Banking & General Financial Awareness
Banking & General Financial Awareness Multiple Choice Questions (MCQs) and Answers with explanation for All Banking Exams of 2024-25 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. Which of the following instruments is issued by corporations to raise funds for a period of up to one year?
[A] Commercial Paper
[B] Call Money
[C] Treasury Bill
[D] Certificate of Deposit
Show Answer
Correct Answer: A [Commercial Paper]
Notes:
Commercial Papers are unsecured promissory notes issued by corporations to raise short-term funds, typically with maturities ranging from 7 days to 1 year.
42. What role does a registrar play in the issue process?
[A] Ensures regulatory compliance
[B] Manages underwriting commitments
[C] Manages applications and allotment of shares
[D] Provides post-issue market support
Show Answer
Correct Answer: C [Manages applications and allotment of shares]
Notes:
The registrar to the issue handles the application process, manages allotment of shares, and maintains investor records.
43. Under which regulation are debenture trustees governed in India?
[A] SEBI (Debenture Trustees) Regulations, 1993
[B] SEBI (Issue of Capital) Regulations, 2005
[C] Companies Act, 2013
[D] SEBI (Underwriting) Regulations, 1999
Show Answer
Correct Answer: A [SEBI (Debenture Trustees) Regulations, 1993]
Notes:
Debenture trustees are governed by the SEBI (Debenture Trustees) Regulations, 1993, which specify their roles and responsibilities.
44. Which of the following is NOT a responsibility of a debenture trustee?
[A] Monitoring the performance of the issuer
[B] Ensuring timely payment of interest and principal
[C] Approving the issue price of debentures
[D] Enforcing the security in case of default
Show Answer
Correct Answer: C [Approving the issue price of debentures]
Notes:
Approving the issue price of debentures is not the responsibility of the debenture trustee. Their primary role is to monitor compliance and protect debenture holders’ interests.
45. What is the primary objective of the SEBI (Buyback of Securities) Regulations, 1998?
[A] To enable companies to raise capital
[B] To provide a mechanism for companies to repurchase their own shares
[C] To facilitate mergers
[D] To regulate debt markets
Show Answer
Correct Answer: B [To provide a mechanism for companies to repurchase their own shares]
Notes:
The SEBI (Buyback of Securities) Regulations, 1998 provide a framework for companies to repurchase their shares from the market, often to improve shareholder value or reduce surplus cash.
46. What is the purpose of a credit rating agency in capital markets?
[A] To regulate stock exchanges
[B] To assign ratings to debt instruments based on credit risk
[C] To trade in government securities
[D] To manage IPO allotments
Show Answer
Correct Answer: B [To assign ratings to debt instruments based on credit risk]
Notes:
Credit rating agencies assign ratings to debt instruments based on the issuer’s creditworthiness, helping investors assess the risk of default.
47. Which of the following companies was the first private life insurer to start operations in India after liberalization?
[A] HDFC Life Insurance
[B] ICICI Prudential Life Insurance
[C] Bajaj Allianz Life Insurance
[D] SBI Life Insurance
Show Answer
Correct Answer: B [ICICI Prudential Life Insurance]
Notes:
ICICI Prudential Life Insurance was the first private life insurer to start operations in India after liberalization in 2000.
48. Fire insurance policies in India generally have a term of:
[A] 1 year
[B] 5 years
[C] 10 years
[D] Lifetime
Show Answer
Correct Answer: A [1 year]
Notes:
Fire insurance policies in India typically have a term of 1 year and must be renewed annually.
49. Which of the following is NOT an example of general insurance?
[A] Health Insurance
[B] Motor Insurance
[C] Term Life Insurance
[D] Marine Insurance
Show Answer
Correct Answer: C [Term Life Insurance]
Notes:
Term life insurance is a type of life insurance, while the others are examples of general insurance.
50. What is the primary difference between CBDCs and cryptocurrencies?
[A] CBDCs are issued by governments, while cryptocurrencies are decentralized
[B] CBDCs have no legal backing
[C] Cryptocurrencies are issued by banks
[D] CBDCs are not used for payments
Show Answer
Correct Answer: A [CBDCs are issued by governments, while cryptocurrencies are decentralized]
Notes:
CBDCs are issued by governments or central banks and have legal backing, while cryptocurrencies are decentralized and not backed by any central authority.
