Banking & Financial Awareness MCQ Set-15

Find out the most important Financial Awareness MCQ for RRB, SBI PO, IBPS PO, Insurance examinations and various other competitive examinations of the BFSI sector in India.

Q.1 The rating score by Credit Rating Agencies is denoted through which of the following symbol?

A. Numeric symbol

B. Simple Alphanumeric Symbol

C. Special Symbol

D. None of these

Answer: B. Simple Alphanumeric Symbol

Note: A credit rating agency is an entity that assesses the ability and willingness of the issuer company for timely payment of interest and principal on a debt instrument. Rating is denoted by a simple alphanumeric symbol, e.g. AA+, A-, etc.

Q.2 Mutual fund was introduced in India in which of the following year?

A. 1963

B. 1972

C. 1949

D. 1992

Answer: A. 1963

Note: When the Government of India launched Unit Trust of India (UTI) in 1963 through the Unit Trust of India Act of 1963, the mutual fund was introduced in India. In 2003, The Unit Trust of India Act 1963 was repealed, paving way for the bifurcation of UTI into Specified Undertaking of Unit Trust of India (SUUTI) and UTI Mutual Fund (UTIMF).

Q.3 Which of the following type of Mutual Fund solely invests in stocks?

A. Gilt Fund

B. Balanced Fund

C. Equity Fund

D. Liquid Fund

Answer: C. Equity Fund

Note: Equity funds are one of the most popular mutual fund schemes. They allow investors to participate in stock markets. Though categorized as high risk, these schemes also have a high return potential in the long run.

Q.4 Which of the following type of Mutual Fund only invests in government securities?

A. Gilt Fund

B. Balanced Fund

C. Liquid Fund

D. Fixed Income or Debt Mutual Fund

Answer: A. Gilt Fund

Note: Gilt funds invest only in government securities. They are preferred by investors who are risk-averse and want no credit risk associated with their investment.

Q.5 The Certificate of Initial Registration for an underwriter with SEBI remains valid for how many years?

A. 5 years

B. 6 years

C. 8 years

D. 10 years

Answer: A. 5 years

Q.6 Which among the following is CORRECT about Balloon Loan?

I. It is a short-term & intermediate-term loan

II. In balloon loans, a portion of the loan’s principal balance is amortized over that period and the remaining balance is due as a final payment at the end of the term.

III. It is a long-term loan

A. Only I

B. Only II

C. Both I & II

D. Both II & III

Answer: C. Both I & II

Q.7 Which of the following type of banking deals with corporations and high-net-worth individuals (HNWI) but not with general public?

A. Wholesale Banking

B. Merchant Banking

C. Narrow Banking

D. Retail Banking

Answer: B. Merchant Banking

Note: The term merchant bank refers to a financial institution that conducts underwriting, loan services, financial advising, and fundraising services for large corporations and high-net-worth individuals (HWNIs). Merchant banks are experts in international trade, which makes them specialists in dealing with multinational corporations. Unlike retail or commercial banks, merchant banks do not provide financial services to the general public. Some of the largest merchant banks in the world include J.P. Morgan Chase, Goldman Sachs, and Citigroup. Source- Investopedia

Q.8 What is the type of banking that offers services to larger customers or organizations such as mortgage brokers, large corporate clients, mid-sized companies, etc.?

A. Wholesale Banking

B. Merchant Banking

C. Narrow Banking

D.Retail Banking

Answer: A. Wholesale Banking

Q.9 Which of the following is the largest cooperative bank in India?

A. Saraswat Cooperative Bank

B. Cosmos Cooperative Bank

C. Bharat Cooperative Bank

D. Punjab & Maharashtra Co-operative Bank

Answer: A. Saraswat Cooperative Bank

Note: Saraswat Co-operative Bank Ltd. is an urban co-operative banking institution, having its headquarter in Mumbai, Maharashtra, India and operating as a co-operative society since 1918.

Q.10 Which of the following RRB is the first to enable the core banking solution platform?

A. Assam Gramin Vikash Bank

B. Rushikulya Gramya Bank

C. Telangana Grameen Vikas Bank

D. Prathama Bank

Answer: B. Rushikulya Gramya Bank

Note: Rushikulya Gramya Bank (RGB) has become the first regional rural bank (RRB) in Orissa with a full core banking solution in February 2011.

List of Banking & Financial Awareness MCQ sets from GKLead.com

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