RBI GRADE B | SEBI GRADE A 2019

Finance (Theory)

MCQ Series
Lecture – 5

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 Question

Q1. Den Communications Ltd. is planning to go for a stock split in a ratio of

1:2. Which is of following will be true for the company if proposed action is
undertaken?

A. FV will double and net-worth will remain same.

B. FV will double and net-worth will also double.
C. FV will remain same and net-worth will double
D. FV will become half and net-worth will double.
E. FV will become half and net-worth will remain unchanged.

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 Explanation
Balance Sheet of a Company
 Question

Q1. Den Communications Ltd. is planning to go for a stock split in a ratio of

1:2. Which is of following will be true for the company if proposed action is
undertaken?

A. FV will double and net-worth will remain same.

B. FV will double and net-worth will also double.
C. FV will remain same and net-worth will double
D. FV will become half and net-worth will double.
E. FV will become half and net-worth will remain unchanged.

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 Question

Q2. In which of the following type(s) bond, principle is paid during the
lifetime of the bond?

A. Zero Coupon Bonds.

B. Consoles
C. Amortizing Bonds
D. Inverse Floater Bonds.
E. Both B and C.

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Explanation
Amortizing Bonds
 Question

Q2. In which of the following type(s) bond, principle is paid during the
lifetime of the bond?

A. Zero Coupon Bonds.

B. Consoles
C. Amortizing Bonds
D. Inverse Floater Bonds.
E. Both B and C.

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 Question
Q3. Given below are the two statements related to CSR. Which of the
following is incorrect?

A. It is applicable to the companies which have a net-worth of 100 Cr.

B. Under it, at least 2% of average net-profit, of immediately preceding two
financial years, needs to be allocated for CSR activities.
A. Statement A only
B. Statement B only
C. Both A and B
D. Neither A nor B

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 Explanation
(Corporate Social Responsibility) CSR

Applicable to What amount needs

whom? to be allocated?

• Net-worth >= 500 Cr. • Minimum 2% of average of net-

• Annual turnover of >= 1000 Cr. profit of immediately
• Net-profits >= 5Cr. preceding three financial years.

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 Question
Q3. Given below are the two statements related to CSR. Which of the
following is incorrect?

A. It is applicable to the companies which have a net-worth of 100 Cr.

B. Under it, at least 2% of average net-profit, of immediately preceding two
financial year needs to be allocated for CSR activities.

A. Statement A only
B. Statement B only
C. Both A and B
D. Neither A nor B

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 Question

Q4. Which of the following entity undertakes the process of transaction

settlement of government securities in secondary market?

A. CCIL
B. RBI
C. NSCCl
D. ICCL
E. None of the above.

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 Explanation
Clearing Corporation of India Ltd.

• Setup in April, 2001.

• Headquartered at Mumbai.
• To provide guaranteed clearing and
settlement function for transactions in
• money, G-Secs, Foreign Exchange and
Derivative Markets, in the secondary market.

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 Question

Q4. Which of the following entity undertakes the process of transaction

settlement of government securities in secondary market?

A. CCIL
B. RBI
C. NSCCl
D. ICCL
E. None of the above.

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 Question

Q5. Which of the following section of Banking Regulation Act, 1949, renders
powers to Reserve Bank to appoint additional directors on the BoD of Banks?

A. Section 36AA
B. Section 36AB
C. Section 36AC
D. Section 9
E. None of the above.

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 Explanation
Banking Regulation Act, 1949

• Sec 36AA: Power of Reserve Bank to remove

managerial and other persons from the office.

• Sec 36AB: Power of Reserve Bank to appoint

additional directors.

• Sec 36AC: Part II-A to override all other laws.

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 Question

Q5. Which of the following section of Banking Regulation Act, 1949, renders
powers to Reserve Bank to appoint additional directors on the BoD of banks?

A. Section 36AA
B. Section 36AB
C. Section 36AC
D. Section 9
E. None of the above.

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 Answers to MCQs

Answers:
Q1 : E
Q2 : C
Q3 : C
Q4 : A
Q5: B

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 Query
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