Banking & Financial Awareness MCQ Set-1

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

Q.1 Banking falls into which of the following sector of an economy?

A. Primary

B. Secondary

C. Tertiary

D. None of these

Answer: C. Tertiary

Note: Banking, Entertainment, Transport, Communication etc. falls into the tertiary or service sector of an economy.

Q.2 Which among the following is CORRECT?

I. Economic growth is a quantitative aspect.

II. Economic development is a qualitative aspect.

III. Economic growth is measured by flow of goods and services produced by an economy.

IV. Economic development is the growth accompanied by welfare of equity.

A. Only I

B. Only II

C. Both I & II

D. I, II, III and IV

Answer: D. I, II, III and IV

Q.3 Which among the following is CORRECT about equity?

A. Equity = Assets – Net Expenses

B. Equity = Assets – Liabilities

C. Equity = Net Revenues – Net Expenses

D. None of these

Answer: B. Equity = Assets – Liabilities

Q.4 Which among the following is CORRECT about cash ratio?

A. Cash Ratio = Cash in Hand / Cash in Stock

B. Cash Ratio = Cash / Expenses

C. Cash Ratio = Cash / Current Liabilities

D. None of these

Answer: C. Cash Ratio = Cash / Current Liabilities

Q.5 Which is the CORRECT formula of Debt-to-Equity Ratio?

A. Debt-to-Equity Ratio = Total Loan /Total Cash

B. Debt-to-Equity Ratio = Total Liabilities /Total Equity

C. Debt-to-Equity Ratio = Total Liabilities /Total Cash

D. None of these

Answer: B. Debt-to-Equity Ratio = Total Liabilities /Total Equity

Q.6 Which among the following is a liability?

A. Salaries and Wages

B. Owning a land

C. Certificates of deposits

D. Inventory

Answer: A. Salaries and Wages

Q.7 Which of the following is the CORRECT formula for profit margin?

A. Profit Margin = Total Sales / Total Expenses

B. Profit Margin = Net Income /Sales

C. Profit Margin = Net Income /Total Expenses

D. None of these

Answer: B. Profit Margin = Net Income /Sales

Note: Net Income = Revenues – Expenses

Q.8 Which among the following is a Economic Growth Measure?

A. Human Development Index

B. Human Poverty Index

C. Infant Mortality

D. GDP shown by PPP

Answer: D. GDP shown by PPP

Q.9 Who among the following in India attempted to measure National Income for the first time?

A. Dadabhai Naroji

B. Jawaharlal Nehru

C. Jamshedji Tata

D. None of these

Answer: A. Dadabhai Naroji

Note: Dadabhai Naroji elaborated the wealth-drain due to the British Raj through his book “Poverty and UN-British Rule in India”. He estimated the per capita annual income to be Rs. 20 in 1863. The first scientific attempt to measure national income in India was made by Prof. VKRV Rao in 1931-1932.

Q.10 India’s National Income Committee was formed in 1949 under the chairmanship of:

A. Prof. VKRV Rao

B. Prof. DR Gadgil

C. Prof. PC Mahalanobis

D. None of these

Answer: C. Prof. PC Mahalanobis

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