HEC GROUP OF INSTITUTIONS, HARIDWAR

TEST SERIES -1

(2020-2021)

B.COM HONS. VTH SEM

FINANCIAL MARKET AND INSTITUTION

Q.NO. 1 – Which of the following describe financial system.

(A) Various financial institution and markets of a country.

(B) Organised and un – organised sectors.

(C) Central bank of a country.

(D) none of the above.

Q.NO. 2 – Following are given a assertion and a reason choose the correct answer.

STATEMENT (I)- A well structured banking system is necessary for development of a

country. However unorganised institutions are also part of this system.

STATEMENT (II) – A financial system includes both organised and unorganised institution.

(A) Both statements are true.

(B) Statement I is true but II is false
(C) Both statement are false.
(D) Statement II is true but I is false.

Q.NO. 3 – Which of the following are apex institutions of a Indian economy.

(A) RBI, SEBI ,BSE, NHB, IRDA

(B) BSE, NSE, IRDA, NHB, NBFC

(C) A and B both are correct

(D) UTI, NBFC, BSE, FCI, NABARD,

Q.NO.4 – Which of the following are necessary for development of a economy.

 (A) A well structured financial system

(B) A group of commercial bank

(C) Stock exchange

(D) None of the above

Q.NO.5 Financial system includes.

(A) central bank of country, banking and non – banking institution and money market.

(B) Apex institutions of country, banking and non – banking institutions and money
market and capital market.

(C) a and b both

(D) option b and unorganised sectors of a country.

Q.NO.6 Name of two important policies that regulate Indian economy.

(A) Fiscal policy, Monetary policy , Five year plans

(B) Monetary policy, Budget of central government, income tax act

(C) only monetary policy and fiscal policy

(D) None of the above

Q.NO.7 Financial intermediaries are :

(A) Banking and non – banking companies

(B) Only financial markets

(C) Money market and capital market and other financial institutions

(D) none of the above

Q.NO. 8 Establishment of RBI.

(A) 1 April 1935

(B) 1 April 1934

(C) 1 April 1933

(D) none of the above

Q.NO. 9 Headquarter of the reserve bank of India

(A) Delhi

(B) Mumbai

(C) Chennai

(D) none of the above

Q.NO. 10 Number of regional offices of RBI.

(A) 15

(B) 4

(C) 19

(D) 3

Q.NO. 11 Which of the following commission is behind the establishment of RBI.

(A) Hilton young commission

(B) Kothari commission

(C) both a and b

(D) none of the above

Q.NO. 12 Assertion (A) – Reserve bank of India is a important institution that control the
activities of FEMA (foreign Exchange management act).

Reason (R) – On the behalf of controller of FEMA and foreign currency RBI has the power
to manage these kind of acts.

Choose the correct option:-

(A) A and R both are true and R is the correct explanation of A.

(B) A and R both are false
(C) A and R both are true but R is not the correct explanation of A.
(D) A is false but R is correct.

Q.NO. 13 National housing bank (NHB) was established in 1987 as wholly owned subsidiary
of which of the following?

(A) State bank of India

(B) Life insurance corporation of India

 (C) Reserve bank of India

(D) Industrial finance corporation of India

Q.NO.14 Lender of the last resort is.

(A) RBI
(B) NABARD
(C) SBI
(D) COMMERCIAL BANKS

Q.NO. 15 A sound economic policy of any government ordinarily entails in it.

(A) Welfare of people

(B) Growth of GDP and national income etc.
(C) Fair distribution of wealth
(D) All of the above

Q.NO.16 Which of the following measures is not adopted by RBI for controlling credit in
India?

(A) Cash deposit ratio

(B) Capital adequacy ratio
(C) Cash reserve ratio
(D) Statutory liquidity ratio

Q.NO. 17 The system of note issue adopted by RBI is.

(A) Proportional reserve method

(B) Minimum reserve method
(C) Partly proportional reserve method and partly minimum reserve method
(D) None of the above

Q.NO. 18 monetary policy is prepared and declared by.

(A) Govt. of India

(B) RBI
(C) State govt.
(D) SBI

Q.NO. 19 Which of the following limits the power of credit creation by commercial banks?

(A) Fiscal policy

(B) Banking laws
(C) REPO rates
 (D) Monetary policy

Q.NO. 20 Which of the following is not the functions of a central bank?

(A) Monopoly of the issuing currency

(B) Credit creation
(C) Custodian of foreign exchange funds
(D) None of these above

Q.NO. 21 If bank rate is reduced by RBI, credit creation will be

(A) Reduced
(B) Constant
(C) Increased
(D) None of the above

Q.NO.22 Qualitative credit control include.

(A) Bank rate policy

(B)Rationing of credit

(C)Open market operations

(D)None of the above

Q.NO.23 At which of the following rate the central bank lends to banks against governmental
securities.

(A) Repo rate

(B) Bank rate
(C) SLR
(D) Reverse repo rate

Q.NO.24 Which of the following is not the the fund based activity of commercial banks.

(A) Issuing the letter of the credit

(B) Bank overdraft
(C) Acceptance of deposit
(D) RTGS and NEFT

Q.NO. 25 When RBI reduces CRR , it results into :

(A) Increase in lendable resources

(B) Decrease in lendable resources
(C) Decrease in Deposits
(D) Increase in deposits
Q.NO.26 Which one of the following is not the function of the reserve bank of india.

(A) Issue of bank notes

(B) Custodian of cash reserves of commercial banks
(C) Accepting deposits and advancing loans to public
(D) Controller of the credit

Q.NO. 27 Which of the following methods indicates quantitative methods of control of credit
creation practiced by the reserve bank of India.

(A) Bank rate

(B) Open market operations
(C) Variable reserve ratio
(D) Credit rationing

Codes-

(A) a,b,c
(B) a,b,d
(C) b,c,d
(D) a,c,d

Q.NO. 28 Reserve bank of India controls the activities of some of the following banks in
India:

i. Commercial banks
ii. Cooperative banks
iii. Foreign banks
iv. Rural banks

Codes-

(A) i, ii,iii
(B) i,ii,iv
(C) ii,iii,iv
(D) i,ii,iii,iv

Q.NO. 29 The Repo rate and Reverse repo rates are resorted to by the RBI as a tool of

(A) Credit control

(B) Settlement system
(C) Currency Management
(D) Liquidity control

Q.NO.30 Reserve bank of India was nationalized on

(A) January 26 , 1948

(B) January 01, 1949
 (C) January 26, 1950
(D) January 01, 1956

Q.NO. 31 Repo rate is the rate on

(A) Commercial banks borrow money from RBI

(B) RBI borrow money from commercial banks
(C) Govt. borrow money from RBI.
(D) One commercial bank lends money to other bank.

Q.NO. 32 In CRR (c) refers to :

(A) Cash
(B) Commission
(C) Customer
(D) Credit

Q.NO.33 Open market operation is the part of :

(A) Fiscal policy

(B) Credit control
(C) Budgetary control
(D) Marketing Policy

Q.NO. 34 Inflation beneficial for:

(A) Business owners

(B) Consumers
(C) A and B both
(D) None of the above

Q.NO. 35 Causes of deflation in economy:

(A) Increase in money supply

(B) Low production
(C) Budget deficit
(D) All of the above