advantage of secondary sources of data is that it is readily and economically available.Correct Answer TrueYour Answer True
True/FalseQuestion2 In small scale organisation, requirement of working capital is quite high due to high amount
of overheads, high buying costs and high selling cost.Correct Answer TrueYour Answer True
True/FalseQuestion3 Banks and Financial Institutions, world-wide, are now financing projects with strategies and
terms that would have been hard to believe/imagine just a few years back.Correct Answer TrueYour Answer True
Select The BlankQuestion 4 ________ is a current assetCorrect Answer Book debtsYour Answer Furniture
Multiple Choice Multiple AnswerQuestion 5 Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial RelationshipYour Answer Linear Relationship , Exponential Relationship , Polynomial Relationship
Multiple Choice Single AnswerQuestion 6 Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Management problems
Multiple Choice Single AnswerQuestion 7 Technical aspect of detailed project report includes :-Correct Answer Detailed Project EngineeringYour Answer Detailed Project Engineering
Multiple Choice Multiple AnswerQuestion 8 Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowingYour Answer Preliminary expenses written off , Increase in secured borrowing
Multiple Choice Single AnswerQuestion 9 Delay in arrival of domestic/foreign machinery and technicians may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Select The BlankQuestion 10 A smaller unit into which the overall requirement of capital of a company is sub-divided is
termed as ________.Correct Answer ShareYour Answer Share
Multiple Choice Single AnswerQuestion11 A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective
Multiple Choice Single Answer
2
Question 12 Sewerage and drainage cost of the project is categorised under :-Correct Answer Building costYour Answer Building cost
Multiple Choice Multiple AnswerQuestion13 Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written offYour Answer Funds from operation , Goodwill written off
Multiple Choice Multiple AnswerQuestion14 In the Detailed Project Report, Management aspects includes :-Correct Answer Determination , Organisation Building , Person / system orientedYour Answer Determination , Organisation Building , Person / system oriented
Select The BlankQuestion15 Short term finance is normally for a period upto ________ year.Correct Answer OneYour Answer One
True/FalseQuestion16 Current assets includes stock-in-process.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion17 The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
Multiple Choice Multiple AnswerQuestion18 Time Series Projection Methods of Demand forecasting consists of :-Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method
Select The BlankQuestion 19 ________ is a current liability.Correct Answer Trade creditYour Answer Trade credit
True/FalseQuestion20 Managerial problems in a project are the most pervasive.Correct Answer TrueYour Answer True
Select The BlankQuestion21 Longer the duration of production cycle, higher the requirement of ________.Correct Answer Working capitalYour Answer Working capital
Select The BlankQuestion22 Retained earnings is a source of ________ finance.Correct Answer InternalYour Answer Short term
Select The BlankQuestion23 ________ is the summary of cash book or Receipts and Payments statement.Correct Answer Cash flow statementYour Answer Trial balance
3
True/FalseQuestion24 In the BCG Matrix, the key term of Cash Cows require further commitment of funds.Correct Answer FalseYour Answer True
True/FalseQuestion25 Cost and time overrun of the project may lead to loss on account of lost market
opportunities.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion26 A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect
Multiple Choice Multiple AnswerQuestion27 Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric methodYour Answer Consumption-level method , Econometric method
Multiple Choice Single AnswerQuestion 28 In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high growth rateYour Answer Products which enjoy a high market share as well as a high growth rate
Multiple Choice Single AnswerQuestion 29 Psychographic market appraisal answers to :-Correct Answer Why they buy?Your Answer Why they buy?
True/FalseQuestion30 Production line diagrams show the organisation structure of the project along with
information on location, personnel required for various departments, and their inter-relationship.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion31 While choosing the location for a project, the following factors should be considered :-Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government
policies and other factorsYour Answer Proximity to raw materials and markets , Availability of infrastructure , Government
policies and other factors
Multiple Choice Single AnswerQuestion32 The cost which change in the same proportion in which the level of production changes is
known as :-Correct Answer Variable costYour Answer Variable cost
Select The BlankQuestion33 Goods purchased on credit ________ in flow of funds.Correct Answer Does not resultYour Answer Decreases
Multiple Choice Multiple AnswerQuestion34 Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Quick ratio
4
Multiple Choice Single AnswerQuestion35 Appointments made at senior level during the half-year is categorised under :-Correct Answer Organisation and managementYour Answer Organisation and management
Multiple Choice Single AnswerQuestion36 Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a projectYour Answer The total of all items of outlay associated with a project
Multiple Choice Multiple AnswerQuestion37 Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability , Sales trends
Match The FollowingQuestion38 Correct Answer Your Answer
Source of funds Depreciation Equity capital
Fixed assets Building Building
Current assets Debtors Debtors
Current liability Trade credit Trade credit
Multiple Choice Single AnswerQuestion39 Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Multiple Choice Multiple AnswerQuestion 40 General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location of the factoryYour Answer Name of the Industrial concern , Proposed product , Location of the factory
Multiple Choice Multiple AnswerQuestion 41 The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance SheetYour Answer Profit and Loss Account , Balance Sheet
Multiple Choice Single AnswerQuestion42 Short supplies of materials may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Multiple Choice Multiple AnswerQuestion43 After the SPACE chart is constructed, we would normally get any one of the following basic
strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture
Select The BlankQuestion 44 ________ occupies a unique position in the macro economic development which helps in
induction of new technology and facilitates, greater efficiency as well as higher productivity.Correct Answer InvestmentYour Answer Marketing
5
Multiple Choice Single AnswerQuestion45 Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Select The BlankQuestion46 Name and designation of the chief executive comes under the ________ category.Correct Answer GeneralYour Answer General
Match The FollowingQuestion47 Correct Answer Your Answer
Private investment Power generation Machine tools
Project Time -bound Time -bound
Programme Not necessarily time bound Not necessarily time bound
Foreign direct investment Machine tools Power generation
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Match The FollowingQuestion Correct Answer Your Answer
Econometric method Mathematical representation ofeconomic relationship
Mathematical representation ofeconomic relationship
Primary source of data Market survey Market survey
Secondary source of data Collected in some other context Collected in some other context
Leading indicators Variables that change faster thanothers
Variables that change faster thanothers
Select The BlankQuestion Details regarding Internal accruals comes under the ________ category of Project
report.Correct Answer Financing plan
Your Answer Financing plan
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects includes :-
Correct Answer Plant capacity , Quality standards , Raw material requirement
Your Answer Plant capacity , Quality standards , Raw material requirement
Select The BlankQuestion A smaller unit into which the overall requirement of capital of a company is sub-
divided is termed as ________.Correct Answer Share
6
Your Answer Share
Select The BlankQuestion In order to meet the cost of large project, the technique of ________ has been
developed so that the financial commitment and risks associated with a project areshared between the project sponsor and the lending institutions.
Correct Answer Limited recourse financing
Your Answer Limited recourse financing
Select The BlankQuestion ________ is a current liability.
Correct Answer Trade credit
Your Answer Trade credit
Select The BlankQuestion ________ is a current asset
Correct Answer Book debts
Your Answer Book debts
Multiple Choice Multiple AnswerQuestion Debt Service coverage ratio may be considered to be one of the most important ratios
calculated by the :-Correct Answer Bankers , Financial Institutions
Your Answer Bankers , Creditors , Financial Institutions
Multiple Choice Multiple AnswerQuestion Ratios relating to working capital are :-
Correct Answer Current ratio , Internal measure , Quick ratio
Your Answer Current ratio , Internal measure , Quick ratio
Multiple Choice Single AnswerQuestion Cost of laying roads comes under :-
Correct Answer Land and site cost
Your Answer Preoperative cost
Multiple Choice Single AnswerQuestion Pre-operative expenses include :-
Correct Answer Interest on deferred payments
Your Answer Market research expenses
7
True/FalseQuestion The cost factors of the product mixed is also taken into account to arrive at cost at
various levels of production and its cost impact of the manufacturing.Correct Answer True
Your Answer True
Select The BlankQuestion Retained earnings indicates that whatever profits are earned by the company are not
distributed by it by way of ________ but are kept aside for use in future for expansionor other purpose.
Correct Answer Dividend
Your Answer Dividend
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Management aspects includes :-
Correct Answer Determination , Organisation Building , Person / system oriented
Your Answer Organisation Building , Person / system oriented , Promoter's equity / stake
True/FalseQuestion The Detailed Project report spells out the modus operandi for the implementation of
the Project and the realization of the Project objectives.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix analyses products in terms of :-
Correct Answer Business strength and Industrial Attractiveness
Your Answer Company's competitive advantage and Company's financial strength
True/FalseQuestion The emphasis of a finance manager should be on taking a synergistic view of the
project rather than looking at it only from the financial aspects.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any one of the following
basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture
Your Answer Aggressive Posture , Competitive Posture , Defensive Posture
True/False
8
Question The ratios of one organisation compared with the ratios of the same organisation istermed as inter-firm comparison.
Correct Answer False
Your Answer False
Select The BlankQuestion Detailed Project Report is generally prepared from a ________ report with additional
information.Correct Answer Feasibility
Your Answer Feasibility
Select The BlankQuestion Under ________ method, the forecasts are modified in the light of observed errors.
Correct Answer Exponential smoothing
Your Answer Cobb Douglas Relationship
Match The FollowingQuestion Correct Answer Your Answer
Source of funds Depreciation Investment
Fixed assets Building Building
Current assets Debtors Debtors
Current liability Trade credit Trade credit
True/FalseQuestion The Detailed Project report must indicate the gestation period of the project.
Correct Answer True
Your Answer True
True/FalseQuestion Delay in recruitment of staff may lead to cost and time overrun
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may lead to :-
Correct Answer Cost and time overrun
Your Answer Cost and time overrun
9
Multiple Choice Single AnswerQuestion Infrastructural projects include :-
Correct Answer Power Generation and Distribution
Your Answer Power Generation and Distribution
Multiple Choice Single AnswerQuestion The method for evaluating the profitability of industrial projects whose object is to
ascertain the period required for recovering the entire investment made in a project isknown as :-
Correct Answer Pay back method
Your Answer Pay back method
Select The BlankQuestion ________ in assets involves outflow of funds.
Correct Answer Increase
Your Answer Increase
Multiple Choice Single AnswerQuestion The rate of discount which would equate the present value of investments to the
present value of benefits over the life of the project is known as :-Correct Answer Internal rate of return
Your Answer Internal rate of return
Select The BlankQuestion Cost of fencing comes under the ________ category of the Project report.
Correct Answer Land and site development
Your Answer Land and site development
Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential reserve of cash is termed as
:-Correct Answer Net Working capital to total assets
Your Answer Quick ratio
Multiple Choice Single AnswerQuestion The sources of funding have expanded from banks, insurance companies and
multilateral agencies to include the :-Correct Answer Capital market
Your Answer Capital market
True/False
10
Question Sensitivity analysis consists of assessing the degree of risk.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out of :-
Correct Answer Cash Profits , Shares , Debentures
Your Answer Cash Profits , Shares
Multiple Choice Single AnswerQuestion Sources of funds include :-
Correct Answer Increase in secured borrowing
Your Answer Increase in secured borrowing
True/FalseQuestion Nominal maximum capacity is the capacity that is technically attainable and this
corresponds to the supplier's guaranteed capacity.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors should be considered :-
Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Governmentpolicies and other factors
Your Answer Proximity to raw materials and markets , Availability of infrastructure , Governmentpolicies and other factors
Multiple Choice Multiple AnswerQuestion Financing plans consists of :-
Correct Answer Share capital , Term loans , Internal accruals
Your Answer Share capital , Term loans , Internal accruals
True/FalseQuestion Ratio should be computed on the basis of inter-related figures which have a cause and
effect relationship.Correct Answer True
Your Answer True
True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are generally during the stage of
Decline of a Product Life Cycle.Correct Answer True
11
Your Answer True
Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-
Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship
Your Answer Linear Relationship , Chain ratio Relationship , Exponential Relationship
Multiple Choice Multiple AnswerQuestion Technical appraisal is basically concerned with :-
Correct Answer Technology , Layout of the plant , Design of the plant
Your Answer Technology , Layout of the plant , Design of the plant
Multiple Choice Single AnswerQuestion Demographic market appraisal answers to
Correct Answer Who they are?
Your Answer Where do the customers live?
Select The BlankQuestion A Project has a ________ represented by growth, maturity and decay.
Correct Answer Life cycle
Your Answer Life cycle
Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions viz.:
Correct Answer Strategic perspective , Time span , Finance cost aspect
Your Answer Strategic perspective , Time span , Social aspect
Multiple Choice Multiple AnswerQuestion Casual methods of Demand forecasting consists of :-
Correct Answer Consumption-level method , Econometric method
Your Answer Trend Projection method , Consumption-level method , Moving Averages method
Multiple Choice Single AnswerQuestion The statement which shows the movement of cash into and out of firm's kittie is
known as :-Correct Answer Cash flow statement
Your Answer Cash flow statement
12
LIST OF ATTEMPTED QUESTIONS AND ANSWERSMultiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-
Correct Answer To help to understand the changes in assets as well as asset sources which are notrevealed by the income statement , To find out the uses of loans raised by the business, To indicate the financial strength and weakness of the business
Your Answer To find out the uses of loans raised by the business , To help to understand the changesin assets as well as asset sources which are not revealed by the income statement ,Helps to prepare financial statements
Select The BlankQuestion Inflow of funds may not necessarily result in ________.
Correct Answer Inflow of cash
Your Answer Inflow of cash
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-
Correct Answer Project finance
Your Answer Project finance
True/FalseQuestion The Detailed Project report spells out the modus operandi for the implementation of the
Project and the realization of the Project objectives.Correct Answer True
Your Answer True
Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity ________.
Correct Answer Decreases
Your Answer Decreases
Multiple Choice Multiple AnswerQuestion Internal sources of funds are :-
Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off
Your Answer Funds from operation , Loss on sale of fixed assets
Multiple Choice Single AnswerQuestion End use method of Commercial appraisal technique is :-
Correct Answer A list of industries wherein the product is used is made and quantity and volume isarrived at
Your Answer A list of industries wherein the product is used is made and quantity and volume isarrived at
13
Multiple Choice Multiple AnswerQuestion The applications of cash are :-
Correct Answer Purchase of fixed assets , Payment of long term loans
Your Answer Purchase of fixed assets , Payment of long term loans
True/FalseQuestion In small scale organisation, requirement of working capital is quite high due to high
amount of overheads, high buying costs and high selling cost.Correct Answer True
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Project organisation Finance manager Finance manager
General category of Project report Location of factory Location of factory
Cost aspect of the project report Consultancy fees Consultancy fees
Financing plan Unsecured loans Unsecured loans
Select The BlankQuestion Longer the duration of production cycle, higher the requirement of ________.
Correct Answer Working capital
Your Answer Working capital
Multiple Choice Single AnswerQuestion Sanctioned bank limits is categorised under :-
Correct Answer Working capital
Your Answer Production, Sales and Profitability
Select The BlankQuestion Cost of fencing comes under the ________ category of the Project report.
Correct Answer Land and site development
Your Answer Land and site development
True/FalseQuestion Trend projection method is the important technique for forecasting demand.
Correct Answer True
14
Your Answer True
True/FalseQuestion The emphasis of a finance manager should be on taking a synergistic view of the project
rather than looking at it only from the financial aspects.Correct Answer True
Your Answer True
Select The BlankQuestion ________ in assets involves outflow of funds.
Correct Answer Increase
Your Answer Increase
Select The BlankQuestion The basic difference between the feasibility study report and ________ is the level of
accuracy and degree of detail.Correct Answer Detailed Project report
Your Answer Detailed Project report
Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may lead to :-
Correct Answer Cost and time overrun
Your Answer Cost and time overrun
Select The BlankQuestion Location of the factory comes under the ________ category of the Project report.
Correct Answer General
Your Answer General
Multiple Choice Multiple AnswerQuestion Financing plans consists of :-
Correct Answer Share capital , Term loans , Internal accruals
Your Answer Share capital , Term loans , Internal accruals
Multiple Choice Single AnswerQuestion Infrastructural projects include :-
Correct Answer Power Generation and Distribution
Your Answer Power Generation and Distribution
True/False
15
Question Market potential should be determined under the Marketing aspect of the Project report.
Correct Answer True
Your Answer True
Select The BlankQuestion ________ tries to have what the customer will want- where, when, in what form and at
what price.Correct Answer Marketing
Your Answer Marketing
Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is known as :-
Correct Answer Finance cost aspect
Your Answer Strategic perspective
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed as :-
Correct Answer Strategic perspective
Your Answer Social aspect
True/FalseQuestion Nominal maximum capacity is the capacity that is technically attainable and this
corresponds to the supplier's guaranteed capacity.Correct Answer True
Your Answer True
Select The BlankQuestion In order to meet the cost of large project, the technique of ________ has been
developed so that the financial commitment and risks associated with a project areshared between the project sponsor and the lending institutions.
Correct Answer Limited recourse financing
Your Answer Long term financing
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-
Correct Answer That it involves current outlay of funds in expectation of future benefits
Your Answer That it involves current outlay of funds in expectation of future benefits
Multiple Choice Single AnswerQuestion Past trend method of Commercial appraisal technique is :-
16
Correct Answer Adopted as a guide depending on the consumption pattern of the society as a whole
Your Answer Adopted as a guide depending on the consumption pattern of the society as a whole
Multiple Choice Single AnswerQuestion The norms for providing open areas have to be strictly followed for safety of labour and
allow sufficient space for outflow of effluents safely in case of :-Correct Answer Chemical unit
Your Answer Chemical unit
Multiple Choice Single AnswerQuestion Short supplies of materials may lead to :-
Correct Answer Cost and time overrun
Your Answer Cost and time overrun
Select The BlankQuestion Investors who invest in the debentures of the company are the ________ of the
company.Correct Answer Creditors
Your Answer Creditors
Match The Following
Question Correct Answer Your Answer
Private investment Power generation Power generation
Project Time -bound Time -bound
Programme Not necessarily time bound Not necessarily time bound
Foreign direct investment Machine tools Machine tools
Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds
where there is :-Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength
and high Industry attractivenessYour Answer Strong Business Strength and high Industry attractiveness , Average Business strength
and high Industry attractiveness
Multiple Choice Multiple AnswerQuestion Management qualities includes :-
Correct Answer Honesty , Financial resources , Initiative
Your Answer Honesty , Financial resources , Initiative
Multiple Choice Single Answer
17
Question The industrial concern earned profits by increasing the sales volume under the :-
Correct Answer Sales concept
Your Answer Sales concept
True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation in the terms of Business
strength and Industry Attractiveness.Correct Answer False
Your Answer False
Select The BlankQuestion Detailed Project Report is generally prepared from a ________ report with additional
information.Correct Answer Feasibility
Your Answer Feasibility
Multiple Choice Single AnswerQuestion Delay in arrival of domestic/foreign machinery and technicians may lead to :-
Correct Answer Cost and time overrun
Your Answer Cost and time overrun
True/FalseQuestion Miscellaneous expenditure is written on the asset side of the Balance sheet.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion General category of the Project report consists of :-
Correct Answer Name of the Industrial concern , Proposed product , Location of the factory
Your Answer Name of the Industrial concern , Proposed product , Location of the factory
Multiple Choice Single AnswerQuestion A Project is a temporary endeavor to achieve some specific objectives within a :-
Correct Answer Predefined time
Your Answer Predefined time
Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors should be considered :-
Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Governmentpolicies and other factors
18
Your Answer Proximity to raw materials and markets , Availability of infrastructure , Governmentpolicies and other factors
Multiple Choice Multiple AnswerQuestion The sources of long term and medium term finance are :-
Correct Answer Equity shares , Public deposit
Your Answer Equity shares , Public deposit
Multiple Choice Single AnswerQuestion The cost which change in the same proportion in which the level of production changes
is known as :-Correct Answer Variable cost
Your Answer Variable cost
Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon appraising the likely
technical gaps consists of :-Correct Answer Problems faced during the Construction and Project implementation
Your Answer Problems faced during the Construction and Project implementation
Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses upon appraising the likely
technical gaps consists of :-Correct Answer Problems pertaining to the period when the project is in operation
Your Answer Problems pertaining to the period when the project is in operation
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Borrower's contribution towards Working capital is
known as :-Correct Answer Margin moneyYour Answer Margin money
Multiple Choice Multiple AnswerQuestion Building cost consists of :-Correct Answer Factory building , Auxiliary buildings ,
Administrative blockYour Answer Factory building , Auxiliary buildings ,
Administrative block
Multiple Choice Single AnswerQuestion In BCG Matrix " CASH COWS" indicate :-Correct Answer Products which have high market share but low
growth potentialYour Answer Products which have high market share but low
growth potential
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Marketing aspects
includes :-Correct Answer Demand forecasting , Promotion , DistributionYour Answer Demand forecasting , Promotion , Distribution
Multiple Choice Single AnswerQuestion Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a
projectYour Answer The total of all items of outlay associated with a
project
True/FalseQuestion In both the extreme situations of trade cycles i.e.
Inflation and depression, requirement of working capital may behigh.
Correct Answer TrueYour Answer True
True/FalseQuestion Name of the finance manager comes under the Project
organisation category of the Project report.Correct Answer TrueYour Answer True
True/FalseQuestion It is mandatory for each unit to obtain necessary
clearance from Pollution Control Authorities before setting up anyproject.
Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following
dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost
aspectYour Answer Strategic perspective , Time span , Finance cost
aspect
Match The FollowingQuestion Correct Answer Your Answer
Management problems Lack of exposure Lack of exposure
Management Quality Initiative Initiative
Management Perception Aspiration level/ conservative Aspirationlevel/ conservative
Organisational Climate Person oriented Person oriented
Multiple Choice Single AnswerQuestion Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Multiple Choice Single AnswerQuestion BCG Product Portfolio Matrix analyses products on
the basis of :-Correct Answer Relative Market share and Industry Growth rateYour Answer Relative Market share and Industry Growth rate
Select The BlankQuestion ________ profitability reduces the strain on working
capital.Correct Answer HighYour Answer Stable
Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in
expectation of future benefitsYour Answer That it involves current outlay of funds in
expectation of future benefits
Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while
assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved ,
Managerial compensation
Your Answer Environmental factors , Risk involved ,Managerial compensation
Multiple Choice Single AnswerQuestion "Fly by night" operator mentality is a :-Correct Answer Management qualityYour Answer Management quality
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be
referred to as :-Correct Answer Project financeYour Answer Project finance
Select The BlankQuestion As the plant capacity increase, the investment cost unit
capacity ________.Correct Answer DecreasesYour Answer Increases
Multiple Choice Multiple AnswerQuestion Debt Service coverage ratio may be considered to be
one of the most important ratios calculated by the :-Correct Answer Bankers , Financial InstitutionsYour Answer Shareholders , Bankers , Financial Institutions
Multiple Choice Single AnswerQuestion A project objective which states What "achieving it "
would cost is known as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect
True/FalseQuestion A project is unique and no two projects are similar.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Limitations of fund flow statement are :-Correct Answer It does not provide any new information but
only rearranges the various facts , It does not consider non-fundtransactions
Your Answer It does not provide any new information but onlyrearranges the various facts , It does not consider non-fundtransactions , It does not help in determining future requirement offunds
Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which
focuses upon appraising the likely technical gaps consists of :-Correct Answer Problems pertaining to the period when the
project is in operationYour Answer Problems pertaining to the period when the project
is in operation
Multiple Choice Single AnswerQuestion Receivables is categorised under :-Correct Answer Current assets and liabilitiesYour Answer Current assets and liabilities
Multiple Choice Single AnswerQuestion It is said that a second rate project in the hands of first
rate management is better than a first rate project in the hands of :-Correct Answer Second rate managementYour Answer Second rate management
Select The BlankQuestion The company having ________, is appropriate for the
strategic posture of Defensive under the SPACE approach.
Correct Answer Lacks both competitive advantage as well asfinancial strength and belongs to a not so attractive industry,operating in an unstable environment
Your Answer Lacks both competitive advantage as well asfinancial strength and belongs to a not so attractive industry,operating in an unstable environment
Select The BlankQuestion Excessive expenditures on foreign technicians leads to
________.Correct Answer Cost and time overrunYour Answer Profit maximisation
True/FalseQuestion The 'BCG Matrix 'analysis various products of the
organisation in the terms of Business strength and IndustryAttractiveness.
Correct Answer FalseYour Answer False
Select The BlankQuestion Having decided on the location and product, the
promoter takes into account the ________ that is to be adopted forproducing the product.
Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology
Multiple Choice Multiple AnswerQuestion Financial and economic aspect of the Visit report
consists of :-Correct Answer Company's financial year , Impact of
Government policies on company operations , Comments on thelast published accounts
Your Answer Company's financial year , Impact of Governmentpolicies on company operations , Comments on the last publishedaccounts
True/FalseQuestion Sensitivity analysis consists of assessing the degree of
risk.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be
viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should
be financed out of :-Correct Answer Cash Profits , Shares , DebenturesYour Answer Cash Profits , Shares , Debentures
True/FalseQuestion In the BCG Matrix "DOGS" indicate products which
are generally during the stage of Decline of a Product Life Cycle.Correct Answer TrueYour Answer True
True/FalseQuestion The construction of National Golden Quadrilateral can
be recognised as Project.Correct Answer TrueYour Answer True
Select The Blank
Question Under the SPACE Model, Customer loyalty isdetermined under the ________ dimension.
Correct Answer Company's competitive advantageYour Answer Company's competitive advantage
True/FalseQuestion The cost factors of the product mixed is also taken into
account to arrive at cost at various levels of production and its costimpact of the manufacturing.
Correct Answer TrueYour Answer True
True/FalseQuestion The emphasis of a finance manager should be on
taking a synergistic view of the project rather than looking at itonly from the financial aspects.
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Miscellaneous fixed assets includes :-Correct Answer CablesYour Answer Cables
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects
includes :-Correct Answer Plant capacity , Quality standards , Raw
material requirementYour Answer Quality standards , Raw material requirement ,
Power / telecom facilities
Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting
consists of :-
Correct Answer Linear Relationship , Exponential Relationship ,Polynomial Relationship
Your Answer Linear Relationship , Exponential Relationship ,Polynomial Relationship
True/FalseQuestion Market potential should be determined under the
Marketing aspect of the Project report.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Ratio analysis is a widely used tool of :-Correct Answer Financial analysisYour Answer Financial analysis
Multiple Choice Single AnswerQuestion Preoperative expenses includes :-Correct Answer Bank guaranteesYour Answer Bank guarantees
Select The BlankQuestion A Project has a ________ represented by growth,
maturity and decay.Correct Answer Life cycleYour Answer Life cycle
True/FalseQuestion If the organisation is a trading organisation, the
requirement of working capital will be on the lower side.Correct Answer FalseYour Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion Cost under-estimation at the project preparation and evaluation stage leads to
cost and time over run.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Short supplies of materials may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Match The FollowingQuestion Correct Answer Your Answer
Project organisation Finance manager Completion date of the project
General category of Project report Location of factory Location of factory
Cost aspect of the project report Consultancy fees Reasons for cost escalations
Financing plan Unsecured loans Finance manager
Select The BlankQuestion ________ is a current assetCorrect Answer Book debtsYour Answer Furniture
Multiple Choice Single AnswerQuestion Disposition of funds includes :-Correct Answer Interest on term loansYour Answer Increase in secured borrowing
Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out of :-Correct Answer Cash Profits , Shares , DebenturesYour Answer Cash Profits , Commercial Papers
True/FalseQuestion Cost and time overrun of the project may lead to loss on account of lost
market opportunities.Correct Answer TrueYour Answer True
Select The BlankQuestion Commission outstanding is ________ of funds.Correct Answer ApplicationYour Answer No flow
Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Multiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-Correct Answer To find out the uses of loans raised by the business , To indicate the
financial strength and weakness of the business , To help to understand the changes inassets as well as asset sources which are not revealed by the income statement
Your Answer To find out the uses of loans raised by the business , To help tounderstand the changes in assets as well as asset sources which are not revealed by theincome statement , Helps to prepare financial statements
Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon appraising
the likely technical gaps consists of :-Correct Answer Problems faced during the Construction and Project implementationYour Answer Problems faced during the Construction and Project implementation
True/FalseQuestion The Detailed Project report spells out the modus operandi for the
implementation of the Project and the realization of the Project objectives.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors should be
considered :-Correct Answer Proximity to raw materials and markets , Availability of infrastructure
, Government policies and other factorsYour Answer Proximity to raw materials and markets , Plant capacity , Availability of
infrastructure
True/FalseQuestion Change in the project concept itself may lead to cost and time overrun.Correct Answer TrueYour Answer True
Select The Blank
Question Name and designation of the chief executive comes under the ________category.
Correct Answer GeneralYour Answer Project organisation
Select The BlankQuestion ________ occupies a unique position in the macro economic development
which helps in induction of new technology and facilitates, greater efficiency as well ashigher productivity.
Correct Answer InvestmentYour Answer Production
Multiple Choice Multiple AnswerQuestion Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written
offYour Answer Funds from operation , Funds from long term loans
Multiple Choice Multiple AnswerQuestion Financing plans consists of :-Correct Answer Share capital , Term loans , Internal accrualsYour Answer Share capital , Term loans , Internal accruals
Multiple Choice Single AnswerQuestion Financial aspect of Detailed Project report includes :-Correct Answer Fixation of means of financial structureYour Answer Fixation of means of financial structure
Select The BlankQuestion ________ is that scarce input which financial resources alone cannot
mobilise.Correct Answer ManagementYour Answer Management
Multiple Choice Single AnswerQuestion A project can be regarded as the sum of the activities directed towards a :-Correct Answer Specific resultYour Answer Specific result
Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective
Select The BlankQuestion Short term finance is normally for a period upto ________ year.
Correct Answer OneYour Answer One
Select The BlankQuestion A Project has a ________ represented by growth, maturity and decay.Correct Answer Life cycleYour Answer Life cycle
Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing Project
finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensationYour Answer Environmental factors , Risk involved , Managerial compensation
Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify substantial
commitment of funds where there is :-Correct Answer Strong Business Strength and high Industry attractiveness , Average
Business strength and high Industry attractivenessYour Answer Strong Business Strength and high Industry attractiveness , Average
Business Strength and Medium Industry Attractiveness , Average Business strength andhigh Industry attractiveness
Select The BlankQuestion Longer the duration of production cycle, higher the requirement of
________.Correct Answer Working capitalYour Answer Working capital
Select The BlankQuestion ________ in assets involves outflow of funds.Correct Answer IncreaseYour Answer Increase
True/FalseQuestion For computing Interest coverage ratio, Profit after Interest and taxes are taken
into account.Correct Answer FalseYour Answer True
Multiple Choice Single AnswerQuestion The cash flow of all the years during the expected life of the project are
discounted at a pre-determined cut off rate and :-Correct Answer Net Present value is obtainedYour Answer Average rate of return is obtained
Multiple Choice Single AnswerQuestion The ratio which indicates the ability of the company to meet current
obligations is termed as :-Correct Answer Current ratioYour Answer Current ratio
True/FalseQuestion Sensitivity analysis consists of assessing the degree of risk.Correct Answer TrueYour Answer True
True/FalseQuestion In small scale organisation, requirement of working capital is quite high due
to high amount of overheads, high buying costs and high selling cost.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Marketing aspect of Detailed Project report includes :-Correct Answer Demand forecastingYour Answer Demand forecasting
True/FalseQuestion The secondary data is collected through market survey, specific for the
project being appraised.Correct Answer FalseYour Answer True
True/FalseQuestion Debt service coverage ratio indicates whether cash earned is sufficient for
debt service.Correct Answer TrueYour Answer True
Select The BlankQuestion Position regarding requirement and training of operational staff comes under
the ________ category of Project report.Correct Answer Project organisationYour Answer Project organisation
Match The FollowingQuestion Correct Answer Your Answer
Moving into new areas/product lines Diversification Projects Rehabilitation Projects
Suppliers' credit Short term finance Short term finance
Deferred credit Long term finance Long term finance
Setting up new units New Projects Diversification Projects
Select The BlankQuestion Retained earnings indicates that whatever profits are earned by the company
are not distributed by it by way of ________ but are kept aside for use in future forexpansion or other purpose.
Correct Answer DividendYour Answer Dividend
Multiple Choice Single AnswerQuestion The basic document for facilitating Project financing is the :-Correct Answer Detailed Project reportYour Answer Articles of Association
Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirementYour Answer Plant capacity , Quality standards , Power / telecom facilities
Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential reserve of cash is
termed as :-Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets
Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix :-Correct Answer Which is highly respected for the sophistication, maturity and quality
in its planning systemsYour Answer Which is highly respected for the sophistication, maturity and quality in
its planning systems
Multiple Choice Single AnswerQuestion Geographic market appraisal answers to :-Correct Answer Where do the customers live?Your Answer Where do the customers live?
Select The BlankQuestion Sometimes the term ________ is interpreted as cash equivalent i.e. cash and
marketable securities.Correct Answer FundYour Answer Fund
Multiple Choice Multiple AnswerQuestion The temporary requirement of working capital can be financed out of :-Correct Answer Inter-corporate Deposits , Commercial PapersYour Answer Inter-corporate Deposits , Commercial Papers
True/FalseQuestion Current assets includes stock-in-process.Correct Answer TrueYour Answer True
InternationalFinance
ASSIGNMENTS
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter
bank transactions?Correct Answer Clearing house for settlement and clearance for the operations
of Ads , Set up a market intelligence cell to study and monitordevelopments in Forex Market
Your Answer Clearing house for settlement and clearance for the operationsof Ads , Make additional foreign currency available to ADs atcheaper rates
Select The BlankQuestion ________ is the agency of ICC which deals with the maritime
crime.Correct Answer International Maritime Bureau
Your Answer International Maritime Bureau
Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?
Correct Answer Buffer Stock Facility
Your Answer Buffer Stock Facility
True/FalseQuestion Cross currency forward contract is not meaningful if original
contract is in Rupees to USDCorrect Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment
Your Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment , The Market report of theexchange which trades the option
Multiple Choice Single AnswerQuestion Which is the most actively traded currency in the international
market today?Correct Answer US Dollar
Your Answer US Dollar
Match The FollowingQuestion Correct Answer Your Answer
Intolerable risk Drop the investmentproject
Drop the investmentproject
Country risk analysis Cost of evluation doesnot justify analysis
Cost of evluation does notjustify analysis
Stock market analysis Banks are ahead Factors' values
Weightages % Factors' values 100% of total
Select The BlankQuestion Global capital market can be understood from the study of
________.Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings
within and outside the countryYour Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings
within and outside the country
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will
be exchanged on :-Correct Answer Monday
Your Answer Monday
Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee
came from June 92?Correct Answer Other managed Floating
Your Answer Pegged to Single currency
Match The FollowingQuestion Correct Answer Your Answer
Maturity of future Time when actualcommodity is delivered
Last date of exercisingoption
Note issuance facility Euronotes Euronotes
Bearer security issued incurrency other than thatof the country of issue
Eurobonds Eurobonds
Margin on future Peformance bond orsecurity deposit
Peformance bond orsecurity deposit
True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a
quasi negotiable instrument.Correct Answer False
Your Answer False
True/FalseQuestion The Prominent non banking financial institutions participating in
the FOREX markets are Pension funds, mutual funds,insurance Cos.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What are margins, with reference to futures market?
Correct Answer Faith money deposited by buyers and sellers ensures liquidity ,Margin ensures solvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity ,Margin ensures solvency for honouring contracts
Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in
foreign exchange?Correct Answer USD 1 trillion
Your Answer USD 1 trillion
Multiple Choice Single AnswerQuestion NIF is basically an agreement :-
Correct Answer By underwriting bank to support funding for a certain period,against which borrowers can issue short term papers
Your Answer Which enables the investor to market the same in thesecondary market
Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of
seven central Banks taken togeather in mid 1992?Correct Answer USD 275 Billion
Your Answer USD 275 Billion
Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an
exporter?Correct Answer Preshipment credit beyond six months for construction and
turnkey projects abroadYour Answer Preshipment credit up to six months for construction and
turnkey projects abroad
Select The BlankQuestion Over the years ________has been the most widely accepted
currency in international capital market.Correct Answer American Dollar
Your Answer American Dollar
Select The BlankQuestion As a result of the world wars in the 20th century the ________
of most of the countries suffered heavily.Correct Answer Economies
Your Answer Currencies
Multiple Choice Single AnswerQuestion Which currency is traded in one leg of about 70% of the world's
transactions?Correct Answer US Dollar
Your Answer US Dollar
Select The BlankQuestion ________ is the acid test for events to be included in country
risk.Correct Answer Control by Government'
Your Answer Recurrence
Select The BlankQuestion The Trans European Automated Real Time Gross Settlement
Express Transfer is popular in ________.Correct Answer Brussels
Your Answer Brussels
Multiple Choice Single AnswerQuestion What is Risk Syndication facility?
Correct Answer Sharing of risk of non payment by supplier
Your Answer Sharing risk of Non payment by the Syndicate of Banks givingloans
True/FalseQuestion If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-
Correct Answer It is an undertaking given by the openers bank to pay certainsum of money , It is an undertaking given on behalf of a certainperson to another person in different country
Your Answer It is an undertaking given by the openers bank to pay certainsum of money , It is an undertaking given on behalf of a certainperson to another person in different country
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them
True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs,
Call and put options.Correct Answer True
Your Answer True
True/FalseQuestion There is no difference between CIP and CIF contracts except
the mode of transportation.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
Select The BlankQuestion When an Indian Company earns at least 50% of its average
turnover from a particular activity then that activity isconsidered as ________.
Correct Answer Core activity
Your Answer Primary activity
Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.
Correct Answer An Irrevocable credit
Your Answer An Irrevocable credit
True/FalseQuestion The volume of trading of Derivatives in the world trade market
is growing but still only 5% of the total.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs
50.5000/52.5050. Which is the offered rate for Rs?Correct Answer USD 1=Rs 50.5000
Your Answer USD 1=Rs 50.5000
Multiple Choice Multiple AnswerQuestion Export finance
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euromarket operations
Your Answer Which are convertible , Which have liquidity confirmed in Euromarket operations , Which have greater intrinsic value
Multiple Choice Multiple Answer
Question What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market
Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?
Correct Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue
Your Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue
Select The BlankQuestion Short term instruments normally issued by corporate
borrowers, forhigh values, at a discount to face value areknown as ________.
Correct Answer Euro Commercial Papers
Your Answer Euro Commercial Papers
Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for
assessing a cross border project ?Correct Answer To weed out unviable projects and rank profitable ones
Your Answer To weed out unviable projects and rank profitable ones
Multiple Choice Single AnswerQuestion Examples of hedge are:
Correct Answer Buy when you are having short position
Your Answer Buy when you are having short position
Multiple Choice Multiple AnswerQuestion What is the effect of cross currency option on the customer?
Correct Answer He gets the flexibility to exposure , He is exposed to additionalrisk of movement of rates between 3 currencies
Your Answer He gets the flexibility to exposure , He is exposed to additionalrisk of movement of rates between 3 currencies
Select The BlankQuestion Forward margin makes a currency cheaper then the currency is
at ________.Correct Answer Discount
Your Answer Discount
Multiple Choice Single AnswerQuestion Why does a person need protection from unfavourable
movement of exchange rate?Correct Answer Unfavourable fluctuations in exchange rate can wipe out the
normal business profitYour Answer Unfavourable fluctuations in exchange rate can wipe out the
normal business profit
Multiple Choice Single AnswerQuestion The capital market is said to be volatile when
Correct Answer Prices of capital market instruments change and are expectedto change drastically
Your Answer Prices of capital market instruments change and are expectedto change drastically
True/FalseQuestion JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion What is the criteria for an Indian Company for Direct
Investment abroad?Correct Answer Activity proposed need to be core activity , Financial
commitment in JV/WOS maximum $ 100 million or equivalentYour Answer Activity proposed need to be core activity , Financial
commitment in JV/WOS maximum $ 100 million or equivalent ,Indian co should not have been black listed
Chapter – 1 – Introduction to international capital marketsEuro currency ; domestic markets ; US Japan ; Switzerland ; UK ; Australia ; Canada ;European ; centers in ECU;
1
Chapter – 2 – International Finance Markets - the U.S. dollar Market ;The U.S. Dollar Market ; The Japanese Yen Market ; The Sterling Market ; The EuroMarket Has Been discussed in the next chapter ; Recent development in internationalFinance Markets ;
5 – 10
Chapter – 3 – International Monetary and Financial SystemThe country’s central ban agreed to buy back their currency at a certain rate of gold;Melting down of gold was freely allowed ; There was unrestricted movement of gold (i.e.import and / or export)The total money supply in the country was determined by the quantum of gold reserves inthe country
13 – 14
The international monetary fund ; quotas ; funding facilities ; regular facilities tranchepolicies ; restore Tranche credit Tranche ; extended arrangement (extended fund facility
15 – 17
(EEF) ; Standard Arrangement (enlarged Arrears Policy)Special facilities (compensatory and contingency financing facility (CCFF)Buffer stock Financing Facility ; Supplemental Reserve Policy (SRP); Reserve Tranche ;Credit Tranche ; Stand by arrangement ;Extended arrangement or extended fund facilities (EFF) special facilities ; CCFF ; Bufferstock financing Facility (BSFF) ; Supplemental resources facility (SRF) Enhancedstructural adjustment facility (ESAF) The fixed exchange rate system
18 – 19
Problems faced by the fixed exchange rate system ; failure of fixed rate system ; theEuropean monetary system (EMS) ; Economic and monetary union ; Recent developments ;post – Maastricht developments; emergence of EURO
20 – 23
The group of seven ; special drawing rights (SDRS) ; The liquidity problems (SDRS) ; theworld bank group ; the world bank; international development agency (IDA) ; internationalfinance corporation (IFC) ; The multinational investment Guarantee Agency (MIGA)
24 – 27
Chapter – 4 – External commercial borrowing – country ; company ; Equity ; Fund raising ;underwriting ; hedging ; arbitraging ; note issuance facility ; Mechanism anddocumentation ; syndicated loans ; floating rate notes ;
31 – 35
Flip – Flop FRN ; MIS – Mich FRN ; MINI Max FRN ; Capped FRNs, Perpetual FRNs;VRN structured FRNs; Terms and conditions of FRN Ero Commercial paper (ECP) ; ADRsand GDRs; GDR – Global depositary Receipts ; The roles of different parties involved inlaunching of GDRGDR – Global Depositary Receipts ; The roles of different parties involved in launching ofGDR steps involved in issuance of GDR are as follows
36 – 39
Pricing and Closing ; costs ; Advantages & Disadvantages of external commercialborrowing
40 – 41
Chapter – 5 – Documents used in International Trade ;Regulatory requirements ; operational requirements ; commercial documents ; financialdocuments transport documents ; risk covering documents ; official / regulatory documents; miscellaneous documents ; Commercial documents ; proforma invoice ; commercialinvoice ; consular invoice customs invoice ; legalized invoice ; combined certificate oforigin and value ; financial documents ; bill of exchange ;
43 – 46
The second of the same tenor and date unpaid ; the first of the same tenor and date unpaid ;or similar words ; sight B/E; Tenor ; time B/E; DP Basis ; document against Payment Basis; Documents against Acceptance Basis Transport documents; bill of lading ; received forshipment bill of lading ; on board bill of lading ;
47 – 49
Short form bill of lading ; long form bill of lading clean bill of lading ; claused bill of lading; through bill of lading ; straight bill of lading ; charter party Bill of lading ; container bill oflading container bill of lading ; combined transport B/L or Mulit Modal B/L lash bill oflading house bill of lading ; Airway bill ; Air consignment Note ; House Air way bill ;Postal Receipt ; Courier /Expected delivery service ; multimodal transport document ; riskcovering documents ; insurance policy ;
50 – 53
Insurance cover note ; official documents export declaration forms ; export certificate;Certificate of origin ; Miscellaneous documents ; packing list ; weight certificate ;certificate of analysis and quality ; certificate of inspection ; health certificate ;phytosanitary / Radiation / Fumigation
55 – 57
Chapter 6 – Methods of payment ; advance payment ; bill for collection ; open account ;barter trade ; bank guarantee ; letter of credit (L / C) Seller wants buyer wants ; parties to a
61 – 66
documentary credit ; applicant issuing bank advising ; confirming bank beneficiary ;negotiating bank ; reimbursing bankTypes of letters of credit ; revocal letter of credit ; irrevocable letter of credit ; confimedirrevocable letter of credit ; transferable l / c revolving letter of credit ; credit available byinstallments; back to back letter of credit ; anticipatory credit or red clause letter of credit ;green clause letter of credit ; deferred payment letter of credit ; standby letter of credit ;flow chart of export transaction under letter of credit
67 – 69
Flow chart of export transaction under letter of credit ; various steps in the transaction are asunder ; steps no. description
70 – 71
Chapter 7 – Export / Import Finance ; - Part I import finance ; import financing throughtrust receipts / import loans ; import financing through issuing l/ c or bank guarantee ; partII – Export Finance Timely ; adequate ; cheaper on liberal terms ; sources for raisingfinance ; own funds ; 2 friends and relative ; 3 advance payment from buyer ; 4 Trade creditfrom suppliers 5 banks and financial institutions ; pre-shipment credit (P.C)
73 – 74
Post shipment credit ; advance against cash incentives / duty draw back ; forfeiting ;rediscounting of export bills abroad ; buyer’s credit ; supplier’s credit
75 -76
Chapter – 8 – Procedure in connection with foreign investment in India – Seciton – Iforeign direct investment ; FERA ; the practice at which a company can issue shares to nonresidents ; fema ; esop ; section II – Foreign technical collaboration ;
79 – 83
General Hotel & Tourism Related Industries ; procedure for granting approval; I / Wehereby certify that ; Documentation ; Standard conditions attached to approval fortechnology agreement ; no objection ; the agreement shall be subject to Indian laws:
84 – 88
Section – III – Portfolio investment ; explanation ; the regulations regarding portfolioinvestments by NRIs / PIOs are as under ; NRI / PIOs ; Section – IV – Other investments ;Section V – procedure for opening branch / project / Liaison office ;
89 - 92
Chapter – 9 – Direct investment outside India – overseas investment division TDR ADRGDR the criteria for investment under the automatic route are as under ; JV/WOS; ODA;The schemes for overseas investment by partnership firms ; criteria for overseas investmentby a registered partnership firm under the automatic route ;
95 – 99
The procedure to be followed by a partnership firm for making investment under theautomatic route ; the procedure to be followed by partnership firms which are not eligibleunder the automatic route ; restrictions for setting up of a second generation company ;resident individual India can acquire foreign securities without prior approval in thefollowing cases ; provided that ; WOS
100 – 102
Chapter – 10 – Taxation ; Bilateral reliefUnilateral relief ; for the purpose of this provision
105 – 106
Part – 2 Forex risk management and hedging techniquesChapter – 1 Foreign exchange markets – The international Market ; survey were ; themarket ; the participants ; information and communication system ; the payment system ;the foreign exchange market in India
109 – 114
Chapter – 2 – Exchange Rates – Exchange rage quotes ; direct and indirect rates ; directrates ; indirect rates; spot and forward rates value rate; ready or cash ; value today ; TOM;spot ; forwards; glossary of market terms; Foreign exchange risks ; transactions exposure ;translation exposure ; economic exposure;
117 – 123
Translation – moving towards a consensus ; economic exposure ; an overview ; scenarioexchange rages in India ; Inward remittances export encashment of foreign currency
124 – 127
travelers cheques ; encashment of foreign currency notes; outward remittances ; imports ;issuing foreign currency travelers cheques issuing foreign currency notes ;Type of transaction exchange rate nomenclature ; Factors affecting movement of exchangerates ; summary
128 – 129
Chapter – 3 – Forward contracts - Forward cover for merchants – forward purchase cover -forward sales contract - repayment of foreign currency loans – period of delivery – crosscurrency booking (sale / Purchase ) ; utilization of the forward cover ; cancellation ;calculation of exchange rates for forward contracts
131 – 137
Cancellation ; early delivery and rollover of forward contracts ; forward sale contracts ;forward purchase contract ; early delivery ; rollover charges
138 – 141
Chapter 4 – Options and Futures – History and development ; recent trends ; key features ofoptions and futures ; premium ; maturity or expiration date ; exercise ; in the money ; at themoney ; out of the money American option European option ; underlying asset price timebefore expiration ; underlying asset price ; time before expiration the rate of interestvolatility
143- 147
Pricing and analysis ; pricing of options ; underlying asset price ; exercise price ; optionsand futures products today ; interest rate options ; foreign exchange options and futures ;equity linked options ; commodity linked futures and options
148 – 152
Chapter – 5 - SwapsWhat are swaps ; interest rate swaps ; lowering financial cost ; hedge exposure to interestrate risk ; restructuring the debt in the balance sheet ; amortizing and accreting swaps ;forward swaps ; Reversible swaps ; basis swaps
155 – 157
Currency swaps ; lowering funding cost ; entering restricted capital markets ; reducingcurrency risk ; supply demand imbalances in the markets ; amortizing currency swaps ;accreting currency swaps ; floating – for floating rate currency swaps ; interest payments ;asset swaps
158 – 161
PART 3 – AGENCIES INVOLVED IN INTERNATIONAL TRADEChapter – 1 – Export import Bank of India ; Functions of Exim Bank ; the exim bankperforms the following functions ; incidental functions ; operations programmes ; directfinancial assistance to exporters ; consultancy and technology services ; pre-shipment credit; facilities for export – oriented units ; overseas investment facility buyer credit facilities fordeemed exports small scale industry export bills rediscounting; the latest new schemes inoperation since 1992 are the following
163 – 166
Chapter – 2 – Reserve Bank of India Exchange controls in India – RBI as the exchangecontrol authority ; Authorized dealers (Ads) ; Money changers ; other receipts ; payment forimports ; other payments ; delegation to Ads; securities ; foreign currency accounts;liberalization of exchange control
169 – 173
Sodhani Committee Recommendations ; Exchange rate management ; 174 – 177Chapter – 3 – Foreign Exchange dealers association of India ; Uniform customs andpractice for collection ;
179 – 180
Chapter 4 – International chamber of commerce – ICC – WCF – IBCC – WCF 183 – 183Chapter – 5 – Export credit guarantee corporation of India ; ECGC; need for export creditinsurance ; credit insurance policies ; scr or standard policy ; turnover policy ; smallexporter policy ; specific shipment policy (short term); buyer wise policy ; specific policyfor supply contract insurance cover for buyer’s credit and line of credit
189 – 190
Services Policy ; construction works policy ; maturity factoring ; Guarantees to banks ; 191
packing credit guarantee ; export production finance guarantee ; post – shipment creditguarantee ; export finance guarantee ; export performance guarantee; export finance(overseas lending ) GuaranteePart – 4 – MiscellaneousChapter 1 – Exchange Earner’s foreign currency (EEFC)Status holder exporter ; individual professional ; others; permissible credits ; permissibledebits ;
195
Chapter 2 – Country Risk ; Quantifying country risk ; A comprehensive example ; use ofcountry risk ; assessment ;
199
Chapter 3 – International capital Budgeting - The Basic Frame work 203 – 204Chapter 4 – Incoterms – Group E departure EXW ; Group F Main carriage unpaid ; FAS ;FOB ; CFR ; CIF ; CPT ; CIP ; Group C; Group D ; Arrival DAF ; DES ; DEQ; DDU CTD/ MTO ; DDP ; delivered duty paid (CTD / MTO)
207- 212
Chapter – 5 – Actuals ; arbitrage ; bankers’ acceptance bond (BAS) ; Bearer Bond ; Bid rate; Bond ; Bull; call option ; caps ; cash commodity ; cash market ; cedel ; certificate ofdeposit (CD) class of option ; closing price ; commission ; commercial paper (CP) ; contractspecifications ; convertible bond ; coupon ; cover; delivery ; delivery month ; equity ; equityswaps ; equity collar ; Eurobond ; Euro clear ; euro commercial paper; euro –currency ;
215 – 217
Exercise price ; expiration date; floating rate note ; fundamental Analysis ; futures contracthedge ; Hybrid ; Interest Rate swap; Intermediation ; Intrinsic Value ; Libor ; Long margin; margin call maturity naked position ; note issuance facility (NIF)
218 -219
Option ; overbought ; oversold ; physical market ; position ; premium purchaser ; put option; settlement price short ; speculator ; strike price ; straight debt tap ; technical analysistranche ; tombstone volatility ; volume ; withholding tax ; yankee bond ;
220 – 221
Chapter – 1 – Introduction to international capital markets 1Ero currency market ; Domestic market ; US, Japan Switzerland ; uk, australiacanada ; european conters in ECU ; Euro ; Asian doller market ; forex marker 1SDR ; ECU ; US dollar ; German ; Swiss ; Japanees ; France ; Canada ; Australia; 2Chaper - 2 - International financial Markets - The U.S.Dollar Market ; pricing ;federal reservice board; curency ; central bank of US ; 5The Japanese Yen Market ; Mof; Long Term Prime Rate ; 1970 japanese 6The Sterling Market ; 20th 19th century 1979 ; OECD Organization for economicco-operation & development EMS Exchange rate Mechanism; FRN ; Bulldog; 7the EURO Market has been discussed in the nex chapter Recent development ininternational financial markets ; septer 11 enron 7LtCN (Long term capital Management Brazil china and mexico; 81990 ; 1980 ; severe tests financial system; securitization forces banks ; attractiveto browwerw; legal issues flexibility ; financial market development segement of ; 9swaps cash flow ; roject related; gain access to international ; marketability ; newfinancing techniques; 10Chapter – 3 – International Monetary and Financial System 131945 ; 1944 ; intenrational world Bank for reconstruciton and development; secondworld war was european ; IMF International Monetary Fund; Gold standard firstworld war 13The country's Central Bank agreed to buy back their currency at a certain rate ofgold; 13
melting down of gold was freely allowed 13There was unrestricted movement of gold (I.e. import and / export 14The total money supply in the country was determined by the quantum of goldreserves in the country 141870 ; 1914 ; 1821 ; 1834 ; 1870 ; European countries gold standard in 1933 ;1930 International Monetary Co-operation ; IBRD ; IMF ; 14popularly known as world bank IMF ; the international monetary fund 1945 ; 1971
; 25 years ; aims 15SDR ((special drawing rights ) 25% 1960 ; 1963 ; Gross domestic product; 5 years; SDR 146 bn to SDR 212 ; 45% ; 1998 ; Two parts 16Funding Facilities ; Regular Facilities ; Special facilities ; restore tranche credittranche ; compensatory and contingency financing facility (CCFF) ; 16Extended arrangement (Extended Fund Facility EEF) ; Buffer stock FinancingFacility ; 16Standard Arrangement (Enlarged Arrears Policy ) ; Supplemental Reserve Policy(Supplemental Reserve Policy (SRP 17Reserve Tranche ; Credit Tranches ; Stand - By Arrangement 17Extended arrangement or extended fund facilities (EFF) 18Special Facilities ; CCFF ; Buffer Stock Financing Facility ; BSFF ; SupplementalResource Facility (SRF) ; 1997 18Enhance Structural Adjustment Facility (ESAF) ; The fixed exchange rate systemUS dollars 35 ounce of gold 19Problem faced by the fixed exchange rate system ; 1960 ; value apprehension ;delay in adjustment 20failure of fixed rate system ; the european monetary system (EMS) EuropeanCommunity 20Currency Snake ; 1973 ; EMS EC ECU European Currency Unit ; SDR ; ERM ; DM; matrix german bundesbank 21EM ; PST ; ERM ; Economic and monetary Union ;
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion Integrated branches of Commercial banks handle forex
transactions as well as options, swaps, futures, arbitrageoperations
Correct Answer True
Your Answer True
True/FalseQuestion JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer False
Select The BlankQuestion The rate of interest on rupee finance for exports is not
exceeding ________ less than PLR.
Correct Answer 0.025
Your Answer 50 basis points over LIBOR
Multiple Choice Multiple AnswerQuestion What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment
Your Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment
Multiple Choice Single AnswerQuestion In the syndicated loan arrangement the borrower has to execute
:-Correct Answer Single Principal loan agreement
Your Answer Single Principal loan agreement
True/FalseQuestion At Least one principal Lender bank is essential for issue of the
ADR or GDR.Correct Answer False
Your Answer True
Multiple Choice Single AnswerQuestion US financial system is the freest system because
Correct Answer Institutions can introduce new products and instuments at theprice of their choice.
Your Answer Institutions can introduce new products and instuments at theprice of their choice.
Multiple Choice Single AnswerQuestion In a coupon swap who is called the buyer?
Correct Answer One who pays the fixed rate of interest
Your Answer One who pays the fixed rate of interest
True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate
quotation.Correct Answer False
Your Answer False
Select The BlankQuestion For setting up joint ventures abroad or equity participation
abroad, EXIM bank provides funds under ________ Scheme.Correct Answer Overseas investment facility
Your Answer Overseas investment facility
Multiple Choice Single AnswerQuestion Under the automatic route of Direct Investment Abroad, what is
the restriction on market purchases?Correct Answer 50% of the net worth of the investing company
Your Answer 50% of the net worth of the investing company
Multiple Choice Single AnswerQuestion What are the powers of money changers?
Correct Answer Purchase and sell foreign currency notes and travellers cheques
Your Answer Purchase and sell foreign currency notes and travellers chequesand also Give export finance
Select The BlankQuestion Any company involved in foreign exchange transactions is
exposed to ________ risk.Correct Answer Currency
Your Answer Currency
Multiple Choice Multiple AnswerQuestion What are the features of Settlement price ?
Correct Answer Price established by the clearing house at the end of eachtrading session , It is used to determine the net gain, loss,margin call and next days price limits
Your Answer Price established by the clearing house at the end of eachtrading session , It is used to determine the net gain, loss,margin call and next days price limits
Multiple Choice Multiple AnswerQuestion What are the activities of ICC?
Correct Answer Aribtration and dispute resolving , Canvass for open tradecombat commercial crime
Your Answer Aribtration and dispute resolving , Canvass for open tradecombat commercial crime , Increased Govt regulation ofBusiness
True/False
Question Cause of increase in cost of public issues Underwriting fees ,selling commission
Correct Answer True
Your Answer False
Select The BlankQuestion The currency swaps used ________.
Correct Answer To lower the risk of currency exposure
Your Answer To lower the risk of currency exposure
True/FalseQuestion The Option period in the forward contract is at the option of the
Banker, hence the bank has to be very conservative in quotingrates.
Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion Which factors affect the exchange rates in short time period?
Correct Answer Demand and supply, interest rates, inflation, , Sentiment,Speculation
Your Answer Demand and supply, interest rates, inflation, , Sentiment,Speculation , GDP,Balance of trade andpayment,Unemployment
Match The FollowingQuestion Correct Answer Your Answer
Departure EXW EXW
Main carriage paid CFR CFR
Main carriage unpaid FAS FAS
Arrival DES DES
Multiple Choice Multiple AnswerQuestion Sterling Market is attractive for an international investor because
Correct Answer Gilts offer higher attractive margin , Choice of issuing mediumterm and long term bonds
Your Answer Gilts offer higher attractive margin , Choice of issuing mediumterm and long term bonds , Linking of issues to currency swaps
True/FalseQuestion In red clause credit some clauses are printed in Red ink.
Correct Answer True
Your Answer False
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs
50.5000/52.5050. Which is the bid rate for USD?Correct Answer USD 1=Rs 50.5000
Your Answer USD 1=Rs 50.5000
Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for
assessing a cross border project ?Correct Answer To weed out unviable projects and rank profitable ones
Your Answer To weed out unviable projects and rank profitable ones
Multiple Choice Multiple AnswerQuestion Criteria for investment abroad under automatic route :-
Correct Answer Activity for investment is core activity of Indian Company. , TotalFinancial commitment in JV/WOS as per prescribed ceiling
Your Answer Activity for investment is core activity of Indian Company. , TotalFinancial commitment in JV/WOS as per prescribed ceiling
Multiple Choice Multiple AnswerQuestion Who can issue the Certificate of Inspection?
Correct Answer Export Inspection Council , Person authorised by Importer.
Your Answer Export Inspection Council , Person authorised by Importer.
Multiple Choice Single Answer
Question Large number of exporters from which country are enjoying theprivilege of receiving up front cash from importers in Russia?
Correct Answer United Kingdom
Your Answer United Kingdom
True/FalseQuestion In developed markets, speculators play important role in
determining the trend of currency rates.Correct Answer True
Your Answer True
Select The BlankQuestion In US Capital Market a Company prepares all the necessary
documents in advance of the public issue under the facilityknown as ________.
Correct Answer Shelf Registration
Your Answer Shelf Registration
Select The BlankQuestion In Overseas market the forward rate is generally quoted on the
basis of ________.Correct Answer Fixed date
Your Answer Calendar month
Select The BlankQuestion Forward Margin makes a currency costlier then the currency is
at ________.Correct Answer Premium
Your Answer Discount
Multiple Choice Multiple AnswerQuestion These are the parties to the documentary credit :-
Correct Answer Negotiating Bank, advising bank , Reimbursing bank,Confirming bank
Your Answer Negotiating Bank, advising bank , Reimbursing bank,Confirming bank
Multiple Choice Multiple AnswerQuestion What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market
Multiple Choice Single AnswerQuestion Fixed, Floating or Limited flexibility are used in the context of
Correct Answer Exchange Rates
Your Answer Exchange Rates
Select The BlankQuestion In mid 1992 ________ rejected the ratification of Maastricht
treatyCorrect Answer Denmark
Your Answer UK
Multiple Choice Multiple AnswerQuestion Under the liberalisation through FEMA, what can an AD offer to
the clients, without the prior permission of RBI or Government?Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and
collars, and forward rate agreementsYour Answer Hedges, interest rate swaps, currency swaps. , Caps and
collars, and forward rate agreements
Multiple Choice Single AnswerQuestion To whom is an AD required to report the cancellation of forward
contracts?Correct Answer No one at all.
Your Answer To Reserve Bank of India, fortnightly
Select The BlankQuestion ECGC provides cover to an Indian contractor for construction
work abroad under ________.Correct Answer Construction works policy
Your Answer Export Performance Guarantee
True/FalseQuestion The Negotiating bank examines the documents submitted by the
seller and makes payment if they comply the terms andconditions of the LC.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question What was the official foreign currency reserve of the group ofseven central Banks taken togeather in mid 1992?
Correct Answer USD 275 Billion
Your Answer USD 275 Billion
Multiple Choice Multiple AnswerQuestion What are the sources of raising funds for exports?
Correct Answer Suppliers credit , Forfaiting
Your Answer Suppliers credit , Forfaiting
Select The BlankQuestion Forward margin makes a currency cheaper then the currency is
at ________.Correct Answer Discount
Your Answer Discount
Multiple Choice Single AnswerQuestion Name the common forex derivatives :-
Correct Answer Options, futures
Your Answer Options, futures
True/FalseQuestion Country risk analysis is a futile exercise in the background of
cost of analysis.Correct Answer True
Your Answer False
Select The BlankQuestion Even after liberalisation of exchange controls, the Euro sterling
market remained volatile because of uncertainties in UK andgyrations of sterling against major ________ countries
Correct Answer OECD
Your Answer OECD
Match The FollowingQuestion Correct Answer Your Answer
Issues linked withLIBOR,LIBID,LIMEAN
FRNs FRNs
Issue of bonds withoutfixed rate of interest,linked to short terminterest rate in the globalmarket
FloatingRate Note FloatingRate Note
Issue of loansinternationally,througharranger, underwriter,comanager, for a largeamount for sharing risk oflending
Syndicated Loans Syndicated Loans
Equity issues in theforeign markets either asdirect investments orportfolio investments.
American or GlobalDepository Receipts
American or GlobalDepository Receipts
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Proforma Invoice, Commercial Invoice, Consaular Invoice are
which type of documents?Correct Answer Commercial Documents
Your Answer Commercial Documents
True/FalseQuestion Charter party bills of lading are generally not acceptable to
bankers as security because Sea Charters are full of problems.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Why does a Transaction exposure arise?
Correct Answer Trading flows , Dividend or capital flows
Your Answer Trading flows , Dividend or capital flows
Multiple Choice Single AnswerQuestion If a dealer of securities is quoting rate as 200-250 then the rate
200 signifies which rate with reference to him?Correct Answer Bid rate
Your Answer Bid rate
Select The BlankQuestion A Documentary credit issued on the strength of another
documentary credit is known as ________.Correct Answer Back to Back credit
Your Answer Back to Back credit
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euromarket operations
Your Answer Which are convertible , Which have liquidity confirmed in Euromarket operations
True/False
Question Tranche' is a managed issue of securities in smallerdenominations.
Correct Answer True
Your Answer False
True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs,
Call and put options.Correct Answer True
Your Answer True
Select The BlankQuestion Global capital market can be understood from the study of
________.Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings
within and outside the countryYour Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings
within and outside the country
Multiple Choice Multiple AnswerQuestion Which events can lead to materialisation of country risk?
Correct Answer Change in Government policies , Change in Government rulesand laws
Your Answer Change in Government policies , Change in Government rulesand laws , Unpredicted Earthquake, Tsunami waves
Multiple Choice Multiple AnswerQuestion What is a 'speculator'?
Correct Answer Trader who is neither hedger nor arbitragor , He takes risks forprofit
Your Answer Trader who is neither hedger nor arbitragor , He takes risks forprofit
Select The BlankQuestion The major industrial power whose economy was not affected
after the II world war was ________.Correct Answer USA
Your Answer USA
Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?
Correct Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue
Your Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue
Multiple Choice Multiple AnswerQuestion What do you understand by Commercial Risk?
Correct Answer Protracted default by the buyer , Insolvency of the buyer
Your Answer Protracted default by the buyer , Insolvency of the buyer
Select The BlankQuestion Legalised invoice is also called ________ invoice.
Correct Answer Visaed
Your Answer Visaed
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will
be exchanged on :-Correct Answer Monday
Your Answer Monday
True/FalseQuestion The American Dollar market comprises of the domestic segment
of USD the offshore segment of USD.Correct Answer True
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
LastStage Form a single currency Meet in Maastricht inNetherland
The First stage in theEuropeand and MonetaryUnion (EMU)
Free movement of capitalin EC
Establish EURO Bank
Stage II in EMU Establishment ofEuropean MonetaryInstitute
Establishment of EuropeanMonetary Institute
Stage III in EMU Members to meet theconvergence criteria andfix the exchange rates
Members to meet theconvergence criteria andfix the exchange rates
Select The Blank
Question Under the ________ standard the Country's Central Bankpromised to buy back the currency at certain rate of Gold.
Correct Answer Gold
Your Answer Gold
True/FalseQuestion An Indian exporting goods to New York receives dollars in New
York.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The factors which affect the performance of an option are:-
Correct Answer Underlying asset price , Time before expiration, rate of interest
Your Answer Underlying asset price , Time before expiration, rate of interest
Multiple Choice Multiple AnswerQuestion Which contracts are used for transportation by road?
Correct Answer FCA , CPT
Your Answer FCA , CPT , CFR
True/FalseQuestion Bid rate is bidders buying rate and offered rate is bidders selling
rate.Correct Answer True
Your Answer False
Match The FollowingQuestion Correct Answer Your Answer
Cancellation of contractsabove USD 500000
ECD ECD
Forward Purchasecontract currency atpremium
Presume earliest delivery Presume earliest delivery
Forward purchasecontract currency atdiscount
Presume latest delivery Presume latest delivery
Exchange margins FEDAI FEDAI
Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee
came from June 92?Correct Answer Other managed Floating
Your Answer Other managed Floating
Multiple Choice Multiple AnswerQuestion Which two countries were included to convert the group of five
into the group of seven?Correct Answer Italy , Canada
Your Answer Canada , Italy
Multiple Choice Single AnswerQuestion Who can open an EEFC account?
Correct Answer Individuals , firms, companies, resident in India
Your Answer Individuals , firms, companies, resident in India
Multiple Choice Single AnswerQuestion Method of advance payment is not disadvantageous to :-
Correct Answer The seller
Your Answer The seller
Multiple Choice Single AnswerQuestion What is the immediate cause for the growth of futures and
options in the last two decades?Correct Answer Increase in volatile trading conditions
Your Answer Increase in volatile trading conditions
Multiple Choice Single AnswerQuestion What do you mean by a derivative?
Correct Answer One which has been derived from other fundamentalinstruments
Your Answer Derived from Mathematical expressions
Multiple Choice Single AnswerQuestion "Currency Snake"
Correct Answer Plus or minus movement of exchange rate around the parity rate
Your Answer Currency of European Country in the early 70's
True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a
quasi negotiable instrument.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion In which currency can the EEFC account be opened?
Correct Answer Any Convertible currency
Your Answer Any Convertible currency
Multiple Choice Multiple AnswerQuestion Criteria for Direct investment abroad under normal route :-
Correct Answer Viability of the proposal, and excellent track record of business ,Experience and expertise of promoters, benefit to the country
Your Answer Total Financial commitment in JV/WOS as per prescribed ceiling, Activity for investment is core activity of Indian Co.
Select The BlankQuestion ________ enables bankers to extend purchase, negotiation or
discount of export bills.Correct Answer Post shipment credit guarantee
Your Answer Post shipment credit guarantee
Multiple Choice Single AnswerQuestion For setting up a joint venture or WOS abroad, Indian banks
operating in India need a clearance :-Correct Answer Under Banking Regulation Act
Your Answer Under Banking Regulation Act
Multiple Choice Single AnswerQuestion Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
True/FalseQuestion Indian companies are now allowed to freely invest abroad up to
$1.5 million, raised through GDE or EEFC without priorpermission from RBI.
Correct Answer False
Your Answer False
Select The BlankQuestion Over the years ________has been the most widely accepted
currency in international capital market.Correct Answer American Dollar
Your Answer American Dollar
True/FalseQuestion Terms in an Irrevocable credit can not be alterred at all.
Correct Answer False
Your Answer True
Select The BlankQuestion Position in a currency is said to be ________, when sales equal
purchases.Correct Answer Square
Your Answer Square
Multiple Choice Multiple AnswerQuestion How is the entry into any conuntry's money market or capital
market is restricted?Correct Answer Because of different tax systems , Because of different credit
standardsYour Answer Because of different tax systems , Because of different credit
standards
Select The BlankQuestion The currency notes and coins of individual countries
participating in "Euro" have ceased to be a legal tender from________.
Correct Answer 2002
Your Answer 2002
Select The BlankQuestion Partnership firm not eligible for Overseas Direct Investment
needs to apply to RBI Approval in form ________.
Correct Answer ODI
Your Answer ODI
Multiple Choice Single AnswerQuestion Where does the word derivative originate from?
Correct Answer Mathematics
Your Answer Mathematics
Select The BlankQuestion To make the export more competitive and remunerative, the
Indian Govt extends ________ facility.Correct Answer Cash Incentives
Your Answer Cash Incentives
Multiple Choice Single AnswerQuestion The financial system of any country consists of
Correct Answer Network of commercial banks, domestic and foreign investmentbanks, NBFCs, etc
Your Answer The Central bank, IMF and world bank
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion Association of several scheduled commercial banks for forex
business is ________.Correct Answer Foreign Exchange Dealers Association of India
Your Answer Foreign Exchange Dealers Association of India
True/FalseQuestion Installment credit is issued for specific quantities of goods to be
shipped every week or month.Correct Answer True
Your Answer True
Select The BlankQuestion Combined Certificate of Origin and Value are required by
________.Correct Answer Commonwealth Countries
Your Answer Commonwealth Countries
Select The BlankQuestion The creditworthiness of the futures seller and the futures buyer
is ________ because of the presence of the Futures exchange.Correct Answer Irrelevant
Your Answer Irrelevant
Select The BlankQuestion When interest rate changes by 0.05 per cent then it has
changed ________ basis points.Correct Answer 50
Your Answer 5
Multiple Choice Multiple AnswerQuestion What were the primary objectives of the group of seven
countries?Correct Answer Bring down the external value of US Dollar , Bring some stability
to exchange rates of all the countriesYour Answer Bring down the external value of US Dollar , Bring some stability
to exchange rates of all the countries
Multiple Choice Multiple Answer
Question The crisis in global capital market in 2002-04 was due to
Correct Answer Collapse of Enron , Collapse of Argentina's currency board ,The war against terrorism
Your Answer Collapse of Enron , Collapse of Argentina's currency board
Multiple Choice Multiple AnswerQuestion Mr A sells an option conferring the right to buy a kilogram of
silver at Rs 8000/- for next six months means :-Correct Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in
next 6 months, even if the price goes up, , The buyer of optioncan sell silver to Mr A at 8000/- per Kg, in next 6 months, even ifthe price goes down.
Your Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, innext 6 months, even if the price goes up, , Mr A has choice ofselling or not selling silver on his own
Multiple Choice Multiple AnswerQuestion Major investors in NIF are :-
Correct Answer Commercial Banks , Non banking Finance companies ,Insurance Companies
Your Answer Commercial Banks , Non banking Finance companies ,Insurance Companies
True/FalseQuestion With the advent of futures and Options there is no need for
additional instruments of risk hedging.Correct Answer False
Your Answer False
Select The BlankQuestion During the fixed rate exchange system prevailing in India, the
intervention currency was ________.Correct Answer Sterling Pound
Your Answer USDollar
Multiple Choice Single AnswerQuestion What help does EXIM Bank provide under the scheme 'Direct
Financial assistance to exporters'?Correct Answer Funds are provided under deferred payment terms to Indian
exporter for credit to foreign buyerYour Answer Funds are provided under deferred payment terms to Indian
exporter for credit to foreign buyer
Multiple Choice Single Answer
Question What is a bill of lading?
Correct Answer Transport document representing movement of goods by water.
Your Answer Transport document representing movement of goods by water.
Multiple Choice Single AnswerQuestion Which controls are not permitted by IMF?
Correct Answer Current account controls
Your Answer Exchange controls
Multiple Choice Multiple AnswerQuestion What are the objectives of International Chamber of
Commerce?Correct Answer Champion the global economy as a force of economic growth ,
Creating of job and prosperityYour Answer Champion the global economy as a force of economic growth ,
Creating of job and prosperity
True/FalseQuestion Yankee bond is issued for domestic borrowers.
Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter
bank transactions?Correct Answer Clearing house for settlement and clearance for the operations
of Ads , Set up a market intelligence cell to study and monitordevelopments in Forex Market
Your Answer Clearing house for settlement and clearance for the operationsof Ads , Set up a market intelligence cell to study and monitordevelopments in Forex Market
True/FalseQuestion An AD can book a forward contract for a part of the amount of
Sale ContractCorrect Answer True
Your Answer False
True/FalseQuestion Sterling FRNs are issued in Europe, USA ,Asia
Correct Answer False
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Bond basis to moneymarket basis
Bond basisx 360/365 Bond basisx 360/365
3 months LIBOR +2 % PA Floating rate Floating for floating ratecurrency swap
15% P.A. Fixed rate Fixed rate
Money market basis tobond basis
Money market basis x365/360
Money market basis x365/360
Select The BlankQuestion In Indian interbank market forward rates are generally quoted on
the basis of ________.Correct Answer Calendar month
Your Answer Calendar month
Multiple Choice Single AnswerQuestion In case of syndication of loans the amount of loan and currency
is finalised by :-Correct Answer Borrower
Your Answer Underwriter of the syndicate
Multiple Choice Single AnswerQuestion European currency Unit
Correct Answer Basket of Currencies of members of EMS
Your Answer Basket of Currencies of members of EMS
Select The BlankQuestion The counter party in option is ________.
Correct Answer The exchange
Your Answer Trustworthy corporation, who hedges the risks of marketuncertainty
Multiple Choice Single AnswerQuestion A Spot Transaction between Japanese Yen and Sterling carried
out on Friday in Singapore, the settlement day will be
Correct Answer Following Tuesday if it is a working day in all the three centers
Your Answer Following Tuesday if it is a working day in all the three centers
Select The BlankQuestion EEFC account holder is allowed to have ________ facility.
Correct Answer Cheque book and nomination
Your Answer Cheque book and nomination
Multiple Choice Multiple AnswerQuestion A Usance bill of exchange may be drawn in 2 ways. Which are
they?Correct Answer Documents against payment , Documents against acceptance
Your Answer Documents against payment , Documents against acceptance
Multiple Choice Single AnswerQuestion Why have futures and options come into existence?
Correct Answer To avoid business risk.
Your Answer To avoid business risk.
True/FalseQuestion In an interest rate swap if the payment schedules are identical,
only diffrence between the two payments is delivered.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What are the main causes of fluctuations in Exchange rates?
Correct Answer Market demand and supply, sentiments , Governmentregulatios, fiscal policies, political instabilities
Your Answer Government regulatios, fiscal policies, political instabilities ,Market demand and supply, sentiments , The purchasing powerof currency changes every second
Multiple Choice Single AnswerQuestion What do you understand by a swap?
Correct Answer 2 counter parties agree to exchange streams of payments overa period of time
Your Answer 2 counter parties agree to exchange streams of payments overa period of time
True/FalseQuestion Import finance is nomally available at rates of interest cheaper
than domestic finance rates.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion A weight list, a packing list used in international trade are which
type of documents?Correct Answer Operational Documents
Your Answer Operational Documents
Multiple Choice Multiple AnswerQuestion What do you understand by 'Foreign Exchange Risk'?
Correct Answer The change in value of currency alters the home currency valueof an asset , liability, , The change in value of currency alters thehome currency value of profit, loss, or future cash flows
Your Answer The change in value of currency alters the home currency valueof an asset , liability, , The change in value of currency alters thehome currency value of profit, loss, or future cash flows
Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an
exporter?Correct Answer Preshipment credit beyond six months for construction and
turnkey projects abroadYour Answer Preshipment credit beyond six months for construction and
turnkey projects abroad
Multiple Choice Single AnswerQuestion Which Indian Co. is not eligible to make investment abroad
under automatic route?Correct Answer Co which is caution listed by RBI
Your Answer Co which is caution listed by RBI
True/FalseQuestion Naked position is when investor does not hedge against market
risk.Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question In DAF, the frontier means :-
Correct Answer Frontier of exporter's country , Frontier of importer's country
Your Answer Frontier of exporter's country , Frontier of importer's country
Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in
foreign exchange?Correct Answer USD 1 trillion
Your Answer USD 1 trillion
Match The FollowingQuestion Correct Answer Your Answer
European option On or after maturity On or after maturity
Out of money Loss Profit
In the money Profit Loss
American option Before maturity Before maturity
Select The BlankQuestion The Trans European Automated Real Time Gross Settlement
Express Transfer is popular in ________.Correct Answer Brussels
Your Answer Brussels
True/FalseQuestion PP Form is required when exports are made to any country by
post parcel on value payable basis.Correct Answer False
Your Answer False
Select The BlankQuestion When an Indian Company earns at least 50% of its average
turnover from a particular activity then that activity is consideredas ________.
Correct Answer Core activity
Your Answer Core activity
Multiple Choice Single AnswerQuestion How many Countries participated in the third survey on Foreign
Exchange, coordinated by BIS in 1992?Correct Answer 26
Your Answer 26
Select The BlankQuestion Indian Co. intending to make investment under Automatic route
needs to submit form ________ to RBI with enclosures.Correct Answer ODA
Your Answer ODA
Multiple Choice Single AnswerQuestion In International trade, Advance payment means :-
Correct Answer Providing up front cash
Your Answer Providing up front cash
True/FalseQuestion If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter bank
transactions?Correct Answer Clearing house for settlement and clearance for the operations of
Ads , Set up a market intelligence cell to study and monitordevelopments in Forex Market
Your Answer Clearing house for settlement and clearance for the operations ofAds , Make additional foreign currency available to ADs atcheaper rates
Select The BlankQuestion ________ is the agency of ICC which deals with the maritime
crime.Correct Answer International Maritime Bureau
Your Answer International Maritime Bureau
Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?
Correct Answer Buffer Stock Facility
Your Answer Buffer Stock Facility
True/FalseQuestion Cross currency forward contract is not meaningful if original
contract is in Rupees to USDCorrect Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration date andtime, the method of payment
Your Answer The exercise or strike price, the amount , The expiration date andtime, the method of payment , The Market report of the exchangewhich trades the option
Multiple Choice Single AnswerQuestion Which is the most actively traded currency in the international
market today?Correct Answer US Dollar
Your Answer US Dollar
Match The Following
Question Correct Answer Your Answer
Intolerable risk Drop the investment project Drop the investment project
Country risk analysis Cost of evluation does notjustify analysis
Cost of evluation does notjustify analysis
Stock market analysis Banks are ahead Factors' values
Weightages % Factors' values 100% of total
Select The BlankQuestion Global capital market can be understood from the study of
________.Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings
within and outside the countryYour Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings
within and outside the country
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will be
exchanged on :-Correct Answer Monday
Your Answer Monday
Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee
came from June 92?Correct Answer Other managed Floating
Your Answer Pegged to Single currency
Match The FollowingQuestion Correct Answer Your Answer
Maturity of future Time when actual commodityis delivered
Last date of exercising option
Note issuance facility Euronotes Euronotes
Bearer security issued incurrency other than that ofthe country of issue
Eurobonds Eurobonds
Margin on future Peformance bond or securitydeposit
Peformance bond or securitydeposit
True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a quasi
negotiable instrument.
Correct Answer False
Your Answer False
True/FalseQuestion The Prominent non banking financial institutions participating in
the FOREX markets are Pension funds, mutual funds, insuranceCos.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What are margins, with reference to futures market?
Correct Answer Faith money deposited by buyers and sellers ensures liquidity ,Margin ensures solvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity ,Margin ensures solvency for honouring contracts
Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in
foreign exchange?Correct Answer USD 1 trillion
Your Answer USD 1 trillion
Multiple Choice Single AnswerQuestion NIF is basically an agreement :-
Correct Answer By underwriting bank to support funding for a certain period,against which borrowers can issue short term papers
Your Answer Which enables the investor to market the same in the secondarymarket
Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of
seven central Banks taken togeather in mid 1992?Correct Answer USD 275 Billion
Your Answer USD 275 Billion
Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an
exporter?Correct Answer Preshipment credit beyond six months for construction and
turnkey projects abroad
Your Answer Preshipment credit up to six months for construction and turnkeyprojects abroad
Select The BlankQuestion Over the years ________has been the most widely accepted
currency in international capital market.Correct Answer American Dollar
Your Answer American Dollar
Select The BlankQuestion As a result of the world wars in the 20th century the ________ of
most of the countries suffered heavily.Correct Answer Economies
Your Answer Currencies
Multiple Choice Single AnswerQuestion Which currency is traded in one leg of about 70% of the world's
transactions?Correct Answer US Dollar
Your Answer US Dollar
Select The BlankQuestion ________ is the acid test for events to be included in country risk.
Correct Answer Control by Government'
Your Answer Recurrence
Select The BlankQuestion The Trans European Automated Real Time Gross Settlement
Express Transfer is popular in ________.Correct Answer Brussels
Your Answer Brussels
Multiple Choice Single AnswerQuestion What is Risk Syndication facility?
Correct Answer Sharing of risk of non payment by supplier
Your Answer Sharing risk of Non payment by the Syndicate of Banks givingloans
True/False
Question If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-
Correct Answer It is an undertaking given by the openers bank to pay certain sumof money , It is an undertaking given on behalf of a certain personto another person in different country
Your Answer It is an undertaking given by the openers bank to pay certain sumof money , It is an undertaking given on behalf of a certain personto another person in different country
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them
True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs, Call
and put options.Correct Answer True
Your Answer True
True/FalseQuestion There is no difference between CIP and CIF contracts except the
mode of transportation.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
Select The BlankQuestion When an Indian Company earns at least 50% of its average
turnover from a particular activity then that activity is consideredas ________.
Correct Answer Core activity
Your Answer Primary activity
Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.
Correct Answer An Irrevocable credit
Your Answer An Irrevocable credit
True/FalseQuestion The volume of trading of Derivatives in the world trade market is
growing but still only 5% of the total.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs
50.5000/52.5050. Which is the offered rate for Rs?Correct Answer USD 1=Rs 50.5000
Your Answer USD 1=Rs 50.5000
Multiple Choice Multiple AnswerQuestion Export finance
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euromarket operations
Your Answer Which are convertible , Which have liquidity confirmed in Euromarket operations , Which have greater intrinsic value
Multiple Choice Multiple AnswerQuestion What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market
Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?
Correct Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue
Your Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue
Select The BlankQuestion Short term instruments normally issued by corporate borrowers,
forhigh values, at a discount to face value are known as________.
Correct Answer Euro Commercial Papers
Your Answer Euro Commercial Papers
Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for assessing
a cross border project ?Correct Answer To weed out unviable projects and rank profitable ones
Your Answer To weed out unviable projects and rank profitable ones
Multiple Choice Single AnswerQuestion Examples of hedge are:
Correct Answer Buy when you are having short position
Your Answer Buy when you are having short position
Multiple Choice Multiple AnswerQuestion What is the effect of cross currency option on the customer?
Correct Answer He gets the flexibility to exposure , He is exposed to additional riskof movement of rates between 3 currencies
Your Answer He gets the flexibility to exposure , He is exposed to additional riskof movement of rates between 3 currencies
Select The BlankQuestion Forward margin makes a currency cheaper then the currency is at
________.Correct Answer Discount
Your Answer Discount
Multiple Choice Single AnswerQuestion Why does a person need protection from unfavourable movement
of exchange rate?
Correct Answer Unfavourable fluctuations in exchange rate can wipe out thenormal business profit
Your Answer Unfavourable fluctuations in exchange rate can wipe out thenormal business profit
Multiple Choice Single AnswerQuestion The capital market is said to be volatile when
Correct Answer Prices of capital market instruments change and are expected tochange drastically
Your Answer Prices of capital market instruments change and are expected tochange drastically
True/FalseQuestion JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion What is the criteria for an Indian Company for Direct Investment
abroad?Correct Answer Activity proposed need to be core activity , Financial commitment
in JV/WOS maximum $ 100 million or equivalentYour Answer Activity proposed need to be core activity , Financial commitment
in JV/WOS maximum $ 100 million or equivalent , Indian coshould not have been black listed
Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?
Correct Answer Advertisement which lists the managers, underwriters, , Listof Providers of recently floated issue
Your Answer Advertisement which lists the managers, underwriters, , Listof Providers of recently floated issue
True/FalseQuestion Out of 15 member countries in European Union 12 countries
commiteed themselves for a single currency.Correct Answer False
Your Answer False
True/FalseQuestion The volume of trading of Derivatives in the world trade
market is growing but still only 5% of the total.Correct Answer False
Your Answer False
Select The BlankQuestion A Credit can be a confirmed credit only if it is also
________.Correct Answer An Irrevocable credit
Your Answer An Irrevocable credit
Match The FollowingQuestion Correct Answer Your Answer
Intolerable risk Drop the investment project Drop the investment project
Country risk analysis Cost of evluation does notjustify analysis
Cost of evluation does notjustify analysis
Stock market analysis Banks are ahead Banks are ahead
Weightages % Factors' values Factors' values
Select The BlankQuestion Over the years ________has been the most widely
accepted currency in international capital market.Correct Answer American Dollar
Your Answer American Dollar
Multiple Choice Single AnswerQuestion What is the meaning of a country risk?
Correct Answer Risk of events in a particular country which may cause lossto a person dealing with that country
Your Answer Risk of events in a particular country which may cause lossto a person dealing with that country
Multiple Choice Multiple AnswerQuestion Which common details will be available in any bill of
Lading?Correct Answer Names of consigner, consignee , The port of loading and
unloading, contract of shipmentYour Answer Names of consigner, consignee , The port of loading and
unloading, contract of shipment
Multiple Choice Single AnswerQuestion What help does EXIM Bank provide under the scheme
'Direct Financial assistance to exporters'?Correct Answer Funds are provided under deferred payment terms to Indian
exporter for credit to foreign buyer
Your Answer Funds are provided under deferred payment terms to Indianexporter for credit to foreign buyer
Match The FollowingQuestion Correct Answer Your Answer
PP Form Export Declaration form Export Declaration form
Health Certificate Fumigation certificate Fumigation certificate
Certificate of Inspection As per importersrequirement
As per importersrequirement
Certifiate of Origin Export Promotion Council Export Promotion Council
Select The BlankQuestion Even after liberalisation of exchange controls, the Euro
sterling market remained volatile because of uncertainties inUK and gyrations of sterling against major ________countries
Correct Answer OECD
Your Answer OECD
Multiple Choice Single AnswerQuestion How many INCOTERMS are there in "Departure" Group?
Correct Answer One
Your Answer Two
Multiple Choice Single AnswerQuestion What is a bill of lading?
Correct Answer Transport document representing movement of goods bywater.
Your Answer Transport document representing movement of goods bywater.
True/FalseQuestion The American Dollar market comprises of the domestic
segment of USD the offshore segment of USD.Correct Answer True
Your Answer True
Select The BlankQuestion The creditworthiness of the futures seller and the futures
buyer is ________ because of the presence of the Futures
exchange.
Correct Answer Irrelevant
Your Answer Irrelevant
Multiple Choice Single AnswerQuestion What was the collective assessment of International
financial market about the country risk of many cnuntries inthe last decade?
Correct Answer Whatever it was, was disastrously wrong.
Your Answer Whatever it was, was disastrously wrong.
Multiple Choice Multiple AnswerQuestion How is the entry into any conuntry's money market or capital
market is restricted?Correct Answer Because of different tax systems , Because of different
credit standardsYour Answer Because of different tax systems , Because of different
credit standards
True/FalseQuestion Till August 1994 India was following the Indirect Methodof
Rate quotation.Correct Answer False
Your Answer True
Select The BlankQuestion In Indian interbank market forward rates are generally
quoted on the basis of ________.Correct Answer Calendar month
Your Answer Calendar month
Select The BlankQuestion Rupee was liberalised on ________ account in 1993, and
on current account in 1994.Correct Answer Trade
Your Answer Trade
Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian
Rupee came from June 92?Correct Answer Other managed Floating
Your Answer Other managed Floating
Multiple Choice Multiple AnswerQuestion Which of these are considered as miscellaneous
documents?Correct Answer Packing list , Weight certificate
Your Answer Packing list , Weight certificate
True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs,
Call and put options.Correct Answer True
Your Answer True
Select The BlankQuestion ECGC provides cover to an Indian contractor for
construction work abroad under ________.Correct Answer Construction works policy
Your Answer Construction works policy
Multiple Choice Single AnswerQuestion Equity can be raised internationallly by a company through
:-Correct Answer Fund raising, underwriting, hedging , arbitration operations
Your Answer Fund raising, underwriting, hedging , arbitration operations
Multiple Choice Single AnswerQuestion How many Countries participated in the third survey on
Foreign Exchange, coordinated by BIS in 1992?Correct Answer 26
Your Answer 26
True/FalseQuestion In red clause credit some clauses are printed in Red ink.
Correct Answer True
Your Answer True
True/FalseQuestion Prior approval of RBI is needed for payment of all imports.
Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion The factors which affect the performance of an option are:-
Correct Answer Underlying asset price , Time before expiration, rate ofinterest
Your Answer Underlying asset price , Time before expiration, rate ofinterest
Multiple Choice Single AnswerQuestion What is the immediate cause for the growth of futures and
options in the last two decades?Correct Answer Increase in volatile trading conditions
Your Answer Management of external risk
Select The BlankQuestion For setting up joint ventures abroad or equity participation
abroad, EXIM bank provides funds under ________Scheme.
Correct Answer Overseas investment facility
Your Answer Overseas investment facility
Select The BlankQuestion To make the export more competitive and remunerative, the
Indian Govt extends ________ facility.Correct Answer Cash Incentives
Your Answer Advance against cash incentives
Multiple Choice Multiple AnswerQuestion What is the criteria for an Indian Company for Direct
Investment abroad?Correct Answer Activity proposed need to be core activity , Financial
commitment in JV/WOS maximum $ 100 million orequivalent
Your Answer Activity proposed need to be core activity , Financialcommitment in JV/WOS maximum $ 100 million orequivalent
Multiple Choice Multiple AnswerQuestion External Commercial Debt market :-
Correct Answer Prevails in Domestic market of foreign country , Prevails inoffshore markets
Your Answer Prevails in Domestic market of foreign country , Prevails inoffshore markets
Multiple Choice Single AnswerQuestion Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
Multiple Choice Multiple AnswerQuestion What do you understand by 'Foreign Exchange Risk'?
Correct Answer The change in value of currency alters the home currencyvalue of an asset , liability, , The change in value ofcurrency alters the home currency value of profit, loss, orfuture cash flows
Your Answer The change in value of currency alters the home currencyvalue of an asset , liability, , The change in value ofcurrency alters the home currency value of profit, loss, orfuture cash flows , Certainty of an event which wouldhappen in favour of the importer/ exporter
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Tuesday, where both
centers have holiday on Wednesday, currencies will beexchanged on :-
Correct Answer Thursday if it is a working day at both the centers
Your Answer Friday
Multiple Choice Single AnswerQuestion Which details about forward contracts do the Exchange
Controls verify ?Correct Answer Particulars of cancellation of forward cover for the
equivalent of USD 500,000Your Answer Particulars of cancellation of forward cover for the
equivalent of USD 500,000
True/FalseQuestion In the forward rate quotations between two currencies,
when one currency is at discount the other currency is atpremium.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed inEuro market operations
Your Answer Which are convertible , Which have liquidity confirmed inEuro market operations
Select The BlankQuestion A Bill of exchange payable 45 days from date of shipment,
is a means of ________ from seller to the buyer.Correct Answer Credit
Your Answer Credit
Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an
exporter?Correct Answer Preshipment credit beyond six months for construction and
turnkey projects abroadYour Answer Preshipment credit beyond six months for construction and
turnkey projects abroad
Select The BlankQuestion Global capital market can be understood from the study of
________.Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt
Borrowings within and outside the countryYour Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt
Borrowings within and outside the country
True/FalseQuestion Import finance is nomally available at rates of interest
cheaper than domestic finance rates.Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion Major s in NIF are :-
Correct Answer Commercial Banks , Non banking Finance companies ,Insurance Companies
Your Answer Commercial Banks , Non banking Finance companies
Select The BlankQuestion In mid 1992 ________ rejected the ratification of Maastricht
treatyCorrect Answer Denmark
Your Answer Denmark
True/FalseQuestion Indian companies are now allowed to freely invest abroad
up to $1.5 million, raised through GDE or EEFC withoutprior permission from RBI.
Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter
bank transactions?Correct Answer Clearing house for settlement and clearance for the operations
of Ads , Set up a market intelligence cell to study and monitordevelopments in Forex Market
Your Answer Clearing house for settlement and clearance for the operationsof Ads , Make additional foreign currency available to ADs atcheaper rates
Select The BlankQuestion ________ is the agency of ICC which deals with the maritime
crime.Correct Answer International Maritime Bureau
Your Answer International Maritime Bureau
Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?
Correct Answer Buffer Stock Facility
Your Answer Buffer Stock Facility
True/FalseQuestion Cross currency forward contract is not meaningful if original
contract is in Rupees to USDCorrect Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment
Your Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment , The Market report of theexchange which trades the option
Multiple Choice Single Answer
Question Which is the most actively traded currency in the internationalmarket today?
Correct Answer US Dollar
Your Answer US Dollar
Match The FollowingQuestion Correct Answer Your Answer
Intolerable risk Drop the investmentproject
Drop the investmentproject
Country risk analysis Cost of evluation does notjustify analysis
Cost of evluation does notjustify analysis
Stock market analysis Banks are ahead Factors' values
Weightages % Factors' values 100% of total
Select The BlankQuestion Global capital market can be understood from the study of
________.Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings
within and outside the countryYour Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings
within and outside the country
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will
be exchanged on :-Correct Answer Monday
Your Answer Monday
Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee
came from June 92?Correct Answer Other managed Floating
Your Answer Pegged to Single currency
Match The FollowingQuestion Correct Answer Your Answer
Maturity of future Time when actualcommodity is delivered
Last date of exercisingoption
Note issuance facility Euronotes Euronotes
Bearer security issued incurrency other than that ofthe country of issue
Eurobonds Eurobonds
Margin on future Peformance bond orsecurity deposit
Peformance bond orsecurity deposit
True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a
quasi negotiable instrument.Correct Answer False
Your Answer False
True/FalseQuestion The Prominent non banking financial institutions participating in
the FOREX markets are Pension funds, mutual funds, insuranceCos.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What are margins, with reference to futures market?
Correct Answer Faith money deposited by buyers and sellers ensures liquidity ,Margin ensures solvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity ,Margin ensures solvency for honouring contracts
Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in
foreign exchange?Correct Answer USD 1 trillion
Your Answer USD 1 trillion
Multiple Choice Single AnswerQuestion NIF is basically an agreement :-
Correct Answer By underwriting bank to support funding for a certain period,against which borrowers can issue short term papers
Your Answer Which enables the investor to market the same in the secondarymarket
Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of
seven central Banks taken togeather in mid 1992?Correct Answer USD 275 Billion
Your Answer USD 275 Billion
Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an
exporter?Correct Answer Preshipment credit beyond six months for construction and
turnkey projects abroadYour Answer Preshipment credit up to six months for construction and turnkey
projects abroad
Select The BlankQuestion Over the years ________has been the most widely accepted
currency in international capital market.Correct Answer American Dollar
Your Answer American Dollar
Select The BlankQuestion As a result of the world wars in the 20th century the ________
of most of the countries suffered heavily.Correct Answer Economies
Your Answer Currencies
Multiple Choice Single AnswerQuestion Which currency is traded in one leg of about 70% of the world's
transactions?Correct Answer US Dollar
Your Answer US Dollar
Select The BlankQuestion ________ is the acid test for events to be included in country
risk.Correct Answer Control by Government'
Your Answer Recurrence
Select The BlankQuestion The Trans European Automated Real Time Gross Settlement
Express Transfer is popular in ________.Correct Answer Brussels
Your Answer Brussels
Multiple Choice Single Answer
Question What is Risk Syndication facility?
Correct Answer Sharing of risk of non payment by supplier
Your Answer Sharing risk of Non payment by the Syndicate of Banks givingloans
True/FalseQuestion If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-
Correct Answer It is an undertaking given by the openers bank to pay certainsum of money , It is an undertaking given on behalf of a certainperson to another person in different country
Your Answer It is an undertaking given by the openers bank to pay certainsum of money , It is an undertaking given on behalf of a certainperson to another person in different country
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them
True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs,
Call and put options.Correct Answer True
Your Answer True
True/FalseQuestion There is no difference between CIP and CIF contracts except
the mode of transportation.Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
Select The BlankQuestion When an Indian Company earns at least 50% of its average
turnover from a particular activity then that activity is consideredas ________.
Correct Answer Core activity
Your Answer Primary activity
Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.
Correct Answer An Irrevocable credit
Your Answer An Irrevocable credit
True/FalseQuestion The volume of trading of Derivatives in the world trade market is
growing but still only 5% of the total.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs
50.5000/52.5050. Which is the offered rate for Rs?Correct Answer USD 1=Rs 50.5000
Your Answer USD 1=Rs 50.5000
Multiple Choice Multiple AnswerQuestion Export finance
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euromarket operations
Your Answer Which are convertible , Which have liquidity confirmed in Euromarket operations , Which have greater intrinsic value
Multiple Choice Multiple AnswerQuestion What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market
Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?
Correct Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue
Your Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue
Select The BlankQuestion Short term instruments normally issued by corporate borrowers,
forhigh values, at a discount to face value are known as________.
Correct Answer Euro Commercial Papers
Your Answer Euro Commercial Papers
Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for
assessing a cross border project ?Correct Answer To weed out unviable projects and rank profitable ones
Your Answer To weed out unviable projects and rank profitable ones
Multiple Choice Single AnswerQuestion Examples of hedge are:
Correct Answer Buy when you are having short position
Your Answer Buy when you are having short position
Multiple Choice Multiple AnswerQuestion What is the effect of cross currency option on the customer?
Correct Answer He gets the flexibility to exposure , He is exposed to additionalrisk of movement of rates between 3 currencies
Your Answer He gets the flexibility to exposure , He is exposed to additionalrisk of movement of rates between 3 currencies
Select The Blank
Question Forward margin makes a currency cheaper then the currency isat ________.
Correct Answer Discount
Your Answer Discount
Multiple Choice Single AnswerQuestion Why does a person need protection from unfavourable
movement of exchange rate?Correct Answer Unfavourable fluctuations in exchange rate can wipe out the
normal business profitYour Answer Unfavourable fluctuations in exchange rate can wipe out the
normal business profit
Multiple Choice Single AnswerQuestion The capital market is said to be volatile when
Correct Answer Prices of capital market instruments change and are expected tochange drastically
Your Answer Prices of capital market instruments change and are expected tochange drastically
True/FalseQuestion JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion What is the criteria for an Indian Company for Direct Investment
abroad?Correct Answer Activity proposed need to be core activity , Financial
commitment in JV/WOS maximum $ 100 million or equivalentYour Answer Activity proposed need to be core activity , Financial
commitment in JV/WOS maximum $ 100 million or equivalent ,Indian co should not have been black listed
Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter bank
transactions?Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set
up a market intelligence cell to study and monitor developments in ForexMarket
Your Answer Clearing house for settlement and clearance for the operations of Ads ,Make additional foreign currency available to ADs at cheaper rates
Select The BlankQuestion ________ is the agency of ICC which deals with the maritime crime.
Correct Answer International Maritime Bureau
Your Answer International Maritime Bureau
Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?
Correct Answer Buffer Stock Facility
Your Answer Buffer Stock Facility
True/FalseQuestion Cross currency forward contract is not meaningful if original contract is in
Rupees to USDCorrect Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration date and time, themethod of payment
Your Answer The exercise or strike price, the amount , The expiration date and time, themethod of payment , The Market report of the exchange which trades theoption
Multiple Choice Single AnswerQuestion Which is the most actively traded currency in the international market
today?Correct Answer US Dollar
Your Answer US Dollar
Match The FollowingQuestion Correct Answer Your Answer
Intolerable risk Drop the investment project Drop the investment project
Country risk analysis Cost of evluation does notjustify analysis
Cost of evluation does notjustify analysis
Stock market analysis Banks are ahead Factors' values
Weightages % Factors' values 100% of total
Select The Blank
Question Global capital market can be understood from the study of ________.
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within andoutside the country
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within andoutside the country
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will be
exchanged on :-Correct Answer Monday
Your Answer Monday
Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee came from
June 92?Correct Answer Other managed Floating
Your Answer Pegged to Single currency
Match The FollowingQuestion Correct Answer Your Answer
Maturity of future Time when actual commodityis delivered
Last date of exercising option
Note issuance facility Euronotes Euronotes
Bearer security issued incurrency other than that ofthe country of issue
Eurobonds Eurobonds
Margin on future Peformance bond or securitydeposit
Peformance bond or securitydeposit
True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a quasi
negotiable instrument.Correct Answer False
Your Answer False
True/FalseQuestion The Prominent non banking financial institutions participating in the
FOREX markets are Pension funds, mutual funds, insurance Cos.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What are margins, with reference to futures market?
Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Marginensures solvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity , Marginensures solvency for honouring contracts
Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in foreign
exchange?Correct Answer USD 1 trillion
Your Answer USD 1 trillion
Multiple Choice Single AnswerQuestion NIF is basically an agreement :-
Correct Answer By underwriting bank to support funding for a certain period, against whichborrowers can issue short term papers
Your Answer Which enables the investor to market the same in the secondary market
Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of seven
central Banks taken togeather in mid 1992?Correct Answer USD 275 Billion
Your Answer USD 275 Billion
Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an exporter?
Correct Answer Preshipment credit beyond six months for construction and turnkeyprojects abroad
Your Answer Preshipment credit up to six months for construction and turnkey projectsabroad
Select The BlankQuestion Over the years ________has been the most widely accepted currency in
international capital market.Correct Answer American Dollar
Your Answer American Dollar
Select The BlankQuestion As a result of the world wars in the 20th century the ________ of most of
the countries suffered heavily.
Correct Answer Economies
Your Answer Currencies
Multiple Choice Single AnswerQuestion Which currency is traded in one leg of about 70% of the world's
transactions?Correct Answer US Dollar
Your Answer US Dollar
Select The BlankQuestion ________ is the acid test for events to be included in country risk.
Correct Answer Control by Government'
Your Answer Recurrence
Select The BlankQuestion The Trans European Automated Real Time Gross Settlement Express
Transfer is popular in ________.Correct Answer Brussels
Your Answer Brussels
Multiple Choice Single AnswerQuestion What is Risk Syndication facility?
Correct Answer Sharing of risk of non payment by supplier
Your Answer Sharing risk of Non payment by the Syndicate of Banks giving loans
True/FalseQuestion If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-
Correct Answer It is an undertaking given by the openers bank to pay certain sum ofmoney , It is an undertaking given on behalf of a certain person to anotherperson in different country
Your Answer It is an undertaking given by the openers bank to pay certain sum ofmoney , It is an undertaking given on behalf of a certain person to anotherperson in different country
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operationabroad , Payment to EOUs in India for services rendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heart operationabroad , Payment to EOUs in India for services rendered by them
True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs, Call and put
options.Correct Answer True
Your Answer True
True/FalseQuestion There is no difference between CIP and CIF contracts except the mode of
transportation.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
Select The BlankQuestion When an Indian Company earns at least 50% of its average turnover from
a particular activity then that activity is considered as ________.Correct Answer Core activity
Your Answer Primary activity
Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.
Correct Answer An Irrevocable credit
Your Answer An Irrevocable credit
True/FalseQuestion The volume of trading of Derivatives in the world trade market is growing
but still only 5% of the total.
Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs
50.5000/52.5050. Which is the offered rate for Rs?Correct Answer USD 1=Rs 50.5000
Your Answer USD 1=Rs 50.5000
Multiple Choice Multiple AnswerQuestion Export finance
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euro marketoperations
Your Answer Which are convertible , Which have liquidity confirmed in Euro marketoperations , Which have greater intrinsic value
Multiple Choice Multiple AnswerQuestion What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance fromresources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance fromresources raised in world capital market
Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?
Correct Answer Advertisement which lists the managers, underwriters, , List of Providers ofrecently floated issue
Your Answer Advertisement which lists the managers, underwriters, , List of Providers ofrecently floated issue
Select The BlankQuestion Short term instruments normally issued by corporate borrowers, forhigh
values, at a discount to face value are known as ________.Correct Answer Euro Commercial Papers
Your Answer Euro Commercial Papers
Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for assessing a cross
border project ?Correct Answer To weed out unviable projects and rank profitable ones
Your Answer To weed out unviable projects and rank profitable ones
Multiple Choice Single AnswerQuestion Examples of hedge are:
Correct Answer Buy when you are having short position
Your Answer Buy when you are having short position
Multiple Choice Multiple AnswerQuestion What is the effect of cross currency option on the customer?
Correct Answer He gets the flexibility to exposure , He is exposed to additional risk ofmovement of rates between 3 currencies
Your Answer He gets the flexibility to exposure , He is exposed to additional risk ofmovement of rates between 3 currencies
Select The BlankQuestion Forward margin makes a currency cheaper then the currency is at
________.Correct Answer Discount
Your Answer Discount
Multiple Choice Single AnswerQuestion Why does a person need protection from unfavourable movement of
exchange rate?Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal
business profitYour Answer Unfavourable fluctuations in exchange rate can wipe out the normal
business profit
Multiple Choice Single AnswerQuestion The capital market is said to be volatile when
Correct Answer Prices of capital market instruments change and are expected to changedrastically
Your Answer Prices of capital market instruments change and are expected to changedrastically
True/FalseQuestion JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion What is the criteria for an Indian Company for Direct Investment abroad?
Correct Answer Activity proposed need to be core activity , Financial commitment inJV/WOS maximum $ 100 million or equivalent
Your Answer Activity proposed need to be core activity , Financial commitment inJV/WOS maximum $ 100 million or equivalent , Indian co should not havebeen black listed
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter
bank transactions?Correct Answer Clearing house for settlement and clearance for the operations
of Ads , Set up a market intelligence cell to study and monitordevelopments in Forex Market
Your Answer Clearing house for settlement and clearance for the operationsof Ads , Make additional foreign currency available to ADs atcheaper rates
Select The BlankQuestion ________ is the agency of ICC which deals with the maritime
crime.Correct Answer International Maritime Bureau
Your Answer International Maritime Bureau
Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?
Correct Answer Buffer Stock Facility
Your Answer Buffer Stock Facility
True/FalseQuestion Cross currency forward contract is not meaningful if original
contract is in Rupees to USDCorrect Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment
Your Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment , The Market report of theexchange which trades the option
Multiple Choice Single AnswerQuestion Which is the most actively traded currency in the international
market today?Correct Answer US Dollar
Your Answer US Dollar
Match The FollowingQuestion Correct Answer Your Answer
Intolerable risk Drop the investmentproject
Drop the investmentproject
Country risk analysis Cost of evluation doesnot justify analysis
Cost of evluation does notjustify analysis
Stock market analysis Banks are ahead Factors' values
Weightages % Factors' values 100% of total
Select The BlankQuestion Global capital market can be understood from the study of
________.Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings
within and outside the countryYour Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings
within and outside the country
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will
be exchanged on :-Correct Answer Monday
Your Answer Monday
Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee
came from June 92?Correct Answer Other managed Floating
Your Answer Pegged to Single currency
Match The Following
Question Correct Answer Your Answer
Maturity of future Time when actualcommodity is delivered
Last date of exercisingoption
Note issuance facility Euronotes Euronotes
Bearer security issued incurrency other than thatof the country of issue
Eurobonds Eurobonds
Margin on future Peformance bond orsecurity deposit
Peformance bond orsecurity deposit
True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a
quasi negotiable instrument.Correct Answer False
Your Answer False
True/FalseQuestion The Prominent non banking financial institutions participating in
the FOREX markets are Pension funds, mutual funds,insurance Cos.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What are margins, with reference to futures market?
Correct Answer Faith money deposited by buyers and sellers ensures liquidity ,Margin ensures solvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity ,Margin ensures solvency for honouring contracts
Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in
foreign exchange?Correct Answer USD 1 trillion
Your Answer USD 1 trillion
Multiple Choice Single AnswerQuestion NIF is basically an agreement :-
Correct Answer By underwriting bank to support funding for a certain period,against which borrowers can issue short term papers
Your Answer Which enables the investor to market the same in thesecondary market
Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of
seven central Banks taken togeather in mid 1992?Correct Answer USD 275 Billion
Your Answer USD 275 Billion
Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an
exporter?Correct Answer Preshipment credit beyond six months for construction and
turnkey projects abroadYour Answer Preshipment credit up to six months for construction and
turnkey projects abroad
Select The BlankQuestion Over the years ________has been the most widely accepted
currency in international capital market.Correct Answer American Dollar
Your Answer American Dollar
Select The BlankQuestion As a result of the world wars in the 20th century the ________
of most of the countries suffered heavily.Correct Answer Economies
Your Answer Currencies
Multiple Choice Single AnswerQuestion Which currency is traded in one leg of about 70% of the world's
transactions?Correct Answer US Dollar
Your Answer US Dollar
Select The BlankQuestion ________ is the acid test for events to be included in country
risk.Correct Answer Control by Government'
Your Answer Recurrence
Select The Blank
Question The Trans European Automated Real Time Gross SettlementExpress Transfer is popular in ________.
Correct Answer Brussels
Your Answer Brussels
Multiple Choice Single AnswerQuestion What is Risk Syndication facility?
Correct Answer Sharing of risk of non payment by supplier
Your Answer Sharing risk of Non payment by the Syndicate of Banks givingloans
True/FalseQuestion If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-
Correct Answer It is an undertaking given by the openers bank to pay certainsum of money , It is an undertaking given on behalf of a certainperson to another person in different country
Your Answer It is an undertaking given by the openers bank to pay certainsum of money , It is an undertaking given on behalf of a certainperson to another person in different country
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them
True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs,
Call and put options.Correct Answer True
Your Answer True
True/False
Question There is no difference between CIP and CIF contracts exceptthe mode of transportation.
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
Select The BlankQuestion When an Indian Company earns at least 50% of its average
turnover from a particular activity then that activity isconsidered as ________.
Correct Answer Core activity
Your Answer Primary activity
Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.
Correct Answer An Irrevocable credit
Your Answer An Irrevocable credit
True/FalseQuestion The volume of trading of Derivatives in the world trade market
is growing but still only 5% of the total.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs
50.5000/52.5050. Which is the offered rate for Rs?Correct Answer USD 1=Rs 50.5000
Your Answer USD 1=Rs 50.5000
Multiple Choice Multiple AnswerQuestion Export finance
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euromarket operations
Your Answer Which are convertible , Which have liquidity confirmed in Euromarket operations , Which have greater intrinsic value
Multiple Choice Multiple AnswerQuestion What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market
Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?
Correct Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue
Your Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue
Select The BlankQuestion Short term instruments normally issued by corporate
borrowers, forhigh values, at a discount to face value areknown as ________.
Correct Answer Euro Commercial Papers
Your Answer Euro Commercial Papers
Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for
assessing a cross border project ?Correct Answer To weed out unviable projects and rank profitable ones
Your Answer To weed out unviable projects and rank profitable ones
Multiple Choice Single AnswerQuestion Examples of hedge are:
Correct Answer Buy when you are having short position
Your Answer Buy when you are having short position
Multiple Choice Multiple Answer
Question What is the effect of cross currency option on the customer?
Correct Answer He gets the flexibility to exposure , He is exposed to additionalrisk of movement of rates between 3 currencies
Your Answer He gets the flexibility to exposure , He is exposed to additionalrisk of movement of rates between 3 currencies
Select The BlankQuestion Forward margin makes a currency cheaper then the currency is
at ________.Correct Answer Discount
Your Answer Discount
Multiple Choice Single AnswerQuestion Why does a person need protection from unfavourable
movement of exchange rate?Correct Answer Unfavourable fluctuations in exchange rate can wipe out the
normal business profitYour Answer Unfavourable fluctuations in exchange rate can wipe out the
normal business profit
Multiple Choice Single AnswerQuestion The capital market is said to be volatile when
Correct Answer Prices of capital market instruments change and are expectedto change drastically
Your Answer Prices of capital market instruments change and are expectedto change drastically
True/FalseQuestion JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion What is the criteria for an Indian Company for Direct
Investment abroad?Correct Answer Activity proposed need to be core activity , Financial
commitment in JV/WOS maximum $ 100 million or equivalentYour Answer Activity proposed need to be core activity , Financial
commitment in JV/WOS maximum $ 100 million or equivalent ,Indian co should not have been black listed
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question Integrated branches of Commercial banks handle forextransactions as well as options, swaps, futures, arbitrageoperations
Correct Answer True
Your Answer True
True/FalseQuestion JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer False
Select The BlankQuestion The rate of interest on rupee finance for exports is not
exceeding ________ less than PLR.Correct Answer 0.025
Your Answer 50 basis points over LIBOR
Multiple Choice Multiple AnswerQuestion What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment
Your Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment
Multiple Choice Single AnswerQuestion In the syndicated loan arrangement the borrower has to execute
:-Correct Answer Single Principal loan agreement
Your Answer Single Principal loan agreement
True/FalseQuestion At Least one principal Lender bank is essential for issue of the
ADR or GDR.Correct Answer False
Your Answer True
Multiple Choice Single AnswerQuestion US financial system is the freest system because
Correct Answer Institutions can introduce new products and instuments at theprice of their choice.
Your Answer Institutions can introduce new products and instuments at theprice of their choice.
Multiple Choice Single AnswerQuestion In a coupon swap who is called the buyer?
Correct Answer One who pays the fixed rate of interest
Your Answer One who pays the fixed rate of interest
True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate
quotation.Correct Answer False
Your Answer False
Select The BlankQuestion For setting up joint ventures abroad or equity participation
abroad, EXIM bank provides funds under ________ Scheme.Correct Answer Overseas investment facility
Your Answer Overseas investment facility
Multiple Choice Single AnswerQuestion Under the automatic route of Direct Investment Abroad, what is
the restriction on market purchases?Correct Answer 50% of the net worth of the investing company
Your Answer 50% of the net worth of the investing company
Multiple Choice Single AnswerQuestion What are the powers of money changers?
Correct Answer Purchase and sell foreign currency notes and travellers cheques
Your Answer Purchase and sell foreign currency notes and travellers chequesand also Give export finance
Select The BlankQuestion Any company involved in foreign exchange transactions is
exposed to ________ risk.Correct Answer Currency
Your Answer Currency
Multiple Choice Multiple Answer
Question What are the features of Settlement price ?
Correct Answer Price established by the clearing house at the end of eachtrading session , It is used to determine the net gain, loss,margin call and next days price limits
Your Answer Price established by the clearing house at the end of eachtrading session , It is used to determine the net gain, loss,margin call and next days price limits
Multiple Choice Multiple AnswerQuestion What are the activities of ICC?
Correct Answer Aribtration and dispute resolving , Canvass for open tradecombat commercial crime
Your Answer Aribtration and dispute resolving , Canvass for open tradecombat commercial crime , Increased Govt regulation ofBusiness
True/FalseQuestion Cause of increase in cost of public issues Underwriting fees ,
selling commissionCorrect Answer True
Your Answer False
Select The BlankQuestion The currency swaps used ________.
Correct Answer To lower the risk of currency exposure
Your Answer To lower the risk of currency exposure
True/FalseQuestion The Option period in the forward contract is at the option of the
Banker, hence the bank has to be very conservative in quotingrates.
Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion Which factors affect the exchange rates in short time period?
Correct Answer Demand and supply, interest rates, inflation, , Sentiment,Speculation
Your Answer Demand and supply, interest rates, inflation, , Sentiment,Speculation , GDP,Balance of trade andpayment,Unemployment
Match The Following
Question Correct Answer Your Answer
Departure EXW EXW
Main carriage paid CFR CFR
Main carriage unpaid FAS FAS
Arrival DES DES
Multiple Choice Multiple AnswerQuestion Sterling Market is attractive for an international investor because
Correct Answer Gilts offer higher attractive margin , Choice of issuing mediumterm and long term bonds
Your Answer Gilts offer higher attractive margin , Choice of issuing mediumterm and long term bonds , Linking of issues to currency swaps
True/FalseQuestion In red clause credit some clauses are printed in Red ink.
Correct Answer True
Your Answer False
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs
50.5000/52.5050. Which is the bid rate for USD?Correct Answer USD 1=Rs 50.5000
Your Answer USD 1=Rs 50.5000
Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for
assessing a cross border project ?Correct Answer To weed out unviable projects and rank profitable ones
Your Answer To weed out unviable projects and rank profitable ones
Multiple Choice Multiple AnswerQuestion Criteria for investment abroad under automatic route :-
Correct Answer Activity for investment is core activity of Indian Company. , TotalFinancial commitment in JV/WOS as per prescribed ceiling
Your Answer Activity for investment is core activity of Indian Company. , TotalFinancial commitment in JV/WOS as per prescribed ceiling
Multiple Choice Multiple AnswerQuestion Who can issue the Certificate of Inspection?
Correct Answer Export Inspection Council , Person authorised by Importer.
Your Answer Export Inspection Council , Person authorised by Importer.
Multiple Choice Single AnswerQuestion Large number of exporters from which country are enjoying the
privilege of receiving up front cash from importers in Russia?Correct Answer United Kingdom
Your Answer United Kingdom
True/FalseQuestion In developed markets, speculators play important role in
determining the trend of currency rates.Correct Answer True
Your Answer True
Select The BlankQuestion In US Capital Market a Company prepares all the necessary
documents in advance of the public issue under the facilityknown as ________.
Correct Answer Shelf Registration
Your Answer Shelf Registration
Select The BlankQuestion In Overseas market the forward rate is generally quoted on the
basis of ________.Correct Answer Fixed date
Your Answer Calendar month
Select The BlankQuestion Forward Margin makes a currency costlier then the currency is
at ________.
Correct Answer Premium
Your Answer Discount
Multiple Choice Multiple AnswerQuestion These are the parties to the documentary credit :-
Correct Answer Negotiating Bank, advising bank , Reimbursing bank,Confirming bank
Your Answer Negotiating Bank, advising bank , Reimbursing bank,Confirming bank
Multiple Choice Multiple AnswerQuestion What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market
Multiple Choice Single AnswerQuestion Fixed, Floating or Limited flexibility are used in the context of
Correct Answer Exchange Rates
Your Answer Exchange Rates
Select The BlankQuestion In mid 1992 ________ rejected the ratification of Maastricht
treatyCorrect Answer Denmark
Your Answer UK
Multiple Choice Multiple AnswerQuestion Under the liberalisation through FEMA, what can an AD offer to
the clients, without the prior permission of RBI or Government?Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and
collars, and forward rate agreementsYour Answer Hedges, interest rate swaps, currency swaps. , Caps and
collars, and forward rate agreements
Multiple Choice Single AnswerQuestion To whom is an AD required to report the cancellation of forward
contracts?Correct Answer No one at all.
Your Answer To Reserve Bank of India, fortnightly
Select The BlankQuestion ECGC provides cover to an Indian contractor for construction
work abroad under ________.Correct Answer Construction works policy
Your Answer Export Performance Guarantee
True/FalseQuestion The Negotiating bank examines the documents submitted by the
seller and makes payment if they comply the terms andconditions of the LC.
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of
seven central Banks taken togeather in mid 1992?Correct Answer USD 275 Billion
Your Answer USD 275 Billion
Multiple Choice Multiple AnswerQuestion What are the sources of raising funds for exports?
Correct Answer Suppliers credit , Forfaiting
Your Answer Suppliers credit , Forfaiting
Select The BlankQuestion Forward margin makes a currency cheaper then the currency is
at ________.Correct Answer Discount
Your Answer Discount
Multiple Choice Single AnswerQuestion Name the common forex derivatives :-
Correct Answer Options, futures
Your Answer Options, futures
True/FalseQuestion Country risk analysis is a futile exercise in the background of
cost of analysis.
Correct Answer True
Your Answer False
Select The BlankQuestion Even after liberalisation of exchange controls, the Euro sterling
market remained volatile because of uncertainties in UK andgyrations of sterling against major ________ countries
Correct Answer OECD
Your Answer OECD
Match The FollowingQuestion Correct Answer Your Answer
Issues linked withLIBOR,LIBID,LIMEAN
FRNs FRNs
Issue of bonds withoutfixed rate of interest,linked to short terminterest rate in the globalmarket
FloatingRate Note FloatingRate Note
Issue of loansinternationally,througharranger, underwriter,comanager, for a largeamount for sharing risk oflending
Syndicated Loans Syndicated Loans
Equity issues in theforeign markets either asdirect investments orportfolio investments.
American or GlobalDepository Receipts
American or GlobalDepository Receipts
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Proforma Invoice, Commercial Invoice, Consaular Invoice are
which type of documents?Correct Answer Commercial Documents
Your Answer Commercial Documents
True/FalseQuestion Charter party bills of lading are generally not acceptable to
bankers as security because Sea Charters are full of problems.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Why does a Transaction exposure arise?
Correct Answer Trading flows , Dividend or capital flows
Your Answer Trading flows , Dividend or capital flows
Multiple Choice Single AnswerQuestion If a dealer of securities is quoting rate as 200-250 then the rate
200 signifies which rate with reference to him?Correct Answer Bid rate
Your Answer Bid rate
Select The BlankQuestion A Documentary credit issued on the strength of another
documentary credit is known as ________.Correct Answer Back to Back credit
Your Answer Back to Back credit
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euromarket operations
Your Answer Which are convertible , Which have liquidity confirmed in Euromarket operations
True/FalseQuestion Tranche' is a managed issue of securities in smaller
denominations.Correct Answer True
Your Answer False
True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs,
Call and put options.Correct Answer True
Your Answer True
Select The BlankQuestion Global capital market can be understood from the study of
________.Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings
within and outside the countryYour Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings
within and outside the country
Multiple Choice Multiple AnswerQuestion Which events can lead to materialisation of country risk?
Correct Answer Change in Government policies , Change in Government rulesand laws
Your Answer Change in Government policies , Change in Government rulesand laws , Unpredicted Earthquake, Tsunami waves
Multiple Choice Multiple AnswerQuestion What is a 'speculator'?
Correct Answer Trader who is neither hedger nor arbitragor , He takes risks forprofit
Your Answer Trader who is neither hedger nor arbitragor , He takes risks forprofit
Select The BlankQuestion The major industrial power whose economy was not affected
after the II world war was ________.Correct Answer USA
Your Answer USA
Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?
Correct Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue
Your Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue
Multiple Choice Multiple AnswerQuestion What do you understand by Commercial Risk?
Correct Answer Protracted default by the buyer , Insolvency of the buyer
Your Answer Protracted default by the buyer , Insolvency of the buyer
Select The BlankQuestion Legalised invoice is also called ________ invoice.
Correct Answer Visaed
Your Answer Visaed
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will
be exchanged on :-Correct Answer Monday
Your Answer Monday
True/FalseQuestion The American Dollar market comprises of the domestic segment
of USD the offshore segment of USD.Correct Answer True
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
LastStage Form a single currency Meet in Maastricht inNetherland
The First stage in theEuropeand and MonetaryUnion (EMU)
Free movement of capitalin EC
Establish EURO Bank
Stage II in EMU Establishment ofEuropean MonetaryInstitute
Establishment of EuropeanMonetary Institute
Stage III in EMU Members to meet theconvergence criteria andfix the exchange rates
Members to meet theconvergence criteria andfix the exchange rates
Select The BlankQuestion Under the ________ standard the Country's Central Bank
promised to buy back the currency at certain rate of Gold.Correct Answer Gold
Your Answer Gold
True/FalseQuestion An Indian exporting goods to New York receives dollars in New
York.Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The factors which affect the performance of an option are:-
Correct Answer Underlying asset price , Time before expiration, rate of interest
Your Answer Underlying asset price , Time before expiration, rate of interest
Multiple Choice Multiple AnswerQuestion Which contracts are used for transportation by road?
Correct Answer FCA , CPT
Your Answer FCA , CPT , CFR
True/FalseQuestion Bid rate is bidders buying rate and offered rate is bidders selling
rate.Correct Answer True
Your Answer False
Match The FollowingQuestion Correct Answer Your Answer
Cancellation of contractsabove USD 500000
ECD ECD
Forward Purchasecontract currency atpremium
Presume earliest delivery Presume earliest delivery
Forward purchasecontract currency atdiscount
Presume latest delivery Presume latest delivery
Exchange margins FEDAI FEDAI
Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee
came from June 92?Correct Answer Other managed Floating
Your Answer Other managed Floating
Multiple Choice Multiple AnswerQuestion Which two countries were included to convert the group of five
into the group of seven?Correct Answer Italy , Canada
Your Answer Canada , Italy
Multiple Choice Single AnswerQuestion Who can open an EEFC account?
Correct Answer Individuals , firms, companies, resident in India
Your Answer Individuals , firms, companies, resident in India
Multiple Choice Single AnswerQuestion Method of advance payment is not disadvantageous to :-
Correct Answer The seller
Your Answer The seller
Multiple Choice Single AnswerQuestion What is the immediate cause for the growth of futures and
options in the last two decades?Correct Answer Increase in volatile trading conditions
Your Answer Increase in volatile trading conditions
Multiple Choice Single AnswerQuestion What do you mean by a derivative?
Correct Answer One which has been derived from other fundamentalinstruments
Your Answer Derived from Mathematical expressions
Multiple Choice Single AnswerQuestion "Currency Snake"
Correct Answer Plus or minus movement of exchange rate around the parity rate
Your Answer Currency of European Country in the early 70's
True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a
quasi negotiable instrument.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion In which currency can the EEFC account be opened?
Correct Answer Any Convertible currency
Your Answer Any Convertible currency
Multiple Choice Multiple AnswerQuestion Criteria for Direct investment abroad under normal route :-
Correct Answer Viability of the proposal, and excellent track record of business ,Experience and expertise of promoters, benefit to the country
Your Answer Total Financial commitment in JV/WOS as per prescribed ceiling, Activity for investment is core activity of Indian Co.
Select The BlankQuestion ________ enables bankers to extend purchase, negotiation or
discount of export bills.Correct Answer Post shipment credit guarantee
Your Answer Post shipment credit guarantee
Multiple Choice Single AnswerQuestion For setting up a joint venture or WOS abroad, Indian banks
operating in India need a clearance :-Correct Answer Under Banking Regulation Act
Your Answer Under Banking Regulation Act
Multiple Choice Single AnswerQuestion Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
True/FalseQuestion Indian companies are now allowed to freely invest abroad up to
$1.5 million, raised through GDE or EEFC without priorpermission from RBI.
Correct Answer False
Your Answer False
Select The BlankQuestion Over the years ________has been the most widely accepted
currency in international capital market.Correct Answer American Dollar
Your Answer American Dollar
True/False
Question Terms in an Irrevocable credit can not be alterred at all.
Correct Answer False
Your Answer True
Select The BlankQuestion Position in a currency is said to be ________, when sales equal
purchases.Correct Answer Square
Your Answer Square
Multiple Choice Multiple AnswerQuestion How is the entry into any conuntry's money market or capital
market is restricted?Correct Answer Because of different tax systems , Because of different credit
standardsYour Answer Because of different tax systems , Because of different credit
standards
Select The BlankQuestion The currency notes and coins of individual countries
participating in "Euro" have ceased to be a legal tender from________.
Correct Answer 2002
Your Answer 2002
Select The BlankQuestion Partnership firm not eligible for Overseas Direct Investment
needs to apply to RBI Approval in form ________.Correct Answer ODI
Your Answer ODI
Multiple Choice Single AnswerQuestion Where does the word derivative originate from?
Correct Answer Mathematics
Your Answer Mathematics
Select The BlankQuestion To make the export more competitive and remunerative, the
Indian Govt extends ________ facility.Correct Answer Cash Incentives
Your Answer Cash Incentives
Multiple Choice Single AnswerQuestion The financial system of any country consists of
Correct Answer Network of commercial banks, domestic and foreign investmentbanks, NBFCs, etc
Your Answer The Central bank, IMF and world bank
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion Association of several scheduled commercial banks for forex
business is ________.Correct Answer Foreign Exchange Dealers Association of India
Your Answer Foreign Exchange Dealers Association of India
True/FalseQuestion Installment credit is issued for specific quantities of goods to be
shipped every week or month.Correct Answer True
Your Answer True
Select The BlankQuestion Combined Certificate of Origin and Value are required by
________.Correct Answer Commonwealth Countries
Your Answer Commonwealth Countries
Select The BlankQuestion The creditworthiness of the futures seller and the futures buyer is
________ because of the presence of the Futures exchange.Correct Answer Irrelevant
Your Answer Irrelevant
Select The BlankQuestion When interest rate changes by 0.05 per cent then it has changed
________ basis points.Correct Answer 50
Your Answer 5
Multiple Choice Multiple AnswerQuestion What were the primary objectives of the group of seven
countries?Correct Answer Bring down the external value of US Dollar , Bring some stability
to exchange rates of all the countriesYour Answer Bring down the external value of US Dollar , Bring some stability
to exchange rates of all the countries
Multiple Choice Multiple AnswerQuestion The crisis in global capital market in 2002-04 was due to
Correct Answer Collapse of Enron , Collapse of Argentina's currency board , Thewar against terrorism
Your Answer Collapse of Enron , Collapse of Argentina's currency board
Multiple Choice Multiple AnswerQuestion Mr A sells an option conferring the right to buy a kilogram of
silver at Rs 8000/- for next six months means :-Correct Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in
next 6 months, even if the price goes up, , The buyer of optioncan sell silver to Mr A at 8000/- per Kg, in next 6 months, even ifthe price goes down.
Your Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, innext 6 months, even if the price goes up, , Mr A has choice ofselling or not selling silver on his own
Multiple Choice Multiple AnswerQuestion Major investors in NIF are :-
Correct Answer Commercial Banks , Non banking Finance companies ,Insurance Companies
Your Answer Commercial Banks , Non banking Finance companies ,Insurance Companies
True/FalseQuestion With the advent of futures and Options there is no need for
additional instruments of risk hedging.Correct Answer False
Your Answer False
Select The BlankQuestion During the fixed rate exchange system prevailing in India, the
intervention currency was ________.Correct Answer Sterling Pound
Your Answer USDollar
Multiple Choice Single AnswerQuestion What help does EXIM Bank provide under the scheme 'Direct
Financial assistance to exporters'?Correct Answer Funds are provided under deferred payment terms to Indian
exporter for credit to foreign buyerYour Answer Funds are provided under deferred payment terms to Indian
exporter for credit to foreign buyer
Multiple Choice Single AnswerQuestion What is a bill of lading?
Correct Answer Transport document representing movement of goods by water.
Your Answer Transport document representing movement of goods by water.
Multiple Choice Single AnswerQuestion Which controls are not permitted by IMF?
Correct Answer Current account controls
Your Answer Exchange controls
Multiple Choice Multiple AnswerQuestion What are the objectives of International Chamber of Commerce?
Correct Answer Champion the global economy as a force of economic growth ,Creating of job and prosperity
Your Answer Champion the global economy as a force of economic growth ,Creating of job and prosperity
True/FalseQuestion Yankee bond is issued for domestic borrowers.
Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter
bank transactions?Correct Answer Clearing house for settlement and clearance for the operations
of Ads , Set up a market intelligence cell to study and monitordevelopments in Forex Market
Your Answer Clearing house for settlement and clearance for the operationsof Ads , Set up a market intelligence cell to study and monitordevelopments in Forex Market
True/FalseQuestion An AD can book a forward contract for a part of the amount of
Sale Contract
Correct Answer True
Your Answer False
True/FalseQuestion Sterling FRNs are issued in Europe, USA ,Asia
Correct Answer False
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Bond basis to moneymarket basis
Bond basisx 360/365 Bond basisx 360/365
3 months LIBOR +2 % PA Floating rate Floating for floating ratecurrency swap
15% P.A. Fixed rate Fixed rate
Money market basis tobond basis
Money market basis x365/360
Money market basis x365/360
Select The BlankQuestion In Indian interbank market forward rates are generally quoted on
the basis of ________.Correct Answer Calendar month
Your Answer Calendar month
Multiple Choice Single AnswerQuestion In case of syndication of loans the amount of loan and currency
is finalised by :-Correct Answer Borrower
Your Answer Underwriter of the syndicate
Multiple Choice Single AnswerQuestion European currency Unit
Correct Answer Basket of Currencies of members of EMS
Your Answer Basket of Currencies of members of EMS
Select The BlankQuestion The counter party in option is ________.
Correct Answer The exchange
Your Answer Trustworthy corporation, who hedges the risks of marketuncertainty
Multiple Choice Single AnswerQuestion A Spot Transaction between Japanese Yen and Sterling carried
out on Friday in Singapore, the settlement day will beCorrect Answer Following Tuesday if it is a working day in all the three centers
Your Answer Following Tuesday if it is a working day in all the three centers
Select The BlankQuestion EEFC account holder is allowed to have ________ facility.
Correct Answer Cheque book and nomination
Your Answer Cheque book and nomination
Multiple Choice Multiple AnswerQuestion A Usance bill of exchange may be drawn in 2 ways. Which are
they?Correct Answer Documents against payment , Documents against acceptance
Your Answer Documents against payment , Documents against acceptance
Multiple Choice Single AnswerQuestion Why have futures and options come into existence?
Correct Answer To avoid business risk.
Your Answer To avoid business risk.
True/FalseQuestion In an interest rate swap if the payment schedules are identical,
only diffrence between the two payments is delivered.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What are the main causes of fluctuations in Exchange rates?
Correct Answer Market demand and supply, sentiments , Government regulatios,fiscal policies, political instabilities
Your Answer Government regulatios, fiscal policies, political instabilities ,Market demand and supply, sentiments , The purchasing powerof currency changes every second
Multiple Choice Single AnswerQuestion What do you understand by a swap?
Correct Answer 2 counter parties agree to exchange streams of payments over aperiod of time
Your Answer 2 counter parties agree to exchange streams of payments over aperiod of time
True/FalseQuestion Import finance is nomally available at rates of interest cheaper
than domestic finance rates.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion A weight list, a packing list used in international trade are which
type of documents?Correct Answer Operational Documents
Your Answer Operational Documents
Multiple Choice Multiple AnswerQuestion What do you understand by 'Foreign Exchange Risk'?
Correct Answer The change in value of currency alters the home currency valueof an asset , liability, , The change in value of currency alters thehome currency value of profit, loss, or future cash flows
Your Answer The change in value of currency alters the home currency valueof an asset , liability, , The change in value of currency alters thehome currency value of profit, loss, or future cash flows
Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an
exporter?Correct Answer Preshipment credit beyond six months for construction and
turnkey projects abroadYour Answer Preshipment credit beyond six months for construction and
turnkey projects abroad
Multiple Choice Single AnswerQuestion Which Indian Co. is not eligible to make investment abroad
under automatic route?Correct Answer Co which is caution listed by RBI
Your Answer Co which is caution listed by RBI
True/False
Question Naked position is when investor does not hedge against marketrisk.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion In DAF, the frontier means :-
Correct Answer Frontier of exporter's country , Frontier of importer's country
Your Answer Frontier of exporter's country , Frontier of importer's country
Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in
foreign exchange?Correct Answer USD 1 trillion
Your Answer USD 1 trillion
Match The FollowingQuestion Correct Answer Your Answer
European option On or after maturity On or after maturity
Out of money Loss Profit
In the money Profit Loss
American option Before maturity Before maturity
Select The BlankQuestion The Trans European Automated Real Time Gross Settlement
Express Transfer is popular in ________.Correct Answer Brussels
Your Answer Brussels
True/FalseQuestion PP Form is required when exports are made to any country by
post parcel on value payable basis.Correct Answer False
Your Answer False
Select The Blank
Question When an Indian Company earns at least 50% of its averageturnover from a particular activity then that activity is consideredas ________.
Correct Answer Core activity
Your Answer Core activity
Multiple Choice Single AnswerQuestion How many Countries participated in the third survey on Foreign
Exchange, coordinated by BIS in 1992?Correct Answer 26
Your Answer 26
Select The BlankQuestion Indian Co. intending to make investment under Automatic route
needs to submit form ________ to RBI with enclosures.Correct Answer ODA
Your Answer ODA
Multiple Choice Single AnswerQuestion In International trade, Advance payment means :-
Correct Answer Providing up front cash
Your Answer Providing up front cash
True/FalseQuestion If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True
Your Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion Which functions does the Bill of Lading
serve?Correct Answer It is a document of title to goods.
, It is receipt of goodsYour Answer It is a document of title to goods. ,
It is receipt of goods
Multiple Choice Single AnswerQuestion A Bank quotes interest rate of 9.50/10.00
for six months dollar deposit, here the bid rate is :-
Correct Answer 9.50% P.A.
Your Answer 9.50% P.A.
Multiple Choice Single AnswerQuestion What is Sovereign Risk?Correct Answer Risk of lending to the government
of a countryYour Answer Risk of lending to the government of a
country
Multiple Choice Single AnswerQuestion How does ICC help poor countries?Correct Answer Attract Foreign Direct investments
togeather with UNCTADYour Answer Attract Foreign Direct investments
togeather with UNCTAD
Multiple Choice Multiple AnswerQuestion As per BIS, recovery from the recent
crisis in global capital market was mainly due toCorrect Answer Rapid and appropriate policy
response in US and other countries , Increase inForeign Direct Investments , free flow of credit
Your Answer Rapid and appropriate policy responsein US and other countries , Increase in Foreign DirectInvestments , free flow of credit
True/FalseQuestion Out of 15 member countries in European
Union 12 countries commiteed themselves for a singlecurrency.
Correct Answer FalseYour Answer True
True/FalseQuestion In red clause credit some clauses are
printed in Red ink.Correct Answer TrueYour Answer True
True/FalseQuestion Transfer of funds for investment abroad
is allowed freely.Correct Answer TrueYour Answer False
Select The BlankQuestion EEFC account holder is allowed to have
________ facility.Correct Answer Cheque book and nominationYour Answer Credit card, safe custody, safe
deposit locker without any fee
Select The BlankQuestion Fixed interest rate Eurobond without the
option to convert to equity is known as ________.Correct Answer Straight Debt
Your Answer Interest rate swap
True/FalseQuestion An Indian importing goods from USA pays
dollars in India.Correct Answer FalseYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
PP Form Export Declaration form Export Declarationform
Health Certificate Fumigation certificate ExportDeclaration form
Certificate of Inspection As per importers requirementExport Declaration form
Certifiate of Origin Export Promotion Council ExportDeclaration form
Multiple Choice Multiple AnswerQuestion For issuing a Documentary credit The
applicant is required to provide to the issuing bankdetails about
Correct Answer The purchase-sales contract, themode of payment, the tenor of payment , The documentsrequired, the names of authorities who would issue thedocuments
Your Answer The purchase-sales contract, the modeof payment, the tenor of payment , The track record ofthe buyer and seller
Multiple Choice Multiple AnswerQuestion The characteristics of an International
documentary credit are :-Correct Answer It is an undertaking given by the
openers bank to pay certain sum of money , It is anundertaking given on behalf of a certain person toanother person in different country
Your Answer It is an undertaking given on behalfof a certain person to another person in differentcountry , It is a stamped agreement and is not validunless it is signed by the issuer
True/FalseQuestion CFR = FOB plus freight paid by seller +
insurance paid by seller.Correct Answer FalseYour Answer True
Select The BlankQuestion Even after liberalisation of exchange
controls, the Euro sterling market remained volatilebecause of uncertainties in UK and gyrations ofsterling against major ________ countries
Correct Answer OECDYour Answer OPEC
True/FalseQuestion Integrated branches of Commercial banks
handle forex transactions as well as options, swaps,futures, arbitrage operations
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Which of them are special funding
facilities of IMF ?Correct Answer Buffer Stock FacilityYour Answer Supplemental Reserve Policy
Multiple Choice Multiple AnswerQuestion What are the sources of raising funds for
exports?Correct Answer Suppliers credit , ForfaitingYour Answer Suppliers credit , Forfaiting , Buyers
credit , Foreign currency or Rupee finance
True/FalseQuestion Normally the forward contracts are booked
for making huge profits.Correct Answer FalseYour Answer False
True/FalseQuestion Head office of ICC is in Paris because of
its First President Eliance Clementel.Correct Answer TrueYour Answer False
Select The BlankQuestion A ________ Bill of lading does not
specify the terms and conditions of carriage.Correct Answer Short FormYour Answer Short Form
Multiple Choice Single AnswerQuestion What is the volume of the world's total
speculative transactions?Correct Answer Roughly 90 % of the total turnoverYour Answer 70% of the total turnover
True/FalseQuestion Till August 1994 India was following the
Indirect Methodof Rate quotation.Correct Answer FalseYour Answer False
Select The BlankQuestion For setting up joint ventures abroad or
equity participation abroad, EXIM bank provides fundsunder ________ Scheme.
Correct Answer Overseas investment facilityYour Answer Overseas investment facility
Multiple Choice Single AnswerQuestion Mr P has exported goods in May 2005 and
is expecting payment of Euro 25000 by the last week ofSept 2005. Give details of the forward contract he canbook :-
Correct Answer He can book a sale contract anytime from May 2005 till Mid Sept 2005, for Euro 25000or less, for maturity last week of Sept.
Your Answer He can book a contract for ForwardPurchase, any time from May 2005 till Mid Sept 2005,for Euro 25000 or less, for maturity last week ofSept.
Select The BlankQuestion In US Capital Market a Company prepares
all the necessary documents in advance of the publicissue under the facility known as ________.
Correct Answer Shelf RegistrationYour Answer Shell Registration
Multiple Choice Multiple AnswerQuestion Which common details will be available in
any bill of Lading?Correct Answer Names of consigner, consignee , The
port of loading and unloading, contract of shipmentYour Answer Names of consigner, consignee , The
port of loading and unloading, contract of shipment ,The name of the vessel , The date of transportationand contract of transportation
Select The BlankQuestion Under the ________ standard the Country's
Central Bank promised to buy back the currency atcertain rate of Gold.
Correct Answer GoldYour Answer Interest
Select The BlankQuestion Short term instruments normally issued by
corporate borrowers, forhigh values, at a discount toface value are known as ________.
Correct Answer Euro Commercial PapersYour Answer ADRs
Select The BlankQuestion The type of trade where a country sells
orange juice in return for cars is known as ________.Correct Answer Counter TradeYour Answer Non money trade
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC
accounts?Correct Answer Payment of hotel bills abroad,
payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them
Your Answer Payment to EOUs in India for servicesrendered by them , Payment of Gifts of GBP 5000 peryear per donor
Multiple Choice Multiple AnswerQuestion Under the liberalisation through FEMA,
what can an AD offer to the clients, without the priorpermission of RBI or Government?
Correct Answer Hedges, interest rate swaps,currency swaps. , Caps and collars, and forward rateagreements
Your Answer Caps and collars, and forward rateagreements , Good and competitive exchange rates andcross currency rates
Multiple Choice Multiple AnswerQuestion Sterling Market is attractive for an
international investor becauseCorrect Answer Gilts offer higher attractive
margin , Choice of issuing medium term and long termbonds
Your Answer Choice of issuing medium term and longterm bonds , Less controls and less formalities to becompleted , Linking of issues to currency swaps
Multiple Choice Single AnswerQuestion Under which contracts the seller pays the
import duty for the buyer?Correct Answer DDPYour Answer DDP
True/FalseQuestion PP Form is required when exports are made
to any country by post parcel on value payable basis.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What were the immediate causes of
converting the group of 5 into group of 7 and convenetheir meeting in late 1985?
Correct Answer Many Industries in USA had becomeuncompetitive with imports , In USA the Tradeprotectionnism had increased
Your Answer Many Industries in USA had becomeuncompetitive with imports , In USA the Tradeprotectionnism had increased , The heads of G5insisted to have a meeting , Failure of IMF to control
the exchange rates
Multiple Choice Single AnswerQuestion What are the powers of money changers?Correct Answer Purchase and sell foreign currency
notes and travellers chequesYour Answer Purchase and sell foreign currency
notes and travellers cheques, give import and exportfinance
Multiple Choice Single AnswerQuestion Who can open an EEFC account?Correct Answer Individuals , firms, companies,
resident in IndiaYour Answer Individuals , firms, companies,
resident in India
Multiple Choice Single AnswerQuestion What is the role of ICC towards WTO?Correct Answer To provide world business
recommendations to WTOYour Answer To further the cause of WTO
Match The FollowingQuestion Correct Answer Your Answer
Swap price Difference in prices of two legs of buyingand selling Quoting rate for both buying and selling acurrency
Euro Market Market in Euro currencies Market in Eurocurrencies
Making market Quoting rate for both buying and sellinga currency Difference in prices of two legs of buyingand selling
Spread Price difference between bid and offer Maket of'Euro'
Select The BlankQuestion Position in a currency is said to be
________, when sales equal purchases.Correct Answer SquareYour Answer Awkward
Select The BlankQuestion Hotels and Airline companies are allowed
to receive payments in Indian rupees from foreigntourist without insisiting on ________.
Correct Answer Encashment certificateYour Answer Encashment certificate
Multiple Choice Multiple AnswerQuestion Why is Bill of Exchange a Quasi
Negotiable Instrument?Correct Answer It represents title to goods , It
is issued under Sale of Goods actYour Answer It represents title to goods , It is
issued under Transportation act , It is issued underBill of exchange act
Multiple Choice Single AnswerQuestion Which details about forward contracts do
the Exchange Controls verify ?Correct Answer Particulars of cancellation of
forward cover for the equivalent of USD 500,000Your Answer Details of all contracts booked and
cancelled beyond a specified limit
Multiple Choice Single AnswerQuestion In the context of International economy
,the period between 1920s and 1930s is known asCorrect Answer Great DepressionYour Answer Great Depression
Multiple Choice Multiple AnswerQuestion What do you understand by Commercial
Risk?Correct Answer Protracted default by the buyer ,
Insolvency of the buyerYour Answer Protracted default by the buyer ,
Insolvency of the buyer
Chapter – 1 – Introduction to international capital marketsEuro currency ; domestic markets ; US Japan ; Switzerland ; UK ; Australia ; Canada ;European ; centers in ECU;
1
Chapter – 2 – International Finance Markets - the U.S. dollar Market ;The U.S. Dollar Market ; The Japanese Yen Market ; The Sterling Market ; The Euro MarketHas Been discussed in the next chapter ; Recent development in international FinanceMarkets ;
5 – 10
Chapter – 3 – International Monetary and Financial SystemThe country’s central ban agreed to buy back their currency at a certain rate of gold; Meltingdown of gold was freely allowed ; There was unrestricted movement of gold (i.e. import and /or export)The total money supply in the country was determined by the quantum of gold reserves in thecountry
13 – 14
The international monetary fund ; quotas ; funding facilities ; regular facilities tranchepolicies ; restore Tranche credit Tranche ; extended arrangement (extended fund facility(EEF) ; Standard Arrangement (enlarged Arrears Policy)Special facilities (compensatory and contingency financing facility (CCFF)Buffer stock Financing Facility ; Supplemental Reserve Policy (SRP); Reserve Tranche ;Credit Tranche ; Stand by arrangement ;
15 – 17
Extended arrangement or extended fund facilities (EFF) special facilities ; CCFF ; Bufferstock financing Facility (BSFF) ; Supplemental resources facility (SRF) Enhanced structuraladjustment facility (ESAF) The fixed exchange rate system
18 – 19
Problems faced by the fixed exchange rate system ; failure of fixed rate system ; theEuropean monetary system (EMS) ; Economic and monetary union ; Recent developments ;post – Maastricht developments; emergence of EURO
20 – 23
The group of seven ; special drawing rights (SDRS) ; The liquidity problems (SDRS) ; theworld bank group ; the world bank; international development agency (IDA) ; internationalfinance corporation (IFC) ; The multinational investment Guarantee Agency (MIGA)
24 – 27
Chapter – 4 – External commercial borrowing – country ; company ; Equity ; Fund raising ;underwriting ; hedging ; arbitraging ; note issuance facility ; Mechanism and documentation; syndicated loans ; floating rate notes ;
31 – 35
Flip – Flop FRN ; MIS – Mich FRN ; MINI Max FRN ; Capped FRNs, Perpetual FRNs;VRN structured FRNs; Terms and conditions of FRN Ero Commercial paper (ECP) ; ADRsand GDRs; GDR – Global depositary Receipts ; The roles of different parties involved inlaunching of GDRGDR – Global Depositary Receipts ; The roles of different parties involved in launching ofGDR steps involved in issuance of GDR are as follows
36 – 39
Pricing and Closing ; costs ; Advantages & Disadvantages of external commercial borrowing 40 – 41Chapter – 5 – Documents used in International Trade ;Regulatory requirements ; operational requirements ; commercial documents ; financialdocuments transport documents ; risk covering documents ; official / regulatory documents ;miscellaneous documents ; Commercial documents ; proforma invoice ; commercial invoice; consular invoice customs invoice ; legalized invoice ; combined certificate of origin andvalue ; financial documents ; bill of exchange ;
43 – 46
The second of the same tenor and date unpaid ; the first of the same tenor and date unpaid ; orsimilar words ; sight B/E; Tenor ; time B/E; DP Basis ; document against Payment Basis ;Documents against Acceptance Basis Transport documents; bill of lading ; received forshipment bill of lading ; on board bill of lading ;
47 – 49
Short form bill of lading ; long form bill of lading clean bill of lading ; claused bill of lading ;through bill of lading ; straight bill of lading ; charter party Bill of lading ; container bill oflading container bill of lading ; combined transport B/L or Mulit Modal B/L lash bill oflading house bill of lading ; Airway bill ; Air consignment Note ; House Air way bill ; PostalReceipt ; Courier /Expected delivery service ; multimodal transport document ; risk coveringdocuments ; insurance policy ;
50 – 53
Insurance cover note ; official documents export declaration forms ; export certificate;Certificate of origin ; Miscellaneous documents ; packing list ; weight certificate ; certificateof analysis and quality ; certificate of inspection ; health certificate ; phytosanitary / Radiation/ Fumigation
55 – 57
Chapter 6 – Methods of payment ; advance payment ; bill for collection ; open account ;barter trade ; bank guarantee ; letter of credit (L / C) Seller wants buyer wants ; parties to adocumentary credit ; applicant issuing bank advising ; confirming bank beneficiary ;negotiating bank ; reimbursing bank
61 – 66
Types of letters of credit ; revocal letter of credit ; irrevocable letter of credit ; confimedirrevocable letter of credit ; transferable l / c revolving letter of credit ; credit available byinstallments; back to back letter of credit ; anticipatory credit or red clause letter of credit ;
67 – 69
green clause letter of credit ; deferred payment letter of credit ; standby letter of credit ; flowchart of export transaction under letter of creditFlow chart of export transaction under letter of credit ; various steps in the transaction are asunder ; steps no. description
70 – 71
Chapter 7 – Export / Import Finance ; - Part I import finance ; import financing through trustreceipts / import loans ; import financing through issuing l/ c or bank guarantee ; part II –Export Finance Timely ; adequate ; cheaper on liberal terms ; sources for raising finance ;own funds ; 2 friends and relative ; 3 advance payment from buyer ; 4 Trade credit fromsuppliers 5 banks and financial institutions ; pre-shipment credit (P.C)
73 – 74
Post shipment credit ; advance against cash incentives / duty draw back ; forfeiting ; rediscounting of export bills abroad ; buyer’scredit ; supplier’s credit
75 -76
Chapter – 8 – Procedure in connection with foreign investment in India – Seciton – I foreigndirect investment ; FERA ; the practice at which a company can issue shares to non residents; fema ; esop ; section II – Foreign technical collaboration ;
79 – 83
General Hotel & Tourism Related Industries ; procedure for granting approval; I / We herebycertify that ; Documentation ; Standard conditions attached to approval for technologyagreement ; no objection ; the agreement shall be subject to Indian laws:
84 – 88
Section – III – Portfolio investment ; explanation ; the regulations regarding portfolioinvestments by NRIs / PIOs are as under ; NRI / PIOs ; Section – IV – Other investments ;Section V – procedure for opening branch / project / Liaison office ;
89 - 92
Chapter – 9 – Direct investment outside India – overseas investment division TDR ADRGDR the criteria for investment under the automatic route are as under ; JV/WOS; ODA; Theschemes for overseas investment by partnership firms ; criteria for overseas investment by aregistered partnership firm under the automatic route ;
95 – 99
The procedure to be followed by a partnership firm for making investment under theautomatic route ; the procedure to be followed by partnership firms which are not eligibleunder the automatic route ; restrictions for setting up of a second generation company ;resident individual India can acquire foreign securities without prior approval in thefollowing cases ; provided that ; WOS
100 – 102
Chapter – 10 – Taxation ; Bilateral reliefUnilateral relief ; for the purpose of this provision
105 – 106
Part – 2 Forex risk management and hedging techniquesChapter – 1 Foreign exchange markets – The international Market ; survey were ; the market; the participants ; information and communication system ; the payment system ; the foreignexchange market in India
109 – 114
Chapter – 2 – Exchange Rates – Exchange rage quotes ; direct and indirect rates ; direct rates; indirect rates; spot and forward rates value rate; ready or cash ; value today ; TOM; spot ;forwards; glossary of market terms; Foreign exchange risks ; transactions exposure ;translation exposure ; economic exposure;
117 – 123
Translation – moving towards a consensus ; economic exposure ; an overview ; scenarioexchange rages in India ; Inward remittances export encashment of foreign currencytravelers cheques ; encashment of foreign currency notes; outward remittances ; imports ;issuing foreign currency travelers cheques issuing foreign currency notes ;
124 – 127
Type of transaction exchange rate nomenclature ; Factors affecting movement of exchangerates ; summary
128 – 129
Chapter – 3 – Forward contracts - Forward cover for merchants – forward purchase cover -forward sales contract - repayment of foreign currency loans – period of delivery – crosscurrency booking (sale / Purchase ) ; utilization of the forward cover ; cancellation ;calculation of exchange rates for forward contracts
131 – 137
Cancellation ; early delivery and rollover of forward contracts ; forward sale contracts ;forward purchase contract ; early delivery ; rollover charges
138 – 141
Chapter 4 – Options and Futures – History and development ; recent trends ; key features ofoptions and futures ; premium ; maturity or expiration date ; exercise ; in the money ; at themoney ; out of the money American option European option ; underlying asset price timebefore expiration ; underlying asset price ; time before expiration the rate of interest volatility
143- 147
Pricing and analysis ; pricing of options ; underlying asset price ; exercise price ; options andfutures products today ; interest rate options ; foreign exchange options and futures ; equitylinked options ; commodity linked futures and options
148 – 152
Chapter – 5 - SwapsWhat are swaps ; interest rate swaps ; lowering financial cost ; hedge exposure to interest raterisk ; restructuring the debt in the balance sheet ; amortizing and accreting swaps ; forwardswaps ; Reversible swaps ; basis swaps
155 – 157
Currency swaps ; lowering funding cost ; entering restricted capital markets ; reducingcurrency risk ; supply demand imbalances in the markets ; amortizing currency swaps ;accreting currency swaps ; floating – for floating rate currency swaps ; interest payments ;asset swaps
158 – 161
PART 3 – AGENCIES INVOLVED IN INTERNATIONAL TRADEChapter – 1 – Export import Bank of India ; Functions of Exim Bank ; the exim bankperforms the following functions ; incidental functions ; operations programmes ; directfinancial assistance to exporters ; consultancy and technology services ; pre-shipment credit ;facilities for export – oriented units ; overseas investment facility buyer credit facilities fordeemed exports small scale industry export bills rediscounting; the latest new schemes inoperation since 1992 are the following
163 – 166
Chapter – 2 – Reserve Bank of India Exchange controls in India – RBI as the exchangecontrol authority ; Authorized dealers (Ads) ; Money changers ; other receipts ; payment forimports ; other payments ; delegation to Ads; securities ; foreign currency accounts;liberalization of exchange control
169 – 173
Sodhani Committee Recommendations ; Exchange rate management ; 174 – 177Chapter – 3 – Foreign Exchange dealers association of India ; Uniform customs and practicefor collection ;
179 – 180
Chapter 4 – International chamber of commerce – ICC – WCF – IBCC – WCF 183 – 183Chapter – 5 – Export credit guarantee corporation of India ; ECGC; need for export creditinsurance ; credit insurance policies ; scr or standard policy ; turnover policy ; small exporterpolicy ; specific shipment policy (short term); buyer wise policy ; specific policy for supplycontract insurance cover for buyer’s credit and line of credit
189 – 190
Services Policy ; construction works policy ; maturity factoring ; Guarantees to banks ;packing credit guarantee ; export production finance guarantee ; post – shipment creditguarantee ; export finance guarantee ; export performance guarantee; export finance(overseas lending ) Guarantee
191
Part – 4 – MiscellaneousChapter 1 – Exchange Earner’s foreign currency (EEFC) 195
Status holder exporter ; individual professional ; others; permissible credits ; permissibledebits ;Chapter 2 – Country Risk ; Quantifying country risk ; A comprehensive example ; use ofcountry risk ; assessment ;
199
Chapter 3 – International capital Budgeting - The Basic Frame work 203 – 204Chapter 4 – Incoterms – Group E departure EXW ; Group F Main carriage unpaid ; FAS ;FOB ; CFR ; CIF ; CPT ; CIP ; Group C; Group D ; Arrival DAF ; DES ; DEQ; DDU CTD /MTO ; DDP ; delivered duty paid (CTD / MTO)
207- 212
Chapter – 5 – Actuals ; arbitrage ; bankers’ acceptance bond (BAS) ; Bearer Bond ; Bid rate ;Bond ; Bull; call option ; caps ; cash commodity ; cash market ; cedel ; certificate of deposit(CD) class of option ; closing price ; commission ; commercial paper (CP) ; contractspecifications ; convertible bond ; coupon ; cover; delivery ; delivery month ; equity ; equityswaps ; equity collar ; Eurobond ; Euro clear ; euro commercial paper; euro –currency ;
215 – 217
Exercise price ; expiration date; floating rate note ; fundamental Analysis ; futures contracthedge ; Hybrid ; Interest Rate swap; Intermediation ; Intrinsic Value ; Libor ; Long margin ;margin call maturity naked position ; note issuance facility (NIF)
218 -219
Option ; overbought ; oversold ; physical market ; position ; premium purchaser ; put option ;settlement price short ; speculator ; strike price ; straight debt tap ; technical analysis tranche ;tombstone volatility ; volume ; withholding tax ; yankee bond ;
220 – 221
Chapter – 1 – Introduction to international capital markets 1Ero currency market ; Domestic market ; US, Japan Switzerland ; uk, australiacanada ; european conters in ECU ; Euro ; Asian doller market ; forex marker 1SDR ; ECU ; US dollar ; German ; Swiss ; Japanees ; France ; Canada ; Australia; 2Chaper - 2 - International financial Markets - The U.S.Dollar Market ; pricing ;federal reservice board; curency ; central bank of US ; 5The Japanese Yen Market ; Mof; Long Term Prime Rate ; 1970 japanese 6The Sterling Market ; 20th 19th century 1979 ; OECD Organization for economicco-operation & development EMS Exchange rate Mechanism; FRN ; Bulldog; 7the EURO Market has been discussed in the nex chapter Recent development ininternational financial markets ; septer 11 enron 7LtCN (Long term capital Management Brazil china and mexico; 81990 ; 1980 ; severe tests financial system; securitization forces banks ; attractiveto browwerw; legal issues flexibility ; financial market development segement of ; 9swaps cash flow ; roject related; gain access to international ; marketability ; newfinancing techniques; 10Chapter – 3 – International Monetary and Financial System 131945 ; 1944 ; intenrational world Bank for reconstruciton and development; secondworld war was european ; IMF International Monetary Fund; Gold standard firstworld war 13The country's Central Bank agreed to buy back their currency at a certain rate ofgold; 13melting down of gold was freely allowed 13There was unrestricted movement of gold (I.e. import and / export 14The total money supply in the country was determined by the quantum of goldreserves in the country 141870 ; 1914 ; 1821 ; 1834 ; 1870 ; European countries gold standard in 1933 ;1930 International Monetary Co-operation ; IBRD ; IMF ; 14
popularly known as world bank IMF ; the international monetary fund 1945 ; 1971; 25 years ; aims 15SDR ((special drawing rights ) 25% 1960 ; 1963 ; Gross domestic product; 5 years; SDR 146 bn to SDR 212 ; 45% ; 1998 ; Two parts 16Funding Facilities ; Regular Facilities ; Special facilities ; restore tranche credittranche ; compensatory and contingency financing facility (CCFF) ; 16Extended arrangement (Extended Fund Facility EEF) ; Buffer stock FinancingFacility ; 16Standard Arrangement (Enlarged Arrears Policy ) ; Supplemental Reserve Policy(Supplemental Reserve Policy (SRP 17Reserve Tranche ; Credit Tranches ; Stand - By Arrangement 17Extended arrangement or extended fund facilities (EFF) 18Special Facilities ; CCFF ; Buffer Stock Financing Facility ; BSFF ; SupplementalResource Facility (SRF) ; 1997 18Enhance Structural Adjustment Facility (ESAF) ; The fixed exchange rate systemUS dollars 35 ounce of gold 19Problem faced by the fixed exchange rate system ; 1960 ; value apprehension ;delay in adjustment 20failure of fixed rate system ; the european monetary system (EMS) EuropeanCommunity 20Currency Snake ; 1973 ; EMS EC ECU European Currency Unit ; SDR ; ERM ; DM; matrix german bundesbank 21EM ; PST ; ERM ; Economic and monetary Union ;
FEDAI does not require RBI permission to frame and revise rules ofbusiness
True
FalseCorporates are allowed to raise funds abroad up to $ 15 million as short term finance if they have EPCG license.
True
FalseWho books an option forward contract?
b)
c)
d)
Party who is not definite about crystallisation of delivery date
Party who is speculator
Party who wants to make more profit
Party who wants to accommodate the other party
India is a founder member ofIMF
.Which causes may force a country to restrict importsor restrict transfer of payments?
a)
b)
c)
d)
Economic difficulties
Balance of payment problemssuch as non availability ofexchange reserves
Strike by banks employees
Non availability of appropriatetransfer technology with banks
Buyer's Credit 4 1. Available to sellerabroad
2. Seller's 1 2. Export Finance
Credit
3. Usance LC 6 3. Discounting exportreceivables
4. Forfaiting 3 4. Available to Buyerabroad
5. Seller paid only onmaturity date
6. Import finance
International Finance_6
- 1 -
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion What do you mean by a derivative?Correct Answer One which has been derived from other fundamental instrumentsYour Answer One which has been derived from other fundamental instruments
Multiple Choice Multiple AnswerQuestion With reference to ECB, fund raising activity includes :-Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of sharesYour Answer Syndicate loans, issue of shares , Floating rate notes, bonds, debentures
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the
offered rate for Rs?Correct Answer USD 1=Rs 50.5000Your Answer USD 1=Rs 50.5000
Match The FollowingQuestion Correct Answer Your Answer
Merchant banking Portfolio management Note issuing and underwrting facility
Securitization Issue of debt in the form of tradeable security Issue of debt in the form of tradeable security
Prime borrower Highest credit rating Venture capital
Traditional banking service Loans and cash credit against security Highest credit rating
Select The BlankQuestion A Bill of exchange payable 45 days from date of shipment, is a means of ________ from seller
to the buyer.Correct Answer CreditYour Answer Intimation of shipment
Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.Correct Answer An Irrevocable creditYour Answer An Irrevocable credit
Multiple Choice Single AnswerQuestion Who introduced the worlds first exchange traded currency futures?Correct Answer Chicago Mercantile ExchangeYour Answer Bretton woods Agreement
Multiple Choice Single AnswerQuestion Name the members of Exchange Banks association :-Correct Answer Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar,Your Answer All banks at any business center
True/FalseQuestion In developed markets, speculators play important role in determining the trend of currency
rates.Correct Answer TrueYour Answer True
International Finance_6
- 2 -
Multiple Choice Multiple AnswerQuestion What are the objectives of International Chamber of Commerce?Correct Answer Champion the global economy as a force of economic growth , Creating of job and
prosperityYour Answer Champion the global economy as a force of economic growth , Creating of job and
prosperity
Multiple Choice Single AnswerQuestion Under which contracts the seller pays the import duty for the buyer?Correct Answer DDPYour Answer DDU
Multiple Choice Multiple AnswerQuestion In which cases can a Resident Individual in India acquire foreign securities without prior
approval?Correct Answer Gift from a person outside India, or Inheritance from a person resident in or outside
India , Security issued under Cashless employees stock option schemeYour Answer Gift from a person outside India, or Inheritance from a person resident in or outside India ,
Security issued under Cashless employees stock option scheme
Multiple Choice Single AnswerQuestion The document formulated by the borrower of syndicated loan, and the arranger, which contains
details of individual shares etc of co-lenders is known as :-Correct Answer Memorandum of informationYour Answer Memorandum of information
Multiple Choice Multiple AnswerQuestion Why does a Transaction exposure arise?Correct Answer Trading flows , Dividend or capital flowsYour Answer Trading flows , Dividend or capital flows
Match The FollowingQuestion Correct Answer Your Answer
LastStage Form a single currency Form a single currency
The First stage in the Europeand and Monetary Union (EMU) Free movement of capital in EC Freemovement of capital in EC
Stage II in EMU Establishment of European Monetary Institute Establishment of European MonetaryInstitute
Stage III in EMU Members to meet the convergence criteria and fix the exchange rates Members to meetthe convergence criteria and fix the exchange rates
Multiple Choice Single AnswerQuestion Value date means the date on which :-Correct Answer Delivery of both the currencies will be madeYour Answer Delivery of both the currencies will be made
True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate quotation.Correct Answer FalseYour Answer True
International Finance_6
- 3 -
Select The BlankQuestion Global capital market can be understood from the study of ________.Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
countryYour Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
country
Multiple Choice Single AnswerQuestion A Specific date forward contract can be booked so as to be :-Correct Answer Payable on a specific date of the calendar monthYour Answer Payable on a specific date of the calendar month
True/FalseQuestion ECGC offers isurance protection to Indian exporters againt payment risks.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What is a bill of lading?Correct Answer Transport document representing movement of goods by water.Your Answer Transport document representing movement of goods by water.
Multiple Choice Multiple AnswerQuestion Which document is used for transportation by air, rail, road, marine?Correct Answer Multimodal transport document , Combined Transport documentYour Answer Multimodal transport document , Combined Transport document
True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.Correct Answer FalseYour Answer False
Select The BlankQuestion After the second world war many countries adopted the route of ________ to give facelift to
sagging economies.Correct Answer Devaluation of their currenciesYour Answer Devaluation of their currencies
Multiple Choice Multiple AnswerQuestion What do you understand by Commercial Risk?Correct Answer Protracted default by the buyer , Insolvency of the buyerYour Answer Insolvency of the buyer , Risk of strikes due to which commercial activity is haulted
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,
Payment to EOUs in India for services rendered by themYour Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment
of Gifts of GBP 5000 per year per donor
Multiple Choice Single AnswerQuestion A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the
settlement day will beCorrect Answer Following Tuesday if it is a working day in all the three centersYour Answer Following Tuesday if it is a working day in all the three centers
International Finance_6
- 4 -
Multiple Choice Multiple AnswerQuestion Name the services provided by 'Reuter 3000' in forex market:-Correct Answer Quotation of forex rates, interest rates , Electronic broking by matching the ratesYour Answer Quotation of forex rates, interest rates , Calculate and quote rates for transactions
Multiple Choice Single AnswerQuestion What do you understand by a forex option?Correct Answer Right and not the obligation to take or give future delivery of an agreed quantity at
certain priceYour Answer Right and not the obligation to take or give future delivery of an agreed quantity at certain
price
True/FalseQuestion Integrated branches of Commercial banks handle forex transactions as well as options, swaps,
futures, arbitrage operationsCorrect Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Financial management is complex process forCorrect Answer Companies which have international tradeYour Answer Companies which have international trade
Select The BlankQuestion The ________is a Floating rate index for swaps.Correct Answer US Commercial paper rateYour Answer US Commercial paper rate
True/FalseQuestion Services of a Paying bank are taken when currencies of exporters country or the importers
country is not involved in the transaction.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion Which two countries were included to convert the group of five into the group of seven?Correct Answer Canada , ItalyYour Answer Canada , Italy
Multiple Choice Multiple AnswerQuestion Which factors influence the valuation of cash flows?Correct Answer Incomplete capital market , Availability of projkect specific concessional finance,Your Answer Availability of projkect specific concessional finance, , volatility of exchange rates
True/FalseQuestion PP Form is required when exports are made to any country by post parcel on value payable
basis.Correct Answer FalseYour Answer False
True/FalseQuestion Sandby credis are introduced by US Banks because they were not permitted to issue on demand
guarantees.Correct Answer TrueYour Answer True
International Finance_6
- 5 -
Select The BlankQuestion The international liquidity problem was tackled effectively by a reserve asset known as
________.Correct Answer Special drawing rightYour Answer Floating exchange
True/FalseQuestion Cross currency forward contract is not meaningful if original contract is in Rupees to USDCorrect Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Tuesday, where both centers have holiday on Wednesday,
currencies will be exchanged on :-Correct Answer Thursday if it is a working day at both the centersYour Answer Thursday if it is a working day at both the centers
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will be exchanged on :-Correct Answer MondayYour Answer Monday
Select The BlankQuestion During the fixed rate exchange system prevailing in India, the intervention currency was
________.Correct Answer Sterling PoundYour Answer Indian Rupees
Multiple Choice Single AnswerQuestion Inhow many groups are INCOTERMS classified?Correct Answer FourYour Answer Four
Multiple Choice Single AnswerQuestion The Direct Investment abroad through share swap arrangement under normal route is permitted
in a :-Correct Answer JV/WOSYour Answer Holding Co
Multiple Choice Single AnswerQuestion Samuraibonds areCorrect Answer Foreign yen bonds issued to non resident entities in Japanese MarketYour Answer Foreign yen bonds issued to non resident entities in Japanese Market
Select The BlankQuestion The large flow of money internationally was caused primarily by the oil price hikes engineered
by ________.Correct Answer OPEC countriesYour Answer European Countries
True/FalseQuestion Proposal for Investment abroa by Indian not falling under automatic route are submitted to
Exchange Control Department of RBI.Correct Answer TrueYour Answer True
International Finance_6
- 6 -
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion What do you mean by a derivative?Correct Answer One which has been derived from other fundamental instrumentsYour Answer One which has been derived from other fundamental instruments
Multiple Choice Multiple AnswerQuestion With reference to ECB, fund raising activity includes :-Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of sharesYour Answer Syndicate loans, issue of shares , Floating rate notes, bonds, debentures
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the
offered rate for Rs?Correct Answer USD 1=Rs 50.5000Your Answer USD 1=Rs 50.5000
Match The FollowingQuestion Correct Answer Your Answer
Merchant banking Portfolio management Note issuing and underwrting facility
Securitization Issue of debt in the form of tradeable security Issue of debt in the form of tradeable security
Prime borrower Highest credit rating Venture capital
Traditional banking service Loans and cash credit against security Highest credit rating
Select The BlankQuestion A Bill of exchange payable 45 days from date of shipment, is a means of ________ from seller
to the buyer.Correct Answer CreditYour Answer Intimation of shipment
Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.Correct Answer An Irrevocable creditYour Answer An Irrevocable credit
Multiple Choice Single AnswerQuestion Who introduced the worlds first exchange traded currency futures?Correct Answer Chicago Mercantile ExchangeYour Answer Bretton woods Agreement
Multiple Choice Single AnswerQuestion Name the members of Exchange Banks association :-Correct Answer Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar,Your Answer All banks at any business center
True/FalseQuestion In developed markets, speculators play important role in determining the trend of currency
rates.Correct Answer TrueYour Answer True
International Finance_6
- 7 -
Multiple Choice Multiple AnswerQuestion What are the objectives of International Chamber of Commerce?Correct Answer Champion the global economy as a force of economic growth , Creating of job and
prosperityYour Answer Champion the global economy as a force of economic growth , Creating of job and
prosperity
Multiple Choice Single AnswerQuestion Under which contracts the seller pays the import duty for the buyer?Correct Answer DDPYour Answer DDU
Multiple Choice Multiple AnswerQuestion In which cases can a Resident Individual in India acquire foreign securities without prior
approval?Correct Answer Gift from a person outside India, or Inheritance from a person resident in or outside
India , Security issued under Cashless employees stock option schemeYour Answer Gift from a person outside India, or Inheritance from a person resident in or outside India ,
Security issued under Cashless employees stock option scheme
Multiple Choice Single AnswerQuestion The document formulated by the borrower of syndicated loan, and the arranger, which contains
details of individual shares etc of co-lenders is known as :-Correct Answer Memorandum of informationYour Answer Memorandum of information
Multiple Choice Multiple AnswerQuestion Why does a Transaction exposure arise?Correct Answer Trading flows , Dividend or capital flowsYour Answer Trading flows , Dividend or capital flows
Match The FollowingQuestion Correct Answer Your Answer
LastStage Form a single currency Form a single currency
The First stage in the Europeand and Monetary Union (EMU) Free movement of capital in EC Freemovement of capital in EC
Stage II in EMU Establishment of European Monetary Institute Establishment of European MonetaryInstitute
Stage III in EMU Members to meet the convergence criteria and fix the exchange rates Members to meetthe convergence criteria and fix the exchange rates
Multiple Choice Single AnswerQuestion Value date means the date on which :-Correct Answer Delivery of both the currencies will be madeYour Answer Delivery of both the currencies will be made
True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate quotation.Correct Answer FalseYour Answer True
International Finance_6
- 8 -
Select The BlankQuestion Global capital market can be understood from the study of ________.Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
countryYour Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
country
Multiple Choice Single AnswerQuestion A Specific date forward contract can be booked so as to be :-Correct Answer Payable on a specific date of the calendar monthYour Answer Payable on a specific date of the calendar month
True/FalseQuestion ECGC offers isurance protection to Indian exporters againt payment risks.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What is a bill of lading?Correct Answer Transport document representing movement of goods by water.Your Answer Transport document representing movement of goods by water.
Multiple Choice Multiple AnswerQuestion Which document is used for transportation by air, rail, road, marine?Correct Answer Multimodal transport document , Combined Transport documentYour Answer Multimodal transport document , Combined Transport document
True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.Correct Answer FalseYour Answer False
Select The BlankQuestion After the second world war many countries adopted the route of ________ to give facelift to
sagging economies.Correct Answer Devaluation of their currenciesYour Answer Devaluation of their currencies
Multiple Choice Multiple AnswerQuestion What do you understand by Commercial Risk?Correct Answer Protracted default by the buyer , Insolvency of the buyerYour Answer Insolvency of the buyer , Risk of strikes due to which commercial activity is haulted
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,
Payment to EOUs in India for services rendered by themYour Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment
of Gifts of GBP 5000 per year per donor
Multiple Choice Single AnswerQuestion A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the
settlement day will beCorrect Answer Following Tuesday if it is a working day in all the three centersYour Answer Following Tuesday if it is a working day in all the three centers
International Finance_6
- 9 -
Multiple Choice Multiple AnswerQuestion Name the services provided by 'Reuter 3000' in forex market:-Correct Answer Quotation of forex rates, interest rates , Electronic broking by matching the ratesYour Answer Quotation of forex rates, interest rates , Calculate and quote rates for transactions
Multiple Choice Single AnswerQuestion What do you understand by a forex option?Correct Answer Right and not the obligation to take or give future delivery of an agreed quantity at
certain priceYour Answer Right and not the obligation to take or give future delivery of an agreed quantity at certain
price
True/FalseQuestion Integrated branches of Commercial banks handle forex transactions as well as options, swaps,
futures, arbitrage operationsCorrect Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Financial management is complex process forCorrect Answer Companies which have international tradeYour Answer Companies which have international trade
Select The BlankQuestion The ________is a Floating rate index for swaps.Correct Answer US Commercial paper rateYour Answer US Commercial paper rate
True/FalseQuestion Services of a Paying bank are taken when currencies of exporters country or the importers
country is not involved in the transaction.Correct Answer FalseYour Answer False
Multiple Choice Multiple AnswerQuestion Which two countries were included to convert the group of five into the group of seven?Correct Answer Canada , ItalyYour Answer Canada , Italy
Multiple Choice Multiple AnswerQuestion Which factors influence the valuation of cash flows?Correct Answer Incomplete capital market , Availability of projkect specific concessional finance,Your Answer Availability of projkect specific concessional finance, , volatility of exchange rates
True/FalseQuestion PP Form is required when exports are made to any country by post parcel on value payable
basis.Correct Answer FalseYour Answer False
True/FalseQuestion Sandby credis are introduced by US Banks because they were not permitted to issue on demand
guarantees.Correct Answer TrueYour Answer True
International Finance_6
- 10 -
Select The BlankQuestion The international liquidity problem was tackled effectively by a reserve asset known as
________.Correct Answer Special drawing rightYour Answer Floating exchange
True/FalseQuestion Cross currency forward contract is not meaningful if original contract is in Rupees to USDCorrect Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Tuesday, where both centers have holiday on Wednesday,
currencies will be exchanged on :-Correct Answer Thursday if it is a working day at both the centersYour Answer Thursday if it is a working day at both the centers
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will be exchanged on :-Correct Answer MondayYour Answer Monday
Select The BlankQuestion During the fixed rate exchange system prevailing in India, the intervention currency was
________.Correct Answer Sterling PoundYour Answer Indian Rupees
Multiple Choice Single AnswerQuestion Inhow many groups are INCOTERMS classified?Correct Answer FourYour Answer Four
Multiple Choice Single AnswerQuestion The Direct Investment abroad through share swap arrangement under normal route is permitted
in a :-Correct Answer JV/WOSYour Answer Holding Co
Multiple Choice Single AnswerQuestion Samuraibonds areCorrect Answer Foreign yen bonds issued to non resident entities in Japanese MarketYour Answer Foreign yen bonds issued to non resident entities in Japanese Market
Select The BlankQuestion The large flow of money internationally was caused primarily by the oil price hikes engineered
by ________.Correct Answer OPEC countriesYour Answer European Countries
True/FalseQuestion Proposal for Investment abroa by Indian not falling under automatic route are submitted to
Exchange Control Department of RBI.Correct Answer TrueYour Answer True
International Finance_6
- 11 -
International Finance_7
- 1 -
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The BlankQuestion A Documentary credit issued on the strength of another documentary credit is known as
________.Correct Answer Back to Back creditYour Answer Back to Back credit
True/FalseQuestion The Option period in the forward contract is at the option of the Banker, hence the bank has to
be very conservative in quoting rates.Correct Answer FalseYour Answer True
True/FalseQuestion JV means Joint venture and WOS means World of Security.Correct Answer FalseYour Answer True
Select The BlankQuestion The rate of interest on rupee finance for exports is not exceeding ________ less than PLR.Correct Answer 0.025Your Answer 50 basis points over LIBOR
True/FalseQuestion The working of the IBRD and IMF in recent has blurred the difference between the twoCorrect Answer TrueYour Answer True
Select The BlankQuestion Global capital market can be understood from the study of ________.Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
countryYour Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
country
Multiple Choice Single AnswerQuestion In case the value date happens to be a holiday then the settlement is done :-Correct Answer On the next working dayYour Answer On the next spot day(third day)
Select The BlankQuestion Legalised invoice is also called ________ invoice.Correct Answer VisaedYour Answer Visaed
True/FalseQuestion The volume of trading of Derivatives in the world trade market is growing but still only 5% of
the total.Correct Answer FalseYour Answer False
Select The BlankQuestion An exchange rate for $ was48.2050, it is now 48.2075, then one says that it has moved
________ basis pointsCorrect Answer 25
International Finance_7
- 2 -
Your Answer 0.0025
Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.Correct Answer An Irrevocable creditYour Answer An Irrevocable credit
Select The BlankQuestion Profitability of a project in China to an Indian may be enhanced by ________.Correct Answer Concessionary finance available in ChinaYour Answer Concessionary Finance available in India
Multiple Choice Single AnswerQuestion A country needs external commercial borrowings to :-Correct Answer Meet the adverse balance of payments positionYour Answer Meet the adverse balance of payments position
Match The FollowingQuestion Correct Answer Your Answer
Maturity of future Time when actual commodity is delivered Last date of exercising option
Note issuance facility Euronotes Euronotes
Bearer security issued in currency other than that of the country of issue Eurobonds Peformance bond orsecurity deposit
Margin on future Peformance bond or security deposit Time when actual commodity is delivered
Multiple Choice Single AnswerQuestion A Bank quotes interest rate of 9.50/10.00 for six months dollar deposit, here the bid rate is :-Correct Answer 9.50% P.A.Your Answer 9.50 divided by 6 =1.58% P.A.
Multiple Choice Multiple AnswerQuestion With reference to ECB, fund raising activity includes :-Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of sharesYour Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of shares
Multiple Choice Single AnswerQuestion In which of the funding facilities the repayment period is between 3 to 5 years ?Correct Answer C.C.F.F.Your Answer Stand By Arrangement
Multiple Choice Multiple AnswerQuestion Why is Bill of Exchange a Quasi Negotiable Instrument?Correct Answer It represents title to goods , It is issued under Sale of Goods actYour Answer It represents title to goods , It is issued under Sale of Goods act
Multiple Choice Multiple AnswerQuestion What do you understand by 'Foreign Exchange Risk'?Correct Answer The change in value of currency alters the home currency value of an asset , liability, ,
The change in value of currency alters the home currency value of profit, loss, or future cash flowsYour Answer The change in value of currency alters the home currency value of an asset , liability, ,
Inability to control various factors contributing to International trade
International Finance_7
- 3 -
Multiple Choice Single AnswerQuestion The document formulated by the borrower of syndicated loan, and the arranger, which contains
details of individual shares etc of co-lenders is known as :-Correct Answer Memorandum of informationYour Answer Participation certificate
Multiple Choice Multiple AnswerQuestion Why does a Transaction exposure arise?Correct Answer Trading flows , Dividend or capital flowsYour Answer Trading flows , Dividend or capital flows
Multiple Choice Single AnswerQuestion What is the volume of the world's total speculative transactions?Correct Answer Roughly 90 % of the total turnoverYour Answer 70% of the total turnover
Multiple Choice Multiple AnswerQuestion A Forward purchase contract was booked with an authorised dealer and subsequently cancelled
.It :-Correct Answer Can be booked again with another dealer , Can be booked again with the same dealerYour Answer Can be booked again with another dealer , Can be booked again with the same dealer
True/FalseQuestion Floating rate notes are traded in secondary market also.Correct Answer TrueYour Answer True
Multiple Choice Multiple AnswerQuestion What were the immediate causes of converting the group of 5 into group of 7 and convene their
meeting in late 1985?Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade
protectionnism had increasedYour Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade
protectionnism had increased
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Tuesday, where both centers have holiday on Wednesday,
currencies will be exchanged on :-Correct Answer Thursday if it is a working day at both the centersYour Answer Thursday if it is a working day at both the centers
Select The BlankQuestion Over the years ________has been the most widely accepted currency in international capital
market.Correct Answer American DollarYour Answer American Dollar
Multiple Choice Single AnswerQuestion When was the first currency swap introduced in world market?Correct Answer 1970Your Answer 1970
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demandCorrect Answer Which are convertible , Which have liquidity confirmed in Euro market operations
International Finance_7
- 4 -
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , whichhave greater gold parity
Multiple Choice Single AnswerQuestion Under which method of payments is the buyer not required to pay till he gets the possession of
the documents?Correct Answer Documents against payment terms specified in the bill of exchangeYour Answer Documents against payment terms specified in the bill of exchange
Multiple Choice Single AnswerQuestion How does ECGC protect banker's against risks for export finance?Correct Answer Issuing various guarantees covering different risks connected with exports at nominal
premiumYour Answer Issuing various guarantees covering different risks connected with exports at nominal
premium
Multiple Choice Single AnswerQuestion What is a bill of lading?Correct Answer Transport document representing movement of goods by water.Your Answer Transport document representing movement of goods by water.
Select The BlankQuestion In Indian interbank market forward rates are generally quoted on the basis of ________.Correct Answer Calendar monthYour Answer Calendar month
Select The BlankQuestion Fixed interest rate Eurobond without the option to convert to equity is known as ________.Correct Answer Straight DebtYour Answer Straight Debt
True/FalseQuestion Yankee bond is issued for domestic borrowers.Correct Answer FalseYour Answer False
Multiple Choice Single AnswerQuestion Examples of hedge are:Correct Answer Buy when you are having short positionYour Answer Buy when you are expecting fall in prices
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the
offered rate for Rs?Correct Answer USD 1=Rs 50.5000Your Answer USD 1=Rs 50.5000 + margin
True/FalseQuestion Proposal for Investment abroa by Indian not falling under automatic route are submitted to
Exchange Control Department of RBI.Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion What is LIBOR?Correct Answer Rate of interest for inter bank lending of funds for various maturities
International Finance_7
- 5 -
Your Answer Interest rate in Money Market in London
Multiple Choice Multiple AnswerQuestion The various arms of World Bank are:Correct Answer International Development Agency , Multinational Investment Guarantee AgencyYour Answer International Development Agency , Multinational Investment Guarantee Agency , Asian
Development Bank
True/FalseQuestion The American Dollar market comprises of the domestic segment of USD the offshore segment
of USD.Correct Answer TrueYour Answer False
Match The FollowingQuestion Correct Answer Your Answer
Cancellation of contracts above USD 500000 ECD ECD
Forward Purchase contract currency at premium Presume earliest delivery Presume earliest delivery
Forward purchase contract currency at discount Presume latest delivery Presume latest delivery
Exchange margins FEDAI FEDAI
Multiple Choice Single AnswerQuestion Value date means the date on which :-Correct Answer Delivery of both the currencies will be madeYour Answer Value of currency will be paid in terms of goods or commodities
Multiple Choice Multiple AnswerQuestion How is the entry into any conuntry's money market or capital market is restricted?Correct Answer Because of different tax systems , Because of different credit standardsYour Answer Because of different tax systems , Because of protectionism
Multiple Choice Single AnswerQuestion What are the functions of Export Import Bank of India?Correct Answer Finance functions and development functionsYour Answer Finance functions and development functions
Multiple Choice Single AnswerQuestion A weight list, a packing list used in international trade are which type of documents?Correct Answer Operational DocumentsYour Answer Bipartite documents
Multiple Choice Single AnswerQuestion Financial management is complex process forCorrect Answer Companies which have international tradeYour Answer Companies which have international trade
Chapter – 1 – Introduction to international capital marketsEuro currency ; domestic markets ; US Japan ; Switzerland ; UK ; Australia ; Canada ;European ; centers in ECU;
1
Chapter – 2 – International Finance Markets - the U.S. dollar Market ;The U.S. Dollar Market ; The Japanese Yen Market ; The Sterling Market ; The EuroMarket Has Been discussed in the next chapter ; Recent development in internationalFinance Markets ;
5 – 10
Chapter – 3 – International Monetary and Financial SystemThe country’s central ban agreed to buy back their currency at a certain rate of gold;Melting down of gold was freely allowed ; There was unrestricted movement of gold (i.e.import and / or export)The total money supply in the country was determined by the quantum of gold reserves inthe country
13 – 14
The international monetary fund ; quotas ; funding facilities ; regular facilities tranchepolicies ; restore Tranche credit Tranche ; extended arrangement (extended fund facility(EEF) ; Standard Arrangement (enlarged Arrears Policy)Special facilities (compensatory and contingency financing facility (CCFF)Buffer stock Financing Facility ; Supplemental Reserve Policy (SRP); Reserve Tranche ;Credit Tranche ; Stand by arrangement ;
15 – 17
Extended arrangement or extended fund facilities (EFF) special facilities ; CCFF ; Bufferstock financing Facility (BSFF) ; Supplemental resources facility (SRF) Enhanced structuraladjustment facility (ESAF) The fixed exchange rate system
18 – 19
Problems faced by the fixed exchange rate system ; failure of fixed rate system ; theEuropean monetary system (EMS) ; Economic and monetary union ; Recent developments ;post – Maastricht developments; emergence of EURO
20 – 23
The group of seven ; special drawing rights (SDRS) ; The liquidity problems (SDRS) ; theworld bank group ; the world bank; international development agency (IDA) ; internationalfinance corporation (IFC) ; The multinational investment Guarantee Agency (MIGA)
24 – 27
Chapter – 4 – External commercial borrowing – country ; company ; Equity ; Fund raising ;underwriting ; hedging ; arbitraging ; note issuance facility ; Mechanism anddocumentation ; syndicated loans ; floating rate notes ;
31 – 35
Flip – Flop FRN ; MIS – Mich FRN ; MINI Max FRN ; Capped FRNs, Perpetual FRNs;VRN structured FRNs; Terms and conditions of FRN Ero Commercial paper (ECP) ; ADRsand GDRs; GDR – Global depositary Receipts ; The roles of different parties involved inlaunching of GDRGDR – Global Depositary Receipts ; The roles of different parties involved in launching ofGDR steps involved in issuance of GDR are as follows
36 – 39
Pricing and Closing ; costs ; Advantages & Disadvantages of external commercialborrowing
40 – 41
Chapter – 5 – Documents used in International Trade ;Regulatory requirements ; operational requirements ; commercial documents ; financialdocuments transport documents ; risk covering documents ; official / regulatory documents ;miscellaneous documents ; Commercial documents ; proforma invoice ; commercialinvoice ; consular invoice customs invoice ; legalized invoice ; combined certificate oforigin and value ; financial documents ; bill of exchange ;
43 – 46
The second of the same tenor and date unpaid ; the first of the same tenor and date unpaid ; 47 – 49
or similar words ; sight B/E; Tenor ; time B/E; DP Basis ; document against Payment Basis; Documents against Acceptance Basis Transport documents; bill of lading ; received forshipment bill of lading ; on board bill of lading ;Short form bill of lading ; long form bill of lading clean bill of lading ; claused bill of lading; through bill of lading ; straight bill of lading ; charter party Bill of lading ; container bill oflading container bill of lading ; combined transport B/L or Mulit Modal B/L lash bill oflading house bill of lading ; Airway bill ; Air consignment Note ; House Air way bill ;Postal Receipt ; Courier /Expected delivery service ; multimodal transport document ; riskcovering documents ; insurance policy ;
50 – 53
Insurance cover note ; official documents export declaration forms ; export certificate;Certificate of origin ; Miscellaneous documents ; packing list ; weight certificate ; certificateof analysis and quality ; certificate of inspection ; health certificate ; phytosanitary /Radiation / Fumigation
55 – 57
Chapter 6 – Methods of payment ; advance payment ; bill for collection ; open account ;barter trade ; bank guarantee ; letter of credit (L / C) Seller wants buyer wants ; parties to adocumentary credit ; applicant issuing bank advising ; confirming bank beneficiary ;negotiating bank ; reimbursing bank
61 – 66
Types of letters of credit ; revocal letter of credit ; irrevocable letter of credit ; confimedirrevocable letter of credit ; transferable l / c revolving letter of credit ; credit available byinstallments; back to back letter of credit ; anticipatory credit or red clause letter of credit ;green clause letter of credit ; deferred payment letter of credit ; standby letter of credit ; flowchart of export transaction under letter of credit
67 – 69
Flow chart of export transaction under letter of credit ; various steps in the transaction are asunder ; steps no. description
70 – 71
Chapter 7 – Export / Import Finance ; - Part I import finance ; import financing throughtrust receipts / import loans ; import financing through issuing l/ c or bank guarantee ; part II– Export Finance Timely ; adequate ; cheaper on liberal terms ; sources for raising finance ;own funds ; 2 friends and relative ; 3 advance payment from buyer ; 4 Trade credit fromsuppliers 5 banks and financial institutions ; pre-shipment credit (P.C)
73 – 74
Post shipment credit ; advance against cash incentives / duty draw back ; forfeiting ;rediscounting of export bills abroad ; buyer’s credit ; supplier’s credit
75 -76
Chapter – 8 – Procedure in connection with foreign investment in India – Seciton – I foreigndirect investment ; FERA ; the practice at which a company can issue shares to nonresidents ; fema ; esop ; section II – Foreign technical collaboration ;
79 – 83
General Hotel & Tourism Related Industries ; procedure for granting approval; I / Wehereby certify that ; Documentation ; Standard conditions attached to approval fortechnology agreement ; no objection ; the agreement shall be subject to Indian laws:
84 – 88
Section – III – Portfolio investment ; explanation ; the regulations regarding portfolioinvestments by NRIs / PIOs are as under ; NRI / PIOs ; Section – IV – Other investments ;Section V – procedure for opening branch / project / Liaison office ;
89 - 92
Chapter – 9 – Direct investment outside India – overseas investment division TDR ADRGDR the criteria for investment under the automatic route are as under ; JV/WOS; ODA;The schemes for overseas investment by partnership firms ; criteria for overseas investmentby a registered partnership firm under the automatic route ;
95 – 99
The procedure to be followed by a partnership firm for making investment under theautomatic route ; the procedure to be followed by partnership firms which are not eligible
100 – 102
under the automatic route ; restrictions for setting up of a second generation company ;resident individual India can acquire foreign securities without prior approval in thefollowing cases ; provided that ; WOSChapter – 10 – Taxation ; Bilateral reliefUnilateral relief ; for the purpose of this provision
105 – 106
Part – 2 Forex risk management and hedging techniquesChapter – 1 Foreign exchange markets – The international Market ; survey were ; themarket ; the participants ; information and communication system ; the payment system ;the foreign exchange market in India
109 – 114
Chapter – 2 – Exchange Rates – Exchange rage quotes ; direct and indirect rates ; directrates ; indirect rates; spot and forward rates value rate; ready or cash ; value today ; TOM;spot ; forwards; glossary of market terms; Foreign exchange risks ; transactions exposure ;translation exposure ; economic exposure;
117 – 123
Translation – moving towards a consensus ; economic exposure ; an overview ; scenarioexchange rages in India ; Inward remittances export encashment of foreign currencytravelers cheques ; encashment of foreign currency notes; outward remittances ; imports ;issuing foreign currency travelers cheques issuing foreign currency notes ;
124 – 127
Type of transaction exchange rate nomenclature ; Factors affecting movement of exchangerates ; summary
128 – 129
Chapter – 3 – Forward contracts - Forward cover for merchants – forward purchase cover -forward sales contract - repayment of foreign currency loans – period of delivery – crosscurrency booking (sale / Purchase ) ; utilization of the forward cover ; cancellation ;calculation of exchange rates for forward contracts
131 – 137
Cancellation ; early delivery and rollover of forward contracts ; forward sale contracts ;forward purchase contract ; early delivery ; rollover charges
138 – 141
Chapter 4 – Options and Futures – History and development ; recent trends ; key features ofoptions and futures ; premium ; maturity or expiration date ; exercise ; in the money ; at themoney ; out of the money American option European option ; underlying asset price timebefore expiration ; underlying asset price ; time before expiration the rate of interestvolatility
143- 147
Pricing and analysis ; pricing of options ; underlying asset price ; exercise price ; optionsand futures products today ; interest rate options ; foreign exchange options and futures ;equity linked options ; commodity linked futures and options
148 – 152
Chapter – 5 - SwapsWhat are swaps ; interest rate swaps ; lowering financial cost ; hedge exposure to interestrate risk ; restructuring the debt in the balance sheet ; amortizing and accreting swaps ;forward swaps ; Reversible swaps ; basis swaps
155 – 157
Currency swaps ; lowering funding cost ; entering restricted capital markets ; reducingcurrency risk ; supply demand imbalances in the markets ; amortizing currency swaps ;accreting currency swaps ; floating – for floating rate currency swaps ; interest payments ;asset swaps
158 – 161
PART 3 – AGENCIES INVOLVED IN INTERNATIONAL TRADEChapter – 1 – Export import Bank of India ; Functions of Exim Bank ; the exim bankperforms the following functions ; incidental functions ; operations programmes ; directfinancial assistance to exporters ; consultancy and technology services ; pre-shipment credit; facilities for export – oriented units ; overseas investment facility buyer credit facilities for
163 – 166
deemed exports small scale industry export bills rediscounting; the latest new schemes inoperation since 1992 are the followingChapter – 2 – Reserve Bank of India Exchange controls in India – RBI as the exchangecontrol authority ; Authorized dealers (Ads) ; Money charges ; other receipts ; payment forimports ; other payments ; delegation to Ads; securities ; foreign currency accounts;liberalization of exchange control
169 – 173
Sodhani Committee Recommendations ; Exchange rate management ; 174 – 177Chapter – 3 – Foreign Exchange dealers association of India ; Uniform customs and practicefor collection ;
179 – 180
Chapter 4 – International chamber of commerce – ICC – WCF – IBCC – WCF 183 – 183Chapter – 5 – Export credit guarantee corporation of India ; ECGC; need for export creditinsurance ; credit insurance policies ; scr or standard policy ; turnover policy ; smallexporter policy ; specific shipment policy (short term); buyer wise policy ; specific policyfor supply contract insurance cover for buyer’s credit and line of credit
189 – 190
Services Policy ; construction works policy ; maturity factoring ; Guarantees to banks ;packing credit guarantee ; export production finance guarantee ; post – shipment creditguarantee ; export finance guarantee ; export performance guarantee; export finance(overseas lending ) Guarantee
191
Part – 4 – MiscellaneousChapter 1 – Exchange Earner’s foreign currency (EEFC)Status holder exporter ; individual professional ; others; permissible credits ; permissibledebits ;
195
Chapter 2 – Country Risk ; Quantifying country risk ; A comprehensive example ; use ofcountry risk ; assessment ;
199
Chapter 3 – International capital Budgeting - The Basic Frame work 203 – 204Chapter 4 – Incoterms – Group E departure EXW ; Group F Main carriage unpaid ; FAS ;FOB ; CFR ; CIF ; CPT ; CIP ; Group C; Group D ; Arrival DAF ; DES ; DEQ; DDU CTD/ MTO ; DDP ; delivered duty paid (CTD / MTO)
207- 212
Chapter – 5 – Actuals ; arbitrage ; bankers’ acceptance bond (BAS) ; Bearer Bond ; Bid rate; Bond ; Bull; call option ; caps ; cash commodity ; cash market ; cedel ; certificate ofdeposit (CD) class of option ; closing price ; commission ; commercial paper (CP) ; contractspecifications ; convertible bond ; coupon ; cover; delivery ; delivery month ; equity ; equityswaps ; equity collar ; Eurobond ; Euro clear ; euro commercial paper; euro –currency ;
215 – 217
Exercise price ; expiration date; floating rate note ; fundamental Analysis ; futures contracthedge ; Hybrid ; Interest Rate swap; Intermediation ; Intrinsic Value ; Libor ; Long margin; margin call maturity naked position ; note issuance facility (NIF)
218 -219
Option ; overbought ; oversold ; physical market ; position ; premium purchaser ; put option; settlement price short ; speculator ; strike price ; straight debt tap ; technical analysistranche ; tombstone volatility ; volume ; withholding tax ; yankee bond ;
220 – 221
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion Which functions does the Bill of Lading
serve?Correct Answer It is a document of title to goods.
, It is receipt of goodsYour Answer It is a document of title to goods. ,
It is receipt of goods
Multiple Choice Single AnswerQuestion A Bank quotes interest rate of 9.50/10.00
for six months dollar deposit, here the bid rate is :-
Correct Answer 9.50% P.A.Your Answer 9.50% P.A.
Multiple Choice Single AnswerQuestion What is Sovereign Risk?Correct Answer Risk of lending to the government
of a countryYour Answer Risk of lending to the government of a
country
Multiple Choice Single AnswerQuestion How does ICC help poor countries?Correct Answer Attract Foreign Direct investments
togeather with UNCTADYour Answer Attract Foreign Direct investments
togeather with UNCTAD
Multiple Choice Multiple AnswerQuestion As per BIS, recovery from the recent
crisis in global capital market was mainly due toCorrect Answer Rapid and appropriate policy
response in US and other countries , Increase inForeign Direct Investments , free flow of credit
Your Answer Rapid and appropriate policy responsein US and other countries , Increase in Foreign DirectInvestments , free flow of credit
True/FalseQuestion Out of 15 member countries in European
Union 12 countries commiteed themselves for a singlecurrency.
Correct Answer FalseYour Answer True
True/FalseQuestion In red clause credit some clauses are
printed in Red ink.Correct Answer TrueYour Answer True
True/FalseQuestion Transfer of funds for investment abroad
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is allowed freely.Correct Answer TrueYour Answer False
Select The BlankQuestion EEFC account holder is allowed to have
________ facility.Correct Answer Cheque book and nominationYour Answer Credit card, safe custody, safe
deposit locker without any fee
Select The BlankQuestion Fixed interest rate Eurobond without the
option to convert to equity is known as ________.Correct Answer Straight DebtYour Answer Interest rate swap
True/FalseQuestion An Indian importing goods from USA pays
dollars in India.Correct Answer FalseYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
PP Form Export Declaration form Export Declarationform
Health Certificate Fumigation certificate ExportDeclaration form
Certificate of Inspection As per importers requirementExport Declaration form
Certifiate of Origin Export Promotion Council ExportDeclaration form
Multiple Choice Multiple AnswerQuestion For issuing a Documentary credit The
applicant is required to provide to the issuing bankdetails about
Correct Answer The purchase-sales contract, themode of payment, the tenor of payment , The documentsrequired, the names of authorities who would issue thedocuments
Your Answer The purchase-sales contract, the modeof payment, the tenor of payment , The track record ofthe buyer and seller
Multiple Choice Multiple AnswerQuestion The characteristics of an International
documentary credit are :-Correct Answer It is an undertaking given by the
openers bank to pay certain sum of money , It is an
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undertaking given on behalf of a certain person toanother person in different country
Your Answer It is an undertaking given on behalfof a certain person to another person in differentcountry , It is a stamped agreement and is not validunless it is signed by the issuer
True/FalseQuestion CFR = FOB plus freight paid by seller +
insurance paid by seller.Correct Answer FalseYour Answer True
Select The BlankQuestion Even after liberalisation of exchange
controls, the Euro sterling market remained volatilebecause of uncertainties in UK and gyrations ofsterling against major ________ countries
Correct Answer OECDYour Answer OPEC
True/FalseQuestion Integrated branches of Commercial banks
handle forex transactions as well as options, swaps,futures, arbitrage operations
Correct Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Which of them are special funding
facilities of IMF ?Correct Answer Buffer Stock FacilityYour Answer Supplemental Reserve Policy
Multiple Choice Multiple AnswerQuestion What are the sources of raising funds for
exports?Correct Answer Suppliers credit , ForfaitingYour Answer Suppliers credit , Forfaiting , Buyers
credit , Foreign currency or Rupee finance
True/FalseQuestion Normally the forward contracts are booked
for making huge profits.Correct Answer FalseYour Answer False
True/FalseQuestion Head office of ICC is in Paris because of
its First President Eliance Clementel.Correct Answer TrueYour Answer False
Select The BlankQuestion A ________ Bill of lading does not
specify the terms and conditions of carriage.
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Correct Answer Short FormYour Answer Short Form
Multiple Choice Single AnswerQuestion What is the volume of the world's total
speculative transactions?Correct Answer Roughly 90 % of the total turnoverYour Answer 70% of the total turnover
True/FalseQuestion Till August 1994 India was following the
Indirect Methodof Rate quotation.Correct Answer FalseYour Answer False
Select The BlankQuestion For setting up joint ventures abroad or
equity participation abroad, EXIM bank provides fundsunder ________ Scheme.
Correct Answer Overseas investment facilityYour Answer Overseas investment facility
Multiple Choice Single AnswerQuestion Mr P has exported goods in May 2005 and
is expecting payment of Euro 25000 by the last week ofSept 2005. Give details of the forward contract he canbook :-
Correct Answer He can book a sale contract anytime from May 2005 till Mid Sept 2005, for Euro 25000or less, for maturity last week of Sept.
Your Answer He can book a contract for ForwardPurchase, any time from May 2005 till Mid Sept 2005,for Euro 25000 or less, for maturity last week ofSept.
Select The BlankQuestion In US Capital Market a Company prepares
all the necessary documents in advance of the publicissue under the facility known as ________.
Correct Answer Shelf RegistrationYour Answer Shell Registration
Multiple Choice Multiple AnswerQuestion Which common details will be available in
any bill of Lading?Correct Answer Names of consigner, consignee , The
port of loading and unloading, contract of shipmentYour Answer Names of consigner, consignee , The
port of loading and unloading, contract of shipment ,The name of the vessel , The date of transportationand contract of transportation
Select The BlankQuestion Under the ________ standard the Country's
Central Bank promised to buy back the currency atcertain rate of Gold.
International Finance_9
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Correct Answer GoldYour Answer Interest
Select The BlankQuestion Short term instruments normally issued by
corporate borrowers, forhigh values, at a discount toface value are known as ________.
Correct Answer Euro Commercial PapersYour Answer ADRs
Select The BlankQuestion The type of trade where a country sells
orange juice in return for cars is known as ________.Correct Answer Counter TradeYour Answer Non money trade
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC
accounts?Correct Answer Payment of hotel bills abroad,
payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them
Your Answer Payment to EOUs in India for servicesrendered by them , Payment of Gifts of GBP 5000 peryear per donor
Multiple Choice Multiple AnswerQuestion Under the liberalisation through FEMA,
what can an AD offer to the clients, without the priorpermission of RBI or Government?
Correct Answer Hedges, interest rate swaps,currency swaps. , Caps and collars, and forward rateagreements
Your Answer Caps and collars, and forward rateagreements , Good and competitive exchange rates andcross currency rates
Multiple Choice Multiple AnswerQuestion Sterling Market is attractive for an
international investor becauseCorrect Answer Gilts offer higher attractive
margin , Choice of issuing medium term and long termbonds
Your Answer Choice of issuing medium term and longterm bonds , Less controls and less formalities to becompleted , Linking of issues to currency swaps
Multiple Choice Single AnswerQuestion Under which contracts the seller pays the
import duty for the buyer?Correct Answer DDPYour Answer DDP
True/FalseQuestion PP Form is required when exports are made
International Finance_9
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to any country by post parcel on value payable basis.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What were the immediate causes of
converting the group of 5 into group of 7 and convenetheir meeting in late 1985?
Correct Answer Many Industries in USA had becomeuncompetitive with imports , In USA the Tradeprotectionnism had increased
Your Answer Many Industries in USA had becomeuncompetitive with imports , In USA the Tradeprotectionnism had increased , The heads of G5insisted to have a meeting , Failure of IMF to controlthe exchange rates
Multiple Choice Single AnswerQuestion What are the powers of money changers?Correct Answer Purchase and sell foreign currency
notes and travellers chequesYour Answer Purchase and sell foreign currency
notes and travellers cheques, give import and exportfinance
Multiple Choice Single AnswerQuestion Who can open an EEFC account?Correct Answer Individuals , firms, companies,
resident in IndiaYour Answer Individuals , firms, companies,
resident in India
Multiple Choice Single AnswerQuestion What is the role of ICC towards WTO?Correct Answer To provide world business
recommendations to WTOYour Answer To further the cause of WTO
Match The FollowingQuestion Correct Answer Your Answer
Swap price Difference in prices of two legs of buyingand selling Quoting rate for both buying and selling acurrency
Euro Market Market in Euro currencies Market in Eurocurrencies
Making market Quoting rate for both buying and sellinga currency Difference in prices of two legs of buyingand selling
Spread Price difference between bid and offer Maket of'Euro'
International Finance_9
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Select The BlankQuestion Position in a currency is said to be
________, when sales equal purchases.Correct Answer SquareYour Answer Awkward
Select The BlankQuestion Hotels and Airline companies are allowed
to receive payments in Indian rupees from foreigntourist without insisiting on ________.
Correct Answer Encashment certificateYour Answer Encashment certificate
Multiple Choice Multiple AnswerQuestion Why is Bill of Exchange a Quasi
Negotiable Instrument?Correct Answer It represents title to goods , It
is issued under Sale of Goods actYour Answer It represents title to goods , It is
issued under Transportation act , It is issued underBill of exchange act
Multiple Choice Single AnswerQuestion Which details about forward contracts do
the Exchange Controls verify ?Correct Answer Particulars of cancellation of
forward cover for the equivalent of USD 500,000Your Answer Details of all contracts booked and
cancelled beyond a specified limit
Multiple Choice Single AnswerQuestion In the context of International economy
,the period between 1920s and 1930s is known asCorrect Answer Great DepressionYour Answer Great Depression
Multiple Choice Multiple AnswerQuestion What do you understand by Commercial
Risk?Correct Answer Protracted default by the buyer ,
Insolvency of the buyerYour Answer Protracted default by the buyer ,
Insolvency of the buyer
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter
bank transactions?Correct Answer Clearing house for settlement and clearance for the operations
of Ads , Set up a market intelligence cell to study and monitordevelopments in Forex Market
Your Answer Clearing house for settlement and clearance for the operationsof Ads , Make additional foreign currency available to ADs atcheaper rates
Select The BlankQuestion ________ is the agency of ICC which deals with the maritime
crime.Correct Answer International Maritime Bureau
Your Answer International Maritime Bureau
Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?
Correct Answer Buffer Stock Facility
Your Answer Buffer Stock Facility
True/FalseQuestion Cross currency forward contract is not meaningful if original
contract is in Rupees to USDCorrect Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment
Your Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment , The Market report of theexchange which trades the option
Multiple Choice Single AnswerQuestion Which is the most actively traded currency in the international
market today?Correct Answer US Dollar
International Finance_10
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Your Answer US Dollar
Match The FollowingQuestion Correct Answer Your Answer
Intolerable risk Drop the investmentproject
Drop the investmentproject
Country risk analysis Cost of evluation does notjustify analysis
Cost of evluation does notjustify analysis
Stock market analysis Banks are ahead Factors' values
Weightages % Factors' values 100% of total
Select The BlankQuestion Global capital market can be understood from the study of
________.Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings
within and outside the countryYour Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings
within and outside the country
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will be
exchanged on :-Correct Answer Monday
Your Answer Monday
Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee
came from June 92?Correct Answer Other managed Floating
Your Answer Pegged to Single currency
Match The FollowingQuestion Correct Answer Your Answer
Maturity of future Time when actualcommodity is delivered
Last date of exercisingoption
Note issuance facility Euronotes Euronotes
Bearer security issued incurrency other than that ofthe country of issue
Eurobonds Eurobonds
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Margin on future Peformance bond orsecurity deposit
Peformance bond orsecurity deposit
True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a
quasi negotiable instrument.Correct Answer False
Your Answer False
True/FalseQuestion The Prominent non banking financial institutions participating in
the FOREX markets are Pension funds, mutual funds, insuranceCos.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What are margins, with reference to futures market?
Correct Answer Faith money deposited by buyers and sellers ensures liquidity ,Margin ensures solvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity ,Margin ensures solvency for honouring contracts
Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in
foreign exchange?Correct Answer USD 1 trillion
Your Answer USD 1 trillion
Multiple Choice Single AnswerQuestion NIF is basically an agreement :-
Correct Answer By underwriting bank to support funding for a certain period,against which borrowers can issue short term papers
Your Answer Which enables the investor to market the same in the secondarymarket
Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of
seven central Banks taken togeather in mid 1992?Correct Answer USD 275 Billion
Your Answer USD 275 Billion
International Finance_10
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Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an
exporter?Correct Answer Preshipment credit beyond six months for construction and
turnkey projects abroadYour Answer Preshipment credit up to six months for construction and turnkey
projects abroad
Select The BlankQuestion Over the years ________has been the most widely accepted
currency in international capital market.Correct Answer American Dollar
Your Answer American Dollar
Select The BlankQuestion As a result of the world wars in the 20th century the ________ of
most of the countries suffered heavily.Correct Answer Economies
Your Answer Currencies
Multiple Choice Single AnswerQuestion Which currency is traded in one leg of about 70% of the world's
transactions?Correct Answer US Dollar
Your Answer US Dollar
Select The BlankQuestion ________ is the acid test for events to be included in country
risk.Correct Answer Control by Government'
Your Answer Recurrence
Select The BlankQuestion The Trans European Automated Real Time Gross Settlement
Express Transfer is popular in ________.Correct Answer Brussels
Your Answer Brussels
Multiple Choice Single AnswerQuestion What is Risk Syndication facility?
Correct Answer Sharing of risk of non payment by supplier
International Finance_10
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Your Answer Sharing risk of Non payment by the Syndicate of Banks givingloans
True/FalseQuestion If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-
Correct Answer It is an undertaking given by the openers bank to pay certainsum of money , It is an undertaking given on behalf of a certainperson to another person in different country
Your Answer It is an undertaking given by the openers bank to pay certainsum of money , It is an undertaking given on behalf of a certainperson to another person in different country
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them
True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs, Call
and put options.Correct Answer True
Your Answer True
True/FalseQuestion There is no difference between CIP and CIF contracts except the
mode of transportation.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Financial management is complex process for
Correct Answer Companies which have international trade
International Finance_10
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Your Answer Companies which have international trade
Select The BlankQuestion When an Indian Company earns at least 50% of its average
turnover from a particular activity then that activity is consideredas ________.
Correct Answer Core activity
Your Answer Primary activity
Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.
Correct Answer An Irrevocable credit
Your Answer An Irrevocable credit
True/FalseQuestion The volume of trading of Derivatives in the world trade market is
growing but still only 5% of the total.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs
50.5000/52.5050. Which is the offered rate for Rs?Correct Answer USD 1=Rs 50.5000
Your Answer USD 1=Rs 50.5000
Multiple Choice Multiple AnswerQuestion Export finance
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euromarket operations
Your Answer Which are convertible , Which have liquidity confirmed in Euromarket operations , Which have greater intrinsic value
Multiple Choice Multiple Answer
International Finance_10
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Question What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market
Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?
Correct Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue
Your Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue
Select The BlankQuestion Short term instruments normally issued by corporate borrowers,
forhigh values, at a discount to face value are known as________.
Correct Answer Euro Commercial Papers
Your Answer Euro Commercial Papers
Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for
assessing a cross border project ?Correct Answer To weed out unviable projects and rank profitable ones
Your Answer To weed out unviable projects and rank profitable ones
Multiple Choice Single AnswerQuestion Examples of hedge are:
Correct Answer Buy when you are having short position
Your Answer Buy when you are having short position
Multiple Choice Multiple AnswerQuestion What is the effect of cross currency option on the customer?
Correct Answer He gets the flexibility to exposure , He is exposed to additionalrisk of movement of rates between 3 currencies
Your Answer He gets the flexibility to exposure , He is exposed to additionalrisk of movement of rates between 3 currencies
Select The BlankQuestion Forward margin makes a currency cheaper then the currency is
at ________.Correct Answer Discount
International Finance_10
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Your Answer Discount
Multiple Choice Single AnswerQuestion Why does a person need protection from unfavourable
movement of exchange rate?Correct Answer Unfavourable fluctuations in exchange rate can wipe out the
normal business profitYour Answer Unfavourable fluctuations in exchange rate can wipe out the
normal business profit
Multiple Choice Single AnswerQuestion The capital market is said to be volatile when
Correct Answer Prices of capital market instruments change and are expected tochange drastically
Your Answer Prices of capital market instruments change and are expected tochange drastically
True/FalseQuestion JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion What is the criteria for an Indian Company for Direct Investment
abroad?Correct Answer Activity proposed need to be core activity , Financial commitment
in JV/WOS maximum $ 100 million or equivalentYour Answer Activity proposed need to be core activity , Financial commitment
in JV/WOS maximum $ 100 million or equivalent , Indian coshould not have been black listed
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion What are the features of Settlement price ?
Correct Answer Price established by the clearing house at the end of eachtrading session , It is used to determine the net gain, loss,margin call and next days price limits
Your Answer Price established by the clearing house at the end of eachtrading session , It is used to determine the net gain, loss,margin call and next days price limits
Select The BlankQuestion Legalised invoice is also called ________ invoice.
Correct Answer Visaed
Your Answer Visaed
True/FalseQuestion The working of the IBRD and IMF in recent has blurred the
difference between the twoCorrect Answer True
Your Answer False
Multiple Choice Multiple AnswerQuestion Under the liberalisation through FEMA, what can an AD offer to
the clients, without the prior permission of RBI or Government?Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars,
and forward rate agreementsYour Answer Hedges, interest rate swaps, currency swaps. , Caps and collars,
and forward rate agreements , Good and competitive exchangerates and cross currency rates
Select The BlankQuestion ________Bill of lading must specify the name of the ship.
Correct Answer "On Board"
Your Answer "On Board"
Multiple Choice Single AnswerQuestion What is the immediate cause for the growth of futures and
options in the last two decades?Correct Answer Increase in volatile trading conditions
Your Answer General market investments
Multiple Choice Single AnswerQuestion In the context of International economy ,the period between
1920s and 1930s is known asCorrect Answer Great Depression
Your Answer Great Depression
Match The FollowingQuestion Correct Answer Your Answer
Departure EXW EXW
Main carriage paid CFR CFR
Main carriage unpaid FAS FAS
Arrival DES DES
Multiple Choice Single AnswerQuestion What is the statutory requirement about receivables of exports
from India?Correct Answer The export receivables must be repatriated within six months of
the date of shipment.Your Answer The export receivables must be repatriated within six months of
the date of shipment.
True/FalseQuestion An exporter expecting payment in$ next month will book a
forward purchase contract.Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion The characteristics of IDA Loan are:
Correct Answer It gives loans to poorer countries , The rate of interest is zeropercent , The repayment period is very long 40 years
Your Answer It gives loans to poorer countries , The rate of interest is zeropercent , The repayment period is very long 40 years
Multiple Choice Multiple AnswerQuestion What is the duty of the AD while booking a forward contract?
Correct Answer Verify the suitable documentary evidence, and that the customeris exposed to risk , Ensure that a genuine transaction exists
Your Answer Verify the suitable documentary evidence, and that the customeris exposed to risk , Ensure that a genuine transaction exists ,Protect the customer fully from exchange risk
Multiple Choice Multiple AnswerQuestion Criteria for Direct investment abroad under normal route :-
Correct Answer Viability of the proposal, and excellent track record of business ,Experience and expertise of promoters, benefit to the country
Your Answer Viability of the proposal, and excellent track record of business ,Experience and expertise of promoters, benefit to the country ,Total Financial commitment in JV/WOS as per prescribed ceiling
Multiple Choice Single AnswerQuestion When was the first currency swap introduced in world market?
Correct Answer 1970
Your Answer 1970
True/FalseQuestion Integrated branches of Commercial banks handle forex
transactions as well as options, swaps, futures, arbitrageoperations
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Who can issue the Certificate of Inspection?
Correct Answer Export Inspection Council , Person authorised by Importer.
Your Answer Export Inspection Council , Person authorised by Importer. ,Reserve Bank of India
Match The FollowingQuestion Correct Answer Your Answer
Cancellation of contractsabove USD 500000
ECD FEDAI
Forward Purchasecontract currency atpremium
Presume earliest delivery Presume earliest delivery
Forward purchasecontract currency atdiscount
Presume latest delivery Presume latest delivery
Exchange margins FEDAI ECD
True/FalseQuestion Both futures and options are traded on a public exchange.
Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euromarket operations
Your Answer Which are convertible , Which have liquidity confirmed in Euromarket operations , Which have greater intrinsic value
Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of
seven central Banks taken togeather in mid 1992?Correct Answer USD 275 Billion
Your Answer GBP 300 billion
Multiple Choice Single AnswerQuestion A Bank quotes interest rate of 9.50/10.00 for six months dollar
deposit, here the bid rate is :-Correct Answer 9.50% P.A.
Your Answer 9.50 divided by 6 =1.58% P.A.
True/FalseQuestion JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion How is the entry into any conuntry's money market or capital
market is restricted?Correct Answer Because of different tax systems , Because of different credit
standardsYour Answer Because of different tax systems , Because of different credit
standards , Because of protectionism
True/False
Question The American Dollar market comprises of the domestic segmentof USD the offshore segment of USD.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The major cost components of NIF are :-
Correct Answer Underwriters fees , Margins of notes
Your Answer Underwriters fees , Documentation charges , Issue registrationfees
True/FalseQuestion FRN's issued with ceiling on interest beyond which the issues is
not required to pay interest is known as Mini-Max FRNCorrect Answer True
Your Answer False
Multiple Choice Single AnswerQuestion A weight list, a packing list used in international trade are which
type of documents?Correct Answer Operational Documents
Your Answer Optional documents
Select The BlankQuestion The credit which does not constitute a legally binding
undertaking between the bank and the beneficiary is ________.Correct Answer Revocable Credit
Your Answer Revocable Credit
Multiple Choice Multiple AnswerQuestion Sterling Market is attractive for an international investor because
Correct Answer Gilts offer higher attractive margin , Choice of issuing mediumterm and long term bonds
Your Answer Gilts offer higher attractive margin , Choice of issuing mediumterm and long term bonds , Linking of issues to currency swaps
Multiple Choice Single AnswerQuestion European currency Unit
Correct Answer Basket of Currencies of members of EMS
Your Answer Basket of Currencies of members of EMS
True/FalseQuestion At Least one principal Lender bank is essential for issue of the
ADR or GDR.Correct Answer False
Your Answer True
True/FalseQuestion In an already booked forward contract, a person may seek early
delivery, extension in period, or cancellation.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion A Run on gold gold by a country means
Correct Answer Exchange of reserve currency in to gold
Your Answer Exchange of gold into Reserve Currency
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs
50.5000/52.5050. Which is the bid rate for USD?Correct Answer USD 1=Rs 50.5000
Your Answer USD 1=Rs 50.5000
Multiple Choice Single AnswerQuestion The Direct Investment abroad through share swap arrangement
under normal route is permitted in a :-Correct Answer JV/WOS
Your Answer JV/WOS
Select The BlankQuestion FRNs are issued for a maturity period of ________ and are
normally redeemed in one shot.Correct Answer 5-7 years
Your Answer 5-7 years
True/False
Question Bid rate is bidders buying rate and offered rate is bidders sellingrate.
Correct Answer True
Your Answer True
True/FalseQuestion Corporates are allowed to raise funds abroad up to $ 15 million
as short term finance if they have EPCG license.Correct Answer True
Your Answer False
Select The BlankQuestion Global capital market can be understood from the study of
________.Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings
within and outside the countryYour Answer IMF, World Bank and local markets
Select The BlankQuestion Short term instruments normally issued by corporate borrowers,
forhigh values, at a discount to face value are known as________.
Correct Answer Euro Commercial Papers
Your Answer Euro Commercial Papers
Select The BlankQuestion Even after liberalisation of exchange controls, the Euro sterling
market remained volatile because of uncertainties in UK andgyrations of sterling against major ________ countries
Correct Answer OECD
Your Answer OECD
Multiple Choice Multiple AnswerQuestion For issuing a Documentary credit The applicant is required to
provide to the issuing bank details aboutCorrect Answer The purchase-sales contract, the mode of payment, the tenor of
payment , The documents required, the names of authoritieswho would issue the documents
Your Answer The purchase-sales contract, the mode of payment, the tenor ofpayment , The documents required, the names of authoritieswho would issue the documents , Authority who will issue thedocuments
Multiple Choice Multiple Answer
Question The crisis in global capital market in 2002-04 was due to
Correct Answer Collapse of Enron , Collapse of Argentina's currency board , Thewar against terrorism
Your Answer Collapse of Enron , Collapse of Argentina's currency board , Thewar against terrorism
Select The BlankQuestion Over the years ________has been the most widely accepted
currency in international capital market.Correct Answer American Dollar
Your Answer American Dollar
Select The BlankQuestion "Flip-Flop', 'Mini-Max', 'Capped' 'Perpetual' are the various types
of ________.Correct Answer Floating Rate Note (FRN)
Your Answer Floating Rate Note (FRN)
Select The BlankQuestion Combined Certificate of Origin and Value are required by
________.Correct Answer Commonwealth Countries
Your Answer Commonwealth Countries
Multiple Choice Single AnswerQuestion Bank with lowest Bid for fees etc and which undertakes the
responsibility of loan syndication is called :-Correct Answer The lead bank- leadmanager- arranger
Your Answer The lead bank- leadmanager- arranger
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion Which functions does the Bill of Lading serve?Correct Answer It is a document of title to goods. , It is receipt of goodsYour Answer It is a document of title to goods. , It is receipt of goods
Multiple Choice Single AnswerQuestion A Bank quotes interest rate of 9.50/10.00
for six months dollar deposit, here the bid rate is :-
Correct Answer 9.50% P.A.Your Answer 9.50% P.A.
Multiple Choice Single AnswerQuestion What is Sovereign Risk?Correct Answer Risk of lending to the government of a countryYour Answer Risk of lending to the government of a country
Multiple Choice Single AnswerQuestion How does ICC help poor countries?Correct Answer Attract Foreign Direct investments togeather with UNCTADYour Answer Attract Foreign Direct investments togeather with UNCTAD
Multiple Choice Multiple AnswerQuestion As per BIS, recovery from the recent crisis in global capital market was mainly due toCorrect Answer Rapid and appropriate policy response in US and other countries , Increase in
Foreign Direct Investments , free flow of creditYour Answer Rapid and appropriate policy response in US and other countries , Increase in
Foreign Direct Investments , free flow of credit
True/FalseQuestion Out of 15 member countries in European Union 12 countries commiteed themselves
for a single currency.Correct Answer FalseYour Answer True
True/FalseQuestion In red clause credit some clauses are printed in Red ink.Correct Answer TrueYour Answer True
True/FalseQuestion Transfer of funds for investment abroad is allowed freely.Correct Answer TrueYour Answer False
Select The BlankQuestion EEFC account holder is allowed to have ________ facility.Correct Answer Cheque book and nominationYour Answer Credit card, safe custody, safe deposit locker without any fee
Select The BlankQuestion Fixed interest rate Eurobond without the option to convert to equity is known as
________.Correct Answer Straight DebtYour Answer Interest rate swap
True/FalseQuestion An Indian importing goods from USA pays dollars in India.Correct Answer FalseYour Answer True
Match The FollowingQuestion Correct Answer Your AnswerPP Form Export Declaration form Export Declarationform
Health Certificate Fumigation certificate Export
Declaration form
Certificate of Inspection As per importers requirementExport Declaration form
Certifiate of Origin Export Promotion Council ExportDeclaration form
Multiple Choice Multiple AnswerQuestion For issuing a Documentary credit The applicant is required to provide to the issuing
bank details aboutCorrect Answer The purchase-sales contract, the mode of payment, the tenor of payment , The
documents required, the names of authorities who would issue the documentsYour Answer The purchase-sales contract, the mode of payment, the tenor of payment , The
track record of the buyer and seller
Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It
is an undertaking given on behalf of a certain person to another person in different countryYour Answer It is an undertaking given on behalf of a certain person to another person in
different country , It is a stamped agreement and is not valid unless it is signed by the issuer
True/FalseQuestion CFR = FOB plus freight paid by seller +insurance paid by seller.Correct Answer FalseYour Answer True
Select The BlankQuestion Even after liberalisation of exchange controls, the Euro sterling market remained
volatile because of uncertainties in UK and gyrations of sterling against major ________ countriesCorrect Answer OECDYour Answer OPEC
True/FalseQuestion Integrated branches of Commercial banks handle forex transactions as well as
options, swaps, futures, arbitrage operationsCorrect Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?Correct Answer Buffer Stock FacilityYour Answer Supplemental Reserve Policy
Multiple Choice Multiple AnswerQuestion What are the sources of raising funds for exports?Correct Answer Suppliers credit , ForfaitingYour Answer Suppliers credit , Forfaiting , Buyers credit , Foreign currency or Rupee finance
True/FalseQuestion Normally the forward contracts are booked for making huge profits.
Correct Answer FalseYour Answer False
True/FalseQuestion Head office of ICC is in Paris because of its First President Eliance Clementel.Correct Answer TrueYour Answer False
Select The BlankQuestion A ________ Bill of lading does not specify the terms and conditions of carriage.Correct Answer Short FormYour Answer Short Form
Multiple Choice Single AnswerQuestion What is the volume of the world's total speculative transactions?Correct Answer Roughly 90 % of the total turnoverYour Answer 70% of the total turnover
True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate quotation.Correct Answer FalseYour Answer False
Select The BlankQuestion For setting up joint ventures abroad or equity participation abroad, EXIM bank
provides funds under ________ Scheme.Correct Answer Overseas investment facilityYour Answer Overseas investment facility
Multiple Choice Single AnswerQuestion Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by
the last week of Sept 2005. Give details of the forward contract he can book :-
Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, forEuro 25000 or less, for maturity last week of Sept.
Your Answer He can book a contract for Forward Purchase, any time from May 2005 till MidSept 2005, for Euro 25000 or less, for maturity last week of Sept.
Select The BlankQuestion In US Capital Market a Company prepares all the necessary documents in advance
of the public issue under the facility known as ________.Correct Answer Shelf RegistrationYour Answer Shell Registration
Multiple Choice Multiple AnswerQuestion Which common details will be available in any bill of Lading?Correct Answer Names of consigner, consignee , The port of loading and unloading, contract
of shipmentYour Answer Names of consigner, consignee , The port of loading and unloading, contract of
shipment , The name of the vessel , The date of transportation and contract of transportation
Select The BlankQuestion Under the ________ standard the Country's Central Bank promised to buy back the
currency at certain rate of Gold.Correct Answer GoldYour Answer Interest
Select The BlankQuestion Short term instruments normally issued by corporate borrowers, forhigh values, at a
discount to face value are known as ________.Correct Answer Euro Commercial PapersYour Answer ADRs
Select The BlankQuestion The type of trade where a country sells orange juice in return for cars is known as
________.Correct Answer Counter TradeYour Answer Non money trade
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation
abroad , Payment to EOUs in India for services rendered by them
Your Answer Payment to EOUs in India for services rendered by them , Payment of Gifts ofGBP 5000 per year per donor
Multiple Choice Multiple AnswerQuestion Under the liberalisation through FEMA, what can an AD offer to the clients, without
the prior permission of RBI or Government?Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward
rate agreementsYour Answer Caps and collars, and forward rate agreements , Good and competitive exchange
rates and cross currency rates
Multiple Choice Multiple AnswerQuestion Sterling Market is attractive for an international investor becauseCorrect Answer Gilts offer higher attractive margin , Choice of issuing medium term and long
term bondsYour Answer Choice of issuing medium term and long term bonds , Less controls and less
formalities to be completed , Linking of issues to currency swaps
Multiple Choice Single AnswerQuestion Under which contracts the seller pays the import duty for the buyer?Correct Answer DDPYour Answer DDP
True/FalseQuestion PP Form is required when exports are made to any country by post parcel on value
payable basis.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What were the immediate causes of converting the group of 5 into group of 7 and
convene their meeting in late 1985?Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the
Trade protectionnism had increasedYour Answer Many Industries in USA had become uncompetitive with imports , In USA the
Trade protectionnism had increased , The heads of G5 insisted to have a meeting , Failure of IMFto control the exchange rates
Multiple Choice Single AnswerQuestion What are the powers of money changers?Correct Answer Purchase and sell foreign currency notes and travellers chequesYour Answer Purchase and sell foreign currency notes and travellers cheques, give import and
export finance
Multiple Choice Single AnswerQuestion Who can open an EEFC account?Correct Answer Individuals , firms, companies, resident in IndiaYour Answer Individuals , firms, companies, resident in India
Multiple Choice Single AnswerQuestion What is the role of ICC towards WTO?Correct Answer To provide world business recommendations to WTOYour Answer To further the cause of WTO
Select The BlankQuestion Position in a currency is said to be ________, when sales equal purchases.Correct Answer SquareYour Answer Awkward
Select The BlankQuestion Hotels and Airline companies are allowed to receive payments in Indian rupees from
foreign tourist without insisiting on ________.Correct Answer Encashment certificateYour Answer Encashment certificate
Multiple Choice Multiple AnswerQuestion Why is Bill of Exchange a Quasi Negotiable Instrument?Correct Answer It represents title to goods , It is issued under Sale of Goods actYour Answer It represents title to goods , It is issued under Transportation act , It is issued
under Bill of exchange act
Multiple Choice Single AnswerQuestion Which details about forward contracts do the Exchange Controls verify ?Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000Your Answer Details of all contracts booked and cancelled beyond a specified limit
Multiple Choice Single AnswerQuestion In the context of International economy,the period between 1920s and 1930s is
known asCorrect Answer Great DepressionYour Answer Great Depression
Multiple Choice Multiple AnswerQuestion What do you understand by Commercial Risk?Correct Answer Protracted default by the buyer, Insolvency of the buyerYour Answer Protracted default by the buyer, Insolvency of the buyer
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion Tranche' is a managed issue of securities in smaller
denominations.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them , Payment of Gifts of GBP 5000 per year perdonor
Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter
bank transactions?Correct Answer Clearing house for settlement and clearance for the operations
of Ads , Set up a market intelligence cell to study and monitordevelopments in Forex Market
Your Answer Clearing house for settlement and clearance for the operationsof Ads , Set up a market intelligence cell to study and monitordevelopments in Forex Market
Select The BlankQuestion The creditworthiness of futures exchange is maintained through
imposition of ________.Correct Answer Margin
Your Answer Penalty
Select The BlankQuestion After the second world war many countries adopted the route of
________ to give facelift to sagging economies.Correct Answer Devaluation of their currencies
Your Answer Change of governments
True/FalseQuestion FEDAI does not require RBI permission to frame and revise
rules of business
Correct Answer False
Your Answer True
Select The BlankQuestion Position in a currency is said to be ________, when sales equal
purchases.Correct Answer Square
Your Answer Deficit
Multiple Choice Multiple AnswerQuestion Underwriters are more attracted to NIF issue because of :-
Correct Answer Lesser risks , Increased returns , Easy marketability features
Your Answer Lesser risks , Increased returns , Easy marketability features
True/FalseQuestion Import finance is nomally available at rates of interest cheaper
than domestic finance rates.Correct Answer False
Your Answer True
Multiple Choice Single AnswerQuestion What is the Indian Govt's obligation of becoming member of
IMF?Correct Answer Ensure orderly exchange arrangement, promote stable
exchange rateYour Answer Introduce gold standard in exchange rate
Multiple Choice Multiple AnswerQuestion Export finance
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Preshipment credit , Post shipment credit
Select The BlankQuestion ________ enables bankers to extend purchase, negotiation or
discount of export bills.Correct Answer Post shipment credit guarantee
Your Answer Specific shipment policy
Match The FollowingQuestion Correct Answer Your Answer
Intolerable risk Drop the investmentproject
Cost of evluation does notjustify analysis
Country risk analysis Cost of evluation does notjustify analysis
Banks are ahead
Stock market analysis Banks are ahead Factors' values
Weightages % Factors' values Drop the investmentproject
Select The BlankQuestion In mid 1992 ________ rejected the ratification of Maastricht
treatyCorrect Answer Denmark
Your Answer Austria
Multiple Choice Multiple AnswerQuestion Name the services provided by 'Reuter 3000' in forex market:-
Correct Answer Quotation of forex rates, interest rates , Electronic broking bymatching the rates
Your Answer Quotation of forex rates, interest rates , Electronic broking bymatching the rates , Demat securities
Multiple Choice Multiple AnswerQuestion What options does the merchant have while booking a forward
contract?Correct Answer Delivery on a Fixed date, within six months , Delivery on a date
between two days separated by a period of maximum one monthYour Answer Delivery on a Fixed date, within six months , Delivery on a date
between two days separated by a period of maximum one month
Multiple Choice Single AnswerQuestion What is the volume of the world's total speculative transactions?
Correct Answer Roughly 90 % of the total turnover
Your Answer Roughly 90 % of the total turnover
True/FalseQuestion ECGC offers isurance protection to Indian exporters againt
payment risks.Correct Answer True
Your Answer True
True/FalseQuestion CFR = FOB plus freight paid by seller + insurance paid by seller.
Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion Sterling Market is attractive for an international investor because
Correct Answer Gilts offer higher attractive margin , Choice of issuing mediumterm and long term bonds
Your Answer Gilts offer higher attractive margin , Choice of issuing mediumterm and long term bonds
Multiple Choice Multiple AnswerQuestion In a documentary credit the word document means :-
Correct Answer Specified documents of title, transportation, insurance , Specifiedcertificates, and other papers required as per the regulations inthe buyers country
Your Answer Specified documents of title, transportation, insurance
Multiple Choice Single AnswerQuestion What is the meaning of right to buy or sell the future contract?
Correct Answer An Option
Your Answer A future
Select The BlankQuestion ECGC provides cover to an Indian contractor for construction
work abroad under ________.Correct Answer Construction works policy
Your Answer Maturity Factoring
True/FalseQuestion An Indian importing goods from USA pays dollars in India.
Correct Answer False
Your Answer True
True/FalseQuestion An Indian exporting goods to New York receives dollars in New
York.
Correct Answer True
Your Answer True
Select The BlankQuestion A Dealer bought USD at 47.5000, in morning and the USD is
quoted in the noon at 1 USD =48.2000/49.7000, then he has theopportunity for ________.
Correct Answer Arbitrage
Your Answer Swap
Multiple Choice Single AnswerQuestion The Direct Investment abroad through share swap arrangement
under normal route is permitted in a :-Correct Answer JV/WOS
Your Answer JV/WOS
Select The BlankQuestion In US Capital Market a Company prepares all the necessary
documents in advance of the public issue under the facilityknown as ________.
Correct Answer Shelf Registration
Your Answer Shelf Registration
Multiple Choice Single AnswerQuestion How many Countries participated in the third survey on Foreign
Exchange, coordinated by BIS in 1992?Correct Answer 26
Your Answer 26
Multiple Choice Single AnswerQuestion A Spot Transaction between Japanese Yen and Sterling carried
out on Friday in Singapore, the settlement day will beCorrect Answer Following Tuesday if it is a working day in all the three centers
Your Answer Following Thursday if it is a working day in all the three centers
Select The BlankQuestion Legalised invoice is also called ________ invoice.
Correct Answer Visaed
Your Answer Proforma
Multiple Choice Single AnswerQuestion Who are the members of the Special committee on Indian Direct
Investments abroad, for normal route?Correct Answer Representatives of Ministry of finance, Ministry of Economic
affairs, Ministry of Commerce and RBIYour Answer Representatives of Ministry of finance, Ministry of Economic
affairs, Ministry of Commerce and RBI
Select The BlankQuestion For opening JV/WOS in Nepal, Bhutan, the ceiling for financial
commitment per annum is ________.Correct Answer Rs. 350 crore
Your Answer Rs. 350 crore
Select The BlankQuestion The price at which a person may purchase or sell the underlying
________.Correct Answer Exercise or strike price
Your Answer Market price
True/FalseQuestion Installment credit is issued for specific quantities of goods to be
shipped every week or month.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The participants in the Forex Markets are :-
Correct Answer Non banking entities wishing to exchange currencies, , Banksand their clients , Speculators, arbitragers
Your Answer Non banking entities wishing to exchange currencies, , Banksand their clients , Speculators, arbitragers
Multiple Choice Multiple AnswerQuestion What were the primary objectives of the group of seven
countries?Correct Answer Bring down the external value of US Dollar , Bring some stability
to exchange rates of all the countriesYour Answer Bring down the external value of US Dollar , Bring some stability
to exchange rates of all the countries
True/False
Question Transfer of funds for investment abroad is allowed freely.
Correct Answer True
Your Answer False
Multiple Choice Single AnswerQuestion In which currency can the EEFC account be opened?
Correct Answer Any Convertible currency
Your Answer Any Convertible currency
Multiple Choice Single AnswerQuestion In International trade, Advance payment means :-
Correct Answer Providing up front cash
Your Answer Providing up front cash
Multiple Choice Single AnswerQuestion Who books an option forward contract?
Correct Answer Party who is not definite about crystallisation of delivery date
Your Answer Party who is speculator
Multiple Choice Single AnswerQuestion What is a "Received for shipment" bill of lading ?
Correct Answer It is not considered by the banks as a good security for financing.
Your Answer It is considered a very safe document
Multiple Choice Multiple AnswerQuestion What are margins, with reference to futures market?
Correct Answer Faith money deposited by buyers and sellers ensures liquidity ,Margin ensures solvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity ,Margin ensures solvency for honouring contracts , Given bybuyer or seller as commission
Multiple Choice Single AnswerQuestion How does ICC access Govt and influence Governmental
decisions?Correct Answer Through national committees
Your Answer Through national committees
Match The FollowingQuestion Correct Answer Your Answer
Investment underAutomatic route
Form ODA Form ODA
Proposal under nonautomatic route
RBI Form NAR
Proposal under Normalroute
Special Committee Special Committee
Investment bypartnerships not in coreactivity
form ODI form ODI
Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-
Correct Answer It is an undertaking given by the openers bank to pay certainsum of money , It is an undertaking given on behalf of a certainperson to another person in different country
Your Answer It is an undertaking given by the openers bank to pay certainsum of money , It is an unconditional undertaking
True/FalseQuestion Services of a Paying bank are taken when currencies of
exporters country or the importers country is not involved in thetransaction.
Correct Answer False
Your Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single AnswerQuestion Fixed, Floating or Limited flexibility are used in the context of
Correct Answer Exchange Rates
Your Answer Exchange Rates
Select The BlankQuestion Exim acts as ________ for Government, RBI and IDBI .
Correct Answer An agent
Your Answer Authorised dealer
Multiple Choice Single AnswerQuestion Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Public Limited companies without international presence
Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.
Correct Answer An Irrevocable credit
Your Answer Anticipatory Credit
Multiple Choice Multiple AnswerQuestion Which of these are considered as miscellaneous documents?
Correct Answer Packing list , Weight certificate
Your Answer Packing list , Insurance cover note , PP Form
Select The BlankQuestion In ________ transaction the delivery is postponed from the
agreed date.Correct Answer Rollover
Your Answer Forward
True/FalseQuestion Integrated branches of Commercial banks handle forex
transactions as well as options, swaps, futures, arbitrageoperations
Correct Answer True
Your Answer False
Multiple Choice Multiple AnswerQuestion World Bank gives loans for
Correct Answer Structural Adjustments , Infrastructure projects , BOP problems
Your Answer Structural Adjustments , BOP problems , Long term Workingcapital
Select The BlankQuestion The credit which does not constitute a legally binding
undertaking between the bank and the beneficiary is ________.Correct Answer Revocable Credit
Your Answer Transferable credit
Multiple Choice Multiple AnswerQuestion What non funded facilities are granted by Export Import Bank of
India?Correct Answer Guarantee for Bid bond, execution of export project, for
borrowings abroad, for retention of money , Advance paymentGuarantee, performance guarantee
Your Answer Advance payment Guarantee, performance guarantee , Letter ofcredits
True/FalseQuestion There is no difference between CIP and CIF contracts except the
mode of transportation.Correct Answer True
Your Answer False
Multiple Choice Single AnswerQuestion What is a coupon swap?
Correct Answer Swap contract exchange of fixed rate payment system for afloating rate system
Your Answer Exchange of fixed deposits to equity
True/FalseQuestion An Indian exporting goods to New York receives dollars in New
York.Correct Answer True
Your Answer True
True/FalseQuestion The credit rating of World Bank is high in the world Capital
market because it operates at the debt equity ratio of 1:2Correct Answer False
Your Answer True
Match The FollowingQuestion Correct Answer Your Answer
Certifiate of Origin Export Promotion Council Risk covering Document
PP Form Export Declaration form Export Declaration form
Health Certificate Fumigation certificate Finance document
Certificate of Inspection As per importersrequirement
As per importersrequirement
True/FalseQuestion Cross currency forward contract is not meaningful if original
contract is in Rupees to USDCorrect Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Who can open an EEFC account?
Correct Answer Individuals , firms, companies, resident in India
Your Answer Individuals , firms, companies, resident in India
Multiple Choice Single AnswerQuestion The 'On Board' bill of lading means bill of lading evidencing that
:-Correct Answer The goods are put on board a ship for shipment
Your Answer A bill of lading evidencing terms and conditions of carriageprinted on it
Match The FollowingQuestion Correct Answer Your Answer
Netherlands Guilder Franc
Germany Mark Peseta
Ireland Punt Dollar
Luxemberg Franc Guilder
Multiple Choice Multiple AnswerQuestion The World Bank Group Consists of
Correct Answer International Development Association , International financeCorporation , Multinational Investment Guarantee Agency
Your Answer Multinational Investment Guarantee Agency , MultinationalInsurance Guarantee Agency
Select The BlankQuestion Any company involved in foreign exchange transactions is
exposed to ________ risk.Correct Answer Currency
Your Answer Currency
True/FalseQuestion If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True
Your Answer False
True/FalseQuestion Floating rate notes are traded in secondary market also.
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euromarket operations
Your Answer Which are convertible , Which have liquidity confirmed in Euromarket operations , Which have greater intrinsic value
Multiple Choice Multiple AnswerQuestion The investor is in the money when :-
Correct Answer The exercise price is below the spot price for a call option , Theexercise price is above the spot price for a put option
Your Answer The exercise price is below the spot price for a call option , Theexercise price is above the spot price for a put option , The
exercise price is above the spot price for a call option
True/FalseQuestion The working of the IBRD and IMF in recent has blurred the
difference between the twoCorrect Answer True
Your Answer True
Select The BlankQuestion For importing goods in India RBI insists on ________ value.
Correct Answer CIF
Your Answer FOB
Select The BlankQuestion Position in a currency is said to be ________, when sales equal
purchases.Correct Answer Square
Your Answer Surplus
Select The BlankQuestion FRNs are issued for a maturity period of ________ and are
normally redeemed in one shot.Correct Answer 5-7 years
Your Answer Up to 1 year
Multiple Choice Multiple AnswerQuestion What are the functions of International Finance Corporation?
Correct Answer Help private enterprise by financing projects , Provide technicalassistance to private enterprise
Your Answer Help private enterprise by financing projects , Provide technicalassistance to private enterprise
Multiple Choice Single AnswerQuestion What is Risk Syndication facility?
Correct Answer Sharing of risk of non payment by supplier
Your Answer Sharing risk of Non payment by the Syndicate of Banks givingloans
Select The Blank
Question A Documentary credit issued on the strength of anotherdocumentary credit is known as ________.
Correct Answer Back to Back credit
Your Answer Green clause credit
Multiple Choice Single AnswerQuestion Value date means the date on which :-
Correct Answer Delivery of both the currencies will be made
Your Answer Value of currency will be paid in terms of goods or commodities
True/FalseQuestion FEDAI does not require RBI permission to frame and revise
rules of businessCorrect Answer False
Your Answer True
Select The BlankQuestion The major industrial power whose economy was not affected
after the II world war was ________.Correct Answer USA
Your Answer UK
Multiple Choice Multiple AnswerQuestion Major investors in NIF are :-
Correct Answer Commercial Banks , Non banking Finance companies ,Insurance Companies
Your Answer Non banking Finance companies , Insurance Companies ,Individual investors abroad
Multiple Choice Multiple AnswerQuestion The crisis in global capital market in 2002-04 was due to
Correct Answer Collapse of Enron , Collapse of Argentina's currency board , Thewar against terrorism
Your Answer Collapse of Argentina's currency board , The war againstterrorism
Multiple Choice Multiple AnswerQuestion Criteria for investment abroad under automatic route :-
Correct Answer Activity for investment is core activity of Indian Company. , TotalFinancial commitment in JV/WOS as per prescribed ceiling
Your Answer Activity for investment is core activity of Indian Company. , CreditRating of the CO to be A++
Multiple Choice Multiple AnswerQuestion How does a company use swap to restructure debt, in its
balance sheet?Correct Answer By resorting to floating rate from fixed rate , By resorting to fixed
rate from floating rateYour Answer By resorting to floating rate from fixed rate , By resorting to fixed
rate from floating rate , Prepayment of existing debts
Select The BlankQuestion ________ is the price at which the market maker is prepared to
borrow the money.Correct Answer Bid rate
Your Answer Selling price
Multiple Choice Single AnswerQuestion Which type of Convertibility of Rupee launched in March 1992 ?
Correct Answer Limited convertibility
Your Answer Limited convertibility
Multiple Choice Multiple AnswerQuestion A Forward purchase contract was booked with an authorised
dealer and subsequently cancelled .It :-Correct Answer Can be booked again with another dealer , Can be booked again
with the same dealerYour Answer Can be booked again with another dealer , Can be booked only
for un booked portion of the contract.
Multiple Choice Single AnswerQuestion Name the members of Exchange Banks association :-
Correct Answer Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar,
Your Answer Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar,
Multiple Choice Single AnswerQuestion If a dealer of securities is quoting rate as 200-250 then the rate
200 signifies which rate with reference to him?Correct Answer Bid rate
Your Answer Bid rate
Multiple Choice Single Answer
Question What do you call a 'decreasing principal swap'?
Correct Answer Amortizing swap
Your Answer Amortizing swap
Multiple Choice Single AnswerQuestion When does a bank have an absolute advantage, in respect of
interest rate swaps?Correct Answer When it has advantage under fixed interest system as well as
floating interest rate systemYour Answer When it has advantage under fixed interest system as well as
floating interest rate system
Multiple Choice Single AnswerQuestion NIF is basically an agreement :-
Correct Answer By underwriting bank to support funding for a certain period,against which borrowers can issue short term papers
Your Answer By underwriting bank to support funding for a certain period,against which borrowers can issue short term papers
1
Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter bank transactions?
Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up amarket intelligence cell to study and monitor developments in Forex Market
Your Answer Clearing house for settlement and clearance for the operations of Ads , Makeadditional foreign currency available to ADs at cheaper rates
Select The BlankQuestion ________ is the agency of ICC which deals with the maritime crime.
Correct Answer International Maritime Bureau
Your Answer International Maritime Bureau
Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?
Correct Answer Buffer Stock Facility
Your Answer Buffer Stock Facility
True/FalseQuestion Cross currency forward contract is not meaningful if original contract is in Rupees to
USDCorrect Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration date and time, the methodof payment
Your Answer The exercise or strike price, the amount , The expiration date and time, the methodof payment , The Market report of the exchange which trades the option
Multiple Choice Single AnswerQuestion Which is the most actively traded currency in the international market today?
Correct Answer US Dollar
Your Answer US Dollar
Match The FollowingQuestion Correct Answer Your Answer
Intolerable risk Drop the investment project Drop the investment project
Country risk analysis Cost of evluation does not justifyanalysis
Cost of evluation does not justifyanalysis
Stock market analysis Banks are ahead Factors' values
2
Weightages % Factors' values 100% of total
Select The BlankQuestion Global capital market can be understood from the study of ________.
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside thecountry
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside thecountry
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will be exchanged on :-
Correct Answer Monday
Your Answer Monday
Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee came from June 92?
Correct Answer Other managed Floating
Your Answer Pegged to Single currency
Match The FollowingQuestion Correct Answer Your Answer
Maturity of future Time when actual commodity isdelivered
Last date of exercising option
Note issuance facility Euronotes Euronotes
Bearer security issued incurrency other than that of thecountry of issue
Eurobonds Eurobonds
Margin on future Peformance bond or securitydeposit
Peformance bond or securitydeposit
True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable
instrument.Correct Answer False
Your Answer False
True/FalseQuestion The Prominent non banking financial institutions participating in the FOREX markets
are Pension funds, mutual funds, insurance Cos.Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
3
Question What are margins, with reference to futures market?
Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensuressolvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensuressolvency for honouring contracts
Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in foreign exchange?
Correct Answer USD 1 trillion
Your Answer USD 1 trillion
Multiple Choice Single AnswerQuestion NIF is basically an agreement :-
Correct Answer By underwriting bank to support funding for a certain period, against whichborrowers can issue short term papers
Your Answer Which enables the investor to market the same in the secondary market
Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of seven central Banks
taken togeather in mid 1992?Correct Answer USD 275 Billion
Your Answer USD 275 Billion
Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an exporter?
Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer Preshipment credit up to six months for construction and turnkey projects abroad
Select The BlankQuestion Over the years ________has been the most widely accepted currency in
international capital market.Correct Answer American Dollar
Your Answer American Dollar
Select The BlankQuestion As a result of the world wars in the 20th century the ________ of most of the
countries suffered heavily.Correct Answer Economies
Your Answer Currencies
Multiple Choice Single AnswerQuestion Which currency is traded in one leg of about 70% of the world's transactions?
4
Correct Answer US Dollar
Your Answer US Dollar
Select The BlankQuestion ________ is the acid test for events to be included in country risk.
Correct Answer Control by Government'
Your Answer Recurrence
Select The BlankQuestion The Trans European Automated Real Time Gross Settlement Express Transfer is
popular in ________.Correct Answer Brussels
Your Answer Brussels
Multiple Choice Single AnswerQuestion What is Risk Syndication facility?
Correct Answer Sharing of risk of non payment by supplier
Your Answer Sharing risk of Non payment by the Syndicate of Banks giving loans
True/FalseQuestion If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-
Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is anundertaking given on behalf of a certain person to another person in differentcountry
Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is anundertaking given on behalf of a certain person to another person in differentcountry
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them
True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs, Call and put options.
5
Correct Answer True
Your Answer True
True/FalseQuestion There is no difference between CIP and CIF contracts except the mode of
transportation.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
Select The BlankQuestion When an Indian Company earns at least 50% of its average turnover from a
particular activity then that activity is considered as ________.Correct Answer Core activity
Your Answer Primary activity
Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.
Correct Answer An Irrevocable credit
Your Answer An Irrevocable credit
True/FalseQuestion The volume of trading of Derivatives in the world trade market is growing but still
only 5% of the total.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is
the offered rate for Rs?Correct Answer USD 1=Rs 50.5000
Your Answer USD 1=Rs 50.5000
Multiple Choice Multiple AnswerQuestion Export finance
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Preshipment credit , Post shipment credit , Buyers credit
6
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations ,Which have greater intrinsic value
Multiple Choice Multiple AnswerQuestion What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resourcesraised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance from resourcesraised in world capital market
Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?
Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recentlyfloated issue
Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recentlyfloated issue
Select The BlankQuestion Short term instruments normally issued by corporate borrowers, forhigh values, at a
discount to face value are known as ________.Correct Answer Euro Commercial Papers
Your Answer Euro Commercial Papers
Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for assessing a cross border
project ?Correct Answer To weed out unviable projects and rank profitable ones
Your Answer To weed out unviable projects and rank profitable ones
Multiple Choice Single AnswerQuestion Examples of hedge are:
Correct Answer Buy when you are having short position
Your Answer Buy when you are having short position
Multiple Choice Multiple AnswerQuestion What is the effect of cross currency option on the customer?
Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement ofrates between 3 currencies
Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement ofrates between 3 currencies
Select The Blank
7
Question Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer Discount
Your Answer Discount
Multiple Choice Single AnswerQuestion Why does a person need protection from unfavourable movement of exchange rate?
Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Multiple Choice Single AnswerQuestion The capital market is said to be volatile when
Correct Answer Prices of capital market instruments change and are expected to change drastically
Your Answer Prices of capital market instruments change and are expected to change drastically
True/FalseQuestion JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion What is the criteria for an Indian Company for Direct Investment abroad?
Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOSmaximum $ 100 million or equivalent
Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOSmaximum $ 100 million or equivalent , Indian co should not have been black listed
15 – 1013 – 1415 – 1718 – 1920 – 2324 – 2731 – 3536 – 3940 – 4143 – 4647 – 4950 – 5355 – 5761 – 6667 – 6970 – 7173 – 7475 -7679 – 8384 – 88
8
89 - 9295 – 99100 – 102105 – 106
109 – 114117 – 123124 – 127128 – 129131 – 137138 – 141143- 147148 – 152155 – 157158 – 161
163 – 166169 – 173174 – 177179 – 180183 – 183189 – 190191
195199203 – 204207- 212215 – 217218 -219220 – 221
Chapter – 1 – Introduction to international capital markets 1Ero currency market ; Domestic market ; US, Japan Switzerland ; uk,australia canada ; european conters in ECU ; Euro ; Asian doller market; forex marker 1SDR ; ECU ; US dollar ; German ; Swiss ; Japanees ; France ; Canada ;Australia; 2Chaper - 2 - International financial Markets - The U.S.Dollar Market ;pricing ; federal reservice board; curency ; central bank of US ; 5The Japanese Yen Market ; Mof; Long Term Prime Rate ; 1970 japanese 6The Sterling Market ; 20th 19th century 1979 ; OECD Organization foreconomic co-operation & development EMS Exchange rate Mechanism;FRN ; Bulldog; 7the EURO Market has been discussed in the nex chapter Recentdevelopment in international financial markets ; septer 11 enron 7LtCN (Long term capital Management Brazil china and mexico; 81990 ; 1980 ; severe tests financial system; securitization forces banks ;attractive to browwerw; legal issues flexibility ; financial marketdevelopment segement of ; 9swaps cash flow ; roject related; gain access to international ;marketability ; new financing techniques; 10Chapter – 3 – International Monetary and Financial System 131945 ; 1944 ; intenrational world Bank for reconstruciton anddevelopment; second world war was european ; IMF International 13
9
Monetary Fund; Gold standard first world war
The country's Central Bank agreed to buy back their currency at acertain rate of gold; 13melting down of gold was freely allowed 13There was unrestricted movement of gold (I.e. import and / export 14The total money supply in the country was determined by the quantumof gold reserves in the country 141870 ; 1914 ; 1821 ; 1834 ; 1870 ; European countries gold standardin 1933 ; 1930 International Monetary Co-operation ; IBRD ; IMF ; 14popularly known as world bank IMF ; the international monetary fund1945 ; 1971 ; 25 years ; aims 15SDR ((special drawing rights ) 25% 1960 ; 1963 ; Gross domesticproduct; 5 years ; SDR 146 bn to SDR 212 ; 45% ; 1998 ; Two parts 16Funding Facilities ; Regular Facilities ; Special facilities ; restore tranchecredit tranche ; compensatory and contingency financing facility (CCFF); 16Extended arrangement (Extended Fund Facility EEF) ; Buffer stockFinancing Facility ; 16Standard Arrangement (Enlarged Arrears Policy ) ; SupplementalReserve Policy (Supplemental Reserve Policy (SRP 17Reserve Tranche ; Credit Tranches ; Stand - By Arrangement 17Extended arrangement or extended fund facilities (EFF) 18Special Facilities ; CCFF ; Buffer Stock Financing Facility ; BSFF ;Supplemental Resource Facility (SRF) ; 1997 18Enhance Structural Adjustment Facility (ESAF) ; The fixed exchange ratesystem US dollars 35 ounce of gold 19Problem faced by the fixed exchange rate system ; 1960 ; valueapprehension ; delay in adjustment 20failure of fixed rate system ; the european monetary system (EMS)European Community 20Currency Snake ; 1973 ; EMS EC ECU European Currency Unit ; SDR ;ERM ; DM ; matrix german bundesbank 21EM ; PST ; ERM ; Economic and monetary Union ;Top of Form
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/FalseQuestion Integrated branches of Commercial banks handle forex transactions as well as
options, swaps, futures, arbitrage operationsCorrect Answer True
Your Answer True
True/FalseQuestion JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer False
Select The BlankQuestion The rate of interest on rupee finance for exports is not exceeding ________ less than
PLR.Correct Answer 0.025
10
Your Answer 50 basis points over LIBOR
Multiple Choice Multiple AnswerQuestion What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration date and time, the methodof payment
Your Answer The exercise or strike price, the amount , The expiration date and time, the methodof payment
Multiple Choice Single AnswerQuestion In the syndicated loan arrangement the borrower has to execute :-
Correct Answer Single Principal loan agreement
Your Answer Single Principal loan agreement
True/FalseQuestion At Least one principal Lender bank is essential for issue of the ADR or GDR.
Correct Answer False
Your Answer True
Multiple Choice Single AnswerQuestion US financial system is the freest system because
Correct Answer Institutions can introduce new products and instuments at the price of their choice.
Your Answer Institutions can introduce new products and instuments at the price of their choice.
Multiple Choice Single AnswerQuestion In a coupon swap who is called the buyer?
Correct Answer One who pays the fixed rate of interest
Your Answer One who pays the fixed rate of interest
True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate quotation.
Correct Answer False
Your Answer False
Select The BlankQuestion For setting up joint ventures abroad or equity participation abroad, EXIM bank
provides funds under ________ Scheme.Correct Answer Overseas investment facility
Your Answer Overseas investment facility
Multiple Choice Single Answer
11
Question Under the automatic route of Direct Investment Abroad, what is the restriction onmarket purchases?
Correct Answer 50% of the net worth of the investing company
Your Answer 50% of the net worth of the investing company
Multiple Choice Single AnswerQuestion What are the powers of money changers?
Correct Answer Purchase and sell foreign currency notes and travellers cheques
Your Answer Purchase and sell foreign currency notes and travellers cheques and also Give exportfinance
Select The BlankQuestion Any company involved in foreign exchange transactions is exposed to ________ risk.
Correct Answer Currency
Your Answer Currency
Multiple Choice Multiple AnswerQuestion What are the features of Settlement price ?
Correct Answer Price established by the clearing house at the end of each trading session , It is usedto determine the net gain, loss, margin call and next days price limits
Your Answer Price established by the clearing house at the end of each trading session , It is usedto determine the net gain, loss, margin call and next days price limits
Multiple Choice Multiple AnswerQuestion What are the activities of ICC?
Correct Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime
Your Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime ,Increased Govt regulation of Business
True/FalseQuestion Cause of increase in cost of public issues Underwriting fees , selling commission
Correct Answer True
Your Answer False
Select The BlankQuestion The currency swaps used ________.
Correct Answer To lower the risk of currency exposure
Your Answer To lower the risk of currency exposure
True/FalseQuestion The Option period in the forward contract is at the option of the Banker, hence the
bank has to be very conservative in quoting rates.
12
Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion Which factors affect the exchange rates in short time period?
Correct Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation
Your Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation , GDP,Balanceof trade and payment,Unemployment
Match The FollowingQuestion Correct Answer Your Answer
Departure EXW EXW
Main carriage paid CFR CFR
Main carriage unpaid FAS FAS
Arrival DES DES
Multiple Choice Multiple AnswerQuestion Sterling Market is attractive for an international investor because
Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long termbonds
Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long termbonds , Linking of issues to currency swaps
True/FalseQuestion In red clause credit some clauses are printed in Red ink.
Correct Answer True
Your Answer False
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is
the bid rate for USD?Correct Answer USD 1=Rs 50.5000
Your Answer USD 1=Rs 50.5000
13
Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for assessing a cross border
project ?Correct Answer To weed out unviable projects and rank profitable ones
Your Answer To weed out unviable projects and rank profitable ones
Multiple Choice Multiple AnswerQuestion Criteria for investment abroad under automatic route :-
Correct Answer Activity for investment is core activity of Indian Company. , Total Financialcommitment in JV/WOS as per prescribed ceiling
Your Answer Activity for investment is core activity of Indian Company. , Total Financialcommitment in JV/WOS as per prescribed ceiling
Multiple Choice Multiple AnswerQuestion Who can issue the Certificate of Inspection?
Correct Answer Export Inspection Council , Person authorised by Importer.
Your Answer Export Inspection Council , Person authorised by Importer.
Multiple Choice Single AnswerQuestion Large number of exporters from which country are enjoying the privilege of receiving
up front cash from importers in Russia?Correct Answer United Kingdom
Your Answer United Kingdom
True/FalseQuestion In developed markets, speculators play important role in determining the trend of
currency rates.Correct Answer True
Your Answer True
Select The BlankQuestion In US Capital Market a Company prepares all the necessary documents in advance of
the public issue under the facility known as ________.Correct Answer Shelf Registration
Your Answer Shelf Registration
Select The BlankQuestion In Overseas market the forward rate is generally quoted on the basis of ________.
Correct Answer Fixed date
Your Answer Calendar month
Select The BlankQuestion Forward Margin makes a currency costlier then the currency is at ________.
14
Correct Answer Premium
Your Answer Discount
Multiple Choice Multiple AnswerQuestion These are the parties to the documentary credit :-
Correct Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank
Your Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank
Multiple Choice Multiple AnswerQuestion What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raisedin world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raisedin world capital market
Multiple Choice Single AnswerQuestion Fixed, Floating or Limited flexibility are used in the context of
Correct Answer Exchange Rates
Your Answer Exchange Rates
Select The BlankQuestion In mid 1992 ________ rejected the ratification of Maastricht treaty
Correct Answer Denmark
Your Answer UK
Multiple Choice Multiple AnswerQuestion Under the liberalisation through FEMA, what can an AD offer to the clients, without
the prior permission of RBI or Government?Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate
agreementsYour Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate
agreements
Multiple Choice Single AnswerQuestion To whom is an AD required to report the cancellation of forward contracts?
Correct Answer No one at all.
Your Answer To Reserve Bank of India, fortnightly
Select The BlankQuestion ECGC provides cover to an Indian contractor for construction work abroad under
________.Correct Answer Construction works policy
15
Your Answer Export Performance Guarantee
True/FalseQuestion The Negotiating bank examines the documents submitted by the seller and makes
payment if they comply the terms and conditions of the LC.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of seven central Banks
taken togeather in mid 1992?Correct Answer USD 275 Billion
Your Answer USD 275 Billion
Multiple Choice Multiple AnswerQuestion What are the sources of raising funds for exports?
Correct Answer Suppliers credit , Forfaiting
Your Answer Suppliers credit , Forfaiting
Select The BlankQuestion Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer Discount
Your Answer Discount
Multiple Choice Single AnswerQuestion Name the common forex derivatives :-
Correct Answer Options, futures
Your Answer Options, futures
True/FalseQuestion Country risk analysis is a futile exercise in the background of cost of analysis.
Correct Answer True
Your Answer False
Select The BlankQuestion Even after liberalisation of exchange controls, the Euro sterling market remained
volatile because of uncertainties in UK and gyrations of sterling against major________ countries
Correct Answer OECD
Your Answer OECD
16
Match The FollowingQuestion Correct Answer Your Answer
Issues linked withLIBOR,LIBID,LIMEAN
FRNs FRNs
Issue of bonds without fixed rateof interest, linked to short terminterest rate in the global market
FloatingRate Note FloatingRate Note
Issue of loansinternationally,through arranger,underwriter,co manager, for alarge amount for sharing risk oflending
Syndicated Loans Syndicated Loans
Equity issues in the foreignmarkets either as directinvestments or portfolioinvestments.
American or Global DepositoryReceipts
American or Global DepositoryReceipts
Bottom of Form
1
Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter bank transactions?
Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a marketintelligence cell to study and monitor developments in Forex Market
Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additionalforeign currency available to ADs at cheaper rates
Select The BlankQuestion ________ is the agency of ICC which deals with the maritime crime.
Correct Answer International Maritime Bureau
Your Answer International Maritime Bureau
Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?
Correct Answer Buffer Stock Facility
Your Answer Buffer Stock Facility
True/FalseQuestion Cross currency forward contract is not meaningful if original contract is in Rupees to
USDCorrect Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration date and time, the method ofpayment
Your Answer The exercise or strike price, the amount , The expiration date and time, the method ofpayment , The Market report of the exchange which trades the option
Multiple Choice Single AnswerQuestion Which is the most actively traded currency in the international market today?
Correct Answer US Dollar
Your Answer US Dollar
Match The FollowingQuestion Correct Answer Your Answer
Intolerable risk Drop the investment project Drop the investment project
Country risk analysis Cost of evluation does not justifyanalysis
Cost of evluation does not justifyanalysis
Stock market analysis Banks are ahead Factors' values
2
Weightages % Factors' values 100% of total
Select The BlankQuestion Global capital market can be understood from the study of ________.
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside thecountry
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside thecountry
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will be exchanged on :-
Correct Answer Monday
Your Answer Monday
Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee came from June 92?
Correct Answer Other managed Floating
Your Answer Pegged to Single currency
Match The FollowingQuestion Correct Answer Your Answer
Maturity of future Time when actual commodity isdelivered
Last date of exercising option
Note issuance facility Euronotes Euronotes
Bearer security issued in currencyother than that of the country ofissue
Eurobonds Eurobonds
Margin on future Peformance bond or securitydeposit
Peformance bond or securitydeposit
True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable
instrument.Correct Answer False
Your Answer False
True/FalseQuestion The Prominent non banking financial institutions participating in the FOREX markets are
Pension funds, mutual funds, insurance Cos.Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
3
Question What are margins, with reference to futures market?
Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensuressolvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensuressolvency for honouring contracts
Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in foreign exchange?
Correct Answer USD 1 trillion
Your Answer USD 1 trillion
Multiple Choice Single AnswerQuestion NIF is basically an agreement :-
Correct Answer By underwriting bank to support funding for a certain period, against which borrowerscan issue short term papers
Your Answer Which enables the investor to market the same in the secondary market
Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of seven central Banks
taken togeather in mid 1992?Correct Answer USD 275 Billion
Your Answer USD 275 Billion
Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an exporter?
Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer Preshipment credit up to six months for construction and turnkey projects abroad
Select The BlankQuestion Over the years ________has been the most widely accepted currency in international
capital market.Correct Answer American Dollar
Your Answer American Dollar
Select The BlankQuestion As a result of the world wars in the 20th century the ________ of most of the countries
suffered heavily.Correct Answer Economies
Your Answer Currencies
Multiple Choice Single AnswerQuestion Which currency is traded in one leg of about 70% of the world's transactions?
Correct Answer US Dollar
4
Your Answer US Dollar
Select The BlankQuestion ________ is the acid test for events to be included in country risk.
Correct Answer Control by Government'
Your Answer Recurrence
Select The BlankQuestion The Trans European Automated Real Time Gross Settlement Express Transfer is
popular in ________.Correct Answer Brussels
Your Answer Brussels
Multiple Choice Single AnswerQuestion What is Risk Syndication facility?
Correct Answer Sharing of risk of non payment by supplier
Your Answer Sharing risk of Non payment by the Syndicate of Banks giving loans
True/FalseQuestion If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-
Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is anundertaking given on behalf of a certain person to another person in different country
Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is anundertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them
True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer True
Your Answer True
5
True/FalseQuestion There is no difference between CIP and CIF contracts except the mode of
transportation.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
Select The BlankQuestion When an Indian Company earns at least 50% of its average turnover from a particular
activity then that activity is considered as ________.Correct Answer Core activity
Your Answer Primary activity
Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.
Correct Answer An Irrevocable credit
Your Answer An Irrevocable credit
True/FalseQuestion The volume of trading of Derivatives in the world trade market is growing but still only
5% of the total.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is
the offered rate for Rs?Correct Answer USD 1=Rs 50.5000
Your Answer USD 1=Rs 50.5000
Multiple Choice Multiple AnswerQuestion Export finance
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
6
Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations ,Which have greater intrinsic value
Multiple Choice Multiple AnswerQuestion What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raisedin world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raisedin world capital market
Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?
Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recentlyfloated issue
Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recentlyfloated issue
Select The BlankQuestion Short term instruments normally issued by corporate borrowers, forhigh values, at a
discount to face value are known as ________.Correct Answer Euro Commercial Papers
Your Answer Euro Commercial Papers
Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for assessing a cross border project
?Correct Answer To weed out unviable projects and rank profitable ones
Your Answer To weed out unviable projects and rank profitable ones
Multiple Choice Single AnswerQuestion Examples of hedge are:
Correct Answer Buy when you are having short position
Your Answer Buy when you are having short position
Multiple Choice Multiple AnswerQuestion What is the effect of cross currency option on the customer?
Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement ofrates between 3 currencies
Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement ofrates between 3 currencies
Select The BlankQuestion Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer Discount
7
Your Answer Discount
Multiple Choice Single AnswerQuestion Why does a person need protection from unfavourable movement of exchange rate?
Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Multiple Choice Single AnswerQuestion The capital market is said to be volatile when
Correct Answer Prices of capital market instruments change and are expected to change drastically
Your Answer Prices of capital market instruments change and are expected to change drastically
True/FalseQuestion JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion What is the criteria for an Indian Company for Direct Investment abroad?
Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum$ 100 million or equivalent
Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum$ 100 million or equivalent , Indian co should not have been black listed
Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?
Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recentlyfloated issue
Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recentlyfloated issue
True/FalseQuestion Out of 15 member countries in European Union 12 countries commiteed themselves for
a single currency.Correct Answer False
Your Answer False
True/FalseQuestion The volume of trading of Derivatives in the world trade market is growing but still only
5% of the total.Correct Answer False
Your Answer False
Select The Blank
8
Question A Credit can be a confirmed credit only if it is also ________.
Correct Answer An Irrevocable credit
Your Answer An Irrevocable credit
Match The FollowingQuestion Correct Answer Your Answer
Intolerable risk Drop the investment project Drop the investment project
Country risk analysis Cost of evluation does not justifyanalysis
Cost of evluation does not justifyanalysis
Stock market analysis Banks are ahead Banks are ahead
Weightages % Factors' values Factors' values
Select The BlankQuestion Over the years ________has been the most widely accepted currency in international
capital market.Correct Answer American Dollar
Your Answer American Dollar
Multiple Choice Single AnswerQuestion What is the meaning of a country risk?
Correct Answer Risk of events in a particular country which may cause loss to a person dealing withthat country
Your Answer Risk of events in a particular country which may cause loss to a person dealing withthat country
Multiple Choice Multiple AnswerQuestion Which common details will be available in any bill of Lading?
Correct Answer Names of consigner, consignee , The port of loading and unloading, contract ofshipment
Your Answer Names of consigner, consignee , The port of loading and unloading, contract ofshipment
Multiple Choice Single AnswerQuestion What help does EXIM Bank provide under the scheme 'Direct Financial assistance to
exporters'?Correct Answer Funds are provided under deferred payment terms to Indian exporter for credit to
foreign buyerYour Answer Funds are provided under deferred payment terms to Indian exporter for credit to
foreign buyer
Match The FollowingQuestion Correct Answer Your Answer
PP Form Export Declaration form Export Declaration form
9
Health Certificate Fumigation certificate Fumigation certificate
Certificate of Inspection As per importers requirement As per importers requirement
Certifiate of Origin Export Promotion Council Export Promotion Council
Select The BlankQuestion Even after liberalisation of exchange controls, the Euro sterling market remained
volatile because of uncertainties in UK and gyrations of sterling against major________ countries
Correct Answer OECD
Your Answer OECD
Multiple Choice Single AnswerQuestion How many INCOTERMS are there in "Departure" Group?
Correct Answer One
Your Answer Two
Multiple Choice Single AnswerQuestion What is a bill of lading?
Correct Answer Transport document representing movement of goods by water.
Your Answer Transport document representing movement of goods by water.
True/FalseQuestion The American Dollar market comprises of the domestic segment of USD the offshore
segment of USD.Correct Answer True
Your Answer True
Select The BlankQuestion The creditworthiness of the futures seller and the futures buyer is ________ because of
the presence of the Futures exchange.Correct Answer Irrelevant
Your Answer Irrelevant
Multiple Choice Single AnswerQuestion What was the collective assessment of International financial market about the country
risk of many cnuntries in the last decade?Correct Answer Whatever it was, was disastrously wrong.
Your Answer Whatever it was, was disastrously wrong.
Multiple Choice Multiple AnswerQuestion How is the entry into any conuntry's money market or capital market is restricted?
10
Correct Answer Because of different tax systems , Because of different credit standards
Your Answer Because of different tax systems , Because of different credit standards
True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate quotation.
Correct Answer False
Your Answer True
Select The BlankQuestion In Indian interbank market forward rates are generally quoted on the basis of
________.Correct Answer Calendar month
Your Answer Calendar month
Select The BlankQuestion Rupee was liberalised on ________ account in 1993, and on current account in 1994.
Correct Answer Trade
Your Answer Trade
Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee came from June 92?
Correct Answer Other managed Floating
Your Answer Other managed Floating
Multiple Choice Multiple AnswerQuestion Which of these are considered as miscellaneous documents?
Correct Answer Packing list , Weight certificate
Your Answer Packing list , Weight certificate
True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer True
Your Answer True
Select The BlankQuestion ECGC provides cover to an Indian contractor for construction work abroad under
________.Correct Answer Construction works policy
Your Answer Construction works policy
11
Multiple Choice Single AnswerQuestion Equity can be raised internationallly by a company through :-
Correct Answer Fund raising, underwriting, hedging , arbitration operations
Your Answer Fund raising, underwriting, hedging , arbitration operations
Multiple Choice Single AnswerQuestion How many Countries participated in the third survey on Foreign Exchange, coordinated
by BIS in 1992?Correct Answer 26
Your Answer 26
True/FalseQuestion In red clause credit some clauses are printed in Red ink.
Correct Answer True
Your Answer True
True/FalseQuestion Prior approval of RBI is needed for payment of all imports.
Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion The factors which affect the performance of an option are:-
Correct Answer Underlying asset price , Time before expiration, rate of interest
Your Answer Underlying asset price , Time before expiration, rate of interest
Multiple Choice Single AnswerQuestion What is the immediate cause for the growth of futures and options in the last two
decades?Correct Answer Increase in volatile trading conditions
Your Answer Management of external risk
Select The BlankQuestion For setting up joint ventures abroad or equity participation abroad, EXIM bank provides
funds under ________ Scheme.Correct Answer Overseas investment facility
Your Answer Overseas investment facility
Select The BlankQuestion To make the export more competitive and remunerative, the Indian Govt extends
________ facility.
12
Correct Answer Cash Incentives
Your Answer Advance against cash incentives
Multiple Choice Multiple AnswerQuestion What is the criteria for an Indian Company for Direct Investment abroad?
Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum$ 100 million or equivalent
Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum$ 100 million or equivalent
Multiple Choice Multiple AnswerQuestion External Commercial Debt market :-
Correct Answer Prevails in Domestic market of foreign country , Prevails in offshore markets
Your Answer Prevails in Domestic market of foreign country , Prevails in offshore markets
Multiple Choice Single AnswerQuestion Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
Multiple Choice Multiple AnswerQuestion What do you understand by 'Foreign Exchange Risk'?
Correct Answer The change in value of currency alters the home currency value of an asset , liability, ,The change in value of currency alters the home currency value of profit, loss, or futurecash flows
Your Answer The change in value of currency alters the home currency value of an asset , liability, ,The change in value of currency alters the home currency value of profit, loss, or futurecash flows , Certainty of an event which would happen in favour of the importer/exporter
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Tuesday, where both centers have holiday on
Wednesday, currencies will be exchanged on :-Correct Answer Thursday if it is a working day at both the centers
Your Answer Friday
Multiple Choice Single AnswerQuestion Which details about forward contracts do the Exchange Controls verify ?
Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000
Your Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000
True/FalseQuestion In the forward rate quotations between two currencies, when one currency is at
discount the other currency is at premium.
13
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Select The BlankQuestion A Bill of exchange payable 45 days from date of shipment, is a means of ________
from seller to the buyer.Correct Answer Credit
Your Answer Credit
Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an exporter?
Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer Preshipment credit beyond six months for construction and turnkey projects abroad
Select The BlankQuestion Global capital market can be understood from the study of ________.
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside thecountry
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside thecountry
True/FalseQuestion Import finance is nomally available at rates of interest cheaper than domestic finance
rates.Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion Major investors in NIF are :-
Correct Answer Commercial Banks , Non banking Finance companies , Insurance Companies
Your Answer Commercial Banks , Non banking Finance companies
Select The BlankQuestion In mid 1992 ________ rejected the ratification of Maastricht treaty
Correct Answer Denmark
Your Answer Denmark
14
True/FalseQuestion Indian companies are now allowed to freely invest abroad up to $1.5 million, raised
through GDE or EEFC without prior permission from RBI.Correct Answer False
Your Answer True
Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter bank transactions?
Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up amarket intelligence cell to study and monitor developments in Forex Market
Your Answer Clearing house for settlement and clearance for the operations of Ads , Makeadditional foreign currency available to ADs at cheaper rates
Select The BlankQuestion ________ is the agency of ICC which deals with the maritime crime.
Correct Answer International Maritime Bureau
Your Answer International Maritime Bureau
Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?
Correct Answer Buffer Stock Facility
Your Answer Buffer Stock Facility
True/FalseQuestion Cross currency forward contract is not meaningful if original contract is in Rupees
to USDCorrect Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration date and time, themethod of payment
Your Answer The exercise or strike price, the amount , The expiration date and time, themethod of payment , The Market report of the exchange which trades the option
Multiple Choice Single AnswerQuestion Which is the most actively traded currency in the international market today?
Correct Answer US Dollar
Your Answer US Dollar
Match The Following
15
Question Correct Answer Your Answer
Intolerable risk Drop the investment project Drop the investment project
Country risk analysis Cost of evluation does not justifyanalysis
Cost of evluation does not justifyanalysis
Stock market analysis Banks are ahead Factors' values
Weightages % Factors' values 100% of total
Select The BlankQuestion Global capital market can be understood from the study of ________.
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outsidethe country
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outsidethe country
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will be exchanged on :-
Correct Answer Monday
Your Answer Monday
Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee came from June 92?
Correct Answer Other managed Floating
Your Answer Pegged to Single currency
Match The FollowingQuestion Correct Answer Your Answer
Maturity of future Time when actual commodity isdelivered
Last date of exercising option
Note issuance facility Euronotes Euronotes
Bearer security issued in currencyother than that of the country ofissue
Eurobonds Eurobonds
Margin on future Peformance bond or securitydeposit
Peformance bond or securitydeposit
True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable
instrument.Correct Answer False
Your Answer False
16
True/FalseQuestion The Prominent non banking financial institutions participating in the FOREX
markets are Pension funds, mutual funds, insurance Cos.Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What are margins, with reference to futures market?
Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensuressolvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensuressolvency for honouring contracts
Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in foreign exchange?
Correct Answer USD 1 trillion
Your Answer USD 1 trillion
Multiple Choice Single AnswerQuestion NIF is basically an agreement :-
Correct Answer By underwriting bank to support funding for a certain period, against whichborrowers can issue short term papers
Your Answer Which enables the investor to market the same in the secondary market
Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of seven central Banks
taken togeather in mid 1992?Correct Answer USD 275 Billion
Your Answer USD 275 Billion
Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an exporter?
Correct Answer Preshipment credit beyond six months for construction and turnkey projectsabroad
Your Answer Preshipment credit up to six months for construction and turnkey projects abroad
Select The BlankQuestion Over the years ________has been the most widely accepted currency in
international capital market.Correct Answer American Dollar
Your Answer American Dollar
Select The BlankQuestion As a result of the world wars in the 20th century the ________ of most of the
countries suffered heavily.
17
Correct Answer Economies
Your Answer Currencies
Multiple Choice Single AnswerQuestion Which currency is traded in one leg of about 70% of the world's transactions?
Correct Answer US Dollar
Your Answer US Dollar
Select The BlankQuestion ________ is the acid test for events to be included in country risk.
Correct Answer Control by Government'
Your Answer Recurrence
Select The BlankQuestion The Trans European Automated Real Time Gross Settlement Express Transfer is
popular in ________.Correct Answer Brussels
Your Answer Brussels
Multiple Choice Single AnswerQuestion What is Risk Syndication facility?
Correct Answer Sharing of risk of non payment by supplier
Your Answer Sharing risk of Non payment by the Syndicate of Banks giving loans
True/FalseQuestion If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-
Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It isan undertaking given on behalf of a certain person to another person in differentcountry
Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It isan undertaking given on behalf of a certain person to another person in differentcountry
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them
18
Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them
True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer True
Your Answer True
True/FalseQuestion There is no difference between CIP and CIF contracts except the mode of
transportation.Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
Select The BlankQuestion When an Indian Company earns at least 50% of its average turnover from a
particular activity then that activity is considered as ________.Correct Answer Core activity
Your Answer Primary activity
Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.
Correct Answer An Irrevocable credit
Your Answer An Irrevocable credit
True/FalseQuestion The volume of trading of Derivatives in the world trade market is growing but still
only 5% of the total.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which
is the offered rate for Rs?Correct Answer USD 1=Rs 50.5000
Your Answer USD 1=Rs 50.5000
19
Multiple Choice Multiple AnswerQuestion Export finance
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations ,Which have greater intrinsic value
Multiple Choice Multiple AnswerQuestion What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resourcesraised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance from resourcesraised in world capital market
Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?
Correct Answer Advertisement which lists the managers, underwriters, , List of Providers ofrecently floated issue
Your Answer Advertisement which lists the managers, underwriters, , List of Providers ofrecently floated issue
Select The BlankQuestion Short term instruments normally issued by corporate borrowers, forhigh values, at
a discount to face value are known as ________.Correct Answer Euro Commercial Papers
Your Answer Euro Commercial Papers
Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for assessing a cross border
project ?Correct Answer To weed out unviable projects and rank profitable ones
Your Answer To weed out unviable projects and rank profitable ones
Multiple Choice Single AnswerQuestion Examples of hedge are:
Correct Answer Buy when you are having short position
Your Answer Buy when you are having short position
Multiple Choice Multiple AnswerQuestion What is the effect of cross currency option on the customer?
20
Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movementof rates between 3 currencies
Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movementof rates between 3 currencies
Select The BlankQuestion Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer Discount
Your Answer Discount
Multiple Choice Single AnswerQuestion Why does a person need protection from unfavourable movement of exchange
rate?Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business
profitYour Answer Unfavourable fluctuations in exchange rate can wipe out the normal business
profit
Multiple Choice Single AnswerQuestion The capital market is said to be volatile when
Correct Answer Prices of capital market instruments change and are expected to changedrastically
Your Answer Prices of capital market instruments change and are expected to changedrastically
True/FalseQuestion JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion What is the criteria for an Indian Company for Direct Investment abroad?
Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOSmaximum $ 100 million or equivalent
Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOSmaximum $ 100 million or equivalent , Indian co should not have been black listed
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple AnswerQuestion Which functions does the Bill of Lading serve?Correct Answer It is a document of title to goods., It is receipt of goodsYour Answer It is a document of title to goods. ,It is receipt of goods
Multiple Choice Single AnswerQuestion A Bank quotes interest rate of 9.50/10.00for six months dollar deposit, here the
bid rate is :-Correct Answer 9.50% P.A.Your Answer 9.50% P.A.
Multiple Choice Single Answer
21
Question What is Sovereign Risk?Correct Answer Risk of lending to the governmentof a countryYour Answer Risk of lending to the government of acountry
Multiple Choice Single AnswerQuestion How does ICC help poor countries?Correct Answer Attract Foreign Direct investments togeather with UNCTADYour Answer Attract Foreign Direct investments togeather with UNCTAD
Multiple Choice Multiple AnswerQuestion As per BIS, recovery from the recent crisis in global capital market was mainly
due toCorrect Answer Rapid and appropriate policy response in US and other countries , Increase
inForeign Direct Investments , free flow of creditYour Answer Rapid and appropriate policy response in US and other countries , Increase in
Foreign DirectInvestments , free flow of credit
True/FalseQuestion Out of 15 member countries in European Union 12 countries commiteed
themselves for a single currency.Correct Answer FalseYour Answer True
True/FalseQuestion In red clause credit some clauses are printed in Red ink.Correct Answer TrueYour Answer True
True/FalseQuestion Transfer of funds for investment abroad is allowed freely.Correct Answer TrueYour Answer False
Select The BlankQuestion EEFC account holder is allowed to have ________ facility.Correct Answer Cheque book and nominationYour Answer Credit card, safe custody, safe deposit locker without any fee
Select The BlankQuestion Fixed interest rate Eurobond without the option to convert to equity is known as
________.Correct Answer Straight DebtYour Answer Interest rate swap
True/FalseQuestion An Indian importing goods from USA pays dollars in India.Correct Answer FalseYour Answer True
Match The FollowingQuestion Correct Answer Your Answer
PP Form Export Declaration form Export Declaration formHealth Certificate Fumigation certificate Export Declaration formCertificate of Inspection As per importers requirement Export Declaration formCertifiate of Origin Export Promotion Council Export Declaration form
Multiple Choice Multiple Answer
22
Question For issuing a Documentary credit The applicant is required to provide to theissuing bankdetails aboutCorrect Answer The purchase-sales contract, the mode of payment, the tenor of payment ,
The documents required, the names of authorities who would issue the documentsYour Answer The purchase-sales contract, the mode of payment, the tenor of payment ,
The track record of the buyer and seller
Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-Correct Answer It is an undertaking given by the openers bank to pay certain sum of
money , It is anundertaking given on behalf of a certain person to another person in different countryYour Answer It is an undertaking given on behalf of a certain person to another person in
differentcountry , It is a stamped agreement and is not valid unless it is signed by the issuer
True/FalseQuestion CFR = FOB plus freight paid by seller + insurance paid by seller.Correct Answer FalseYour Answer True
Select The BlankQuestion Even after liberalization of exchange controls, the Euro sterling market remained
volatilebecause of uncertainties in UK and gyrations of sterling against major ________ countriesCorrect Answer OECDYour Answer OPEC
True/FalseQuestion Integrated branches of Commercial banks handle forex transactions as well as
options, swaps,futures, arbitrage operationsCorrect Answer TrueYour Answer True
Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?Correct Answer Buffer Stock FacilityYour Answer Supplemental Reserve Policy
Multiple Choice Multiple AnswerQuestion What are the sources of raising funds for exports?Correct Answer Suppliers credit , ForfaitingYour Answer Suppliers credit , Forfaiting , Buyers credit , Foreign currency or Rupee
finance
True/FalseQuestion Normally the forward contracts are booked for making huge profits.Correct Answer FalseYour Answer False
True/FalseQuestion Head office of ICC is in Paris because of its First President Eliance Clementel.Correct Answer TrueYour Answer False
Select The BlankQuestion A ________ Bill of lading does not specify the terms and conditions of carriage.
23
Correct Answer Short FormYour Answer Short Form
Multiple Choice Single AnswerQuestion What is the volume of the world's total speculative transactions?Correct Answer Roughly 90 % of the total turnoverYour Answer 70% of the total turnover
True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate quotation.Correct Answer FalseYour Answer False
Select The BlankQuestion For setting up joint ventures abroad or equity participation abroad, EXIM bank
provides fundsunder ________ Scheme.Correct Answer Overseas investment facilityYour Answer Overseas investment facility
Multiple Choice Single AnswerQuestion Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by
the last week of Sept 2005. Give details of the forward contract he canbook :-Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, for
Euro 25000or less, for maturity last week of Sept.Your Answer He can book a contract for Forward Purchase, any time from May 2005 till Mid
Sept 2005,for Euro 25000 or less, for maturity last week of Sept.
Select The BlankQuestion In US Capital Market a Company prepares all the necessary documents in
advance of the public issue under the facility known as ________.Correct Answer Shelf RegistrationYour Answer Shell Registration
Multiple Choice Multiple AnswerQuestion Which common details will be available in any bill of Lading?Correct Answer Names of consigner, consignee , The port of loading and unloading,
contract of shipmentYour Answer Names of consigner, consignee , The port of loading and unloading, contract
of shipment ,The name of the vessel , The date of transportation and contract of transportation
Select The BlankQuestion Under the ________ standard the Country's Central Bank promised to buy back
the currency at certain rate of Gold.Correct Answer GoldYour Answer Interest
Select The BlankQuestion Short term instruments normally issued by corporate borrowers, forhigh values,
at a discount to face value are known as ________.Correct Answer Euro Commercial PapersYour Answer ADRs
Select The BlankQuestion The type of trade where a country sells orange juice in return for cars is known as
24
________.Correct Answer Counter TradeYour Answer Non money trade
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation
abroad ,Payment to EOUs in India for services rendered by themYour Answer Payment to EOUs in India for services rendered by them , Payment of Gifts of
GBP 5000 per year per donor
Multiple Choice Multiple AnswerQuestion Under the liberalisation through FEMA, what can an AD offer to the clients,
without the priorpermission of RBI or Government?Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and
forward rateagreementsYour Answer Caps and collars, and forward rate agreements , Good and competitive
exchange rates and cross currency rates
Multiple Choice Multiple AnswerQuestion Sterling Market is attractive for an international investor becauseCorrect Answer Gilts offer higher attractive margin , Choice of issuing medium term and longtermbondsYour Answer Choice of issuing medium term and long term bonds , Less controls and lessformalities to be completed , Linking of issues to currency swaps
Multiple Choice Single AnswerQuestion Under which contracts the seller pays the import duty for the buyer?Correct Answer DDPYour Answer DDP
True/FalseQuestion PP Form is required when exports are made to any country by post parcel on valuepayable basis.Correct Answer FalseYour Answer True
Multiple Choice Multiple AnswerQuestion What were the immediate causes of converting the group of 5 into group of 7 andconvenetheir meeting in late 1985?Correct Answer Many Industries in USA had become uncompetitive with imports , In USA
the Tradeprotectionnism had increasedYour Answer Many Industries in USA had become uncompetitive with imports , In USA the
Tradeprotectionnism had increased , The heads of G5 insisted to have a meeting , Failure of IMF tocontrolthe exchange rates
Multiple Choice Single AnswerQuestion What are the powers of money changers?Correct Answer Purchase and sell foreign currency notes and travellers chequesYour Answer Purchase and sell foreign currency notes and travellers cheques, give import
and export
25
finance
Multiple Choice Single AnswerQuestion Who can open an EEFC account?Correct Answer Individuals , firms, companies, resident in IndiaYour Answer Individuals , firms, companies, resident in India
Multiple Choice Single AnswerQuestion What is the role of ICC towards WTO?Correct Answer To provide world business recommendations to WTOYour Answer To further the cause of WTO
Match The FollowingQuestion Correct Answer Your Answer-Swap price Difference in prices of two legs of buying and selling Quoting rate for both buyingand selling a currency-Euro Market Market in Euro currencies Market in Euro currencies-Making market Quoting rate for both buying and sellinga currency Difference in prices of twolegs of buying and selling-Spread Price difference between bid and offer Maket of 'Euro'
Select The BlankQuestion Position in a currency is said to be ________, when sales equal purchases.Correct Answer SquareYour Answer Awkward
Select The BlankQuestion Hotels and Airline companies are allowed to receive payments in Indian rupees
from foreigntourist without insisiting on ________.Correct Answer Encashment certificateYour Answer Encashment certificate
Multiple Choice Multiple AnswerQuestion Why is Bill of Exchange a Quasi Negotiable Instrument?Correct Answer It represents title to goods , It is issued under Sale of Goods actYour Answer It represents title to goods , It is issued under Transportation act , It is issued
underBill of exchange act
Multiple Choice Single AnswerQuestion Which details about forward contracts do the Exchange Controls verify ?Correct Answer Particulars of cancellation of forward cover for the equivalent of USD
500,000Your Answer Details of all contracts booked and cancelled beyond a specified limit
Multiple Choice Single AnswerQuestion In the context of International economy ,the period between 1920s and 1930s is
known asCorrect Answer Great DepressionYour Answer Great Depression
Multiple Choice Multiple AnswerQuestion What do you understand by Commercial Risk?Correct Answer Protracted default by the buyer, Insolvency of the buyerYour Answer Protracted default by the buyer, Insolvency of the buyer
26
Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter bank transactions?
Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a marketintelligence cell to study and monitor developments in Forex Market
Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additionalforeign currency available to ADs at cheaper rates
Select The BlankQuestion ________ is the agency of ICC which deals with the maritime crime.
Correct Answer International Maritime Bureau
Your Answer International Maritime Bureau
Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?
Correct Answer Buffer Stock Facility
Your Answer Buffer Stock Facility
True/FalseQuestion Cross currency forward contract is not meaningful if original contract is in Rupees to
USDCorrect Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration date and time, the method ofpayment
Your Answer The exercise or strike price, the amount , The expiration date and time, the method ofpayment , The Market report of the exchange which trades the option
Multiple Choice Single AnswerQuestion Which is the most actively traded currency in the international market today?
Correct Answer US Dollar
Your Answer US Dollar
Match The FollowingQuestion Correct Answer Your Answer
Intolerable risk Drop the investment project Drop the investment project
Country risk analysis Cost of evluation does not justifyanalysis
Cost of evluation does not justifyanalysis
Stock market analysis Banks are ahead Factors' values
27
Weightages % Factors' values 100% of total
Select The BlankQuestion Global capital market can be understood from the study of ________.
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside thecountry
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside thecountry
Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will be exchanged on :-
Correct Answer Monday
Your Answer Monday
Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee came from June 92?
Correct Answer Other managed Floating
Your Answer Pegged to Single currency
Match The FollowingQuestion Correct Answer Your Answer
Maturity of future Time when actual commodity isdelivered
Last date of exercising option
Note issuance facility Euronotes Euronotes
Bearer security issued in currencyother than that of the country ofissue
Eurobonds Eurobonds
Margin on future Peformance bond or securitydeposit
Peformance bond or securitydeposit
True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.
Correct Answer False
Your Answer False
True/FalseQuestion The Prominent non banking financial institutions participating in the FOREX markets are
Pension funds, mutual funds, insurance Cos.Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
28
Question What are margins, with reference to futures market?
Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvencyfor honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvencyfor honouring contracts
Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in foreign exchange?
Correct Answer USD 1 trillion
Your Answer USD 1 trillion
Multiple Choice Single AnswerQuestion NIF is basically an agreement :-
Correct Answer By underwriting bank to support funding for a certain period, against which borrowerscan issue short term papers
Your Answer Which enables the investor to market the same in the secondary market
Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of seven central Banks taken
togeather in mid 1992?Correct Answer USD 275 Billion
Your Answer USD 275 Billion
Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an exporter?
Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer Preshipment credit up to six months for construction and turnkey projects abroad
Select The BlankQuestion Over the years ________has been the most widely accepted currency in international
capital market.Correct Answer American Dollar
Your Answer American Dollar
Select The BlankQuestion As a result of the world wars in the 20th century the ________ of most of the countries
suffered heavily.Correct Answer Economies
Your Answer Currencies
Multiple Choice Single AnswerQuestion Which currency is traded in one leg of about 70% of the world's transactions?
Correct Answer US Dollar
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Your Answer US Dollar
Select The BlankQuestion ________ is the acid test for events to be included in country risk.
Correct Answer Control by Government'
Your Answer Recurrence
Select The BlankQuestion The Trans European Automated Real Time Gross Settlement Express Transfer is popular
in ________.Correct Answer Brussels
Your Answer Brussels
Multiple Choice Single AnswerQuestion What is Risk Syndication facility?
Correct Answer Sharing of risk of non payment by supplier
Your Answer Sharing risk of Non payment by the Syndicate of Banks giving loans
True/FalseQuestion If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True
Your Answer True
Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-
Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is anundertaking given on behalf of a certain person to another person in different country
Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is anundertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them
True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer True
Your Answer True
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True/FalseQuestion There is no difference between CIP and CIF contracts except the mode of transportation.
Correct Answer True
Your Answer True
Multiple Choice Single AnswerQuestion Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
Select The BlankQuestion When an Indian Company earns at least 50% of its average turnover from a particular
activity then that activity is considered as ________.Correct Answer Core activity
Your Answer Primary activity
Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.
Correct Answer An Irrevocable credit
Your Answer An Irrevocable credit
True/FalseQuestion The volume of trading of Derivatives in the world trade market is growing but still only
5% of the total.Correct Answer False
Your Answer False
Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the
offered rate for Rs?Correct Answer USD 1=Rs 50.5000
Your Answer USD 1=Rs 50.5000
Multiple Choice Multiple AnswerQuestion Export finance
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand
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Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations ,Which have greater intrinsic value
Multiple Choice Multiple AnswerQuestion What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised inworld capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised inworld capital market
Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?
Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recentlyfloated issue
Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recentlyfloated issue
Select The BlankQuestion Short term instruments normally issued by corporate borrowers, forhigh values, at a
discount to face value are known as ________.Correct Answer Euro Commercial Papers
Your Answer Euro Commercial Papers
Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for assessing a cross border project
?Correct Answer To weed out unviable projects and rank profitable ones
Your Answer To weed out unviable projects and rank profitable ones
Multiple Choice Single AnswerQuestion Examples of hedge are:
Correct Answer Buy when you are having short position
Your Answer Buy when you are having short position
Multiple Choice Multiple AnswerQuestion What is the effect of cross currency option on the customer?
Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement ofrates between 3 currencies
Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement ofrates between 3 currencies
Select The BlankQuestion Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer Discount
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Your Answer Discount
Multiple Choice Single AnswerQuestion Why does a person need protection from unfavourable movement of exchange rate?
Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Multiple Choice Single AnswerQuestion The capital market is said to be volatile when
Correct Answer Prices of capital market instruments change and are expected to change drastically
Your Answer Prices of capital market instruments change and are expected to change drastically
True/FalseQuestion JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer False
Multiple Choice Multiple AnswerQuestion What is the criteria for an Indian Company for Direct Investment abroad?
Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum$ 100 million or equivalent
Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum$ 100 million or equivalent , Indian co should not have been black listed