Banking Awareness Quiz for SBI CBO – Quiz 6

Banking Awareness Quiz for SBI CBO

Banking Awareness Section plays an important part in SBI CBO exam. We’ve provided Banking Awareness Quiz for SBI CBO that is essential for SBI CBO examination. The Banking Awareness Quiz for SBI CBO is based on both static banking and current banking in the news. This Banking Awareness Quiz for SBI CBO can help you prepare for the upcoming SBI CO exam and others. So go ahead and attempt the Banking Awareness Quiz for SBI CBO, now.

Q1. Which section of RBI Act, 1934 was amended to constitute a Monetary Policy commitee?
(a) Section 45ZB
(b) Section 54ZB
(c) Section 34ZB
(d) Section 45BZ
(e) Section 54BZ

Answer & Explanation
1.Ans (a)
Section 45ZB of the amended RBI Act, 1934 also provides for an empowered six-member monetary policy committee (MPC) to be constituted by the Central Government by notification in the Official Gazette. The first such MPC was constituted on September 29, 2016. The present MPC members, as notified by the Central Government in the Official Gazette of October 5, 2020.

Q2. The monetary policy report published by RBI must contain
(a) Sources of Inflation
(b) Forecast of Inflation for 6-18 months ahead
(c) Both a and b
(d) repo rate
(e) MSS

Answer & Explanation
2.Ans (c)
Once in every six months, the Reserve Bank is required to publish a document called the Monetary Policy Report to explain:
a. the sources of inflation; and
b. the forecast of inflation for 6-18 months ahead.

Q3. Monetary policy committee was set up on whose recommendations?
(a) Urjit patel
(b) Narashiman
(c) Subarao
(d) Central Government
(e) Vinayak

Answer & Explanation
3.Ans (a)
Suggestions for setting up a Monetary policy committee is not new and goes back to 2002 when YV Reddy committee proposed to establish a MPC, then Tarapore committee in 2006, Percy Mistry committee in 2007, Raghuram Rajan committee in 2009 and then Urjit Patel Committee in 2013.

Q4. In the Indian money market, the main borrowers of short-term funds are
(a) Central Government
(b) State Governments
(c) Local bodies, such as, municipalities, village panchayats, etc.
(d) traders, industrialists, farmers, exporters and importers
(e) All the above

Answer & Explanation
4.Ans (d)
In the Indian money market, the main borrowers of short-term funds are: (a) Central Government, (b) State Governments, (c) Local bodies, such as, municipalities, village panchayats, etc., (d) traders, industrialists, farmers, exporters and importers, and (e) general public.

Q5. Which of the following is not a feature of Indian call money market?
(a) The call money market is highly sensitive and competitive market
(b) Mainly the banks participate in the call money market.
(c) Call money market provides the institutional arrangement for making the temporary surplus of some banks available to other banks which are temporary in short of funds.
(d) The rate of interest in the call money market is highly stable.
(e) None of the above

Answer & Explanation
5.Ans (d)
(i) Call money market provides the institutional arrangement for making the temporary surplus of some banks available to other banks which are temporary in short of funds.
(ii) Mainly the banks participate in the call money market. The State Bank of India is always on the lenders’ side of the market.
(iii) The call money market operates through brokers who always keep in touch with banks and establish a link between the borrowing and lending banks.
(iv) The call money market is highly sensitive and competitive market. As such, it acts as the best indicator of the liquidity position of the organised money market.
(v) The rate of interest in the call money market is highly unstable. It quickly rises under the pressures of excess demand for funds and quickly falls under the pressures of excess supply of funds.

Q6. Which of the following steps can improve Indian Money Market?
(a) Bringing the unorganised sector under the purview of RBI.
(b) Providing discounting and rediscounting facilities.
(c) Increasing the number of clearing houses
(d) Reducing the variation in interest rate
(e) All the above

Answer & Explanation
6.Ans (e)
In a view of the various defects in the Indian money market, the following suggestions have been made for its proper development:
(i) The activities of the indigenous banks should be brought under the effective control of the Reserve Bank of India.
(ii) Discounting and rediscounting facilities should be expanded in a big way to develop the bill market in the country.
(iii) For raising the efficiency of the money market, the number of the clearing houses in the country should be increased and their working improved.
(iv) Variations in the interest rates should be reduced.

Q7. The aim of ___________ funds is to provide capital appreciation over the medium to long-term.
(a) Equity Funds
(b) Debt Funds
(c) Money Market Funds
(d) Hybrid Funds
(e) None of these

Answer & Explanation
7.Ans (a)
Equity Funds and Growth Funds are similar in nature. The aim of these funds is to provide capital appreciation over the medium to long-term. Such schemes normally invest a major part of their corpus in equities. These investments are meant for a longer time horizon; thus, equity funds rank high on the risk-return matrix.

Q8. Under ____________ main objective is to safeguard the investors capital in the event of market downturns while providing them scope for capital appreciation by investing during the upturns of the equity market.
(a) Tax Savings Funds
(b) Fixed Maturity Funds
(c) Pension Funds
(d) Capital Protection Funds
(e) None of these

Answer & Explanation
8.Ans (d)
It is a close end hybrid fund, whose main objective is to safeguard the investors capital in the event of market downturns while providing them scope for capital appreciation by investing during the upturns of the equity market. This kind of fund is skewed more towards debt, even if the portfolio is a mix of both equity and debt. The proportion of debt to equity in this fund is 8:2.

Q9. _________ invest exclusively in government securities, that have no risk by default.
(a) Sector Funds
(b) Index Funds
(c) Commodity Focused Funds
(d) Guilt Funds
(e) None of these

Answer & Explanation
9.Ans (d)
Guilt funds invest exclusively in government securities, that have no risk by default. NAVs of this scheme also fluctuate due to change in interest rates and other economic factors as in the case with income or debt-oriented schemes. To conclude, this fund can give a stable income to the investors.

Q10. Which of the following components are included in Net Factor Income from Abroad
(a) Net Compensation of employees from abroad
(b) Net Property and Entrepreneurial Income
(c) Net retained earnings of resident companies working in foreign countries
(d) All the above
(e) None of the above

Answer & Explanation
10.Ans (d)
net factor from abroad is the difference between the income received from Android for rendering factor services by normal residents of the country to the rest of the world and the income paid for factor services rendered by non resident in domestic territory of a company that factor from abroad has three components namely that compensation of employees from abroad net property and entrepreneur income example cent interest profit and evidence from abroad and net retained earnings of resident company is working in foreign countries.

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