LUCKNOW PUBLIC SCHOOL

(C.P. SINGH FOUNDATION)

INTERNAL ASSESMENT : 2024-25
SUBJECT : BANKING
CLASS – XI
STUDENT’S NAME
SECTION ROLL NO.

DATE : …………………………
TIME ALLOWED : 60 MINUTES
GENERAL INSTRUCTIONS:
1. Attempt all the questions. SIGNATURE OF INVIGILATOR
2. Read the questions carefully. M.M: 40
SECTION – A
1. What is a secured loan?
a) Loan backed by collateral b) Loan based on borrower’s creditworthiness
c) Loan without any security d) Loan with high interest rates
OR
What is an unsecured loan?
a) Loan backed by collateral b) Loan based on borrower’s creditworthiness
c) Loan requiring fixed deposit d) Loan without repayment period
2. Which of the following is a fee-based product for banks?
a) Auto loan b) Mutual fund sale
c) Housing loan d) Overdraft
3. What is the role of the Asset Liability Management Committee (ALCO)?
a) Manage bank branches b) Invest in real estate
c) Provide loans to startups d) Monitor credit risk and liquidity
4. Define "Entrepreneurship Skills."]
a) Knowledge of stock markets
b) The ability to identify and manage business opportunities
c) Financial accounting expertise
d) Investment banking knowledge
5. What are liquid assets?
a) Assets with high market value b) Assets that can be easily converted to cash
c) Fixed-term investments d) Non-monetary investments
OR
Which of these is NOT a liquid asset?
a) Cash in hand b) Investments in government securities
c) Long-term fixed deposits d) Money at call and short notice
6. What does "SLR" stand for in banking?
a) Standard Lending Rate b) Statutory Liquidity Ratio
c) Short-term Lending Rule d) Securities Lending Regulation
7. Which of the following loans is NOT secured?
a) Car loan b) Home loan
c) Personal loan d) Mortgage loan
8. What is the primary objective of entrepreneurship?
a) To reduce financial risks b) To create wealth and employment
c) To invest in mutual funds d) To regulate inflation

9. What is the main purpose of discounting bills of exchange?

a) To increase investment options b) To manage liquidity needs of businesses
c) To avoid taxes d) To diversify a portfolio
OR
Why do banks use cash credit facilities?
a) To improve foreign exchange reserves b) To secure long-term deposits
c) To reduce loan defaults d) To provide short-term financing
10. What is overdraft?
a) A short-term loan to withdraw more than the balance
b) A type of fixed deposit
c) A government scheme
d) A loan with no interest
OR
What is the meaning of cash credit?
a) A term loan repayment option b) A facility allowing withdrawal beyond balance
c) A type of recurring deposit d) None of the above
11. What does RBI use to regulate money supply?
a) Repo rate b) Liquidity Adjustment Facility
c) Statutory Liquidity Ratio d) All of the above
12. Which type of loan is given against property?
a) Secured loan b) Unsecured loan
c) Overdraft d) Term loan
13. What is the main role of venture capital?
a) Provide loans to individuals b) Invest in innovative startups
c) Facilitate government bonds d) Trade in stocks
14. What is the purpose of Term Loans?
a) Provide short-term funding b) Purchase and installation of assets
c) Provide overdraft facilities d) For working capital management
15. What does "CRR" stand for?
a) Cash Reserve Ratio b) Credit Reserve Requirement
c) Credit Ratio Reserve d) Central Reserve Rate
16. What type of risk does Asset Liability Management (ALM) focus on?
a) Credit risk b) Market risk
c) Liquidity risk d) Operational risk
17. Which of the following is NOT a type of current account?
a) Individual Current Account b) Joint Current Account
c) Corporate Current Account d) Fixed Deposit Account
18. What is the primary objective of small finance banks?
a) Provide loans for large corporations
b) Provide financial inclusion to underserved sectors
c) Offer investment advice
d) Offer high interest savings accounts
19. Which type of loan requires no collateral?
a) Home loan b) Auto loan
c) Personal loan d) Mortgage loan
20. What does “EFT” stand for in banking?
a) Electronic Funds Transfer b) Enhanced Funds Transfer
c) Emergency Funds Transfer d) External Funds Transfer
21. What is a ‘Mutual Fund’?
a) A type of fixed deposit b) A pool of funds used for diversified investments
c) A savings account d) A loan product
22. Which of the following is a characteristic of retail banking?
a) Serving large corporations b) Small transaction amounts, large customer base
c) Providing merchant services d) Long-term loans
23. What is the primary function of the Commercial Bank?
a) Monitor stock market b) Accept deposits and make loans
c) Regulate other banks d) Offer investment advice
24. What is meant by "Nominee" in banking terms?
a) A person who can authorize transactions on behalf of the account holder
b) A person who manages the bank’s funds
c) A person who inherits the balance in the account after the account holder’s death
d) A person who checks account activities
25. What is the primary objective of business incubation?
a) Regulate business mergers b) Provide loans for established businesses
c) Help startups in their early stages d) Facilitate large-scale manufacturing
26. What does “EMI” stand for in banking?
a) Estimated Monthly Interest b) Equal Monthly Installments
c) Exclusive Monthly Investment d) External Money Investment
27. What is a partnership in the context of entrepreneurship?
a) A loan facility provided by banks
b) A business operation by two or more persons sharing profits
c) A single-person business structure
d) A governmental financial scheme
28. Which type of deposit is NOT a demand deposit?
a) Savings Account b) Current Account
c) Fixed Deposit Account d) Money Market Deposit Account
29. What is a key difference between retail and wholesale banking?
a) Retail banking caters to corporations, wholesale to individuals
b) Retail banking offers services for large sums, wholesale offers services to individuals
c) Retail banking focuses on consumer transactions, wholesale focuses on corporate transactions
d) Wholesale banking offers higher interest rates
30. What is an example of "Non-performing Asset" (NPA)?
a) Home loan paid in full b) Loan for business that defaults
c) Fixed deposit earning interest d) Term loan fully repaid
SECTION – B
31. Assertion (A): Banks invest in mutual funds to manage liquidity.
Reason (R): Mutual funds provide fixed returns.
a) Both A and R are true, and R is the correct explanation of A.
b) Both A and R are true, but R is not the correct explanation of A.
c) A is true, but R is false.
d) A is false, but R is true.
OR
Assertion (A): Secured loans carry lower interest rates compared to unsecured loans.
Reason (R): Collateral reduces the risk for the bank.
a) Both A and R are true, and R is the correct explanation of A.
b) Both A and R are true, but R is not the correct explanation of A.
c) A is true, but R is false.
d) A is false, but R is true.
32. Assertion (A): Discounting bills of exchange helps businesses manage their working capital.
Reason (R): It allows immediate access to funds by selling future receivables at a discount.
a) Both A and R are true, and R is the correct explanation of A.
b) Both A and R are true, but R is not the correct explanation of A.
c) A is true, but R is false.
d) A is false, but R is true.

33. Assertion (A): Entrepreneurship promotes innovation in the economy.

Reason (R): Entrepreneurs create new products and services to meet market needs.
a) Both A and R are true, and R is the correct explanation of A.
b) Both A and R are true, but R is not the correct explanation of A.
c) A is true, but R is false.
d) A is false, but R is true.
34. Assertion (A): Banks face liquidity risks due to poor asset management.
Reason (R): Liquidity risk is unrelated to the mismatch of assets and liabilities.
a) Both A and R are true, and R is the correct explanation of A.
b) Both A and R are true, but R is not the correct explanation of A.
c) A is true, but R is false.
d) A is false, but R is true.
OR
 Assertion (A): Overdrafts help businesses manage working capital efficiently.
Reason (R): Overdraft facilities are available for long-term loans.
a) Both A and R are true, and R is the correct explanation of A.
b) Both A and R are true, but R is not the correct explanation of A.
c) A is true, but R is false.
d) A is false, but R is true.
35. Assertion (A): Statutory Liquidity Ratio ensures banks maintain liquidity.
Reason (R): SLR reserves are kept in the form of gold or government securities.
a) Both A and R are true, and R is the correct explanation of A.
b) Both A and R are true, but R is not the correct explanation of A.
c) A is true, but R is false.
d) A is false, but R is true.
36. Assertion (A): Liquid assets are critical for maintaining a bank's liquidity.
Reason (R): Liquid assets can be easily converted to cash without significant loss of value.
a) Both A and R are true, and R is the correct explanation of A.
b) Both A and R are true, but R is not the correct explanation of A.
c) A is true, but R is false.
d) A is false, but R is true.
37. Assertion (A): Personal loans are usually unsecured.
Reason (R): They require collateral like property or gold.
a) Both A and R are true, and R is the correct explanation of A.
b) Both A and R are true, but R is not the correct explanation of A.
c) A is true, but R is false.
d) A is false, but R is true.
38. Assertion (A): Entrepreneurship helps in generating employment opportunities.
Reason (R): Entrepreneurs establish businesses that require human resources for operations.
a) Both A and R are true, and R is the correct explanation of A.
b) Both A and R are true, but R is not the correct explanation of A.
c) A is true, but R is false.
d) A is false, but R is true.
39. Assertion (A): Banks maintain statutory liquidity reserves to destabilize the financial system.
Reason (R): SLR enables banks to meet unexpected withdrawals and regulatory requirements.
a) Both A and R are true, and R is the correct explanation of A.
b) Both A and R are true, but R is not the correct explanation of A.
c) A is true, but R is false.
d) A is false, but R is true.
40. Assertion (A): Entrepreneurs take calculated risks to achieve business success.
Reason (R): Risk-taking is essential for innovation and capturing market opportunities.
a) Both A and R are true, and R is the correct explanation of A.
b) Both A and R are true, but R is not the correct explanation of A.
c) A is true, but R is false.
d) A is false, but R is true.