Longterm funds in the capital, market can be raised either by borrowing from certain institutions or through - (1) issue of note (2) taking loan from Government (3) issue of securities (4) taking loan from foreign institutions

Longterm funds in the capital, market can be raised either by borrowing from certain institutions or through - (1) issue of note (2) taking loan from Government (3) issue of securities (4) taking loan from foreign institutions
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(3) issue of securities Explanation: Capital markets provide for the buying and selling of long term debt or equity backed securities. When they work well, the capital markets channel the wealth of savers to those who can put it to long term productive use, such as companies or governments making long term investments. Capital Markets allow businesses to raise long-term funds by providing a market for securities, both through debt and equity.
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Long-term funds in the capital market can be raised either by borrowing from certain institutions or through (1) issue of note (2) taking loan from Government (3) issue of securities (4) taking loan from foreign institutions

Description : Long-term funds in the capital market can be raised either by borrowing from certain institutions or through (1) issue of note (2) taking loan from Government (3) issue of securities (4) taking loan from foreign institutions

Last Answer :  issue of securities

The RBI can decrease the money supply in the market by: a) selling government securities b) buying government securities c) borrowing money from commercial banks d) none of the above

Description : The RBI can decrease the money supply in the market by: a) selling government securities b) buying government securities c) borrowing money from commercial banks d) none of the above

Last Answer : a) selling government securities

Which one of the following statements is false ? (A) The Open Market Operations involve the sale or purchase of govt. securities by the Central Bank (B) The RBI manages longterm liquidity through rapos (C) The RBI manages longterm liquidity through Open Market Operations (D) Open Market Operations do not alter the total stock of govt. securities but change the proportion of govt. securities held by the RBI, Commercial Banks and Co-operative Banks

Description : Which one of the following statements is false ? (A) The Open Market Operations involve the sale or purchase of govt. securities by the Central Bank (B) The RBI manages longterm liquidity through ... change the proportion of govt. securities held by the RBI, Commercial Banks and Co-operative Banks

Last Answer : Answer: The RBI manages longterm liquidity through rapos

If he Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should - (1) lower cash reserve ratio (2) raise discount rates (3) sell government securities (4) All of the above

Description : If he Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should - (1) lower cash reserve ratio (2) raise discount rates (3) sell government securities (4) All of the above

Last Answer : (1) lower cash reserve ratio Explanation: When the Central Bank of a country intends to increase money supply, it should lower the Cash Reserve Ratio. A decrease in CRR helps the commercial banks to ... the amount of Bank deposits and they will lend more as they have more amount as their reserve.

If the Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should (1) lower cash reserve ratio (2) raise discount rates (3) sell government securities (4) All of the above

Description : If the Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should (1) lower cash reserve ratio (2) raise discount rates (3) sell government securities (4) All of the above

Last Answer :  lower cash reserve ratio

The main source of long-term credit for a business unit is - (1) sale of stocks and bonds to the public (2) borrowing from banks (3) loans from the Government (4) deposits from the public and financial institutions

Description : The main source of long-term credit for a business unit is - (1) sale of stocks and bonds to the public (2) borrowing from banks (3) loans from the Government (4) deposits from the public and financial institutions

Last Answer : (1) sale of stocks and bonds to the public Explanation: Companies issue securities called stocks and bonds to raise necessary capital which funds the company's daily operations and growth. ... issuing stock to owners called stockholders doesn't require the company's repayment of investor principal.

The main source of long-term credit for a business unit is (1) sale of stocks and bonds to the public (2) borrowing from banks (3) loans from the Government (4) deposits from the public and financial institutions

Description : The main source of long-term credit for a business unit is (1) sale of stocks and bonds to the public (2) borrowing from banks (3) loans from the Government (4) deposits from the public and financial institutions

Last Answer : sale of stocks and bonds to the public

Sub-prime lending refers to ________ A. lending done by banks at rates below PLR B. Funds raised by the banks at sub-libor rates C. Group of banks which are not rated as prime banks as per Banker‘s Almanac D. lending done by financing institutions including banks to customers not meeting with normally required credit appraisal standards E. All of the Above

Description : Sub-prime lending refers to ________ A. lending done by banks at rates below PLR B. Funds raised by the banks at sub-libor rates C. Group of banks which are not rated as ... institutions including banks to customers not meeting with normally required credit appraisal standards E. All of the Above

Last Answer : D. lending done by financing institutions including banks to customers not meeting with normally required credit appraisal standards Explanation: In finance, subprime lending (also referred to ... schedule, sometimes reflecting setbacks, such as unemployment, divorce, medical emergencies, etc.

In Bank‟s balance sheet, which of the following is an asset? A. Its paid up capital B. Its saved deposits C. Its instrument in government securities D. Its accumulated Reserve Funds E. Its Current Deposits

Description : In Bank‟s balance sheet, which of the following is an asset? A. Its paid up capital B. Its saved deposits C. Its instrument in government securities D. Its accumulated Reserve Funds E. Its Current Deposits

Last Answer : C. Its instrument in government securities Explanation: Bank assets comprises cash, money at short notice, bills and securities discounted, bank‘s investments in government securities, loans sanctioned by the bank.

Which of the following can issue commercial paper for raising short term funds? A. Corporates B. Primary Dealers C. All-India Financial Institutions D. Both (B) and (C) E. All of the Above

Description : Which of the following can issue commercial paper for raising short term funds? A. Corporates B. Primary Dealers C. All-India Financial Institutions D. Both (B) and (C) E. All of the Above

Last Answer : E. All of the Above Explanation: A Commercial Paper (CP) is an unsecured money market instrument issued as a promissory note. It is a short-term funding tool that highly rated ... -India financial institutions (AIFIs) can use, typically to meet shortterm funding and working capital requirements.

Which of the following is a revenue receipt? a) Loan from the International Monetary Fund b) Grant from the World Bank c) Borrowing from the Public d) Public Issue of shares

Description : Which of the following is a revenue receipt? a) Loan from the International Monetary Fund b) Grant from the World Bank c) Borrowing from the Public d) Public Issue of shares

Last Answer : b) Grant from the World Bank

Which of the following does not affect the fund flow statement a) Issue of shares b) Borrowing c) Repayment of loan d) Payment to creditors

Description : Which of the following does not affect the fund flow statement a) Issue of shares b) Borrowing c) Repayment of loan d) Payment to creditors

Last Answer : d) Payment to creditors

The RBI can increase the money supply in the market by: a) selling government securitiesb) buying government securitiesc) borrowing money from commercial banksd) none of the above

Description : The RBI can increase the money supply in the market by: a) selling government securities b) buying government securities c) borrowing money from commercial banks d) none of the above

Last Answer : b) buying government securities

Long-term debt securities issued by the GOI or any of the State Government‟s or undertakings owned by them or by development financial institutions are called as ________ A. Shares B. Debentures C. Bonds D. Both (A) and (C) E. None of the Above

Description : Long-term debt securities issued by the GOI or any of the State Government‟s or undertakings owned by them or by development financial institutions are called as ________ A. Shares B. Debentures C. Bonds D. Both (A) and (C) E. None of the Above

Last Answer : C. Bonds Explanation: Long-term debt securities issued by the Government of India or any of the State Government‘s or undertakings owned by them or by development financial institutions are called as bonds.

Interest paid by the government on the loans raised is called - (1) Debt Servicing (2) Deficit Financing (3) Discounted Budgeting (4) Bridge-loan

Description : Interest paid by the government on the loans raised is called - (1) Debt Servicing (2) Deficit Financing (3) Discounted Budgeting (4) Bridge-loan

Last Answer : (1) Debt Servicing Explanation: Debt service is the amount of money required to make payments on the principal and interest on outstanding loans, the interest on bonds. or the principal of maturing bonds. An ... or company unable to make such payments is said to be "unable to service one's debt."

Interest paid by the government on the loans raised is called (1) Debt Servicing (2) Deficit Financing (3) Discounted Budgeting (4) Bridge-loan

Description : Interest paid by the government on the loans raised is called (1) Debt Servicing (2) Deficit Financing (3) Discounted Budgeting (4) Bridge-loan 

Last Answer :  Debt Servicing

Open Market Operations refer to (1) Borrowings by Scheduled banks from RBI (2) Lending by Commercial banks to industry (3) Purchase and sale of Government securities by RBI (4) Deposit mobilization

Description : Open Market Operations refer to (1) Borrowings by Scheduled banks from RBI (2) Lending by Commercial banks to industry (3) Purchase and sale of Government securities by RBI (4) Deposit mobilization

Last Answer : (3) Purchase and sale of Government securities by RBI Explanation: Open Market Operation (OMO) refers to the buying and selling of government securities in the open market in order to expand or ... in the banking system. A central bank uses OMO as the primary means of implementing monetary policy.

Open Market Operations refer to __________ . (1) Borrowings by Scheduled banks from RBI (2) Lending by Commercial banks to industry (3) Purchase and sale of Government securities by RBI (4) Deposit mobilisation

Description : Open Market Operations refer to __________ . (1) Borrowings by Scheduled banks from RBI (2) Lending by Commercial banks to industry (3) Purchase and sale of Government securities by RBI (4) Deposit mobilisation

Last Answer : Purchase and sale of Government securities by RBI

Which type of foreign investment is considered as unsafe? (1) Foreign Direct Investment (FDI) (2) Portfolio Investment (3) NRI deposits (4) External commercial borrowing

Description : Which type of foreign investment is considered as unsafe? (1) Foreign Direct Investment (FDI) (2) Portfolio Investment (3) NRI deposits (4) External commercial borrowing

Last Answer : (2) Portfolio Investment Explanation: Portfolio Investments are considered unsafe. These are investments in the form of a group (portfolio) of assets, including transactions in equity securities, such as ... which allows an investor to exercise a certain degree of managerial control over a company.

Which type of foreign investment is considered as unsafe? (1) Foreign Direct Investment (FDI) (2) Portfolio Investment (3) NRI deposits (4) External commercial borrowing

Description : Which type of foreign investment is considered as unsafe? (1) Foreign Direct Investment (FDI) (2) Portfolio Investment (3) NRI deposits (4) External commercial borrowing 

Last Answer : Portfolio Investment

Capital market deals with - (1) Short term fund (2) Long term fund (3) Cash (4) Both long and short term funds

Description : Capital market deals with - (1) Short term fund (2) Long term fund (3) Cash (4) Both long and short term funds

Last Answer : (2) Long term fund Explanation: Capital markets are financial markets for the buying and selling of long-term debt or equity-backed securities. These markets channel the wealth of savers to those ... put it to long-term productive use, such as companies or governments making long-term investments.

Capital market deals with (1) Short term fund (2) Long term fund (3) Cash (4) Both long and short term funds

Description : Capital market deals with (1) Short term fund (2) Long term fund (3) Cash (4) Both long and short term funds 

Last Answer : Long term fund

For hannelizing the unaccounted money for productive purposes the Government Introduced the scheme of : (1) Special Bearer Bonds (2) Resurgent. India Bonds (3) Provident Funds (4) Market Loans

Description : For hannelizing the unaccounted money for productive purposes the Government Introduced the scheme of : (1) Special Bearer Bonds (2) Resurgent. India Bonds (3) Provident Funds (4) Market Loans

Last Answer : (1) Special Bearer Bonds Explanation: The Special Bearer Bonds (Immunities And Exemptions) Act, 1981 laid down the purpose of such bonds as necessary to canalize for productive purposes black money which has ... to issue at par certain bearer bonds to be known as the Special Bearer Bonds, 1991.

For channelising the unaccounted money for productive purposes the Government Introduced the scheme of : (1) Special Bearer Bonds (2) Resurgent India Bonds (3) Provident Funds (4) Market Loans

Description : For channelising the unaccounted money for productive purposes the Government Introduced the scheme of : (1) Special Bearer Bonds (2) Resurgent India Bonds (3) Provident Funds (4) Market Loans

Last Answer :  Special Bearer Bonds

A profit maximizing firm will invest up to the level of investment where (a) The cost of borrowing equals marginal efficiency of capital (b) The cost of borrowing is greater than marginal efficiency of capital © The cost of borrowing is less than marginal efficiency of capital (d) The cost of borrowing is equal to marginal propensity to consume.

Description : A profit maximizing firm will invest up to the level of investment where (a) The cost of borrowing equals marginal efficiency of capital (b) The cost of borrowing is greater than marginal ... marginal efficiency of capital (d) The cost of borrowing is equal to marginal propensity to consume.

Last Answer : (a) The cost of borrowing equals marginal efficiency of capital

Loans raised by the government from the public are known as: a) Corporate borrowings b) Common borrowings c) Market borrowings d) Private borrowings

Description : Loans raised by the government from the public are known as: a) Corporate borrowings b) Common borrowings c) Market borrowings d) Private borrowings

Last Answer : : c) Market borrowings

9. If the Federal Reserve wishes to increase the money supply, it should: a. raise the reserve requirement b. raise the discount rate c. buy Treasury securities in the open market d. all of the above

Description : 9. If the Federal Reserve wishes to increase the money supply, it should: a. raise the reserve requirement b. raise the discount rate c. buy Treasury securities in the open market d. all of the above

Last Answer : c. buy Treasury securities in the open market

New capital issue is placed in - (1) Secondary market (2) Grey market (3) Primary market (4) Black market

Description : New capital issue is placed in - (1) Secondary market (2) Grey market (3) Primary market (4) Black market

Last Answer : (3) Primary market Explanation: The primary market is that part of the capital markets that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain funding through ... sold for the first time. Therefore it is also called the new issue market (NIM).

New capital issue is placed in (1) Secondary market (2) Grey market (3) Primary market (4) Black market

Description : New capital issue is placed in (1) Secondary market (2) Grey market (3) Primary market (4) Black market

Last Answer : Primary market

Maximum loan size to a single person cannot exceed ________ of total capital funds. A. 30% B. 20% C. 11% D. 10% E. None of the Above

Description : Maximum loan size to a single person cannot exceed ________ of total capital funds. A. 30% B. 20% C. 11% D. 10% E. None of the Above

Last Answer : D. 10% Explanation: Maximum loan size to a single person cannot exceed 10% of total capital funds; cannot exceed 15% in the case of a group. Small finance bank can lend 75% of their total adjusted ... capital funds to single borrower, 15% to a group Minimum 50% of loans should be up to 25 lakhs.

Which of the following is the mode of settlement of securities wherein the transfer of securities and funds happen simultaneously? A. Delivery versus Payment (DvP) B. Duration C. Convexity D. All of the Above E. None of the Above

Description : Which of the following is the mode of settlement of securities wherein the transfer of securities and funds happen simultaneously? A. Delivery versus Payment (DvP) B. Duration C. Convexity D. All of the Above E. None of the Above

Last Answer : A. Delivery versus Payment (DvP) Explanation: Delivery versus Payment (DvP) is the mode of settlement of securities wherein the transfer of securities and funds happen simultaneously. ... securities are not delivered and vice versa. DvP settlement eliminates the settlement risk in transactions.

Under a conservative financing policy a firm would use long-term financing to finance some of the temporary current assets. What should the firm do when a "dip" in temporary current assets causes total assets to fall below the total long-term financing? A. Use the excess funds to pay down long-term debt. B. Invest the excess long-term financing in marketable securities. C. Use the excess funds to repurchase common stock. D. Purchase additional plant and equipment.

Description : Under a conservative financing policy a firm would use long-term financing to finance some of the temporary current assets. What should the firm do when a "dip" in temporary current assets causes ... C. Use the excess funds to repurchase common stock. D. Purchase additional plant and equipment.

Last Answer : B. Invest the excess long-term financing in marketable securities.

Which of the following statements is not correct? A. For the purpose of Funds Flow Statement, the term 'fund ' generally refers to net working capital B. Funds flow is a wider concept than the Cash flow C. The flow of funds must arise due to external and not internal transactions of the business D. The capitalisation of reserves by the issue of bonus shares also involves flow of funds

Description : Which of the following statements is not correct? A. For the purpose of Funds Flow Statement, the term 'fund ' generally refers to net working capital B. Funds flow is a wider concept than ... business D. The capitalisation of reserves by the issue of bonus shares also involves flow of funds

Last Answer : D. The capitalisation of reserves by the issue of bonus shares also involves flow of funds

The basic aim of Securities and Exchange Board of India (SEBI) is to– (A) Develop an effective and efficient monitoring and control system for the Indian Capital Market (B) To help Bombay Stock Exchange only (C) To help National Stock Exchange of India Ltd. only (D) To help OTC Exchange of India only

Description : The basic aim of Securities and Exchange Board of India (SEBI) is to- (A) Develop an effective and efficient monitoring and control system for the Indian Capital Market (B) To help Bombay Stock Exchange ... To help National Stock Exchange of India Ltd. only (D) To help OTC Exchange of India only

Last Answer : Answer: Develop an effective and efficient monitoring and control system for the Indian Capital Market

In the Capital market, the term arbitrage is used with reference to ______ A. Purchase of securities to cover the sale B. Sale of securities to reduce the loss on purchase C. Simultaneous purchase and sale of securities to make profits from price D. Variation in different markets E. None of the Above

Description : In the Capital market, the term arbitrage is used with reference to ______ A. Purchase of securities to cover the sale B. Sale of securities to reduce the loss on purchase C. Simultaneous purchase ... of securities to make profits from price D. Variation in different markets E. None of the Above

Last Answer : C. Simultaneous purchase and sale of securities to make profits from price Explanation: Arbitrage is the simultaneous purchase and sale of an asset to profit from a difference in the price. ... on different markets or in different forms. Arbitrage exists as a result of market inefficiencies.

________ are financial markets for the buying and selling of long-term debt or equity-backed securities. A. Bullion Market B. Capital Market C. Money Market D. All of the Above E. None of the Above

Description : ________ are financial markets for the buying and selling of long-term debt or equity-backed securities. A. Bullion Market B. Capital Market C. Money Market D. All of the Above E. None of the Above

Last Answer : B. Capital Market Explanation: Capital market is a market where buyers and sellers engage in trade of financial securities like bonds, stocks, etc

Who among the following are institutional investors in the Indian Debt Market? A. Banks B. Mutual funds C. Foreign investors (FIIs) D. Trusts E. All of the Above

Description : Who among the following are institutional investors in the Indian Debt Market? A. Banks B. Mutual funds C. Foreign investors (FIIs) D. Trusts E. All of the Above

Last Answer : E. All of the Above Explanation: Institutional investors operating in the Indian Debt Market are : Banks Insurance companies Provident funds Mutual funds Trusts Corporate treasuries

Government securities are considered liquid because they are - (1) backed by the Government treasury (2) convertible into other types of saving deposits (3) quickly and easily marketable (4) stable in value

Description : Government securities are considered liquid because they are - (1) backed by the Government treasury (2) convertible into other types of saving deposits (3) quickly and easily marketable (4) stable in value

Last Answer : (3) quickly and easily marketable Explanation: Liquid Asset is an asset that can be converted into cash quickly and with minimal impact to the price received. In a liquid market, ... free highly liquid financial instruments, which market participants are more willing to transact and take positions.

What are gilt-edged securities? (1) Securities issued by the multinational companies. (2) Securities issued by the Government (3) Securities issued by the private sector (4) Securities issued by the joint venture companies

Description : What are gilt-edged securities? (1) Securities issued by the multinational companies. (2) Securities issued by the Government (3) Securities issued by the private sector (4) Securities issued by the joint venture companies

Last Answer : (2) Securities issued by the Government Explanation: Gilt-edged securities are bonds issued by governments. They are government securities, i.e., instruments issued by the government to borrow money from the market. Gilt-edged securities are a high-grade investment with very low risk.

Government securities are considered liquid because they are (1) backed by the Government treasury (2) convertible into other types of saving deposits (3) quickly and easily marketable (4) stable in value

Description : Government securities are considered liquid because they are (1) backed by the Government treasury (2) convertible into other types of saving deposits (3) quickly and easily marketable (4) stable in value

Last Answer : quickly and easily marketable 

What are gilt–edged securities? (1) Securities issued by the multinational companies. (2) Securities issued by the Government (3) Securities issued by the private sector (4) Securities issued by the joint venture companies

Description : What are gilt–edged securities? (1) Securities issued by the multinational companies. (2) Securities issued by the Government (3) Securities issued by the private sector (4) Securities issued by the joint venture companies 

Last Answer : Securities issued by the Government

The price at which the government offers to sell foodgrains lower than the market price is known as? a. Procurement price b. Minimum support price c. Issue price d. Market price.

Description : The price at which the government offers to sell foodgrains lower than the market price is known as? a. Procurement price b. Minimum support price c. Issue price d. Market price.

Last Answer : c. Issue price

The minimum guaranteed price at which the government offers to purchase any quantity is known as; a. Procurement price b. Minimum Support Price c. Issue Price d. Market Price.

Description : The minimum guaranteed price at which the government offers to purchase any quantity is known as; a. Procurement price b. Minimum Support Price c. Issue Price d. Market Price.

Last Answer : b. Minimum Support Price

Farmers are paid a pre-announced price by the government for their crops. It is called: a. Issue price b. Invested price c. Market price d. Minimum support price.

Description : Farmers are paid a pre-announced price by the government for their crops. It is called: a. Issue price b. Invested price c. Market price d. Minimum support price.

Last Answer : d. Minimum support price.

Open market operations of RBI refer to buying and selling of - (1) Commercial bills (2) Foreign exchange (3) Gold (4) Government bonds

Description : Open market operations of RBI refer to buying and selling of - (1) Commercial bills (2) Foreign exchange (3) Gold (4) Government bonds

Last Answer : (4) Government bonds Explanation: OMOs are the market operations conducted by the Reserve Bank of India by way of sale/ purchase of Government securities to/ from the market with an objective to ... are tight, the RBI will buy securities from the market, thereby releasing liquidity into the market.

Open market operations of RBI refer to buying and selling of (1) Commercial bills (2) Foreign exchange (3) Gold (4) Government bonds

Description : Open market operations of RBI refer to buying and selling of (1) Commercial bills (2) Foreign exchange (3) Gold (4) Government bonds

Last Answer : Government bonds

What records a country's transactions (made by individuals, firms and government bodies.) with the rest of the world? a) Trade deficit b) Capital Budget c) Foreign imports d) Balance of Payments or BoP

Description : What records a country's transactions (made by individuals, firms and government bodies.) with the rest of the world? a) Trade deficit b) Capital Budget c) Foreign imports d) Balance of Payments or BoP

Last Answer : b) other things remaining equal

3. Which of the following is a NOT component of M-2? a. small time deposits b. money market mutual funds c. stocks d. checkable deposits

Description : 3. Which of the following is a NOT component of M-2? a. small time deposits b. money market mutual funds c. stocks d. checkable deposits

Last Answer : c. stocks

Repo Market means (a) A money market instrument which helps in collateral short term borrowing and lending through sale and purchase operation in debt instrument (b) A money market instrument which helps in collateral long term borrowing and lending through sale and purchase operation in debt instrument (c) A money market instrument which helps in collateral short term lending through sale and purchase operation in debt instrument (d) A money market instrument which helps in collateral short term borrowing through sale and purchase operation in debt instrument

Description : Repo Market means (a) A money market instrument which helps in collateral short term borrowing and lending through sale and purchase operation in debt instrument (b) A money market ... instrument which helps in collateral short term borrowing through sale and purchase operation in debt instrument

Last Answer : (a) A money market instrument which helps in collateral short term borrowing and lending through sale and purchase operation in debt instrument 

The capital issues of public limited companies are subject to guidelines issued by– (A) Reserve Bank of India (B) Central Government (C) Central Bank of India (D) Securities & Exchange Board of India (SEBI)

Description : The capital issues of public limited companies are subject to guidelines issued by– (A) Reserve Bank of India (B) Central Government (C) Central Bank of India (D) Securities & Exchange Board of India (SEBI)

Last Answer : Answer: Securities amp; Exchange Board of India (SEBI)