Banking Awareness Based on Financial Market | Daily Banking Awareness Quiz

Banking Awareness Based on Financial Market | Daily Banking Awareness Quiz

Banking Awareness Quiz for SBI Clerk, SBI PO, RBI, IBPS PO/Clerk/RRB/SO & other Banking & competitive exams 2020-21. Banking Awareness is an important part of any banking and Financial exam. You can Attempt Banking Awareness Quiz.

                               Topic- Financial Market

 

Q1.Financial market consists of how many types of institutions?
(a)2
(b)3
(c)4
(d)5
(e)6

Answer & Explanation
Ans.1.(a)
Exp.The financial market consists of majorly two types of institutions. The first one is depository institutions, and the other is non- depository institutions.

Q2.Which is Not a type of Depository Institution?
(a)Commercial Banks
(b)NABARD
(c)Mutual Savings Banks
(d)Credit Co-operative Societies
(e)Savings and Loan Associations

Answer & Explanation
Ans.2.(b)
Exp.NABARD is Not a type of Depository Institution.

Q3.Define Non-Depository Institutions-
(a)These institutions take deposits from the investors, i.e. individuals and organizations and further invest this fund into debt instruments.
(b)The financial institutions which accept deposits from the individuals or firms (investors) and utilize this money to grant loans and advances
(c)It is an association formed and managed by individuals who pool in their savings to provide the funds for mortgage loans and benefit from such advances.
(d)The institutions which function as financial intermediaries and not as banks, and hedges the risk of loss at the same time.
(e)All of the above

Answer & Explanation
Ans.3.(d)
Exp.The institutions which function as financial intermediaries and not as banks, and hedges the risk of loss at the same time are called non-depository institutions.

Q4.Which of the following is/are called non-depository institutions?
(a)Commercial Banks
(b)Pension Fund Institutions
(c)Insurance Companies
(d)Only (a) & (c)
(e)Only (b) & (c)

Answer & Explanation
Ans.4.(e)
Exp.Some of the well known non-depository institutions are as follows-
(a)Pension Fund Institutions
(b)Mutual Fund Companies
(c)Insurance Companies
(d)Brokerage Firms

Q5.Which of the following is Not a type of financial market?
(a)Cash or Spot Market
(b)Forward or Futures Market
(c)Oligopoly Market
(d)Money Market
(e)Capital Market

Answer & Explanation
Ans.5.(c)
Exp.Any market which deals in financial assets is a financial market. The following are the different types of financial market-
(a)Cash or Spot Market
(b)Forward or Futures Market
(c)Money Market
(d)Capital Market
(e)Primary Market
(f)Secondary Market
(g)Debt Market
(h)Equity Market
(i)Exchange-Traded Market
(j)Over-The-Counter Market

Q6.What is an Equity Market?
(a)The financial market which facilitates the trading of debt instruments or instrument with fixed interest such as bonds, fixed deposits, debentures are called debt market.
(b)The financial market which provides very short-term loans or advances having a maturity period within a year of issue is termed as a money market.
(c)This market exists for the trading of medium and long-term financial instruments between the individuals and financial institutions.
(d)This market deals in financial instruments or securities whose value keeps on fluctuating and the claimant receives the amount which persists on the date of redemption.
(e)It is a spot or real-time market where all the trading and transactions are executed or take place immediately.

Answer & Explanation
Ans.6.(d)
Exp.This market deals in financial instruments or securities whose value keeps on fluctuating and the claimant receives the amount which persists on the date of redemption.

Q7.In a financial market, when the listed companies issue new securities, or new companies take entry with new stocks, it is called as a-
(a)Cash or Spot Market
(b)Primary Market
(c)Secondary Market
(d)Money Market
(e)Capital Market

Answer & Explanation
Ans.7.(b)
Exp. In a financial market, when the listed companies issue new securities, or new companies take entry with new stocks, it is called as a primary market.

Q8.What is/are the Functions of Financial Markets?
(a)Facilitate Price Determination and Discovery
(b)Mobilize Savings
(c)Accelerate Economic Development
(d)Provide Liquidity to Financial Assets
(e)All of the sbove

Answer & Explanation
Ans.8.(e)
Exp.The Functions of Financial Markets are-
(a)Facilitate Price Determination and Discovery
(b)Mobilize Savings
(c)Accelerate Economic Development
(d)Provide Liquidity to Financial Assets
(e)Reduce Transaction Cost
(f)Capital Formation
(g)Create New Assets and Liabilities
(h)Determine Capital Formation Rate

Q9.The most common financial market is REITs, Expand the abbreviation “I” in REIT’s-
(a)Income
(b)Interesting
(c)Initial
(d)Interest
(e)Investment

Answer & Explanation
Ans.9.(e)
Exp.The most common financial market is Real Estate Investment Trusts (REITs). It initiates investments from small investors who are interested in real estate investing but lack sufficient funds for the purpose. These trusts pool in the funds collected from such investors into profitable real estate projects.

Q10.Financial markets require financial intermediaries such as –
(a)Bank
(b)Non-banking financial companies
(c)Stock exchanges
(d)Mutual fund companies
(e)Any of the above

Answer & Explanation
Ans.10.(e)
Exp.These markets require financial intermediaries such as a bank, non-banking financial companies, stock exchanges, mutual fund companies, insurance companies, brokers, etc. to function.

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