Quiz 109 : Finance & Economy Current Affairs for Bank PO
First Published: May 28, 2009 | Last Updated:June 10, 2019
1. Which among the following would follow when RBI cuts the CRR?
[A] Stress on money markets would increase
[B] Stress on money markets would decrease
[C] Banks will need to invest more in Government Securities
[D] Banks will need to increase the interest rates
Show Answer
Correct Answer: B [Stress on money markets would decrease]
Notes:
cash reserve ratio — the portion of deposits that banks keep in cash with the central bank — to ease the strain in money markets.
2. Consider the following countries:
- Cambodia
- Malaysia
- Indonesia
- Myanmar
Which among the above are members of Both ASEAN and East Asia Summit?
[A] 1 & 2
[B] 2 & 3
[C] 1, 2 & 3
[D] 1, 2, 3 & 4
Show Answer
Correct Answer: D [1, 2, 3 & 4]
Notes:
Association of South-East Asian Nations (ASEAN) is comprised of Indonesia, Singapore, Philippines, Malaysia, Brunei, Thailand, Cambodia, Lao PDR, Myanmar and Vietnam.
East Asia Summit (EAS) is a grouping of 18 countries in the East Asian, Southeast Asian and South Asian regions. Its members include 10 ASEAN members along with India, China, Australia, Japan, New Zealand, the Republic of Korea, United States and Russia.
3. Which among the following gives a precise definition of” Arbitrage” in Financial World?
[A] To profit from an existing discrepancy among prices, exchange rates, and/or interest rates on Different Markets without risk of these changing
[B] To profit from an existing discrepancy among prices, exchange rates, and/or interest rates on Same market without risk of these changing
[C] To profit from an existing discrepancy among prices, exchange rates, and/or interest rates on new techniques or products in same market.
[D] All the above
Show Answer
Correct Answer: A [To profit from an existing discrepancy among prices, exchange rates, and/or interest rates on Different Markets without risk of these changing]
4. RBI uses the policy instrument Reverse Repo for which of the following reasons?
- To increase the liquidity of commercial banks
- To absorb liquidity from commercial banks
- To reduce the fiscal deficit of central Government
Choose the correct option:
[A] 1 & 2
[B] 2 & 3
[C] 1, 2 & 3
[D] 1 & 3
Show Answer
Correct Answer: A [1 & 2]
Notes:
Reverse repo rate is the rate of interest at which the RBI borrows funds from other banks in the short term. This is done by RBI selling government bonds / securities to banks with the commitment to buy them back at a future date. The banks use the reverse repo facility to deposit their short-term excess funds with the RBI and earn interest on it. RBI can reduce liquidity in the banking system by increasing the rate at which it borrows from banks. Hiking the repo and reverse repo rate ends up reducing the liquidity and pushes up interest rates.
When the RBI increases the Reverse Repo, it means that now the RBI will provide extra interest on the money which it borrows from the banks. An increase in reverse repo rate means that banks earn higher returns by lending to RBI. This indicates a hike in the deposit rates.
5. Exchangeable Bonds are Bonds which can be exchanged with________?
[A] Equity Shares of a single company
[B] Equity Shares of a group company
[C] Both of them
[D] None of the above
Show Answer
Correct Answer: B [Equity Shares of a group company]
6. Which of the following is / are traded on National Spot Exchange of India?
- Shares
- Commodities
- Bonds
Choose the correct option:
[A] 1 & 2 Only
[B] 2 & 3 Only
[C] 2 only
[D] 1 & 3 Only
Show Answer
Correct Answer: C [2 only]
Notes:
National Spot Exchange Limited (NSEL) is a Commodities exchange in India, and is a joint venture of Financial Technologies (India) Ltd. (FTIL) and National Agricultural Cooperative Marketing Federation of India (NAFED). The exchange launched its live trading operations in different commodities on October 15th 2008.
7. Which among the following defines Hyperinflation?
[A] Cumulative inflation rate over three years approaching 100% to “inflation exceeding 50% a month
[B] Cumulative inflation rate over five years approaching 100% to “inflation exceeding 50% a month
[C] Growth in Inflation Level of 100 % in 3 years
[D] Growth in Inflation Level of 100 % in 1 year
Show Answer
Correct Answer: A [Cumulative inflation rate over three years approaching 100% to “inflation exceeding 50% a month]
Comments
deep-end-u
FIEO:-
Federation of Indian Export Organisations.setup in Oct,1965
PS
The answer to Q.10 should be “2 only”. Reverse Repo is used by the RBI to pull out liquidity from the commercial banks.
KALAICHELVAN . A
Please kindly post the Yojana and projects in Indian Economics
deepak
provide some agricultural gk
tarunnagpal
Sir just want to know about 12th question is that national stock exchange or naional spot exchange..if it is NSE then shares also traded over there…Please advise..
Shadan firdaus
National spot exchange traded only commodity not share.
saritachoudhary
sir i want to know about 12th question.it is nse or national spot exchange. Its not a sensable questin. Plz clear confustion.
harsh
gud sir
lovejit88
@PS
Reverse repo can be used in either way
snehajit gupta
i love it
Struggler
Sir , please check 10th ques. Answer should be just option 2. Correct me if m wrong !