11. Which of the following exactly define the meaning of Mezzanine Financing?
[A] It is a hybrid of debt and equity financing.
[B] It is the highest-risk form of debt, but it offers some of the highest returns.
[C] It allows companies with less collateral to secure funding for growth.
[D] All of the Above
Show Answer
Correct Answer: D [All of the Above]
Notes:
Mezzanine capital is any subordinated debt or preferred equity instrument that represents a claim on a company’s assets .Mezzanine financings can be structured either as debt or preferred stock.
12. Which of the following best define the term Relationship discount?
[A] It is given to the couple applying for personal loans.
[B] It is an additional benefit by banks.
[C] It is given to a prospective applicant if they have a pre-existing relationship with the lender.
[D] Both b and c
Show Answer
Correct Answer: D [Both b and c]
Notes:
Relationship discount is an additional benefit that is provided by the banks or lenders to a prospective applicant if they have a pre-existing relationship with the lender. Relationship discounts may result in the lender providing borrower with discounts when applying for the loan .
13. Which of the following are the ways to repay the personal loan?
[A] Equated Monthly Installments via Cheques
[B] Electronic Clearing Services
[C] Cash
[D] Both a and b
Show Answer
Correct Answer: D [Both a and b]
Notes:
The loan can be repaid in the form of Equated Monthly Installment (EMI) via post-dated cheques drawn in favour of the bank or by releasing a mandate allowing payment through the Electronic Clearing Services (ECS) system.
14. What are the Pre-Payment charges applied on paying personal loan before tenure period.
[A] 10% of the Principal
[B] 5% of the Principal
[C] 1-2% of the Principal
[D] 7% of the Principal
Show Answer
Correct Answer: C [1-2% of the Principal]
Notes:
To pay off your personal loan before the loan tenure is completed, one get charged an additional fee termed as pre-payment charge. This pre-payment penalty usually ranges between 1% and 2% of the principal outstanding.
15. Which of the following organizations is the Mutual Fund market regulator in India?
[A] SEBI
[B] RBI
[C] ICICI
[D] CIBIL
Show Answer
Correct Answer: A [SEBI]
Notes:
As far as Mutual funds are concerned, SEBI makes the policies for mutual funds and also regulates the industry. It lays guidelines for the mutual funds to safeguard the investors’ interest.
16. Which of the following mutual funds solely invests in stocks?
[A] Bond Fund
[B] Fixed Income Fund
[C] Money Market Mutual Fund
[D] Equity Fund
Show Answer
Correct Answer: D [Equity Fund]
Notes:
An equity fund invests 60% or more of its assets primarily in equity shares of companies .An equity investment refers to the buying and holding of shares of stock on a stock market by individuals and firms .
17. Mutual funds in India are permitted to invest in which of the following?
[A] Securities
[B] Securities and Gold
[C] Securities other than Real Estate
[D] Securities, Gold and Real Estate
Show Answer
Correct Answer: D [Securities, Gold and Real Estate]
Notes:
Mutual funds in India are permitted to invest in Securities, Gold and Real Estate. A mutual fund is prohibited from investing in any unlisted security or a security issued through private placement by an associate or a group company of the sponsor.
18. National Housing Bank was set up on July 9, 1988 under which among the following acts?
[A] National Housing Bank Act, 1985
[B] National Housing Bank Act, 1986
[C] National Housing Bank Act, 1987
[D] None of the Above
Show Answer
Correct Answer: C [National Housing Bank Act, 1987]
Notes:
NHB is wholly owned by Reserve Bank of India, which contributed the entire paid-up capital. The Head Office of NHB is at New Delhi. NHB was set up on July 9, 1988 under the National Housing Bank Act, 1987.
19. Which of the following clearly define Direct Housing Finance?
[A] It refers to the finance provided to individuals or groups of individual including co-operative societies.
[B] It is channeled by the way of terms of loans to housing finance institutions, housing boards etc.
[C] Bank finance extended to a person who is already owning a house in the town of village.
[D] Both a and c
Show Answer
Correct Answer: D [Both a and c]
Notes:
Direct Housing Finance refers to the finance provided by banks to individuals or groups of individuals including co-operative societies for acquisition/construction of accommodation.
20. What is the time period for a Short term corporate loan?
[A] 1 Year
[B] 18 Months
[C] Both a and b
[D] None of the above
Show Answer
Correct Answer: C [Both a and b]
Notes:
A short-term loan, usually offered to firms that don’t qualify for a line of credit. It generally runs less than a year, though it can also refer to a loan of up to 18 months or so.
