Banking & General Financial Awareness
Banking & General Financial Awareness Multiple Choice Questions (MCQs) and Answers with explanation for All Banking Exams of 2020-2021 such as IBPS Bank PO, IBPS Bank Clerical, RRB PO and Clerical, SBI PO and SBI Clerical, IBPS Recruitments, RBI Grade B and RBI Banking Examinations.
41. What is the maximum maturity term for Treasury Bills in India?
[A] 91 days
[B] 182 days
[C] 364 days
[D] 730 days
Show Answer
Correct Answer: C [364 days]
Notes:
Treasury Bills in India are issued with maximum maturities of 91 days, 182 days, and 364 days.
42. Which of the following describes “arbitrage” in stock markets?
[A] Investing in stocks for long-term capital appreciation
[B] Simultaneously buying and selling an asset in different markets to profit from price differences
[C] Holding stocks during volatile market periods
[D] Short-selling stocks to profit from declining prices
Show Answer
Correct Answer: B [Simultaneously buying and selling an asset in different markets to profit from price differences]
Notes:
Arbitrage involves taking advantage of price differences for the same asset in different markets by simultaneously buying in one market and selling in another.
43. The Life Insurance Corporation of India (LIC) was established in which year?
[A] 1947
[B] 1956
[C] 1969
[D] 1972
Show Answer
Correct Answer: B [1956]
Notes:
The Life Insurance Corporation of India (LIC) was established in 1956 after the nationalization of the life insurance sector.
44. Which of the following types of insurance provides coverage for damages caused to third parties?
[A] Life Insurance
[B] Health Insurance
[C] Motor Third-Party Liability Insurance
[D] Travel Insurance
Show Answer
Correct Answer: C [Motor Third-Party Liability Insurance]
Notes:
Motor Third-Party Liability Insurance covers damages or injuries caused to third parties by the insured vehicle. It is mandatory in India.
45. Which type of insurance is mandatory for employers in India under the Employee State Insurance Act?
[A] Group Health Insurance
[B] Workers’ Compensation Insurance
[C] Term Life Insurance
[D] Employer Liability Insurance
Show Answer
Correct Answer: B [Workers’ Compensation Insurance]
Notes:
Workers’ Compensation Insurance is mandatory under the Employee State Insurance Act, providing coverage for work-related injuries.
46. Which of the following services is offered by health insurance companies in India?
[A] Annuity plans
[B] Pension plans
[C] Cashless hospitalization
[D] Term life insurance
Show Answer
Correct Answer: C [Cashless hospitalization]
Notes:
Health insurance companies in India offer services like cashless hospitalization, where policyholders can avail treatment without upfront payment.
47. In health insurance, “Pre-existing condition” refers to:
[A] A condition diagnosed after the policy issuance
[B] A medical condition that existed before buying the policy
[C] A disease covered without any waiting period
[D] A medical emergency requiring immediate treatment
Show Answer
Correct Answer: B [A medical condition that existed before buying the policy]
Notes:
A pre-existing condition is a medical condition that the policyholder had before purchasing the health insurance policy, often subject to a waiting period.
48. Which type of letter of credit guarantees payment even if the buyer fails to make the payment?
[A] Revocable Letter of Credit
[B] Irrevocable Letter of Credit
[C] Confirmed Letter of Credit
[D] Standby Letter of Credit
Show Answer
Correct Answer: D [Standby Letter of Credit]
Notes:
A Standby Letter of Credit (SBLC) acts as a guarantee and ensures that the seller will receive payment even if the buyer defaults.
49. Which entity typically issues a Certificate of Origin in international trade?
[A] Exporter
[B] Customs Authority
[C] Chamber of Commerce
[D] Bank
Show Answer
Correct Answer: C [Chamber of Commerce]
Notes:
A Certificate of Origin, which certifies the country of origin of goods, is usually issued by the Chamber of Commerce.
50. Which type of retirement account in India provides tax-free maturity and withdrawal benefits?
[A] Public Provident Fund (PPF)
[B] National Pension System (NPS)
[C] Employee Provident Fund (EPF)
[D] Senior Citizens’ Saving Scheme (SCSS)
Show Answer
Correct Answer: A [Public Provident Fund (PPF)]
Notes:
The Public Provident Fund (PPF) provides tax-free maturity and withdrawal benefits under Section 80C and Section 10 of the Income Tax Act.
