JAIIB Exam 2025 – IE&IFS Important Questions MCQs Quiz-30

28/03/2025

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JAIIB Exam 2025 IE&IFS Important Questions MCQs Quiz-30

JAIIB Exam Quiz 2025: The JAIIB exam is scheduled for 2025 by IIBF. Here, we are providing JAIIB IE&IFS MCQ-based quizzes on a regular basis. You can attempt the quizzes regularly to prepare for the upcoming JAIIB exam. The quizzes will be provided module-wise and unit-wise. You can attempt the JAIIB IE&IFS quizzes from the links below and improve your preparation by practicing regularly. These quizzes will help you boost your score in the JAIIB exam and guide you to clear the exam on your first attempt.

Q.1 In the call/notice/term money market, which of the following statements is most accurate?
A) Call money refers to unsecured lending/borrowing of funds for a period between 2 days and 14 days.
B) Notice money refers to unsecured lending/borrowing of funds for 1 day.
C) Term money refers to unsecured lending/borrowing of funds for more than 14 days and up to one year.
D) The interest rate in this market is solely determined by the Reserve Bank of India

Q.2 According to RBI guidelines, what is the maximum limit for schedule commercial bank including SFB in the call and notice money market?
A) 50% of capital funds on a daily average basis and 100% on any given day.
B) 75% of capital funds on a daily average basis and 110% on any given day.
C) 100% of capital funds on a daily average basis in a reporting fortnight and 125% on any given day.
D) No limits apply to these institutions as they are exempt from RBI guidelines

Q 3 What is the prudential limit for cooperative banks’ participation in the call, notice, and term money market in relation to their aggregate deposits as per regulatory norms?
A) 5.0% of aggregate deposits as at the end of the previous financial year.
B) 2.0% of aggregate deposits as at the end of the previous financial year.
C) 10% of capital funds as at the end of the previous financial year.
D) 2.0% of average fortnightly deposits for the current financial year.

Q.4 Which of the following correctly states the regulatory prudential limits for primary delaers in participation in the Call, Notice, and Term Money Market?
A) both Call and Notice Money exposures are capped at 225% of Net Owned Fund (NOF) as at the end of the previous financial year on a daily average basis in a reporting
B) Call, Notice, and Term Money exposure is capped at 5.0% of aggregate deposits, and 225% of Net Worth applies to only Term Money.
C) There are no regulatory limits on participation in Call, Notice, or Term Money markets as they are purely market-driven.
D) Call Money exposure is capped at 100% of capital funds, while Term Money is capped at 5% of aggregate deposits of the previous financial year.

Q.5. Which of the following statements about Treasury Bills (T-Bills) and non-competitive bidding is correct?
A) Only corporate bodies and banks are allowed to participate in non-competitive bidding for T-Bills.
B) Retail investors can only participate in T-Bill auctions through competitive bidding and cannot access the Retail Direct portal.
C) Designated Foreign Central Banks such as Nepal Rashtra Bank can participate on a non-competitive basis, and retail investors’ non-competitive allocation is capped at 5% within the notified amount.
D) T-Bill auctions are only conducted using a uniform price method, and physical bids are never accepted under any circumstances

Q.6 Which of the following statements correctly describes the issuance and pricing of Treasury Bills (T-Bills) and Cash Management Bills (CMBs)?
A) T-Bills/CMBs are issued for a minimum amount of ₹1,000 and in multiples of ₹1,000, and are quoted at par in the primary and secondary markets.
B) T-Bills/CMBs are issued for a minimum of ₹10,000 and in multiples of ₹10,000, quoted at a discount to par, and redeemed at par value, with the difference representing the return.
C) T-Bills/CMBs are issued for any amount as per the investor’s discretion and are always quoted on a price basis in the secondary market.
D) T-Bills/CMBs offer periodic interest payments before maturity, and the principal is redeemed at a discount.

Q.7 Which of the following statements regarding Certificates of Deposit (CDs) is accurate?
A) CDs are issued by scheduled commercial banks and select financial institutions, with a minimum denomination of ₹5 lakh and are typically issued for tenors of 1 to 5 years.
B) CDs are non-negotiable money market instruments that pay periodic interest and are redeemed at a discount.
C) CDs are negotiable, issued in dematerialised form at a discount, typically for tenors ranging from 7 days to 1 year, with a minimum subscription amount of ₹1 lakh.
D) CDs are negotiable instruments, issued at a discount, typically for tenors between 7 days and 1 year, with a minimum subscription of ₹5 lakh and multiples of ₹5 lakh thereafter.

Q.8 Which of the following statements about the issuance of Commercial Papers (CPs) in India is correct?
A) Only companies with fund-based facilities classified as “substandard assets” by banks are eligible to issue CPs.
B) CPs can be issued by companies, NBFCs, and AIFIs, provided their bank borrowings are classified as standard assets and the minimum credit rating is ‘A3’ from a SEBI-registered CRA.
C) All entities, regardless of credit rating, are permitted to issue CPs provided they have a net worth of at least ₹50 crore.
D) CP issuers are required to obtain credit ratings from three SEBI-registered CRAs, and can adopt the highest rating among them

Q.9 Which of the following statements about Repo transactions is incorrect?
A) Repo transactions involve the sale of a security with an agreement to repurchase it at a predetermined price in the future.
B) Only government securities issued by the Central Government are eligible for Repo transactions.
C) The repo rate is derived from the rate of interest payable on the funds lent.
D) A Tri-Party Repo involves an intermediary facilitating collateral selection, payment, settlement, and custody

Q.10. What is the primary role of a Tri-Party Agent in a triparty repo transaction?
A) To act as a counterparty to both borrower and lender, guaranteeing the financial obligation of both parties.
B) To select collateral, manage custody, handle settlement, and ensure post-trade processing without taking on any counterparty risk.
C) To provide liquidity to the borrower in the event of margin shortfall during the life of the transaction.
D) To participate in the credit risk of the borrower and ensure 100% guarantee of collateral value to the lender.

Q.11 Which of the following is NOT an eligibility criterion for becoming a Tri-Party Agent as per RBI guidelines?
A) The applicant should have a minimum paid-up equity share capital of ₹25 crores.
B) The applicant must have at least 5 years of prior experience in the financial sector, preferably in custody, clearing, or settlement services.
C) Only scheduled commercial banks and clearing corporations authorised under FEMA can become tri-party agents.
D) The applicant must have adequate system infrastructure to perform collateral management and related services

Q. 12 In the Bills Rediscounting Scheme (BRDS), what does the Derivative Usance Promissory Note (DUPN) represent?
A) A negotiable instrument issued directly to the customer by the RBI for refinancing trade bills.
B) A promissory note issued by a borrowing bank to a lender, deriving its value from underlying unencumbered usance bills.
C) A promissory note drawn by the borrower on the supplier, backed by collateral from the bank.
D) A note issued by RBI to provide liquidity support to NBFCs against government securities.

Q.13. Which of the following bills CANNOT be used as collateral under the Bills Rediscounting Scheme (BRDS)?
A) Unencumbered bills of exchange arising from bona fide trade transactions.
B) Bills with an unexpired tenor of 75 days arising from the supply of goods.
C) Bills drawn on the basis of a trade transaction between two manufacturing companies.
D) House bills or bills of exchange issued by finance companies.

Q.14. What is a key distinguishing feature of the Long-Term Repo Operations (LTRO) introduced by the RBI in February 2020 compared to regular Liquidity Adjustment Facility (LAF) repos?
A) LTROs are conducted at variable rates determined by the market, while LAF repos are fixed at the repo rate.
B) LTROs provide long-term liquidity to banks at the prevailing policy repo rate, with tenors up to 3 years, unlike LAF repos which are short-term in nature.
C) LTROs are exclusively available to non-banking financial companies (NBFCs), while LAF repos are available to banks.
D) LTROs require a minimum bid amount of Rs 10 crore, whereas LAF repos require Rs 1 crore.

Answer:

Q1: C
Q2: C
Q3: B
Q4: A
Q5: C
Q6: B
Q7: D
Q8: B
Q9: B
Q10: B
Q11: C
Q12: B
Q13: D
Q14: B

For Detailed solution with an explanation watch the below video