JAIIB Exam 2025 – IE&IFS Important Questions MCQs Quiz-32

04/04/2025

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JAIIB Exam 2025 IE&IFS Important Questions MCQs Quiz-32

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 Which of the following statements about Government Securities (G-Secs) in India is incorrect?
A) Government securities include Treasury bills, Central Government securities, and State Development Loans.
B) Only banks and financial institutions are eligible to purchase Government Securities.
C) Government securities help finance the fiscal deficit and manage temporary cash mismatches.
D) Government securities can be held in Subsidiary General Ledger (SGL) accounts or in dematerialised form with NSDL

Q.2 Which of the following statements about State Development Loans (SDLs) is correct?
A) SDLs are issued by the Central Government to manage temporary cash mismatches.
B) The Reserve Bank of India conducts auctions for SDLs.
C) SDLs do not pay interest; they are zero-coupon securities.
D) The secondary market for SDLs operates only through telephone-based trading

Q 3 Which of the following entities cannot invest in Government Securities (G-Secs) in India without prior approval?
A) Indian corporate bodies and institutions
B) Non-Resident Indians (NRIs)
C) Foreign Central Banks (FCBs)
D) Any foreign entity not specified by RBI and the Government of India

Q.4 What is the minimum investment amount required to purchase Government Securities (G-Secs) in an auction conducted by the Reserve Bank of India (RBI)?
A) ₹1,000
B) ₹5,000
C) ₹10,000
D) ₹50,000

Q.5 In the issuance of Government Securities (G-Secs), how is the coupon rate determined in a yield-based auction?
A) The coupon rate is pre-determined before the auction.
B) The coupon rate is decided based on bids submitted during the auction.
C) The coupon rate changes periodically based on market conditions.
D) The coupon rate is fixed at zero, making it a zero-coupon bond

Q.6 What is the key difference between the Uniform Price and Multiple Price auction methods for Government Securities?
A) In the Uniform Price method, all accepted bidders pay the same price, whereas in the Multiple Price method, each accepted bidder pays their quoted price.
B) In the Uniform Price method, only the highest bidders win, whereas in the Multiple Price method, all bidders get an equal allocation.
C) The Uniform Price method is used only for short-term securities, while the Multiple Price method is used for long-term securities.
D) The Uniform Price method allows investors to revise their bids after submission, whereas the Multiple Price method does not.

Q.7 What is the primary role of Primary Dealers (PDs) in the Government Securities market?
A) To regulate interest rates on government securities.
B) To purchase government securities directly from RBI and resell them to other buyers.
C) To set monetary policy decisions along with the Reserve Bank of India.
D) To issue treasury bills and bonds on behalf of the Government of India

Q.8 What is the primary role of the Fixed Income Money Market and Derivatives Association of India (FIMMDA)?
A) To regulate the bond, money, and derivatives markets in India.
B) To act as a self-regulatory organization and develop best practices for fixed income and derivative markets.
C) To issue Government Securities on behalf of the Reserve Bank of India.
D) To directly control monetary policy and interest rates in India

Q.9 Which of the following statements about Inter-Corporate Deposits (ICDs) is incorrect?
A) ICDs are unsecured borrowings between corporates and financial institutions (FIs), typically with higher interest rates compared to similar-rated banks.
B) The most common tenor for an ICD is 90 days.
C) Primary Dealers are not permitted to borrow in the ICD market.
D) The borrowing under ICD is restricted to 150% of the Net Owned Funds, with a minimum tenor of 7 days

Q.10 Which of the following statements about corporate bonds in India is incorrect?
A) Corporate bonds are priced based on a spread over the corresponding government security, depending on the perceived risk.
B) Corporate bonds carry ratings from AAA to D, with AAA indicating the highest safety and D indicating a very high risk of default.
C) Bonds with ratings up to BBB are considered non-investment grade.
D) All corporate bonds are issued and held in dematerialized form, as per RBI regulations.

Q.11 Which of the following is not an objective of developing a robust corporate bond market in India?
A) To reduce the stress on banks by diversifying credit risk across different investors.
B) To supply long-term investment products for long-term investors.
C) To reduce funding costs for corporates by eliminating agency and disintermediation costs.
D) To allow Indian firms to rely solely on bank finance for funding requirements.

Q.12 Which of the following is true regarding the secondary market transactions on the Negotiated Dealing System – Order Matching (NDS-OM) platform?
A) Only primary dealers can participate in secondary market transactions.
B) Investors can access the platform through a registered online portal to buy or sell government securities.
C) Secondary market transactions are limited to only Treasury Bills and not Government Securities.
D) The platform is available only for institutional investors and not for retail investors

Q.13 Which of the following is not a requirement for a retail investor to open a Retail Direct Gilt (RDG) Account for investing in Government Securities?
A) A Rupee savings bank account in India
B) A Permanent Account Number (PAN) issued by the Income Tax Department
C) A minimum investment of ₹1,00,000 at the time of account opening
D) A valid email ID and registered mobile number

Q.14 Which of the following securities can not be bought and sold under the RBI Retail Direct Scheme (RDS)?
A) Government of India Treasury Bills
B) Government of India Dated Securities
C) Sovereign Gold Bonds (SGB)
D) Corporate Bonds issued by private companies

Q.15 Which of the following facilities is not available under the Retail Direct Gilt (RDG) Account scheme?
A) Nomination facility, allowing the transfer of securities to a nominee in case of the investor’s death.
B) The ability to pledge or place a lien on securities held in the RDG account.
C) Retail investors can gift government securities to other Retail Direct Investors.
D) All transactions, including buying and selling, must be done through physical forms or documents

Q.16 Which of the following statements about STRIPS (Separate Trading of Registered Interest and Principal of Securities) is correct?
A) STRIPS are created by separating the interest payments from the principal of a bond, effectively turning it into a series of zero-coupon securities.
B) STRIPS have the same maturity but different coupon payments.
C) STRIPS are issued directly by the U.S. Treasury as standalone securities.
D) The price of a STRIP is typically higher than that of a comparable coupon bond because of its lack of periodic interest payments

Answer:

Q1: B
Q2: B
Q3: D
Q4: C
Q5: B
Q6: A
Q7: B
Q8: B
Q9: C
Q10: C
Q11: D
Q12: B
Q13: C
Q14: D
Q15: D
Q16: A

For Detailed solution with an explanation watch the below video