54-Instruments of Money Market

Banking Awareness Multiple Choice Questions (MCQs) and Answers with explanation on Instruments of Money Market for IBPS Bank PO, IBPS Bank Clerical, RRB PO and Clerical, SBI PO and SBI Clerical, IBPS Recruitments, RBI Grade B and RBI Bank

1. The most active segment of the Money Market in India is which one of the following?

[A] Call Money / Notice Money Market
[B] Repo / Reverse Repo
[C] Commercial Paper (CP)
[D] Certificate of Deposit (CD)

Show Answer

2. Which of the following are money markets instruments?

[A] A 14-day repurchase agreement of Treasury 8% 2007
[B] A treasury bill with 7 days to maturity
[C] A 3-month certificate of deposit
[D] All of the above

Show Answer

3. On which of the following instruments is the rate of return calculated on a ‘discount basis’?

[A] Commercial paper
[B] Commercial bills
[C] Both 1 and 2
[D] Neither 1 nor 2

Show Answer

4. Liquidity status of certificate of deposit which is more negotiable is considered as?

[A] certified liquidity
[B] term liquidity
[C] more liquid
[D] less liquid

Show Answer

5. Commercial paper issued with low interest rate thus commercial paper are categorized as

[A] payables rating
[B] commercial rating
[C] poor credit rating
[D] better credit rating

Show Answer

6. Maximum maturity days of holding commercial paper are

[A] 170 days
[B] 270 days
[C] 120 days
[D] 5 days

Show Answer

7. In borrowing and lending of federal funds, federal funds rate is result of function between which of the following?

[A] supply and demand
[B] assets and liability
[C] Cost and marketing
[D] Income and expense

Show Answer

8. The demand for heavy loans can lead to which of the following?

[A] excess funds for banks
[B] Deficiencies for banks
[C] Organized reservation
[D] Competitive reservations

Show Answer

9. Which among the following helps RBI to manage liquidity conditions in the economy with banks having an avenue to surplus funds or avail funds?

[A] SLR
[B] Money market Mutual Funds
[C] Reverse repos
[D] Repos

Show Answer

10. Which among them is responsible for maintaining a Minimum reserve system against printing of currency notes?

[A] Issue Department
[B] Banking Department
[C] Both 1 & 2
[D] None of the above

Show Answer

Advertisement

Kindly help us to keep GKToday updated and error free. Use this form to report error or outdated information in questions. We shall rectify asap...