Quiz on Banking & Economic Awareness

1. We sometimes read in newspapers/magazines about ‘Sovereign Wealth Funds’. Which of the following best defines the same?

(A) These are the funds which are created to finance relief work, bailout packages and other emergency activities.
(B) These are the funds of the government or the central bank of a country which are invested further to earn profitable returns.
(C) These are the funds which are accumulated by some people and not put on active circulation as they retain the funds as Black Money.

• 1) Only (A)
• 2) Only (B)
• 3) Only (C)
• 4) Only (A) and (C)
• 5) None of these

2. Examine the following policies related to the financial sector:

(A) Restrictive Trade Practices

(B) Financial Deficit Management

(C) Capital Account Convertibility

Which of the above policies is/are basically designed to transfer local financial assets into foreign financial assets freely and at market-determined exchange rates?

• 1) Only (A)
• 2) Only (B)
• 3) Only (C)
• 4) All the above
• 5) None of the above

3. Consider the following statements with respect to NABARD:

(A) It inspects RRBs and Cooperative Banks.

(B) It maintains Research and Development Fund to promote research in agriculture and rural development.

(C) It accepts short-term deposits from the public like any other bank to improve its capital base.

Which of the above statements is/are correct?

• 1) Only (A)
• 2) Only (B)
• 3) Only (C)
• 4) Only (A) and (B)
• 5) All the above

4. We often read in financial newspapers that the RBI has revised certain rates/ratios under LAF. What is the expanded form of LAF?

• 1) Legal Adjustment Facility
• 2) Liquidity Adjustment Facility
• 3) Long-term Adjustment Facility
• 4) Liquidity Adjustment Formality
• 5) None of these

5. In the event of winding up of a bank how are the interests of the depositors protected in the eyes of the law? Choose the correct option(s):

(A) Depositors will receive up to `10,000, irrespective of the size of their deposit in the bank.

(B) The small depositors are given full assurance as all such deposits (up to `1 lakh) are fully insured by the DICGC.

(C) Depositors’ money gets precedence over the bank’s capital and depositors will incur loss only if the bank’s losses are more than its capital.

• 1) Only (A)
• 2) Only (B)
• 3) Only (C)
• 4) Only (B) and (C)
• 5) None of these

6. Which of the following is/are considered as the consumer information source(s)?

• 1) Personal and commercial sources
• 2) Public sources
• 3) Experiential sources
• 4) Only 1) and 2)
• 5) Only 1) and 3)

7. What do you mean by Zero-Based Budgeting?

• 1) Every year the budget starts from a scratch.
• 2) Making provisions to reduce the expenses to almost zero level
• 3) Managing the expenses required for the upcoming year with zero net income
• 4) Compromising with a situation of no profit and no loss
• 5) None of these

8. In case you plan to promote a customer, who amongst the following is a customer as defined by a bank?

• 1) A person who is regularly getting bank drafts issued
• 2) A person regularly maintaining a loan/deposit account
• 3) A person regularly visiting a bank branch
• 4) A person regularly getting bank drafts encashed
• 5) None of these

9. What is the meaning of MIS for an economic organisation like a bank?

• 1) Management of Information of Sales
• 2) Middle Income Scheme
• 3) Marketing Information System
• 4) Management Information System
• 5) None of these

Answers :-2
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