ANSWER THE FOLLOWING (1 Mark Questions) -Solved 1. Define Financial System A.
It is complex closely connected network of financial institutions, agents, markets, services, instruments, procedures and practices adopted in various transactions in the economy. 2. Name the components of the financial system of any country A. The financial system of any country consists of i. Specialised and non- Specialized financial institutions(Banking and NonBanking financial Institutions) ii. iii. Organised and unorganized financial markets Financial Instruments and Services which facilitate transfer of funds
3. Mention the functions of the Financial System. A. The functions of the Financial System are i) Provision of liquidity ii)
Mobilization of savings 4. What are Financial Markets A. Financial Markets are those that facilitate buying and selling of financial transactions and services. 5. Name the state owned insurance corporations of India. A. The two state owned insurance corporations of India are Life Insurance Corporation of India (LIC) and the General Insurance Corporation of India (GIC). 6. Define ICICI A. INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA 7. What is a money Market? A. Money market refers to the market where money and highly liquid marketable securities are bought and sold having a maturity period of one or less than one year. 8. Who are the participants of the T-bill market. A. The Reserve Bank of India, mutual funds, financial institutions, primary dealers, satellite dealers, provident funds, corporates, foreign banks, and foreign institutional investors are all participants in the treasury bill market. 9. What is a call money market. A. Call money market refers to the market for short -term funds ranging from
overnight funds to funds for a maximum tenor of 14 days .
10. Name a money market instrument, which enables collateralized short term
borrowing and lending through sale/purchase operation s in debt instruments.
during the period for which the IPO is open. debt.
constituted for the purpose of regulating or controlling the business of buying.5 percent is payable on the market value of shares being transferred. Define a stock exchange.
13. What instruments are contained in the capital Market? A. A. 19.e.A. holding and handling of securities in electronic form. What is Book building process? A. The primary market is that part of the capital markets that deals with the
issuance of new securities. Define DEMATERIALISATION A. Mention the difference between term deposit and Certificate of Deposit(CDs)
. In case of transfer of physical shares. 17. Stock exchange means anybody of individuals. Depositories are those who are licensed by the Securities and Exchange Board of India (SEBI) to undertake depository functions i. which are above or equal to the floor price. Capital market comprises of equity. A. The National Securities Depository Ltd. No stamp duty for transfer of securities in the electronic form. Dematerialisation (³Demat´ in short form) signifies conversion of a share certificate from its physical form to electronic form for the same number of holding which is credited to your demat account which you open with a Depository Participant (DP). whether incorporated or not. Name the two depositories in India. 11. What are the benefits of having a demat account? A. selling or dealing in securities
15. It is a mechanism where. Who are the depositories
A. including future markets in commodities ?
12. What is a primary market? A. bids are
collected from investors at various prices.
14. 18. (NSDL) and Central Depository Services (India) Ltd (CDSL) are the two depositories. foreign exchange and derivatives
markets. Repo. stamp duty of 0. 16.
What are the services provided by the stock exchanges. Distinguish between repo and Reverse Repo. 5. Certificate of deposits rates are usually higher than the term deposit rates. 2. 5. 10. 6. What are the characteristics of T-bills. Distinguish between the primary and Secondary markets. Write a short note on i) Commercial papers ii) Certificate of Deposit. Distinguish between money market and capital market. Distinguish between a primary market and a secondary market. ANSWER THE FOLLOWING QUESTIONS (7 Marks Questions) 1. 3. Describe the primary market in India. 4. What are the Characteristics of the Financial system. What are its advantages and disadvantages. State the functions of a foreign exchange market. 3. due to the low transactions costs
ANSWER THE FOLLOWING QUESTIONS (3 Mark Questions) 1. ³Treasury bills are important short-term source of finance for the government´ Explain. Certificates of deposits differ from term deposit as they have the facility for transfer and
multiple ownerships before maturity. A financial System is a well-integrated system whose parts interact with each other. What is listing. What are the characteristics and functions of the financial markets. 6. Classify the financial intermediaries functioning in the Indian Financial system and bring out their features.A. 4. What is a capital market? What are its major constituents? 8. 9. What is a financial system? Discuss the components of the Financial system. 2. 7. Comment. 7.
. What are the distinctive features of stock markets in India.
Mention the Sources of funds of commercial banks. Define a Bank.. 4.g. 11. 1934. A. Non-monetary function 3. What are Unsecured loans. The Sources of funds of commercial banks are i. no collateral is involved). Why is RBI called Banker¶s bank and the lender of the last resort. private sector and the Indian or foreign banks depending upon the ownership. cooperative and regional rural banks. security) for the loan. Loans and advances
. A. Define e-banking A. A. Unorganized sector ii.e. Commercial banks operating in India may be categorized into public sector. In times of needs the banks can borrow funds from the RBI and hence it is called the lender of the last resort. What are General utility services A.ANSWER THE FOLLOWING (1 Mark Questions) -Solved 1.. The RBI is responsible to controls the volume of reserves of all commercial. Investments v. Organised sector 6. A secured loan is a loan in which the borrower pledges some asset (e. management and control. A. 10. NPAs means non-performance Assets. Banks provide a system for easily transferring money from one person or business to another 2. E-banking refers to the use of technology which allows customers to perform banking transactions electronically without visiting a brick and morter institution 12. A bank is a financial institution where an individual can deposit money. Bills discounted iv. What are Secured loan A. Mention the two broad functions of RBI. A.. 9. RBI in turn includes only those banks in this schedule which satisfy the criteria laid down vide section 42 (6) (a) of the Act 7.e. Cash in Hand ii. How are Commercial banks classified? A. General utility services are those services which are rendered by commercial banks not only to the customers but also to the general public.Scheduled Banks in India constitute those banks which have been included in the Second Schedule of Reserve Bank of India (RBI) Act. What are Scheduled Commercial Banks. The functions of the RBI can be classifies as the i. Money at Call and Short notice iii. The Indian Banking System consists of two parts i. What is NPAs A. 8. Unsecured loans are monetary loans that are not secured against the borrowers assets (i. Monetary function ii. A. a car or property) as collateral (i. A. How do we classify the Indian commercial Banks. 5.
3. 4. Mention the Asset classification and categories of NPAs. What are the various factors affecting liquidity of the Banks. 5. What are commercial banks? Explain their features 2. Explain the various factors determining the liquidity of Banks. 4. 7. Explain the features of commercial banks.
. Write the schematic representation of the structure of commercial Banks in India. Mention the different methods of Granting Loans by Bank 6.ANSWER THE FOLLOWING QUESTIONS (Three marks questions) 1. 10. What are NPAs. Distinguish between Indian Banks and Foreign Banks. Explain the terms i) Liquidity ii) Profitability of a commercial Banks ANSWER THE FOLLOWING QUESTIONS(Seven marks questions) 1. Mention the objectives of RBI 2. Write briefly on the profitability of Commercial Banks. Mention the difference between public sector and private sector banks. What are the modes of short-term financial assistance of the commercial a banks 5. 9. Discuss the various sources of funds of a commercial banks. 3. 8.
as the effecting of contracts which provide sickness benefits or medical.Bodily injuries to others. What is principle of Indemnity. A.ANSWER THE FOLLOWING (1 Mark Questions) -Solved 1. What is insurable interest A. A. A. whether in-patient or outpatient on an indemnity. 3. Define Insurance. What is endowment insurance A. A risk diversifiable if it is possible to reduce risk through pooling or risks sharing agreements. reimbursement. What are diversifiable risks. A. 6. An insurer normally rejects some applicants and accept others. The cause of loss made be direct and an insured are in order to claim for compensation. This means that if the insured suffers a loss against which the policy has been made he shall be fully indeminified only to the extent of loss 5. .Personal injuries to others. 9. What is Principle of Causa Proxima A.Property damage to others. Fire Insurance is a contract of indemnity wherein the insurer undertakes to indemnify the insured against financial loss or damage to property caused directly as a result of fire anytime during an agreed period of time 11. or hospital expense benefits. Are those risks which affect nearly all humans at the same time. Under the agreement.Define Health Insurance. What is Hull ´All Risks´
. Protects against liability claims and lawsuits involving : . services prepaid. Health Insurance or health cover is defined in the registration of Indian Insurance companies Regulations 2000. A pure risk exists when there is a chance of loss but no chance of gain 2. A. 10 . The underwriting process determines which applicants are eligible for insurance coverage. What is fire insurance? A. . hospital or other plans basis including assured benefits and long term care. Define Liability Insurance. Define pure risk. Serves as an effective means to accumulate a specific sum of money over a period of time. A. surgical. Insurable interest means one must stand to suffer a measurable loss (in currency) if the insured-against event occurs 4. the insurer agrees to reimburse loss in return for the insured¶s premium payment 7. The criteria to accept an insurance may by using strict underwriting policy and stringent rules to determine eligibility 8. A. What is underwriting process. 12. Insurance in Finance terms can be defined as a contract actual agreement b/w two parties the insurer and the insured.
Mention the Risk Management techniques. Explain Marine Hull insurance. 4. Describe the various types of General Insurance. 2. 7. Describe the various types of risks. 6. Mention the factors affecting individuals demand for the Insurance. 2.
ANSWER THE FOLLWOING QUESTIONS( Seven marks questions) 1. Differentiate between Diversifiable and Non-diversifiable risks. Describe the concept of Insurable risk. Give two examples of health insurance. 3. What are the Characteristics of Insurance industry. Differentiate between pure and speculative risks. Briefly describe the role of Insurance in Economic growth. 5. Write the short note on i) Fire Insurance ii) Marine Insurance Briefly describe the various General Insurance Products. The hull "All Risks" policy usually pertains to chances of physical loss or damage to the aircraft ANSWER THE FOLLOWING QUESTIONS(Three marks questions) 1. Describe the classification of Insurance. 3.
. Write a short note on the benefits of Insurance 8. 4. 5. 10.A. 9.
What is Risk Appraisal A. Mention the Underwriting meth ods.
. The necessary conditions are a)Agreement between two parties b) Lawful object c)Capacity to contract
d) Legal purpose (e) Consideration (f) Possibility of performance etc. Define Insurance Contracts. Adverse Selection or Unfavorable selection ii. Insurance contracts are agreements between insurance companies and insured for Purpose of transferring from insured to the insurer a part of the risk of loss arising Contingent event 2. Principle of subrogation is based on the law of equity. A. Define Underwriting. What is Principle of Causa Proxima A. the third party should not avoid his or her financial responsibilities 4. Define the principle of Subrogatio n A. 3. when an insurer has paid a claim to an insured and a different party is liable for the cost of the loss.ANSWER THE FOLLOWING (1 Mark Questions) ±Solved 1. 7. A. What are the necessary conditions for Insurance contracts A. The cause of loss made be direct and an insured are in order to claim for compensation 5. What is personal risks. What are the two principles of Underwriting . Consistency or persistency 9. Risk appraisal is a simple concept used by life insurance companies to assess a fair premium cost for people who purchase their products . A. A. A loss could be due to a cause of causes. which provides that. Underwriting is the insurance function that is responsible for assessing and classifying the degree of risk a proposed insured or group and making a decision concerning coverage of risks 8. These are risks that directly affect the individual s capability to earn income 6. The two main principles of Underwriting are i.
Manual Rating iii. to indemnify another insurer against all or part of the loss that insurer may sustain under the policy of insurance
. Judgement Rating ii.A. A. Reinsurance is a transaction in which one insurer agrees for a premium. There are various methods of rate determination some of them are: i. Merit Rating a) Experience merit rating b) Retrospective merit rating
10.What is reinsurance.