This article presents the multiple choice question for the course Banking and Financial Services. The Banking and Financial Services course is about understanding of banking system and banking services.
_____________ is not a type of bank account.
- Savings account
- Current account
- Capital account
- Demat account
Which of the following is the main function of a commercial bank?
- Accepting deposits and granting loans
- Regulating foreign exchange
- Regulating monetary policy
- Issuing currency notes
What does ‘KYC’ stand for in banking?
- Know Your Customer
- Keep Your Card
- Keep Your Cash
- Know Your Credit
What is a “unicorn” in the context of venture capital?
- A venture capital fund that has achieved high returns for its investors
- A startup company that is valued at $1 billion or more
- A company that is headquartered in Silicon Valley
- A company that has achieved high growth rates over a short period of time
_______________ is a scheduled bank in India.
- Cooperative Bank
- Moneylender
- Chit Fund
- Microfinance Institution
What is the role of a credit policy in credit management?
- To determine the credit limit for customers
- To define the terms and conditions for providing credit to customers
- To evaluate the creditworthiness of customers
- To determine the interest rate on credit provided to customers
Which of the following is NOT a function of a commercial bank?
- Issuing currency notes
- Providing investment banking services
- Accepting deposits from the government
- Granting loans and advances
What is the function of a credit policy?
- To define the company’s marketing strategy
- To define the company’s pricing strategy
- To define the company’s investment strategy
- To define the company’s credit management strategy
Which of the following is an example of a non-deposit liability for a commercial bank?
- Savings account
- Fixed deposit account
- Borrowings from other banks
- Certificate of deposit
______________ is the full form of an ATM in banking.
- Automatic Teller Machine
- Automatic Transaction Machine
- Automated Teller Machine
- Automated Transaction Machine
What is the full form of NPA in banking?
- Non-Performing Asset
- Non-Performing Account
- Non-Performing Advance
- Non-Performing Amortization
What is the purpose of a commercial bank’s reserve requirement?
- To maintain solvency of the bank
- To generate profits for the bank
- To ensure liquidity of the bank
- To manage the bank’s capital adequacy
______________ is not a type of banking regulation.
- Prudential regulation
- Monetary regulation
- Market regulation
- Supervisory regulation
What is the primary role of the central bank in a country’s economy?
- Lending money to commercial banks
- Regulating commercial banks
- Issuing currency
- Implementing fiscal policy
Which of the following is not a type of monetary policy tool?
- Open market operations
- Reserve requirements
- Capital adequacy ratios
- Discount rates
What is the main objective of prudential regulation?
- To ensure financial stability
- To control inflation
- To promote economic growth
- To manage foreign exchange rates
Demand deposit account is _____________________________.
- A savings account with a fixed interest rate
- An account that can be withdrawn from at any time without prior notice
- An account that requires a minimum balance
- A type of investment account
What is the role of the general partner in a venture capital fund?
- To provide financing for the fund
- To provide legal and regulatory support
- To manage the fund’s investments
- To raise capital from investors
What is the main source of funds for a development bank?
- Deposits from the general public
- Equity investments from shareholders
- Loans and grants from international organizations
- Fees from financial advisory services
___________________________ is the primary objective of a development bank.
- Maximizing profits for shareholders
- Providing financial services to the general public
- Promoting economic development of a country
- Facilitating international trade and commerce
What is the difference between a venture capital fund and a private equity fund?
- A venture capital fund invests in early-stage companies, while a private equity fund invests in established companies.
- A venture capital fund provides financing for small businesses, while a private equity fund provides financing for large businesses.
- A venture capital fund is typically a closed-end fund, while a private equity fund is typically an open-end fund.
- There is no difference between a venture capital fund and a private equity fund.
What is the typical focus of a development bank’s lending activities?
- Consumer loans
- Commercial and corporate loans
- Infrastructure and developmental projects
- Personal loans for education and healthcare
_______________ is not a type of deposit account.
- Savings account
- Current account
- Fixed deposit account
- Loan account
The purpose of the Know Your Customer (KYC) policy in banking is _____________________ .
- To prevent money laundering and terrorist financing
- To encourage customers to save money
- To provide customers with loans at low interest rates
- To promote financial inclusion
Which of the following is not a type of non-performing asset (NPA)?
- Sub-standard assets
- Doubtful assets
- Bad assets
- Standard assets
The purpose of a credit rating agency is _________________________.
- To rate the creditworthiness of borrowers
- To provide loans to customers
- To regulate the financial system
- To issue currency
What is a credit rating?
- The process of evaluating a company’s marketing strategies
- The process of evaluating a company’s financial performance
- The process of evaluating a company’s human resources
- The process of evaluating a company’s production processes
The main objective of the Basel III framework is ____________________ .
- To regulate commercial banks
- To ensure financial stability
- To promote economic growth
- To manage foreign exchange rates
What is the purpose of a development bank’s technical assistance programs?
- To generate profits for the bank
- To provide loans to developing countries
- To provide financial literacy training to borrowers
- To support capacity building and skill development in project implementation
Who assigns credit ratings to companies?
- Stock brokers
- Credit bureaus
- Banks
- Credit rating agencies
Which of the following is NOT a typical function of a development bank?
- Providing deposit and savings accounts to the public
- Financing infrastructure projects
- Providing long-term loans for agriculture and rural development
- Promoting export-oriented industries
___________ is not a type of credit risk.
- Default risk
- Interest rate risk
- Liquidity risk
- Country risk
What is the primary focus of a development bank’s poverty alleviation programs?
- Providing free grants to low-income individuals
- Offering low-interest rate loans to low-income individuals
- Providing vocational training to low-income individuals
- Providing affordable housing to low-income individuals
What is the function of a development bank’s risk management department?
- To generate profits for the bank
- To manage the bank’s investment portfolio
- To ensure compliance with regulations
- To assess and manage credit risk in lending activities
The purpose of a Letter of Credit (LC) is ______________________.
- To provide loans to customers
- To regulate the financial system
- To facilitate international trade
- To promote financial inclusion
What is the role of development banks in providing long-term financing?
- Providing short-term loans to businesses
- Providing equity investments to businesses
- Providing long-term loans to businesses
- Providing insurance services to businesses
What is the main function of commercial banks?
- Providing loans to individuals and businesses
- Issuing currency
- Regulating the stock market
- Managing government budgets
The main objective of venture capital funds is _____________________________.
- To provide short-term financing to companies
- To provide long-term financing to companies
- To provide seed capital to startup companies
- To provide funding for charitable organizations
What is the role of international development banks?
- To provide financial services to the general public
- To promote economic development in developing countries
- To manage the investments of private individuals
- To provide insurance services to businesses
The source of capital for venture capital funds is _________________ .
- Government grants
- Bank loans
- Private investors
- Charitable donations
What is the function of a central bank in relation to commercial banks?
- Regulating the monetary policy
- Providing loans to individuals
- Managing stock market investments
- Facilitating international trade
What is the function of a credit monitoring system?
- To approve loans and advances to customers
- To manage the company’s investment portfolio
- To evaluate and manage credit risk
- To provide financial advice to customers
The primary source of income for commercial banks are _______________ .
- Interest on loans
- Fees and commissions
- Trading securities
- Government grants
What is a debit card?
- A type of credit card
- A type of prepaid card
- A type of savings account
- A type of checking account
The risk profile of venture capital funds is _________________ .
- Low risk
- Moderate risk
- High risk
- No risk
What is the difference between credit risk and market risk?
- Credit risk is the risk of loss due to changes in market conditions, while market risk is the risk of loss due to defaults by customers.
- Credit risk is the risk of loss due to defaults by customers, while market risk is the risk of loss due to changes in market conditions.
- Credit risk and market risk have the same definition.
- Credit risk and market risk are unrelated.
What is the role of limited partners in venture capital funds?
- They provide the capital for the fund
- They manage the day-to-day operations of the fund
- They make investment decisions on behalf of the fund
- They provide mentorship and guidance to the portfolio companies
Which of the following is a liability for a commercial bank?
- Loans to customers
- Deposits from customers
- Interest income
- Investment in stocks
What is a cashier’s check?
- A check drawn on the bank’s own funds
- A check drawn on the customer’s funds
- A check drawn on the government’s funds
- A check drawn on a third party’s funds
What is the role of a credit manager?
- Approving loans and advances to customers
- Managing the company’s investment portfolio
- Assessing the creditworthiness of customers
- Providing financial advice to customers
Which of the following is a type of savings account offered by banks?
- Credit card
- Checking account
- Money market account
- Personal loan
What is the role of commercial banks in the payment system?
- Issuing currency
- Regulating interest rates
- Facilitating transactions
- Managing government bonds
The function of a commercial bank in managing liquidity risk is ________________________________.
- Managing stock market investments
- Issuing currency
- Regulating interest rates
- Maintaining adequate cash reserves
Credit management is about __________________ .
- Managing a company’s social media accounts
- Managing a company’s financial statements
- Managing a company’s credit risk
- Managing a company’s inventory
What is the role of venture capital funds in the startup ecosystem?
- Providing mentorship and guidance to startup companies
- Providing operational support to startup companies
- Connecting startups with potential customers and partners
- All of the above
Which organization is responsible for issuing currency notes in India?
- Ministry of Finance
- Reserve Bank of India (RBI)
- Indian Banks’ Association (IBA)
- Securities and Exchange Board of India (SEBI)
What type of bank product allows businesses to borrow money for short-term financing needs?
- Home loans
- Business loans
- Car loans
- Personal loans
What is the typical investment horizon for venture capital funds?
- 1-2 years
- 3-5 years
- 5-10 years
- 10+ years
Venture capital funds are the ___________________________ .
- Funds used for personal expenses
- Funds used for purchasing real estate
- Funds used for investing in startup companies
- Funds used for government projects
What is a time deposit in a commercial bank?
- A loan provided by the bank
- A type of savings account
- An account for managing investments
- A deposit with a fixed term and higher interest rate
Home equity loan is ____________________ .
- A loan taken against the equity in a home
- A loan taken against the value of a car
- A loan taken against the value of a business
- A loan taken against the value of a stock portfolio
The role of commercial banks in the creation of money is ______________________ .
- Issuing currency
- Providing loans to customers
- Regulating interest rates
- Managing government bonds
What is a credit rating scale?
- A scale used to measure a company’s profitability
- A scale used to measure a company’s market share
- A scale used to measure a company’s production capacity
- A scale used to measure a company’s creditworthiness
What type of bank product allows individuals to earn interest on their savings over a fixed period of time?
- Checking accounts
- Savings accounts
- Money market accounts
- Certificate of deposit
A credit rating of “AAA” signifies __________________.
- High creditworthiness with very low risk of default
- Low creditworthiness with very high risk of default
- Medium creditworthiness with moderate risk of default
- High creditworthiness with high risk of default
What is a payday loan?
- A short-term loan with a high interest rate and fees
- A long-term loan with a low interest rate and fees
- A type of checking account with a high interest rate
- A type of savings account with a low interest rate
What type of bank product allows individuals to make purchases and pay bills without using cash or writing checks?
- Personal loans
- Credit cards
- Home loans
- Business loans
A credit rating of “D” signifies ________________ .
- High creditworthiness with very low risk of default
- Low creditworthiness with very high risk of default
- Medium creditworthiness with moderate risk of default
- Default or near default
What is the function of a commercial bank in managing market risk?
- Managing stock market investments
- Evaluating creditworthiness of borrowers
- Issuing currency
- Regulating interest rates
What type of bank product provides individuals with a specific amount of money that can be used for purchasing a car?
- Personal loans
- Credit cards
- Auto loans
- Home loans
A credit limit is _____________________________________.
- The maximum amount of credit a company can provide to its customers
- The minimum amount of credit a company can provide to its customers
- The average amount of credit provided by a company
- The interest rate charged on credit provided by a company
What is the main goal of credit management?
- Maximizing profits for the company
- Minimizing losses due to credit risk
- Maximizing sales revenue for the company
- Minimizing inventory costs
Which of the following is NOT a credit rating agency?
- Moody’s
- Standard & Poor’s
- FICO
- Fitch Ratings
What is a bank product that provides individuals with a loan to finance their education?
- Personal loans
- Credit cards
- Home loans
- Student loans
What is a bank product that provides individuals with a credit line that can be used for various purposes?
- Personal loans
- Credit cards
- Home equity loans
- Lines of credit
How do credit ratings impact borrowing costs for companies?
- Higher credit ratings result in lower borrowing costs
- Higher credit ratings result in higher borrowing costs
- Credit ratings do not impact borrowing costs
- Credit ratings impact only the tenure of borrowing, not the cost
What is a bank product that provides businesses with funds to purchase or lease equipment or machinery?
- Personal loans
- Credit cards
- Business loans
- Equipment financing
What is the function of a commercial bank in the foreign exchange market?
- Regulating interest rates
- Managing stock market investments
- Facilitating international trade
- Providing loans to individuals
Which of the following is NOT a type of development bank?
- National development bank
- Regional development bank
- International development bank
- Retail development bank
What is the role of a commercial bank in managing credit risk?
- a) Evaluating creditworthiness of borrowers
- b) Issuing credit cards to customers
- c) Managing stock market investments
- d) Regulating interest rates
What is the purpose of credit scoring in credit management?
- a. To determine the creditworthiness of customers
- b. To determine the interest rate on credit provided to customers
- c. To determine the credit limit for customers
- d. To determine the payment terms for customers
The purpose of the Priority Sector Lending (PSL) scheme in India is _____________________.
- A) To provide loans to large businesses
- B) To promote small-scale industries
- C) To regulate the banking system
- D) To promote financial inclusion
What is the main function of the Securities and Exchange Board of India (SEBI)?
- A) Regulating the banking system
- B) Regulating the stock market
- C) Regulating the insurance industry
- D) Regulating the mutual fund industry
What is a CD (certificate of deposit)?
- a) A type of savings account with a high interest rate
- b) A type of loan that must be repaid within a specific time period
- c) An investment in stocks or bonds
- d) An insurance policy
A credit score is _____________________.
- a) A measure of an individual’s creditworthiness
- b) The interest rate charged on a loan
- c) The total amount of debt an individual owes
- d) The amount of money an individual has in savings
What is a checking account?
- a) An account that pays a fixed interest rate
- b) An account used for long-term savings
- c) An account used for everyday transactions
- d) An account used for international transactions
What is the purpose of the Reserve Bank of India (RBI)?
- A) Regulating the stock market
- B) Regulating the insurance industry
- C) Regulating the mutual fund industry
- D) Regulating the banking system
Who regulates and supervises the functioning of credit rating agencies in India?
- a. Securities and Exchange Board of India (SEBI)
- b. Reserve Bank of India (RBI)
- c. Ministry of Finance
- d. Indian Banks’ Association (IBA)
What is the maximum amount insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) in India?
- A) Rs. 1 lakh
- B) Rs. 5 lakhs
- C) Rs. 10 lakhs
- D) Rs. 25 lakhs
What is the interest rate charged by the Reserve Bank of India (RBI) when banks borrow money overnight through the repo rate?
- a. Reverse repo rate
- b. Prime lending rate
- c. Base rate
- d. Marginal cost of funds based lending rate (MCLR
