MCQ - Indian Financial System | Financial System Multiple Choice Questions and Answers | MCQ on Financial Market


1.       Indian financial system comprises of both organized and Unorganized sector.
2.       SEBI was given legal status in the year 1992. It was set up in 1988
3.       Non-banking assets and Non-performing assets are synonymous term. (Write True or False)
4.       The Indian money market does not deal in cash or money but in promissory notes, government paper. (Write True or False)

5.       Mention one function of underwriters. Ans: They ensure the sale of shares or debentures of a company even before offering to the public.                    
6.       RBI follows Minimum Reserve System for issuing paper currency note.
7.       Under Section 22 of the RBI Act, the RBI issues notes.
8.       New issue market has organizational set-up. (Write True or False)
9.       Industrial Development Bank of India (IDBI) accepts deposits from the public. (Write True or False).
10.   IFCI was the first development bank of India. It was established in 1948.
11.   The bill which does not require any acceptance is called Promissory Note.
12.   The company which sets up a mutual fund is called Sponsor.
13.   Sponsoring commercial bank contributes 35% of the total share capital of the Regional Rural Bank.  (Govt. of India=50%, Sponsor banks=35% and State govt=15%)
14.   Bank deposit is a non-marketable security.                  True
15.   Government bond is a long-term security.                   True      
16.   Certificate of deposit can be issued only by commercial bank.             False, can also be issued by FIs
17.   Credit card is a prepaid card.                                               False
18.   The Government of India set up the the Narasingham committee in 1991.
19.   International capital market are also called Euro market.
20.   Mutual Fund is an AMERICAN concept.
21.   A development bank does not accept deposits from public.
22.   Industrial development bank of India is a wholly owned subsidiary of RBI. It was established in 1964.
23.   The SEBI has been set up to Protect interest of the investors in company  and Regulate the working of stock broker.
24.   Commercial banks are allowed to enter into insurance business by The IRDA Act of 1999.
25.   NABARD was established in the year 1982.
26.   The Reserve Bank of India is managed by GOVERNOR.
27.   Treasury Bills are instruments of MONEY market.
28.   Mutual funds were first started in USA during 19th century.
29.   Financial market comprises of Capital Market and Money Market. TRUE
30.   Seasonal diversity is one of the defects of Indian money market.      TRUE
31.   Price stability is not an objective of monetary policy of Reserve Bank of India. F
32.   The main function of mutual funds is to mobilize the savings of the general public and invest the same in the stock market securities.                TRUE
33.   Financial institutions are also termed as FINANCIAL MARKET.
34.   Commercial Banks Scheme, 1970 provides that the board of directors of nationalized banks will be composed of SEVEN members including chairman.
35.   The Treasury bill is government Bonds for a short period usually of 91 days duration.
36.   Primary market refers to the long-term flow of funds from the surplus sector to the government and Private sector through primary issue of equity and debts.
37.   Treasury Bills, Commercial papers, Commercial Bills are one of the instruments of money market. TRUE
38.   Bull, Bear, Stag and Lame Duck are the speculators who are active on Stock Exchange of India. TRUE
39.   Merchant bankers undertake the function of purchase and sale of securities of the investors and provide portfolio management.                 TRUE
40.   Capital market deals with buying and selling of long term investible fund and money market deals with short-term funds.
41.   Demonetization has been implemented for 3 times in India till today.
42.   RBI acts as a lender of last resort in Indian banking system.
43.   Non-banking assets and non-performing assets are synonymous terms.       False
44.   Money market deals with short-term investible fund.                            True
45.   IDBI accepts deposits from public.                                    False
46.   Price stability is an objective of monetary policy of RBI.                          True                      
47.   Recent devaluation in India has been implemented on Indian Currency.
48.   The company which sets up a mutual fund is called Asset Management Company.
49.   35 % of the total share of regional rural bank is contributed by sponsoring commercial banks.
50.   Bank deposit is a marketable security.                            False
51.   Merchant banker performs the function of portfolio management. True

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