Industries and finance - MCQs with answers
1. Which of the following is not included under the money market?a. RBI
b. Commercial banks
c. SEBI
d. None of the above
View Answer / Hide AnswerANSWER: c. SEBI
Money market includes RBI, commercial banks and other financial institutions. SEBI belongs to capital market.
i. Call money market is a short term market
ii. Money can be borrowed for not less than a week
a. I only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: a. I only
It is a very short term market, also known as overnight market as money can be borrowed or lent for a day.
i. Treasury bills are used by government to get long term loans
ii. The maturity period of a treasury bill in India ranges from 14 days to 365 days
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: b. ii only
Treasury bills are used by government to get short term loans
a. RBI
b. Commercial banks
c. SEBI
d. Finance Ministry
View Answer / Hide AnswerANSWER: a. RBI
RBI as an agent of the Government of India discounts the treasury bills.
i. Treasury bills can be issued by all the states
ii. They are not used for OMO
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: d. none
Treasury bills cannot be issued by the states. They are used by the RBI for open market operations.
i. Trading of treasury bills is not allowed in the market
ii. The ad hoc treasury bills have been replaced by Ways and Mean Advances System
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: b. ii only
Trading of treasury bills is allowed in the market.
i. Commercial bills are not tradable in market
ii. It is raised by the payer and accepted for payment by the payee on some future date
a. I only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: d. none
Commercial bills are raised by the payee and accepted for payment by the payer on some future date. They are tradable in market.
i. The certificate of deposits are issued at a discount to the face value
ii. The issuing institution can repurchase it before maturity period.
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: a. I only
The issuing institution cannot repurchase it before maturity period.
i. It should be a listed company
ii. It should have a working capital of 5 crores at least
a. i only
b. ii only
c. i and ii
d. None
View Answer / Hide AnswerANSWER: c. I and ii
Commercial papers are short term borrowing instruments that are used by corporates.
i. The Money Market Mutual Fund aims at providing investment opportunities to small investors to enter into markets
ii. Banks can get their bills rediscounted directly by DFHI
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: c. both
The DFHI was set up in 1988 to provide investment opportunities to small investors to enter into markets.
a. Gilt-edged market
b. Industrial securities market
c. Call money market
d. None of the above
View Answer / Hide AnswerANSWER: a. Gilt-edged market
The market for transaction of government securities is called gilt-edged market.
i. In debentures, maturity period is pre-decided.
ii. Companies cant issue debentures.
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: a. I only
Companies can issue debentures to raise capital and in debentures, maturity period and interest rate too is pre-decided.
i. NBFCs can accept demand deposits
ii. Deposit insurance facility of DICGC is available for NBFC depositors.
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: d. none
NBFCs cannot accept demand deposits. Deposit insurance facility of DICGC is not available for NBFC depositors.
i. The RBI registers and regulates brokers and sub-brokers working in the securities market.
ii. RBI also prevents insider trading in the securities market.
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: d. none
The SEBI registers and regulates brokers and sub-brokers working in the securities market. SEBI also prevents insider trading in the securities market.
i. SEBI was given a statutory status on the recommendation of Narasimhan Committee
ii. The chairman and members are appointed by the government and RBI
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: c. both
SEBI regulates stock markets and other markets in the country.
