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According to you what is meant by the term 'limited liability company'?
An enterprise that blends elements of partnership and banking structures.
An enterprise that blends elements of proprietorship and partnership structures.
An enterprise that blends elements of proprietorship and corporate company structures.
An enterprise that blends elements of partnership and corporate company structures.

Identify the statement that is incorrect with regards to a limited liability company?
A limited liability company is a legal form of a company that provides limited liability to its owners.
It is an enterprise that blends elements of proprietorship and corporate company structures.
In a limited liability company the liability of the shareholders is limited to the contribution of face value of its shares.
A limited liability company has the status of the legal person.

A financial intermediary acts as a bridge between net savers and net borrowers in an economy. Who among the following are the major savers in an economy?
Government
Non-resident Individuals (NRIs)
Households
Corporates

A financial intermediary acts as a bridge between net savers and net borrowers in an economy. Who among the following are the major borrowers in an economy?
Small and Medium Enterprises (SMEs)
Non-resident Individuals (NRIs)
Households
Corporates

Which of the below is the major source of income for banks?
Spread between the borrowing costs and income from lending.
Profits earned from investments made in primary and secondary markets.
Interest income earned from Government Securities.
Income earned from providing various services to customers.

The RBI has made it mandatory for commercial banks to maintain a certain percentage of their funds in liquid assets such as cash and liquid short term investments. This protects the banks from getting exposed to _________.
Credit risk
Interest rate risk
Liquidity risk
Market risk

If I fail to repay the personal loan taken from XYZ bank ,which of the below risk is XYZ Bank exposed to
Credit risk
Interest rate risk
Liquidity risk
Market risk

______________ is the risk of default in loan repayment due to loss in balance sheet position arising from movement in market prices.
Credit risk
Interest rate risk
Liquidity risk
Market risk

Commercial banks are exposed to various types of risks. Due to which of the following reasons can commercial banks get exposed to credit risk?
Investment is long term assets
Failure of or downturn in the business
Change in interest rates in the market
Change in foreign exchange rates

If a large number of investors start making large withdrawals from a bank at the same time, it can expose the bank to liquidity risk. Which of the below factor can expose the bank towards liquidity risk?
Large investments in long term assets
Failure of or downturn in the business
Change in interest rates in the market
Change in foreign exchange rates

Which of the below factor can expose the bank to market risk?
Large investment in long term assets
Failure of or downturn in the business
Intended default by the debtor
Change in interest rates in the market

From which of the following services do banks earn net interest income?
Treasury services
Borrowing and lending services
Underwriting services
Sale of third party products

Mutual funds are regulated by ________.
RBI
PFRDA
IRDA
SEBI

Banks earn fee based income from locker services
True
False

_________ is a market for dealing with short term financial assets and securities.
Stock market
Commodity market
Currency market
Money market

What is the maximum tenure of money market instruments?
Six months
One year
5 years
15 years

Which of the following market deals in long term securities?
Currency market
Commodity market
Capital market
Money market

Banks earn net interest income from their borrowing and lending operations.
True
False

Which of the following is a money market instrument?
Commercial paper
G-secs
Bank fixed deposits
Corporate fixed deposits

Which of the following is a debt market instrument?
Certificate of deposit
Commercial paper
Treasury bill
G-secs

In which of the following markets can gold be traded?
Money market
Commodity market
Foreign exchange market
Debt market

In the earlier days coins were accepted as money. Which of the below statement was correct with regards to acceptance of coins as money?
Coins were accepted at their nominal value and transactions involved neither weighing nor counting.
Coins were accepted at their nominal value and transactions involved weighing rather than counting.
Coins were accepted at their nominal value and transactions involved counting as well as weighing.
Coins were accepted at their nominal value and transactions involved counting rather than weighing.

Which of the following is an asset for a bank?
FCNR deposit
Term deposit
Retail loan
RFC FD

_________ is small value credit extended to individuals for consumption and lifestyle assets.
Business loan
Retail credit
Corporate loan
Priority sector loan

_________ are provided by banks for purchase of fixed assets such as plant and machinery.
Retail credit
Credit cards
Term loans
Priority sector loans

__________ is provided by banks for meeeting operational expenses of day to day working.
Retail credit
Priority sector loan
Term loan
Working capital finance

At what rate does the Reserve Bank rediscount bills of exchange?
Repo rate
Reverse repo rate
Bank rate
Inter-bank call money rate

To control liquidity in the market, open market operations(OMO) are carried out by RBI. As part of OMOs, by which of the following ways can the Reserve Bank reduce the money in circulation?
By buying Government securities
By selling Government securities
By rediscounting bills of exchange
By increasing CRR

Which of the below statement is incorrect?
Credit card enables the cardholder to avail credit for a certain number of days.
In case of credit card transactions, the bank makes the payment to the merchant and recovers the amount from the card holder by raising a bill.
In case of debit cards, the cardholder can use the card only to the extent of balance available in the account.
Debit card is based on the principle of 'spend now and pay later'.

Praveen has issued a bill of exchange directing XYZ Bank Limited to pay Rs. 1000 to Rakesh. Identify which of the below statement is correct.
Praveen is the drawee, XYZ Bank is the drawer and Rakesh is the payee.
Praveen is the drawer, XYZ Bank is the drawee and Rakesh is the payee.
Praveen is the drawer, XYZ Bank is the payee and Rakesh is the drawee.
Praveen is the drawee, XYZ Bank is the payee and Rakesh is the drawer.

Which of the following cannot be deposited in an NRO savings account?
Rent earned in India
Sale proceeds of investment made in India
Foreign inward remittance in the individual's name
Foreign income earned by the individual outside India

Identify which of the below statement is correct.
Interest earned on NRO account is fully exempted from income tax in India.
Interest earned on NRE account is fully exempted from income tax in India.
Interest earned on NRE account as well as NRO account is fully exempted from income tax in India.
Neither the interest earned on NRE account nor the interest earned on NRO account is fully exempted from income tax in India.

Mr. Kapoor is a NRI who has recently returned from the US. He wants to deposit his US Dollars in a savings account maintained in US dollars in India. Which of the following accounts can Mr. Kapoor choose?
NRO
NRE
FCNR
RFC

Foreign Currency Non Resident (FCNR) account cannot be opened as savings account.
True
False

Which of the following is not a financial instrument ?
Cheque
Demand Draft
Currency
Gold jewellery

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Mahendra Singh

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