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This set of Financial Markets and Institutions Multiple Choice Questions & Answers (MCQs) focuses on Financial Markets And Institutions Set 14

Q1 | The demand for heavy loans can cause
  • excess funds for banks
  • deficiencies for banks
  • organized reservation
  • competitive reservations
Q2 | In primary markets, first time issued shares to be publicly traded in stock markets is considered as
  • traded offering
  • public markets
  • issuance offering
  • initial public offering
Q3 | Transaction cost of trading of financial instruments in centralized market is classified as
  • flexible costs
  • low transaction costs
  • high transaction costs
  • constant costs
Q4 | Stocks or shares that are sold to investors without transacting through financial institutions are classified as
  • direct transfer
  • indirect transfer
  • global transfer
  • pension transfer
Q5 | Type of financial security which have linked payoff to another issued security is classified as
  • linked security
  • derivative security
  • payable security
  • non-issuing security
Q6 | In primary markets, property of shares which made it easy to sell newly issued security isconsidered as
  • increased liquidity
  • decreased liquidity
  • money flow
  • large funds
Q7 | Liquidity status of certificate of deposit which is more negotiable is considered as
  • certified liquidity
  • term liquidity
  • more liquid
  • less liquid
Q8 | Commercial paper issued with low interest rate thus commercial paper are categorized as
  • payables rating
  • commercial rating
  • poor credit rating
  • better credit rating
Q9 | Maximum maturity days of holding commercial paper are
  • 170 days
  • 270 days
  • 120 days
  • 5 days
Q10 | In borrowing and lending of federal funds, federal funds rate is result of function between
  • assets and liability
  • cost and marketing
  • supply and demand
  • income and expense
Q11 | A "hybrid" fund is one that:
  • invests in both bonds and stocks
  • started as a closed-end investment company, but changed to a mutual fund
  • has different "loads" for different classes of investors in the fund
  • can serve as an investment vehicle, but also provides check-writing privileges.
Q12 | The first mutual fund was established in the:
  • 1890s
  • 1920s
  • 1940s
  • 1960s
Q13 | A mutual fund that invests solely in stocks would be categorized as a/an:
  • bond fund
  • fixed income fund
  • money market fund
  • equity fund
Q14 | A large number (about 25%) of long-term mutual funds are _____________ funds, buying securities in proportions similar to those of a major stock index.
  • small cap
  • large cap
  • fixed income
  • index
Q15 | The bulk of the nation's money supply is created within the private banking system and is sometimes called:
  • inside money
  • net money
  • base money
  • outside money
Q16 | A type of bank account designed to compete with money market mutual funds, and having limited check-writing services, is known as:
  • wholesale CDs
  • demand deposit
  • repurchase agreement
  • NOW account
Q17 | __________would encompass fees received by the bank, but not revenues comingfrom interest charges on loans.
  • Net interest margin
  • Spread
  • Non interest income
  • Non interest expense
Q18 | Another name used for a bank income statement is:
  • report of income
  • statement of retained earnings
  • overhead efficiency report
  • report of condition
Q19 | Which of the following is an advantage to investors of an open-end mutual fund?
  • Once all the shares have been sold, the investor does not have to put in more money.
  • The investors can sell their shares in the over-the-counter market with low transaction fees.
  • The fund agrees to redeem shares at any time.
  • The market value of the fund’s shares may be higher than the value of the assets held by the fund.
Q20 | In --------------- Securities share bond debentures are offered to the public for subscription for raising capital or fund.
  • Prime Securities
  • Public Securities
  • Preferred Securities
  • Primary Securities
Q21 | The agreement which incurs the transaction between two parties and promise held that secondparty will sell security at specific maturity is classified as
  • repurchasing commercial notes
  • repurchase bills
  • purchase agreement
  • reverse repurchase agreement
Q22 | Which among the following was set up by RBI in 1988 jointly with public sector banks and all India Financial Institutions to develop the money market & provide liquidity to money market instruments as sequel to Vaghul Working Group recommendations?
  • Discount and Finance House of India Ltd (DFHI)
  • Central Depository Services (India) Limited (CDSL)
  • Financial Intelligence Unit India (FIU-I
Q23 | Which among the following is correct regarding BPLR or bench mark prime lending rate?
  • It is lowest interest rate below PLR charged by a bank from the best customer of the financial year
  • It is highest interest rate above PLR charged by a bank from the any customer of the financial year
  • Both (a) & (b)
  • None of the above
Q24 | Which among the following coined the term “Second generation Reforms”?
  • World Bank
  • International Monetary Fund
  • Reserve bank of India
  • SBI
Q25 | The commercial paper issued with low interest rate thus the commercial paper are categorized as
  • payables rating
  • commercial rating
  • poor credit rating
  • better credit rating