JAIIB Exam 2025 – IE&IFS Important Questions MCQs Quiz-34

21/04/2025

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JAIIB Exam 2025 IE&IFS Important Questions MCQs Quiz-34

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 combinations most accurately captures the key factors driving the increased interconnectedness of global financial markets?
A. Capital controls, rising domestic savings, and localized regulatory standards
B. Reduced cross-border fund mobility, fixed interest rate regimes, and technological stagnation
C. Technological advancements, harmonised prudential regulations, and reliance on global capital flows
D. Increased protectionism, rigid monetary frameworks, and capital market isolation

Q.2 Which of the following best highlights the importance of interconnectedness in financial markets?
A. It increases arbitrage opportunities between market segments and encourages standalone policy frameworks.
B. It restricts access to financial services and limits the use of modern technology.
C. It promotes economic growth by improving price signalling, fostering innovation, and enhancing resource allocation efficiency.
D. It isolates domestic financial systems from global competition, thereby preserving traditional practices

Q.3 Which of the following best explains the primary reason why heterogeneity in financial markets necessitates interconnectedness?
A. Uniformity in market participants eliminates the need for market integration.
B. Heterogeneous markets encourage segmentation, reducing the role of cross-border capital flows.
C. Financial markets are inherently homogeneous, and interconnectedness is driven purely by regulatory mandates.
D. The diversity in market characteristics—such as geography, liquidity, risk profile, and participant type— requires integration to ensure efficient allocation of capital and risk-sharing.

Q.4 Which of the following statements best captures the rationale behind the formation and functioning of the Asian Clearing Union (ACU)?
A. The ACU was primarily established to eliminate all foreign trade among member countries and promote self-sufficiency.
B. The ACU functions as a bilateral trade mechanism to encourage competition among non-member nations.
C. The ACU facilitates multilateral net settlements to conserve foreign exchange, promote regional trade, and enhance monetary cooperation among member countries.
D. The ACU requires all member countries to settle transactions exclusively in US dollars to maintain consistency and transparency

Q.5 Which of the following best explains the role of the money market in India’s monetary policy transmission mechanism?
A. The money market in India reacts primarily to global shocks, with limited influence from domestic policy changes.
B. Changes in the policy rate directly influence the Weighted Average Call Money Rate (WACR), which in turn affects other money market rates, making it the first step in the
transmission of monetary policy.
C. The WACR is independent of the policy rate and moves solely in response to year-end liquidity surpluses.
D. The Reserve Bank of India (RBI) allows the money market to operate freely without managing liquidity conditions

Q.6 Which of the following best describes the interconnectedness of the credit market in the context of India’s monetary policy transmission?
A. The credit market in India is largely independent of monetary policy, as non-banking sources dominate corporate finance.
B. Corporate bond yields are negatively correlated with government bond yields, reflecting diverging market expectations.
C. Bank lending rates play a crucial role in policy transmission due to India’s bank-dominated system, and factors like asset quality, regulatory environment, and inflation affect the effectiveness of this transmission.
D. The influence of monetary policy on credit markets is minimal due to exchange rate rigidity and absence of dollarisation

Q.7 How does the interconnectedness between the bond market and capital (equity) market typically manifest in the Indian financial system?
A. Bond yields and equity markets in India usually move together, both rising and falling simultaneously due to shared investor sentiment.
B. Equity markets in India are entirely independent of bond market movements and are influenced only by global stock indices.
C. There is typically an inverse relationship between bond yields and equity market performance—rising bond yields often lead to falling equity indices and vice versa.
D. Capital market movements are determined exclusively by changes in exchange rates and are unrelated to domestic bond yields

Q.8 Which of the following best explains the relationship between the stock market and the foreign exchange market in India?
A. A decline in the stock market typically leads to an appreciation of the Indian Rupee due to higher domestic consumption.
B. Increased Foreign Institutional Investor (FII) inflows into the stock market often lead to a depreciation of the Indian Rupee due to higher capital outflows.
C. A booming stock market attracts FII investments, which strengthens the Rupee, while a falling stock market prompts FII withdrawals, leading to Rupee depreciation.
D. The USD-INR exchange rate is largely unaffected by FII activity and is only influenced by trade deficits

Q.9 Which of the following best describes the concept of the contagion effect in financial markets?
A. It is the gradual improvement of economic indicators across markets due to synchronized policy reforms.
B. It refers to the deliberate alignment of interest rates and inflation targets among central banks in different regions.
C. It is the rapid spread of financial disturbances or crises from one market or region to another, driven by interdependence in trade, investment, and capital flows.
D. It is a phenomenon exclusive to domestic markets where price manipulation causes synchronized asset inflation

Answer:

Q1: C
Q2: C
Q3: D
Q4: C
Q5: B
Q6: C
Q7: C
Q8: C
Q9: C

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