TAKSHASHILA MAHAVIDHYALAY AMRAVATI

FOR B.Com 2nd Semester IV

SUBJECT :INDIAN FINANCIAL SYSTEM

1. The concept of Financial management is

a. Profit maximization

b. All features of obtaining and using financial resources for company operations

c. Organization of funds

d. Effective Management of every company

Answer: b.All features of obtaining and using financial resources for company operations

2. Equity shareholders are called

a. Owners of the company

b. Partners of the company

c. Executives of the company

d. Guardian of the company

Answer: (a) Owners of the company

3. Internal sources of capital are those that are

a. generated through outsiders such as suppliers

b. generated through loans from commercial banks

c. generated through issue of shares

d. generated within the business

Answer: (d) Generated within the business

 4. What are the three interrelated areas of finance?

a. Financial markets, option and forwards

b. Banking, financial institutions and swap currency

c. Investment, Financial management and Financial market & Financial institution

d. All of above

Ans (c) Investment, Financial management and Financial market & Financial institution

5. Stock exchange is known as __________ market for securities.

a. Primary market

b. Secondary market

c. Capital market

d. None of the above

Ans (b) Secondary Market

6. _________ is a market for lending & borrowing of short term funds.

a. Money market

b. Primary market

c. Capital market

d. All of the above

Ans (a) Money Market

7. Which of the following is the function of financial market?

a. Mobilization of savings

b. Price fixation

c. Provide liquidity to financial assets

d. All of the above

Ans (d) All of the above

8. _______ is a link between savers & borrowers, helps to establish a link between savers &
investors

a. Marketing

b. Financial market

c. Money market

d. None of these

Ans (b) Financial Market

9. In which year State Bank of India was formed?

a. 1947

b. 1950

c. 1955

d. 1949

Ans C 1955

10. Reserve Bank of India was formed as per recommendation of which committee?

a. Hilton Young Commission

b. Deshmukh Commission

c. Keynes Commission

d. Purshotamdas Thakurdas Commission

Ans a. Hilton Young Commission

11. Which was the first bank to introduce Internet banking?

a. Canara Bank

b. ICICI Bank

c. Punjab National Bank

d. State Bank of India

Ans: b. ICICI Bank

12. Which was the first bank to introduce credit card in India?

a. Canara Bank

b. Central Bank of India

c. Bank of Baroda

d. ICICI Bank

Answer: Central Bank of India

13. Which bank has launched the fist contactless debit, credit and multi-currency forex card?

a. Axis Bank

b. ICICI Bank

c. HDFC Bank

d. SBI

Ans: a.Axis Bank

14. Abbreviation of BHIM?

a. Bharat Interface for Money

b. Bharat Interact for Money

c. Bill Interface for Money

d. Bharat Internet for Money

Ans a) Bharat Interface for Money

15. UPI is an ______ payment service?

a. Offline

b. Online

c. Both a and b

d. None of these

Ans b) Online

16. PIN stands for:

a. Portable Identification Number

b. Permanent Identification Number

c. Personal Identification Number

d. None of The Above

Ans c) Personal Identification Number

17. …… is plastic money

a. Banking transfer

b. Cheque

c. Digital cash

d. Credit card

Ans (d) Credit card

18. Which is primary function of the Bank:

a. Issue of credit letter

b. Keeping valuables

c. Accepting deposits

d. Giving loan for Education.

Ans: (c) Accepting deposits

19. A debit card is issued to

a. All Customers of the bank

b. All Customers having saving bank account with bank

c. A bank customer who is income tax assesee

d. All corporate salary account holder

Ans (b) All Customers having saving bank account with bank

20.ATM stands for:

a. Automated Teller Machine

b. Automatic Telling Machine

c. Automatic Taking Machine

d. None of These

Ans a) Automated Teller Machine

21. Credit can be created by:

a. RBI

b. Foreign banks

c. Commercial banks
 d. Private banks

Answer: C Commercial bank

22. Current account deposits are

a. Non repayable

b. Non repayable on demand

c. Repayable on demand

d. None of these

Answer: C Repayable on demand

23. The most widely used tool of monetary policy is known as?

a. Open market operations

b. Discount rate

c. Issuing of notes

d. None of these

Answer: A Open market operations

24. NBFC stands for

a. New banking finance company

b. New business finance and credit

c. National banking and Finance Corporation

d. Non banking financial company

Answer: D Non banking financial company

25. Which is the primary activity of a commercial bank?

a. Maintaining deposit accounts including current accounts

b. Issue and pay cheques

c. Collect cheques for the bank’s customers

 d. All of these

Answer: D All of these

26.________ refers to that portion of total deposits with a commercial bank has to keep with the
central bank:

a. SLR

b. Bank rate

c. CRR

d. None

Ans (c) CRR

27. In order to encourage investment in the economy, the Central Bank may ________

a. Reduce Cash Reserve Ratio

b. Increase Cash Reserve Ratio

c. Sell Government securities in the open market

d. Increase Bank Rate

Ans: (A) Reduce Cash Reserve Ratio

28. Institution that accepts deposits for lending purpose is known as __________

a. Commercial Bank

b. Central Bank

c. Government

d. Public

Ans (A) Commercial Bank

29. Which among the following is incorrect?

a. RBI is the Bank of Issue

b. RBI acts as Banker to the Government

 c. RBI is Banker's Bank

d. RBI does not regulate the flow of credit

ANS: d) RBI does not regulate the flow of credit

30. Who was the first governor of Reserve Bank of India from Indian origin?

a. Osborne Smith

b. C. Rajagopalachari

c. L. K. Jha

d. C.D. Deshmukh

Ans: C.D. Deshmukh

31. What is CRR?

a. Cash Reserve Ratio

b. Current Ratio Rate

c. Review Report

d. Credit Rating Record

Ans : a. Cash Reserve Ratio

32. The central banking functions in India are performed by the

a. Central Bank of India

b. State Bank of India

c. Reserve Bank of India

d. Punjab National Bank

Ans : (c) Reserve Bank of India

33. Which of the following is not a function of the RBI?

a. custodian of foreign exchange

 b. bankers' bank

c. banker to the public

d. bank issue

Ans (c) banker to the public

34. The RBI has helped to finance India's foreign trade through

a. NABARD

b. State Bank of India

c. IDBI

d. EXIM bank

Ans : (d) EXIM

35. In India, NIFTY and SENSEX are calculated on the basis of

a. Market Capitalization

b. Paid up Capital

c. Free-float Capitalization

d. .Authorized Share Capital

Ans C.Free-float Capitalization

36. When was Nifty established?

a. A 1996

b. B 1952

c. C 1965

d. D None of these

Ans (a)1996

37. Which of the following is responsible for the fluctuations in the Sensex?

a. A Political instability
 b. B Monetary policy

c. C Rain

d. D All of the above

Ans (d) All of the above

38. BSE is

a. Bombay Securities Exchange

b. Bombay Stock Enterprise

c. Bitcoin Stock Exchange

d. Bombay Stock Exchange

Ans b. Bombay Stock Exchange

39. Which of the following TERM does not belong to the stock exchange?

a. NAV

b. NSE

c. IPO

d. KPO

Ans (d) KPO

40. How many companies are included in the SENSEX?

a. 30
b. 50
c. 111
d. 25

Ans a. 30