3RD SEM FIN - SCDL C PGDBA...certificate of deposits. Correct Answer False Your Answer True Select...

3RD

SEMESTER

ASSIGNMENTS

FINANCE

SCDL

Tristar

justvishal

ASSIGNMENTS

Tristar

justvishal

CAPITAL MARKET -AMITA

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?Correct Answer Securities Contract Regulation ActYour Answer Securities Contract Regulation Act

Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?Correct Answer A net connection , A registered account with a broker and a demat account , Bank

payment gateway or online banking facilityYour Answer A registered account with a broker and a demat account , Bank payment gateway or online

banking facility , A net connection

Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term instrumentsYour Answer Market for long term funds and investments in long term instruments

True/FalseQuestion Sweat equity shares are shares issued by company to employees or directors to discount.Correct Answer TrueYour Answer True

True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and commercial paper.Correct Answer FalseYour Answer False

Multiple Choice Single AnswerQuestion Under various SEBI regulations how many brokers suspended?Correct Answer 8Your Answer 8

Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till approval of trustees

and offer document has been filed with the board , With each offer document pay filing fees , Offerdocument to contain disclosures

Your Answer With each offer document pay filing fees , Offer document to contain disclosures

Match The FollowingQuestion Correct Answer Your Answer

Charge card Form of plastic money Member establishment

Warning Bulletin Authenticity test Authenticity test

Credit information company SBI, HDFC bank SBI, HDFC bank

Credit card issuing company Visa/Master Card Visa/Master Card

Multiple Choice Single Answer

Question Who forms the Asset management company (AMC)?Correct Answer Group of trusteesYour Answer Group of trustees

Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate account to be

maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank

Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital market?Correct Answer US$14 bnYour Answer US$14 bn

Multiple Choice Single AnswerQuestion Under which regulation is reporting mandatory in respect of acquisitions arising out of firm

allot meant in public issues and rights issues etc?Correct Answer Regulation (3) 4Your Answer Regulation (3) 4

True/FalseQuestion Book building is a process whereby the price is determined on the basis of actual demand as

evident from the offers given by the various institutional investors and underwriters.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion The Money market mutual funds (MMMFs) can invest the funds in which of these securities?Correct Answer Call/notice moneyYour Answer Call/notice money

Multiple Choice Multiple AnswerQuestion What is the information to be placed before the board of directors as per the Kumarmangalam

report?Correct Answer Annual operating plans , Capital budgets , Quarterly resultsYour Answer Annual operating plans , Capital budgets , Quarterly results

True/FalseQuestion Bidder cannot revise his bids.Correct Answer FalseYour Answer True

Multiple Choice Multiple AnswerQuestion What are ESOP's ?Correct Answer One of the methods of giving part ownership of the company to the employees ,

Employees can take part in the prosperity of the company , Is a reward and linked with the increase in theprices of the shares

Your Answer Is a reward and linked with the increase in the prices of the shares , One of the methods ofgiving part ownership of the company to the employees , Employees can take part in the prosperity of thecompany


Shareholders Should effectively participate in general body meetings Should effectively participate ingeneral body meetings

Objective of Audit committee Look into defaults to depositors creditors shareholders and debenture holdersLook into defaults to depositors creditors shareholders and debenture holders

Reasons of failures of corporate governance in spite of norms Superficial commitment to vision, missionand values Superficial commitment to vision, mission and values

Functions of Chief Executive, ED, Managers Assisting the board in decision making process Assisting theboard in decision making process

Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB

controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB controlled

by Indians promoters

Select The BlankQuestion While structuring the deal the entrepreneur seeks ________.Correct Answer Voting controlYour Answer Goodwill

True/FalseQuestion DRR is treated as part of general reserve for consideration of bonus issue of proposals.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills , Experience

Multiple Choice Multiple AnswerQuestion What precautions are to be taken with respect to delivery instruction slip ?Correct Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in

target account idYour Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in

target account id

True/FalseQuestion Reliance group has added over 10000 crores in market capital.Correct Answer TrueYour Answer False

Select The BlankQuestion An acquirer who holds 15% or more but less than 75% of voting' rights can acquire such

additional shares as would entitle him to exercise more than ________ of voting rights in an financial year.Correct Answer 0.05Your Answer 0.2

Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCH

Your Answer FITSCH

Select The BlankQuestion The appointment of a ________ is mandatory in a offer process.Correct Answer Merchant BankerYour Answer Merchant Banker

Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public issue as regards to

its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore



Multiple Choice Single AnswerQuestion To make a public announcement the acquirer has to appoint :-Correct Answer Merchant BankerYour Answer Merchant Banker

Multiple Choice Single AnswerQuestion What is a more contemporary definition of corporate governance?Correct Answer Corporate Governance is all about promoting corporate fairness, transparency and

accountabilityYour Answer Corporate Governance is all about promoting corporate fairness, transparency and

accountability

Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in compliance of SEBI

regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock exchanges at least 4 days

before the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days , Annual disclosures

Your Answer Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days

Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries

Select The BlankQuestion The merger of GTB and UTI was called off due to intervention of ________Correct Answer SEBI and RBIYour Answer SEBI and RBI

Select The BlankQuestion The Merchant banker will incorporate in the letter of offer the comments made by SEBI and

then send within ________ days from the date of PA to all shareholders whose names appear in the registerof the company.

Correct Answer 45Your Answer 45

Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?Correct Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in

opinion of boardYour Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in opinion

of board

True/FalseQuestion The public cannot give their complaints or comments on the issuer company or others

connected with the issue to SEBI.Correct Answer FalseYour Answer False

True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer No stamp duty , Reduction in paperless work , Reduction in transaction costYour Answer Reduction in paperless work , Reduction in transaction cost , Holds funds in an account

Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the

investor's holdings in an electronic form , Effect settlement of securities traded on exchangesYour Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the

investor's holdings in an electronic form , Effect settlement of securities traded on exchanges

True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large corporates to issue

certificate of deposits.Correct Answer FalseYour Answer True

Select The BlankQuestion Directors should not be member of more than________ committees.Correct Answer 10Your Answer 10

Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE

Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?Correct Answer 1Your Answer 1

True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities separately for each client.Correct Answer FalseYour Answer False

Capital Market_2

- 1 -


Select The BlankQuestion Information technology, communication and entertainment represent ________

stocks.Correct Answer ICEYour Answer ICE

True/FalseQuestion The public cannot give their complaints or comments on the issuer company or

others connected with the issue to SEBI.Correct Answer FalseYour Answer True

True/FalseQuestion In order to dematerialize the securities one has to fill DRF.Correct Answer TrueYour Answer True

Select The BlankQuestion In case of an IPO of any security of issue size of Rs________ or more security shall

be issued only in demat form.Correct Answer 10 croresYour Answer 10 crores

Multiple Choice Multiple AnswerQuestion What are the obligations of a company in a share buy back?Correct Answer The offer letter should contain true, factual and material information and should

not be misleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of the closureof the offer.

Your Answer The offer letter should contain true, factual and material information and shouldnot be misleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of the closureof the offer.

Select The BlankQuestion The DP opens investor account in the system and gives an account number also

known as ________.Correct Answer BO IDYour Answer BO ID

Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many times of the net

owned funds?Correct Answer 4 timesYour Answer 4 times

Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Degree of popularity of the industry , Overall economic condition , Demand

and supply capitalYour Answer Overall economic condition , Demand and supply capital , Degree of popularity of

the industry

Match The Following

Capital Market_2

- 2 -

Question Correct Answer Your Answer

Portfolio Collection of assets Collection of assets

Factors influencing portfolio decisions Business and Market risks Business and Market risks

Code of conduct- Portfolio Manager Observe high standard of integrity and fairness Observe highstandard of integrity and fairness

SEBI Regulations Portfolio Manager must fulfill the capital adequacy norms To make timelydecision regarding sale and purchase of securities

Multiple Choice Multiple AnswerQuestion What are the major factors influencing portfolio decisions?Correct Answer Investor characteristics , Liquidity needs and tax considerations , Investment

and interest rate riskYour Answer Investor characteristics , Liquidity needs and tax considerations , Investment and

interest rate risk

Multiple Choice Single AnswerQuestion The refinance made available to any HFC is not to be more than :-Correct Answer 60% of its outstanding housing loansYour Answer 60% of its outstanding housing loans


















Multiple Choice Single AnswerQuestion Who forms the Asset management company (AMC)?Correct Answer Group of trustees

Your Answer Group of trustees




























target account id




Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer FITSCH

Select The Blank

Question The appointment of a ________ is mandatory in a offer process.Correct Answer Merchant BankerYour Answer Merchant Banker








accountability










Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?

Correct Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as inopinion of board

Your Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in opinionof board















Multiple Choice Single AnswerQuestion What was the objective of setting up the Securities Trading

corporation of India Ltd?Correct Answer To promote secondary market in government securities

Your Answer To strengthen the capital markets

Multiple Choice Multiple AnswerQuestion What are the salient features of Hire Purchase ?

Correct Answer Finance company purchases the equipment supplier and lets iton hire , During the contract hirer can opt for an early repaymentand purchase the asset , Hirer may be required to make downpayment

Your Answer During the contract hirer can opt for an early repayment andpurchase the asset , Hirer may be required to make downpayment , Finance company purchases the equipment supplierand lets it on hire

True/FalseQuestion A mutual fund shall not invest more than 10% of is NAV in equity

shares in cases of open ended schemes.Correct Answer True

Your Answer True

Select The BlankQuestion ________ are a kind of portfolio schemes.

Correct Answer Mutual funds

Your Answer Mutual funds

Multiple Choice Single AnswerQuestion Who takes risk at the time of investment ?

Correct Answer Investor

Your Answer Investor

True/FalseQuestion MIBOR is a security. Derivatives based on this interest rate have

legal recognition under SCRA.Correct Answer False

Your Answer True

Select The BlankQuestion It is the responsibility of the ________ to ensure the timely

refunds and allotments of the securities.Correct Answer Lead managers

Your Answer Lead managers

True/FalseQuestion A credit card is a payment mechanism which enables the holder

to buy goods and services on credit.Correct Answer True

Your Answer True


Looses the rights to vote Non voting shares Non voting shares

Book building Bharati Televentures Bharati Televentures

Depository Bank of securities Bank of securities

First to introduce rollingsettlements in the country

NSE NSE

Select The BlankQuestion Final prospectus in the book building p________ess is to be filed

with the ROC.Correct Answer ROC

Your Answer ROC

Select The BlankQuestion A company with highly rated instrument has the opportunity to

________ by quoting less interest rates.Correct Answer Reduce the cost of borrowing

Your Answer Reduce the cost of borrowing

True/FalseQuestion Book building is a process whereby the price is determined on

the basis of actual demand as evident from the offers given bythe various institutional investors and underwriters.

Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies

by NHB?Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any

appointment of auditorsYour Answer Minimum paid up capital 1 crore , At least 2 directors , At least

50% loans in long term nature

Multiple Choice Single AnswerQuestion A portfolio manager could undertake the following on behalf of

his clients :-Correct Answer Hedging and arbitrage transactions

Your Answer Hedging and arbitrage transactions

Multiple Choice Multiple AnswerQuestion How is price determined in an open offer?

Correct Answer Negotiated price , Price paid by acquirer , Average weekly highlow of closing share of the target company

Your Answer Negotiated price , Price paid by acquirer , Average weekly highlow of closing share of the target company

Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?

Correct Answer Sound General knowledge , Analytical ability and marketingskills , Experience

Your Answer Experience , Sound General knowledge , Analytical ability andmarketing skills

Multiple Choice Single AnswerQuestion Renewal of portfolio fund on maturity shall be deemed as a fresh

placement for a minimum period of :-Correct Answer 1 year

Your Answer 2 years

True/FalseQuestion In order to dematerialize the securities one has to fill DRF.

Correct Answer True

Your Answer True

Select The Blank

Question One of the process of book building is that the issuer appoints a________ also known as the book runner.

Correct Answer Lead manager

Your Answer Lead manager

Select The BlankQuestion The process of securitisation involves transfer of assets to a

person specially created called as ________.Correct Answer Special purpose vehicle

Your Answer Trust

True/FalseQuestion A custodian can transfer beneficial ownership legally.

Correct Answer False

Your Answer False

Multiple Choice Single AnswerQuestion Apart from the portfolio management fees what percentage of

returns can the portfolio manager share from their client'sprofits?

Correct Answer 0

Your Answer 0

True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities

purchased under the buy back arrangement to be extinguishedand physically destroyed.


Your Answer False

Select The BlankQuestion BSE introduced an equity stock index known as ________.

Correct Answer SENSEX

Your Answer SENSEX

Multiple Choice Multiple AnswerQuestion As per the recommendations of the Kumarmangalam Birla

committee report who are the key components of an auditcommittee.

Correct Answer Board , Internal auditor , External auditor

Your Answer Board , Internal auditor , External auditor

Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20

000 crores?Correct Answer Infosys , Satyam , Wipro

Your Answer Infosys , Satyam , Wipro

Multiple Choice Multiple AnswerQuestion What are the obligations of a company in a share buy back?

Correct Answer The offer letter should contain true, factual and materialinformation and should not be misleading. , The company mustpay the consideration only by the way of cash , The companyshould not issue any fresh securities including bonus shares tillthe date of the closure of the offer.

Your Answer The offer letter should contain true, factual and materialinformation and should not be misleading. , The company mustpay the consideration only by the way of cash , The companyshould not issue any fresh securities including bonus shares tillthe date of the closure of the offer.

Multiple Choice Multiple AnswerQuestion What are the different kinds of stock exchanges in India?

Correct Answer Voluntary non profit making organizations , Joint stockcompanies limited by shares , Joint stock companies Limited byguarantee

Your Answer Voluntary non profit making organizations , Joint stockcompanies limited by shares , Private limited companies

Multiple Choice Multiple AnswerQuestion Companies are not allowed to buy back securities :-

Correct Answer Through any/ own subsidiary company , Through any/group ofinvestment company , If default subsists in respect ofrepayments of deposits, term loans to any financial institutionsand redemption of preference shares or debentures

Your Answer Through any/ own subsidiary company , Through any/group ofinvestment company , If default subsists in respect ofrepayments of deposits, term loans to any financial institutionsand redemption of preference shares or debentures

True/FalseQuestion The depository can legally transfer beneficial ownership.

Correct Answer True

Your Answer True

Select The BlankQuestion For issues upto Rs. 50 crores the number of lead managers will

not exceed ________.Correct Answer 2

Your Answer 4


Ready forward transaction(Repo)

Interbank sale andrepurchase of securities

Operations in call moneymarkets

Commercial paper Means of raising shortterm debt by companies

Means of raising short termdebt by companies

STCI Operations in call moneymarkets

Launched in fiscal 2004-05

Market stabilsation Bonds Launched in fiscal 2004-05


True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their

trustees and asset management companies.Correct Answer False

Your Answer False

Multiple Choice Single AnswerQuestion What is the time frame to submit a report to SEBI for acquisition

transactions arising out of firm allotment in public issues rightissues etc?

Correct Answer 21 days

Your Answer 21 days

True/FalseQuestion The acquirer is required to appoint a merchant banker before

making a PA.Correct Answer True

Your Answer True

Select The BlankQuestion The right to buy is called ________.

Correct Answer Call option

Your Answer Call option

Multiple Choice Single AnswerQuestion Upto what percentage has the RBI permitted the banks to invest

in the capital market ?Correct Answer 0.05

Your Answer 0.05

Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital

markets?Correct Answer Establishment of NSE

Your Answer Opening of Indian Capital Markets to FII's

Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making

an public issue as regards to its net worth?Correct Answer Net worth of the company should not be less than 1 crore

Your Answer Net worth of the company should not be less than 1 crore

Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were

debarred?Correct Answer 1

Your Answer 3

Select The BlankQuestion Among the closed schemes, 4 long term assurance schemes

were launched with a return ranging between ________.Correct Answer 13 - 14%

Your Answer 15 - 16%

Multiple Choice Multiple AnswerQuestion What are the major factors influencing portfolio decisions?

Correct Answer Investor characteristics , Liquidity needs and tax considerations ,Investment and interest rate risk

Your Answer Investor characteristics , Liquidity needs and tax considerations ,Investment and interest rate risk

Multiple Choice Single AnswerQuestion What was the percentage of public offering under the IPOs

through the book building method ?Correct Answer 0.1

Your Answer 0.25

Multiple Choice Multiple AnswerQuestion What are the main features of commercial paper?

Correct Answer Short term financial instrument , Negotiable and transferableinstrument , Companies issue it for raising short term debt

Your Answer Short term financial instrument , Negotiable and transferableinstrument , Companies issue it for raising short term debt

Select The BlankQuestion A ________ can legally transfer beneficial ownership.

Correct Answer Depository

Your Answer Depository

Multiple Choice Multiple AnswerQuestion The setting up of NSE consists of:-

Correct Answer Set up by IDBI , Equity paid up capital of Rs25 crores , Startedoperations in June 1994

Your Answer Equity paid up capital of Rs25 crores , Started operations inJune 1994 , There is a trading floor in this exchange

Multiple Choice Single AnswerQuestion Which Act defines the term Stock Exchange?

Correct Answer Securities Contract Regulation Act

Your Answer Securities And Exchange Board of India

1

Multiple Choice Single AnswerQuestion What was the objective of setting up the Securities Trading corporation of India Ltd?

CorrectAnswer

To promote secondary market in government securities



CorrectAnswer

Finance company purchases the equipment supplier and lets it on hire , During thecontract hirer can opt for an early repayment and purchase the asset , Hirer may berequired to make down payment

Your Answer During the contract hirer can opt for an early repayment and purchase the asset , Hirermay be required to make down payment , Finance company purchases the equipmentsupplier and lets it on hire

True/FalseQuestion A mutual fund shall not invest more than 10% of is NAV in equity shares in cases of open

ended schemes.Correct

AnswerTrue

Your Answer True


CorrectAnswer

Mutual funds



CorrectAnswer

Investor


True/FalseQuestion MIBOR is a security. Derivatives based on this interest rate have legal recognition under

SCRA.Correct

AnswerFalse

Your Answer True

Select The BlankQuestion It is the responsibility of the ________ to ensure the timely refunds and allotments of the

securities.Correct

AnswerLead managers


2

True/FalseQuestion A credit card is a payment mechanism which enables the holder to buy goods and

services on credit.Correct

AnswerTrue

Your Answer True






NSE NSE

Select The BlankQuestion Final prospectus in the book building p________ess is to be filed with the ROC.

CorrectAnswer

ROC

Your Answer ROC

Select The BlankQuestion A company with highly rated instrument has the opportunity to ________ by quoting less

interest rates.Correct

AnswerReduce the cost of borrowing


True/FalseQuestion Book building is a process whereby the price is determined on the basis of actual demand

as evident from the offers given by the various institutional investors and underwriters.Correct

AnswerTrue

Your Answer True

Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies by NHB?

CorrectAnswer

Minimum paid up capital 1 crore , At least 2 directors , Any appointment of auditors

Your Answer Minimum paid up capital 1 crore , At least 2 directors , At least 50% loans in long termnature

Multiple Choice Single AnswerQuestion A portfolio manager could undertake the following on behalf of his clients :-

3

CorrectAnswer

Hedging and arbitrage transactions



CorrectAnswer

Negotiated price , Price paid by acquirer , Average weekly high low of closing share of thetarget company

Your Answer Negotiated price , Price paid by acquirer , Average weekly high low of closing share of thetarget company


CorrectAnswer

Sound General knowledge , Analytical ability and marketing skills , Experience

Your Answer Experience , Sound General knowledge , Analytical ability and marketing skills

Multiple Choice Single AnswerQuestion Renewal of portfolio fund on maturity shall be deemed as a fresh placement for a

minimum period of :-Correct

Answer1 year

Your Answer 2 years


CorrectAnswer

True

Your Answer True

Select The BlankQuestion One of the process of book building is that the issuer appoints a ________ also known as

the book runner.Correct

AnswerLead manager


Select The BlankQuestion The process of securitisation involves transfer of assets to a person specially created

called as ________.Correct

AnswerSpecial purpose vehicle

Your Answer Trust


CorrectAnswer

False

4

Your Answer False

Multiple Choice Single AnswerQuestion Apart from the portfolio management fees what percentage of returns can the portfolio

manager share from their client's profits?Correct

Answer0

Your Answer 0

True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities purchased under the buy

back arrangement to be extinguished and physically destroyed.Correct

AnswerFalse

Your Answer False


CorrectAnswer

SENSEX

Your Answer SENSEX

Multiple Choice Multiple AnswerQuestion As per the recommendations of the Kumarmangalam Birla committee report who are the

key components of an audit committee.Correct

AnswerBoard , Internal auditor , External auditor


Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20 000 crores?

CorrectAnswer

Infosys , Satyam , Wipro



CorrectAnswer

The offer letter should contain true, factual and material information and should not bemisleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of theclosure of the offer.

Your Answer The offer letter should contain true, factual and material information and should not bemisleading. , The company must pay the consideration only by the way of cash , Thecompany should not issue any fresh securities including bonus shares till the date of theclosure of the offer.


5

CorrectAnswer

Voluntary non profit making organizations , Joint stock companies limited by shares ,Joint stock companies Limited by guarantee

Your Answer Voluntary non profit making organizations , Joint stock companies limited by shares ,Private limited companies


CorrectAnswer

Through any/ own subsidiary company , Through any/group of investment company , Ifdefault subsists in respect of repayments of deposits, term loans to any financialinstitutions and redemption of preference shares or debentures

Your Answer Through any/ own subsidiary company , Through any/group of investment company , Ifdefault subsists in respect of repayments of deposits, term loans to any financialinstitutions and redemption of preference shares or debentures


CorrectAnswer

True

Your Answer True

Select The BlankQuestion For issues upto Rs. 50 crores the number of lead managers will not exceed ________.

CorrectAnswer

2

Your Answer 4


Ready forward transaction (Repo) Interbank sale and repurchase ofsecurities

Operations in call money markets

Commercial paper Means of raising short term debtby companies

Means of raising short term debtby companies

STCI Operations in call money markets Launched in fiscal 2004-05

Market stabilsation Bonds Launched in fiscal 2004-05 Interbank sale and repurchase ofsecurities

True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their trustees and asset

management companies.Correct

AnswerFalse

Your Answer False

Multiple Choice Single AnswerQuestion What is the time frame to submit a report to SEBI for acquisition transactions arising out

of firm allotment in public issues right issues etc?Correct

Answer21 days

6

Your Answer 21 days

True/FalseQuestion The acquirer is required to appoint a merchant banker before making a PA.

CorrectAnswer

True

Your Answer True


CorrectAnswer

Call option


Multiple Choice Single AnswerQuestion Upto what percentage has the RBI permitted the banks to invest in the capital market ?

CorrectAnswer

0.05

Your Answer 0.05

Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?

CorrectAnswer

Establishment of NSE


Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public issue as regards

to its net worth?Correct

AnswerNet worth of the company should not be less than 1 crore


Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?

CorrectAnswer

1

Your Answer 3

Select The BlankQuestion Among the closed schemes, 4 long term assurance schemes were launched with a return

ranging between ________.Correct

Answer13 - 14%


7


CorrectAnswer

Investor characteristics , Liquidity needs and tax considerations , Investment and interestrate risk

Your Answer Investor characteristics , Liquidity needs and tax considerations , Investment and interestrate risk

Multiple Choice Single AnswerQuestion What was the percentage of public offering under the IPOs through the book building

method ?Correct

Answer0.1

Your Answer 0.25


CorrectAnswer

Short term financial instrument , Negotiable and transferable instrument , Companiesissue it for raising short term debt

Your Answer Short term financial instrument , Negotiable and transferable instrument , Companiesissue it for raising short term debt


CorrectAnswer

Depository


Multiple Choice Multiple Answer

Question The setting up of NSE consists of:-

CorrectAnswer

Set up by IDBI , Equity paid up capital of Rs25 crores , Started operations in June 1994

Your Answer Equity paid up capital of Rs25 crores , Started operations in June 1994 , There is atrading floor in this exchange


CorrectAnswer

Securities Contract Regulation Act



Select The BlankQuestion ________ is an international credit rating company.Correct Answer FITSCHYour Answer Crisil

True/FalseQuestion The acquirer is required to appoint a merchant banker before making a PA.

8

Correct Answer TrueYour Answer True

Select The BlankQuestion Hire Purchase transactions are liable to ________.Correct Answer Sales taxYour Answer Sales tax



Multiple Choice Single AnswerQuestion What is Discretionary Portfolio management service ?Correct Answer Client gives his money for investment to the portfolio manager and leaves it to him to

make all the investment decisions.Your Answer Client gives his money for investment to the portfolio manager and leaves it to him to

make all the investment decisions.

True/FalseQuestion Depositary facilitates transfers without having to handle money.Correct Answer FalseYour Answer True


Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what amount is expected to be paid

from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores

Multiple Choice Multiple AnswerQuestion The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number of investors who have

common financial goal , Issue units to investor which represent right in assets , Investments in mutualfunds may be in the form of stock, bond, money market securitiesYour Answer A trust that pools in savings and funds from large number of investors who have common

financial goal , Issue units to investor which represent right in assets , Investments in mutual funds maybe in the form of stock, bond, money market securities

True/FalseQuestion If the credit rating is obtained from two different agencies in case of issue of debt

instruments, all the ratings need not be disclosed in the document.Correct Answer FalseYour Answer True

Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any litigation connected with ________.Correct Answer Securities markets

9

Your Answer Clients

Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?Correct Answer Knowledge and information about various aspects of capital markets , Ability to

evaluate and analyze , Update the knowledgeYour Answer Knowledge and information about various aspects of capital markets , Ability to evaluate

and analyze , Update the knowledge

Multiple Choice Multiple AnswerQuestion Describe the stock lending mechanism:-Correct Answer Involves two parties one who is willing to lend and other who wishes to borrow

securities at market related rates , Lender is assured of getting equivalent the relevant securities byNSSCL on the settlement date , Lender gets benefit of reasonable return called lending feeYour Answer Involves two parties one who is willing to lend and other who wishes to borrow securities

at market related rates , Lender gets benefit of reasonable return called lending fee

Multiple Choice Multiple AnswerQuestion What are the limitations of refinance facility?Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds of HFC's , Not to

exceed 15 % of NOF of NHBYour Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds of HFC's , Not to

exceed 15 % of NOF of NHB

Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what period from the date of passing

the resolution?Correct Answer 12 monthsYour Answer 12 months


10 HDFC foreign currency deal Global investors pumping funds in India Specific Funds

0.57 FII current free float sensex company FII free float stock NIFTY companies

0.45 FII free float stock NIFTY companies FII's total free float sex and NIFTY

$ 476 mn Global investors pumping funds in India Specific Funds HDFC foreign currency deal

Multiple Choice Single AnswerQuestion When did the trading in foreign currency options start in India?Correct Answer 37809Your Answer 37829

Multiple Choice Single AnswerQuestion What is the main objective of credit appraisal ?Correct Answer Assess the repayment capacityYour Answer Assess the age of the person borrowing

True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their trustees and asset management

companies.Correct Answer FalseYour Answer False

Select The Blank

10

Question In the L & T reliance case, Reliance was fined ________.Correct Answer Rs. 5 lacsYour Answer Rs. 5 lacs

Select The BlankQuestion Recently many banks have started issuing ________ which could also be used as a debit card.Correct Answer ATM cardYour Answer ATM card

Select The BlankQuestion A ________ means any persons connected with a company and who is reasonably having

access to unpublished price sensitive information.Correct Answer InsiderYour Answer Insider

Select The BlankQuestion SENSEX is calculated using ________ method.Correct Answer Market capitalizationYour Answer Weighted


Share buy back is a way of Returning surplus cash to the shareholders Returning surplus cash to theshareholders

Dutch Auction Price of the Buy back is done by the shareholders Price of the Buy back is done by theshareholders

Open market purchases No minimum price stipulation No minimum price stipulation

Companies holding more than 90% equity Can be delisted Can be delisted




True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities separately for each client.Correct Answer FalseYour Answer True




evident from the offers given by the various institutional investors and underwriters.

11


Multiple Choice Single AnswerQuestion What is the system of rolling settlement prevalent in the USA ?Correct Answer Transaction + 3Your Answer Transaction + 3

Multiple Choice Single AnswerQuestion What is the most important objective for an investor?Correct Answer Protection of the value of the investmentYour Answer Profit maximization

Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's issued by RBI :-Correct Answer All the NBFC's must register with RBI , Without the registration certificate no company

can undertake activities of NBFC , All companies must be liquid assets equal to 15% of depositsYour Answer All the NBFC's must register with RBI , Without the registration certificate no company can

undertake activities of NBFC , All companies must be liquid assets equal to 15% of deposits

Multiple Choice Single AnswerQuestion What do you mean by venture capital?Correct Answer Providing seed, start up capital and first stage financingYour Answer Providing seed, start up capital and first stage financing

Multiple Choice Single AnswerQuestion What was the turning point in the working of Indian capital markets?Correct Answer Establishment of NSEYour Answer Opening of Indian Capital Markets to FII's

Select The BlankQuestion The continuing growth in ________ was one of the factors that contributed to the growth of

credit rating.Correct Answer Information technologyYour Answer Information technology

Select The BlankQuestion In case of a public issue by a listed company participation by promoters in the proposed

issues in excess of the required minimum percentage shall also be looked in for a period of ________.Correct Answer 1 yearYour Answer 3 years

True/FalseQuestion A portfolio manager has to assure a guaranteed return to his client.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring , Communication through the net ,

Operate in stock market privately through home or officeYour Answer Screen based trading in place of traditional ring , Communication through the net ,

Operate in stock market privately through home or office

Select The BlankQuestion The Kumarmangalam Birla report stressed on the importance of ________ with respect to

AGM's.Correct Answer Proxy voting / ballot systemsYour Answer Proxy voting / ballot systems

12

True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities purchased under the buy

back arrangement to be extinguished and physically destroyed.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint debenture trustee , Debenture

redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint debenture trustee , Debenture

redemption reserve to be created


Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity , Must disclose investment

strategyYour Answer VCF's must be registered , Cannot carry out another activity , Must disclose investment

strategy

Multiple Choice Single AnswerQuestion What is the minimum number of days for which the bid should remain open in book building?Correct Answer 5 daysYour Answer 7 days

Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many times of the net owned

funds?Correct Answer 4 timesYour Answer 4 times

Select The BlankQuestion With the introduction of ________ accounts the complaints about allotment have surely gone

down.Correct Answer DEMATYour Answer DEMAT


True/FalseQuestion The buy back of shares by Indian corporates has been very successful in India.Correct Answer FalseYour Answer True

Multiple Choice Single AnswerQuestion What percentage of funds should be invested in unlisted companies?Correct Answer 0.74Your Answer 0.76

Select The BlankQuestion When one decides to have the shares in an electronic form one has to approach ________.Correct Answer DPYour Answer SEBI

True/FalseQuestion The issue price for placement portion and net offer to public are not the same.Correct Answer FalseYour Answer True

Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Overall economic condition , Demand and supply capital , Degree of popularity of the

industryYour Answer Overall economic condition , Degree of popularity of the industry , High profitability is

one of the criteria


Multiple Choice Single AnswerQuestion What is the main objective of credit appraisal ?Correct Answer Assess the repayment capacityYour Answer Assess the repayment capacity

True/FalseQuestion Mutual funds can do investments in any security issued by way of private placement by an

associate or group company of the sponsor.Correct Answer FalseYour Answer True

Multiple Choice Multiple AnswerQuestion What are participatory notes?Correct Answer Instruments used by foreign funds , Instruments used but investors not register with

SEBI , Investors interested in taking exposure in Indian securitiesYour Answer Instruments used but investors not register with SEBI , Investors interested in taking

exposure in Indian securities

True/FalseQuestion Employee stock option scheme granted to the employee is transferable.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion Briefly describe the SEBI guidelines for the merchant bankers :-Correct Answer Should have an authorization from SEBI , Expertise good financial standing and high

degree of professional integrity , Company abides by the various requirements relating to disclosers, listingof instruments etc

Your Answer Should have an authorization from SEBI , Expertise good financial standing and highdegree of professional integrity , Company abides by the various requirements relating to disclosers, listingof instruments etc

Select The BlankQuestion In 2001 a case of rigging and short selling based insider trading was noticed in the case of

proposed merger of ________.Correct Answer UTI Bank with GTBYour Answer UTI Bank with GTB

True/FalseQuestion The lease agreement provides for a transfer of ownership to the lessee either at the end of the

period or during the period of lease.Correct Answer FalseYour Answer True

Multiple Choice Multiple AnswerQuestion What are the eligibility norms for a listed company for making a public issue?Correct Answer If the issue size is less than five times pre issue net worth , If the issue size is more than

or equal to five times pre issue networth then the listed company to take book building route , 60% of issuesize to be allotted to QIB's

Your Answer If the issue size is less than five times pre issue net worth , If the issue size is more than orequal to five times pre issue networth then the listed company to take book building route , 60% of issuesize to be allotted to QIB's

Multiple Choice Multiple AnswerQuestion Where is the difference in buying and selling dematerialized shares ?Correct Answer Process of delivery , Receipt of securities , Pledging the sharesYour Answer Process of delivery , Receipt of securities , Pledging the shares , Sale of shares

Multiple Choice Multiple AnswerQuestion When is the public announcement required to be made?Correct Answer In case of indirect acquisition or change in control, the PA shall be made by acquirer

within 3 months of conummation of such acquisition , The offer prices in such case shall be determinedwith reference to date of public announcement

Your Answer The offer prices in such case shall be determined with reference to date of publicannouncement , PA shall be made by the target company , In case of indirect acquisition or change incontrol, the PA shall be made by acquirer within 3 months of conummation of such acquisition

Multiple Choice Multiple AnswerQuestion What are the main features of commercial paper?Correct Answer Short term financial instrument , Negotiable and transferable instrument , Companies

issue it for raising short term debtYour Answer Short term financial instrument , Negotiable and transferable instrument , Companies issue

it for raising short term debt




Share buy back is a way of Returning surplus cash to the shareholders Siphoning of excess cash by thepromoters

Dutch Auction Price of the Buy back is done by the shareholders No minimum price stipulation

Open market purchases No minimum price stipulation Returning surplus cash to the shareholders

Companies holding more than 90% equity Can be delisted Have to consider buy back

Multiple Choice Multiple AnswerQuestion The following are some of the procedures of converting physical holding into electronic form :-Correct Answer Surrender certificates to DP , DP intimates request to depositary , DP submits the

certificates to registrarYour Answer DP intimates request to depositary , DP submits the certificates to registrar , The pledgee

has to confirm the request through his her DP

Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what amount is expected to be paid

from the primary market during this year?Correct Answer 15000 croresYour Answer 25000 crores

Multiple Choice Multiple AnswerQuestion The setting up of NSE consists of:-Correct Answer Set up by IDBI , Equity paid up capital of Rs25 crores , Started operations in June 1994Your Answer Set up by IDBI , Equity paid up capital of Rs25 crores , Started operations in June 1994

Multiple Choice Single AnswerQuestion What is issued by mutual funds?Correct Answer UnitsYour Answer Units

Select The BlankQuestion AA rated companies can raise ________ of its net worth.Correct Answer 2.5 timesYour Answer 1.5 times

True/FalseQuestion Constant change would be one of the reasons for failure of corporate governance.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion Upto what percentage has the RBI permitted the banks to invest in the capital market ?Correct Answer 0.05Your Answer 0.05

Multiple Choice Single AnswerQuestion For a VCF to be registered with SEBI what is the registration fee ?Correct Answer 5 lacsYour Answer 5 lacs

Select The BlankQuestion ________ are a kind of portfolio schemes.Correct Answer Mutual fundsYour Answer Mutual funds

Select The BlankQuestion Markets have moved away from Badla system to ________ .Correct Answer Derivatives TradingYour Answer Mutual Funds Trading



Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?Correct Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in

opinion of boardYour Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in opinion

of board , Government regulations

Select The BlankQuestion The service charge is levied for allowing subscribers for entry into or exit from mutual schemes

is called as ________.Correct Answer LoadYour Answer AMC

Multiple Choice Multiple AnswerQuestion What are the obligations of a company in a share buy back?Correct Answer The offer letter should contain true, factual and material information and should not be

misleading. , The company must pay the consideration only by the way of cash , The company should notissue any fresh securities including bonus shares till the date of the closure of the offer.

Your Answer The offer letter should contain true, factual and material information and should not bemisleading. , The company must pay the consideration only by the way of cash

Multiple Choice Single AnswerQuestion How much percentage of company's revenue would be accounted for by the business with new

name?Correct Answer 0.5Your Answer 0.3

Select The BlankQuestion It is the responsibility of the ________ to ensure the timely refunds and allotments of the

securities.

Correct Answer Lead managersYour Answer Lead managers

Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any litigation connected with ________.Correct Answer Securities marketsYour Answer Securities markets

Multiple Choice Single AnswerQuestion Crisil's AAA rating stands for :-Correct Answer Highest safetyYour Answer Highest safety

True/FalseQuestion Amendment to SCRA will facilitate derivatives trading in interest rate futures and options if

there is an underlying asset.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion What is the main advantage of a rolling settlement?Correct Answer Quicker paymentsYour Answer Quicker payments

Multiple Choice Single AnswerQuestion What is the minimum offer an acquirer can make ?Correct Answer Min 20%Your Answer Min 15 %


its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should be more than 5 crores




Factors influencing portfolio decisions Business and Market risks To make timely decision regarding saleand purchase of securities

Code of conduct- Portfolio Manager Observe high standard of integrity and fairness Observe high standardof integrity and fairness

SEBI Regulations Portfolio Manager must fulfill the capital adequacy norms Portfolio Manager must fulfillthe capital adequacy norms


Question Who suffered heavy losses during bad times of stock markets?Correct Answer Small investorsYour Answer Small investors

True/FalseQuestion The acquirer is required to appoint a merchant banker before making a PA.Correct Answer TrueYour Answer True















































target account id





Select The Blank









accountability








































































target account id





Select The Blank









accountability








































































target account id





Select The Blank









accountability








































































target account id





Select The Blank









accountability






























connected with the issue to SEBI.Correct Answer FalseYour Answer True

Select The BlankQuestion The right to buy is called ________.Correct Answer Call optionYour Answer Call option


Multiple Choice Single AnswerQuestion Who is responsible to get the securities listed on all the stock exchanges?Correct Answer Merchant bankerYour Answer SEBI

Select The BlankQuestion A mutual fund scheme shall not invest more than ________ of its NAV in unrated

debt by a single issuer.Correct Answer 0.1Your Answer 0.1


True/FalseQuestion The depository can legally transfer beneficial ownership.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion Since when have the Indian Stock markets risen ?Correct Answer 37775Your Answer 38200

Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till approval of

trustees and offer document has been filed with the board , With each offer document pay filingfees , Offer document to contain disclosures

Your Answer The Asset management company shall not launch any scheme till approval oftrustees and offer document has been filed with the board , With each offer document pay filingfees , Offer document to contain disclosures

Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer Must disclose investment strategy , VCF's must be registered , Cannot carry

out another activityYour Answer VCF's must be registered , Cannot carry out another activity , Must disclose

investment strategy

True/FalseQuestion Money market mutual funds are not permitted to invest in treasury bills and

commercial paper.Correct Answer FalseYour Answer True

Multiple Choice Single AnswerQuestion When can the American style option exercised?Correct Answer On or before the expiry dateYour Answer On or before the expiry date


Multiple Choice Single AnswerQuestion What is the estimated figure of credit card defaults in India?Correct Answer 800 croresYour Answer 800 crores

True/FalseQuestion Depositary facilitates transfers without having to handle money.Correct Answer FalseYour Answer False

Select The BlankQuestion AA rated companies can raise ________ of its net worth.Correct Answer 2.5 timesYour Answer 2 times

Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring , Communication through the

net , Operate in stock market privately through home or officeYour Answer Screen based trading in place of traditional ring , Communication through the net ,


Multiple Choice Multiple AnswerQuestion What are the eligibility norms for an unlisted company for making a public issue?Correct Answer Pre issue net worth not less than 1 crores in the last 3 years , Track record of

distributable profits for at least 3 years , Issue size shall not exceed five times of its pre issue networth

Your Answer Issue size shall not exceed five times of its pre issue net worth , Pre issue networth not less than 1 crores in the last 3 years , Track record of distributable profits for at least 3years

Select The BlankQuestion Markets have moved away from Badla system to ________ .Correct Answer Derivatives TradingYour Answer Derivatives Trading

Multiple Choice Multiple AnswerQuestion During the budget 2003 - 04, Finance Minister made some announcements which he

hopes will make investors think in terms of returning to stock market :-Correct Answer No capital gains tax on investment made in equity after 1/3/03 held for 1 year ,

Removal of income tax on dividends in the hands of receiverYour Answer No capital gains tax on investment made in equity after 1/3/03 held for 1 year ,

Removal of income tax on dividends in the hands of receiver , Investors income tax on dividendreduced to 12.5%

Multiple Choice Single AnswerQuestion How many members are appointed by the central government?Correct Answer 2Your Answer 2

Multiple Choice Multiple AnswerQuestion Which acts were amended to remove some of the hurdles to corporatisation and

demutualisation of stock exchanges?Correct Answer SCRA , Depository ActYour Answer SCRA , Depository Act


Shareholders Should effectively participate in general body meetings Should effectively participatein general body meetings

Objective of Audit committee Look into defaults to depositors creditors shareholders anddebenture holders Look into defaults to depositors creditors shareholders and debenture holders

Reasons of failures of corporate governance in spite of norms Superficial commitment to vision,mission and values Superficial commitment to vision, mission and values

Functions of Chief Executive, ED, Managers Assisting the board in decision making processDecision making

Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20 000 crores?Correct Answer Infosys , Satyam , WiproYour Answer Infosys , Satyam , Wipro

Multiple Choice Multiple AnswerQuestion What does SEBI do with its power ?Correct Answer Cancel certificate issued to custodian , Inspect books of DP , issuers or

beneficiary owners , Investigate an acquirerYour Answer Cancel certificate issued to custodian , Inspect books of DP , issuers or

beneficiary owners , Investigate an acquirer

True/FalseQuestion Amendment to SCRA will facilitate derivatives trading in interest rate futures and

options if there is an underlying asset.Correct Answer TrueYour Answer True











Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Overall economic condition , Demand and supply capital , Degree of popularity

of the industryYour Answer Overall economic condition , Demand and supply capital , Degree of popularity of

the industry








interest rate risk


True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large corporates to

issue certificate of deposits.Correct Answer FalseYour Answer False


Multiple Choice Multiple AnswerQuestion What is dematerialization ?Correct Answer Physical certificates converted into electronic from , Credited into investors

account with his/ her DPYour Answer Physical certificates converted into electronic from , Credited into investors

account with his/ her DP , Selling shares

Select The BlankQuestion ________ is in the form of a usance promissory note payable after 45 days from the

date of issue.Correct Answer Certificate of DepositYour Answer Certificate of Deposit



Multiple Choice Single AnswerQuestion What is the amount of net worth accompany should have for opting for an IPO ?Correct Answer 1 Crore

Your Answer 1 Crore


called as ________.Correct Answer Special purpose vehicleYour Answer Special purpose vehicle

True/FalseQuestion A mutual fund shall not invest more than 10% of is NAV in equity shares in cases of

open ended schemes.Correct Answer TrueYour Answer False

Multiple Choice Single AnswerQuestion What is a put option?Correct Answer Right to sellYour Answer Right to sell

True/FalseQuestion Venture capital finance is risk finance for entrepreneurial growth oriented companies.Correct Answer TrueYour Answer True


Multiple Choice Single AnswerQuestion Who can change the composition of securities?Correct Answer Fund managerYour Answer Fund manager


Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's issued by RBI :-Correct Answer All the NBFC's must register with RBI , Without the registration certificate no

company can undertake activities of NBFC , All companies must be liquid assets equal to 15% ofdeposits

Your Answer All the NBFC's must register with RBI , Without the registration certificate nocompany can undertake activities of NBFC , All companies must be liquid assets equal to 15% ofdeposits

True/FalseQuestion Transactions that involve substantial payment towards goodwill, brand equity or

intellectual property must be placed before the board of directors as per the recommendations ofthe Kumarmangalam Birla report.



Multiple Choice Single AnswerQuestion Deposits can be accepted for a maximum period of :-Correct Answer 5 yearsYour Answer 10 years



Multiple Choice Single AnswerQuestion In the wake of boom of which sector the Indian mutual fund launched various sector

specific schemes?Correct Answer SoftwareYour Answer Software

Select The Blank

Question In 2001 a case of rigging and short selling based insider trading was noticed in thecase of proposed merger of ________.

Correct Answer UTI Bank with GTBYour Answer OBC with GTB



Multiple Choice Single AnswerQuestion What is equipment leasing ?Correct Answer Contractual agreement where the lessor of equipment transfers the right to use

the equipment to the lesseeYour Answer Contractual agreement where the lessor of equipment transfers the right to use

the equipment to the lessee



the industry

True/FalseQuestion Mergers and amalgamations of companies are also covered under the SEBI

regulations 1997.Correct Answer FalseYour Answer False



True/FalseQuestion Constant change would be one of the reasons for failure of corporate governance.Correct Answer TrueYour Answer False



True/FalseQuestion The company opting for an IPO should have net worth of at least Rs 1 crore in each

of the preceding two years.Correct Answer True

Your Answer False

Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the depository ,

Maintain the investor's holdings in an electronic form , Effect settlement of securities traded onexchanges

Your Answer Enable surrender and withdrawal of securities to and from the depository ,Maintain the investor's holdings in an electronic form , Effect settlement of securities traded onexchanges

Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity , Must disclose

investment strategyYour Answer VCF's must be registered , Cannot carry out another activity , Must disclose

investment strategy



Castrol FY 2003 - 03 Dividend Rs145 crores FY 2003 - 03 Dividend Rs145 crores

MS Verma committee Dual Flotation Dual Flotation

Hero Honda FY 2003 - 03 Dividend Rs187 crores FY 2003 - 03 Dividend Rs187 crores

VSNL FY 2003 - 03 Dividend Rs172 crores FY 2003 - 03 Dividend Rs172 crores



Multiple Choice Multiple AnswerQuestion What is dematerialization ?Correct Answer Credited into investors account with his/ her DP , Physical certificates

converted into electronic fromYour Answer Physical certificates converted into electronic from , Credited into investors

account with his/ her DP

Select The BlankQuestion No mutual fund under all its schemes should own more than ________ of any

company's paid up capital carrying voting rights.Correct Answer 0.1

Your Answer 0.3





Multiple Choice Single AnswerQuestion If the unlisted company does not satisfy the criteria of net worth profitability and issue

size how can it come out with a public issue?Correct Answer Through book building processYour Answer Through book building process

Multiple Choice Single AnswerQuestion Which is the favorite destination for venture funds?Correct Answer BPOYour Answer BPO

Multiple Choice Multiple AnswerQuestion Who issues participatory notes?Correct Answer Associates of India based foreign brokerages , Domestic institutional

brokeragesYour Answer Associates of India based foreign brokerages , Domestic institutional brokerages



Ready forward transaction (Repo) Interbank sale and repurchase of securities Interbank sale andrepurchase of securities

Commercial paper Means of raising short term debt by companies Means of raising short termdebt by companies

STCI Operations in call money markets Operations in call money markets

Market stabilsation Bonds Launched in fiscal 2004-05 Launched in fiscal 2004-05


commercial paper.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies by NHB?Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of

auditorsYour Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of

auditors

True/FalseQuestion SEBI has taken an action to ban on Badla.Correct Answer TrueYour Answer False




Multiple Choice Single AnswerQuestion What is the limit for aggregate investment of FII's NRI's and OCB's?Correct Answer 0.3Your Answer 0.25

True/FalseQuestion Acquisition finance, which provide funding for acquiring another company are often

closely held or fairly owned.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what amount is expected to

be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores

Select The BlankQuestion The acquirer is required to make the PA within ________ working days of entering

into an agreement to acquire shares or deciding to acquire share's voting rights of targetcompany.


Multiple Choice Single AnswerQuestion What is the objective of public announcement?Correct Answer Ensure that the shareholders of the target company are aware of the exit

opportunity available to themYour Answer Ensure that the shareholders of the target company are aware of the exit

opportunity available to them





controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB

controlled by Indians promoters

Select The BlankQuestion When one decides to have the shares in an electronic form one has to approach

________.Correct Answer DPYour Answer DP




Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's issued by RBI :-Correct Answer Without the registration certificate no company can undertake activities of

NBFC , All companies must be liquid assets equal to 15% of deposits , All the NBFC's mustregister with RBI











Select The Blank










the industry




company's paid up capital carrying voting rights.Correct Answer 0.1Your Answer 0.3






size how can it come out with a public issue?

Correct Answer Through book building processYour Answer Through book building process














auditors























________.

Correct Answer DPYour Answer DP


Select The BlankQuestion The NSE Nifty index comprises of ________companies.Correct Answer 50Your Answer 50


0.1 Government decided to pay dividend Government decided to pay dividend

0.15 MF cannot invest as percentage of NAV in debt instrument issued by singleissuer MF cannot invest as percentage of NAV in debt instrument issued by singleissuer

Annual statement of accounts of MF To be audited by auditor To be audited byauditor

Rs. 8000 crores Current shortfall in UTI schemes Current shortfall in UTIschemes



markets?Correct Answer Establishment of NSEYour Answer Establishment of NSE

Multiple Choice Multiple AnswerQuestion What are the major factors influencing portfolio decisions?Correct Answer Investor characteristics , Liquidity needs and tax

considerations , Investment and interest rate riskYour Answer Investor characteristics , Liquidity needs and tax

considerations , Investment and interest rate risk

Select The BlankQuestion The portfolio manager has to place the funds of all their clients

in a separate account to be maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank

True/FalseQuestion ISIN is a unique identification number for security.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion What do you understand by capital markets ?Correct Answer Market for long term funds and investments in long term

instruments

Your Answer Market for long term funds and investments in long terminstruments

Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what

amount is expected to be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores

Multiple Choice Single AnswerQuestion What is the amount invested by the FII's in the Indian Capital

market?Correct Answer US$14 bnYour Answer US$14 bn

Multiple Choice Multiple AnswerQuestion The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number of

investors who have common financial goal , Issue units to investor whichrepresent right in assets , Investments in mutual funds may be in the form ofstock, bond, money market securitiesYour Answer A trust that pools in savings and funds from large number of

investors who have common financial goal , Issue units to investor whichrepresent right in assets , Investments in mutual funds may be in the form ofstock, bond, money market securities

Multiple Choice Multiple AnswerQuestion Companies are not allowed to buy back securities :-Correct Answer Through any/ own subsidiary company , Through any/group of

investment company , If default subsists in respect of repayments of deposits,term loans to any financial institutions and redemption of preference shares ordebenturesYour Answer Through any/ own subsidiary company , Through any/group of

investment company , If default subsists in respect of repayments of deposits,term loans to any financial institutions and redemption of preference shares ordebentures

Multiple Choice Multiple AnswerQuestion Briefly describe the SEBI guidelines for the merchant bankers :-Correct Answer Should have an authorization from SEBI , Expertise good

financial standing and high degree of professional integrity , Company abides bythe various requirements relating to disclosers, listing of instruments etcYour Answer Should have an authorization from SEBI , Expertise good

financial standing and high degree of professional integrity , Company abides bythe various requirements relating to disclosers, listing of instruments etc

Multiple Choice Single AnswerQuestion What is issued by mutual funds?Correct Answer UnitsYour Answer Units

Multiple Choice Multiple AnswerQuestion During the budget 2003 - 04, Finance Minister made some

announcements which he hopes will make investors think in terms of returning tostock market :-

Correct Answer No capital gains tax on investment made in equity after1/3/03 held for 1 year , Removal of income tax on dividends in the hands ofreceiverYour Answer Removal of income tax on dividends in the hands of receiver ,

Investors income tax on dividend reduced to 12.5% , No capital gains tax oninvestment made in equity after 1/3/03 held for 1 year

Select The BlankQuestion The merchant bankers should act as ________ of the investor's money

and put a lot of responsibility on them.Correct Answer CustodianYour Answer Custodian

True/FalseQuestion Reliance group has added over 10000 crores in market capital.Correct Answer TrueYour Answer True

Select The BlankQuestion BSE introduced an equity stock index known as ________.Correct Answer SENSEXYour Answer SENSEX

Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in

India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries

Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20 000

crores?Correct Answer Infosys , Satyam , WiproYour Answer Infosys , Satyam , Wipro



transactions arising out of firm allotment in public issues right issues etc?Correct Answer 21 daysYour Answer 21 days

Select The BlankQuestion The portfolio manager has to place the funds of all their clients

in a separate account to be maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank

Multiple Choice Single AnswerQuestion What is government's move towards Stock Exchanges ?Correct Answer DemutulisationYour Answer Dematerialization

Multiple Choice Multiple AnswerQuestion As per the recommendations of the Kumarmangalam Birla committee

report who are the key components of an audit committee.Correct Answer External auditor , Board , Internal auditorYour Answer Board , Internal auditor , External auditor

True/FalseQuestion SEBI can investigate and inspect books of accounts and records of

insiders.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing

skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing

skills , Experience

Multiple Choice Single AnswerQuestion What is the objective of a credit information company?Correct Answer To ascertain the credit worthiness of

individuals/organizations and make the data available to all banksYour Answer To ascertain the credit worthiness of individuals/organizations

and make the data available to all banks

True/FalseQuestion Transactions that involve substantial payment towards goodwill,

brand equity or intellectual property must be placed before the board ofdirectors as per the recommendations of the Kumarmangalam Birla report.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion What is the amount of net worth accompany should have for opting

for an IPO ?Correct Answer 1 CroreYour Answer 1 Crore

True/FalseQuestion A credit card is a payment mechanism which enables the holder to

buy goods and services on credit.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion When are VCF's entitled to get its units listed on stock exchange?Correct Answer After expiration of 3 years form date of issuance of unitsYour Answer After expiration of 3 years form date of issuance of units

True/FalseQuestion Book building is a process whereby the price is determined on the

basis of actual demand as evident from the offers given by the variousinstitutional investors and underwriters.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion A portfolio manager could undertake the following on behalf of his

clients :-Correct Answer Hedging and arbitrage transactionsYour Answer Hedging and arbitrage transactions

Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint

debenture trustee , Debenture redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint debenture

trustee , Debenture redemption reserve to be created




Factors influencing portfolio decisions Business and Market risks Business andMarket risks

Code of conduct- Portfolio Manager Observe high standard of integrity andfairness Observe high standard of integrity and fairness

SEBI Regulations Portfolio Manager must fulfill the capital adequacy normsPortfolio Manager must fulfill the capital adequacy norms

Multiple Choice Multiple AnswerQuestion What information is required to be furnished to stock exchanges in

compliance of SEBI regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock

exchanges at least 4 days before the date , Any person holding more than 15% butless than 75% voting rights shall be disclosed with 2 days , Annual disclosuresYour Answer Details of proposed acquisition need to be filed with Stock

exchanges at least 4 days before the date , Any person holding more than 15% butless than 75% voting rights shall be disclosed with 2 days , Annual disclosures

Multiple Choice Multiple AnswerQuestion What are the requirements regarding promoter's contribution and

lock in?Correct Answer In case of IPO, promoters have to necessarily offer at least

20% of the post issue capital , In case of listed company promoters shallparticipate either to extent of 20% of proposed or post issue , In case of anyissue of capital the minimum contribution shall be locked in for a period of 3yearsYour Answer In case of IPO, promoters have to necessarily offer at least 20%

of the post issue capital , In case of listed company promoters shallparticipate either to extent of 20% of proposed or post issue , In case of anyissue of capital the minimum contribution shall be locked in for a period of 3years

True/FalseQuestion Constant change would be one of the reasons for failure of

corporate governance.Correct Answer TrueYour Answer True

Select The BlankQuestion Final prospectus in the book building p________ess is to be filed

with the ROC.Correct Answer ROCYour Answer ROC

Multiple Choice Single AnswerQuestion Who forms the Asset management company (AMC)?Correct Answer Group of trusteesYour Answer Group of trustees

True/FalseQuestion Employee stock option scheme granted to the employee is

transferable.Correct Answer FalseYour Answer False

Multiple Choice Single AnswerQuestion How many companies are there to do business of credit rating?Correct Answer 4Your Answer 4

Multiple Choice Multiple AnswerQuestion What are the general obligations of mutual fund ?Correct Answer Every AMC should maintain proper books of accounts ,

Financial year for all schemes to end as on March 31 each year , Every mutualfund shall have the annual statements audited by auditorYour Answer Every AMC should maintain proper books of accounts , Financial

year for all schemes to end as on March 31 each year , Every mutual fund shallhave the annual statements audited by auditor

Select The BlankQuestion Recently, SEBI has allowed buy back of shares upto ________% of the

total shares without requirement of a special resolutionCorrect Answer 10Your Answer 10




True/FalseQuestion The acquirer is required to appoint a merchant banker before making

a PA.Correct Answer TrueYour Answer True



instrumentsYour Answer Market for long term funds and investments in long term

instruments



skills , Experience

Multiple Choice Single AnswerQuestion What is Discretionary Portfolio management service ?Correct Answer Client gives his money for investment to the portfolio

manager and leaves it to him to make all the investment decisions.Your Answer Client gives his money for investment to the portfolio manager

and leaves it to him to make all the investment decisions.







Question The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number of



True/FalseQuestion If the credit rating is obtained from two different agencies in

case of issue of debt instruments, all the ratings need not be disclosed in thedocument.Correct Answer FalseYour Answer True

Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any litigation

connected with ________.Correct Answer Securities marketsYour Answer Clients

Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?Correct Answer Knowledge and information about various aspects of capital

markets , Ability to evaluate and analyze , Update the knowledgeYour Answer Knowledge and information about various aspects of capital

markets , Ability to evaluate and analyze , Update the knowledge

Multiple Choice Multiple AnswerQuestion Describe the stock lending mechanism:-Correct Answer Involves two parties one who is willing to lend and other who

wishes to borrow securities at market related rates , Lender is assured ofgetting equivalent the relevant securities by NSSCL on the settlement date ,Lender gets benefit of reasonable return called lending feeYour Answer Involves two parties one who is willing to lend and other who

wishes to borrow securities at market related rates , Lender gets benefit ofreasonable return called lending fee

Multiple Choice Multiple AnswerQuestion What are the limitations of refinance facility?Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan

funds of HFC's , Not to exceed 15 % of NOF of NHBYour Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan

funds of HFC's , Not to exceed 15 % of NOF of NHB

Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what period

from the date of passing the resolution?Correct Answer 12 monthsYour Answer 12 months


10 HDFC foreign currency deal Global investors pumping funds in India SpecificFunds



$ 476 mn Global investors pumping funds in India Specific Funds HDFC foreigncurrency deal




trustees and asset management companies.Correct Answer FalseYour Answer False

Select The BlankQuestion In the L & T reliance case, Reliance was fined ________.Correct Answer Rs. 5 lacsYour Answer Rs. 5 lacs

Select The BlankQuestion Recently many banks have started issuing ________ which could also

be used as a debit card.Correct Answer ATM cardYour Answer ATM card

Select The BlankQuestion A ________ means any persons connected with a company and who is

reasonably having access to unpublished price sensitive information.Correct Answer InsiderYour Answer Insider



Share buy back is a way of Returning surplus cash to the shareholders Returningsurplus cash to the shareholders

Dutch Auction Price of the Buy back is done by the shareholders Price of the Buyback is done by the shareholders



True/FalseQuestion The public cannot give their complaints or comments on the issuer

company or others connected with the issue to SEBI.Correct Answer FalseYour Answer False


True/FalseQuestion A portfolio manager need not necessarily sell or purchase

securities separately for each client.Correct Answer FalseYour Answer True

True/FalseQuestion RBI has permitted all commercial banks, financial institutions and

large corporates to issue certificate of deposits.Correct Answer FalseYour Answer True





Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's

issued by RBI :-Correct Answer All the NBFC's must register with RBI , Without the

registration certificate no company can undertake activities of NBFC , Allcompanies must be liquid assets equal to 15% of depositsYour Answer All the NBFC's must register with RBI , Without the registration

certificate no company can undertake activities of NBFC , All companies must beliquid assets equal to 15% of deposits


Question What do you mean by venture capital?Correct Answer Providing seed, start up capital and first stage financingYour Answer Providing seed, start up capital and first stage financing


markets?Correct Answer Establishment of NSEYour Answer Opening of Indian Capital Markets to FII's

Select The BlankQuestion The continuing growth in ________ was one of the factors that

contributed to the growth of credit rating.Correct Answer Information technologyYour Answer Information technology

Select The BlankQuestion In case of a public issue by a listed company participation by

promoters in the proposed issues in excess of the required minimum percentageshall also be looked in for a period of ________.Correct Answer 1 yearYour Answer 3 years

True/FalseQuestion A portfolio manager has to assure a guaranteed return to his

client.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring ,

Communication through the net , Operate in stock market privately through homeor officeYour Answer Screen based trading in place of traditional ring ,

Communication through the net , Operate in stock market privately through homeor office

Select The BlankQuestion The Kumarmangalam Birla report stressed on the importance of

________ with respect to AGM's.Correct Answer Proxy voting / ballot systemsYour Answer Proxy voting / ballot systems


purchased under the buy back arrangement to be extinguished and physicallydestroyed.Correct Answer FalseYour Answer False






Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity

, Must disclose investment strategyYour Answer VCF's must be registered , Cannot carry out another activity ,

Must disclose investment strategy

Multiple Choice Single AnswerQuestion What is the minimum number of days for which the bid should remain

open in book building?Correct Answer 5 daysYour Answer 7 days

Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many

times of the net owned funds?Correct Answer 4 timesYour Answer 4 times

Select The BlankQuestion With the introduction of ________ accounts the complaints about

allotment have surely gone down.Correct Answer DEMATYour Answer DEMAT















































target account id





Select The Blank









accountability




























client.Correct Answer False

Your Answer True


shares in cases of open ended schemes.Correct Answer True

Your Answer True

True/FalseQuestion Reliance group has added over 10000 crores in market capital.

Correct Answer True

Your Answer False

Select The BlankQuestion Most of the deals struck on the fist day of foreign currency

options were of ________ maturity.Correct Answer 1 year

Your Answer 5 years

Multiple Choice Multiple AnswerQuestion Explain the important achievements of SEBI :-

Correct Answer Takeover code formulated , Proper disclosure to investorsthrough prospectus mandatory , Guidelines for merchant banker

Your Answer Takeover code formulated , Proper disclosure to investorsthrough prospectus mandatory , Guidelines for merchant banker

Multiple Choice Multiple AnswerQuestion What are participatory notes?

Correct Answer Instruments used by foreign funds , Instruments used butinvestors not register with SEBI , Investors interested in takingexposure in Indian securities

Your Answer Instruments used by foreign funds , Instruments used butinvestors not register with SEBI , Investors interested in takingexposure in Indian securities

Select The BlankQuestion Directors should not be member of more than________

committees.Correct Answer 10

Your Answer 7

Multiple Choice Single AnswerQuestion Who forms the Asset management company (AMC)?

Correct Answer Group of trustees


Multiple Choice Single AnswerQuestion What is the main objective of the promoting Discount and

finance house of India (DFHI) ?Correct Answer Increasing transactions of money market assets

Your Answer Increasing transactions of money market assets

Multiple Choice Single AnswerQuestion What is the amount of net tangible assets, company should have

to make an IPO?Correct Answer 3 crores

Your Answer 5crores

Select The BlankQuestion No mutual fund under all its schemes should own more than

________ of any company's paid up capital carrying votingrights.

Correct Answer 0.1

Your Answer 0.3

Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what

period from the date of passing the resolution?Correct Answer 12 months

Your Answer 12 months


promoters in the proposed issues in excess of the required

minimum percentage shall also be looked in for a period of________.

Correct Answer 1 year

Your Answer 3 years

Multiple Choice Multiple AnswerQuestion What is the procedure to make a public announcement ?

Correct Answer Acquirer to appoint a Merchant Banker , PA to be made throughMerchant Banker , PA to be made within four working days ofentering an agreement to acquire shares

Your Answer Acquirer to appoint a Merchant Banker , PA to be made throughMerchant Banker , PA to be made within four working days ofentering an agreement to acquire shares


amount is expected to be paid from the primary market duringthis year?

Correct Answer 15000 crores

Your Answer 25000 crores


Correct Answer Through any/ own subsidiary company , Through any/group ofinvestment company , If default subsists in respect ofrepayments of deposits, term loans to any financial institutionsand redemption of preference shares or debentures

Your Answer Through any/ own subsidiary company , Through any/group ofinvestment company , If default subsists in respect ofrepayments of deposits, term loans to any financial institutionsand redemption of preference shares or debentures


ESPS Stock option method Stock option method

Sweat equity Share issue forconsideration other thancash

Share issue forconsideration other thancash

Stock lending mechanism Introduced by SEBI in1997

Introduced by SEBI in1997

ESOP Recipe to makeemployees millionaires

Recipe to make employeesmillionaires

True/FalseQuestion The public cannot give their complaints or comments on the

issuer company or others connected with the issue to SEBI.Correct Answer False

Your Answer False

Multiple Choice Single AnswerQuestion What is the status of Stock exchanges today?

Correct Answer Joint stock companies

Your Answer Joint stock companies

Multiple Choice Single AnswerQuestion Since when have the Indian Stock markets risen ?

Correct Answer 37775

Your Answer 38200

Multiple Choice Multiple AnswerQuestion What are the objectives of NHB?

Correct Answer To promote, establish, aid in promotion and support of housingfinance institutions , To make loans advances or render anyother form of financial assistance to focusing finance institutions, To guarantee financial obligations

Your Answer To promote, establish, aid in promotion and support of housingfinance institutions , To make loans advances or render anyother form of financial assistance to focusing finance institutions, To guarantee financial obligations

Multiple Choice Single AnswerQuestion Apart from the portfolio management fees what percentage of

returns can the portfolio manager share from their client'sprofits?

Correct Answer 0

Your Answer 0

Multiple Choice Single AnswerQuestion What is the percentage of restriction on HFC's disbursement on

project lending for refinance ?Correct Answer 0.3

Your Answer 0.3

Select The BlankQuestion Markets have moved away from Badla system to ________ .

Correct Answer Derivatives Trading

Your Answer Mutual Funds Trading

True/FalseQuestion MIBOR is a security. Derivatives based on this interest rate have

legal recognition under SCRA.Correct Answer False

Your Answer False

True/FalseQuestion The buy back of shares by Indian corporates has been very

successful in India.Correct Answer False

Your Answer True


0.1 Government decided topay dividend

NAV

0.15 MF cannot invest aspercentage of NAV in debtinstrument issued bysingle issuer

MF cannot invest aspercentage of NAV in debtinstrument issued by singleissuer

Annual statement ofaccounts of MF

To be audited by auditor To be audited by auditor

Rs. 8000 crores Current shortfall in UTIschemes

Current shortfall in UTIschemes

Multiple Choice Single AnswerQuestion What is government's move towards Stock Exchanges ?

Correct Answer Demutulisation

Your Answer Dematerialization

Multiple Choice Single AnswerQuestion How much should be the minimum post issue capital of the

company?Correct Answer 10 crores

Your Answer 10 crores

Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?

Correct Answer Enable surrender and withdrawal of securities to and from thedepository , Maintain the investor's holdings in an electronic form, Effect settlement of securities traded on exchanges

Your Answer Enable surrender and withdrawal of securities to and from thedepository , Maintain the investor's holdings in an electronic form, Effect settlement of securities traded on exchanges


securities separately for each client.Correct Answer False

Your Answer False

Multiple Choice Single AnswerQuestion For a VCF to be registered with SEBI what is the registration fee

?Correct Answer 5 lacs

Your Answer 5 lacs

Select The BlankQuestion The VCs to flourish requires a well developed ________.

Correct Answer Capital market

Your Answer Long term funds

Multiple Choice Multiple AnswerQuestion What should be done if the address of investor changes?

Correct Answer Inform DP and update records , Inform different companies

Your Answer Inform DP and update records , Inform different companies

Multiple Choice Single AnswerQuestion When did the concept of corporate governance evolve?

Correct Answer During the watergate scandal

Your Answer During the watergate scandal

Multiple Choice Single AnswerQuestion How many times Refinance cannot exceed net owned funds of

Housing finance companies?Correct Answer 5 times

Your Answer 5 times

True/FalseQuestion Money market mutual funds are not permitted to invest in

treasury bills and commercial paper.Correct Answer False

Your Answer False

Select The BlankQuestion In case of an IPO of any security of issue size of Rs________ or

more security shall be issued only in demat form.Correct Answer 10 crores

Your Answer 1 crore

True/FalseQuestion The issue price for placement portion and net offer to public are

not the same.Correct Answer False

Your Answer False


Correct Answer Finance company purchases the equipment supplier and lets iton hire , During the contract hirer can opt for an early repaymentand purchase the asset , Hirer may be required to make downpayment

Your Answer Finance company purchases the equipment supplier and lets iton hire , During the contract hirer can opt for an early repaymentand purchase the asset , Hirer may be required to make downpayment

Multiple Choice Multiple AnswerQuestion What is Sweat equity ?

Correct Answer Equity shares issued by the company to the employees , Issuedto directors at a discount , For consideration other than cash forproviding now

Your Answer Equity shares issued by the company to the employees , Issuedto directors at a discount , For consideration other than cash forproviding now

Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20

000 crores?Correct Answer Infosys , Satyam , Wipro

Your Answer Infosys , Wipro , IBM

True/FalseQuestion February UTI sought permission of SEBI to close 7 assured

plans prematurely.Correct Answer True

Your Answer True

Select The BlankQuestion The service charge is levied for allowing subscribers for entry

into or exit from mutual schemes is called as ________.Correct Answer Load

Your Answer Load

Select The BlankQuestion ________ is an international credit rating company.

Correct Answer FITSCH

Your Answer FITSCH

Select The BlankQuestion The NSE Nifty index comprises of ________companies.

Correct Answer 50

Your Answer 50

Select The BlankQuestion For an approval of HFC one of the norms is that the promoter's

contribution has to be minimum ________ of paid up capital.Correct Answer 0.3

Your Answer 0.3


Select The BlankQuestion The liability of the underwriters in the MS shoes case was

estimated to be ________.Correct Answer Rs. 500 crores

Your Answer Rs. 500 crores

Select The BlankQuestion Largest deal struck on Day 1 of foreign currency option got

underway in India was of ________.Correct Answer Standard Chartered Bank

Your Answer ICICI Bank

True/FalseQuestion If the credit rating is obtained from two different agencies in case

of issue of debt instruments, all the ratings need not be disclosedin the document.


Your Answer True

True/FalseQuestion Venture capital finance is risk finance for entrepreneurial growth

oriented companies.Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?

Correct Answer Knowledge and information about various aspects of capitalmarkets , Ability to evaluate and analyze , Update the knowledge

Your Answer Knowledge and information about various aspects of capitalmarkets , Ability to evaluate and analyze , Update the knowledge

Multiple Choice Multiple AnswerQuestion The following are some of the procedures of converting physical

holding into electronic form :-Correct Answer Surrender certificates to DP , DP intimates request to depositary

, DP submits the certificates to registrarYour Answer Surrender certificates to DP , DP intimates request to depositary

, DP submits the certificates to registrar


contributed to the growth of credit rating.Correct Answer Information technology

Your Answer Information technology

True/FalseQuestion At the inception of the hire purchases transaction the finance

company records the hire purchase installment receivable ascurrent asset.

Correct Answer True

Your Answer False

Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture

in India ?Correct Answer Reliance Industries

Your Answer Reliance Industries

Select The BlankQuestion When one decides to have the shares in an electronic form one

has to approach ________.Correct Answer DP

Your Answer DP


Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion What is issued by mutual funds?

Correct Answer Units

Your Answer Units


Correct Answer Sound General knowledge , Analytical ability and marketing

skills , Experience

Your Answer Analytical ability and marketing skills , Experience , High risktaking capacity

Multiple Choice Multiple AnswerQuestion Who can buy or sell securities on containing the certificate of

registration?Correct Answer Underwriter , Merchant banker , Investment advisor

Your Answer Merchant banker , Investment advisor , RBI

Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-

Correct Answer Must disclose investment strategy , VCF's must be registered ,Cannot carry out another activity

Your Answer VCF's must be registered , Cannot carry out another activity ,Must disclose investment strategy

True/FalseQuestion DRR is treated as part of general reserve for consideration of

bonus issue of proposals.Correct Answer True

Your Answer True


1995 MS shoes scam MS shoes scam

9/1/2001 SENSEX touched low of2600

UTI GTB merger

4/1/2001 Tata finance scam cameto light

Tata finance scam came tolight

11/1/2001 Reliance sale of 10.5%stake in L&T to grasim

Reliance sale of 10.5%stake in L&T to grasim

Multiple Choice Single AnswerQuestion What is the underwriter paid ?

Correct Answer Commission

Your Answer Commission


Question How is a share buy back a useful mechanism in preventinghostile takeovers?

Correct Answer Share buyback reduces the floating stock in the market therebyreducing the scope for a raider to acquire enough stock to gainmanagement control.

Your Answer Share buyback reduces the floating stock in the market therebyreducing the scope for a raider to acquire enough stock to gainmanagement control.

Select The BlankQuestion The process of securitisation involves transfer of assets to a

person specially created called as ________.Correct Answer Special purpose vehicle

Your Answer Special purpose vehicle

Multiple Choice Multiple AnswerQuestion Describe E-trading :-

Correct Answer Screen based trading in place of traditional ring , Communicationthrough the net , Operate in stock market privately through homeor office

Your Answer Screen based trading in place of traditional ring , Communicationthrough the net , Operate in stock market privately through homeor office

Multiple Choice Single AnswerQuestion If the unlisted company does not satisfy the criteria of net worth

profitability and issue size how can it come out with a publicissue?

Correct Answer Through book building process

Your Answer Merchant bankers

Multiple Choice Multiple AnswerQuestion Who issues participatory notes?

Correct Answer Associates of India based foreign brokerages , Domesticinstitutional brokerages

Your Answer Associates of India based foreign brokerages , Domesticinstitutional brokerages , Banks for a second or pari passucharge in case of debt instruments

Multiple Choice Single AnswerQuestion What is equipment leasing ?

Correct Answer Contractual agreement where the lessor of equipment transfersthe right to use the equipment to the lessee

Your Answer Contractual agreement where the lessor of equipment transfersthe right to use the equipment to the lessee



Your Answer 1 year

Multiple Choice Multiple AnswerQuestion What are the likely costs incurred by a credit card issuing bank?

Correct Answer Membership fees to visa/MasterCard , Marketing cost ,Administrative cost and cost of bad debts

Your Answer Membership fees to visa/MasterCard , Marketing cost ,Administrative cost and cost of bad debts


Correct Answer Statutory approvals refused , Sole acquirer being person died ,Circumstances as in opinion of board

Your Answer Statutory approvals refused , Sole acquirer being person died ,Circumstances as in opinion of board

Multiple Choice Single AnswerQuestion How many points the sensex went up in January 2000 during the

ketan parekh scam?Correct Answer 700 points

Your Answer 700 points

Multiple Choice Multiple AnswerQuestion What are ESOP's ?

Correct Answer Employees can take part in the prosperity of the company , Is areward and linked with the increase in the prices of the shares ,One of the methods of giving part ownership of the company tothe employees

Your Answer One of the methods of giving part ownership of the company tothe employees , Employees can take part in the prosperity of thecompany



Correct Answer The offer letter should contain true, factual and materialinformation and should not be misleading. , The company mustpay the consideration only by the way of cash , The companyshould not issue any fresh securities including bonus shares tillthe date of the closure of the offer.

Your Answer The shares have to be delisted from the exchange aftercompletion of the buy back , The offer letter should contain true,factual and material information and should not be misleading. ,The company should not issue any fresh securities includingbonus shares till the date of the closure of the offer.

Multiple Choice Single AnswerQuestion What do you understand by capital markets ?

Correct Answer Market for long term funds and investments in long terminstruments

Your Answer Investment in equities

Multiple Choice Multiple AnswerQuestion What are the limitations of refinance facility?

Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loanfunds of HFC's , Not to exceed 15 % of NOF of NHB

Your Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loanfunds of HFC's , Not to exceed 15 % of NOF of NHB


markets?Correct Answer Establishment of NSE

Your Answer Establishment of regional stock exchanges

True/FalseQuestion Acquisition finance, which provide funding for acquiring another

company are often closely held or fairly owned.Correct Answer True

Your Answer True

Select The BlankQuestion In the L & T reliance case, Reliance was fined ________.

Correct Answer Rs. 5 lacs

Your Answer Rs. 5 lacs


Question What is the information to be placed before the board ofdirectors as per the Kumarmangalam report?

Correct Answer Annual operating plans , Capital budgets , Quarterly results

Your Answer Annual operating plans , Capital budgets , Quarterly results




Multiple Choice Multiple AnswerQuestion What does SEBI do with its power ?

Correct Answer Cancel certificate issued to custodian , Inspect books of DP ,issuers or beneficiary owners , Investigate an acquirer

Your Answer Cancel certificate issued to custodian , Inspect books of DP ,issuers or beneficiary owners , Investigate an acquirer

Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making

an public issue as regards to its net worth?Correct Answer Net worth of the company should not be less than 1 crore


Multiple Choice Multiple AnswerQuestion The features of mutual Fund are :-

Correct Answer A trust that pools in savings and funds from large number ofinvestors who have common financial goal , Issue units toinvestor which represent right in assets , Investments in mutualfunds may be in the form of stock, bond, money marketsecurities

Your Answer A trust that pools in savings and funds from large number ofinvestors who have common financial goal , Issue units toinvestor which represent right in assets , Investments in mutualfunds may be in the form of stock, bond, money marketsecurities

Multiple Choice Single AnswerQuestion Who suffered heavy losses during bad times of stock markets?

Correct Answer Small investors

Your Answer Large investors


market?Correct Answer US$14 bn

Your Answer US$18 bn

Multiple Choice Single AnswerQuestion The capital Adequacy ratio for NBFC's has been fixed at :-

Correct Answer 0.12

Your Answer 0.1

Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?

Correct Answer A net connection , A registered account with a broker and ademat account , Bank payment gateway or online banking facility

Your Answer Bank payment gateway or online banking facility , A netconnection , A registered account with a broker and a demataccount

Select The BlankQuestion A significant portion of the investment through the participatory

notes is managed by ________ entities.Correct Answer 114

Your Answer 135

Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?

Correct Answer Credit rating , Maturity more than 18 months appoint debenturetrustee , Debenture redemption reserve to be created

Your Answer Credit rating , Maturity more than 18 months appoint debenturetrustee , Debenture redemption reserve to be created

Select The BlankQuestion Hire Purchase transactions are liable to ________.

Correct Answer Sales tax

Your Answer Sales tax

Multiple Choice Multiple AnswerQuestion What are the features of a Certificate of deposit?

Correct Answer It is a document title to a time deposit , Freely negotiable andmarketable , Can be issued only by commercial banks

Your Answer It is a document title to a time deposit , Freely negotiable andmarketable , Can be issued only by commercial banks

Select The BlankQuestion ________ is in the form of a usance promissory note payable

after 45 days from the date of issue.Correct Answer Certificate of Deposit

Your Answer Certificate of Deposit

Multiple Choice Single AnswerQuestion Who was the first to introduce rolling settlement in India?

Correct Answer NSE

Your Answer NSDL

Multiple Choice Single AnswerQuestion In the wake of boom of which sector the Indian mutual fund

launched various sector specific schemes?Correct Answer Software

Your Answer Software

Multiple Choice Single AnswerQuestion What is the most important objective for an investor?

Correct Answer Protection of the value of the investment

Your Answer Profit maximization




Multiple Choice Multiple AnswerQuestion What are the preconditions for trading on the net?Correct Answer A net connection , A registered account with a broker and a demat

account , Bank payment gateway or online banking facility

Your Answer A registered account with a broker and a demat account , Bank paymentgateway or online banking facility , A net connection


True/FalseQuestion Sweat equity shares are shares issued by company to employees or directors

to discount.Correct Answer TrueYour Answer True




Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any scheme till

approval of trustees and offer document has been filed with the board , With each offerdocument pay filing fees , Offer document to contain disclosures

Your Answer With each offer document pay filing fees , Offer document to containdisclosures







Question Who forms the Asset management company (AMC)?Correct Answer Group of trusteesYour Answer Group of trustees

Select The BlankQuestion The portfolio manager has to place the funds of all their clients in a separate

account to be maintained by them with ________.Correct Answer Scheduled Commercial BankYour Answer Scheduled Commercial Bank


Multiple Choice Single AnswerQuestion Under which regulation is reporting mandatory in respect of acquisitions

arising out of firm allot meant in public issues and rights issues etc?Correct Answer Regulation (3) 4Your Answer Regulation (3) 4

True/FalseQuestion Book building is a process whereby the price is determined on the basis of

actual demand as evident from the offers given by the various institutional investors andunderwriters.


Multiple Choice Single AnswerQuestion The Money market mutual funds (MMMFs) can invest the funds in which of

these securities?Correct Answer Call/notice moneyYour Answer Call/notice money

Multiple Choice Multiple AnswerQuestion What is the information to be placed before the board of directors as per the

Kumarmangalam report?Correct Answer Annual operating plans , Capital budgets , Quarterly resultsYour Answer Annual operating plans , Capital budgets , Quarterly results



Question What are ESOP's ?Correct Answer One of the methods of giving part ownership of the company to the

employees , Employees can take part in the prosperity of the company , Is a reward andlinked with the increase in the prices of the shares

Your Answer Is a reward and linked with the increase in the prices of the shares , Oneof the methods of giving part ownership of the company to the employees , Employeescan take part in the prosperity of the company


Shareholders Should effectively participate in general body meetings Should effectivelyparticipate in general body meetings

Objective of Audit committee Look into defaults to depositors creditors shareholders anddebenture holders Look into defaults to depositors creditors shareholders and debentureholders

Reasons of failures of corporate governance in spite of norms Superficial commitment tovision, mission and values Superficial commitment to vision, mission and values

Functions of Chief Executive, ED, Managers Assisting the board in decision makingprocess Assisting the board in decision making process

Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not misused by

NRI , OCB controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused by NRI ,

OCB controlled by Indians promoters


True/FalseQuestion DRR is treated as part of general reserve for consideration of bonus issue of

proposals.Correct Answer TrueYour Answer True


Correct Answer Sound General knowledge , Analytical ability and marketing skills ,Experience

Your Answer Sound General knowledge , Analytical ability and marketing skills ,Experience

Multiple Choice Multiple AnswerQuestion What precautions are to be taken with respect to delivery instruction slip ?Correct Answer DIS numbers are pre printed , Account number to be stamped ,

Investor should fill in target account idYour Answer DIS numbers are pre printed , Account number to be stamped , Investor

should fill in target account id


Select The BlankQuestion An acquirer who holds 15% or more but less than 75% of voting' rights can

acquire such additional shares as would entitle him to exercise more than ________ ofvoting rights in an financial year.

Correct Answer 0.05Your Answer 0.2



Multiple Choice Single AnswerQuestion What is the eligibility norm for an unlisted company for making an public

issue as regards to its net worth?Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore




Multiple Choice Single AnswerQuestion What is a more contemporary definition of corporate governance?Correct Answer Corporate Governance is all about promoting corporate fairness,

transparency and accountabilityYour Answer Corporate Governance is all about promoting corporate fairness,

transparency and accountability


compliance of SEBI regulations 1997 ?Correct Answer Details of proposed acquisition need to be filed with Stock exchanges

at least 4 days before the date , Any person holding more than 15% but less than 75%voting rights shall be disclosed with 2 days , Annual disclosures

Your Answer Any person holding more than 15% but less than 75% voting rights shallbe disclosed with 2 days



Select The BlankQuestion The Merchant banker will incorporate in the letter of offer the comments

made by SEBI and then send within ________ days from the date of PA to allshareholders whose names appear in the register of the company.


Multiple Choice Multiple AnswerQuestion When can an offer be withdrawn?Correct Answer Statutory approvals refused , Sole acquirer being person died ,

Circumstances as in opinion of boardYour Answer Statutory approvals refused , Sole acquirer being person died ,

Circumstances as in opinion of board

True/False

Question The public cannot give their complaints or comments on the issuer companyor others connected with the issue to SEBI.

Correct Answer FalseYour Answer False


Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer No stamp duty , Reduction in paperless work , Reduction in

transaction costYour Answer Reduction in paperless work , Reduction in transaction cost , Holds

funds in an account

Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the

depository , Maintain the investor's holdings in an electronic form , Effect settlement ofsecurities traded on exchanges

Your Answer Enable surrender and withdrawal of securities to and from the depository, Maintain the investor's holdings in an electronic form , Effect settlement of securitiestraded on exchanges

True/FalseQuestion RBI has permitted all commercial banks, financial institutions and large

corporates to issue certificate of deposits.Correct Answer FalseYour Answer True




True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities

separately for each client.Correct Answer FalseYour Answer False



Multiple Choice Single AnswerQuestion What is a call option?Correct Answer Right to buyYour Answer Right to buy

Select The BlankQuestion For an approval of HFC one of the norms is that the promoter's contribution has to be minimum

________ of paid up capital.Correct Answer 0.3Your Answer 0.3


Multiple Choice Single AnswerQuestion What is the time frame stipulated by SEBI for members intending to avail of the buy back

offer?Correct Answer Minimum 15 days and not exceeding 30 daysYour Answer Minimum 15 days and not exceeding 30 days


controlled by Indians promotersYour Answer Ensure participatory notes not misused by NRI , OCB controlled by Indians promoters ,

Issue participatory notes by FII to non regulated entities

Multiple Choice Single AnswerQuestion What is government's move towards Stock Exchanges ?Correct Answer DemutulisationYour Answer Demutulisation

Multiple Choice Single AnswerQuestion What is the main objective of credit appraisal ?Correct Answer Assess the repayment capacityYour Answer Assess the installment being paid

Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies by NHB?Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of auditorsYour Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of auditors

True/FalseQuestion A bidder can request for a transaction registration slip as the proof of his having entered the

bid.


Multiple Choice Multiple AnswerQuestion What are the major factors influencing portfolio decisions?Correct Answer Investment and interest rate risk , Investor characteristics , Liquidity needs and tax

considerationsYour Answer Investor characteristics , Liquidity needs and tax considerations , Investment and interest

rate risk

True/FalseQuestion Acquisition finance, which provide funding for acquiring another company are often closely

held or fairly owned.Correct Answer TrueYour Answer True

Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any litigation connected with ________.Correct Answer Securities marketsYour Answer Securities markets

Select The BlankQuestion In February 2004, UTI sought permission of SEBI to prematurely close ________ schemes.Correct Answer 7Your Answer 8

True/FalseQuestion At the inception of the hire purchases transaction the finance company records the hire

purchase installment receivable as current asset.Correct Answer TrueYour Answer True

Select The BlankQuestion The company intending to buy back their shares must open a ________ account as per SEBI

regulations.Correct Answer EscrowYour Answer Escrow


Rs. 8000 crores Current shortfall in UTI schemes Current shortfall in UTI schemes

0.1 Government decided to pay dividend Government decided to pay dividend

0.15 MF cannot invest as percentage of NAV in debt instrument issued by single issuer MF cannot investas percentage of NAV in debt instrument issued by single issuer

Annual statement of accounts of MF To be audited by auditor To be audited by auditor


True/FalseQuestion The buy back of shares by Indian corporates has been very successful in India.Correct Answer FalseYour Answer True


Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint debenture trustee , Debenture

redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint debenture trustee , Debenture

redemption reserve to be created



Select The BlankQuestion The VCs to flourish requires a well developed ________.Correct Answer Capital marketYour Answer Capital market


Rematerialisation RRF RRF

NSE Settlement cycle T + 3 Settlement cycle T + 3

RBI Gilt securities mobilization Gilt securities mobilization

Non corporate benefit Bonus Bonus

Select The BlankQuestion In 2001 a case of rigging and short selling based insider trading was noticed in the case of

proposed merger of ________.Correct Answer UTI Bank with GTBYour Answer UTI Bank with GTB

Multiple Choice Multiple AnswerQuestion The benefits of availing depository services are :-Correct Answer Reduction in paperless work , Reduction in transaction cost , No stamp dutyYour Answer No stamp duty , Reduction in paperless work , Reduction in transaction cost

Select The Blank

Question For issues upto Rs. 50 crores the number of lead managers will not exceed ________.Correct Answer 2Your Answer 2

Multiple Choice Single AnswerQuestion How is a share buy back a useful mechanism in preventing hostile takeovers?Correct Answer Share buyback reduces the floating stock in the market thereby reducing the scope for a

raider to acquire enough stock to gain management control.Your Answer Share buyback reduces the floating stock in the market thereby reducing the scope for a

raider to acquire enough stock to gain management control.

Multiple Choice Multiple AnswerQuestion To open a DP account, following things are required :-Correct Answer Proof of identity , Proof of address , PhotographYour Answer Proof of identity , Proof of address , Photograph

Multiple Choice Single AnswerQuestion What is the objective of a credit information company?Correct Answer To ascertain the credit worthiness of individuals/organizations and make the data

available to all banksYour Answer To ascertain the credit worthiness of individuals/organizations and make the data available

to all banks


True/FalseQuestion Mutual funds can do investments in any security issued by way of private placement by an

associate or group company of the sponsor.Correct Answer FalseYour Answer False





Your Answer Details of proposed acquisition need to be filed with Stock exchanges at least 4 daysbefore the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with2 days , Annual disclosures



True/False

Question Transactions that involve substantial payment towards goodwill, brand equity or intellectualproperty must be placed before the board of directors as per the recommendations of the KumarmangalamBirla report.





demutualisation of stock exchanges?Correct Answer SCRA , Depository ActYour Answer SCRA

Multiple Choice Multiple AnswerQuestion What are the stages in the process of book building broadly divided into?Correct Answer Syndicate formation , Issue processYour Answer Syndicate formation , Issue process


distributable profits for at least 3 years , Issue size shall not exceed five times of its pre issue net worthYour Answer Pre issue net worth not less than 1 crores in the last 3 years , Track record of distributable

profits for at least 3 years , Issue size shall not exceed five times of its pre issue net worth

Multiple Choice Single AnswerQuestion What is the most common complaint of the investors?Correct Answer Non receipt of refund orders and allotment adviseYour Answer Non receipt of refund orders and allotment advise


accountabilityYour Answer To conduct business in accordance with the shareholders interest while conforming to the

local laws and customs

Multiple Choice Multiple AnswerQuestion What are the eligibility norms for a listed company for making a public issue?Correct Answer If the issue size is less than five times pre issue net worth , If the issue size is more than

or equal to five times pre issue networth then the listed company to take book building route , 60% of issuesize to be allotted to QIB's

Your Answer If the issue size is less than five times pre issue net worth , If the issue size is more than orequal to five times pre issue networth then the listed company to take book building route , 60% of issuesize to be allotted to QIB's




Multiple Choice Single AnswerQuestion What is the underwriter paid ?Correct Answer CommissionYour Answer Commission







Multiple Choice Single AnswerQuestion What is Discretionary Portfolio management service ?Correct Answer Client gives his money for investment to the portfolio manager and leaves it to

him to make all the investment decisions.Your Answer Client gives his money for investment to the portfolio manager and leaves it to

him to make all the investment decisions.





Multiple Choice Multiple AnswerQuestion The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number of investors who

have common financial goal , Issue units to investor which represent right in assets , Investmentsin mutual funds may be in the form of stock, bond, money market securities

Your Answer A trust that pools in savings and funds from large number of investors who havecommon financial goal , Issue units to investor which represent right in assets , Investments inmutual funds may be in the form of stock, bond, money market securities



Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any litigation connected with

________.Correct Answer Securities marketsYour Answer Clients

Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?Correct Answer Knowledge and information about various aspects of capital markets , Ability to

evaluate and analyze , Update the knowledgeYour Answer Knowledge and information about various aspects of capital markets , Ability to

evaluate and analyze , Update the knowledge

Multiple Choice Multiple AnswerQuestion Describe the stock lending mechanism:-Correct Answer Involves two parties one who is willing to lend and other who wishes to borrow

securities at market related rates , Lender is assured of getting equivalent the relevant securitiesby NSSCL on the settlement date , Lender gets benefit of reasonable return called lending fee

Your Answer Involves two parties one who is willing to lend and other who wishes to borrowsecurities at market related rates , Lender gets benefit of reasonable return called lending fee

Multiple Choice Multiple AnswerQuestion What are the limitations of refinance facility?Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds of HFC's

, Not to exceed 15 % of NOF of NHBYour Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds of HFC's ,

Not to exceed 15 % of NOF of NHB

Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what period from the date

of passing the resolution?Correct Answer 12 monthsYour Answer 12 months





$ 476 mn Global investors pumping funds in India Specific Funds HDFC foreign currency deal



True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their trustees and asset

management companies.Correct Answer FalseYour Answer False


Select The BlankQuestion Recently many banks have started issuing ________ which could also be used as a

debit card.Correct Answer ATM cardYour Answer ATM card

Select The BlankQuestion A ________ means any persons connected with a company and who is reasonably

having access to unpublished price sensitive information.Correct Answer InsiderYour Answer Insider



Share buy back is a way of Returning surplus cash to the shareholders Returning surplus cash tothe shareholders

Dutch Auction Price of the Buy back is done by the shareholders Price of the Buy back is done bythe shareholders




others connected with the issue to SEBI.Correct Answer False

Your Answer False


True/FalseQuestion A portfolio manager need not necessarily sell or purchase securities separately for

each client.Correct Answer FalseYour Answer True


issue certificate of deposits.Correct Answer FalseYour Answer True

True/FalseQuestion Book building is a process whereby the price is determined on the basis of actual

demand as evident from the offers given by the various institutional investors and underwriters.Correct Answer TrueYour Answer True








Select The Blank

Question The continuing growth in ________ was one of the factors that contributed to thegrowth of credit rating.

Correct Answer Information technologyYour Answer Information technology

Select The BlankQuestion In case of a public issue by a listed company participation by promoters in the

proposed issues in excess of the required minimum percentage shall also be looked in for aperiod of ________.

Correct Answer 1 yearYour Answer 3 years



net , Operate in stock market privately through home or officeYour Answer Screen based trading in place of traditional ring , Communication through the net

, Operate in stock market privately through home or office

Select The BlankQuestion The Kumarmangalam Birla report stressed on the importance of ________ with

respect to AGM's.Correct Answer Proxy voting / ballot systemsYour Answer Proxy voting / ballot systems

True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities purchased under the

buy back arrangement to be extinguished and physically destroyed.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint debenture trustee ,

Debenture redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint debenture trustee ,

Debenture redemption reserve to be created




investment strategy


Question What is the minimum number of days for which the bid should remain open in bookbuilding?

Correct Answer 5 daysYour Answer 7 days



Select The BlankQuestion With the introduction of ________ accounts the complaints about allotment have

surely gone down.Correct Answer DEMATYour Answer DEMAT













known as ________.

Correct Answer BO IDYour Answer BO ID





the industry








interest rate risk



Select The BlankQuestion Information technology, communication and entertainment represent

________ stocks.Correct Answer ICEYour Answer ICE


company or others connected with the issue to SEBI.

Correct Answer FalseYour Answer True



Multiple Choice Single AnswerQuestion Who is responsible to get the securities listed on all the stock

exchanges?Correct Answer Merchant bankerYour Answer SEBI

Select The BlankQuestion A mutual fund scheme shall not invest more than ________ of its

NAV in unrated debt by a single issuer.Correct Answer 0.1Your Answer 0.1





Multiple Choice Multiple AnswerQuestion Describe the regulatory aspects of mutual funds :-Correct Answer The Asset management company shall not launch any

scheme till approval of trustees and offer document has been filed with the board, With each offer document pay filing fees , Offer document to contain disclosures

Your Answer The Asset management company shall not launch any schemetill approval of trustees and offer document has been filed with the board , Witheach offer document pay filing fees , Offer document to contain disclosures

Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer Must disclose investment strategy , VCF's must be registered ,

Cannot carry out another activityYour Answer VCF's must be registered , Cannot carry out another activity ,


True/FalseQuestion Money market mutual funds are not permitted to invest in treasury

bills and commercial paper.Correct Answer FalseYour Answer True







Correct Answer Screen based trading in place of traditional ring ,Communication through the net , Operate in stock market privately through homeor office

Your Answer Screen based trading in place of traditional ring , Communicationthrough the net , Operate in stock market privately through home or office

Multiple Choice Multiple AnswerQuestion What are the eligibility norms for an unlisted company for making a

public issue?Correct Answer Pre issue net worth not less than 1 crores in the last 3 years ,

Track record of distributable profits for at least 3 years , Issue size shall notexceed five times of its pre issue net worth

Your Answer Issue size shall not exceed five times of its pre issue net worth ,Pre issue net worth not less than 1 crores in the last 3 years , Track record ofdistributable profits for at least 3 years


Multiple Choice Multiple AnswerQuestion During the budget 2003 - 04, Finance Minister made some

announcements which he hopes will make investors think in terms of returning tostock market :-

Correct Answer No capital gains tax on investment made in equity after 1/3/03held for 1 year , Removal of income tax on dividends in the hands of receiver

Your Answer No capital gains tax on investment made in equity after 1/3/03held for 1 year , Removal of income tax on dividends in the hands of receiver ,Investors income tax on dividend reduced to 12.5%


Multiple Choice Multiple AnswerQuestion Which acts were amended to remove some of the hurdles to

corporatisation and demutualisation of stock exchanges?Correct Answer SCRA , Depository ActYour Answer SCRA , Depository Act


Shareholders Should effectively participate in general body meetings Shouldeffectively participate in general body meetings

Objective of Audit committee Look into defaults to depositors creditorsshareholders and debenture holders Look into defaults to depositors creditorsshareholders and debenture holders

Reasons of failures of corporate governance in spite of norms Superficialcommitment to vision, mission and values Superficial commitment to vision,mission and values

Functions of Chief Executive, ED, Managers Assisting the board in decisionmaking process Decision making

Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20 000

crores?Correct Answer Infosys , Satyam , WiproYour Answer Infosys , Satyam , Wipro

Multiple Choice Multiple AnswerQuestion What does SEBI do with its power ?Correct Answer Cancel certificate issued to custodian , Inspect books of DP ,

issuers or beneficiary owners , Investigate an acquirerYour Answer Cancel certificate issued to custodian , Inspect books of DP ,

issuers or beneficiary owners , Investigate an acquirer

True/FalseQuestion Amendment to SCRA will facilitate derivatives trading in interest rate

futures and options if there is an underlying asset.Correct Answer TrueYour Answer True



more security shall be issued only in demat form.Correct Answer 10 croresYour Answer 10 crores


Question What are the obligations of a company in a share buy back?Correct Answer The offer letter should contain true, factual and material

information and should not be misleading. , The company must pay theconsideration only by the way of cash , The company should not issue any freshsecurities including bonus shares till the date of the closure of the offer.

Your Answer The offer letter should contain true, factual and materialinformation and should not be misleading. , The company must pay theconsideration only by the way of cash , The company should not issue any freshsecurities including bonus shares till the date of the closure of the offer.

Select The BlankQuestion The DP opens investor account in the system and gives an account

number also known as ________.Correct Answer BO IDYour Answer BO ID

Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how

many times of the net owned funds?Correct Answer 4 timesYour Answer 4 times

Multiple Choice Multiple AnswerQuestion What are the factors that determine the value of a firm?Correct Answer Overall economic condition , Demand and supply capital ,

Degree of popularity of the industryYour Answer Overall economic condition , Demand and supply capital ,

Degree of popularity of the industry



Factors influencing portfolio decisions Business and Market risks Business andMarket risks

Code of conduct- Portfolio Manager Observe high standard of integrity andfairness Observe high standard of integrity and fairness

SEBI Regulations Portfolio Manager must fulfill the capital adequacy norms Tomake timely decision regarding sale and purchase of securities


Correct Answer Investor characteristics , Liquidity needs and taxconsiderations , Investment and interest rate risk




large corporates to issue certificate of deposits.Correct Answer FalseYour Answer False



instruments

Multiple Choice Multiple AnswerQuestion What is dematerialization ?Correct Answer Physical certificates converted into electronic from , Credited

into investors account with his/ her DPYour Answer Physical certificates converted into electronic from , Credited into

investors account with his/ her DP , Selling shares

Select The BlankQuestion ________ is in the form of a usance promissory note payable after

45 days from the date of issue.Correct Answer Certificate of DepositYour Answer Certificate of Deposit




Multiple Choice Single AnswerQuestion What is the amount of net worth accompany should have for opting

for an IPO ?Correct Answer 1 CroreYour Answer 1 Crore

Select The BlankQuestion The process of securitisation involves transfer of assets to a person

specially created called as ________.Correct Answer Special purpose vehicleYour Answer Special purpose vehicle


shares in cases of open ended schemes.Correct Answer TrueYour Answer False


True/FalseQuestion Venture capital finance is risk finance for entrepreneurial growth

oriented companies.Correct Answer TrueYour Answer True






issued by RBI :-

Correct Answer Without the registration certificate no company can undertakeactivities of NBFC , All companies must be liquid assets equal to 15% of deposits, All the NBFC's must register with RBI

Your Answer All the NBFC's must register with RBI , Without the registrationcertificate no company can undertake activities of NBFC , All companies must beliquid assets equal to 15% of deposits

True/FalseQuestion Transactions that involve substantial payment towards goodwill,

brand equity or intellectual property must be placed before the board of directorsas per the recommendations of the Kumarmangalam Birla report.







Multiple Choice Single AnswerQuestion In the wake of boom of which sector the Indian mutual fund launched

various sector specific schemes?Correct Answer SoftwareYour Answer Software

Select The BlankQuestion In 2001 a case of rigging and short selling based insider trading was

noticed in the case of proposed merger of ________.Correct Answer UTI Bank with GTBYour Answer OBC with GTB



Multiple Choice Single AnswerQuestion What is equipment leasing ?Correct Answer Contractual agreement where the lessor of equipment

transfers the right to use the equipment to the lesseeYour Answer Contractual agreement where the lessor of equipment transfers

the right to use the equipment to the lessee




True/FalseQuestion Mergers and amalgamations of companies are also covered under

the SEBI regulations 1997.Correct Answer FalseYour Answer False


________ of any company's paid up capital carrying voting rights.Correct Answer 0.1Your Answer 0.3


skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills

, Experience


Correct Answer Screen based trading in place of traditional ring ,Communication through the net , Operate in stock market privately through homeor office



profitability and issue size how can it come out with a public issue?Correct Answer Through book building processYour Answer Through book building process


Multiple Choice Multiple AnswerQuestion Who issues participatory notes?Correct Answer Associates of India based foreign brokerages , Domestic

institutional brokeragesYour Answer Associates of India based foreign brokerages , Domestic

institutional brokerages



Ready forward transaction (Repo) Interbank sale and repurchase of securitiesInterbank sale and repurchase of securities

Commercial paper Means of raising short term debt by companies Means ofraising short term debt by companies




bills and commercial paper.


Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies by

NHB?Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any

appointment of auditorsYour Answer Minimum paid up capital 1 crore , At least 2 directors , Any

appointment of auditors







company are often closely held or fairly owned.Correct Answer TrueYour Answer True



Select The BlankQuestion The acquirer is required to make the PA within ________ working

days of entering into an agreement to acquire shares or deciding to acquireshare's voting rights of target company.


Multiple Choice Single AnswerQuestion What is the objective of public announcement?Correct Answer Ensure that the shareholders of the target company are aware

of the exit opportunity available to themYour Answer Ensure that the shareholders of the target company are aware of

the exit opportunity available to them


True/FalseQuestion If the credit rating is obtained from two different agencies in case of

issue of debt instruments, all the ratings need not be disclosed in the document.Correct Answer FalseYour Answer True

Multiple Choice Multiple AnswerLIST OF ATTEMPTED QUESTIONS AND ANSWERS





issued by RBI :-Correct Answer All the NBFC's must register with RBI , Without the registration


Your Answer All the NBFC's must register with RBI , Without the registrationcertificate no company can undertake activities of NBFC , All companies must beliquid assets equal to 15% of deposits

True/False

Question Transactions that involve substantial payment towards goodwill,brand equity or intellectual property must be placed before the board of directorsas per the recommendations of the Kumarmangalam Birla report.







Multiple Choice Single AnswerQuestion In the wake of boom of which sector the Indian mutual fund launched

various sector specific schemes?Correct Answer SoftwareYour Answer Software

Select The BlankQuestion In 2001 a case of rigging and short selling based insider trading was

noticed in the case of proposed merger of ________.Correct Answer UTI Bank with GTBYour Answer OBC with GTB



Correct Answer Mutual fundsYour Answer Mutual funds

Multiple Choice Single AnswerQuestion What is equipment leasing ?Correct Answer Contractual agreement where the lessor of equipment

transfers the right to use the equipment to the lesseeYour Answer Contractual agreement where the lessor of equipment transfers

the right to use the equipment to the lessee




True/FalseQuestion Mergers and amalgamations of companies are also covered under

the SEBI regulations 1997.Correct Answer FalseYour Answer False

Select The BlankQuestion The DP opens investor account in the system and gives an account

number also known as ________.Correct Answer BO IDYour Answer BO ID

True/FalseQuestion Constant change would be one of the reasons for failure of corporate

governance.Correct Answer TrueYour Answer False


more security shall be issued only in demat form.Correct Answer 10 croresYour Answer 10 crores

True/FalseQuestion The company opting for an IPO should have net worth of at least Rs

1 crore in each of the preceding two years.Correct Answer TrueYour Answer False


depository , Maintain the investor's holdings in an electronic form , Effectsettlement of securities traded on exchanges

Your Answer Enable surrender and withdrawal of securities to and from thedepository , Maintain the investor's holdings in an electronic form , Effectsettlement of securities traded on exchanges

Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity ,

Must disclose investment strategyYour Answer VCF's must be registered , Cannot carry out another activity ,




instruments


Castrol FY 2003 - 03 Dividend Rs145 crores FY 2003 - 03 Dividend Rs145crores


Hero Honda FY 2003 - 03 Dividend Rs187 crores FY 2003 - 03 Dividend Rs187crores




Multiple Choice Single AnswerQuestion When did the trading in foreign currency options start in India?


Multiple Choice Multiple AnswerQuestion What is dematerialization ?Correct Answer Credited into investors account with his/ her DP , Physical

certificates converted into electronic fromYour Answer Physical certificates converted into electronic from , Credited into

investors account with his/ her DP


________ of any company's paid up capital carrying voting rights.Correct Answer 0.1Your Answer 0.3


skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills

, Experience





profitability and issue size how can it come out with a public issue?Correct Answer Through book building processYour Answer Through book building process


Multiple Choice Multiple AnswerQuestion Who issues participatory notes?Correct Answer Associates of India based foreign brokerages , Domestic

institutional brokerages

Your Answer Associates of India based foreign brokerages , Domesticinstitutional brokerages



Ready forward transaction (Repo) Interbank sale and repurchase of securitiesInterbank sale and repurchase of securities

Commercial paper Means of raising short term debt by companies Means ofraising short term debt by companies




bills and commercial paper.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies by

NHB?Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any

appointment of auditorsYour Answer Minimum paid up capital 1 crore , At least 2 directors , Any

appointment of auditors







company are often closely held or fairly owned.Correct Answer TrueYour Answer True



Select The BlankQuestion The acquirer is required to make the PA within ________ working

days of entering into an agreement to acquire shares or deciding to acquireshare's voting rights of target company.


Multiple Choice Single AnswerQuestion What is the objective of public announcement?Correct Answer Ensure that the shareholders of the target company are aware

of the exit opportunity available to themYour Answer Ensure that the shareholders of the target company are aware of

the exit opportunity available to them


True/FalseQuestion If the credit rating is obtained from two different agencies in case of

issue of debt instruments, all the ratings need not be disclosed in the document.Correct Answer FalseYour Answer True

Multiple Choice Multiple AnswerQuestion How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not

misused by NRI , OCB controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused

by NRI , OCB controlled by Indians promoters

Select The BlankQuestion When one decides to have the shares in an electronic form one has

to approach ________.Correct Answer DPYour Answer DP

Question How does SEBI react to the Scams in participatory notes issuance?Correct Answer Tighten FII regulations , Ensure participatory notes not

misused by NRI , OCB controlled by Indians promotersYour Answer Tighten FII regulations , Ensure participatory notes not misused

by NRI , OCB controlled by Indians promoters

Select The BlankQuestion When one decides to have the shares in an electronic form one has

to approach ________.Correct Answer DPYour Answer DP





account , Bank payment gateway or online banking facilityYour Answer A registered account with a broker and a demat account , Bank payment

gateway or online banking facility , A net connection

















account to be maintained by them with ________.Correct Answer Scheduled Commercial Bank

Your Answer Scheduled Commercial Bank












Multiple Choice Multiple AnswerQuestion What are ESOP's ?Correct Answer One of the methods of giving part ownership of the company to the














Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and marketing skills ,

ExperienceYour Answer Sound General knowledge , Analytical ability and marketing skills ,

Experience


Investor should fill in target account id

Your Answer DIS numbers are pre printed , Account number to be stamped , Investorshould fill in target account id














Your Answer Corporate Governance is all about promoting corporate fairness,transparency and accountability













True/FalseQuestion The public cannot give their complaints or comments on the issuer company

or others connected with the issue to SEBI.Correct Answer FalseYour Answer False




funds in an account


























Match The Following































Select The BlankQuestion While structuring the deal the entrepreneur seeks ________.

Correct Answer Voting controlYour Answer Goodwill





Experience


Investor should fill in target account idYour Answer DIS numbers are pre printed , Account number to be stamped , Investor

should fill in target account id








Question What is the eligibility norm for an unlisted company for making an publicissue as regards to its net worth?

Correct Answer Net worth of the company should not be less than 1 croreYour Answer Net worth of the company should not be less than 1 crore





transparency and accountabilityYour Answer Corporate Governance is all about promoting corporate fairness,



















funds in an account






Select The BlankQuestion Directors should not be member of more than________ committees.Correct Answer 10

Your Answer 10











Experience

Your Answer Sound General knowledge , Analytical ability and marketing skills ,Experience

Multiple Choice Single AnswerQuestion What is Discretionary Portfolio management service ?Correct Answer Client gives his money for investment to the portfolio manager and

leaves it to him to make all the investment decisions.Your Answer Client gives his money for investment to the portfolio manager and

leaves it to him to make all the investment decisions.



Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what amount is

expected to be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores

Multiple Choice Multiple AnswerQuestion The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number of investors

who have common financial goal , Issue units to investor which represent right in assets ,Investments in mutual funds may be in the form of stock, bond, money market securities

Your Answer A trust that pools in savings and funds from large number of investorswho have common financial goal , Issue units to investor which represent right in assets ,Investments in mutual funds may be in the form of stock, bond, money market securities

True/FalseQuestion If the credit rating is obtained from two different agencies in case of issue of

debt instruments, all the ratings need not be disclosed in the document.Correct Answer FalseYour Answer True



Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?Correct Answer Knowledge and information about various aspects of capital markets ,

Ability to evaluate and analyze , Update the knowledgeYour Answer Knowledge and information about various aspects of capital markets ,

Ability to evaluate and analyze , Update the knowledge

Multiple Choice Multiple AnswerQuestion Describe the stock lending mechanism:-Correct Answer Involves two parties one who is willing to lend and other who wishes

to borrow securities at market related rates , Lender is assured of getting equivalent therelevant securities by NSSCL on the settlement date , Lender gets benefit of reasonablereturn called lending fee

Your Answer Involves two parties one who is willing to lend and other who wishes toborrow securities at market related rates , Lender gets benefit of reasonable return calledlending fee

Multiple Choice Multiple AnswerQuestion What are the limitations of refinance facility?Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds

of HFC's , Not to exceed 15 % of NOF of NHBYour Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds of

HFC's , Not to exceed 15 % of NOF of NHB

Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what period from

the date of passing the resolution?Correct Answer 12 monthsYour Answer 12 months






Multiple Choice Single AnswerQuestion When did the trading in foreign currency options start in India?



True/FalseQuestion SEBI cannot investigate the affairs of mutual funds and their trustees and

asset management companies.Correct Answer FalseYour Answer False


Select The BlankQuestion Recently many banks have started issuing ________ which could also be

used as a debit card.Correct Answer ATM cardYour Answer ATM card





Share buy back is a way of Returning surplus cash to the shareholders Returning surpluscash to the shareholders

Dutch Auction Price of the Buy back is done by the shareholders Price of the Buy back isdone by the shareholders







separately for each client.Correct Answer FalseYour Answer True









Question The following are some of the regulations governing the NBFC's issued byRBI :-

Correct Answer All the NBFC's must register with RBI , Without the registrationcertificate no company can undertake activities of NBFC , All companies must be liquidassets equal to 15% of deposits

Your Answer All the NBFC's must register with RBI , Without the registrationcertificate no company can undertake activities of NBFC , All companies must be liquidassets equal to 15% of deposits



Select The BlankQuestion The continuing growth in ________ was one of the factors that contributed to

the growth of credit rating.Correct Answer Information technologyYour Answer Information technology

Select The BlankQuestion In case of a public issue by a listed company participation by promoters in

the proposed issues in excess of the required minimum percentage shall also be looked infor a period of ________.



Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring , Communication

through the net , Operate in stock market privately through home or officeYour Answer Screen based trading in place of traditional ring , Communication

through the net , Operate in stock market privately through home or office

Select The Blank

Question The Kumarmangalam Birla report stressed on the importance of ________with respect to AGM's.

Correct Answer Proxy voting / ballot systemsYour Answer Proxy voting / ballot systems

True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities purchased

under the buy back arrangement to be extinguished and physically destroyed.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint debenture

trustee , Debenture redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint debenture trustee ,



Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity , Must

disclose investment strategyYour Answer VCF's must be registered , Cannot carry out another activity , Must

disclose investment strategy

Multiple Choice Single AnswerQuestion What is the minimum number of days for which the bid should remain open

in book building?Correct Answer 5 daysYour Answer 7 days

Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many times

of the net owned funds?Correct Answer 4 timesYour Answer 4 times

Select The BlankQuestion With the introduction of ________ accounts the complaints about allotment

have surely gone down.Correct Answer DEMAT

Your Answer DEMATLIST OF ATTEMPTED QUESTIONS AND ANSWERS







Experience

Multiple Choice Single AnswerQuestion What is Discretionary Portfolio management service ?Correct Answer Client gives his money for investment to the portfolio manager and

leaves it to him to make all the investment decisions.Your Answer Client gives his money for investment to the portfolio manager and

leaves it to him to make all the investment decisions.



Multiple Choice Single AnswerQuestion As per the reports and the letter of intent filed with SEBI, what amount is

expected to be paid from the primary market during this year?Correct Answer 15000 croresYour Answer 15000 crores

Multiple Choice Multiple AnswerQuestion The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number of investors

who have common financial goal , Issue units to investor which represent right in assets ,Investments in mutual funds may be in the form of stock, bond, money market securities

Your Answer A trust that pools in savings and funds from large number of investorswho have common financial goal , Issue units to investor which represent right in assets ,Investments in mutual funds may be in the form of stock, bond, money market securities

True/FalseQuestion If the credit rating is obtained from two different agencies in case of issue of

debt instruments, all the ratings need not be disclosed in the document.Correct Answer FalseYour Answer True



Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?Correct Answer Knowledge and information about various aspects of capital markets ,

Ability to evaluate and analyze , Update the knowledgeYour Answer Knowledge and information about various aspects of capital markets ,

Ability to evaluate and analyze , Update the knowledge

Multiple Choice Multiple AnswerQuestion Describe the stock lending mechanism:-Correct Answer Involves two parties one who is willing to lend and other who wishes

to borrow securities at market related rates , Lender is assured of getting equivalent therelevant securities by NSSCL on the settlement date , Lender gets benefit of reasonablereturn called lending fee

Your Answer Involves two parties one who is willing to lend and other who wishes toborrow securities at market related rates , Lender gets benefit of reasonable return calledlending fee


Question What are the limitations of refinance facility?Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds

of HFC's , Not to exceed 15 % of NOF of NHBYour Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds of

HFC's , Not to exceed 15 % of NOF of NHB

Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what period from

the date of passing the resolution?Correct Answer 12 monthsYour Answer 12 months









asset management companies.Correct Answer FalseYour Answer False


Select The BlankQuestion Recently many banks have started issuing ________ which could also be

used as a debit card.Correct Answer ATM cardYour Answer ATM card





Share buy back is a way of Returning surplus cash to the shareholders Returning surpluscash to the shareholders

Dutch Auction Price of the Buy back is done by the shareholders Price of the Buy back isdone by the shareholders







separately for each client.Correct Answer False

Your Answer True








Multiple Choice Multiple AnswerQuestion The following are some of the regulations governing the NBFC's issued by

RBI :-Correct Answer All the NBFC's must register with RBI , Without the registration

certificate no company can undertake activities of NBFC , All companies must be liquidassets equal to 15% of deposits

Your Answer All the NBFC's must register with RBI , Without the registrationcertificate no company can undertake activities of NBFC , All companies must be liquidassets equal to 15% of deposits



Select The Blank

Question The continuing growth in ________ was one of the factors that contributed tothe growth of credit rating.

Correct Answer Information technologyYour Answer Information technology

Select The BlankQuestion In case of a public issue by a listed company participation by promoters in

the proposed issues in excess of the required minimum percentage shall also be looked infor a period of ________.



Multiple Choice Multiple AnswerQuestion Describe E-trading :-Correct Answer Screen based trading in place of traditional ring , Communication

through the net , Operate in stock market privately through home or officeYour Answer Screen based trading in place of traditional ring , Communication

through the net , Operate in stock market privately through home or office

Select The BlankQuestion The Kumarmangalam Birla report stressed on the importance of ________

with respect to AGM's.Correct Answer Proxy voting / ballot systemsYour Answer Proxy voting / ballot systems

True/FalseQuestion The SEBI guidelines do not make it mandatory for the securities purchased

under the buy back arrangement to be extinguished and physically destroyed.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion What are the SEBI guidelines for issue of debt instruments?Correct Answer Credit rating , Maturity more than 18 months appoint debenture

trustee , Debenture redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint debenture trustee ,


Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture in India ?Correct Answer Reliance Industries

Your Answer Reliance Industries

Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another activity , Must

disclose investment strategyYour Answer VCF's must be registered , Cannot carry out another activity , Must

disclose investment strategy

Multiple Choice Single AnswerQuestion What is the minimum number of days for which the bid should remain open

in book building?Correct Answer 5 daysYour Answer 7 days

Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how many times

of the net owned funds?Correct Answer 4 timesYour Answer 4 times

Select The BlankQuestion With the introduction of ________ accounts the complaints about allotment

have surely gone down.Correct Answer DEMATYour Answer DEMATLIST OF ATTEMPTED QUESTIONS AND ANSWERS






True/False

Question Sweat equity shares are shares issued by company to employees or directorsto discount.






























Match The Following














Experience


Investor should fill in target account id

Your Answer DIS numbers are pre printed , Account number to be stamped , Investorshould fill in target account id














Your Answer Corporate Governance is all about promoting corporate fairness,transparency and accountability


















funds in an account












Question What was the objective of setting up the Securities Trading corporation ofIndia Ltd?

Correct Answer To promote secondary market in government securities



Correct Answer Finance company purchases the equipment supplier and lets it on hire ,During the contract hirer can opt for an early repayment and purchase theasset , Hirer may be required to make down payment

Your Answer During the contract hirer can opt for an early repayment and purchase theasset , Hirer may be required to make down payment , Finance companypurchases the equipment supplier and lets it on hire

True/FalseQuestion A mutual fund shall not invest more than 10% of is NAV in equity shares in

cases of open ended schemes.Correct Answer True

Your Answer True





Correct Answer Investor


True/FalseQuestion MIBOR is a security. Derivatives based on this interest rate have legal

recognition under SCRA.Correct Answer False

Your Answer True

Select The BlankQuestion It is the responsibility of the ________ to ensure the timely refunds and

allotments of the securities.Correct Answer Lead managers


True/FalseQuestion A credit card is a payment mechanism which enables the holder to buy

goods and services on credit.Correct Answer True

Your Answer True






NSE NSE

Select The BlankQuestion Final prospectus in the book building p________ess is to be filed with the

ROC.Correct Answer ROC

Your Answer ROC

Select The BlankQuestion A company with highly rated instrument has the opportunity to ________

by quoting less interest rates.Correct Answer Reduce the cost of borrowing



actual demand as evident from the offers given by the various institutionalinvestors and underwriters.

Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion What are the norms for Approval of Housing finance companies by NHB?

Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment ofauditors

Your Answer Minimum paid up capital 1 crore , At least 2 directors , At least 50% loansin long term nature

Multiple Choice Single AnswerQuestion A portfolio manager could undertake the following on behalf of his clients :-

Correct Answer Hedging and arbitrage transactions



Correct Answer Negotiated price , Price paid by acquirer , Average weekly high low ofclosing share of the target company

Your Answer Negotiated price , Price paid by acquirer , Average weekly high low ofclosing share of the target company


Correct Answer Sound General knowledge , Analytical ability and marketing skills ,Experience

Your Answer Experience , Sound General knowledge , Analytical ability and marketingskills



Your Answer 2 years


Correct Answer True

Your Answer True

Select The BlankQuestion One of the process of book building is that the issuer appoints a ________

also known as the book runner.Correct Answer Lead manager


Select The BlankQuestion The process of securitisation involves transfer of assets to a person

specially created called as ________.Correct Answer Special purpose vehicle

Your Answer Trust



Your Answer False

Multiple Choice Single AnswerQuestion Apart from the portfolio management fees what percentage of returns can

the portfolio manager share from their client's profits?Correct Answer 0

Your Answer 0


purchased under the buy back arrangement to be extinguished andphysically destroyed.


Your Answer False


Correct Answer SENSEX

Your Answer SENSEX

Multiple Choice Multiple AnswerQuestion As per the recommendations of the Kumarmangalam Birla committee

report who are the key components of an audit committee.Correct Answer Board , Internal auditor , External auditor


Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20 000 crores?

Correct Answer Infosys , Satyam , Wipro



Correct Answer The offer letter should contain true, factual and material information andshould not be misleading. , The company must pay the consideration onlyby the way of cash , The company should not issue any fresh securitiesincluding bonus shares till the date of the closure of the offer.

Your Answer The offer letter should contain true, factual and material information andshould not be misleading. , The company must pay the consideration onlyby the way of cash , The company should not issue any fresh securitiesincluding bonus shares till the date of the closure of the offer.


Correct Answer Voluntary non profit making organizations , Joint stock companies limitedby shares , Joint stock companies Limited by guarantee

Your Answer Voluntary non profit making organizations , Joint stock companies limitedby shares , Private limited companies


Correct Answer Through any/ own subsidiary company , Through any/group of investmentcompany , If default subsists in respect of repayments of deposits, termloans to any financial institutions and redemption of preference shares ordebentures

Your Answer Through any/ own subsidiary company , Through any/group of investmentcompany , If default subsists in respect of repayments of deposits, termloans to any financial institutions and redemption of preference shares ordebentures


Correct Answer True

Your Answer True

Select The BlankQuestion For issues upto Rs. 50 crores the number of lead managers will not

exceed ________.Correct Answer 2

Your Answer 4

Match The Following


Ready forward transaction(Repo)


Operations in call moneymarkets

Commercial paper Means of raising short termdebt by companies

Means of raising short termdebt by companies

STCI Operations in call moneymarkets

Launched in fiscal 2004-05

Market stabilsation Bonds Launched in fiscal 2004-05 Interbank sale and repurchaseof securities


asset management companies.Correct Answer False

Your Answer False


transactions arising out of firm allotment in public issues right issues etc?Correct Answer 21 days

Your Answer 21 days

True/FalseQuestion The acquirer is required to appoint a merchant banker before making a

PA.Correct Answer True

Your Answer True


Correct Answer Call option


Multiple Choice Single AnswerQuestion Upto what percentage has the RBI permitted the banks to invest in the

capital market ?Correct Answer 0.05

Your Answer 0.05


Question What was the turning point in the working of Indian capital markets?

Correct Answer Establishment of NSE



issue as regards to its net worth?Correct Answer Net worth of the company should not be less than 1 crore


Multiple Choice Single AnswerQuestion Under section 11 B of SEBI act how many issuers were debarred?

Correct Answer 1

Your Answer 3

Select The BlankQuestion Among the closed schemes, 4 long term assurance schemes were

launched with a return ranging between ________.Correct Answer 13 - 14%



Correct Answer Investor characteristics , Liquidity needs and tax considerations ,Investment and interest rate risk


Multiple Choice Single AnswerQuestion What was the percentage of public offering under the IPOs through the

book building method ?Correct Answer 0.1

Your Answer 0.25


Correct Answer Short term financial instrument , Negotiable and transferable instrument ,Companies issue it for raising short term debt

Your Answer Short term financial instrument , Negotiable and transferable instrument ,Companies issue it for raising short term debt


Correct Answer Depository


Multiple Choice Multiple AnswerQuestion The setting up of NSE consists of:-

Correct Answer Set up by IDBI , Equity paid up capital of Rs25 crores , Started operationsin June 1994

Your Answer Equity paid up capital of Rs25 crores , Started operations in June 1994 ,There is a trading floor in this exchange


Correct Answer Securities Contract Regulation Act


Capital Market_20

- 1 -





connected with the issue to SEBI.Correct Answer FalseYour Answer True



Multiple Choice Single AnswerQuestion Who is responsible to get the securities listed on all the stock exchanges?Correct Answer Merchant bankerYour Answer SEBI

Select The BlankQuestion A mutual fund scheme shall not invest more than ________ of its NAV in unrated

debt by a single issuer.Correct Answer 0.1Your Answer 0.1






Capital Market_20

- 2 -


Multiple Choice Multiple AnswerQuestion Describe in brief the SEBI regulations for venture capital funds :-Correct Answer Must disclose investment strategy , VCF's must be registered , Cannot carry

out another activityYour Answer VCF's must be registered , Cannot carry out another activity , Must disclose

investment strategy


commercial paper.Correct Answer FalseYour Answer True










distributable profits for at least 3 years , Issue size shall not exceed five times of its pre issue networth

Capital Market_20

- 3 -

Your Answer Issue size shall not exceed five times of its pre issue net worth , Pre issue networth not less than 1 crores in the last 3 years , Track record of distributable profits for at least 3years


Multiple Choice Multiple AnswerQuestion During the budget 2003 - 04, Finance Minister made some announcements which he

hopes will make investors think in terms of returning to stock market :-Correct Answer No capital gains tax on investment made in equity after 1/3/03 held for 1 year ,

Removal of income tax on dividends in the hands of receiverYour Answer No capital gains tax on investment made in equity after 1/3/03 held for 1 year ,

Removal of income tax on dividends in the hands of receiver , Investors income tax on dividendreduced to 12.5%



demutualisation of stock exchanges?Correct Answer SCRA , Depository ActYour Answer SCRA , Depository Act


Shareholders Should effectively participate in general body meetings Should effectively participatein general body meetings

Objective of Audit committee Look into defaults to depositors creditors shareholders anddebenture holders Look into defaults to depositors creditors shareholders and debenture holders

Reasons of failures of corporate governance in spite of norms Superficial commitment to vision,mission and values Superficial commitment to vision, mission and values

Functions of Chief Executive, ED, Managers Assisting the board in decision making processDecision making

Multiple Choice Multiple AnswerQuestion Which companies have eroded market capitalization by Rs20 000 crores?Correct Answer Infosys , Satyam , WiproYour Answer Infosys , Satyam , Wipro

Multiple Choice Multiple AnswerQuestion What does SEBI do with its power ?Correct Answer Cancel certificate issued to custodian , Inspect books of DP , issuers or

beneficiary owners , Investigate an acquirerYour Answer Cancel certificate issued to custodian , Inspect books of DP , issuers or

beneficiary owners , Investigate an acquirer

Capital Market_20

- 4 -

True/FalseQuestion Amendment to SCRA will facilitate derivatives trading in interest rate futures and

options if there is an underlying asset.Correct Answer TrueYour Answer True













the industry




Capital Market_20

- 5 -





interest rate risk



issue certificate of deposits.Correct Answer FalseYour Answer False


Multiple Choice Multiple AnswerQuestion What is dematerialization ?Correct Answer Physical certificates converted into electronic from , Credited into investors

account with his/ her DPYour Answer Physical certificates converted into electronic from , Credited into investors

account with his/ her DP , Selling shares

Select The BlankQuestion ________ is in the form of a usance promissory note payable after 45 days from the

date of issue.Correct Answer Certificate of DepositYour Answer Certificate of Deposit



Multiple Choice Single AnswerQuestion What is the amount of net worth accompany should have for opting for an IPO ?Correct Answer 1 Crore

Capital Market_20

- 6 -

Your Answer 1 Crore


called as ________.Correct Answer Special purpose vehicleYour Answer Special purpose vehicle

True/FalseQuestion A mutual fund shall not invest more than 10% of is NAV in equity shares in cases of

open ended schemes.Correct Answer TrueYour Answer False


True/FalseQuestion Venture capital finance is risk finance for entrepreneurial growth oriented companies.Correct Answer TrueYour Answer True

Capital Market_21

- 1 -
















Select The Blank

Capital Market_21

- 2 -










the industry





True/FalseQuestion Constant change would be one of the reasons for failure of corporate governance.Correct Answer TrueYour Answer False



True/FalseQuestion The company opting for an IPO should have net worth of at least Rs 1 crore in each

of the preceding two years.Correct Answer True

Capital Market_21

- 3 -

Your Answer False

Multiple Choice Multiple AnswerQuestion What are the facilities offered by NSDL?Correct Answer Enable surrender and withdrawal of securities to and from the depository ,

Maintain the investor's holdings in an electronic form , Effect settlement of securities traded onexchanges

Your Answer Enable surrender and withdrawal of securities to and from the depository ,Maintain the investor's holdings in an electronic form , Effect settlement of securities traded onexchanges



investment strategy



Castrol FY 2003 - 03 Dividend Rs145 crores FY 2003 - 03 Dividend Rs145 crores


Hero Honda FY 2003 - 03 Dividend Rs187 crores FY 2003 - 03 Dividend Rs187 crores




Multiple Choice Multiple AnswerQuestion What is dematerialization ?Correct Answer Credited into investors account with his/ her DP , Physical certificates

converted into electronic fromYour Answer Physical certificates converted into electronic from , Credited into investors

account with his/ her DP


company's paid up capital carrying voting rights.Correct Answer 0.1

Capital Market_21

- 4 -

Your Answer 0.3






size how can it come out with a public issue?Correct Answer Through book building processYour Answer Through book building process












Capital Market_21

- 5 -



auditors

















Capital Market_21

- 6 -







________.Correct Answer DPYour Answer DP








instruments



skills , Experience





































































































instruments



skills , Experience















































































































the industry

Match The Following








interest rate risk
















































target account id





Select The Blank









accountability


























Capital Market_26CM LIST OF ATTEMPTED QUESTIONS AND ANSWERS


True/FalseQuestion The acquirer is required to appoint a merchant banker before

making a PA.Correct Answer TrueYour Answer True




instruments

Multiple Choice Multiple AnswerQuestion What must be the quality of a good portfolio manager?Correct Answer Sound General knowledge , Analytical ability and

marketing skills , ExperienceYour Answer Sound General knowledge , Analytical ability and marketing

skills , Experience


manager and leaves it to him to make all the investment decisions.Your Answer Client gives his money for investment to the portfolio

manager and leaves it to him to make all the investment decisions.

True/FalseQuestion Depositary facilitates transfers without having to handle money.Correct Answer False

Page 1

Capital Market_26Your Answer True





Multiple Choice Multiple AnswerQuestion The features of mutual Fund are :-Correct Answer A trust that pools in savings and funds from large number

of investors who have common financial goal , Issue units to investor whichrepresent right in assets , Investments in mutual funds may be in the form ofstock, bond, money market securitiesYour Answer A trust that pools in savings and funds from large number of


True/FalseQuestion If the credit rating is obtained from two different agencies in case

of issue of debt instruments, all the ratings need not be disclosed in thedocument.Correct Answer FalseYour Answer True

Select The BlankQuestion As per SEBI regulations, PMS must not be involved in any

litigation connected with ________.Correct Answer Securities marketsYour Answer Clients

Multiple Choice Multiple AnswerQuestion What qualities do the merchant bankers need to possess?Correct Answer Knowledge and information about various aspects of

capital markets , Ability to evaluate and analyze , Update the knowledgePage 2

Capital Market_26Your Answer Knowledge and information about various aspects of capital


Multiple Choice Multiple AnswerQuestion Describe the stock lending mechanism:-Correct Answer Involves two parties one who is willing to lend and other

who wishes to borrow securities at market related rates , Lender is assured ofgetting equivalent the relevant securities by NSSCL on the settlement date ,Lender gets benefit of reasonable return called lending feeYour Answer Involves two parties one who is willing to lend and other who


Multiple Choice Multiple AnswerQuestion What are the limitations of refinance facility?Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total

Loan funds of HFC's , Not to exceed 15 % of NOF of NHBYour Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan


Multiple Choice Single AnswerQuestion The process of share buy back must be completed within what

period from the date of passing the resolution?Correct Answer 12 monthsYour Answer 12 months


10 HDFC foreign currency deal Global investors pumping funds in IndiaSpecific Funds

0.57 FII current free float sensex company FII free float stock NIFTYcompanies


$ 476 mn Global investors pumping funds in India Specific Funds HDFCforeign currency deal

Multiple Choice Single AnswerPage 3

Capital Market_26Question When did the trading in foreign currency options start in India?Correct Answer 37809Your Answer 37829





Select The BlankQuestion Recently many banks have started issuing ________ which

could also be used as a debit card.Correct Answer ATM cardYour Answer ATM card

Select The BlankQuestion A ________ means any persons connected with a company and

who is reasonably having access to unpublished price sensitive information.Correct Answer InsiderYour Answer Insider



Share buy back is a way of Returning surplus cash to the shareholdersReturning surplus cash to the shareholders

Page 4

Capital Market_26

Dutch Auction Price of the Buy back is done by the shareholders Price of theBuy back is done by the shareholders

Open market purchases No minimum price stipulation No minimum pricestipulation











Multiple Choice Single AnswerQuestion What is the system of rolling settlement prevalent in the USA ?

Page 5

Capital Market_26Correct Answer Transaction + 3Your Answer Transaction + 3




registration certificate no company can undertake activities of NBFC , Allcompanies must be liquid assets equal to 15% of depositsYour Answer All the NBFC's must register with RBI , Without the

registration certificate no company can undertake activities of NBFC , Allcompanies must be liquid assets equal to 15% of deposits







promoters in the proposed issues in excess of the required minimumpercentage shall also be looked in for a period of ________.Correct Answer 1 yearYour Answer 3 years

Page 6

Capital Market_26True/FalseQuestion A portfolio manager has to assure a guaranteed return to his



Communication through the net , Operate in stock market privately throughhome or officeYour Answer Screen based trading in place of traditional ring ,

Communication through the net , Operate in stock market privately throughhome or office






debenture trustee , Debenture redemption reserve to be createdYour Answer Credit rating , Maturity more than 18 months appoint

debenture trustee , Debenture redemption reserve to be created

Multiple Choice Single AnswerQuestion Which company was responsible for spreading the equity culture

in India ?Correct Answer Reliance IndustriesYour Answer Reliance Industries

Multiple Choice Multiple AnswerPage 7

Capital Market_26Question Describe in brief the SEBI regulations for venture capital funds :-Correct Answer VCF's must be registered , Cannot carry out another

activity , Must disclose investment strategyYour Answer VCF's must be registered , Cannot carry out another activity ,


Multiple Choice Single AnswerQuestion What is the minimum number of days for which the bid should

remain open in book building?Correct Answer 5 daysYour Answer 7 days

Multiple Choice Single AnswerQuestion As per RBI regulation, bank borrowings should not exceed how

many times of the net owned funds?Correct Answer 4 timesYour Answer 4 times

Select The BlankQuestion With the introduction of ________ accounts the complaints

about allotment have surely gone down.Correct Answer DEMATYour Answer DEMAT

Page 8

ASSIGNMENTS

Tristar

justvishal


Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has

changed its name to ________ effective from October 1992.Correct Answer SCICI Ltd

Your Answer SCICI Ltd

Multiple Choice Multiple AnswerQuestion IFC provides financial assistance :-

Correct Answer Through loans , Through purchase of shares , For economicdevelopment

Your Answer Largely as aid , Through loans

Select The BlankQuestion Period of Holiday Insurance is ________.

Correct Answer Six months or less

Your Answer Six months or less

Multiple Choice Multiple AnswerQuestion From time to time RBI has issued :-

Correct Answer Straight coupon bonds , Inflation linked bonds , Zero couponbonds

Your Answer Straight coupon bonds , Inflation linked bonds , Zero couponbonds

Multiple Choice Multiple AnswerQuestion R B I issues currency notes against the security of:-

Correct Answer Gold bullion , Foreign securities , GOI securities

Your Answer Gold bullion , Foreign securities , GOI securities

Multiple Choice Single AnswerQuestion The type of banking involving a small number of Large

Customers viz.Corporates & multinationals is :-Correct Answer Wholesale Banking

Your Answer Wholesale Banking

True/False

Question NABARD is an apex institution in the field of Integrated RuralDevelopment.

Correct Answer True

Your Answer True

Select The BlankQuestion The ________ are buy and hold investors and almost never

trade on their investments.Correct Answer Provident Funds

Your Answer Mutual Funds

Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-

Correct Answer New Projects , Renovation , Modernisation

Your Answer New Projects , Renovation , Modernisation

Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the

obligation to contribute further premium by :-Correct Answer Surrendering the policy , Converting it into paid up policy ,

Assigning it in the open marketYour Answer Surrendering the policy , Converting it into paid up policy ,

Assigning it in the open market

Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-

Correct Answer By lending at 0% interest. , For periods up to ten years , Byborrowing from IBRD

Your Answer By borrowing from IBRD , By lending at 0% interest. , Forperiods up to ten years

Multiple Choice Single AnswerQuestion Financial institutions deal in :-

Correct Answer Financial assets

Your Answer Financial assets

Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-

Correct Answer Liaison with RBI , Evolve Policies , Vigilance & Control

Your Answer Liaison with RBI , Evolve Policies , Vigilance & Control

Multiple Choice Single AnswerQuestion Treasury bills are issued by :-

Correct Answer RBI

Your Answer RBI

True/FalseQuestion The bids for T-Bills are on price/interest basis.

Correct Answer True

Your Answer True

True/FalseQuestion No TDS is deducted on Interest paid on CDs.

Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-

Correct Answer Government regulation and control

Your Answer Government regulation and control

Multiple Choice Multiple AnswerQuestion Mutual fund has main entities like :-

Correct Answer Sponsor , Trust , Asset Management company

Your Answer Sponsor , Trust , Asset Management company

Multiple Choice Multiple AnswerQuestion Prominent Institutional Investors are :-

Correct Answer Foreign Investors(FIIs) , Corporate Treasuries , Mutual Funds

Your Answer Foreign Investors(FIIs) , Corporate Treasuries , Mutual Funds

Multiple Choice Single AnswerQuestion A record of the holdings of GOI dated securities of each holder

is contained in :-

Correct Answer SGL pass book

Your Answer SGL pass book

Multiple Choice Single AnswerQuestion The unorganised financial system includes :-

Correct Answer Indigenous bankers

Your Answer Indigenous bankers

Multiple Choice Single AnswerQuestion SIDCs & SIICs are under the control of :-

Correct Answer State Governments

Your Answer State Governments

True/FalseQuestion PFC has been persuading State Governments restructuring of

their power sector to make them viable.Correct Answer True

Your Answer True


Advances Loans/cash credits Loans/cash credits

Cash withdrawal facility ATM ATM

Remittances MT/DD/TT/EFT MT/DD/TT/EFT

Government business Collection of taxes Collection of taxes

Select The BlankQuestion GIC raises funds to meet claims from ________.

Correct Answer Premium collected

Your Answer Premium collected

Select The BlankQuestion The CRAFICARD recommended the establishment of

________.

Correct Answer NABARD

Your Answer NABARD

Multiple Choice Multiple AnswerQuestion The objective NEF Scheme of SIDBI is to provide equity support

to :-Correct Answer New Units in tiny Sector , New Units in Small Sector , Existing

units in tiny & small scale sectorYour Answer New Units in tiny Sector , New Units in Small Sector , Existing

units in tiny & small scale sector

Multiple Choice Single AnswerQuestion Which of the following institution was set up as a subsidy of RBI

in 1964?Correct Answer IDBI

Your Answer IDBI

Select The BlankQuestion Kisan Vikas Patra are issued through ________.

Correct Answer Post Offices

Your Answer Post Offices

Multiple Choice Single AnswerQuestion DFHI was incorporated under the :-

Correct Answer Companies Act, 1956

Your Answer Companies Act, 1956

Multiple Choice Single AnswerQuestion Which one of the following is not a deposit account?

Correct Answer Cash Credit account

Your Answer Cash Certificate

True/FalseQuestion CP is a usance promissory note hence it can be negotiated by

endorsement & delivery.Correct Answer True

Your Answer False

Select The BlankQuestion The ________ meet the long and medium term credit needs of

agriculture.Correct Answer Land Development Banks

Your Answer Regional Rural Banks

Multiple Choice Single AnswerQuestion Zero Coupon Bonds are issued at a :-

Correct Answer Discount to face value

Your Answer Discount to face value

True/FalseQuestion NABARD provides Refinance for Marketing of Crops.

Correct Answer True

Your Answer False

True/FalseQuestion The Capital of NABARD is subscribed by World Bank.


Your Answer False

Multiple Choice Multiple AnswerQuestion Soft Loan Scheme for modernisation is provided by :-

Correct Answer IFCI , ICICI , SIDBI

Your Answer ICICI

True/FalseQuestion In case of T-Bills potential investors have to put in competitive

bids.Correct Answer True

Your Answer True


Development financialinstitutions

IFCI IFCI

Organised sector Banking System Banking System

Unorganised sector Indigenous banks Indigenous banks

Mutual funds UTI UTI

True/FalseQuestion Non bank financial institutions undertake fund and non fund

based activities.Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion Instruments issued by DFIs and Banks carry :-

Correct Answer Highest credit ratings

Your Answer Highest credit ratings

Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-

Correct Answer SIDF

Your Answer SIDF

True/FalseQuestion Amongst others, ICICI also provided long and medium term

loans or equity finance.Correct Answer True

Your Answer True

Select The BlankQuestion Interest on advances is generally calculated on ________

products.Correct Answer Daily

Your Answer Fortnightly

Select The BlankQuestion The ________ has been accredited by RBI as a Primary Dealer

in Governemt Securities.Correct Answer STCI

Your Answer GIC

Select The BlankQuestion ________ is merely an asset created out of book entries.

Correct Answer SDR

Your Answer SDR

Multiple Choice Single AnswerQuestion Development Financial Institutions provide finance to the needy

Correct Answer Corporates & govt. institutions

Your Answer Corporates & govt. institutions


Multiple Choice Multiple AnswerQuestion SIDBI provides :-

Correct Answer Refinance , Rediscounting of Bills , Financial support to SSIDC

Your Answer Refinance , Rediscounting of Bills , Financial support to SSIDC

True/FalseQuestion NABARD does not provide Refinance for stocking & distribution

of Chemical Fertilisers.Correct Answer False

Your Answer False

Multiple Choice Single AnswerQuestion Which of the following services is not provided by Commercial

banks?Correct Answer Deposit Insurance

Your Answer Deposit Insurance

Multiple Choice Single AnswerQuestion IDBI has helped in the establishment of :-

Correct Answer EXIM Bank

Your Answer IFCI

Select The BlankQuestion DFIs are the second largest issuer of ________ after the Govt

and Sovereign bodies.Correct Answer Debt instruments

Your Answer Debt instruments

True/FalseQuestion A Cheque is a Negotiable Instrument.

Correct Answer True

Your Answer True

True/False

Question State loans are much less liquid than GOI Securities.

Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion IIBI (formerly known as IRBI )undertakes :-

Correct Answer Merchant Banking activities , Lease or hire purchase finance ,Consultancy & managerial services

Your Answer Merchant Banking activities , Lease or hire purchase finance ,Consultancy & managerial services

True/FalseQuestion Development financial institutions primarily lend to Agriculture

sector.Correct Answer False

Your Answer False

True/FalseQuestion Banks do not invest in the GOI securities .


Your Answer False

Select The BlankQuestion NABARDs Criteria for Refinance covers Technical ________ of

the project.Correct Answer Feasibility

Your Answer Feasibility

True/FalseQuestion IMF discourages excessive use of its resources by imposing a

surcharge on large loans.Correct Answer True

Your Answer True

Select The BlankQuestion As a banker to the Government, RBI accepts Government

deposits at ________% interest.Correct Answer 0

Your Answer 0

Select The BlankQuestion HDFCs loans were linked up with________.

Correct Answer Planned Savings

Your Answer Planned Savings

Multiple Choice Multiple AnswerQuestion Other than Tourism, International funds remittances comprise of

:-Correct Answer Donations/Charity , Payments of Salaries , Payments of Royalty

Your Answer Donations/Charity , Payments of Royalty

Multiple Choice Single AnswerQuestion PFC is committed to the integrated development of :-

Correct Answer Power

Your Answer Power

Multiple Choice Single AnswerQuestion A major part of the credit of SFCs went to :-

Correct Answer SSI units

Your Answer SSI units

Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-

Correct Answer Over one year

Your Answer Over one year

Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme for

modernisation is also undertaken by IDBI.Correct Answer ICICI

Your Answer ICICI

True/FalseQuestion A Bill of Exchange is negotiable.

Correct Answer True

Your Answer True

Select The BlankQuestion NHB at present has a ________ Capital of Rs. 350 crores.

Correct Answer Paid-up

Your Answer Paid-up

Select The BlankQuestion The term ________ refers to the act of a bank extending finance

to the seller against a letter of credit.Correct Answer Negotiation

Your Answer Negotiation

True/FalseQuestion Under MIGA the World bank offers various forms of Political

Insurance.Correct Answer True

Your Answer True

Select The BlankQuestion The loans under________ are based on Poverty Reduction

Strategy Paper.Correct Answer PRGF

Your Answer PRGF

Multiple Choice Multiple AnswerQuestion The general insurance business can be :-

Correct Answer Marine insurance , Fire insurance , Miscellaneous

Your Answer Marine insurance , Fire insurance , Miscellaneous

Multiple Choice Single AnswerQuestion FIs can be classified into two categories depending on the basis

of incorporation and :-Correct Answer Operation

Your Answer Size


Question The main objective of ICICI was :-

Correct Answer To augment export finance in India , To channelise WorldBank's funds to industries in India , To help in building up aCapital Market in India

Your Answer To augment export finance in India , To help in building up aCapital Market in India , To aid Rural Development in India

Multiple Choice Single AnswerQuestion SIDCs & SIICs give loans ,guarantees & :-

Correct Answer Lease finance

Your Answer Lease finance

Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-

Correct Answer Corporates

Your Answer Corporates

True/FalseQuestion SCICI is a member of the OTCEI.

Correct Answer True

Your Answer True

Select The BlankQuestion The extent of powers enjoyed by a branch depends on the size

of its ________.Correct Answer Business

Your Answer Business

True/FalseQuestion Gramin banks are State Owned Banks.

Correct Answer True

Your Answer False

True/FalseQuestion NIDHIS are Trading Organisations.


Your Answer True

Multiple Choice Single AnswerQuestion Corporate Debentures are :-

Correct Answer Long term debt instruments

Your Answer Long term debt instruments

Multiple Choice Multiple AnswerQuestion Credit Information report is also known as :-

Correct Answer Credit report , Banker's report , Confidential report

Your Answer Credit report , Banker's report , Confidential report


Largest borrower in theworld

IBRD IBRD

International MonetaryCooperation

IMF IMF

Prevention of crises CCL CCL

Political insurance MIGA MIGA

Multiple Choice Single AnswerQuestion The apex institution in the field of Industrial Development is :-

Correct Answer IDBI

Your Answer IDBI

Multiple Choice Single AnswerQuestion Bills Rediscounting Scheme of IDBI was introduced in the year

:-Correct Answer 1965

Your Answer 1965

Select The BlankQuestion Development financial institutions have been established to

cater to ________ of the industrial sector.Correct Answer Long term financial needs

Your Answer Long term financial needs

Select The BlankQuestion The ________ was set up to help corrections in BOP

maladjustments.Correct Answer IMF

Your Answer UNO

Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-

Correct Answer Financial commitment , Voting power , Drawing power

Your Answer Financial commitment , Voting power , Drawing power

Multiple Choice Multiple AnswerQuestion Functions of R.O. of a bank include :-

Correct Answer Inspection/audit , Control on branches , Grant loans/advances

Your Answer Control on branches , Grant loans/advances , Pay interest ondeposits

Multiple Choice Single AnswerQuestion IDBI introduced Automatic Refinance Scheme in the year :-

Correct Answer 1978

Your Answer 1975

Select The BlankQuestion The ________ is the apex institution in the field of foreign trade

in India.Correct Answer EXIM bank

Your Answer EXIM bank

Multiple Choice Multiple AnswerQuestion SFCs provide finance to :-

Correct Answer Corporates , Partnerships , Proprietary firms

Your Answer Corporates , Partnerships , Proprietary firms

Match The Following


Aquaculture ,BrackishWater

Fisheries Fisheries

Ploughing, weeding,transplantation

Seasonal AgriculturalOperations

Irrigation & Drainage

Market Yards, Storage &Warehousing

Agricultural Marketing Agricultural Marketing

Hill ,Tribal Areadevelopment

Area Development Area Development

Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables member

countries to :-Correct Answer Rebuild resources , Stabilise currencies , Pay for imports

Your Answer Rebuild resources , Stabilise currencies , Pay for imports


True/FalseQuestion NABARD provides short term refinance for procurement

activities also.Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion Tourism promotes :-

Correct Answer Credit Card Business , International remittances , Travellers'Cheques

Your Answer Credit Card Business , International remittances , Travellers'Cheques

True/FalseQuestion HDFC was set up by NHB.


Your Answer False

Multiple Choice Single AnswerQuestion IMF articles were amended in 1978 to legalise the :-

Correct Answer Floating exchange rates

Your Answer Special drawing rights

Select The BlankQuestion Syndication involves ________ sanction.

Correct Answer In principle

Your Answer In principle

Multiple Choice Single AnswerQuestion The organised financial system includes :-

Correct Answer Commercial banks

Your Answer Commercial banks

Match The Following


CRR Primary reserverequirement

Prevention of speculativehoarding in

Bankers Bank Controlling the reserves ofcommercial banks

Controlling the reserves ofcommercial banks

Exchange control FEMA FEMA

OMO Government securities Secondary reserverequirement

Multiple Choice Multiple AnswerQuestion The prominent Bond issuing PSU are :-

Correct Answer MTNL , NTPC , SAIL

Your Answer MTNL , NTPC , SAIL

Select The BlankQuestion The Premium of ________ is obtained through obligatory

reinsurance premium.Correct Answer GIC

Your Answer GIC

Select The BlankQuestion The ________ does not collect Savings from the Public.

Correct Answer NIICO Ltd.

Your Answer NIICO Ltd.

Multiple Choice Single AnswerQuestion Development Financial institutions include :-

Correct Answer State financial institutions

Your Answer State financial institutions


Money MarketInstruments

CP, T- Bills CP, T- Bills

Negotaible Instruments Bills of exchange,Cheques

Bills of exchange,Cheques

GOI securities ZCB, ILBonds ZCB, ILBonds

Long Term Debtinstruments

PSU Bonds PSU Bonds

Select The BlankQuestion NABARD took over the functions of ACD, RPCC of RBI &

________.Correct Answer ARDC

Your Answer ARDC

Select The BlankQuestion The price in financial markets is known as ________.

Correct Answer Rate of interest

Your Answer Rate of interest

True/FalseQuestion Banks lend to corporates directly.

Correct Answer True

Your Answer True

True/FalseQuestion Banks authorised to deal in foreign exchange are known as

Authorised Dealers.Correct Answer False

Your Answer False

True/FalseQuestion Under open market operation RBI conducts buying /selling

shares/debentures of blue chip companies.Correct Answer False

Your Answer False

Multiple Choice Single AnswerQuestion Initial Quantum of resources of IMF were contributed by

members according to :-Correct Answer Quotas fixed for members

Your Answer Quotas fixed for members

Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-

Correct Answer RBI

Your Answer RBI

Multiple Choice Multiple AnswerQuestion ECGC Board comprises of Directors representing :-

Correct Answer Government , Banking/Insurance , Trade/Industry

Your Answer Government


is contained in :-Correct Answer SGL pass book


Multiple Choice Multiple AnswerQuestion Which of the following statements are not prepared on a daily

basis in branch?Correct Answer Cash Book , Trial Balance , P/L statement

Your Answer Cash Book , Trial Balance , P/L statement

Multiple Choice Single AnswerQuestion Size of the Quota depended upon :-

Correct Answer GNP

Your Answer GNP

Multiple Choice Multiple AnswerQuestion DICGC does not insure the deposits :-

Correct Answer Of foreign Governments , Of State Cooperative Banks , Of theCentral Government

Your Answer Of foreign Governments , Of State Cooperative Banks , Of theCentral Government

Select The BlankQuestion Financial markets are the centres that provide facilities for

buying and selling of ________.

Correct Answer Financial claims and services

Your Answer Goods and services

Multiple Choice Multiple AnswerQuestion Agricultural Finance Consultancy Ltd(AFC) activities cover :-

Correct Answer Regional /Sectoral planning , Benchmark Surveys , Pre-feasibility studies

Your Answer Pre-feasibility studies , Regional /Sectoral planning , BenchmarkSurveys

Select The BlankQuestion In a Bank, the investment decisions are taken at ________

level.Correct Answer Head Office

Your Answer Head Office

True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.


Your Answer False

Multiple Choice Single AnswerQuestion IRBI was set up with a focus on :-

Correct Answer Sick Units

Your Answer Sick Units

Multiple Choice Single AnswerQuestion SFCs suffer from a very high ratio of: -

Correct Answer Overdues

Your Answer Overdues

Multiple Choice Multiple AnswerQuestion Functions of NIDHIs include :-

Correct Answer Accepting Deposits , Granting loans , Encourage thrift

Your Answer Accepting Deposits , Granting loans , Speculation


Question R B I conducts monetary control by way of O M O in :-

Correct Answer Treasury bills , State /central Government Securities

Your Answer Treasury bills , State /central Government Securities

Multiple Choice Single AnswerQuestion The foreign currency account maintained by an authorised

dealer with its correspondent abroad is :-Correct Answer Nostro Account

Your Answer Nostro Account

Select The BlankQuestion Mutual Funds provide the benefits of ________.

Correct Answer Portfolio management

Your Answer Bulk investment

Select The BlankQuestion An ________ letter of credit cannot be canceled by the buyer

without the seller's consent.Correct Answer Irrevocable

Your Answer Irrevocable

Multiple Choice Single AnswerQuestion The primary sources of IMF resources are :-

Correct Answer Quotas

Your Answer Quotas

Multiple Choice Multiple AnswerQuestion The unorganised financial system comprises of :-

Correct Answer Money lenders , Indigenous bankers , Lending pawn brokers


Multiple Choice Single AnswerQuestion The first long term industrial financing corporation set up in the

country was :-Correct Answer IFCI

Your Answer IFCI

Select The BlankQuestion The HDFC was set up in 1977 by the ________.

Correct Answer ICICI

Your Answer ICICI

Multiple Choice Single AnswerQuestion One of the leading All India FI is :-

Correct Answer SIDBI

Your Answer LIC

True/FalseQuestion Small Savings are source of Capital Receipts for the

Government.Correct Answer True

Your Answer True

True/FalseQuestion The overdraft facility is also known as Cash credit facility.

Correct Answer True

Your Answer False

Multiple Choice Single AnswerQuestion RBI was established under the:-

Correct Answer RBI Act

Your Answer RBI Act

Multiple Choice Multiple AnswerQuestion Duties of an International Banking unit cover :-

Correct Answer Handling foreign currency , Handling Doc. credits , Grantinglines of Credit

Your Answer Handling foreign currency , Handling Doc. credits , Grantinglines of Credit

True/FalseQuestion The currency notes issued by RBI are legal tender everywhere

in India without any limit.

Correct Answer True

Your Answer False

Multiple Choice Multiple AnswerQuestion Post Offices are popular for mobilizing small savings of the

public due to :-Correct Answer Wide network , Tax concessions , Saftey of funds

Your Answer Low returns , Wide network , Saftey of funds

Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute

infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam

LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam

Ltd



Correct Answer Benchmark Surveys , Pre-feasibility studies , Regional/Sectoral planning

Your Answer Benchmark Surveys , Pre-feasibility studies , Regional/Sectoral planning




Select The BlankQuestion The ________ is the apex institution in the field of foreign

trade in India.Correct Answer EXIM bank

Your Answer FEDAI



Your Answer True

True/FalseQuestion NABARD does not provide Refinance for stocking &

distribution of Chemical Fertilisers.Correct Answer False

Your Answer False



Your Answer Power

True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural

Development.

Correct Answer True

Your Answer False


Insurance of allemployees of a Firm

Group Insurance Group Insurance

Premium Throughout Life Whole Life Whole Life

Fixed Period Insurance Endowment Endowment

Insurance of oceanCargo

Marine Insurance Marine Insurance

Select The BlankQuestion DFIs are the second largest issuer of ________ after the

Govt and Sovereign bodies.Correct Answer Debt instruments


True/FalseQuestion Mortgage Loans are loans against property.

Correct Answer True

Your Answer True



Your Answer Revocable

Multiple Choice Single AnswerQuestion Liabilities of Insurance Cos are mostly :-

Correct Answer Long term

Your Answer Long term


deposits at ________% interest.

Correct Answer 0

Your Answer 0.05

Multiple Choice Single AnswerQuestion Bills Rediscounting Scheme of IDBI was introduced in the

year :-Correct Answer 1965

Your Answer 1975



Your Answer Banking Regulation Act,1949







Multiple Choice Single AnswerQuestion The first development Bank of India, established in 1948 was

:-Correct Answer IFCI

Your Answer IFCI



Your Answer True


Question Under Project Finance Scheme IDBI provides assistance for:-




Correct Answer True

Your Answer True









Your Answer Over three years



Your Answer Audited Balance Sheet , Trial Balance , P/L statement


Correct Answer True

Your Answer True



Your Answer False

Multiple Choice Single AnswerQuestion Treasury Bills are issued by the :-

Correct Answer RBI

Your Answer RBI

Multiple Choice Single AnswerQuestion Account where lump sum investment is made for specific

period is :-Correct Answer Term Deposit account

Your Answer Term Deposit account

Multiple Choice Single AnswerQuestion The apex institution in the field of foreign trade in India is :-


Your Answer EXIM Bank

Multiple Choice Multiple AnswerQuestion Basic Life insurance policies include :-

Correct Answer Term insurance , Annuity contracts , Pension plans

Your Answer Term insurance , Annuity contracts , Pension plans



Your Answer ICICI


Correct Answer Merchant Banking activities , Lease or hire purchase finance ,

Consultancy & managerial services

Your Answer Lease or hire purchase finance , Consultancy & managerialservices , Rural credit activities

Select The BlankQuestion Syndication of Loans Globally does not involve any funds as

it is ________ activity.Correct Answer Non-fund based

Your Answer Non-fund based





Correct Answer SDR

Your Answer EFF






Your Answer Global Banking

Select The BlankQuestion The extent of powers enjoyed by a branch depends on the

size of its ________.Correct Answer Business






Inter Bank Call MoneyMarkets

BRs, Call MoneyReceipts

Currencies

Money MarketInstuments

CP, CD ,T- Bills CP, CD ,T- Bills

Capital MarketInstruments

Shares Shares

Debt Market Instruments GOI Securities ,Bonds Shares

Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low

income groups.Correct Answer Weaker sections

Your Answer Weaker sections



Your Answer False

Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables

member countries to :-Correct Answer Rebuild resources , Stabilise currencies , Pay for imports


Select The BlankQuestion The repayment holiday period is also known as ________

period.Correct Answer Moratorium

Your Answer Moratorium

Multiple Choice Single AnswerQuestion A non-scheduled bank does not deal in :-

Correct Answer Foreign Exchange

Your Answer Foreign Exchange



Your Answer Foreign Investors(FIIs) , Corporate Treasuries , Public sectorCompanies







Your Answer False






Your Answer IFCI

Select The Blank

Question DFIs are the second largest issuer of ________ after the Govtand Sovereign bodies.

Correct Answer Debt instruments



Correct Answer True

Your Answer True

True/FalseQuestion State loans are much less liquid than GOI Securities.

Correct Answer True

Your Answer True






Your Answer False



Your Answer False






Your Answer True



Your Answer 0









Your Answer Power









Your Answer ICICI


Correct Answer True

Your Answer True



Your Answer Paid-up






Your Answer True



Your Answer PRGF






Your Answer Size

Multiple Choice Multiple AnswerQuestion The main objective of ICICI was :-










Correct Answer True

Your Answer True





Correct Answer True

Your Answer False



Your Answer True









IBRD IBRD


IMF IMF




Correct Answer IDBI

Your Answer IDBI



Your Answer 1965






Your Answer UNO








Correct Answer 1978

Your Answer 1975


in India.

Correct Answer EXIM bank







Fisheries Fisheries












Correct Answer Benchmark Surveys , Pre-feasibility studies , Regional /Sectoral planning

Your Answer Benchmark Surveys , Pre-feasibility studies , Regional /Sectoral planning


Correct Answer Handling foreign currency , Handling Doc. credits , Granting lines of Credit

Your Answer Handling foreign currency , Handling Doc. credits , Granting lines of Credit

Select The BlankQuestion The ________ is the apex institution in the field of foreign trade in India.

Correct Answer EXIM bank

Your Answer FEDAI



Your Answer True

True/FalseQuestion NABARD does not provide Refinance for stocking & distribution of

Chemical Fertilisers.Correct Answer False

Your Answer False



Your Answer Power


Development.Correct Answer True

Your Answer False


Insurance of all employees ofa Firm




Insurance of ocean Cargo Marine Insurance Marine Insurance

Select The BlankQuestion DFIs are the second largest issuer of ________ after the Govt and

Sovereign bodies.

Correct Answer Debt instruments



Correct Answer True

Your Answer True

Select The BlankQuestion An ________ letter of credit cannot be canceled by the buyer without the

seller's consent.Correct Answer Irrevocable





Select The BlankQuestion As a banker to the Government, RBI accepts Government deposits at

________% interest.Correct Answer 0

Your Answer 0.05

Multiple Choice Single AnswerQuestion Bills Rediscounting Scheme of IDBI was introduced in the year :-

Correct Answer 1965

Your Answer 1975





Question The underdeveloped markets are characterised by :-






Multiple Choice Single AnswerQuestion The first development Bank of India, established in 1948 was :-

Correct Answer IFCI

Your Answer IFCI

True/FalseQuestion Non bank financial institutions undertake fund and non fund based

activities.Correct Answer True

Your Answer True





Correct Answer True

Your Answer True










Multiple Choice Multiple AnswerQuestion Which of the following statements are not prepared on a daily basis in

branch?Correct Answer Cash Book , Trial Balance , P/L statement



Correct Answer True

Your Answer True

True/FalseQuestion Small Savings are source of Capital Receipts for the Government.

Correct Answer True

Your Answer False


Correct Answer RBI

Your Answer RBI

Multiple Choice Single AnswerQuestion Account where lump sum investment is made for specific period is :-

Correct Answer Term Deposit account








Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme for modernisation

is also undertaken by IDBI.Correct Answer ICICI

Your Answer ICICI


Correct Answer Merchant Banking activities , Lease or hire purchase finance , Consultancy& managerial services

Your Answer Lease or hire purchase finance , Consultancy & managerial services ,Rural credit activities

Select The BlankQuestion Syndication of Loans Globally does not involve any funds as it is ________

activity.Correct Answer Non-fund based






Correct Answer SDR

Your Answer EFF




Multiple Choice Single AnswerQuestion The type of banking involving a small number of Large Customers

viz.Corporates & multinationals is :-Correct Answer Wholesale Banking


Select The BlankQuestion The extent of powers enjoyed by a branch depends on the size of its

________.Correct Answer Business







BRs, Call Money Receipts Currencies

Money Market Instuments CP, CD ,T- Bills CP, CD ,T- Bills

Capital Market Instruments Shares Shares


Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income groups.

Correct Answer Weaker sections


True/FalseQuestion Banks authorised to deal in foreign exchange are known as Authorised

Dealers.Correct Answer False

Your Answer False

Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables member countries to

:-Correct Answer Rebuild resources , Stabilise currencies , Pay for imports


Select The BlankQuestion The repayment holiday period is also known as ________ period.

Correct Answer Moratorium







Your Answer Foreign Investors(FIIs) , Corporate Treasuries , Public sector Companies



changed its name to ________ effective from October 1992.Correct Answer SCICI Ltd

Your Answer SCICI Ltd

Multiple Choice Multiple AnswerQuestion IFC provides financial assistance :-

Correct Answer Through loans , Through purchase of shares , For economicdevelopment

Your Answer Largely as aid , Through loans






Your Answer Straight coupon bonds , Inflation linked bonds , Zero couponbonds






Your Answer Wholesale Banking



Your Answer True

Select The BlankQuestion The ________ are buy and hold investors and almost never

trade on their investments.Correct Answer Provident Funds

Your Answer Mutual Funds









Correct Answer By lending at 0% interest. , For periods up to ten years , Byborrowing from IBRD









Correct Answer RBI

Your Answer RBI


Correct Answer True

Your Answer True


Correct Answer True

Your Answer True









Your Answer Foreign Investors(FIIs) , Corporate Treasuries , Mutual Funds


is contained in :-

Correct Answer SGL pass book





Multiple Choice Single AnswerQuestion SIDCs & SIICs are under the control of :-

Correct Answer State Governments

Your Answer State Governments



Your Answer True


Advances Loans/cash credits Loans/cash credits

Cash withdrawal facility ATM ATM

Remittances MT/DD/TT/EFT MT/DD/TT/EFT

Government business Collection of taxes Collection of taxes


Correct Answer Premium collected

Your Answer Premium collected

Select The BlankQuestion The CRAFICARD recommended the establishment of

________.

Correct Answer NABARD

Your Answer NABARD



units in tiny & small scale sectorYour Answer New Units in tiny Sector , New Units in Small Sector , Existing

units in tiny & small scale sector



Your Answer IDBI






Your Answer Companies Act, 1956

Multiple Choice Single AnswerQuestion Which one of the following is not a deposit account?

Correct Answer Cash Credit account

Your Answer Cash Certificate



Your Answer False

Select The BlankQuestion The ________ meet the long and medium term credit needs of

agriculture.Correct Answer Land Development Banks

Your Answer Regional Rural Banks





Correct Answer True

Your Answer False



Your Answer False

Multiple Choice Multiple AnswerQuestion Soft Loan Scheme for modernisation is provided by :-

Correct Answer IFCI , ICICI , SIDBI

Your Answer ICICI



Your Answer True



IFCI IFCI






Your Answer True

Multiple Choice Single AnswerQuestion Instruments issued by DFIs and Banks carry :-

Correct Answer Highest credit ratings

Your Answer Highest credit ratings


Correct Answer SIDF

Your Answer SIDF

True/FalseQuestion Amongst others, ICICI also provided long and medium term

loans or equity finance.Correct Answer True

Your Answer True

Select The BlankQuestion Interest on advances is generally calculated on ________

products.Correct Answer Daily

Your Answer Fortnightly

Select The BlankQuestion The ________ has been accredited by RBI as a Primary Dealer

in Governemt Securities.Correct Answer STCI

Your Answer GIC


Correct Answer SDR

Your Answer SDR

Multiple Choice Single AnswerQuestion Development Financial Institutions provide finance to the needy

Correct Answer Corporates & govt. institutions

Your Answer Corporates & govt. institutions


True/FalseQuestion NABARD provides short term refinance for procurement

activities also.Correct Answer True

Your Answer True






Your Answer False

Multiple Choice Single AnswerQuestion IMF articles were amended in 1978 to legalise the :-

Correct Answer Floating exchange rates

Your Answer Special drawing rights


Correct Answer In principle

Your Answer In principle





CRR Primary reserverequirement

Prevention of speculativehoarding in

Bankers Bank Controlling the reserves ofcommercial banks

Controlling the reserves ofcommercial banks

Exchange control FEMA FEMA

OMO Government securities Secondary reserverequirement


Correct Answer MTNL , NTPC , SAIL

Your Answer MTNL , NTPC , SAIL



Your Answer GIC






Your Answer State financial institutions


Money MarketInstruments

CP, T- Bills CP, T- Bills

Negotaible Instruments Bills of exchange,Cheques

Bills of exchange,Cheques

GOI securities ZCB, ILBonds ZCB, ILBonds

Long Term Debtinstruments

PSU Bonds PSU Bonds

Select The BlankQuestion NABARD took over the functions of ACD, RPCC of RBI &

________.Correct Answer ARDC

Your Answer ARDC



Your Answer Rate of interest


Correct Answer True

Your Answer True



Your Answer False

True/FalseQuestion Under open market operation RBI conducts buying /selling

shares/debentures of blue chip companies.Correct Answer False

Your Answer False

Multiple Choice Single AnswerQuestion Initial Quantum of resources of IMF were contributed by

members according to :-Correct Answer Quotas fixed for members

Your Answer Quotas fixed for members


Correct Answer RBI

Your Answer RBI



Your Answer Government


is contained in :-Correct Answer SGL pass book




Your Answer Cash Book , Trial Balance , P/L statement

Multiple Choice Single AnswerQuestion Size of the Quota depended upon :-

Correct Answer GNP

Your Answer GNP

Multiple Choice Multiple AnswerQuestion DICGC does not insure the deposits :-

Correct Answer Of foreign Governments , Of State Cooperative Banks , Of theCentral Government

Your Answer Of foreign Governments , Of State Cooperative Banks , Of theCentral Government


buying and selling of ________.Correct Answer Financial claims and services



Correct Answer Regional /Sectoral planning , Benchmark Surveys , Pre-feasibility studies


Select The BlankQuestion In a Bank, the investment decisions are taken at ________

level.Correct Answer Head Office




Your Answer False




Multiple Choice Single AnswerQuestion SFCs suffer from a very high ratio of: -



Multiple Choice Multiple AnswerQuestion Functions of NIDHIs include :-

Correct Answer Accepting Deposits , Granting loans , Encourage thrift

Your Answer Accepting Deposits , Granting loans , Speculation

Multiple Choice Multiple AnswerQuestion R B I conducts monetary control by way of O M O in :-


Your Answer Treasury bills , State /central Government Securities

Multiple Choice Single AnswerQuestion The foreign currency account maintained by an authorised

dealer with its correspondent abroad is :-Correct Answer Nostro Account

Your Answer Nostro Account



Your Answer Bulk investment




Multiple Choice Single AnswerQuestion The primary sources of IMF resources are :-

Correct Answer Quotas

Your Answer Quotas


Question The unorganised financial system comprises of :-



Multiple Choice Single AnswerQuestion The first long term industrial financing corporation set up in the

country was :-Correct Answer IFCI

Your Answer IFCI



Your Answer ICICI

Multiple Choice Single AnswerQuestion One of the leading All India FI is :-

Correct Answer SIDBI

Your Answer LIC



Your Answer True


Correct Answer True

Your Answer False



Your Answer RBI Act




True/FalseQuestion The currency notes issued by RBI are legal tender everywhere

in India without any limit.Correct Answer True

Your Answer False



Your Answer Low returns , Wide network , Saftey of funds


infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam

LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam

Ltd







Your Answer False


Question Which of the following services is not provided by Commercialbanks?

Correct Answer Deposit Insurance




Your Answer IFCI





Correct Answer True

Your Answer True


Correct Answer True

Your Answer True






Your Answer False



Your Answer False






Your Answer True



Your Answer 0









Your Answer Power









Your Answer ICICI


Correct Answer True

Your Answer True



Your Answer Paid-up





Insurance.

Correct Answer True

Your Answer True



Your Answer PRGF






Your Answer Size











Correct Answer True

Your Answer True





Correct Answer True

Your Answer False



Your Answer True







Match The Following



IBRD IBRD


IMF IMF




Correct Answer IDBI

Your Answer IDBI



Your Answer 1965






Your Answer UNO





Question Functions of R.O. of a bank include :-




Correct Answer 1978

Your Answer 1975









Fisheries Fisheries












Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has changed its name to

________ effective from October 1992.Correct Answer SCICI LtdYour Answer SCICI Ltd

Select The BlankQuestion AFC's membership consists of commercial, cooperative banks and DFIs including

________.Correct Answer EXIM bankYour Answer EXIM bank

Multiple Choice Single AnswerQuestion Financial institutions deal in :-Correct Answer Financial assetsYour Answer Financial assets

Multiple Choice Single AnswerQuestion The lender of the last resort to the market is the :-Correct Answer RBIYour Answer RBI

Select The BlankQuestion One of the objectives of NHB is to augment the ________ resources for the housing

sector.Correct Answer FinancialYour Answer Financial

Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-Correct Answer By borrowing from IBRD , By lending at 0% interest. , For periods up to ten

yearsYour Answer By borrowing from IBRD , By lending at 0% interest. , For periods up to ten years

Multiple Choice Single AnswerQuestion A company issues CP to save on :-Correct Answer Interest costYour Answer Interest cost

True/FalseQuestion PFC has been persuading State Governments restructuring of their power sector to

make them viable.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion The ultimate source of money in India is:-Correct Answer RBIYour Answer RBI

True/FalseQuestion The SFCs also borrow from SIDBI & IDBI.Correct Answer FalseYour Answer True


Question RBI was established under the:-Correct Answer RBI ActYour Answer RBI Act

Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production as well as:-Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management

Multiple Choice Multiple AnswerQuestion A member's IMF Quota determines its :-Correct Answer Financial commitment , Voting power , Drawing powerYour Answer Financial commitment , Voting power , Drawing power

Select The BlankQuestion Period of Holiday Insurance is ________.Correct Answer Six months or lessYour Answer Three years

Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-Correct Answer Government regulation and controlYour Answer Government regulation and control

Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-Correct Answer BanksYour Answer Banks

True/FalseQuestion The bids for T-Bills are on price/interest basis.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion The unorganised financial system includes :-Correct Answer Indigenous bankersYour Answer Indigenous bankers

Multiple Choice Single AnswerQuestion Long term debt instruments have a maturity of :-Correct Answer Over one yearYour Answer Over one year

Multiple Choice Multiple AnswerQuestion The general insurance business can be :-Correct Answer Marine insurance , Fire insurance , MiscellaneousYour Answer Fire insurance , Miscellaneous , Marine insurance

True/FalseQuestion NABARD does not provide Refinance for stocking & distribution of Chemical

Fertilisers.Correct Answer FalseYour Answer False


Question The unorganised financial system comprises of :-Correct Answer Money lenders , Indigenous bankers , Lending pawn brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers

True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural Development.Correct Answer TrueYour Answer True

Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income groups.Correct Answer Weaker sectionsYour Answer Weaker sections

Multiple Choice Single AnswerQuestion Development Financial institutions include :-Correct Answer State financial institutionsYour Answer State financial institutions

Multiple Choice Single AnswerQuestion Money Markets Instruments have a maturity of less than :-Correct Answer One yearYour Answer One year

Select The BlankQuestion The price in financial markets is known as ________.Correct Answer Rate of interestYour Answer Rate of interest


Development financial institutions IFCI IFCI




Select The BlankQuestion The HDFC was set up in 1977 by the ________.Correct Answer ICICIYour Answer ICICI

Multiple Choice Single AnswerQuestion Certificate of deposit is a :-Correct Answer Usance promissory noteYour Answer Term Deposit Receipt

True/FalseQuestion A Bill of Exchange is negotiable.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion Commercial Papers are issued by :-Correct Answer CorporatesYour Answer Corporates

Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than the balance is :-Correct Answer OverdraftYour Answer Overdraft

Multiple Choice Multiple AnswerQuestion The loans of finance companies are generally :-Correct Answer At high interest , Unsecured , Based on borrowers worthYour Answer At high interest , Unsecured , Based on borrowers worth

Multiple Choice Single AnswerQuestion For a focus on the SSI Sector in 1986 IDBI created :-Correct Answer SIDFYour Answer SIDF

True/FalseQuestion Issuance of CD attracts reserve requirements.Correct Answer FalseYour Answer False

True/FalseQuestion Banks issue Guarantees on behalf of their clients.Correct Answer TrueYour Answer True


NABARD Rural Development Rural Development

AFC Ltd Consultancy Consultancy

HUDCO Housing Housing

NCDC Development of Cooperatives Development of Cooperatives

True/FalseQuestion Under MIGA the World bank offers various forms of Political Insurance.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the obligation to contribute

further premium by :-Correct Answer Surrendering the policy , Converting it into paid up policy , Assigning it in the

open marketYour Answer Surrendering the policy , Converting it into paid up policy , Assigning it in the

open market


Question The organised financial system includes :-Correct Answer Commercial banksYour Answer Commercial banks

Select The BlankQuestion The term ________ refers to the act of a bank extending finance to the seller against

a letter of credit.Correct Answer NegotiationYour Answer Negotiation

Multiple Choice Multiple AnswerQuestion Functions of a Bank's H.O. include:-Correct Answer Liaison with RBI , Evolve Policies , Vigilance & ControlYour Answer Liaison with RBI , Evolve Policies , Vigilance & Control

Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd

Select The BlankQuestion GIC raises funds to meet claims from ________.Correct Answer Premium collectedYour Answer Premium collected

Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies

Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-Correct Answer New Projects , Renovation , ModernisationYour Answer New Projects , Renovation , Modernisation







Multiple Choice Single AnswerQuestion The lender of the last resort to the market is the :-Correct Answer RBI

Your Answer RBI










Multiple Choice Single AnswerQuestion RBI was established under the:-Correct Answer RBI ActYour Answer RBI Act





Question The underdeveloped markets are characterised by :-Correct Answer Government regulation and controlYour Answer Government regulation and control








Multiple Choice Multiple AnswerQuestion The unorganised financial system comprises of :-Correct Answer Money lenders , Indigenous bankers , Lending pawn brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers





Question Money Markets Instruments have a maturity of less than :-Correct Answer One yearYour Answer One year

























open market

Multiple Choice Single AnswerQuestion The organised financial system includes :-Correct Answer Commercial banksYour Answer Commercial banks







Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-Correct Answer New Projects , Renovation , ModernisationYour Answer New Projects , Renovation , ModernisationLIST OF ATTEMPTED QUESTIONS AND ANSWERS

Select The BlankQuestion The Shipping Credit and Investment Company of India Ltd. has changed its

name to ________ effective from October 1992.Correct Answer SCICI LtdYour Answer SCICI Ltd

Select The BlankQuestion AFC's membership consists of commercial, cooperative banks and DFIs

including ________.Correct Answer EXIM bankYour Answer EXIM bank


Multiple Choice Single AnswerQuestion The lender of the last resort to the market! is the :-Correct Answer RBIYour Answer RBI

Select The BlankQuestion One of the objectives of NHB is to augment the ________ resources for the

housing sector.Correct Answer FinancialYour Answer Financial

Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-Correct Answer By borrowing from IBRD , By lending at 0% interest. , For periods up

to ten years

Your Answer By borrowing from IBRD , By lending at 0% interest. , For periods up toten years


True/FalseQuestion PFC has been persuading State Governments restructuring of their power

sector to make them viable.Correct Answer TrueYour Answer True




Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production as well a!

s:-Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management




Question The underdeveloped markets are characterised by :-Correct Answer Government regulation and controlYour Answer Government reg! ulation and control






can be :-Correct Answer Marine insurance , Fire insurance , MiscellaneousYour Answer Fire insurance , Miscellaneous , Marine insurance


Chemical Fertilisers.Correct Answer FalseYour Answer False


True/FalseQuestion NABARD is an apex institution in the field of Integrated Rural Development.

&nbs! p; Correct Answer TrueYour Answer True




Select The BlankQuestion The price in financial markets is known as ________.Correct Answer &n! bsp; Rate of interestYour Answer Rate of interest










Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than the balance is

:-Correct Answer OverdraftYour Answer Overdraft



&n! bsp; Correct Answer SIDFYour Answer SIDF








True/FalseQuestion Under MIGA the World bank offers various forms of Political Insurance.


Multiple Choice Multiple AnswerQuestion In case of a Life policy it is possible to withdraw from the obligation to

contribute further premium by :-Correct Answer Surrendering the policy , Converting it into paid up policy , Assigning

it in the open marketYour Answer Surrendering the policy , Converting it into paid up policy , Assigning it

in the open market


Select The BlankQuestion The term ________ refers to the act of a bank extending finance to the seller

against a letter of credit.Correct Answer NegotiationYour Answer Negotiation


Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute infrastructure projects

are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd


!Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies

Multiple Choice Multiple AnswerQuestion Under Project Finance Scheme IDBI provides assistance for :-Correct Answer New Projects , Renovation , Modernisation


Yahoo! for GoodClick here to donate to the Hurricane Katrina relief effort.YAHOO! GROUPS LINKS

Visit your group "SCDL_PGDBA_Finance_2004" on the web.

To unsubscribe from this group, send an email to:[email protected]

Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.LIST OF ATTEMPTED QUESTIONS AND ANSWERS

























































open market









Financial Institution and Banking

Topic PageNoorganised sector 2financial services 2Indian financial system 3commercial banks 4development financial institutions 5insurance companies 5other public sector financial institutions 5post office savings 5mutual funds 5non banking finanical institutions 6Reserve bank of India 9functions of RBI 9banker to the government 10bankers bank 10supervising authority 10exchange control authority 10promoter of financial system 11fiscal and monetary policy 12open market operations 12developmental financial institutions 17industrial finance corporation of India 17Industrial development bank of india - idbi 18industrial credit and investment corporation of india Ltd - icici 19irbi 20sfcs 20sidc and siics 20state small industries development corporation (SSIDC) 21power finance corporation (PFC) 21financial services offered by the corporation 21term loans 21lease financing 22direct discounting of bills 22guarantee services 22loan syndication 22short term loan 22institutional development services 22utility development plans 23financial assistance for power sector studies 23reform and restructuring related studies 23reform and restructuring of SEBs 23OFAP 23export import bank of india 24national bank of agriculture and rural development 24

genesis of NABARD 24ARC 24GOI 24ACD 24CRAFICARD 24types of refinance facilities 26interest rates 26production credits 28financing weavers 28OSAO 29refinance for marketing of crops 29other refinance facilities 30long term loans to state governments 30investment credit ( medium and long term) refinance 31shipping credit and investment company of India (SCICI) 33principal activities 33agricultural finance consultancy ltd (AFC) 34area of specialisation 36surveys and studies 38National co-operative development corporation (NCDC) 38finance and financing 39procedure of santion / disbursal of assistance 40promotional and development role 40marketing 40agricultural inputs 40agro-processing industries 41storage and cold storage 41program for weaker sections 41consumer business 41area based integrated co-operative development project 42national housing bank (NHB) 42housing and urban development corporation (HUDCO) 44housing development finance corporation (HDFC) 44land development banks 45banking sector 49retail banking 49cash credit 50safe custody services for safe keeping of important documents 50acceptance of deposits from non resident indians 51difference between retail banking and wholesale banking 51global banking 51scheduled bank in india 52commercial bank and cooperative bank 52public sector banks 52private sector banks 52bank accounts 53deposit account 53

lump sum investment 54periodic investment 54cash credit 54loan syndication 54repayment period 54bill 55discount 55remittance 55letter of credit 55bank guarantee 56negotiation 56cash reserve ratio 56statutory reserve ratio 57note pertaining to reserve ratio 57clearing operation 57daily product basis 57monthly product basis 58repayment holiday 58credit instruments 59negotiable instruments 59acceptance 59credit report 59syndication 59custodial services 60security 60foreign exchange 60securitisation 60international banking 60international trade 61tourism 61remittance of funds from one place to another place besides tourism 61syndication of loans global for corporate houses 61foreign exchange management 62profile of a bank 62branch banking 62different layers of banking 62duties of an international banking department 63exchange operations 63administrative functions in a bank 63administrative units 64banking business 65Deposit insurance and credit guarantee corporation (DICGC) 66export credit guarantee corporation (ECGC) 67indian money market 73instrument 73comercial paper 74certificates of deposit 75

treasury bills 75short term debentures 75bill of exchange 75long term debt instruments 76government of India dated securities (GOISEC) 76inflation linked bonds 77zero coupon bonds 77state government securities (state loans) 78public sector undertaking bonds (PSU Bonds) 78bonds of public financial institutions (PFI) 78corporate debentures 79Pass through certificates (PTC) 79issuers 79government of India and other sovereign bodies 80banks and development financial institutions 80public sector undertaking (PSU ) 81private sector companies 81government owned or quasi governement non corporate entities 82investors 82banks 83insurance companies 84provident funds 84mutual funds 86trusts 86corporate treasuries 87foreign institutional investors 87securities trading corporation of india (STCI) 88discount and finance house of india 88non banking financial intermediaries 93LIC 93general nature of insurance companies 93instroduction of Life Insurance corporations 93types and structure of insurance plans 94general insurance corporation 96unit trust of india 98provident / pension funds 99post offices 99Non bank financial companies (NBFC) 99investment companies 100loan companies 102chit funds 102NIDHIS 103hire purchase finance companies 104equipment leasing finance companies 104international monetary fund (IMF) 109quotas 109concessional and non concessional lending 113

poverty reduction and growth facility (PRGF) 113stand by arrangments (SBA) 114extended fund facility (EFF) 114supplement reserve facility (SRF) 114contingent credit lines (CCL) 114compensatory financing facility (CFF) 114emergency assistance 114special drawing rights 114the international bank for reconstruction and development 115world bank 115international finance corporation 115international development assiciation (IDA) 116the bank for international settlements 116regional development agencies 116RBI 119non performing assets 120out of order status 121overdue 121income recognition 121reversal of income 122appropriation of recovery in NPA 122NPA 122sub standard Assets 123subtful assets 124loss assets 124account with temporary deficiancies 124upgradation of loan accounts classified as NPA 125account regularised near about the balance sheet date 125agricultural advances 126government guaranteed advances 128restructuring rescheduling of loans 128upgradation of restructured accounts 130corporate debt restructuring (CDR systems) 131CDR 131stand still clause 138category 2 CDR system 139projects under implementation 142assest classification 142income recognition 144provisioning 145availability of security / net worth of borrower / guarantor 145take-out finance 145post shipment supplier credit 145export project finance 146advances under rehabiliation approved by BIFR/TLI 146provisioning norms general 146sub standard Assets 148

leased assets 148advances 150advances covered by CGTSI guarantee 151take-out finance 152reserve for exchange rate fluctuations account (RERFA) 152country risk 153securitisation company (SC) / reconstruction company (RC) 154writing off of NPA 155direct finance to farmers for agricultural purposes 156purchase of agricultural implements and machinery 156development of irrigation potential through 156lending to priority sector 158priority sector advances 161direct finance to farmers for agricultural purposes 161indirect finance to agriculture 163small scale and ancillary industries 166tiny enterprises 166small scale service and business enterprises(SSSBE) 166industrial estates 167KVI sector 167small road and water transport operators (SRWTO) 167retail trade 168small business 168professional and self emplyed persons 168state sponsored organisations for scheduled castes / scheduled tribes 169education 170housing 170compsumption loans 170loans to self help groups (SHG)/NGO/MICROEDIT 170food and agro based processing sector 171software industry 171venture capital 171investments in special bonds 173HUDCO 174NSIC 174NHB 174lines of credit 174bills rediscounting 175deposits in rural infrastructure development (RIDF) 175leasing and hire purchase 175targets for priority sector lending by scheduled commercial banks 177scheduled commercial banks excluding foreign banks 177direct / indirect agricultural lending 177small scale industries 178DRI advances 178Weaker sections 178Targets for foreign banks 178

rural infrastructure developments fund (RIDF ) 180common guidelines for priority sector advances 183application forms 183mode of disbursement of loan 184repayment schedule 184rates of interest 184penal interest 185inspection charges 185insurance against fire and other risks 185other charges 186photographs of borrowers 186discretionary powers 186machinery to look into complants 186amendments 186Chapter – 1 : Overview of Financial markets Meaning and scopeFollowing groups; organized sector and unorganized sector ; financial servicesFinancial systems commercial banks ; development financial institutions ;insurance companies ; other public sector financial institutions ; post officesavings bank ; national bank for agriculture and rural development ; Mutualfunds ; non – banking financial institutions

1 – 5

Chapter – 2 Reserve bank of India – The main functions of RBI are ; Noteissuing authority ; banker to the Government ; Bankers’ Bank ; Supervisingauthority ; Exchange control Authority ; Promoter of Financial System ; Fiscaland Monetary policy ; open market operations ;

9 – 12

Chapter – 3 – Development Financial Institutions – Introduction ; IndustrialFinance Corporation of India ; Industrial development bank of India ;Industrial credit and investment corporation of India ltd., The purpose IRBI ;SFCs ; The SIDCs and SIICs ; Functions ; state small industries developmentcorporations (SSIDCs) Power Finance Corporation (PFC) Financial ServicesOffered by the Corporation ; Lease Financing – Direct Discounting of Bills;;Guarantee Services; Loan Syndication ; short term loan ;

17 – 21

Institutional Development ServicesActing as an instrument for ushering in reforms in the state utilities bothfinancial and technical ; utility development plans ; Financial Assistance forpower sector studies ; Reform & Restructuring related studies ; Reforms &Restructuring of SEBs ; Export import bank of India ; National Bank foragriculture and rural development ; Genesis of NABARDTypes of refinance facilities ; interest rates ; production credits ; Otherrefinance facilities ; investment credit (Medium and long term) Refinance

22 - 31

Shipping credit and investment company of India (SCICI)Agricultural Finance Consultancy Ltd (AFC)Membership ; Organization ; Services ; Area of specialization ; surveys &studies ; crop production ; Forestry ; Irrigation & Drainage ; AgriculturalEngineering ; Horticulture & Plantation ; Fisheries ; Livestock & Dairy ;Agricultural & Livestock Marketing ; Agri-Business & Agro-Industries ; AreaDevelopment Planning ; Agricultural & Rural Credit ; Project Formulation &Appraisal ; Institution Building ;

33 – 37

Social Sector Development ; Remote Sensing Application & ResourcesManagement Centre ; Training & Manpower Development ; RuralInfrastructure ; Surveys and Studies ; National Co-operative DevelopmentCorporation (NCDC) ; Genesis ; Functions ; Organization and Management ;Finance and Financing ; Purposes for which assistance is provided ; Procedureof sanction / disbursal of assistance ; Promotional and development role ;Activities and program ; Marketing ; Agricultural inputs ; Agro- Processingindustries ; Sugar ; Spinning Mill ; Others ; Storage and Cold Storage ; Storage; Cold Storage ; Program for weaker sections ; Consumer business

38 – 41

Are based integrated co-operative development project ; National housing bank(NHB) Role and functions in Housing sector ; Role NHB; Housing and urbandevelopment corporation (HUDCO); Housing development financecorporation (HDFC) ; land development banks ;

42 – 45

Chapter - 4 – Banking Sector – What is bank and what is banking Extendingfinancial assistance to exports on soft terms ; safe custody services for safekeeping of important documents ; acceptance of deposits from non-residentIndians ; difference between retail banking and wholesale banking

49 – 51

What is a schedule bank in India ; What is the difference between acommercial bank and a co-operative bank ; different bank accounts – deposit ;deposit account without withdrawals facility – different categories ;

52 – 53

Different bank accounts – advances and loans ; cash credit loan ; repaymentperiod ; banking terms often used / common banking practices ; discount ;remittance ; letter of credit ; advantage ; Bank guarantee ; example of financialguarantee example of performance guarantee ; letters of credit and bankguarantees play a very important role in international banking statutoryReserve ratio ; Note pertaining to reserve ratio ; clearing operation ; dailyproduct basis ; repayment holiday

54 – 58

Credit instruments ; Negotiable instruments ; acceptance ; credit report ;syndication ; custodial service ; security ; foreign exchange ; securitization ;international banking internal trade tourism ; remittance of funds from oneplace to another place besides tourism / international trade ; Syndication ofloans globally for corporate houses ;

59 -61

Accessing international market for equity / borrowing in the form of ADR /GDR and Ero Bonds Etc., Foreign exchange management ; profile of a bankdifferent layers of banking operations in India in general ; what are the dutiesof an international banking department? Exchange operations administrativefunctions in a bank ; different administrative units in a bank

62 – 63

Typical functions of different administration units of a bank ; at the head officelevel ; banking business vs. other business ; deposit insurance and creditguarantee corporation (DICGC) ; Export credit guarantee corporation (ECGC)

64 – 68

Chapter – 5 Indian Money Market – Indian Money Market ; instruments ;Money market instruments ; commercial paper (CP) certificates of deposit(CD) ; Treasury Bills (T – Bills); long term debt instruments ; government ofIndia dated securities (GOISECs) ; New types of Goisecs ;

73 – 77

State government securities (State Loans) ; Public Sector Undertaking Bonds(PSU Bonds ) ; Bonds of public financial institutions (PFIs) Corporate

78 - 83

debentures ; Pass Through Certificates (PTSs) Issuers ; Government of Indiaand other sovereign bodies ; Banks and development financial instructions ;public sector undertaking (PSUs) private sector companies ; Governmentowned or quasi government non corporate entities ; investors ; banks ; banks ;Insurance companies ; provident funds ; Several factors have contributed to thegrowth of PFs in India ; Mutual funds ; trusts ; corporate treasuries ; foreigninstructional investors ; securities trading corporation of India ltd., (STCI) ;discount and finance house of India;

84 – 89

Chapter – 6 – Non Banking Financial intermediariesLIC ; General Nature of Insurance Companies ; Introduction of Life InsuranceCorporations ; Types and structure of insurance plans ; valuation of life policy; growth of life business and fund ; investment pattern and policy ; generalinsurance corporation ; organization ; types and structure of business; incomeand investment pattern

93 - 97

Unit trust of India and other mutual funds ; provident / pension funds; postoffices ; other non-bank financial companies’ (NBFCs) ; Investmentcompanies ;

98-101

Loans companies chit funds ; nidhis functions ; accepting deposits loan andadvances ; other aspects ; Hire – purchase finance companies ; functions ;installment – credit ; financing of purchase of equipment, vehicles etc. ;purchase of old assets ; consumer credit ; equipment leasing financecompanies;

102 – 105

Chapter – 7 ; International Financing agencies – International monetary Fund(IMF) ; Funding facilities ; Schemes of the IMF funding ; concessional andnon-concessional lending ; IMF Facilities ;

109 – 113

poverty reduction and growth facility ; stand – by arrangement ; extended fundfacility ; supplemental reserve facility ; contingent credit lines ; compensatoryfinancing facility ; emergency assistance ; special drawing rights ; theinternational bank for reconstruction and development ; international financecorporation ; 1956; international development association ; the bank forinternational settlements ; regional development agencies ; European bank forreconstruction and development;

114 – 117

Important regulatory instructions issued by the RBI ; contents ; general ;definitions ; non – performing assets ; year ending march 31 specified period ;out of order status ; overdue ; income recognition ; income recognitions ;income recognition – policy ; reversal of income this will apply to governmentguaranteed accounts also ; appropriation of recovery in NPAs ; interestapplication ; reporting of NPAs; Asset classification ; categories of NPAs ; sub– standard assets ; NPA for a period less than or equal to 18 months ;

119 – 123

Guidance note on asset classifications ; provisioning norms ; doubtful assetsloss assets ; guidelines for classification off assets ; accounts with temporarydeficiencies ; up gradation of loan accounts classified as NPAs ; Accountsregularized near about the balance sheet date ;

124 – 125

Asset classification to be borrower – wise and not facility wise ; ; advancesunder consortium arrangements ; record of recovery of the individual member;accounts where there is a erosion in the value of security ; advances to

126-127

PACs/FSS ceded to commercial banks ; advances against term deposits NSC’sKVP / IVP ; loans with moratorium for payment of interest ; agriculturaladvances;Government guaranteed advances ; restructuring of loans ; upgradation ofrestructured accounts; general ; corporate debt restructuring (CDR System)Background ; objective structure CDR system in the country will have a threetier structure ; cdr standing forum and its core group ; cdr empowered group ;cdr cell ;

128- 134

Other features ; eligibility criteria ; reference to CDR system ; legal basis ;stand – still clause ; additional finance ; exit option ; conversion option ;category 2 cdr system ; accounting treatment for restructured accounts ;

135 – 140

Disclosure ; implementation of the revised guidelines ; projects underimplementation ; asset classification ; category II ; category III ; incomerecognition ; provisioning ; availability of security / net worth of borrower /guarantor ; take – out finance ; post – shipment supplier’s credit

141 – 145

Export project finance ; advances under rehabilitation approved by BIFR / RLI; provisioning norms general ; loss assets ; doubtful assets ; period for whichthe advance has been considered as doubtful ; provisions requirement ;valuation of security for provisioning purposes ; sub-standard assets ; standardassets ; floating provisions ; provisions on leased assets sub – standard assets ;doubtful assets ; period age provisions loss assets ; loss assets ; guidelines forprovisions under special circumstances ; government guaranteed advances

146 – 149

Advances granted under rehabilitation packages approved by BIFR / termlending institutions ; treatment of interest suspense account ; Advancescovered by ECG / DICGC guarantee ; advance covered by CGTSI guarantee ;Take out finance ; reserve for exchange rate fluctuations account (RERFA) ;Provisioning for country risk ; Risk category ; ECGC classification ;Provisioning requirement (per cent)

150 – 153

Provisioning norms for sale of financial assets to securitization company (SC) /Reconstruction company (RC) ; writing off of NPAsAnnexure – II Revelant extract of the list of direct agricultural advances fromthe Master Circular on lending to priority sector – RPCD. Plan.BC. 42A /01.09.01/ 2001-02 dated 11 November, 2002.

154-156

Direct Finance of farmers for Agricultural Purposes ; purchase of agriculturalimplements and machinery ; development of irrigation potential through ;reclamation and loan development schemes ; construction of farm buildingsand structure etc., ; construction and running of storage facilities ; productionand processing of hybrid seeds for crops ; payment of irrigation charges etc., ;other types of direct finance of farmers ; Lending to Priority Sector

156 - 158

Section – 1 – Classification of Priority Sector advances ; Agriculture ; directFinance to Framers for Agricultural Purposes ; Indirect Finance to agriculture ;small scale industries ; small scale and ancillary industries ;

161 – 165

Tiny Enterprises ; small scale service & Business Enterprises (SSSBE’s) ;Indirect finance in the small – scale industrial sector will include credit to ;industrial estates KVI Sector ; Other Activities / Borrowers in the Prioritysector ; Small road & Water Transport operators (SRWTO)

166 - 167

Retail trade – advances granted to small business ; professional & self –employed persons ; state sponsored organizations for scheduled castes /scheduled tribes

168 – 169

Education ; housing ; consumption loans ; loans to self – help groups (SHGs) /NGOs / Microcredit ; Food and agro – based processing sector ; softwareindustry ; venture capital

170 – 171

Section – II ; Certain Types of Funds deployment eligible as priority sectoradvances ; State Financial Corporations (SFCs) / State Industrial DevelopmentCorporations (SIDCs) ; Rural Electrification Corporation (REC) ; Nabard ;Small industries development Bank of India (SIDBI) ; the National industriescorporation ltd., (NSIC) ; National housing bank (NHB) ; Housing & Urbandevelopment corporation (HUDCO) ;

173 - 174

Other investments ; lines of credit ; bills rediscounting ; deposits in ruralinfracture development fund (RIDF) leasing and hire purchase

174 – 175

Section – III – Targets for priority sector lending by scheduled commercialbanks (excluding RRBs) ; Main Targets for all scheduled commercial banksexcluding foreign banks ; sub-targets for all scheduled commercial banksexcluding foreign banks ; Direct / Indirect Agricultura lending

177

Small scale industries ; DRI advances ; weaker sections ; Targets for foreignbanks ; deposit by foreign banks with SIDBI towards shortfall in priority sectorlending ; contribution by banks to rural infrastructure development fund(RIDF)

178 – 181

Section – IV – Common guidelines for priority sector advancesProcessing of applications ; completion of application forms ; issue ofacknowledgement of loan applications ; disposal of applications ; rejection ofproposals ; register of rejected applications ; mode of disbursement of loan ;repayment schedule ; rates of interest

183 – 184

Penal interest ; inspection charges ; insurance against fire and other risks ;banks may waive insurance of assets financed by bank credit in the followingcases;

185

Other charges ; Photographs borrowers; discretionary powers; machinery tolook into complaints ; amendments ; annexure I – general guidelines onpriority sector lending ; general guidelines on priority sector lending

186 -189

For its long term operations NABARD raises funds by :-

a)

b)

c)

d)

Floating Bonds in openmarket

Drawing from the CentralGovt.

Drawing from National Ruralcredit Funds

Borrowing from RRBs

Secured Premium Notes areBonds

.Most of the Indian PS Banks practice retail banking.

True

False

1. Pure NBFI 1. REC

2. Specialised NBFI 2. FFC

3. Film Finance 3. HDFC

4. Rural Electrification 4. Chit Funds

5. UTI

6. NICo Ltd.

Marks : 2

26.facilities

are for economies in transition.

Legally speaking Pass Through Certificates

are and are tradeablefreely.

EXIM Bank canraise resources by:-

a)

b)

c)

Issuing bonds

Borrowing fromRBI

d) Borrowing fromInternationalFinancialInstitutions

Borrowing fromState Govt

1. Gen.Insurance 1. LIC ofIndia Ltd

2. Life Insurance 2. HDFC

3. Mutual fund 3. PPF

4. SmallSavings

4. Chit Funds

5. UTI

6. NICo ofIndia Ltd.

If the Bank allows a finance of Rs 95 against a Bill of Rs 100 the difference of Rs. 5is known as the :-

a)

b)

c)

d)

Discount

Margin

Interest

Commission

41. DFHI was set up with the following objective :-

a)

b)

c)

d)

Executor Trustee Services

To even out imbalances

To provide liquidity

To promote secondary market



Question SIDBI provides :-





Your Answer False






Your Answer IFCI





Correct Answer True

Your Answer True


Correct Answer True

Your Answer True






Your Answer False



Your Answer False






Your Answer True



Your Answer 0









Your Answer Power









Your Answer ICICI


Correct Answer True

Your Answer True

Select The Blank

Question NHB at present has a ________ Capital of Rs. 350 crores.


Your Answer Paid-up






Your Answer True



Your Answer PRGF






Your Answer Size











Correct Answer True

Your Answer True





Correct Answer True

Your Answer False



Your Answer True









IBRD IBRD


IMF IMF




Correct Answer IDBI

Your Answer IDBI



Your Answer 1965





maladjustments.

Correct Answer IMF

Your Answer UNO








Correct Answer 1978

Your Answer 1975









Fisheries Fisheries











Financial Institutions & Banking_6

- 1 -



Correct Answer Benchmark Surveys , Pre-feasibility studies , Regional /Sectoralplanning

Your Answer Benchmark Surveys , Pre-feasibility studies , Regional /Sectoralplanning


Correct Answer Handling foreign currency , Handling Doc. credits , Granting linesof Credit

Your Answer Handling foreign currency , Handling Doc. credits , Granting linesof Credit



Your Answer FEDAI



Your Answer True



Your Answer False



Your Answer Power

True/False


- 2 -


Correct Answer True

Your Answer False











Correct Answer True

Your Answer True







Select The Blank


- 3 -

Question As a banker to the Government, RBI accepts Governmentdeposits at ________% interest.

Correct Answer 0

Your Answer 0.05


Correct Answer 1965

Your Answer 1975











Correct Answer IFCI

Your Answer IFCI



Your Answer True


- 4 -





Correct Answer True

Your Answer True














Correct Answer True


- 5 -

Your Answer True



Your Answer False


Correct Answer RBI

Your Answer RBI

Multiple Choice Single AnswerQuestion Account where lump sum investment is made for specific period

is :-Correct Answer Term Deposit account










Your Answer ICICI



- 6 -



Select The BlankQuestion Syndication of Loans Globally does not involve any funds as it is

________ activity.Correct Answer Non-fund based






Correct Answer SDR

Your Answer EFF











- 7 -









Shares Shares


Select The BlankQuestion 55% of HUDCO loans are earmarked for________& low income

groups.Correct Answer Weaker sections




Your Answer False








- 8 -








- 1 -

38. Initial Quantum of resources of IMF were contributed by members according to :-

Quotas fixed for membersSDR fixed for membersPopulationWealth of the nation










Your Answer IDBI





Correct Answer By borrowing from IBRD , By lending at 0% interest. , Forperiods up to ten years




- 2 -


Your Answer False



Your Answer False






Your Answer Wide network , Tax concessions



Your Answer True




Multiple Choice Single AnswerQuestion NABARD was established on the recommendations of :-

Correct Answer CRAFICARD

Your Answer CRAFICARD

Select The Blank


- 3 -

Question Period of Holiday Insurance is ________.









Select The BlankQuestion AFC's membership consists of commercial, cooperative banks

and DFIs including ________.Correct Answer EXIM bank






infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd

Your Answer SSN Nigam Ltd , MSR Dev.Corporation , MKV Dev. Corporation.

Select The BlankQuestion SCICI provides domestic & foreign loans for capital equipment

and________ services.Correct Answer Technical

Your Answer Technical


- 4 -

Multiple Choice Single AnswerQuestion Certificate of deposit is a :-

Correct Answer Usance promissory note

Your Answer Usance promissory note



Your Answer False



Your Answer GIC





Correct Answer To augment export finance in India , To channelise World Bank'sfunds to industries in India , To help in building up a CapitalMarket in India

Your Answer To augment export finance in India , To channelise World Bank'sfunds to industries in India , To help in building up a CapitalMarket in India



Your Answer ICICI



- 5 -

Question A company issues CP to save on :-

Correct Answer Interest cost

Your Answer Interest cost


Correct Answer Granting lines of Credit , Handling foreign currency , HandlingDoc. credits





True/FalseQuestion The currency notes issued by RBI are legal tender everywhere in

India without any limit.Correct Answer True

Your Answer True






Your Answer False



Your Answer Straight coupon bonds , Inflation linked bonds , Zero coupon


- 6 -

bonds




Multiple Choice Single AnswerQuestion DICGC also provides :-

Correct Answer Security to deposits

Your Answer Guarantee to banks


Small Savings Chit Funds Chit Funds

Gen.Insurance NICo of India Ltd. NICo of India Ltd.

Life Insurance LIC of India Ltd LIC of India Ltd

Mutual fund UTI UTI







Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production

as well as:-Correct Answer Crop Planning , Plant Protection , Farm Management


- 7 -

Your Answer Crop Planning , Plant Protection , Farm Management



Your Answer False





Correct Answer True

Your Answer True


Correct Answer True

Your Answer True

Select The BlankQuestion In a Bank, the investment decisions are taken at ________ level.

Correct Answer Head Office







- 8 -

NCDC Development ofCooperatives

Development ofCooperatives

True/FalseQuestion Banks issue Guarantees on behalf of their clients.

Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion NonBanking Financial Companies are :-

Correct Answer Financial institutions

Your Answer Financial institutions

Multiple Choice Single AnswerQuestion A record of the holdings of GOI dated securities of each holder is

contained in :-Correct Answer SGL pass book





Your Answer True



Your Answer Confirmed

Select The BlankQuestion The ________ of NABARD covers release of refinance without

prior sanction for refinance limit.Correct Answer ARS

Your Answer CFSF


Correct Answer True

Your Answer True



Your Answer True



Your Answer True



IFCI Banking System

Organised sector Banking System IFCI





Your Answer Paid-up

Select The BlankQuestion Development financial institutions have been established to cater

to ________ of the industrial sector.Correct Answer Long term financial needs

Your Answer Short term financial needs

Select The BlankQuestion General insurance policies are genarally issued for ________

year.Correct Answer One

Your Answer Ten



Your Answer True



Your Answer Banking Regulation Act






Your Answer Money markets



Your Answer True


Correct Answer True

Your Answer True


Correct Answer IDBI

Your Answer IDBI






Your Answer Financial support to SSIDC

Multiple Choice Multiple AnswerQuestion R B I conducts monetary control by way of O M O in :-


Your Answer Treasury bills , Ways and means advances , TOD

Select The BlankQuestion SCICI provides domestic & foreign loans for capital equipment

and________ services.Correct Answer Technical

Your Answer After sales



Your Answer Financial companies


Correct Answer True

Your Answer True

True/FalseQuestion IDA does not lend to countries that are not in a position to

borrow from IBRD.Correct Answer False

Your Answer True








Question Agricultural Finance Consultancy Ltd(AFC) activities cover :-

Correct Answer Pre-feasibility studies , Regional /Sectoral planning , BenchmarkSurveys



Correct Answer International remittances , Travellers' Cheques , Credit CardBusiness




Your Answer NSE



Your Answer OF&GICO Ltd.


Correct Answer 1978

Your Answer 1975



Your Answer Government , Banking/Insurance , Trade/Industry

Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by

Correct Answer Banks

Your Answer Banks






Your Answer Long term returns

Multiple Choice Multiple AnswerQuestion DFHI was set up jointly by :-

Correct Answer RBI , Banks , All India Fis

Your Answer RBI , All India Fis , SEBI


Small Savings Chit Funds HDFC

Gen.Insurance NICo of India Ltd. UTI

Life Insurance LIC of India Ltd LIC of India Ltd

Mutual fund UTI Chit Funds



Your Answer Short term deposit receipts



Your Answer True

Multiple Choice Multiple AnswerQuestion The loans of finance companies are generally :-

Correct Answer At high interest , Unsecured , Based on borrowers worth

Your Answer At high interest , Unsecured , Based on borrowers worth






Your Answer HUDCO



Your Answer Fixed assets



Your Answer 0.05

Multiple Choice Single AnswerQuestion A company issues CP to save on :-

Correct Answer Interest cost

Your Answer Taxes

Select The Blank

Question The price in financial markets is known as ________.


Your Answer Premium


Correct Answer RBI

Your Answer RBI



Correct Answer Usance promissory note

Your Answer Legal Tender

True/FalseQuestion Cancellation of a Guarantee is known as "revocation".

Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion IFCI raises its funds by way of :-

Correct Answer Issuing bonds , Borrowing from RBI , Borrowing from IDBI

Your Answer Issuing bonds , Issuing shares




Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by

Correct Answer Banks



Film Finance FFC Chit Funds

Rural Electrification REC REC

Pure NBFI UTI UTI

Specialised NBFI HDFC HDFC

Multiple Choice Single AnswerQuestion SFCs suffer from a very high ratio of:-




infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd

Your Answer Konkan Railway Corporation , MSR Dev.Corporation

Multiple Choice Multiple AnswerQuestion EXIM Bank can raise resources by:-

Correct Answer Issuing bonds , Borrowing from RBI , Borrowing fromInternational Financial Institutions

Your Answer Issuing bonds , Borrowing from RBI




True/FalseQuestion CPs have to be compulsorily rated.

Correct Answer True

Your Answer True


as well as:-Correct Answer Crop Planning , Plant Protection , Farm Management

Your Answer Crop Planning , Plant Protection

Multiple Choice Multiple AnswerQuestion EXIM Bank provides financial assistance to:-

Correct Answer Indian Companies , Commercial Banks , Foreign Governments

Your Answer Investment trusts , Indian Companies



Your Answer Credit report , Banker's report , Client's Report


Correct Answer RBI

Your Answer RBI



Your Answer True

Multiple Choice Single AnswerQuestion Credit Risk under NEF Scheme of SIDBI is borne by :-

Correct Answer Central Govt & SIDBI

Your Answer SIDBI



Your Answer Deposits



Your Answer Operation

Select The Blank

Question Financial markets are the centres that provide facilities forbuying and selling of ________.

Correct Answer Financial claims and services

Your Answer Financial claims and services





Correct Answer Pre-feasibility studies , Regional /Sectoral planning , BenchmarkSurveys


True/FalseQuestion EXIM Bank provides Lines of Credit to other nations for Indian

exports.Correct Answer True

Your Answer True



Your Answer False





Correct Answer True

Your Answer True

Select The BlankQuestion Legally speaking Pass Through Certificates are ________ and

are tradeable freely.Correct Answer Promissory notes

Your Answer Bills of Exchange



Your Answer RPFG

Select The BlankQuestion AFC's membership consists of commercial, cooperative banks

and DFIs including ________.Correct Answer EXIM bank




IBRD MIGA


IMF PRGF

Prevention of crises CCL IBRD

Political insurance MIGA CFF

Multiple Choice Single AnswerQuestion Money Markets Instruments have a maturity of less than :-

Correct Answer One year

Your Answer One year

Multiple Choice Single AnswerQuestion The word ' Tranche ' is a French word which means :-

Correct Answer A Slice

Your Answer A Slice




Select The BlankQuestion The department handing ________ in the banks is known as the

Treasury.Correct Answer Investments

Your Answer Cash & currency


Correct Answer True

Your Answer True



Your Answer Salaried persons



units in tiny & small scale sectorYour Answer Existing Large Industrial Units , New Units in tiny Sector , New

Units in Small Sector

Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-

Correct Answer PSUs , Private Sector Cos. , Govt.bodies

Your Answer PSUs , Private Sector Cos. , FIIs

Select The Blank

Question NABARDs Criteria for Refinance covers Technical ________ ofthe project.

Correct Answer Feasibility

Your Answer Viability


Correct Answer RBI

Your Answer Central Govt.



Your Answer False




Multiple Choice Single AnswerQuestion NonBanking Financial Companies are :-

Correct Answer Financial institutions

Your Answer Manufacturing units



Your Answer Money lenders , Indigenous bankers , Chit funds

True/FalseQuestion Most of the Indian PS Banks practice retail banking.

Correct Answer True

Your Answer True

Select The BlankQuestion Secured Premium Notes are ________.

Correct Answer Debentures

Your Answer Bonds


Correct Answer True

Your Answer False



name to ________ effective from October 1992.

Correct Answer SCICI LtdYour Answer SCICI Ltd


including ________.

Correct Answer EXIM bankYour Answer EXIM bank


Correct Answer Financial assetsYour Answer Financial assets

Multiple Choice Single AnswerQuestion The lender of the last resort to the market! is the :-

Correct Answer RBIYour Answer RBI


housing sector.

Correct Answer FinancialYour Answer Financial


Correct Answer By borrowing from IBRD , By lending at 0% interest. , For periods upto ten years




sector to make them viable.







Correct Answer RBI ActYour Answer RBI Act

Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production as well

as:-

Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management


Correct Answer Financial commitment , Voting power , Drawing powerYour Answer Financial commitment , Voting power , Drawing power


Correct Answer Six months or lessYour Answer Three years


Correct Answer Government regulation and controlYour Answer Government reg! ulation and control

Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-

Correct Answer BanksYour Answer Banks




Correct Answer Indigenous bankersYour Answer Indigenous bankers


Correct Answer Over one yearYour Answer Over one year


Correct Answer Marine insurance , Fire insurance , MiscellaneousYour Answer Fire insurance , Miscellaneous , Marine insurance


Fertilisers.



Correct Answer Money lenders , Indigenous bankers , Lending pawn brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers


&nbs! p;



Correct Answer Weaker sectionsYour Answer Weaker sections


Correct Answer State financial institutionsYour Answer State financial institutions


Correct Answer One yearYour Answer One year


Correct Answer &n! bsp; Rate of interestYour Answer Rate of interest







Correct Answer ICICIYour Answer ICICI


Correct Answer Usance promissory noteYour Answer Term Deposit Receipt




Correct Answer CorporatesYour Answer Corporates

Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than the balance

is :-

Correct Answer OverdraftYour Answer Overdraft


Correct Answer At high interest , Unsecured , Based on borrowers worthYour Answer At high interest , Unsecured , Based on borrowers worth


Correct Answer SIDFYour Answer SIDF

True/FalseQuestion Issuance of CD attracts reserve requirements.












contribute further premium by :-

Correct Answer Surrendering the policy , Converting it into paid up policy , Assigning itin the open market

Your Answer Surrendering the policy , Converting it into paid up policy , Assigning it inthe open market


Correct Answer Commercial banksYour Answer Commercial banks

Select The BlankQuestion The term ________ refers to the act of a bank extending finance to the

seller against a letter of credit.

Correct Answer NegotiationYour Answer Negotiation


Correct Answer Liaison with RBI , Evolve Policies , Vigilance & ControlYour Answer Liaison with RBI , Evolve Policies , Vigilance & Control


are :-

Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd


Correct Answer Premium collectedYour Answer Premium collected

!Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-

Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies


Correct Answer New Projects , Renovation , ModernisationYour Answer New Projects , Renovation , Modernisation


name to ________ effective from October 1992.

Correct Answer SCICI LtdYour Answer SCICI Ltd


including ________.



Correct Answer Financial assetsYour Answer Financial assets

Multiple Choice Single AnswerQuestion The lender of the last resort to the market is the :-



housing sector.

Correct Answer FinancialYour Answer Financial


Correct Answer By borrowing from IBRD , By lending at 0% interest. , For periods upto ten years



Correct Answer Interest costYour Answer Interest cost









Correct Answer RBI ActYour Answer RBI Act

Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production as well

as:-

Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management


Correct Answer Financial commitment , Voting power , Drawing powerYour Answer Financial commitment , Voting power , Drawing power


Correct Answer Six months or lessYour Answer Three years


Correct Answer Government regulation and controlYour Answer Government regulation and control








Correct Answer Over one yearYour Answer Over one year


Correct Answer Marine insurance , Fire insurance , MiscellaneousYour Answer Fire insurance , Miscellaneous , Marine insurance


Fertilisers.



Correct Answer Money lenders , Indigenous bankers , Lending pawn brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers




Correct Answer Weaker sectionsYour Answer Weaker sections


Correct Answer State financial institutionsYour Answer State financial institutions


Correct Answer One yearYour Answer One year


Correct Answer Rate of interestYour Answer Rate of interest









Correct Answer Usance promissory noteYour Answer Term Deposit Receipt




Correct Answer CorporatesYour Answer Corporates


is :-



Correct Answer At high interest , Unsecured , Based on borrowers worthYour Answer At high interest , Unsecured , Based on borrowers worth



True/FalseQuestion Issuance of CD attracts reserve requirements.







contribute further premium by :-

Correct Answer Surrendering the policy , Converting it into paid up policy , Assigning itin the open market

Your Answer Surrendering the policy , Converting it into paid up policy , Assigning it inthe open market


Correct Answer Commercial banksYour Answer Commercial banks

Select The BlankQuestion The term ________ refers to the act of a bank extending finance to the

seller against a letter of credit.

Correct Answer NegotiationYour Answer Negotiation


Correct Answer Liaison with RBI , Evolve Policies , Vigilance & ControlYour Answer Liaison with RBI , Evolve Policies , Vigilance & Control


are :-

Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd


Correct Answer Premium collectedYour Answer Premium collected

Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-

Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies


Correct Answer New Projects , Renovation , ModernisationYour Answer New Projects , Renovation , Modernisation


Correct Answer Post OfficesYour Answer Post Offices




Corporates RIL, HPCL RIL, HPCLNGOs CSP, CRY, PLAN CSP, CRY, PLANDFI IDBI, IFCI, ICICI IDBI, IFCI, ICICIPSUs NTPC, NHPC, Coal India NTPC, NHPC, Coal India

Multiple Choice Multiple AnswerQuestion DFHI was set up jointly by :-

Correct Answer RBI , Banks , All India FisYour Answer RBI , Banks , All India Fis , SEBI

Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme for modernisation is

also undertaken by IDBI.




Multiple Choice Single AnswerQuestion Investment on a monthly basis and repayment on due date

is made in :-

Correct Answer Recurring depositYour Answer Term deposit account


Correct Answer Credit Card Business , International remittances ,Travellers' Cheques

Your Answer Credit Card Business , International remittances ,Travellers' Cheques


Correct Answer Interest costYour Answer Taxes


is :-


Select The BlankQuestion AFC's membership consists of commercial, cooperative

banks and DFIs including ________.


Multiple Choice Multiple AnswerQuestion Functions of R.O. do not cover :-

Correct Answer SLR/CRR maintenance , Liaison with RBI/IBA ,Issuing Lending Policy

Your Answer Liaison with RBI/IBA , Issuing Lending Policy

Select The BlankQuestion The ________ of NABARD covers release of refinance

without prior sanction for refinance limit.

Correct Answer ARSYour Answer CFSF

Select The BlankQuestion The ________ regulation makes the banks the largest

investor in the GOI securities.

Correct Answer SLRYour Answer SLR

Multiple Choice Multiple AnswerQuestion Post Offices are popular for mobilizing small savings of

the public due to :-

Correct Answer Wide network , Tax concessions , Saftey of fundsYour Answer Wide network , Tax concessions , Saftey of funds



Multiple Choice Single AnswerQuestion SIDBI commenced its operations from :-

Correct Answer April 2,1990Your Answer April 2,1990




Correct Answer Commercial banksYour Answer Financial companies


Correct Answer By borrowing from IBRD , By lending at 0%interest. , For periods up to ten years

Your Answer By borrowing from IBRD , By lending at 0% interest. ,For periods up to ten years


Correct Answer MTNL , NTPC , SAILYour Answer MTNL , NTPC , SAIL


Hill ,Tribal Area development Area Development Area Development

Aquaculture , Brackish Water Fisheries Fisheries

Ploughing, weeding, transplantationSeasonal Agricultural Operations Irrigation & Drainage

Market Yards, Storage &Warehousing Agricultural Marketing Agricultural Marketing

True/FalseQuestion Small Savings are source of Capital Receipts for the Government.

Correct Answer TrueYour Answer False

Multiple Choice Multiple AnswerQuestion The financial Assistance provided by the IMF enables member countries to

:-

Correct Answer Rebuild resources , Stabilise currencies , Pay for importsYour Answer Rebuild resources , Stabilise currencies , Undertake specific projects




Correct Answer EXIM BankYour Answer ICICI


Correct Answer Paid-upYour Answer Paid-up



Select The BlankQuestion In a Bank, the investment decisions are taken at ________ level.

Correct Answer Head OfficeYour Answer Head Office

Multiple Choice Single AnswerQuestion RBI is also referred to as :-

Correct Answer Apex BankYour Answer Apex Bank

Multiple Choice Multiple AnswerQuestion EXIM Bank can raise resources by:-

Correct Answer Issuing bonds , Borrowing from RBI , Borrowing from InternationalFinancial Institutions

Your Answer Borrowing from RBI , Borrowing from International Financial Institutions


Correct Answer PowerYour Answer Power





Correct Answer Refinance , Rediscounting of Bills , Financial support to SSIDCYour Answer Refinance , Financial support to SSIDC , Cash Credit facilities



Multiple Choice Multiple AnswerQuestion Other than Tourism, International funds remittances comprise of :-

Correct Answer Donations/Charity , Payments of Salaries , Payments of RoyaltyYour Answer Payments of Royalty , Travel related payments




Correct Answer Planned SavingsYour Answer Planned Savings






Correct Answer Portfolio managementYour Answer Portfolio management

True/FalseQuestion In case of T-Bills potential investors have to put in

competitive bids.


True/FalseQuestion Non bank financial institutions undertake fund and non fund based activities.



Correct Answer Inspection/audit , Control on branches , Grant loans/advancesYour Answer Inspection/audit , Control on branches , Grant loans/advances


Correct Answer Handling foreign currency , Handling Doc. credits , Granting lines ofCreditYour Answer Maintaining SLR/CRR , Handling foreign currency , Handling Doc. credits

, Granting lines of Credit

Select The BlankQuestion Secured Premium Notes are ________.

Correct Answer DebenturesYour Answer Debentures


Correct Answer In principleYour Answer Funded










Your Answer FEDAI



Your Answer True



Your Answer False



Your Answer Power

True/False


Correct Answer True

Your Answer False











Correct Answer True

Your Answer True







Select The Blank


Correct Answer 0

Your Answer 0.05


Correct Answer 1965

Your Answer 1975




Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by : -







Correct Answer IFCI

Your Answer IFCI



Your Answer True





Correct Answer True

Your Answer True














Correct Answer True

Your Answer True



Your Answer False


Correct Answer RBI

Your Answer RBI












Your Answer ICICI











Correct Answer SDR

Your Answer EFF


















Shares Shares







Your Answer False















changed its name to ________ effective from October 1992.Correct Answer SCICI LtdYour Answer SCICI Ltd


including ________.Correct Answer EXIM bankYour Answer EXIM bank



Select The BlankQuestion One of the objectives of NHB is to augment the ________ resources

for the housing sector.Correct Answer FinancialYour Answer Financial

Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-Correct Answer By borrowing from IBRD , By lending at 0% interest. , For

periods up to ten yearsYour Answer By borrowing from IBRD , By lending at 0% interest. , For

periods up to ten years


True/FalseQuestion PFC has been persuading State Governments restructuring of their

power sector to make them viable.Correct Answer TrueYour Answer True




Multiple Choice Multiple AnswerQuestion The major area of AFC's specialisation included Crop Production as

well a! s:-Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management



Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-Correct Answer Government regulation and controlYour Answer Government reg! ulation and control










Development.&nbs! p; Correct Answer TrueYour Answer True












True/FalseQuestion A Bill of Exchange is negotiable.Correct Answer True

Your Answer True


Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than the

balance is :-Correct Answer OverdraftYour Answer Overdraft












Insurance.Correct Answer TrueYour Answer True




Your Answer Surrendering the policy , Converting it into paid up policy ,Assigning it in the open market


Select The BlankQuestion The term ________ refers to the act of a bank extending finance to

the seller against a letter of credit.Correct Answer NegotiationYour Answer Negotiation


Multiple Choice Multiple AnswerQuestion Bonds issued by institutions through SPVs to execute infrastructure

projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam Ltd

Select The BlankQuestion GIC raises funds to meet claims from ________.Correct Answer Premium collectedYour Answer Premium collected!Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies





Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.











































Your Answer True
















open market



















































Your Answer True
















open market



















































Your Answer True
















open market









Select The BlankQuestion Kisan Vikas Patra are issued through ________.Correct Answer Post OfficesYour Answer Post Offices



Corporates RIL, HPCL RIL, HPCL

NGOs CASP, CRY, PLAN CASP, CRY, PLAN

DFI IDBI, IFCI, ICICI IDBI, IFCI, ICICI

PSUs NTPC, NHPC, Coal India NTPC, NHPC, Coal India

Multiple Choice Multiple AnswerQuestion DFHI was set up jointly by :-Correct Answer RBI , Banks , All India FisYour Answer RBI , Banks , All India Fis , SEBI

Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme

for modernisation is also undertaken by IDBI.Correct Answer ICICIYour Answer ICICI



is made in :-Correct Answer Recurring depositYour Answer Term deposit account

Multiple Choice Multiple AnswerQuestion Tourism promotes :-Correct Answer Credit Card Business , International remittances ,

Travellers' ChequesYour Answer Credit Card Business , International remittances ,

Travellers' Cheques

Multiple Choice Single AnswerQuestion A company issues CP to save on :-Correct Answer Interest costYour Answer Taxes


Question A current account where the customer can withdraw morethan the balance is :-Correct Answer OverdraftYour Answer Overdraft


banks and DFIs including ________.Correct Answer EXIM bankYour Answer EXIM bank

Multiple Choice Multiple AnswerQuestion Functions of R.O. do not cover :-Correct Answer SLR/CRR maintenance , Liaison with RBI/IBA ,

Issuing Lending PolicyYour Answer Liaison with RBI/IBA , Issuing Lending Policy


without prior sanction for refinance limit.Correct Answer ARSYour Answer CFSF


investor in the GOI securities.Correct Answer SLRYour Answer SLR


the public due to :-Correct Answer Wide network , Tax concessions , Saftey of fundsYour Answer Wide network , Tax concessions , Saftey of funds


Multiple Choice Single AnswerQuestion SIDBI commenced its operations from :-Correct Answer April 2,1990Your Answer April 2,1990


Multiple Choice Single AnswerQuestion The organised financial system includes :-Correct Answer Commercial banksYour Answer Financial companies


Correct Answer By borrowing from IBRD , By lending at 0%interest. , For periods up to ten yearsYour Answer By borrowing from IBRD , By lending at 0% interest. ,

For periods up to ten years

Multiple Choice Multiple AnswerQuestion The prominent Bond issuing PSU are :-Correct Answer MTNL , NTPC , SAILYour Answer MTNL , NTPC , SAIL



Aquaculture ,Brackish Water Fisheries Fisheries

Ploughing, weeding, transplantation Seasonal Agricultural OperationsIrrigation & Drainage

Market Yards, Storage & Warehousing Agricultural MarketingAgricultural Marketing


Government.Correct Answer TrueYour Answer False


member countries to :-Correct Answer Rebuild resources , Stabilise currencies , Pay for

importsYour Answer Rebuild resources , Stabilise currencies , Undertake

specific projects


Multiple Choice Single AnswerQuestion IDBI has helped in the establishment of :-Correct Answer EXIM BankYour Answer ICICI

Select The BlankQuestion NHB at present has a ________ Capital of Rs. 350 crores.Correct Answer Paid-upYour Answer Paid-up

True/FalseQuestion The Capital of NABARD is subscribed by World Bank.Correct Answer FalseYour Answer False

Select The BlankQuestion In a Bank, the investment decisions are taken at

________ level.Correct Answer Head OfficeYour Answer Head Office

Multiple Choice Single AnswerQuestion RBI is also referred to as :-Correct Answer Apex BankYour Answer Apex Bank

Multiple Choice Multiple AnswerQuestion EXIM Bank can raise resources by:-Correct Answer Issuing bonds , Borrowing from RBI , Borrowing

from International Financial InstitutionsYour Answer Borrowing from RBI , Borrowing from International

Financial Institutions

Multiple Choice Single AnswerQuestion PFC is committed to the integrated development of :-Correct Answer PowerYour Answer Power

True/FalseQuestion PFC has been persuading State Governments restructuring

of their power sector to make them viable.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion SIDBI provides :-Correct Answer Refinance , Rediscounting of Bills , Financial

support to SSIDCYour Answer Refinance , Financial support to SSIDC , Cash Credit

facilities

True/FalseQuestion Under MIGA the World bank offers various forms of

Political Insurance.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion Other than Tourism, International funds remittances

comprise of :-Correct Answer Donations/Charity , Payments of Salaries ,

Payments of RoyaltyYour Answer Payments of Royalty , Travel related payments

True/FalseQuestion SCICI is a member of the OTCEI.Correct Answer TrueYour Answer False


Correct Answer Planned SavingsYour Answer Planned Savings


True/FalseQuestion HDFC was set up by NHB.Correct Answer FalseYour Answer False

Select The BlankQuestion Mutual Funds provide the benefits of ________.Correct Answer Portfolio managementYour Answer Portfolio management


competitive bids.Correct Answer TrueYour Answer True

True/FalseQuestion Non bank financial institutions undertake fund and non

fund based activities.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion Functions of R.O. of a bank include :-Correct Answer Inspection/audit , Control on branches , Grant

loans/advancesYour Answer Inspection/audit , Control on branches , Grant

loans/advances

Multiple Choice Multiple AnswerQuestion Duties of an International Banking unit cover :-Correct Answer Handling foreign currency , Handling Doc.

credits , Granting lines of CreditYour Answer Maintaining SLR/CRR , Handling foreign currency ,

Handling Doc. credits , Granting lines of Credit

Select The BlankQuestion Secured Premium Notes are ________.Correct Answer DebenturesYour Answer Debentures

Select The BlankQuestion Syndication involves ________ sanction.Correct Answer In principleYour Answer Funded










Your Answer FEDAI



Your Answer True



Your Answer False



Your Answer Power

True/False


Correct Answer True

Your Answer False











Correct Answer True

Your Answer True







Select The Blank


Correct Answer 0

Your Answer 0.05


Correct Answer 1965

Your Answer 1975




Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by : -







Correct Answer IFCI

Your Answer IFCI



Your Answer True





Correct Answer True

Your Answer True














Correct Answer True

Your Answer True



Your Answer False


Correct Answer RBI

Your Answer RBI












Your Answer ICICI











Correct Answer SDR

Your Answer EFF


















Shares Shares







Your Answer False













Financial Institutions & Banking_18LIST OF ATTEMPTED QUESTIONS AND ANSWERS


changed its name to ________ effective from October 1992.Correct Answer SCICI LtdYour Answer SCICI Ltd

Select The BlankQuestion AFC's membership consists of commercial, cooperative banks and

DFIs including ________.Correct Answer EXIM bankYour Answer EXIM bank



Select The BlankQuestion One of the objectives of NHB is to augment the ________

resources for the housing sector.Correct Answer FinancialYour Answer Financial

Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-Correct Answer By borrowing from IBRD , By lending at 0% interest. , For

periods up to ten yearsYour Answer By borrowing from IBRD , By lending at 0% interest. , For

periods up to ten years


Page 1

Financial Institutions & Banking_18True/FalseQuestion PFC has been persuading State Governments restructuring of

their power sector to make them viable.Correct Answer TrueYour Answer True





as well a! s:-Correct Answer Crop Planning , Plant Protection , Farm ManagementYour Answer Crop Planning , Plant Protection , Farm Management



Multiple Choice Single AnswerQuestion The underdeveloped markets are characterised by :-Correct Answer Government regulation and controlYour Answer Government reg! ulation and control

Page 2

Financial Institutions & Banking_18Multiple Choice Single AnswerQuestion Cetificate of deposit are issued by :-Correct Answer BanksYour Answer Banks







Multiple Choice Multiple AnswerQuestion The unorganised financial system comprises of :-Correct Answer Money lenders , Indigenous bankers , Lending pawn

brokersYour Answer Money lenders , Indigenous bankers , Lending pawn brokers


Development.&nbs! p; Correct Answer TrueYour Answer True

Page 3



groups.Correct Answer Weaker sectionsYour Answer Weaker sections










Multiple Choice Single AnswerQuestion Certificate of deposit is a :-Correct Answer Usance promissory note

Page 4

Financial Institutions & Banking_18Your Answer Term Deposit Receipt



Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more than

the balance is :-Correct Answer OverdraftYour Answer Overdraft







NABARD Rural Development Rural DevelopmentPage 5






Insurance.Correct Answer TrueYour Answer True







to the seller against a letter of credit.Correct Answer NegotiationYour Answer Negotiation



infrastructure projects are :-Correct Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN

Page 6

Financial Institutions & Banking_18Nigam LtdYour Answer MSR Dev.Corporation , MKV Dev. Corporation. , SSN Nigam

Ltd

Select The BlankQuestion GIC raises funds to meet claims from ________.Correct Answer Premium collectedYour Answer Premium collected!Multiple Choice Multiple AnswerQuestion Treasuries could be either those of the :-Correct Answer PSUs , Private Sector Cos. , Govt.bodiesYour Answer PSUs , Private Sector Cos. , Govt.bodies





Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.

Page 7

Financial Institution and Banking

Topic PageNoorganised sector 2financial services 2Indian financial system 3commercial banks 4development financial institutions 5insurance companies 5other public sector financial institutions 5post office savings 5mutual funds 5non banking finanical institutions 6Reserve bank of India 9functions of RBI 9banker to the government 10bankers bank 10supervising authority 10exchange control authority 10promoter of financial system 11fiscal and monetary policy 12open market operations 12developmental financial institutions 17industrial finance corporation of India 17Industrial development bank of india - idbi 18industrial credit and investment corporation of india Ltd - icici 19irbi 20sfcs 20sidc and siics 20state small industries development corporation (SSIDC) 21power finance corporation (PFC) 21financial services offered by the corporation 21term loans 21lease financing 22direct discounting of bills 22guarantee services 22loan syndication 22short term loan 22institutional development services 22utility development plans 23financial assistance for power sector studies 23reform and restructuring related studies 23reform and restructuring of SEBs 23OFAP 23export import bank of india 24national bank of agriculture and rural development 24genesis of NABARD 24ARC 24GOI 24ACD 24CRAFICARD 24types of refinance facilities 26interest rates 26production credits 28financing weavers 28OSAO 29

refinance for marketing of crops 29other refinance facilities 30long term loans to state governments 30investment credit ( medium and long term) refinance 31shipping credit and investment company of India (SCICI) 33principal activities 33agricultural finance consultancy ltd (AFC) 34area of specialisation 36surveys and studies 38National co-operative development corporation (NCDC) 38finance and financing 39procedure of santion / disbursal of assistance 40promotional and development role 40marketing 40agricultural inputs 40agro-processing industries 41storage and cold storage 41program for weaker sections 41consumer business 41area based integrated co-operative development project 42national housing bank (NHB) 42housing and urban development corporation (HUDCO) 44housing development finance corporation (HDFC) 44land development banks 45banking sector 49retail banking 49cash credit 50safe custody services for safe keeping of important documents 50acceptance of deposits from non resident indians 51difference between retail banking and wholesale banking 51global banking 51scheduled bank in india 52commercial bank and cooperative bank 52public sector banks 52private sector banks 52bank accounts 53deposit account 53lump sum investment 54periodic investment 54cash credit 54loan syndication 54repayment period 54bill 55discount 55remittance 55letter of credit 55bank guarantee 56negotiation 56cash reserve ratio 56statutory reserve ratio 57note pertaining to reserve ratio 57clearing operation 57daily product basis 57monthly product basis 58repayment holiday 58credit instruments 59

negotiable instruments 59acceptance 59credit report 59syndication 59custodial services 60security 60foreign exchange 60securitisation 60international banking 60international trade 61tourism 61remittance of funds from one place to another place besides tourism 61syndication of loans global for corporate houses 61foreign exchange management 62profile of a bank 62branch banking 62different layers of banking 62duties of an international banking department 63exchange operations 63administrative functions in a bank 63administrative units 64banking business 65Deposit insurance and credit guarantee corporation (DICGC) 66export credit guarantee corporation (ECGC) 67indian money market 73instrument 73comercial paper 74certificates of deposit 75treasury bills 75short term debentures 75bill of exchange 75long term debt instruments 76government of India dated securities (GOISEC) 76inflation linked bonds 77zero coupon bonds 77state government securities (state loans) 78public sector undertaking bonds (PSU Bonds) 78bonds of public financial institutions (PFI) 78corporate debentures 79Pass through certificates (PTC) 79issuers 79government of India and other sovereign bodies 80banks and development financial institutions 80public sector undertaking (PSU ) 81private sector companies 81government owned or quasi governement non corporate entities 82investors 82banks 83insurance companies 84provident funds 84mutual funds 86trusts 86corporate treasuries 87foreign institutional investors 87securities trading corporation of india (STCI) 88discount and finance house of india 88

non banking financial intermediaries 93LIC 93general nature of insurance companies 93instroduction of Life Insurance corporations 93types and structure of insurance plans 94general insurance corporation 96unit trust of india 98provident / pension funds 99post offices 99Non bank financial companies (NBFC) 99investment companies 100loan companies 102chit funds 102NIDHIS 103hire purchase finance companies 104equipment leasing finance companies 104international monetary fund (IMF) 109quotas 109concessional and non concessional lending 113poverty reduction and growth facility (PRGF) 113stand by arrangments (SBA) 114extended fund facility (EFF) 114supplement reserve facility (SRF) 114contingent credit lines (CCL) 114compensatory financing facility (CFF) 114emergency assistance 114special drawing rights 114the international bank for reconstruction and development 115world bank 115international finance corporation 115international development assiciation (IDA) 116the bank for international settlements 116regional development agencies 116RBI 119non performing assets 120out of order status 121overdue 121income recognition 121reversal of income 122appropriation of recovery in NPA 122NPA 122sub standard Assets 123subtful assets 124loss assets 124account with temporary deficiancies 124upgradation of loan accounts classified as NPA 125account regularised near about the balance sheet date 125agricultural advances 126government guaranteed advances 128restructuring rescheduling of loans 128upgradation of restructured accounts 130corporate debt restructuring (CDR systems) 131CDR 131stand still clause 138category 2 CDR system 139projects under implementation 142

assest classification 142income recognition 144provisioning 145availability of security / net worth of borrower / guarantor 145take-out finance 145post shipment supplier credit 145export project finance 146advances under rehabiliation approved by BIFR/TLI 146provisioning norms general 146sub standard Assets 148leased assets 148advances 150advances covered by CGTSI guarantee 151take-out finance 152reserve for exchange rate fluctuations account (RERFA) 152country risk 153securitisation company (SC) / reconstruction company (RC) 154writing off of NPA 155direct finance to farmers for agricultural purposes 156purchase of agricultural implements and machinery 156development of irrigation potential through 156lending to priority sector 158priority sector advances 161direct finance to farmers for agricultural purposes 161indirect finance to agriculture 163small scale and ancillary industries 166tiny enterprises 166small scale service and business enterprises(SSSBE) 166industrial estates 167KVI sector 167small road and water transport operators (SRWTO) 167retail trade 168small business 168professional and self emplyed persons 168state sponsored organisations for scheduled castes / scheduled tribes169education 170housing 170compsumption loans 170loans to self help groups (SHG)/NGO/MICROEDIT 170food and agro based processing sector 171software industry 171venture capital 171investments in special bonds 173HUDCO 174NSIC 174NHB 174lines of credit 174bills rediscounting 175deposits in rural infrastructure development (RIDF) 175leasing and hire purchase 175targets for priority sector lending by scheduled commercial banks 177scheduled commercial banks excluding foreign banks 177direct / indirect agricultural lending 177small scale industries 178DRI advances 178Weaker sections 178

Targets for foreign banks 178rural infrastructure developments fund (RIDF ) 180common guidelines for priority sector advances 183application forms 183mode of disbursement of loan 184repayment schedule 184rates of interest 184penal interest 185inspection charges 185insurance against fire and other risks 185other charges 186photographs of borrowers 186discretionary powers 186machinery to look into complants 186amendments 186

Financial Institutions & Banking_20Select The BlankQuestion Kisan Vikas Patra are issued through ________.Correct Answer Post OfficesYour Answer Post Offices



Corporates RIL, HPCL RIL, HPCL

NGOs CASP, CRY, PLAN CASP, CRY, PLAN

DFI IDBI, IFCI, ICICI IDBI, IFCI, ICICI

PSUs NTPC, NHPC, Coal India NTPC, NHPC, Coal India

Multiple Choice Multiple AnswerQuestion DFHI was set up jointly by :-Correct Answer RBI , Banks , All India FisYour Answer RBI , Banks , All India Fis , SEBI

Select The BlankQuestion In addition to IFCI and ________ the Soft Loan Scheme

for modernisation is also undertaken by IDBI.Correct Answer ICICIYour Answer ICICI



is made in :-Correct Answer Recurring deposit

Page 1

Financial Institutions & Banking_20Your Answer Term deposit account

Multiple Choice Multiple AnswerQuestion Tourism promotes :-Correct Answer Credit Card Business , International remittances ,

Travellers' ChequesYour Answer Credit Card Business , International remittances ,

Travellers' Cheques

Multiple Choice Single AnswerQuestion A company issues CP to save on :-Correct Answer Interest costYour Answer Taxes

Multiple Choice Single AnswerQuestion A current account where the customer can withdraw more

than the balance is :-Correct Answer OverdraftYour Answer Overdraft


banks and DFIs including ________.Correct Answer EXIM bankYour Answer EXIM bank

Multiple Choice Multiple AnswerQuestion Functions of R.O. do not cover :-Correct Answer SLR/CRR maintenance , Liaison with RBI/IBA ,

Issuing Lending PolicyYour Answer Liaison with RBI/IBA , Issuing Lending Policy


without prior sanction for refinance limit.Correct Answer ARSYour Answer CFSF


investor in the GOI securities.Correct Answer SLR

Page 2

Financial Institutions & Banking_20Your Answer SLR


the public due to :-Correct Answer Wide network , Tax concessions , Saftey of fundsYour Answer Wide network , Tax concessions , Saftey of funds


Multiple Choice Single AnswerQuestion SIDBI commenced its operations from :-Correct Answer April 2,1990Your Answer April 2,1990


Multiple Choice Single AnswerQuestion The organised financial system includes :-Correct Answer Commercial banksYour Answer Financial companies

Multiple Choice Multiple AnswerQuestion IDA lends to poor countries :-Correct Answer By borrowing from IBRD , By lending at 0%

interest. , For periods up to ten yearsYour Answer By borrowing from IBRD , By lending at 0% interest. ,

For periods up to ten years

Multiple Choice Multiple AnswerQuestion The prominent Bond issuing PSU are :-Correct Answer MTNL , NTPC , SAILYour Answer MTNL , NTPC , SAIL


Page 3



Aquaculture ,Brackish Water Fisheries Fisheries

Ploughing, weeding, transplantation Seasonal Agricultural OperationsIrrigation & Drainage

Market Yards, Storage & Warehousing Agricultural MarketingAgricultural Marketing


Government.Correct Answer TrueYour Answer False


member countries to :-Correct Answer Rebuild resources , Stabilise currencies , Pay for

importsYour Answer Rebuild resources , Stabilise currencies , Undertake

specific projects


Multiple Choice Single AnswerQuestion IDBI has helped in the establishment of :-Correct Answer EXIM BankYour Answer ICICI

Select The BlankQuestion NHB at present has a ________ Capital of Rs. 350 crores.Correct Answer Paid-upYour Answer Paid-up

True/FalsePage 4

Financial Institutions & Banking_20Question The Capital of NABARD is subscribed by World Bank.Correct Answer FalseYour Answer False

Select The BlankQuestion In a Bank, the investment decisions are taken at

________ level.Correct Answer Head OfficeYour Answer Head Office

Multiple Choice Single AnswerQuestion RBI is also referred to as :-Correct Answer Apex BankYour Answer Apex Bank

Multiple Choice Multiple AnswerQuestion EXIM Bank can raise resources by:-Correct Answer Issuing bonds , Borrowing from RBI , Borrowing

from International Financial InstitutionsYour Answer Borrowing from RBI , Borrowing from International

Financial Institutions

Multiple Choice Single AnswerQuestion PFC is committed to the integrated development of :-Correct Answer PowerYour Answer Power

True/FalseQuestion PFC has been persuading State Governments restructuring

of their power sector to make them viable.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion SIDBI provides :-Correct Answer Refinance , Rediscounting of Bills , Financial

support to SSIDCYour Answer Refinance , Financial support to SSIDC , Cash Credit

facilities

True/FalseQuestion Under MIGA the World bank offers various forms of

Page 5

Financial Institutions & Banking_20Political Insurance.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion Other than Tourism, International funds remittances

comprise of :-Correct Answer Donations/Charity , Payments of Salaries ,

Payments of RoyaltyYour Answer Payments of Royalty , Travel related payments

True/FalseQuestion SCICI is a member of the OTCEI.Correct Answer TrueYour Answer False

Select The BlankQuestion HDFCs loans were linked up with________.Correct Answer Planned SavingsYour Answer Planned Savings


True/FalseQuestion HDFC was set up by NHB.Correct Answer FalseYour Answer False

Select The BlankQuestion Mutual Funds provide the benefits of ________.Correct Answer Portfolio managementYour Answer Portfolio management


competitive bids.Correct Answer TrueYour Answer True

Page 6

Financial Institutions & Banking_20True/FalseQuestion Non bank financial institutions undertake fund and non

fund based activities.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion Functions of R.O. of a bank include :-Correct Answer Inspection/audit , Control on branches , Grant

loans/advancesYour Answer Inspection/audit , Control on branches , Grant

loans/advances

Multiple Choice Multiple AnswerQuestion Duties of an International Banking unit cover :-Correct Answer Handling foreign currency , Handling Doc.

credits , Granting lines of CreditYour Answer Maintaining SLR/CRR , Handling foreign currency ,

Handling Doc. credits , Granting lines of Credit

Select The BlankQuestion Secured Premium Notes are ________.Correct Answer DebenturesYour Answer Debentures

Select The BlankQuestion Syndication involves ________ sanction.Correct Answer In principleYour Answer Funded

Page 7

ASSIGNMENTS

Tristar

justvishal



Project Financing Help improving Corporate Return on Equity Industrial FinanceCorporation of India

Finance in international financial markets Issue of Euro bonds Issue of Euro bonds

International financial institutions World Bank Increasing emphasis on the Privateinitiative

Policy of Liberalisation, Privatisation and Globalisation Increasing emphasis on thePrivate initiative Help improving Corporate Return on Equity

Multiple Choice Multiple AnswerQuestion The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance SheetYour Answer Profit and Loss Account , Auditors report , Balance Sheet

Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Management problems

Select The BlankQuestion The Project Cycle should be in the ________ orderCorrect Answer Identification of Project - Project Appraisal - Negotiations for loansYour Answer Identification of Project - Project Appraisal - Negotiations for loans

True/FalseQuestion Change in the project concept itself may lead to cost and time overrun.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion The industrial concern earned profits by increasing the sales volume under

the :-Correct Answer Sales conceptYour Answer Marketing concept

True/FalseQuestion Cost and time overrun of the project may lead to loss on account of lost

market opportunities.


Multiple Choice Multiple AnswerQuestion Management qualities includes :-Correct Answer Honesty , Financial resources , InitiativeYour Answer Honesty , Initiative , Too ambitious promoters

Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial

RelationshipYour Answer Linear Relationship , Chain ratio Relationship , Exponential Relationship

True/FalseQuestion Financial analysis based on accounting ratios will give mis-leading results if

the effects of changes in price level are not taken into account.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-Correct Answer To find out the uses of loans raised by the business , To indicate the

financial strength and weakness of the business , To help to understand the changes inassets as well as asset sources which are not revealed by the income statement

Your Answer To indicate the financial strength and weakness of the business , To helpto understand the changes in assets as well as asset sources which are not revealed by theincome statement , Helps to prepare financial statements

True/FalseQuestion The maximum Seed Capital assistance provided by IDBI under the project

will be restricted to 50% of the required promoter's contribution or Rs. 50 lakhswhichever is lower.


Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance

Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspectYour Answer Strategic perspective , Time span , Finance cost aspect , Social aspect

Multiple Choice Single AnswerQuestion Strategic Position and Action Evaluation Model :-Correct Answer Is an approach to hammer out an appropriate strategic posture for a

firm and its individual businessYour Answer Which is highly respected for the sophistication, maturity and quality in

its planning systems

Multiple Choice Single AnswerQuestion The Projects which are undertaken to manufacture certain products which are

being used as raw material by the existing units is known as :-Correct Answer Backward Integration ProjectsYour Answer Backward Integration Projects

Multiple Choice Multiple AnswerQuestion Technical appraisal is basically concerned with :-Correct Answer Technology , Layout of the plant , Design of the plantYour Answer Technology , Layout of the plant , Design of the plant

True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from Pollution

Control Authorities before setting up any project.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors should be

considered :-Correct Answer Proximity to raw materials and markets , Availability of infrastructure

, Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of infrastructure ,

Government policies and other factors

Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future

benefitsYour Answer That it involves current outlay of funds in expectation of future benefits

Select The BlankQuestion Longer the duration of production cycle, higher the requirement of

________.Correct Answer Working capitalYour Answer Working capital

Select The BlankQuestion Inflow of funds may not necessarily result in ________.

Correct Answer Inflow of cashYour Answer Inflow of cash

Multiple Choice Single AnswerQuestion Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution

Select The BlankQuestion Details regarding Administrative / controlling office comes under the

________ category.Correct Answer GeneralYour Answer Project organisation

Multiple Choice Multiple AnswerQuestion Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Quick ratio

Select The BlankQuestion Depreciation is sometimes treated as ________ funds.Correct Answer SourceYour Answer Source

Multiple Choice Single AnswerQuestion Miscellaneous fixed assets includes :-Correct Answer CablesYour Answer Cables

Multiple Choice Single AnswerQuestion In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high growth

rateYour Answer Products which enjoy a high market share as well as a high growth rate

Select The BlankQuestion ________ is a current liability.Correct Answer Trade creditYour Answer Unsecured loans


Econometric method Mathematical representation of economic relationship Suitable forforecasting the demand for intermediate products

Primary source of data Market survey Market survey

Secondary source of data Collected in some other context Collected in some othercontext

Leading indicators Variables that change faster than others Mathematical representationof economic relationship

Multiple Choice Multiple AnswerQuestion Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured

borrowingYour Answer Depreciation , Increase in secured borrowing

True/FalseQuestion The construction of National Golden Quadrilateral can be recognised as

Project.Correct Answer TrueYour Answer True

True/FalseQuestion The cost factors of the product mixed is also taken into account to arrive at

cost at various levels of production and its cost impact of the manufacturing.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion Capital Issue expenses include :-Correct Answer Brokerage fees to registrarsYour Answer Market research expenses

Select The BlankQuestion Having decided on the location and product, the promoter takes into account

the ________ that is to be adopted for producing the product.Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology

Multiple Choice Single AnswerQuestion Past trend method of Commercial appraisal technique is :-Correct Answer Adopted as a guide depending on the consumption pattern of the

society as a wholeYour Answer A list of industries wherein the product is used is made and quantity and

volume is arrived at


Question Management category of Visit report consists of :-Correct Answer Managing Director , Institutional nominees , Committees of the boardYour Answer Managing Director , Electrical engineers , Committees of the board

Multiple Choice Single AnswerQuestion Sanctioned bank limits is categorised under :-Correct Answer Working capitalYour Answer Production, Sales and Profitability

Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix analyses products in terms of :-Correct Answer Business strength and Industrial AttractivenessYour Answer Business strength and Industrial Attractiveness

Multiple Choice Multiple AnswerQuestion Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability , Sales trends

Multiple Choice Single AnswerQuestion Cost of overheads include :-Correct Answer Cost of repairs and maintenanceYour Answer Cost of repairs and maintenance

Multiple Choice Multiple AnswerQuestion External sources of cash are as follows :-Correct Answer Issue of new shares , Long term loans , Short term borrowingsYour Answer Issue of new shares , Long term loans , Short term borrowings

Select The BlankQuestion The company having ________, is appropriate for the strategic posture of

Conservative under the SPACE approach.Correct Answer Limited competitive advantage, belonging to a not so attractive

industry but enjoying financial strength and operating in a relatively stable environmentYour Answer High financial strength, high industrial strength, enjoying a competitive

advantage and belonging to an attractive industry, operating in a relatively stableenvironmental conditions

True/FalseQuestion Sensitivity analysis consists of assessing the degree of risk.Correct Answer TrueYour Answer True

True/FalseQuestion A high debt equity ratio may indicate that the financial stake of the creditors

is more than that of the owners.


Multiple Choice Single AnswerQuestion The cost of Plant and Machinery includes :-Correct Answer Cost of stores and sparesYour Answer Building and civil construction

Select The BlankQuestion The basic difference between the feasibility study report and ________ is the

level of accuracy and degree of detail.Correct Answer Detailed Project reportYour Answer Audit report


Multiple Choice Multiple AnswerQuestion The sources of long term and medium term finance are :-

Correct Answer Public deposit , Equity shares

Your Answer Equity shares , Bridge loan , Working capital loan

Multiple Choice Multiple AnswerQuestion Disposition of funds includes :-

Correct Answer Increase in working capital , Preliminary expenses , Dividend

Your Answer Increase in working capital , Dividend , Preliminary expenseswritten off

Select The BlankQuestion The company having ________, is appropriate for the strategic

posture of Conservative under the SPACE approach.Correct Answer Limited competitive advantage, belonging to a not so attractive

industry but enjoying financial strength and operating in arelatively stable environment

Your Answer Limited financial strength, enjoying competitive advantage,belonging to attractive industry and operating in a relativelyvolatile environment

Select The BlankQuestion A market survey generally is a ________ survey.

Correct Answer Sample

Your Answer Sample

Multiple Choice Single AnswerQuestion The ratio which covers those assets which can be converted into

cash immediately is known as :-Correct Answer Quick ratio

Your Answer Quick ratio

Multiple Choice Single AnswerQuestion Delay in arrival of domestic/foreign machinery and technicians

may lead to :-Correct Answer Cost and time overrun

Your Answer Cost and time overrun

Multiple Choice Multiple AnswerQuestion Casual methods of Demand forecasting consists of :-

Correct Answer Consumption-level method , Econometric method

Your Answer Consumption-level method , Econometric method

Select The BlankQuestion Having decided on the location and product, the promoter takes

into account the ________ that is to be adopted for producingthe product.

Correct Answer Manufacturing process and technology

Your Answer Manufacturing process and technology

Multiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-

Correct Answer To find out the uses of loans raised by the business , To indicatethe financial strength and weakness of the business , To help tounderstand the changes in assets as well as asset sourceswhich are not revealed by the income statement

Your Answer To find out the uses of loans raised by the business , To help tounderstand the changes in assets as well as asset sourceswhich are not revealed by the income statement , Helps toprepare financial statements

Multiple Choice Multiple AnswerQuestion The data for ratio analysis is obtained from :-

Correct Answer Profit and Loss Account , Balance Sheet

Your Answer Profit and Loss Account , Balance Sheet , Cash flow statement

Select The BlankQuestion ________ in assets involves outflow of funds.

Correct Answer Increase

Your Answer Increase

Multiple Choice Single AnswerQuestion Technology, design, layout of the plant as well as inputs and

infrastructural facilities are to be considered under :-Correct Answer Technical appraisal

Your Answer Technical appraisal

True/FalseQuestion The Detailed Project report must indicate the gestation period of

the project.Correct Answer True

Your Answer False

True/FalseQuestion Interest and Dividend are to be considered while calculating

Operating ratio.Correct Answer False

Your Answer False

Multiple Choice Single AnswerQuestion Short supplies of materials may lead to :-

Correct Answer Cost and time overrun


True/FalseQuestion Ratio should be computed on the basis of inter-related figures

which have a cause and effect relationship.Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost

is known as :-Correct Answer Finance cost aspect

Your Answer Finance cost aspect

Select The BlankQuestion More accurate the estimation of the level of current assets and

current liabilities, more accurate will be estimation of therequirement of ________.

Correct Answer Working capital

Your Answer Working capital

Multiple Choice Single AnswerQuestion The rate of discount which would equate the present value of

investments to the present value of benefits over the life of the

project is known as :-

Correct Answer Internal rate of return

Your Answer Net Present value

Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while

assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensation

Your Answer Environmental factors , Risk involved , Political issues


Private investment Power generation Nearness to market

Project Time -bound Time -bound

Programme Not necessarily timebound

Not necessarily time bound

Foreign direct investment Machine tools Power generation

True/FalseQuestion The advantage of secondary sources of data is that it is readily

and economically available.Correct Answer True

Your Answer False

Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed

as :-Correct Answer Strategic perspective

Your Answer Strategic perspective

Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions

viz.:Correct Answer Strategic perspective , Time span , Finance cost aspect

Your Answer Strategic perspective , Time span , Finance cost aspect

True/False

Question A project is unique and no two projects are similar.

Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion The sources of cash are :-

Correct Answer Cash from operations , Sale of machinery , Issue of new shares

Your Answer Cash from operations , Sale of machinery , Issue of new shares

Multiple Choice Single AnswerQuestion Profit is the result of customer satisfaction, indeed customer

delight under the :-Correct Answer Marketing concept

Your Answer Marketing concept

Multiple Choice Multiple AnswerQuestion Management qualities includes :-

Correct Answer Honesty , Financial resources , Initiative

Your Answer Honesty , Financial resources , Initiative

Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-

Correct Answer That it involves current outlay of funds in expectation of futurebenefits

Your Answer That it involves current outlay of funds in expectation of futurebenefits

Select The BlankQuestion ________ is the summary of cash book or Receipts and

Payments statement.Correct Answer Cash flow statement

Your Answer Cash flow statement

Select The BlankQuestion Under the SPACE Model, Customer loyalty is determined under

the ________ dimension.Correct Answer Company's competitive advantage

Your Answer Company's competitive advantage

True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation in

the terms of Business strength and Industry Attractiveness.Correct Answer False

Your Answer False

Select The BlankQuestion A smaller unit into which the overall requirement of capital of a

company is sub-divided is termed as ________.Correct Answer Share

Your Answer Share

Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify

substantial commitment of funds where there is :-Correct Answer Strong Business Strength and high Industry attractiveness ,

Average Business strength and high Industry attractivenessYour Answer Average Business Strength and Medium Industry Attractiveness

, Average Business strength and high Industry attractiveness ,Average Business Strength and Low Industry attractiveness

Multiple Choice Single AnswerQuestion The ratio which indicates the ability of the company to meet

current obligations is termed as :-Correct Answer Current ratio

Your Answer Current ratio

True/FalseQuestion The General Electric Company incorporated in the USA, is highly

respected for the sophistication, maturity and quality in itsplanning systems.

Correct Answer True

Your Answer False


Correct Answer Inflow of cash

Your Answer Outflow of cash

Match The Following


Current ratio Liquidity ratio Current liability

Debt-Equity ratio Solvency ratio Debt

External liabilities Debt Relationship between NetProfit after taxes and totalshareholders funds

Shareholders funds Equity Equity

True/FalseQuestion There is a need for studying Project finance both for the lenders

as well as the borrowers as both of them have equal stake inmaking the Project a success.

Correct Answer True

Your Answer True

Select The BlankQuestion Sometimes the term ________ is interpreted as cash equivalent

i.e. cash and marketable securities.Correct Answer Fund

Your Answer Investment

Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to

as :-Correct Answer Project finance

Your Answer Balance Sheet

Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Management aspects includes :-

Correct Answer Determination , Organisation Building , Person / system oriented

Your Answer Determination , Organisation Building , Person / system oriented

Select The BlankQuestion Depreciation is sometimes treated as ________ funds.

Correct Answer Source

Your Answer Source

True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from

Pollution Control Authorities before setting up any project.Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion In BCG Matrix "QUESTION MARKS" indicate :-

Correct Answer Products which have high growth potential but low market share

Your Answer Products which have high growth potential but low market share

True/FalseQuestion Production line diagrams show the organisation structure of the

project along with information on location, personnel required forvarious departments, and their inter-relationship.


Your Answer True

PROJECT FINANCE


Question The objectives of the funds flow statement is as follows :-

Correct Answer To help to understand the changes in assets as well as asset sourceswhich are not revealed by the income statement , To find out the uses of loans raised bythe business , To indicate the financial strength and weakness of the business

Your Answer To find out the uses of loans raised by the business , To help tounderstand the changes in assets as well as asset sources which are not revealed bythe income statement , Helps to prepare financial statements

Select The Blank

Question Inflow of funds may not necessarily result in ________.



Question Every project involves financial outlay which can be referred to as :-

Correct Answer Project financeYour Answer Project finance

True/False

Question The Detailed Project report spells out the modus operandi for theimplementation of the Project and the realization of the Project objectives.


Select The Blank

Question As the plant capacity increase, the investment cost unit capacity ________.

Correct Answer DecreasesYour Answer Decreases


Question Internal sources of funds are :-

Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill writtenoff

Your Answer Funds from operation , Loss on sale of fixed assets


Question End use method of Commercial appraisal technique is :-

Correct Answer A list of industries wherein the product is used is made and quantityand volume is arrived at

Your Answer A list of industries wherein the product is used is made and quantity andvolume is arrived at


Question The applications of cash are :-

Correct Answer Purchase of fixed assets , Payment of long term loans

Your Answer Purchase of fixed assets , Payment of long term loans

True/False

Question In small scale organisation, requirement of working capital is quite high dueto high amount of overheads, high buying costs and high selling cost.


Qnt. Correct Your AnsProject Manager Finance Manager Finance ManagerGeneral category of Projectreport

Location of factory Location of factory

Cost aspect of the project Consultancy fees Consultancy feesFinancing plan Unsecured Unsecured

Select The Blank

Question Longer the duration of production cycle, higher the requirement of ________.

Correct Answer Working capitalYour Answer Working capital


Question Sanctioned bank limits is categorised under :-

Correct Answer Working capitalYour Answer Production, Sales and Profitability

Select The Blank

Question Cost of fencing comes under the ________ category of the Project report.

Correct Answer Land and site developmentYour Answer Land and site development

True/False

Question Trend projection method is the important technique for forecasting demand.


True/False

Question The emphasis of a finance manager should be on taking a synergistic view ofthe project rather than looking at it only from the financial aspects.


Select The Blank

Question ________ in assets involves outflow of funds.

Correct Answer IncreaseYour Answer Increase

Select The Blank

Question The basic difference between the feasibility study report and ________ is thelevel of accuracy and degree of detail.

Correct Answer Detailed Project reportYour Answer Detailed Project report


Question Delays in infrastructure Development by State Agencies may lead to :-

Correct Answer Cost and time overrunYour Answer Cost and time overrun

Select The Blank

Question Location of the factory comes under the ________ category of the Projectreport.

Correct Answer General

Your Answer General


Question Financing plans consists of :-

Correct Answer Share capital , Term loans , Internal accrualsYour Answer Share capital , Term loans , Internal accruals


Question Infrastructural projects include :-

Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution

True/False

Question Market potential should be determined under the Marketing aspect of theProject report.


Select The Blank

Question ________ tries to have what the customer will want- where, when, in whatform and at what price.

Correct Answer MarketingYour Answer Marketing


Question A project objective which states What "achieving it " would cost is known as:-

Correct Answer Finance cost aspectYour Answer Strategic perspective


Question A project objective which states "What' is to be viewed" is termed as :-

Correct Answer Strategic perspectiveYour Answer Social aspect

True/False

Question Nominal maximum capacity is the capacity that is technically attainable andthis corresponds to the supplier's guaranteed capacity.


Select The Blank

Question In order to meet the cost of large project, the technique of ________ hasbeen developed so that the financial commitment and risks associated with a project areshared between the project sponsor and the lending institutions.

Correct Answer Limited recourse financingYour Answer Long term financing


Question The basic characteristic of a project is :-

Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits


Question Past trend method of Commercial appraisal technique is :-

Correct Answer Adopted as a guide depending on the consumption pattern of thesociety as a whole

Your Answer Adopted as a guide depending on the consumption pattern of the societyas a whole


Question The norms for providing open areas have to be strictly followed for safety oflabour and allow sufficient space for outflow of effluents safely in case of :-

Correct Answer Chemical unitYour Answer Chemical unit


Question Short supplies of materials may lead to :-


Select The Blank

Question Investors who invest in the debentures of the company are the ________ ofthe company.

Correct Answer CreditorsYour Answer Creditors

Match The Following

QuestionCorrect AnswerYour Answer

Private investment Power generationProject Time-boundProgramme Not necessarily time boundForeign directinvestment

Machine tools


Question As per the GE's Stop Light Matrix, Products may justify substantialcommitment of funds where there is :-

Correct Answer Strong Business Strength and high Industry attractiveness , AverageBusiness strength and high Industry attractiveness

Your Answer Strong Business Strength and high Industry attractiveness , AverageBusiness strength and high Industry attractiveness


Question Management qualities includes :-

Correct Answer Honesty , Financial resources , InitiativeYour Answer Honesty , Financial resources , Initiative


Question The industrial concern earned profits by increasing the sales volume underthe :-

Correct Answer Sales conceptYour Answer Sales concept

True/False

Question The 'BCG Matrix 'analysis various products of the organisation in the termsof Business strength and Industry Attractiveness.


Select The Blank

Question Detailed Project Report is generally prepared from a ________ report withadditional information.

Correct Answer FeasibilityYour Answer Feasibility


Question Delay in arrival of domestic/foreign machinery and technicians may lead to :-


True/False

Question Miscellaneous expenditure is written on the asset side of the Balance sheet.



Question General category of the Project report consists of :-

Correct Answer Name of the Industrial concern , Proposed product , Location of thefactory

Your Answer Name of the Industrial concern , Proposed product , Location of thefactory


Question A Project is a temporary endeavor to achieve some specific objectives withina :-

Correct Answer Predefined timeYour Answer Predefined time


Question While choosing the location for a project, the following factors should beconsidered :-

Correct Answer Proximity to raw materials and markets , Availability of infrastructure ,Government policies and other factors

Your Answer Proximity to raw materials and markets , Availability of infrastructure ,Government policies and other factors


Question The sources of long term and medium term finance are :-

Correct Answer Equity shares , Public depositYour Answer Equity shares , Public deposit


Question The cost which change in the same proportion in which the level ofproduction changes is known as :-

Correct Answer Variable costYour Answer Variable cost


Question The second phase of the technical appraisal which focuses upon appraisingthe likely technical gaps consists of :-

Correct Answer Problems faced during the Construction and Project implementationYour Answer Problems faced during the Construction and Project implementation


Question The third phase of the technical appraisal which focuses upon appraising thelikely technical gaps consists of :-

Correct Answer Problems pertaining to the period when the project is in operationYour Answer Problems pertaining to the period when the project is in operation

True/FalseQuestion In the BCG Matrix, the key term of Cash Cows require further commitment

of funds.


Select The BlankQuestion In the GE's Stop Light Matrix, when ________ situation prevails , Products

call for divestment.

Correct Answer Average Business Strength and Low Industry attractivenessYour Answer Average Business Strength and Low Industry attractiveness



Your Answer That it involves current outlay of funds in expectation of future benefits

Select The BlankQuestion ________ tries to have what the customer will want- where, when, in what

form and at what price.Correct Answer MarketingYour Answer Finance

Multiple Choice Single AnswerQuestion Financial aspect of Detailed Project report includes :-

Correct Answer Fixation of means of financial structureYour Answer Fixation of means of financial structure

Multiple Choice Single AnswerQuestion A project can be regarded as the sum of the activities directed towards a :-

Correct Answer Specific resultYour Answer Specific result

Multiple Choice Single AnswerQuestion Sewerage and drainage cost of the project is categorised under :-

Correct Answer Building costYour Answer Building cost

Multiple Choice Single AnswerQuestion The BCG Product Portfolio Matrix :-

Correct Answer Is a tool for strategic ( product ) planning and resource allocationYour Answer Is a tool for strategic ( product ) planning and resource allocation

Multiple Choice Single AnswerQuestion End use method of Commercial appraisal technique is :-

Correct Answer A list of industries wherein the product is used is made and quantityand volume is arrived at


Select The BlankQuestion ________ capital represents permanent capital.

Correct Answer EquityYour Answer Debentures

Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-

Correct Answer Linear Relationship , Exponential Relationship , PolynomialRelationship

Your Answer Linear Relationship , Exponential Relationship , Polynomial Relationship

Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any one of the

following basic strategic postures :-

Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture

Select The BlankQuestion ________ in liabilities involves inflow of funds.

Correct Answer IncreaseYour Answer Cash

Select The BlankQuestion ________ occupies a unique position in the macro economic development

which helps in induction of new technology and facilitates, greater efficiency as well ashigher productivity.

Correct Answer InvestmentYour Answer Investment

Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be referred to as :-

Correct Answer Project financeYour Answer Project finance


the effects of changes in price level are not taken into account.


Select The BlankQuestion Excessive expenditures on foreign technicians leads to ________.

Correct Answer Cost and time overrunYour Answer Management problems

Multiple Choice Single AnswerQuestion Appointments made at senior level during the half-year is categorised under

:-Correct Answer Organisation and managementYour Answer Organisation and management

Multiple Choice Single AnswerQuestion Infrastructural projects include :-


Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may lead to :-


Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify substantial

commitment of funds where there is :-

Correct Answer Strong Business Strength and high Industry attractiveness , AverageBusiness strength and high Industry attractiveness


Multiple Choice Single AnswerQuestion The cost of Plant and Machinery may be adjusted for a possible increase

known as :-

Correct Answer EscalationYour Answer Inflation

Multiple Choice Multiple AnswerQuestion Demand technique forecasting of Commercial appraisal includes :-

Correct Answer Future demand of the product , Proper survey of the product , Futureavailability and supply of the product

Your Answer Future demand of the product , Proper survey of the product , Futureavailability and supply of the product

Multiple Choice Single AnswerQuestion The BCG product Portfolio Matrix, General Electric Stop Light Matrix and

Strategic Position and Action Evaluation Model are considered to be highly relevant as :-

Correct Answer Portfolio Planning ToolsYour Answer Portfolio Planning Tools

Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity ________.

Correct Answer DecreasesYour Answer Decreases

Multiple Choice Multiple AnswerQuestion The applications of cash are :-

Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Issue of new machinery




Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out of :-

Correct Answer Cash Profits , Shares , DebenturesYour Answer Cash Profits , Shares , Debentures

True/FalseQuestion Ratio analysis is a technique of planning and control.


True/FalseQuestion Miscellaneous expenditure is written on the asset side of the Balance sheet.


Select The BlankQuestion Cost of fencing comes under the ________ category of the Project report.

Correct Answer Land and site developmentYour Answer Land and site development

Multiple Choice Single AnswerQuestion The ratio which covers those assets which can be converted into cash

immediately is known as :-

Correct Answer Quick ratioYour Answer Quick ratio

Multiple Choice Single AnswerQuestion The Projects which are undertaken to manufacture certain products which

are being used as raw material by the existing units is known as :-

Correct Answer Backward Integration ProjectsYour Answer Backward Integration Projects

Select The BlankQuestion Retained earnings indicates that whatever profits are earned by the

company are not distributed by it by way of ________ but are kept aside for use in futurefor expansion or other purpose.

Correct Answer DividendYour Answer Dividend

Multiple Choice Multiple AnswerQuestion Time Series Projection Methods of Demand forecasting consists of :-

Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method

True/FalseQuestion Unlike financial projections, there cannot be any fixed, well-recognised or

structure formula/steps for management evaluation/appraisal.


True/FalseQuestion Production line diagrams show the organisation structure of the project

along with information on location, personnel required for various departments, and theirinter-relationship.


Select The BlankQuestion ________ is a current asset

Correct Answer Book debtsYour Answer Trade credit

True/FalseQuestion For computing Interest coverage ratio, Profit after Interest and taxes are

taken into account.


Select The BlankQuestion Details regarding Internal accruals comes under the ________ category of

Project report.

Correct Answer Financing planYour Answer Cost aspect

Multiple Choice Multiple AnswerQuestion Management category of Visit report consists of :-

Correct Answer Managing Director , Institutional nominees , Committees of the boardYour Answer Managing Director , Institutional nominees , Committees of the board

True/FalseQuestion Nominal maximum capacity is the capacity that is technically attainable and

this corresponds to the supplier's guaranteed capacity.


Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential reserve of cash is

termed as :-

Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets

Multiple Choice Multiple AnswerQuestion The following are the sources of funds :-

Correct Answer Operating Profit , Non operating IncomeYour Answer Operating Profit , Dividends

True/FalseQuestion Change in the project concept itself may lead to cost and time overrun.



Multiple Choice Single AnswerQuestion Borrower's contribution towards Working capital is known as :-Correct Answer Margin moneyYour Answer Margin money

Multiple Choice Multiple AnswerQuestion Building cost consists of :-Correct Answer Factory building , Auxiliary buildings , Administrative blockYour Answer Factory building , Auxiliary buildings , Administrative block

Multiple Choice Single AnswerQuestion In BCG Matrix " CASH COWS" indicate :-Correct Answer Products which have high market share but low growth potentialYour Answer Products which have high market share but low growth potential

Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Marketing aspects includes :-Correct Answer Demand forecasting , Promotion , DistributionYour Answer Demand forecasting , Promotion , Distribution

Multiple Choice Single AnswerQuestion Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a projectYour Answer The total of all items of outlay associated with a project

True/FalseQuestion In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of

working capital may be high.Correct Answer TrueYour Answer True

True/FalseQuestion Name of the finance manager comes under the Project organisation category of the Project

report.Correct Answer TrueYour Answer True

True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities

before setting up any project.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspectYour Answer Strategic perspective , Time span , Finance cost aspect


Management problems Lack of exposure Lack of exposure

Management Quality Initiative Initiative

Management Perception Aspiration level/ conservative Aspiration level/ conservative

Organisational Climate Person oriented Person oriented


Multiple Choice Single AnswerQuestion BCG Product Portfolio Matrix analyses products on the basis of :-Correct Answer Relative Market share and Industry Growth rateYour Answer Relative Market share and Industry Growth rate

Select The BlankQuestion ________ profitability reduces the strain on working capital.Correct Answer HighYour Answer Stable

Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits

Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing Project finance financing are

:-Correct Answer Environmental factors , Risk involved , Managerial compensationYour Answer Environmental factors , Risk involved , Managerial compensation

Multiple Choice Single AnswerQuestion "Fly by night" operator mentality is a :-Correct Answer Management qualityYour Answer Management quality


Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity ________.Correct Answer DecreasesYour Answer Increases

Multiple Choice Multiple AnswerQuestion Debt Service coverage ratio may be considered to be one of the most important ratios

calculated by the :-Correct Answer Bankers , Financial InstitutionsYour Answer Shareholders , Bankers , Financial Institutions

Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspect


True/FalseQuestion A project is unique and no two projects are similar.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion Limitations of fund flow statement are :-Correct Answer It does not provide any new information but only rearranges the various facts , It does

not consider non-fund transactionsYour Answer It does not provide any new information but only rearranges the various facts , It does not

consider non-fund transactions , It does not help in determining future requirement of funds

Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses upon appraising the likely technical

gaps consists of :-Correct Answer Problems pertaining to the period when the project is in operationYour Answer Problems pertaining to the period when the project is in operation

Multiple Choice Single AnswerQuestion Receivables is categorised under :-Correct Answer Current assets and liabilitiesYour Answer Current assets and liabilities

Multiple Choice Single AnswerQuestion It is said that a second rate project in the hands of first rate management is better than a first

rate project in the hands of :-Correct Answer Second rate managementYour Answer Second rate management

Select The BlankQuestion The company having ________, is appropriate for the strategic posture of Defensive under the

SPACE approach.Correct Answer Lacks both competitive advantage as well as financial strength and belongs to a not so

attractive industry, operating in an unstable environmentYour Answer Lacks both competitive advantage as well as financial strength and belongs to a not so

attractive industry, operating in an unstable environment

Select The BlankQuestion Excessive expenditures on foreign technicians leads to ________.Correct Answer Cost and time overrunYour Answer Profit maximisation

True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation in the terms of Business

strength and Industry Attractiveness.Correct Answer FalseYour Answer False

Select The BlankQuestion Having decided on the location and product, the promoter takes into account the ________ that

is to be adopted for producing the product.Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology

Multiple Choice Multiple AnswerQuestion Financial and economic aspect of the Visit report consists of :-Correct Answer Company's financial year , Impact of Government policies on company operations ,

Comments on the last published accountsYour Answer Company's financial year , Impact of Government policies on company operations ,

Comments on the last published accounts


Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective

Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out of :-Correct Answer Cash Profits , Shares , DebenturesYour Answer Cash Profits , Shares , Debentures

True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline

of a Product Life Cycle.Correct Answer TrueYour Answer True

True/FalseQuestion The construction of National Golden Quadrilateral can be recognised as Project.Correct Answer TrueYour Answer True

Select The BlankQuestion Under the SPACE Model, Customer loyalty is determined under the ________ dimension.Correct Answer Company's competitive advantageYour Answer Company's competitive advantage

True/FalseQuestion The cost factors of the product mixed is also taken into account to arrive at cost at various

levels of production and its cost impact of the manufacturing.Correct Answer TrueYour Answer True

True/FalseQuestion The emphasis of a finance manager should be on taking a synergistic view of the project rather

than looking at it only from the financial aspects.Correct Answer TrueYour Answer True



Question In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirementYour Answer Quality standards , Raw material requirement , Power / telecom facilities

Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial RelationshipYour Answer Linear Relationship , Exponential Relationship , Polynomial Relationship

True/FalseQuestion Market potential should be determined under the Marketing aspect of the Project report.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion Ratio analysis is a widely used tool of :-Correct Answer Financial analysisYour Answer Financial analysis

Multiple Choice Single AnswerQuestion Preoperative expenses includes :-Correct Answer Bank guaranteesYour Answer Bank guarantees

Select The BlankQuestion A Project has a ________ represented by growth, maturity and decay.Correct Answer Life cycleYour Answer Life cycle

True/FalseQuestion If the organisation is a trading organisation, the requirement of working capital will be on the

lower side.Correct Answer FalseYour Answer True


True/FalseQuestion In the BCG Matrix, the key term of Cash Cows require further commitment

of funds.Correct Answer FalseYour Answer False

Select The BlankQuestion In the GE's Stop Light Matrix, when ________ situation prevails , Products

call for divestment.Correct Answer Average Business Strength and Low Industry attractivenessYour Answer Average Business Strength and Low Industry attractiveness




form and at what price.Correct Answer MarketingYour Answer Finance

Multiple Choice Single AnswerQuestion Financial aspect of Detailed Project report includes :-Correct Answer Fixation of means of financial structureYour Answer Fixation of means of financial structure

Multiple Choice Single AnswerQuestion A project can be regarded as the sum of the activities directed towards a :-Correct Answer Specific resultYour Answer Specific result

Multiple Choice Single AnswerQuestion Sewerage and drainage cost of the project is categorised under :-Correct Answer Building costYour Answer Building cost

Multiple Choice Single AnswerQuestion The BCG Product Portfolio Matrix :-Correct Answer Is a tool for strategic ( product ) planning and resource allocationYour Answer Is a tool for strategic ( product ) planning and resource allocation

Multiple Choice Single AnswerQuestion End use method of Commercial appraisal technique is :-Correct Answer A list of industries wherein the product is used is made and quantity

and volume is arrived atYour Answer A list of industries wherein the product is used is made and quantity and


Select The BlankQuestion ________ capital represents permanent capital.Correct Answer EquityYour Answer Debentures


Export market technique of Commercial appraisal Government provides ampleencouragement Government provides ample encouragement

Demand Technique forecasting of Commercial appraisal Future demand of the productFuture demand of the product

Past trend method of Commercial appraisal Adopted as a guide depending on theconsumption pattern of the society as a whole Adopted as a guide depending on theconsumption pattern of the society as a whole

End use method of Commercial appraisal A list of industries wherein the product is usedis made and quantity and volume is arrived at A list of industries wherein the product isused is made and quantity and volume is arrived at


RelationshipYour Answer Linear Relationship , Exponential Relationship , Polynomial

Relationship

Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any one of the

following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture

Select The BlankQuestion ________ in liabilities involves inflow of funds.Correct Answer Increase

Your Answer Cash







Select The BlankQuestion Excessive expenditures on foreign technicians leads to ________.Correct Answer Cost and time overrunYour Answer Management problems

Multiple Choice Single AnswerQuestion Appointments made at senior level during the half-year is categorised under

:-Correct Answer Organisation and managementYour Answer Organisation and management


Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun


commitment of funds where there is :-Correct Answer Strong Business Strength and high Industry attractiveness , Average

Business strength and high Industry attractiveness



Source of funds Depreciation Equity capital

Fixed assets Building Building

Current assets Debtors Investment

Current liability Trade credit Debtors


known as :-Correct Answer EscalationYour Answer Inflation

Multiple Choice Multiple AnswerQuestion Demand technique forecasting of Commercial appraisal includes :-Correct Answer Future demand of the product , Proper survey of the product , Future

availability and supply of the productYour Answer Future demand of the product , Proper survey of the product , Future

availability and supply of the product

Multiple Choice Single AnswerQuestion The BCG product Portfolio Matrix, General Electric Stop Light Matrix and

Strategic Position and Action Evaluation Model are considered to be highly relevant as :-Correct Answer Portfolio Planning ToolsYour Answer Portfolio Planning Tools

Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity ________.Correct Answer DecreasesYour Answer Decreases

Multiple Choice Multiple AnswerQuestion The applications of cash are :-Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Issue of new machinery

True/False

Question A high debt equity ratio may indicate that the financial stake of the creditorsis more than that of the owners.



True/FalseQuestion Ratio analysis is a technique of planning and control.Correct Answer FalseYour Answer False

True/FalseQuestion Miscellaneous expenditure is written on the asset side of the Balance sheet.Correct Answer TrueYour Answer False

Select The BlankQuestion Cost of fencing comes under the ________ category of the Project report.Correct Answer Land and site developmentYour Answer Land and site development


immediately is known as :-Correct Answer Quick ratioYour Answer Quick ratio



Select The BlankQuestion Retained earnings indicates that whatever profits are earned by the company

are not distributed by it by way of ________ but are kept aside for use in future forexpansion or other purpose.


Multiple Choice Multiple AnswerQuestion Time Series Projection Methods of Demand forecasting consists of :-

Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method

True/FalseQuestion Unlike financial projections, there cannot be any fixed, well-recognised or

structure formula/steps for management evaluation/appraisal.Correct Answer TrueYour Answer True

True/FalseQuestion Production line diagrams show the organisation structure of the project along

with information on location, personnel required for various departments, and their inter-relationship.


Select The BlankQuestion ________ is a current assetCorrect Answer Book debtsYour Answer Trade credit

True/FalseQuestion For computing Interest coverage ratio, Profit after Interest and taxes are taken

into account.Correct Answer FalseYour Answer True

Select The BlankQuestion Details regarding Internal accruals comes under the ________ category of

Project report.Correct Answer Financing planYour Answer Cost aspect

Multiple Choice Multiple AnswerQuestion Management category of Visit report consists of :-Correct Answer Managing Director , Institutional nominees , Committees of the boardYour Answer Managing Director , Institutional nominees , Committees of the board

True/FalseQuestion Nominal maximum capacity is the capacity that is technically attainable and

this corresponds to the supplier's guaranteed capacity.Correct Answer TrueYour Answer False


Question The ratio that roughly measures the company's potential reserve of cash istermed as :-

Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets

Multiple Choice Multiple AnswerQuestion The following are the sources of funds :-Correct Answer Operating Profit , Non operating IncomeYour Answer Operating Profit , Dividends



True/FalseQuestion 1 The advantage of secondary sources of data is that it is readily and

economically available.Correct Answer TrueYour Answer True

True/FalseQuestion2 In small scale organisation, requirement of working capital is quite high due

to high amount of overheads, high buying costs and high selling cost.Correct Answer TrueYour Answer True

True/FalseQuestion3 Banks and Financial Institutions, world-wide, are now financing projects

with strategies and terms that would have been hard to believe/imagine just a few yearsback.


Select The BlankQuestion 4 ________ is a current assetCorrect Answer Book debtsYour Answer Furniture

Multiple Choice Multiple AnswerQuestion 5 Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial

Relationship

Your Answer Linear Relationship , Exponential Relationship , PolynomialRelationship

Multiple Choice Single AnswerQuestion 6 Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Management problems

Multiple Choice Single AnswerQuestion 7 Technical aspect of detailed project report includes :-Correct Answer Detailed Project EngineeringYour Answer Detailed Project Engineering

Multiple Choice Multiple AnswerQuestion 8 Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured

borrowingYour Answer Preliminary expenses written off , Increase in secured borrowing

Multiple Choice Single AnswerQuestion 9 Delay in arrival of domestic/foreign machinery and technicians may lead to

:-Correct Answer Cost and time overrunYour Answer Cost and time overrun

Select The BlankQuestion 10 A smaller unit into which the overall requirement of capital of a company

is sub-divided is termed as ________.Correct Answer ShareYour Answer Share

Multiple Choice Single AnswerQuestion11 A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective

Multiple Choice Single AnswerQuestion 12 Sewerage and drainage cost of the project is categorised under :-Correct Answer Building costYour Answer Building cost

Multiple Choice Multiple AnswerQuestion13 Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written

offYour Answer Funds from operation , Goodwill written off

Multiple Choice Multiple AnswerQuestion14 In the Detailed Project Report, Management aspects includes :-Correct Answer Determination , Organisation Building , Person / system orientedYour Answer Determination , Organisation Building , Person / system oriented

Select The BlankQuestion15 Short term finance is normally for a period upto ________ year.Correct Answer OneYour Answer One

True/FalseQuestion16 Current assets includes stock-in-process.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion17 The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future


Multiple Choice Multiple AnswerQuestion18 Time Series Projection Methods of Demand forecasting consists of :-Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method

Select The BlankQuestion 19 ________ is a current liability.Correct Answer Trade creditYour Answer Trade credit

True/FalseQuestion20 Managerial problems in a project are the most pervasive.Correct Answer TrueYour Answer True

Select The BlankQuestion21 Longer the duration of production cycle, higher the requirement of


Select The BlankQuestion22 Retained earnings is a source of ________ finance.Correct Answer Internal

Your Answer Short term

Select The BlankQuestion23 ________ is the summary of cash book or Receipts and Payments

statement.Correct Answer Cash flow statementYour Answer Trial balance

True/FalseQuestion24 In the BCG Matrix, the key term of Cash Cows require further

commitment of funds.Correct Answer FalseYour Answer True

True/FalseQuestion25 Cost and time overrun of the project may lead to loss on account of lost

market opportunities.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion26 A project objective which states What "achieving it " would cost is known

as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect

Multiple Choice Multiple AnswerQuestion27 Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric methodYour Answer Consumption-level method , Econometric method

Multiple Choice Single AnswerQuestion 28 In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high growth


Multiple Choice Single AnswerQuestion 29 Psychographic market appraisal answers to :-Correct Answer Why they buy?Your Answer Why they buy?

True/FalseQuestion30 Production line diagrams show the organisation structure of the project

along with information on location, personnel required for various departments, and theirinter-relationship.


Multiple Choice Multiple AnswerQuestion31 While choosing the location for a project, the following factors should be




Multiple Choice Single AnswerQuestion32 The cost which change in the same proportion in which the level of

production changes is known as :-Correct Answer Variable costYour Answer Variable cost

Select The BlankQuestion33 Goods purchased on credit ________ in flow of funds.Correct Answer Does not resultYour Answer Decreases

Multiple Choice Multiple AnswerQuestion34 Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Quick ratio

Multiple Choice Single AnswerQuestion35 Appointments made at senior level during the half-year is categorised

under :-Correct Answer Organisation and managementYour Answer Organisation and management

Multiple Choice Single AnswerQuestion36 Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a projectYour Answer The total of all items of outlay associated with a project

Multiple Choice Multiple AnswerQuestion37 Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability , Sales trends

Match The FollowingQuestion38 Correct Answer Your Answer



Current assets Debtors Debtors

Current liability Trade credit Trade credit

Multiple Choice Single AnswerQuestion39 Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance

Multiple Choice Multiple AnswerQuestion 40 General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location of the

factoryYour Answer Name of the Industrial concern , Proposed product , Location of the

factory

Multiple Choice Multiple AnswerQuestion 41 The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance SheetYour Answer Profit and Loss Account , Balance Sheet

Multiple Choice Single AnswerQuestion42 Short supplies of materials may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun

Multiple Choice Multiple AnswerQuestion43 After the SPACE chart is constructed, we would normally get any one of

the following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture

Select The BlankQuestion 44 ________ occupies a unique position in the macro economic development


Correct Answer InvestmentYour Answer Marketing

Multiple Choice Single AnswerQuestion45 Infrastructural projects include :-


Select The BlankQuestion46 Name and designation of the chief executive comes under the ________

category.Correct Answer GeneralYour Answer General


Private investment Power generation Machine tools


Programme Not necessarily time bound Not necessarily time bound


Project Finance _15

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Correct Answer To help to understand the changes in assets as well as assetsources which are not revealed by the income statement , Tofind out the uses of loans raised by the business , To indicate thefinancial strength and weakness of the business




Your Answer Inflow of cash



Your Answer Project finance

True/FalseQuestion The Detailed Project report spells out the modus operandi for the

implementation of the Project and the realization of the Projectobjectives.

Correct Answer True

Your Answer True

Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity

________.Correct Answer Decreases

Your Answer Decreases

Multiple Choice Multiple AnswerQuestion Internal sources of funds are :-

Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwillwritten off

Project Finance _15

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Correct Answer A list of industries wherein the product is used is made andquantity and volume is arrived at

Your Answer A list of industries wherein the product is used is made andquantity and volume is arrived at




True/FalseQuestion In small scale organisation, requirement of working capital is

quite high due to high amount of overheads, high buying costsand high selling cost.

Correct Answer True

Your Answer True


Project organisation Finance manager Finance manager

General category ofProject report


Cost aspect of the projectreport

Consultancy fees Consultancy fees

Financing plan Unsecured loans Unsecured loans

Select The BlankQuestion Longer the duration of production cycle, higher the requirement

of ________.Correct Answer Working capital


Multiple Choice Single AnswerQuestion Sanctioned bank limits is categorised under :-

Project Finance _15

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Your Answer Production, Sales and Profitability

Select The BlankQuestion Cost of fencing comes under the ________ category of the

Project report.Correct Answer Land and site development

Your Answer Land and site development

True/FalseQuestion Trend projection method is the important technique for

forecasting demand.Correct Answer True

Your Answer True

True/FalseQuestion The emphasis of a finance manager should be on taking a

synergistic view of the project rather than looking at it only fromthe financial aspects.

Correct Answer True

Your Answer True




Select The BlankQuestion The basic difference between the feasibility study report and

________ is the level of accuracy and degree of detail.Correct Answer Detailed Project report

Your Answer Detailed Project report

Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may

lead to :-Correct Answer Cost and time overrun


Project Finance _15

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Select The BlankQuestion Location of the factory comes under the ________ category of

the Project report.Correct Answer General

Your Answer General

Multiple Choice Multiple AnswerQuestion Financing plans consists of :-

Correct Answer Share capital , Term loans , Internal accruals

Your Answer Share capital , Term loans , Internal accruals


Correct Answer Power Generation and Distribution

Your Answer Power Generation and Distribution

True/FalseQuestion Market potential should be determined under the Marketing

aspect of the Project report.Correct Answer True

Your Answer True

Select The BlankQuestion ________ tries to have what the customer will want- where,

when, in what form and at what price.Correct Answer Marketing

Your Answer Marketing





as :-

Project Finance _15

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Correct Answer Strategic perspective

Your Answer Social aspect

True/FalseQuestion Nominal maximum capacity is the capacity that is technically

attainable and this corresponds to the supplier's guaranteedcapacity.

Correct Answer True

Your Answer True

Select The BlankQuestion In order to meet the cost of large project, the technique of

________ has been developed so that the financial commitmentand risks associated with a project are shared between theproject sponsor and the lending institutions.

Correct Answer Limited recourse financing

Your Answer Long term financing




Multiple Choice Single AnswerQuestion Past trend method of Commercial appraisal technique is :-

Correct Answer Adopted as a guide depending on the consumption pattern of thesociety as a whole

Your Answer Adopted as a guide depending on the consumption pattern of thesociety as a whole

Multiple Choice Single AnswerQuestion The norms for providing open areas have to be strictly followed

for safety of labour and allow sufficient space for outflow ofeffluents safely in case of :-

Correct Answer Chemical unit

Your Answer Chemical unit


Project Finance _15

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Select The BlankQuestion Investors who invest in the debentures of the company are the

________ of the company.Correct Answer Creditors

Your Answer Creditors


Private investment Power generation Power generation




Foreign direct investment Machine tools Machine tools



Average Business strength and high Industry attractivenessYour Answer Strong Business Strength and high Industry attractiveness ,

Average Business strength and high Industry attractiveness




Multiple Choice Single AnswerQuestion The industrial concern earned profits by increasing the sales

volume under the :-Correct Answer Sales concept

Your Answer Sales concept

True/False

Project Finance _15

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Question The 'BCG Matrix 'analysis various products of the organisation inthe terms of Business strength and Industry Attractiveness.


Your Answer False

Select The BlankQuestion Detailed Project Report is generally prepared from a ________

report with additional information.Correct Answer Feasibility





True/FalseQuestion Miscellaneous expenditure is written on the asset side of the

Balance sheet.Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion General category of the Project report consists of :-

Correct Answer Name of the Industrial concern , Proposed product , Location ofthe factory

Your Answer Name of the Industrial concern , Proposed product , Location ofthe factory

Multiple Choice Single AnswerQuestion A Project is a temporary endeavor to achieve some specific

objectives within a :-Correct Answer Predefined time

Your Answer Predefined time

Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors

should be considered :-Correct Answer Proximity to raw materials and markets , Availability of

infrastructure , Government policies and other factors

Project Finance _15

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Your Answer Proximity to raw materials and markets , Availability ofinfrastructure , Government policies and other factors


Correct Answer Equity shares , Public deposit

Your Answer Equity shares , Public deposit

Multiple Choice Single AnswerQuestion The cost which change in the same proportion in which the level

of production changes is known as :-Correct Answer Variable cost

Your Answer Variable cost

Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon

appraising the likely technical gaps consists of :-Correct Answer Problems faced during the Construction and Project

implementationYour Answer Problems faced during the Construction and Project

implementation

Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses upon

appraising the likely technical gaps consists of :-Correct Answer Problems pertaining to the period when the project is in

operationYour Answer Problems pertaining to the period when the project is in

operation

Project Finance _16

- 1 -




Your Answer Source

Multiple Choice Multiple AnswerQuestion External sources of cash are as follows :-

Correct Answer Issue of new shares , Long term loans , Short termborrowings

Your Answer Long term loans , Short term borrowings , Issue of newshares

Multiple Choice Single AnswerQuestion In BCG Matrix " CASH COWS" indicate :-

Correct Answer Products which have high market share but low growthpotential

Your Answer Products which have high market share but low growthpotential




Multiple Choice Multiple AnswerQuestion Financial and economic aspect of the Visit report consists of

:-Correct Answer Company's financial year , Impact of Government policies

on company operations , Comments on the last publishedaccounts

Your Answer Company's financial year , Impact of Government policieson company operations , Comments on the last publishedaccounts

True/FalseQuestion Ratio should be computed on the basis of inter-related

figures which have a cause and effect relationship.

Project Finance _16

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Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion Preoperative expenses includes :-

Correct Answer Bank guarantees

Your Answer Bank guarantees

Select The BlankQuestion Retained earnings is a source of ________ finance.

Correct Answer Internal

Your Answer Internal

Select The BlankQuestion ________ profitability reduces the strain on working capital.

Correct Answer High

Your Answer High



Your Answer Profit and Loss Account , Balance Sheet

True/FalseQuestion Cost under-estimation at the project preparation and

evaluation stage leads to cost and time over run.Correct Answer True

Your Answer False

Multiple Choice Single AnswerQuestion Cost of laying roads comes under :-

Correct Answer Land and site cost

Your Answer Preoperative cost

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Multiple Choice Multiple AnswerQuestion Ratios relating to working capital are :-

Correct Answer Current ratio , Internal measure , Quick ratio

Your Answer Current ratio , Internal measure , Quick ratio

True/FalseQuestion A project is unique and no two projects are similar.

Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion Borrower's contribution towards Working capital is known

as :-Correct Answer Margin money

Your Answer Margin money


Correct Answer Name of the Industrial concern , Proposed product ,Location of the factory

Your Answer Name of the Industrial concern , Proposed product ,Location of the factory

Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following

dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspect

Your Answer Time span , Finance cost aspect , Strategic perspective

Multiple Choice Single AnswerQuestion Cost of overheads include :-

Correct Answer Cost of repairs and maintenance

Your Answer Cost of repairs and maintenance


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True/FalseQuestion Unlike financial projections, there cannot be any fixed,

well-recognised or structure formula/steps for managementevaluation/appraisal.

Correct Answer True

Your Answer True





Preliminary and capitalissue expenses

Brokerage andcommission

Foundation and erectioncharges

Land and sitedevelopment cost

Cost of laying roads Brokerage andcommission

Building cost Cost of factory building Cost of factory building

Plant and machinerycost

Foundation anderection charges

Cost of laying roads


Correct Answer That it involves current outlay of funds in expectation offuture benefits

Your Answer That it involves current outlay of funds in expectation offuture benefits


Correct Answer Equity

Your Answer Equity

Project Finance _16

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Multiple Choice Single AnswerQuestion The entire life of the project is taken into account under

Correct Answer Average rate of return method

Your Answer Pay back method




Multiple Choice Single AnswerQuestion BCG Product Portfolio Matrix analyses products on the

basis of :-Correct Answer Relative Market share and Industry Growth rate

Your Answer Relative Market share and Industry Growth rate

True/FalseQuestion A high debt equity ratio may indicate that the financial stake

of the creditors is more than that of the owners.Correct Answer True

Your Answer True


Project Financing Help improvingCorporate Return onEquity

Help improvingCorporate Return onEquity

Finance in internationalfinancial markets

Issue of Euro bonds World Bank

Project Finance _16

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International financialinstitutions

World Bank Issue of Euro bonds

Policy of Liberalisation,Privatisation andGlobalisation

Increasing emphasis onthe Private initiative

Increasing emphasis onthe Private initiative

True/FalseQuestion Land and site development comes under the cost aspect of

the Project report.Correct Answer True

Your Answer True


________ has been developed so that the financialcommitment and risks associated with a project are sharedbetween the project sponsor and the lending institutions.


Your Answer Limited recourse financing

Multiple Choice Multiple AnswerQuestion Debt Service coverage ratio may be considered to be one of

the most important ratios calculated by the :-Correct Answer Bankers , Financial Institutions

Your Answer Bankers , Financial Institutions

True/FalseQuestion Debt Equity ratio is a 'Solvency ratio'.

Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion Technical aspect of detailed project report includes :-

Correct Answer Detailed Project Engineering

Your Answer Detailed Project Engineering

True/False

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Question Cost and time overrun of the project may lead to loss onaccount of lost market opportunities.

Correct Answer True

Your Answer True

Select The BlankQuestion A smaller unit into which the overall requirement of capital

of a company is sub-divided is termed as ________.Correct Answer Share

Your Answer Share

True/FalseQuestion There is a need for studying Project finance both for the

lenders as well as the borrowers as both of them have equalstake in making the Project a success.

Correct Answer True

Your Answer True




Multiple Choice Multiple AnswerQuestion Production and sales aspect of Visit report consists of :-

Correct Answer Utilisation of installed capacity , Input availability , Salestrends

Your Answer Utilisation of installed capacity , Input availability , Salestrends

Multiple Choice Single AnswerQuestion The rate of discount which would equate the present value

of investments to the present value of benefits over the lifeof the project is known as :-


Your Answer Internal rate of return

Select The Blank

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Question ________ is a current asset

Correct Answer Book debts

Your Answer Book debts

Multiple Choice Multiple AnswerQuestion Building cost consists of :-

Correct Answer Factory building , Auxiliary buildings , Administrativeblock

Your Answer Factory building , Auxiliary buildings , Administrativeblock

True/FalseQuestion Nominal maximum capacity is the capacity that is

technically attainable and this corresponds to the supplier'sguaranteed capacity.

Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion In the Cash flow statement, the sources of funds include

Correct Answer Share Issue

Your Answer Share Issue

Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be

financed out of :-Correct Answer Cash Profits , Shares , Debentures

Your Answer Cash Profits , Shares , Debentures




Project Finance _17

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True/FalseQuestion In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of

working capital may be high.Correct Answer TrueYour Answer True

True/FalseQuestion Name of the finance manager comes under the Project organisation category of the Project

report.Correct Answer TrueYour Answer True


before setting up any project.Correct Answer TrueYour Answer True





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Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing Project finance financing are

:-Correct Answer Environmental factors , Risk involved , Managerial compensationYour Answer Environmental factors , Risk involved , Managerial compensation





calculated by the :-Correct Answer Bankers , Financial InstitutionsYour Answer Shareholders , Bankers , Financial Institutions

Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspect

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Multiple Choice Multiple AnswerQuestion Limitations of fund flow statement are :-Correct Answer It does not provide any new information but only rearranges the various facts , It does

not consider non-fund transactionsYour Answer It does not provide any new information but only rearranges the various facts , It does not

consider non-fund transactions , It does not help in determining future requirement of funds

Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses upon appraising the likely technical

gaps consists of :-Correct Answer Problems pertaining to the period when the project is in operationYour Answer Problems pertaining to the period when the project is in operation


Multiple Choice Single AnswerQuestion It is said that a second rate project in the hands of first rate management is better than a first

rate project in the hands of :-Correct Answer Second rate managementYour Answer Second rate management

Select The BlankQuestion The company having ________, is appropriate for the strategic posture of Defensive under the

SPACE approach.Correct Answer Lacks both competitive advantage as well as financial strength and belongs to a not so

attractive industry, operating in an unstable environmentYour Answer Lacks both competitive advantage as well as financial strength and belongs to a not so

attractive industry, operating in an unstable environment



strength and Industry Attractiveness.Correct Answer FalseYour Answer False

Select The BlankQuestion Having decided on the location and product, the promoter takes into account the ________ that

is to be adopted for producing the product.Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology

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Multiple Choice Multiple AnswerQuestion Financial and economic aspect of the Visit report consists of :-Correct Answer Company's financial year , Impact of Government policies on company operations ,

Comments on the last published accountsYour Answer Company's financial year , Impact of Government policies on company operations ,

Comments on the last published accounts




True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline

of a Product Life Cycle.Correct Answer TrueYour Answer True

True/FalseQuestion The construction of National Golden Quadrilateral can be recognised as Project.Correct Answer TrueYour Answer True

Select The BlankQuestion Under the SPACE Model, Customer loyalty is determined under the ________ dimension.Correct Answer Company's competitive advantageYour Answer Company's competitive advantage

True/FalseQuestion The cost factors of the product mixed is also taken into account to arrive at cost at various

levels of production and its cost impact of the manufacturing.Correct Answer TrueYour Answer True


than looking at it only from the financial aspects.Correct Answer TrueYour Answer True



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Question In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirementYour Answer Quality standards , Raw material requirement , Power / telecom facilities

Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial RelationshipYour Answer Linear Relationship , Exponential Relationship , Polynomial Relationship

True/FalseQuestion Market potential should be determined under the Marketing aspect of the Project report.Correct Answer TrueYour Answer True




True/FalseQuestion If the organisation is a trading organisation, the requirement of working capital will be on the

lower side.Correct Answer FalseYour Answer True

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Correct Answer Public deposit , Equity shares




Your Answer Increase in working capital , Dividend , Preliminary expenseswritten off


posture of Conservative under the SPACE approach.Correct Answer Limited competitive advantage, belonging to a not so attractive

industry but enjoying financial strength and operating in arelatively stable environment

Your Answer Limited financial strength, enjoying competitive advantage,belonging to attractive industry and operating in a relativelyvolatile environment



Your Answer Sample


cash immediately is known as :-Correct Answer Quick ratio





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Your Answer Manufacturing process and technology


Correct Answer To find out the uses of loans raised by the business , To indicatethe financial strength and weakness of the business , To help tounderstand the changes in assets as well as asset sourceswhich are not revealed by the income statement




Your Answer Profit and Loss Account , Balance Sheet , Cash flow statement





infrastructural facilities are to be considered under :-Correct Answer Technical appraisal

Your Answer Technical appraisal

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Your Answer False

True/FalseQuestion Interest and Dividend are to be considered while calculating

Operating ratio.Correct Answer False

Your Answer False






Your Answer True




Select The BlankQuestion More accurate the estimation of the level of current assets and

current liabilities, more accurate will be estimation of therequirement of ________.




investments to the present value of benefits over the life of the

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project is known as :-


Your Answer Net Present value



Your Answer Environmental factors , Risk involved , Political issues


Private investment Power generation Nearness to market





True/FalseQuestion The advantage of secondary sources of data is that it is readily

and economically available.Correct Answer True

Your Answer False






Your Answer Strategic perspective , Time span , Finance cost aspect

True/False

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Question A project is unique and no two projects are similar.

Correct Answer True

Your Answer True


Correct Answer Cash from operations , Sale of machinery , Issue of new shares



delight under the :-Correct Answer Marketing concept

Your Answer Marketing concept










Select The BlankQuestion Under the SPACE Model, Customer loyalty is determined under

the ________ dimension.Correct Answer Company's competitive advantage

Your Answer Company's competitive advantage

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True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation in

the terms of Business strength and Industry Attractiveness.Correct Answer False

Your Answer False



Your Answer Share



Average Business strength and high Industry attractivenessYour Answer Average Business Strength and Medium Industry Attractiveness

, Average Business strength and high Industry attractiveness ,Average Business Strength and Low Industry attractiveness

Multiple Choice Single AnswerQuestion The ratio which indicates the ability of the company to meet

current obligations is termed as :-Correct Answer Current ratio

Your Answer Current ratio

True/FalseQuestion The General Electric Company incorporated in the USA, is highly

respected for the sophistication, maturity and quality in itsplanning systems.

Correct Answer True

Your Answer False



Your Answer Outflow of cash

Match The Following

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Current ratio Liquidity ratio Current liability

Debt-Equity ratio Solvency ratio Debt

External liabilities Debt Relationship between NetProfit after taxes and totalshareholders funds

Shareholders funds Equity Equity



Correct Answer True

Your Answer True

Select The BlankQuestion Sometimes the term ________ is interpreted as cash equivalent

i.e. cash and marketable securities.Correct Answer Fund




Your Answer Balance Sheet



Your Answer Determination , Organisation Building , Person / system oriented



Your Answer Source

Project Finance _18

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Your Answer True







Your Answer True

Project Finance _19

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Select The BlankQuestion ________ is a current liability.Correct Answer Trade creditYour Answer Trade credit

Multiple Choice Multiple AnswerQuestion Marketing category of the Project report consists of :-Correct Answer Target market , Market potential , Pricing policyYour Answer Target market , Market potential , Pricing policy

Select The BlankQuestion Under the SPACE Model, Customer loyalty is determined under the ________

dimension.Correct Answer Company's competitive advantageYour Answer Company's competitive advantage

Multiple Choice Single AnswerQuestion Sources of funds include :-Correct Answer Increase in secured borrowingYour Answer Increase in secured borrowing

True/FalseQuestion It is mandatory for each unit to obtain necessary clearance from Pollution Control

Authorities before setting up any project.Correct Answer TrueYour Answer False


Select The BlankQuestion ________ tries to have what the customer will want- where, when, in what form and at

what price.Correct Answer MarketingYour Answer Marketing

True/FalseQuestion Debt Service Coverage Ratio is one of the most important ratios calculated by the

bankers or financial institutions giving long term finance to the organisation.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion Management qualities includes :-Correct Answer Honesty , Financial resources , InitiativeYour Answer Honesty , Financial resources , Initiative

Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon appraising the likely

technical gaps consists of :-Correct Answer Problems faced during the Construction and Project implementationYour Answer Problems faced during the Construction and Project implementation

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Multiple Choice Single AnswerQuestion Land and site development cost includes cost of :-Correct Answer GatesYour Answer Gates

Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect

Select The BlankQuestion ________ in assets involves outflow of funds.Correct Answer IncreaseYour Answer Increase











Multiple Choice Single AnswerQuestion Disposal of fixed assets is categorised under :-Correct Answer MiscellaneousYour Answer Miscellaneous

True/FalseQuestion The emphasis of a finance manager should be on taking a synergistic view of the

project rather than looking at it only from the financial aspects.Correct Answer TrueYour Answer True

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Multiple Choice Single AnswerQuestion Geographic market appraisal answers to :-Correct Answer Where do the customers live?Your Answer Where do the customers live?


Select The BlankQuestion ________ occupies a unique position in the macro economic development which

helps in induction of new technology and facilitates, greater efficiency as well as higherproductivity.

Correct Answer InvestmentYour Answer Production


Multiple Choice Single AnswerQuestion Pre-operative expenses include :-Correct Answer Interest on deferred paymentsYour Answer Interest on deferred payments

Multiple Choice Multiple AnswerQuestion Advantages of fund flow statement are :-Correct Answer It determines financial consequences of the business operations , It enables

the firm to plan its financial resources properly , It helps as a reliable guide for the futurerequirement of funds

Your Answer It determines financial consequences of the business operations , It considersnon-fund transactions , It enables the firm to plan its financial resources properly

True/FalseQuestion Managerial problems in a project are the most pervasive.Correct Answer TrueYour Answer True

True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are generally during the stage of

Decline of a Product Life Cycle.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion The applications of cash are :-Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Payment of long term loans , Issue of new machinery

True/FalseQuestion Debt Equity ratio is a 'Solvency ratio'.Correct Answer TrueYour Answer True

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True/FalseQuestion Current assets includes stock-in-process.Correct Answer TrueYour Answer True


Multiple Choice Single AnswerQuestion Liabilities side of Balance sheet includes :-Correct Answer Unsecured loansYour Answer Unsecured loans

Multiple Choice Single AnswerQuestion The rate of discount which would equate the present value of investments to the

present value of benefits over the life of the project is known as :-Correct Answer Internal rate of returnYour Answer Internal rate of return


Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any one of the following

basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture

Select The BlankQuestion ________ is the summary of cash book or Receipts and Payments statement.Correct Answer Cash flow statementYour Answer Cash flow statement

Multiple Choice Single AnswerQuestion The point at which the unit neither earns profit nor incurs loss is known as :-Correct Answer Break Even PointYour Answer Break Even Point


Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing Project finance

financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensationYour Answer Environmental factors , Risk involved , Managerial compensation

Multiple Choice Multiple AnswerQuestion Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric method

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Select The BlankQuestion Under ________ method, the forecasts are modified in the light of observed errors.Correct Answer Exponential smoothingYour Answer Exponential smoothing

Multiple Choice Multiple AnswerQuestion Provision for tax can be treated as :-Correct Answer Item of current liabilities , Added back to the profit as per profit and loss

account to arrive at operating profitsYour Answer Added back to the profit as per profit and loss account to arrive at operating

profits , Item of current assets , Item of working capital

Select The BlankQuestion Retained earnings indicates that whatever profits are earned by the company are not

distributed by it by way of ________ but are kept aside for use in future for expansion or otherpurpose.



Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential reserve of cash is termed as

:-Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets

Select The BlankQuestion Name and designation of the chief executive comes under the ________ category.Correct Answer GeneralYour Answer General


Multiple Choice Single AnswerQuestion In the Cash flow statement, the sources of funds includeCorrect Answer Share IssueYour Answer Share Issue

Project Finance _20

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True/FalseQuestion Land and site development comes under the cost aspect of the Project report.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion Location of the factory comes under the :-Correct Answer General categoryYour Answer General category


Project appraisal It is the evaluation of project from technical, market, financial, economic andsocial perspective before committing funds for investment It is a preliminary assessment of theproject idea to determine whether or not the investment opportunity is promising

Program It is large in scope, is activity oriented and is not necessarily time bound It is large inscope, is activity oriented and is not necessarily time bound

Project It is one-shot, time-limited, goal oriented, major undertaking requiring the commitment ofvaried skills and resources It deals with the impact of the investment project on people and theirlives

Pre-feasibility study It is a preliminary assessment of the project idea to determine whether or notthe investment opportunity is promising It is one-shot, time-limited, goal oriented, majorundertaking requiring the commitment of varied skills and resources

Multiple Choice Single AnswerQuestion The sources of funding have expanded from banks, insurance companies and

multilateral agencies to include the :-Correct Answer Capital marketYour Answer Debt market

Multiple Choice Single AnswerQuestion Cost of overheads include :-Correct Answer Cost of repairs and maintenanceYour Answer Cost of electricity

True/FalseQuestion The Detailed Project report spells out the modus operandi for the implementation of

the Project and the realization of the Project objectives.Correct Answer TrueYour Answer True

True/FalseQuestion Debt Service means payment of installments and interest against an amount

borrowed as per terms of loan.Correct Answer TrueYour Answer True

True/False

Project Finance _20

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Question The ratios of one organisation compared with the ratios of the same organisation istermed as inter-firm comparison.


Select The BlankQuestion Depreciation is sometimes treated as ________ funds.Correct Answer SourceYour Answer Application


Multiple Choice Multiple AnswerQuestion The Key terms used in the BCG Product Portfolio matrix are :-Correct Answer Stars , Question marksYour Answer Stars , Question marks , Invest



Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial RelationshipYour Answer Linear Relationship , Chain ratio Relationship , Exponential Relationship

Multiple Choice Single AnswerQuestion Delay in arrival of domestic/foreign machinery and technicians may lead to :-Correct Answer Cost and time overrunYour Answer Profit maximisation

Multiple Choice Single AnswerQuestion Past trend method of Commercial appraisal technique is :-Correct Answer Adopted as a guide depending on the consumption pattern of the society as a

wholeYour Answer Adopted as a guide depending on the consumption pattern of the society as a

whole

Multiple Choice Multiple AnswerQuestion Limitations of fund flow statement are :-Correct Answer It does not provide any new information but only rearranges the various facts ,

It does not consider non-fund transactionsYour Answer It does not consider non-fund transactions , It does not help in determining future

requirement of funds , It does not provide any new information but only rearranges the variousfacts

Select The Blank

Project Finance _20

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Question As the plant capacity increase, the investment cost unit capacity ________.Correct Answer DecreasesYour Answer Increases

Multiple Choice Single AnswerQuestion Preoperative expenses includes :-Correct Answer Bank guaranteesYour Answer Brokerage on capital issue

Multiple Choice Single AnswerQuestion Short supplies of materials may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun

Select The BlankQuestion In order to meet the cost of large project, the technique of ________ has been

developed so that the financial commitment and risks associated with a project are sharedbetween the project sponsor and the lending institutions.

Correct Answer Limited recourse financingYour Answer Limited recourse financing

True/FalseQuestion For computing Interest coverage ratio, Profit after Interest and taxes are taken into

account.Correct Answer FalseYour Answer True

Multiple Choice Single AnswerQuestion The ratio which covers those assets which can be converted into cash immediately is

known as :-Correct Answer Quick ratioYour Answer Current ratio

Multiple Choice Multiple AnswerQuestion Management category of Visit report consists of :-Correct Answer Managing Director , Institutional nominees , Committees of the boardYour Answer Managing Director , Electrical engineers , Institutional nominees

Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix analyses products in terms of :-Correct Answer Business strength and Industrial AttractivenessYour Answer Relative Market share and Industry Growth rate

Multiple Choice Single AnswerQuestion The basic document for facilitating Project financing is the :-Correct Answer Detailed Project reportYour Answer Detailed Project report

Select The BlankQuestion The ________ market is longer the order of the day since this is an era of

professionalization and specialised services are available at cost.Correct Answer MonopolisticYour Answer Monopolistic

True/False

Project Finance _20

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Question Ratio should be computed on the basis of inter-related figures which have a causeand effect relationship.


Multiple Choice Multiple AnswerQuestion Demand technique forecasting of Commercial appraisal includes :-Correct Answer Future demand of the product , Proper survey of the product , Future

availability and supply of the productYour Answer Future demand of the product , Export market , Future availability and supply of

the product

Select The BlankQuestion Having decided on the location and product, the promoter takes into account the

________ that is to be adopted for producing the product.Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology

Multiple Choice Multiple AnswerQuestion Time Series Projection Methods of Demand forecasting consists of :-Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method

Select The BlankQuestion More accurate the estimation of the level of current assets and current liabilities, more

accurate will be estimation of the requirement of ________.Correct Answer Working capitalYour Answer Working capital

Multiple Choice Multiple AnswerQuestion Defaults category of the Project report may be in respect of :-Correct Answer Term loans , Principal , InterestYour Answer Term loans , Principal , Interest


General functional layout Present the general relationship between equipment buildings and civilworks The plan of work concerning installation as well as initial operation

Location Broad area such as city, industrial belt etc. The diagrams indicating the flow of materials,utilities, final product, by-products and emission

Site Specific piece of land where the project would be set up Broad area such as city, industrialbelt etc.

Plant layout Physical layout of the factory Specific piece of land where the project would be set up

True/FalseQuestion If the organisation is a trading organisation, the requirement of working capital will be

on the lower side.Correct Answer FalseYour Answer True

Select The Blank

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Question Cost of fencing comes under the ________ category of the Project report.Correct Answer Land and site developmentYour Answer Building cost

Multiple Choice Multiple AnswerQuestion Disposition of funds includes :-Correct Answer Increase in working capital , Preliminary expenses , DividendYour Answer Increase in working capital , Preliminary expenses , Preliminary expenses written

off

Multiple Choice Multiple AnswerQuestion Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowingYour Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing ,

Preliminary expenses

Multiple Choice Single AnswerQuestion The Projects which are undertaken to manufacture certain products which are being

used as raw material by the existing units is known as :-Correct Answer Backward Integration ProjectsYour Answer Backward Integration Projects

Select The BlankQuestion In the GE's Stop Light Matrix, when ________ situation prevails , Products call for

divestment.Correct Answer Average Business Strength and Low Industry attractivenessYour Answer Weak Business strength and high Industry attractiveness

Select The BlankQuestion Investors who invest in the debentures of the company are the ________ of the

company.Correct Answer CreditorsYour Answer Creditors


calculated by the :-Correct Answer Bankers , Financial InstitutionsYour Answer Shareholders , Bankers , Creditors

Multiple Choice Single AnswerQuestion Dissentions among the promoters is a :-Correct Answer Management problemYour Answer Management perception

Select The BlankQuestion Goods purchased on credit ________ in flow of funds.Correct Answer Does not resultYour Answer Does not result

True/FalseQuestion The secondary data is collected through market survey, specific for the project being

appraised.Correct Answer FalseYour Answer False

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Multiple Choice Single AnswerQuestion Profit is the result of customer satisfaction, indeed customer delight under the :-Correct Answer Marketing conceptYour Answer Marketing concept

Multiple Choice Multiple AnswerQuestion Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written offYour Answer Funds from operation , Goodwill written off , Funds from long term loans

Project Finance _21

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Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out of :-Correct Answer Debentures , Cash Profits , SharesYour Answer Debentures , Cash Profits , Shares

Multiple Choice Multiple AnswerQuestion The sources of long term and medium term finance are :-Correct Answer Equity shares , Public depositYour Answer Equity shares , Bridge loan , Public deposit

Multiple Choice Single AnswerQuestion The emphasis of the Banks and Financial institutions particularly in India has shifted

from 'Sanctions', 'Disbursements' and 'Security-orientation' to 'Recovery/Recycling' and :-Correct Answer Activity orientationYour Answer Activity orientation

Multiple Choice Single AnswerQuestion Technology, design, layout of the plant as well as inputs and infrastructural facilities

are to be considered under :-Correct Answer Technical appraisalYour Answer Financial appraisal

Select The BlankQuestion Detailed Project Report is generally prepared from a ________ report with additional

information.Correct Answer FeasibilityYour Answer Feasibility

True/FalseQuestion A high debt equity ratio may indicate that the financial stake of the creditors is more

than that of the owners.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion The formula for Break Even Point is :-Correct Answer Fixed cost / ( Sales Price - Variables)Your Answer (Profit after tax +Depreciation + Interest)/ Interest

Multiple Choice Single AnswerQuestion Receivables is categorised under :-Correct Answer Current assets and liabilitiesYour Answer Material inputs and utilities

Multiple Choice Multiple AnswerQuestion Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Internal measure

Select The BlankQuestion Longer the duration of production cycle, higher the requirement of ________.Correct Answer Working capitalYour Answer Fixed assets

Project Finance _21

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Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Management aspects includes :-Correct Answer Determination , Organisation Building , Person / system orientedYour Answer Organisation Building , Person / system oriented , Promoter's equity / stake

True/FalseQuestion Financial analysis based on accounting ratios will give mis-leading results if the

effects of changes in price level are not taken into account.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirementYour Answer Plant capacity , Quality standards , Raw material requirement

Select The BlankQuestion Inflow of funds may not necessarily result in ________.Correct Answer Inflow of cashYour Answer Decrease in funds

Multiple Choice Multiple AnswerQuestion Building cost consists of :-Correct Answer Factory building , Auxiliary buildings , Administrative blockYour Answer cost of development , Factory building , Auxiliary buildings


Increase in current liabilities Decreases working capital Stability of funds

Increase in liabilities Inflow of funds Inflow of funds

Decrease in liabilities Outflow of funds Increases working capital

Increase in current assets Increases working capital Outflow of funds

Select The BlankQuestion Sometimes the term ________ is interpreted as cash equivalent i.e. cash and

marketable securities.Correct Answer FundYour Answer Fund

True/FalseQuestion Name of the finance manager comes under the Project organisation category of the

Project report.Correct Answer TrueYour Answer False


True/False

Project Finance _21

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Question The maximum Seed Capital assistance provided by IDBI under the project will berestricted to 50% of the required promoter's contribution or Rs. 50 lakhs whichever is lower.



Project organisation Finance manager Completion date of the project

General category of Project report Location of factory Reasons for cost escalations

Cost aspect of the project report Consultancy fees Finance manager

Financing plan Unsecured loans Location of factory

True/FalseQuestion Trend projection method is the important technique for forecasting demand.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability

Multiple Choice Multiple AnswerQuestion The sources of cash are :-Correct Answer Cash from operations , Sale of machinery , Issue of new sharesYour Answer Purchase of fixed assets , Cash from operations , Sale of machinery


True/FalseQuestion Production line diagrams show the organisation structure of the project along with

information on location, personnel required for various departments, and their inter-relationship.Correct Answer FalseYour Answer True

Select The BlankQuestion ________ is a current assetCorrect Answer Book debtsYour Answer Book debts

Select The BlankQuestion The company having ________, is appropriate for the strategic posture of Defensive

under the SPACE approach.Correct Answer Lacks both competitive advantage as well as financial strength and belongs to

a not so attractive industry, operating in an unstable environmentYour Answer High financial strength, high industrial strength, enjoying a competitive advantage

and belonging to an attractive industry, operating in a relatively stable environmental conditions

Project Finance _21

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Multiple Choice Single AnswerQuestion Management aspect of detailed project report includesCorrect Answer Organisation structureYour Answer Demand forecasting

Select The BlankQuestion ________ profitability reduces the strain on working capital.Correct Answer HighYour Answer High

Multiple Choice Multiple AnswerQuestion The following are the sources of funds :-Correct Answer Operating Profit , Non operating IncomeYour Answer Operating Profit , Operating Loss , Non operating Income

Multiple Choice Single AnswerQuestion The cash flow of all the years during the expected life of the project are discounted at

a pre-determined cut off rate and :-Correct Answer Net Present value is obtainedYour Answer Internal rate of return is obtained

Multiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-Correct Answer To find out the uses of loans raised by the business , To indicate the financial

strength and weakness of the business , To help to understand the changes in assets as well asasset sources which are not revealed by the income statement

Your Answer To find out the uses of loans raised by the business , To indicate the financialstrength and weakness of the business , To help to understand the changes in assets as well asasset sources which are not revealed by the income statement

Multiple Choice Single AnswerQuestion Cost of materials include :-Correct Answer Cost of components and consumable storesYour Answer Cost of electricity

True/FalseQuestion The Detailed Project report must indicate the gestation period of the project.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion Strategic Position and Action Evaluation Model :-Correct Answer Is an approach to hammer out an appropriate strategic posture for a firm and

its individual businessYour Answer Which is highly respected for the sophistication, maturity and quality in its

planning systems

Select The BlankQuestion Location of the factory comes under the ________ category of the Project report.Correct Answer GeneralYour Answer General

Select The BlankQuestion Retained earnings is a source of ________ finance.Correct Answer InternalYour Answer Internal

Project Finance _21

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Multiple Choice Multiple AnswerQuestion General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location of the factoryYour Answer Name of the Industrial concern , Proposed product , Location of the factory

Select The BlankQuestion Short term finance is normally for a period upto ________ year.Correct Answer OneYour Answer Two

Multiple Choice Single AnswerQuestion Appointments made at senior level during the half-year is categorised under :-Correct Answer Organisation and managementYour Answer Current assets and liabilities

Select The BlankQuestion Commission outstanding is ________ of funds.Correct Answer ApplicationYour Answer Application

Multiple Choice Single AnswerQuestion The statement which shows the movement of cash into and out of firm's kittie is

known as :-Correct Answer Cash flow statementYour Answer Profit and Loss statement

Multiple Choice Single AnswerQuestion Cost of utilities include :-Correct Answer Cost of electricityYour Answer Cost of components and consumable stores

Multiple Choice Single AnswerQuestion Marketing aspect of Detailed Project report includes :-Correct Answer Demand forecastingYour Answer Detailed Project Engineering

True/FalseQuestion In both the extreme situations of trade cycles i.e. Inflation and depression,

requirement of working capital may be high.Correct Answer TrueYour Answer False

Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors should be considered :-Correct Answer Proximity to raw materials and markets , Availability of infrastructure ,

Government policies and other factorsYour Answer Proximity to raw materials and markets , Plant capacity , Availability of

infrastructure


True/FalseQuestion For computing Interest coverage ratio, Profit after Interest and

taxes are taken into account.Correct Answer False

Your Answer True



Your Answer Working capital loan , Equity shares




True/FalseQuestion Debt Service means payment of installments and interest

against an amount borrowed as per terms of loan.Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion Sewerage and drainage cost of the project is categorised under

:-Correct Answer Building cost

Your Answer Land and site cost






Your Answer A method based on the assumption that the behavior of thevariables would continue in similar/same direction andmagnitude, as in the past



Your Answer Equity financing



Correct Answer True

Your Answer True

Select The BlankQuestion Details regarding Bridge finance comes under the ________

category of Project report.Correct Answer Financing plan

Your Answer Cost aspect

Multiple Choice Single AnswerQuestion Cost of utilities include :-

Correct Answer Cost of electricity

Your Answer Cost of insurance



Your Answer Census







Select The BlankQuestion Position regarding requirement and training of operational staff

comes under the ________ category of Project report.Correct Answer Project organisation

Your Answer General category



Your Answer Fund flow statement



Your Answer Strategic perspective , Finance cost aspect



Your Answer That it is for an indefinite period of time



Your Answer True


Question Time Series Projection Methods of Demand forecasting consistsof :-

Correct Answer Trend Projection method , Moving Averages method




Your Answer Profit maximisation

True/FalseQuestion Debt Equity ratio is a 'Solvency ratio'.

Correct Answer True

Your Answer True




Your Answer Size of the plant




Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Marketing aspects includes :-

Correct Answer Demand forecasting , Promotion , Distribution

Your Answer Cost / Time overruns , Promotion


Increase in currentliabilities

Decreases working capital Decreases working capital

Increase in liabilities Inflow of funds Cash flow analysis







Select The BlankQuestion Short term finance is normally for a period upto ________ year.

Correct Answer One

Your Answer One



Your Answer Selling



Correct Answer True

Your Answer True

Select The BlankQuestion Commission outstanding is ________ of funds.

Correct Answer Application

Your Answer Application


delight under the :-

Correct Answer Marketing concept

Your Answer Profitability concept

True/FalseQuestion The secondary data is collected through market survey, specific

for the project being appraised.Correct Answer False

Your Answer False

Multiple Choice Single AnswerQuestion The method for evaluating the profitability of industrial projects

whose object is to ascertain the period required for recoveringthe entire investment made in a project is known as :-

Correct Answer Pay back method




Your Answer Fixation of means of financial structure




Multiple Choice Multiple AnswerQuestion Provision for tax can be treated as :-

Correct Answer Item of current liabilities , Added back to the profit as per profitand loss account to arrive at operating profits

Your Answer Item of current liabilities , Added back to the profit as per profitand loss account to arrive at operating profits



Your Answer True


Organisation andManagement

Strikes/lay-offs/lockoutsetc.

Sanctioned bank limit

Material inputs and utilities Stock of raw material Stock of raw material

Working capital Sanctioned bank limit Finished goods

Marketing Pricing policy Receivables

True/FalseQuestion Cost under-estimation at the project preparation and evaluation

stage leads to cost and time over run.Correct Answer True

Your Answer True


quite high due to high amount of overheads, high buying costsand high selling cost.

Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion Financial and economic aspect of the Visit report consists of :-

Correct Answer Company's financial year , Impact of Government policies oncompany operations , Comments on the last published accounts

Your Answer Company's financial year

Multiple Choice Single AnswerQuestion The formula for Break Even Point is :-

Correct Answer Fixed cost / ( Sales Price - Variables)

Your Answer Fixed cost / ( Sales Price - Variables)




Select The BlankQuestion Goods purchased on credit ________ in flow of funds.

Correct Answer Does not result

Your Answer Does not result

Multiple Choice Single AnswerQuestion The assets held by a business which can be converted in the

form of cash or used during the course of normal operations istermed as :-

Correct Answer Current assets

Your Answer Current assets


implementation of the Project and the realization of the Projectobjectives.

Correct Answer True

Your Answer True

Project Finance _2

- 1 -




Your Answer Sales rise




Multiple Choice Multiple AnswerQuestion The Key terms used in the BCG Product Portfolio matrix are :-

Correct Answer Stars , Question marks

Your Answer Stars , Question marks



Your Answer Profit and Loss Account , Auditors report


Technical aspect ofdetailed project report

Detailed ProjectEngineering

Transport

Financial aspect ofDetailed Project report

Profitability Detailed ProjectEngineering

Marketing aspect ofDetailed Project report

Distribution Conservativeness

Management aspect ofdetailed project report

Conservativeness Distribution



Project Finance _2

- 2 -

Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion Marketing aspect of Detailed Project report includes :-

Correct Answer Demand forecasting

Your Answer Demand forecasting

True/FalseQuestion In the BCG Matrix, the key term of Cash Cows require further

commitment of funds.Correct Answer False

Your Answer True



Your Answer Increase in working capital , Preliminary expenses


Project appraisal It is the evaluation ofproject from technical,market, financial,economic and socialperspective beforecommitting funds forinvestment

It is a preliminaryassessment of the projectidea to determine whetheror not the investmentopportunity is promising

Program It is large in scope, isactivity oriented and is notnecessarily time bound

It deals with the impact ofthe investment project onpeople and their lives

Project It is one-shot, time-limited,goal oriented, majorundertaking requiring thecommitment of variedskills and resources

It involves the allocation ofresources amongcompeting projects

Pre-feasibility study It is a preliminaryassessment of the projectidea to determine whetheror not the investmentopportunity is promising

It is large in scope, isactivity oriented and is notnecessarily time bound

Project Finance _2

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True/FalseQuestion Change in the project concept itself may lead to cost and time

overrun.Correct Answer True

Your Answer True

True/FalseQuestion Land and site development comes under the cost aspect of the

Project report.Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion It is said that a second rate project in the hands of first rate

management is better than a first rate project in the hands of :-Correct Answer Second rate management

Your Answer Second rate management







Your Answer True

Select The BlankQuestion The Project Cycle should be in the ________ order

Correct Answer Identification of Project - Project Appraisal - Negotiations forloans

Your Answer Procurement of Goods/services - Project Appraisal - Monitoringof operations on completion

Multiple Choice Single AnswerQuestion Cost of materials include :-

Project Finance _2

- 4 -

Correct Answer Cost of components and consumable stores

Your Answer Cost of components and consumable stores



Your Answer Share capital , Term loans



Your Answer True





Multiple Choice Single AnswerQuestion The cost of Plant and Machinery may be adjusted for a possible

increase known as :-Correct Answer Escalation

Your Answer Escalation



Your Answer No flow

Select The BlankQuestion ________ is that scarce input which financial resources alone

cannot mobilise.Correct Answer Management

Your Answer Sales

Project Finance _2

- 5 -




operation






Your Answer Products which enjoy a high market share as well as a highgrowth rate



Your Answer Equity

Multiple Choice Single AnswerQuestion Demographic market appraisal answers to

Correct Answer Who they are?

Your Answer When they buy?

Select The BlankQuestion ________ is a current liability.

Correct Answer Trade credit

Your Answer Trade credit

True/FalseQuestion The construction of National Golden Quadrilateral can be

recognised as Project.

Project Finance _2

- 6 -

Correct Answer True

Your Answer True



Your Answer Building cost



infrastructure , Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of






True/FalseQuestion Name of the finance manager comes under the Project

organisation category of the Project report.Correct Answer True

Your Answer True

True/FalseQuestion Delay in recruitment of staff may lead to cost and time overrun

Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion Miscellaneous fixed assets includes :-

Correct Answer Cables

Your Answer Plant and machinery

Project Finance _2

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Select The BlankQuestion Name and designation of the chief executive comes under the

________ category.Correct Answer General

Your Answer Project organisation



Your Answer Environmental factors , Risk involved , Managerial compensation

Multiple Choice Multiple AnswerQuestion Sources of funds includes :-

Correct Answer Depreciation , Preliminary expenses written off , Increase insecured borrowing

Your Answer Preliminary expenses written off , Increase in secured borrowing

Multiple Choice Multiple AnswerQuestion Technical appraisal is basically concerned with :-

Correct Answer Technology , Layout of the plant , Design of the plant

Your Answer Technology , Layout of the plant , Production costs


Correct Answer Utilisation of installed capacity , Input availability , Sales trends

Your Answer Utilisation of installed capacity , Input availability





appraising the likely technical gaps consists of :-

Project Finance _2

- 8 -

Correct Answer Problems faced during the Construction and Projectimplementation

Your Answer Problems faced during the Construction and Projectimplementation


Correct Answer Operating Profit , Non operating Income

Your Answer Operating Profit , Non operating Income , Dividends

True/FalseQuestion A high debt equity ratio may indicate that the financial stake of

the creditors is more than that of the owners.Correct Answer True

Your Answer True






Your Answer Cash Profits , Shares




Your Answer Sales rise




Multiple Choice Multiple AnswerQuestion The Key terms used in the BCG Product Portfolio matrix are :-

Correct Answer Stars , Question marks

Your Answer Stars , Question marks



Your Answer Profit and Loss Account , Auditors report


Technical aspect ofdetailed project report

Detailed ProjectEngineering

Transport

Financial aspect ofDetailed Project report

Profitability Detailed ProjectEngineering

Marketing aspect ofDetailed Project report

Distribution Conservativeness

Management aspect ofdetailed project report

Conservativeness Distribution



Correct Answer True

Your Answer True





commitment of funds.Correct Answer False

Your Answer True



Your Answer Increase in working capital , Preliminary expenses


Project appraisal It is the evaluation ofproject from technical,market, financial,economic and socialperspective beforecommitting funds forinvestment

It is a preliminaryassessment of the projectidea to determine whetheror not the investmentopportunity is promising

Program It is large in scope, isactivity oriented and is notnecessarily time bound

It deals with the impact ofthe investment project onpeople and their lives

Project It is one-shot, time-limited,goal oriented, majorundertaking requiring thecommitment of variedskills and resources

It involves the allocation ofresources amongcompeting projects

Pre-feasibility study It is a preliminaryassessment of the projectidea to determine whetheror not the investmentopportunity is promising

It is large in scope, isactivity oriented and is notnecessarily time bound


overrun.Correct Answer True

Your Answer True



Your Answer True

Multiple Choice Single AnswerQuestion It is said that a second rate project in the hands of first rate

management is better than a first rate project in the hands of :-Correct Answer Second rate management

Your Answer Second rate management







Your Answer True


Correct Answer Identification of Project - Project Appraisal - Negotiations forloans

Your Answer Procurement of Goods/services - Project Appraisal - Monitoringof operations on completion

Multiple Choice Single AnswerQuestion Cost of materials include :-

Correct Answer Cost of components and consumable stores

Your Answer Cost of components and consumable stores



Your Answer Share capital , Term loans



Your Answer True





Multiple Choice Single AnswerQuestion The cost of Plant and Machinery may be adjusted for a possible

increase known as :-Correct Answer Escalation

Your Answer Escalation



Your Answer No flow

Select The BlankQuestion ________ is that scarce input which financial resources alone

cannot mobilise.Correct Answer Management

Your Answer Sales




operation






Your Answer Products which enjoy a high market share as well as a highgrowth rate



Your Answer Equity



Your Answer When they buy?




True/FalseQuestion The construction of National Golden Quadrilateral can be

recognised as Project.

Correct Answer True

Your Answer True



Your Answer Building cost










organisation category of the Project report.Correct Answer True

Your Answer True


Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion Miscellaneous fixed assets includes :-

Correct Answer Cables

Your Answer Plant and machinery


________ category.Correct Answer General

Your Answer Project organisation




Multiple Choice Multiple AnswerQuestion Sources of funds includes :-





Your Answer Technology , Layout of the plant , Production costs


Correct Answer Utilisation of installed capacity , Input availability , Sales trends

Your Answer Utilisation of installed capacity , Input availability





appraising the likely technical gaps consists of :-

Correct Answer Problems faced during the Construction and Projectimplementation



Correct Answer Operating Profit , Non operating Income

Your Answer Operating Profit , Non operating Income , Dividends

True/FalseQuestion A high debt equity ratio may indicate that the financial stake of

the creditors is more than that of the owners.Correct Answer True

Your Answer True








Correct Answer To help to understand the changes in assets as well as asset sourceswhich are not revealed by the income statement , To find out the uses ofloans raised by the business , To indicate the financial strength andweakness of the business

Your Answer To find out the uses of loans raised by the business , To help tounderstand the changes in assets as well as asset sources which are notrevealed by the income statement , Helps to prepare financial statements





Correct Answer Project finance



implementation of the Project and the realization of the Project objectives.Correct Answer True

Your Answer True





Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off



Question End use method of Commercial appraisal technique is :-

Correct Answer A list of industries wherein the product is used is made and quantity andvolume is arrived at





True/FalseQuestion In small scale organisation, requirement of working capital is quite high

due to high amount of overheads, high buying costs and high selling cost.Correct Answer True

Your Answer True



General category of Projectreport






________.Correct Answer Working capital





Select The Blank

Question Cost of fencing comes under the ________ category of the Project report.

Correct Answer Land and site development


True/FalseQuestion Trend projection method is the important technique for forecasting

demand.Correct Answer True

Your Answer True

True/FalseQuestion The emphasis of a finance manager should be on taking a synergistic view

of the project rather than looking at it only from the financial aspects.Correct Answer True

Your Answer True




Select The BlankQuestion The basic difference between the feasibility study report and ________ is

the level of accuracy and degree of detail.Correct Answer Detailed Project report





Select The BlankQuestion Location of the factory comes under the ________ category of the Project

report.Correct Answer General

Your Answer General







True/FalseQuestion Market potential should be determined under the Marketing aspect of the


Your Answer True


form and at what price.Correct Answer Marketing


Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is known

as :-Correct Answer Finance cost aspect


Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed as :-



True/FalseQuestion Nominal maximum capacity is the capacity that is technically attainable

and this corresponds to the supplier's guaranteed capacity.Correct Answer True

Your Answer True

Select The BlankQuestion In order to meet the cost of large project, the technique of ________ has

been developed so that the financial commitment and risks associated witha project are shared between the project sponsor and the lendinginstitutions.




Correct Answer That it involves current outlay of funds in expectation of future benefits



Correct Answer Adopted as a guide depending on the consumption pattern of the societyas a whole

Your Answer Adopted as a guide depending on the consumption pattern of the societyas a whole

Multiple Choice Single AnswerQuestion The norms for providing open areas have to be strictly followed for safety

of labour and allow sufficient space for outflow of effluents safely in case of:-






Select The BlankQuestion Investors who invest in the debentures of the company are the ________

of the company.Correct Answer Creditors









Business strength and high Industry attractivenessYour Answer Strong Business Strength and high Industry attractiveness , Average

Business strength and high Industry attractiveness





the :-Correct Answer Sales concept


True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation in the terms

of Business strength and Industry Attractiveness.Correct Answer False

Your Answer False

Select The BlankQuestion Detailed Project Report is generally prepared from a ________ report with

additional information.Correct Answer Feasibility


Multiple Choice Single AnswerQuestion Delay in arrival of domestic/foreign machinery and technicians may lead to

:-Correct Answer Cost and time overrun


True/FalseQuestion Miscellaneous expenditure is written on the asset side of the Balance

sheet.Correct Answer True

Your Answer True


Correct Answer Name of the Industrial concern , Proposed product , Location of the factory

Your Answer Name of the Industrial concern , Proposed product , Location of the factory

Multiple Choice Single AnswerQuestion A Project is a temporary endeavor to achieve some specific objectives

within a :-Correct Answer Predefined time



considered :-Correct Answer Proximity to raw materials and markets , Availability of infrastructure ,

Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of infrastructure ,





Multiple Choice Single AnswerQuestion The cost which change in the same proportion in which the level of

production changes is known as :-

Correct Answer Variable cost



appraising the likely technical gaps consists of :-Correct Answer Problems faced during the Construction and Project implementation

Your Answer Problems faced during the Construction and Project implementation

Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses upon appraising

the likely technical gaps consists of :-Correct Answer Problems pertaining to the period when the project is in operation

Your Answer Problems pertaining to the period when the project is in operation

LIST OF ATTEMPTED QUESTIONS AND ANSWERSLIST OF ATTEMPTED QUESTIONS AND ANSWERS

True/FalseQuestion 1 The advantage of secondary sources of data is that it is readily and economically

available.Correct Answer TrueYour Answer True

True/FalseQuestion2 In small scale organisation, requirement of working capital is quite high due to high

amount of overheads, high buying costs and high selling cost.Correct Answer TrueYour Answer True

True/FalseQuestion3 Banks and Financial Institutions, world-wide, are now financing projects with

strategies and terms that would have been hard to believe/imagine just a few years back.Correct Answer TrueYour Answer True


Multiple Choice Multiple AnswerQuestion 5 Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial RelationshipYour Answer Linear Relationship , Exponential Relationship , Polynomial Relationship



Multiple Choice Multiple AnswerQuestion 8 Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowingYour Answer Preliminary expenses written off , Increase in secured borrowing

Multiple Choice Single AnswerQuestion 9 Delay in arrival of domestic/foreign machinery and technicians may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun

Select The BlankQuestion 10 A smaller unit into which the overall requirement of capital of a company is sub-

divided is termed as ________.Correct Answer ShareYour Answer Share



Multiple Choice Multiple AnswerQuestion13 Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written offYour Answer Funds from operation , Goodwill written off




Multiple Choice Single AnswerQuestion17 The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits




Select The BlankQuestion21 Longer the duration of production cycle, higher the requirement of ________.Correct Answer Working capitalYour Answer Working capital

Select The BlankQuestion22 Retained earnings is a source of ________ finance.Correct Answer InternalYour Answer Short term

Select The BlankQuestion23 ________ is the summary of cash book or Receipts and Payments statement.Correct Answer Cash flow statementYour Answer Trial balance

True/FalseQuestion24 In the BCG Matrix, the key term of Cash Cows require further commitment of

funds.Correct Answer FalseYour Answer True

True/FalseQuestion25 Cost and time overrun of the project may lead to loss on account of lost market

opportunities.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion26 A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect


Multiple Choice Single AnswerQuestion 28 In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high growth rate

Your Answer Products which enjoy a high market share as well as a high growth rate


True/FalseQuestion30 Production line diagrams show the organisation structure of the project along with

information on location, personnel required for various departments, and their inter-relationship.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion31 While choosing the location for a project, the following factors should be

considered :-Correct Answer Proximity to raw materials and markets , Availability of infrastructure ,

Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of infrastructure ,


Multiple Choice Single AnswerQuestion32 The cost which change in the same proportion in which the level of production

changes is known as :-Correct Answer Variable costYour Answer Variable cost



Multiple Choice Single AnswerQuestion35 Appointments made at senior level during the half-year is categorised under :-Correct Answer Organisation and managementYour Answer Organisation and management









Multiple Choice Multiple AnswerQuestion 40 General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location of the factoryYour Answer Name of the Industrial concern , Proposed product , Location of the factory



Multiple Choice Multiple AnswerQuestion43 After the SPACE chart is constructed, we would normally get any one of the

following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture

Select The BlankQuestion 44 ________ occupies a unique position in the macro economic development which

helps in induction of new technology and facilitates, greater efficiency as well as higherproductivity.


Multiple Choice Single AnswerQuestion45 Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution

Select The BlankQuestion46 Name and designation of the chief executive comes under the ________ category.Correct Answer GeneralYour Answer General








Econometric method Mathematicalrepresentation ofeconomic relationship

Mathematicalrepresentation ofeconomic relationship


Secondary source of data Collected in some othercontext

Collected in some othercontext

Leading indicators Variables that changefaster than others

Variables that changefaster than others

Select The BlankQuestion Details regarding Internal accruals comes under the ________

category of Project report.Correct Answer Financing plan

Your Answer Financing plan

Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects includes :-

Correct Answer Plant capacity , Quality standards , Raw material requirement

Your Answer Plant capacity , Quality standards , Raw material requirement



Your Answer Share











Multiple Choice Multiple AnswerQuestion Debt Service coverage ratio may be considered to be one of the

most important ratios calculated by the :-Correct Answer Bankers , Financial Institutions

Your Answer Bankers , Creditors , Financial Institutions







Multiple Choice Single AnswerQuestion Pre-operative expenses include :-

Correct Answer Interest on deferred payments

Your Answer Market research expenses

True/False

Question The cost factors of the product mixed is also taken into accountto arrive at cost at various levels of production and its costimpact of the manufacturing.

Correct Answer True

Your Answer True

Select The BlankQuestion Retained earnings indicates that whatever profits are earned by

the company are not distributed by it by way of ________ butare kept aside for use in future for expansion or other purpose.

Correct Answer Dividend

Your Answer Dividend


Correct Answer Determination , Organisation Building , Person / systemoriented

Your Answer Organisation Building , Person / system oriented , Promoter'sequity / stake

True/FalseQuestion The Detailed Project report spells out the modus operandi for

the implementation of the Project and the realization of theProject objectives.

Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix analyses products in terms of

:-Correct Answer Business strength and Industrial Attractiveness

Your Answer Company's competitive advantage and Company's financialstrength


synergistic view of the project rather than looking at it only fromthe financial aspects.

Correct Answer True

Your Answer True


Question After the SPACE chart is constructed, we would normally getany one of the following basic strategic postures :-

Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture

Your Answer Aggressive Posture , Competitive Posture , Defensive Posture

True/FalseQuestion The ratios of one organisation compared with the ratios of the

same organisation is termed as inter-firm comparison.Correct Answer False

Your Answer False




Select The BlankQuestion Under ________ method, the forecasts are modified in the light

of observed errors.Correct Answer Exponential smoothing

Your Answer Cobb Douglas Relationship


Source of funds Depreciation Investment






Your Answer True

True/False

Question Delay in recruitment of staff may lead to cost and time overrun

Correct Answer True

Your Answer True







Multiple Choice Single AnswerQuestion The method for evaluating the profitability of industrial projects

whose object is to ascertain the period required for recoveringthe entire investment made in a project is known as :-







investments to the present value of benefits over the life of theproject is known as :-






Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential

reserve of cash is termed as :-Correct Answer Net Working capital to total assets


Multiple Choice Single AnswerQuestion The sources of funding have expanded from banks, insurance

companies and multilateral agencies to include the :-Correct Answer Capital market

Your Answer Capital market

True/FalseQuestion Sensitivity analysis consists of assessing the degree of risk.

Correct Answer True

Your Answer True




Multiple Choice Single AnswerQuestion Sources of funds include :-

Correct Answer Increase in secured borrowing

Your Answer Increase in secured borrowing



Correct Answer True

Your Answer True


Question While choosing the location for a project, the following factorsshould be considered :-

Correct Answer Proximity to raw materials and markets , Availability ofinfrastructure , Government policies and other factors

Your Answer Proximity to raw materials and markets , Availability ofinfrastructure , Government policies and other factors






Your Answer True

True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are

generally during the stage of Decline of a Product Life Cycle.Correct Answer True

Your Answer True


Correct Answer Linear Relationship , Exponential Relationship , PolynomialRelationship

Your Answer Linear Relationship , Chain ratio Relationship , ExponentialRelationship



Your Answer Technology , Layout of the plant , Design of the plant



Your Answer Where do the customers live?

Select The BlankQuestion A Project has a ________ represented by growth, maturity and

decay.Correct Answer Life cycle

Your Answer Life cycle



Your Answer Strategic perspective , Time span , Social aspect



Your Answer Trend Projection method , Consumption-level method , MovingAverages method

Multiple Choice Single AnswerQuestion The statement which shows the movement of cash into and out

of firm's kittie is known as :-Correct Answer Cash flow statement



Correct Answer To help to understand the changes in assets as well as assetsources which are not revealed by the income statement , Tofind out the uses of loans raised by the business , To indicatethe financial strength and weakness of the business








True/FalseQuestion The Detailed Project report spells out the modus operandi for

the implementation of the Project and the realization of theProject objectives.

Correct Answer True

Your Answer True





Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwillwritten off




Your Answer A list of industries wherein the product is used is made andquantity and volume is arrived at





quite high due to high amount of overheads, high buying costs

and high selling cost.

Correct Answer True

Your Answer True



General category ofProject report
















Your Answer True

True/False

Question The emphasis of a finance manager should be on taking asynergistic view of the project rather than looking at it only fromthe financial aspects.

Correct Answer True

Your Answer True




Select The BlankQuestion The basic difference between the feasibility study report and

________ is the level of accuracy and degree of detail.Correct Answer Detailed Project report







Your Answer General







True/FalseQuestion Market potential should be determined under the Marketing

aspect of the Project report.Correct Answer True

Your Answer True







Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is

termed as :-Correct Answer Strategic perspective




Correct Answer True

Your Answer True


________ has been developed so that the financialcommitment and risks associated with a project are sharedbetween the project sponsor and the lending institutions.







Correct Answer Adopted as a guide depending on the consumption pattern ofthe society as a whole

Your Answer Adopted as a guide depending on the consumption pattern ofthe society as a whole









________ of the company.Correct Answer Creditors






Not necessarily timebound









Multiple Choice Single AnswerQuestion The industrial concern earned profits by increasing the sales

volume under the :-Correct Answer Sales concept


True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation

in the terms of Business strength and Industry Attractiveness.Correct Answer False

Your Answer False







True/False

Question Miscellaneous expenditure is written on the asset side of theBalance sheet.

Correct Answer True

Your Answer True


Correct Answer Name of the Industrial concern , Proposed product , Location ofthe factory

Your Answer Name of the Industrial concern , Proposed product , Location ofthe factory

Multiple Choice Single AnswerQuestion A Project is a temporary endeavor to achieve some specific

objectives within a :-Correct Answer Predefined time









Multiple Choice Single AnswerQuestion The cost which change in the same proportion in which the

level of production changes is known as :-Correct Answer Variable cost


Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses

upon appraising the likely technical gaps consists of :-Correct Answer Problems faced during the Construction and Project

implementation





operation

TopicPgNumber

industrial policy after independence 1project 2investment decisions and resource identification 2foreign direct investment 2location of project 3environmental aspects - a matter of public interest 3object of environmental clearance 4project objective 4project financing - a strategic prespective and models 7BCG product portfolio matrix 7seynive tiles 7SPACE 7relative market share 8STARS 8QUESTION MARKS 8CASH COWS 8DOGS 8GE's stop light matrix 9business strength 10industry attractiveness 10the SPACE model 10dimesion and factor evaluated 11company's competitive advantage 11company's financial strength 11industry strength 11environmental stability 11SPACE modus operandi 11SPACE chart 13THE OUTCOME strategic posture 13postures 13

aggressive posture 14competetive posture 14conservative posture 14defensive posture 14SPACE CHART 15generic strategies and key options 15project finance 17what / why is the need for project financing 19project 21project cycle 23types of project 25new projects 25expansion project 25diversification project 25backward integration projects 25forward integration projects 25modernisation projects 25rehabiliation projects 25short term finance 26long term finance 26bridge loan 26seed money 27seed capital 27technical appraisal 29phase I , II , III 29process / production technology 30project engineering 30competitiveness indicators 30manufacturing process / technology 31technical arrangements 31size of the plant 32product mix 32selection of the plant and machinery 32procurement of plant and machinery 32plant layout 33appraisal - financial 35capital cost of the project 35sources of funds 36financial projections 36ratio analysis 36break even point 36cost of the project 36land and site development 37buildings and civil construction / works 37plant and machinery 38technical know-how and related feeds / charges 38expenses on foregin technicians 38misc fixed assets 38

preliminary expenses 39capital issue expenses 39pre-operative expenses 39provision of contingencies 40margin money for working capital 40initial cash loses 40sources of funds 40sales / production forecast 45cost of production 46discounted cash flow techniques 47pay back method 47average rate of return method 50time value of money - discounting technique 50net present value method 50internal rate of return 51information required for calculation of net present value and IRR 51life of the project 51cash outflow 52cash inflow 52residual or terminal value of the project 52cost of the capital 52cost of convertibe debentures 53cost of working capital 53break even point analysis 53fixed costs 54variable cost 54BEP 54significance / utility of BEP for financial appraisal 55projected cash flow 55sources of funds 56deployment of funds 56cash flows 57cash inflow 58projected balance sheets 58liablities 58assets 58financial indicators 59debt serice coverage ratio 59interest cover ratio 59appraisal - commercial 61demand technique forecasting 61past trend method 61end use method 61export market 61supply depth of competition 62marketing aspects 62appraisal market 66market appraisal 66

demand analysis 67qualitative methods 67time series projection methods 68casual methods 68quantitative methods 68jury or executive opninion method 68delphi method 68time series projection methods 69trend projection method 69exponential smoothing method 69casual methods 69chain ratio method 69consumption level method 69end use method 69appraisal management 73management perception 74management qualities 74organisational climate 74organisational structure form 74management problems 74appraisal environmental 77working capital requirement / fianancing 79working capital 79margin money for working capital 80ratio analysis 82net working capital to total assets 82current ratio 82quick (acid test) ratio 82internal measure 82projected working results 84profitablity projections or estimates of working results 84project implementation 87financing plan 92comments 92project organization 92project scheduling 93additional comments 93capital expenditure and financing 94production sales and profitability 94current assets and liabilities 95material inputs and utilities 95working capital commercial bank borrowing 95organization and management 95visit report 96production and sales 98financial and economic 99financial projections 100key steps in market and demand analysis and their relationships 101

project report 103norms of regulatory authority and Fis 103key business considerations 104detailed project report 106financial aspects 106marketing aspects 106management aspects 106technical aspects 106government policies 106infrastructure 107social cost benefit 107sensitivity analysis 107vegprotein LTS 109basic assumptions underlying financial projections 111depreciation schedule 112

LIST OF ATTEMPTED QUESTIONS ANDANSWERSLIST OF ATTEMPTED QUESTIONS AND ANSWERS



True/FalseQuestion2 In small scale organisation, requirement of working capital is quite

high due to high amount of overheads, high buying costs and high selling cost.Correct Answer TrueYour Answer True

True/FalseQuestion3 Banks and Financial Institutions, world-wide, are now financing

projects with strategies and terms that would have been hard to believe/imagine justa few years back.




Relationship

Your Answer Linear Relationship , Exponential Relationship , PolynomialRelationship



Multiple Choice Multiple AnswerQuestion 8 Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in

secured borrowingYour Answer Preliminary expenses written off , Increase in secured borrowing

Multiple Choice Single AnswerQuestion 9 Delay in arrival of domestic/foreign machinery and technicians may

lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun

Select The BlankQuestion 10 A smaller unit into which the overall requirement of capital of a

company is sub-divided is termed as ________.Correct Answer ShareYour Answer Share

Multiple Choice Single AnswerQuestion11 A project objective which states "What' is to be viewed" is termed as

:-Correct Answer Strategic perspectiveYour Answer Strategic perspective


Multiple Choice Multiple AnswerQuestion13 Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill

written off

Your Answer Funds from operation , Goodwill written off





benefitsYour Answer That it involves current outlay of funds in expectation of future

benefits






Select The Blank

Question22 Retained earnings is a source of ________ finance.Correct Answer InternalYour Answer Short term





True/FalseQuestion25 Cost and time overrun of the project may lead to loss on account of

lost market opportunities.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion26 A project objective which states What "achieving it " would cost is

known as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect


Multiple Choice Single AnswerQuestion 28 In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high

growth rateYour Answer Products which enjoy a high market share as well as a high growth

rate


True/False

Question30 Production line diagrams show the organisation structure of theproject along with information on location, personnel required for variousdepartments, and their inter-relationship.


Multiple Choice Multiple AnswerQuestion31 While choosing the location for a project, the following factors should

be considered :-Correct Answer Proximity to raw materials and markets , Availability of



Multiple Choice Single AnswerQuestion32 The cost which change in the same proportion in which the level of

production changes is known as :-Correct Answer Variable costYour Answer Variable cost













Multiple Choice Multiple AnswerQuestion 40 General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location of

the factoryYour Answer Name of the Industrial concern , Proposed product , Location of the

factory



Multiple Choice Multiple AnswerQuestion43 After the SPACE chart is constructed, we would normally get any one

of the following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture

Select The BlankQuestion 44 ________ occupies a unique position in the macro economic

development which helps in induction of new technology and facilitates, greaterefficiency as well as higher productivity.



Select The BlankQuestion46 Name and designation of the chief executive comes under the

________ category.Correct Answer GeneralYour Answer General








commitment of funds.Correct Answer FalseYour Answer False

Select The BlankQuestion In the GE's Stop Light Matrix, when ________ situation prevails ,

Products call for divestment.Correct Answer Average Business Strength and Low Industry attractivenessYour Answer Average Business Strength and Low Industry attractiveness



benefits

Select The Blank

Question ________ tries to have what the customer will want- where, when, inwhat form and at what price.

Correct Answer MarketingYour Answer Finance


Multiple Choice Single AnswerQuestion A project can be regarded as the sum of the activities directed towards a

:-Correct Answer Specific resultYour Answer Specific result

Multiple Choice Single AnswerQuestion Sewerage and drainage cost of the project is categorised under :-Correct Answer Building costYour Answer Building cost

Multiple Choice Single AnswerQuestion The BCG Product Portfolio Matrix :-Correct Answer Is a tool for strategic ( product ) planning and resource allocationYour Answer Is a tool for strategic ( product ) planning and resource allocation

Multiple Choice Single AnswerQuestion End use method of Commercial appraisal technique is :-Correct Answer A list of industries wherein the product is used is made and

quantity and volume is arrived atYour Answer A list of industries wherein the product is used is made and

quantity and volume is arrived at

Select The BlankQuestion ________ capital represents permanent capital.Correct Answer EquityYour Answer Debentures


Export market technique of Commercial appraisal Government provides ampleencouragement Government provides ample encouragement

Demand Technique forecasting of Commercial appraisal Future demand of theproduct Future demand of the product

Past trend method of Commercial appraisal Adopted as a guide depending on theconsumption pattern of the society as a whole Adopted as a guide depending on theconsumption pattern of the society as a whole

End use method of Commercial appraisal A list of industries wherein the product isused is made and quantity and volume is arrived at A list of industries wherein theproduct is used is made and quantity and volume is arrived at



Relationship

Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any one of

the following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture

Select The BlankQuestion ________ in liabilities involves inflow of funds.Correct Answer IncreaseYour Answer Cash

Select The BlankQuestion ________ occupies a unique position in the macro economic




True/FalseQuestion Financial analysis based on accounting ratios will give mis-leading

results if the effects of changes in price level are not taken into account.Correct Answer TrueYour Answer True


Multiple Choice Single AnswerQuestion Appointments made at senior level during the half-year is categorised



Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun


commitment of funds where there is :-Correct Answer Strong Business Strength and high Industry attractiveness ,






Current assets Debtors Investment

Current liability Trade credit Debtors


known as :-Correct Answer EscalationYour Answer Inflation

Multiple Choice Multiple AnswerQuestion Demand technique forecasting of Commercial appraisal includes :-Correct Answer Future demand of the product , Proper survey of the product ,

Future availability and supply of the productYour Answer Future demand of the product , Proper survey of the product ,

Future availability and supply of the product

Multiple Choice Single AnswerQuestion The BCG product Portfolio Matrix, General Electric Stop Light Matrix

and Strategic Position and Action Evaluation Model are considered to be highlyrelevant as :-

Correct Answer Portfolio Planning ToolsYour Answer Portfolio Planning Tools


________.Correct Answer DecreasesYour Answer Decreases

Multiple Choice Multiple AnswerQuestion The applications of cash are :-Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Issue of new machinery

True/FalseQuestion A high debt equity ratio may indicate that the financial stake of the

creditors is more than that of the owners.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out

of :-Correct Answer Cash Profits , Shares , DebenturesYour Answer Cash Profits , Shares , Debentures

True/FalseQuestion Ratio analysis is a technique of planning and control.Correct Answer FalseYour Answer False

True/FalseQuestion Miscellaneous expenditure is written on the asset side of the Balance

sheet.


Select The BlankQuestion Cost of fencing comes under the ________ category of the Project

report.Correct Answer Land and site developmentYour Answer Land and site development


immediately is known as :-Correct Answer Quick ratioYour Answer Quick ratio

Multiple Choice Single AnswerQuestion The Projects which are undertaken to manufacture certain products

which are being used as raw material by the existing units is known as :-Correct Answer Backward Integration ProjectsYour Answer Backward Integration Projects


company are not distributed by it by way of ________ but are kept aside for use infuture for expansion or other purpose.



True/FalseQuestion Unlike financial projections, there cannot be any fixed, well-recognised

or structure formula/steps for management evaluation/appraisal.Correct Answer TrueYour Answer True

True/FalseQuestion Production line diagrams show the organisation structure of the project

along with information on location, personnel required for various departments,and their inter-relationship.


Select The BlankQuestion ________ is a current assetCorrect Answer Book debtsYour Answer Trade credit

True/FalseQuestion For computing Interest coverage ratio, Profit after Interest and taxes

are taken into account.Correct Answer FalseYour Answer True

Select The BlankQuestion Details regarding Internal accruals comes under the ________ category

of Project report.Correct Answer Financing planYour Answer Cost aspect

Multiple Choice Multiple AnswerQuestion Management category of Visit report consists of :-Correct Answer Managing Director , Institutional nominees , Committees of the

boardYour Answer Managing Director , Institutional nominees , Committees of the

board

True/FalseQuestion Nominal maximum capacity is the capacity that is technically attainable

and this corresponds to the supplier's guaranteed capacity.Correct Answer TrueYour Answer False

Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential reserve of cash

is termed as :-Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets

Multiple Choice Multiple AnswerQuestion The following are the sources of funds :-Correct Answer Operating Profit , Non operating IncomeYour Answer Operating Profit , Dividends


LIST OF ATTEMPTED QUESTIONS AND ANSWERSLIST OF ATTEMPTED QUESTIONS AND ANSWERS



True/FalseQuestion2 In small scale organisation, requirement of working capital is quite

high due to high amount of overheads, high buying costs and high selling cost.Correct Answer TrueYour Answer True

True/FalseQuestion3 Banks and Financial Institutions, world-wide, are now financing

projects with strategies and terms that would have been hard to believe/imagine justa few years back.





Relationship



Multiple Choice Multiple AnswerQuestion 8 Sources of funds includes :-



Multiple Choice Single AnswerQuestion 9 Delay in arrival of domestic/foreign machinery and technicians may

lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun

Select The BlankQuestion 10 A smaller unit into which the overall requirement of capital of a

company is sub-divided is termed as ________.Correct Answer ShareYour Answer Share

Multiple Choice Single AnswerQuestion11 A project objective which states "What' is to be viewed" is termed as



Multiple Choice Multiple AnswerQuestion13 Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill

written offYour Answer Funds from operation , Goodwill written off



True/FalseQuestion16 Current assets includes stock-in-process.Correct Answer True

Your Answer True



benefits











True/FalseQuestion25 Cost and time overrun of the project may lead to loss on account of

lost market opportunities.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion26 A project objective which states What "achieving it " would cost is



Multiple Choice Single AnswerQuestion 28 In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high

growth rateYour Answer Products which enjoy a high market share as well as a high growth

rate


True/FalseQuestion30 Production line diagrams show the organisation structure of the

project along with information on location, personnel required for variousdepartments, and their inter-relationship.


Multiple Choice Multiple AnswerQuestion31 While choosing the location for a project, the following factors should





Question32 The cost which change in the same proportion in which the level ofproduction changes is known as :-

Correct Answer Variable costYour Answer Variable cost












Multiple Choice Single AnswerQuestion39 Every project involves financial outlay which can be referred to as :-Correct Answer Project finance


Multiple Choice Multiple AnswerQuestion 40 General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location of

the factoryYour Answer Name of the Industrial concern , Proposed product , Location of the

factory



Multiple Choice Multiple AnswerQuestion43 After the SPACE chart is constructed, we would normally get any one

of the following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture

Select The BlankQuestion 44 ________ occupies a unique position in the macro economic




Select The BlankQuestion46 Name and designation of the chief executive comes under the













True/FalseQuestion In both the extreme situations of trade cycles i.e. Inflation and depression,

requirement of working capital may be high.Correct Answer TrueYour Answer True

True/FalseQuestion Name of the finance manager comes under the Project organisation category

of the Project report.Correct Answer True

Your Answer True














Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing Project

finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensationYour Answer Environmental factors , Risk involved , Managerial compensation




Multiple Choice Multiple AnswerQuestion Debt Service coverage ratio may be considered to be one of the most

important ratios calculated by the :-Correct Answer Bankers , Financial InstitutionsYour Answer Shareholders , Bankers , Financial Institutions

Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is known as

:-Correct Answer Finance cost aspectYour Answer Finance cost aspect


Multiple Choice Multiple AnswerQuestion Limitations of fund flow statement are :-Correct Answer It does not provide any new information but only rearranges the

various facts , It does not consider non-fund transactionsYour Answer It does not provide any new information but only rearranges the various

facts , It does not consider non-fund transactions , It does not help in determining futurerequirement of funds

Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses upon appraising the

likely technical gaps consists of :-Correct Answer Problems pertaining to the period when the project is in operationYour Answer Problems pertaining to the period when the project is in operation


Multiple Choice Single AnswerQuestion It is said that a second rate project in the hands of first rate management is

better than a first rate project in the hands of :-Correct Answer Second rate managementYour Answer Second rate management


Defensive under the SPACE approach.Correct Answer Lacks both competitive advantage as well as financial strength and

belongs to a not so attractive industry, operating in an unstable environmentYour Answer Lacks both competitive advantage as well as financial strength and

belongs to a not so attractive industry, operating in an unstable environment


True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation in the terms

of Business strength and Industry Attractiveness.Correct Answer FalseYour Answer False



Multiple Choice Multiple AnswerQuestion Financial and economic aspect of the Visit report consists of :-Correct Answer Company's financial year , Impact of Government policies on

company operations , Comments on the last published accounts

Your Answer Company's financial year , Impact of Government policies on companyoperations , Comments on the last published accounts




True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are generally during the

stage of Decline of a Product Life Cycle.Correct Answer TrueYour Answer True



Select The BlankQuestion Under the SPACE Model, Customer loyalty is determined under the

________ dimension.Correct Answer Company's competitive advantageYour Answer Company's competitive advantage



True/FalseQuestion The emphasis of a finance manager should be on taking a synergistic view of

the project rather than looking at it only from the financial aspects.Correct Answer True

Your Answer True


Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirementYour Answer Quality standards , Raw material requirement , Power / telecom facilities



Relationship

True/FalseQuestion Market potential should be determined under the Marketing aspect of the

Project report.Correct Answer TrueYour Answer True




True/FalseQuestion If the organisation is a trading organisation, the requirement of working

capital will be on the lower side.Correct Answer FalseYour Answer True








Pollution Control Authorities before setting up any project.Correct Answer TrueYour Answer False

Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is termed as


Select The BlankQuestion ________ tries to have what the customer will want- where, when, in

what form and at what price.Correct Answer MarketingYour Answer Marketing

True/FalseQuestion Debt Service Coverage Ratio is one of the most important ratios

calculated by the bankers or financial institutions giving long term finance to theorganisation.






implementation



Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is






Management Perception Aspiration level/ conservative Aspiration level/conservative









synergistic view of the project rather than looking at it only from the financialaspects.








Question The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future


benefits


Multiple Choice Multiple AnswerQuestion Advantages of fund flow statement are :-Correct Answer It determines financial consequences of the business

operations , It enables the firm to plan its financial resources properly , It helps asa reliable guide for the future requirement of funds

Your Answer It determines financial consequences of the business operations, It considers non-fund transactions , It enables the firm to plan its financialresources properly


True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are generally

during the stage of Decline of a Product Life Cycle.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion The applications of cash are :-Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Payment of long term loans , Issue of

new machinery






investments to the present value of benefits over the life of the project is knownas :-

Correct Answer Internal rate of returnYour Answer Internal rate of return


decay.Correct Answer Life cycleYour Answer Life cycle

Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any

one of the following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture

Select The BlankQuestion ________ is the summary of cash book or Receipts and Payments

statement.Correct Answer Cash flow statementYour Answer Cash flow statement

Multiple Choice Single AnswerQuestion The point at which the unit neither earns profit nor incurs loss is

known as :-Correct Answer Break Even PointYour Answer Break Even Point


Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing

Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial

compensationYour Answer Environmental factors , Risk involved , Managerial compensation

Multiple Choice Multiple AnswerQuestion Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric methodYour Answer Consumption-level method , Econometric method

Select The BlankQuestion Under ________ method, the forecasts are modified in the light of

observed errors.Correct Answer Exponential smoothingYour Answer Exponential smoothing

Multiple Choice Multiple AnswerQuestion Provision for tax can be treated as :-Correct Answer Item of current liabilities , Added back to the profit as per profit

and loss account to arrive at operating profitsYour Answer Added back to the profit as per profit and loss account to arrive

at operating profits , Item of current assets , Item of working capital


company are not distributed by it by way of ________ but are kept aside for usein future for expansion or other purpose.



Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential reserve of

cash is termed as :-Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets

Select The Blank

Question Name and designation of the chief executive comes under the________ category.

Correct Answer GeneralYour Answer General










Pollution Control Authorities before setting up any project.Correct Answer TrueYour Answer False


Question A project objective which states "What' is to be viewed" is termed as:-

Correct Answer Strategic perspectiveYour Answer Strategic perspective

Select The BlankQuestion ________ tries to have what the customer will want- where, when, in

what form and at what price.Correct Answer MarketingYour Answer Marketing

True/FalseQuestion Debt Service Coverage Ratio is one of the most important ratios

calculated by the bankers or financial institutions giving long term finance to theorganisation.






implementation



Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is






Management Perception Aspiration level/ conservative Aspiration level/conservative









synergistic view of the project rather than looking at it only from the financialaspects.


Multiple Choice Single AnswerQuestion Geographic market appraisal answers to :-Correct Answer Where do the customers live?








benefits


Multiple Choice Multiple AnswerQuestion Advantages of fund flow statement are :-Correct Answer It determines financial consequences of the business

operations , It enables the firm to plan its financial resources properly , It helps asa reliable guide for the future requirement of funds

Your Answer It determines financial consequences of the business operations, It considers non-fund transactions , It enables the firm to plan its financialresources properly


True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are generally

during the stage of Decline of a Product Life Cycle.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion The applications of cash are :-Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Payment of long term loans , Issue of

new machinery






investments to the present value of benefits over the life of the project is knownas :-

Correct Answer Internal rate of returnYour Answer Internal rate of return


decay.Correct Answer Life cycleYour Answer Life cycle

Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any

one of the following basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture

Select The Blank

Question ________ is the summary of cash book or Receipts and Paymentsstatement.

Correct Answer Cash flow statementYour Answer Cash flow statement

Multiple Choice Single AnswerQuestion The point at which the unit neither earns profit nor incurs loss is

known as :-Correct Answer Break Even PointYour Answer Break Even Point


Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing

Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial

compensationYour Answer Environmental factors , Risk involved , Managerial compensation

Multiple Choice Multiple AnswerQuestion Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric methodYour Answer Consumption-level method , Econometric method

Select The BlankQuestion Under ________ method, the forecasts are modified in the light of

observed errors.Correct Answer Exponential smoothingYour Answer Exponential smoothing

Multiple Choice Multiple AnswerQuestion Provision for tax can be treated as :-Correct Answer Item of current liabilities , Added back to the profit as per profit

and loss account to arrive at operating profitsYour Answer Added back to the profit as per profit and loss account to arrive

at operating profits , Item of current assets , Item of working capital


company are not distributed by it by way of ________ but are kept aside for usein future for expansion or other purpose.




Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential reserve of

cash is termed as :-Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets







Project report.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion Location of the factory comes under the :-Correct Answer General categoryYour Answer General category


Project appraisal It is the evaluation of project from technical, market, financial,economic and social perspective before committing funds for investment It is apreliminary assessment of the project idea to determine whether or not theinvestment opportunity is promising

Program It is large in scope, is activity oriented and is not necessarily time boundIt is large in scope, is activity oriented and is not necessarily time bound

Project It is one-shot, time-limited, goal oriented, major undertaking requiring thecommitment of varied skills and resources It deals with the impact of theinvestment project on people and their lives

Pre-feasibility study It is a preliminary assessment of the project idea todetermine whether or not the investment opportunity is promising It is one-shot,time-limited, goal oriented, major undertaking requiring the commitment of variedskills and resources

Multiple Choice Single AnswerQuestion The sources of funding have expanded from banks, insurance

companies and multilateral agencies to include the :-Correct Answer Capital marketYour Answer Debt market

Multiple Choice Single AnswerQuestion Cost of overheads include :-Correct Answer Cost of repairs and maintenanceYour Answer Cost of electricity


implementation of the Project and the realization of the Project objectives.Correct Answer TrueYour Answer True

True/FalseQuestion Debt Service means payment of installments and interest against an

amount borrowed as per terms of loan.Correct Answer TrueYour Answer True

True/FalseQuestion The ratios of one organisation compared with the ratios of the same

organisation is termed as inter-firm comparison.Correct Answer FalseYour Answer False

Select The BlankQuestion Depreciation is sometimes treated as ________ funds.Correct Answer SourceYour Answer Application


Multiple Choice Multiple AnswerQuestion The Key terms used in the BCG Product Portfolio matrix are :-Correct Answer Stars , Question marksYour Answer Stars , Question marks , Invest




RelationshipYour Answer Linear Relationship , Chain ratio Relationship , Exponential

Relationship

Multiple Choice Single AnswerQuestion Delay in arrival of domestic/foreign machinery and technicians may

lead to :-Correct Answer Cost and time overrunYour Answer Profit maximisation

Multiple Choice Single AnswerQuestion Past trend method of Commercial appraisal technique is :-Correct Answer Adopted as a guide depending on the consumption pattern of

the society as a wholeYour Answer Adopted as a guide depending on the consumption pattern of the

society as a whole

Multiple Choice Multiple AnswerQuestion Limitations of fund flow statement are :-Correct Answer It does not provide any new information but only rearranges

the various facts , It does not consider non-fund transactionsYour Answer It does not consider non-fund transactions , It does not help in

determining future requirement of funds , It does not provide any new informationbut only rearranges the various facts


________.Correct Answer DecreasesYour Answer Increases

Multiple Choice Single AnswerQuestion Preoperative expenses includes :-Correct Answer Bank guaranteesYour Answer Brokerage on capital issue


Select The BlankQuestion In order to meet the cost of large project, the technique of ________

has been developed so that the financial commitment and risks associated with aproject are shared between the project sponsor and the lending institutions.

Correct Answer Limited recourse financingYour Answer Limited recourse financing

True/FalseQuestion For computing Interest coverage ratio, Profit after Interest and taxes

are taken into account.Correct Answer FalseYour Answer True


cash immediately is known as :-Correct Answer Quick ratioYour Answer Current ratio


Correct Answer Managing Director , Institutional nominees , Committees of theboard

Your Answer Managing Director , Electrical engineers , Institutional nominees

Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix analyses products in terms of :-Correct Answer Business strength and Industrial AttractivenessYour Answer Relative Market share and Industry Growth rate

Multiple Choice Single AnswerQuestion The basic document for facilitating Project financing is the :-Correct Answer Detailed Project reportYour Answer Detailed Project report

Select The BlankQuestion The ________ market is longer the order of the day since this is an

era of professionalization and specialised services are available at cost.Correct Answer MonopolisticYour Answer Monopolistic

True/FalseQuestion Ratio should be computed on the basis of inter-related figures which

have a cause and effect relationship.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion Demand technique forecasting of Commercial appraisal includes :-Correct Answer Future demand of the product , Proper survey of the product ,

Future availability and supply of the productYour Answer Future demand of the product , Export market , Future availability

and supply of the product

Select The BlankQuestion Having decided on the location and product, the promoter takes into

account the ________ that is to be adopted for producing the product.Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology


Select The Blank

Question More accurate the estimation of the level of current assets andcurrent liabilities, more accurate will be estimation of the requirement of________.

Correct Answer Working capitalYour Answer Working capital

Multiple Choice Multiple AnswerQuestion Defaults category of the Project report may be in respect of :-Correct Answer Term loans , Principal , InterestYour Answer Term loans , Principal , Interest


General functional layout Present the general relationship between equipmentbuildings and civil works The plan of work concerning installation as well as initialoperation

Location Broad area such as city, industrial belt etc. The diagrams indicating theflow of materials, utilities, final product, by-products and emission

Site Specific piece of land where the project would be set up Broad area such ascity, industrial belt etc.

Plant layout Physical layout of the factory Specific piece of land where the projectwould be set up

True/FalseQuestion If the organisation is a trading organisation, the requirement of

working capital will be on the lower side.Correct Answer FalseYour Answer True

Select The BlankQuestion Cost of fencing comes under the ________ category of the Project

report.Correct Answer Land and site developmentYour Answer Building cost

Multiple Choice Multiple AnswerQuestion Disposition of funds includes :-Correct Answer Increase in working capital , Preliminary expenses , DividendYour Answer Increase in working capital , Preliminary expenses , Preliminary

expenses written off

Multiple Choice Multiple AnswerQuestion Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in

secured borrowingYour Answer Depreciation , Preliminary expenses written off , Increase in

secured borrowing , Preliminary expenses

Multiple Choice Single AnswerQuestion The Projects which are undertaken to manufacture certain products

which are being used as raw material by the existing units is known as :-Correct Answer Backward Integration ProjectsYour Answer Backward Integration Projects

Select The BlankQuestion In the GE's Stop Light Matrix, when ________ situation prevails ,

Products call for divestment.Correct Answer Average Business Strength and Low Industry attractivenessYour Answer Weak Business strength and high Industry attractiveness


________ of the company.Correct Answer CreditorsYour Answer Creditors

Multiple Choice Multiple AnswerQuestion Debt Service coverage ratio may be considered to be one of the

most important ratios calculated by the :-Correct Answer Bankers , Financial InstitutionsYour Answer Shareholders , Bankers , Creditors

Multiple Choice Single AnswerQuestion Dissentions among the promoters is a :-Correct Answer Management problemYour Answer Management perception

Select The BlankQuestion Goods purchased on credit ________ in flow of funds.Correct Answer Does not resultYour Answer Does not result

True/FalseQuestion The secondary data is collected through market survey, specific for

the project being appraised.Correct Answer FalseYour Answer False

Multiple Choice Single AnswerQuestion Profit is the result of customer satisfaction, indeed customer delight

under the :-Correct Answer Marketing conceptYour Answer Marketing concept

Multiple Choice Multiple AnswerQuestion Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill

written offYour Answer Funds from operation , Goodwill written off , Funds from long

term loans


Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed

out of :-Correct Answer Debentures , Cash Profits , SharesYour Answer Debentures , Cash Profits , Shares

Multiple Choice Multiple AnswerQuestion The sources of long term and medium term finance are :-Correct Answer Equity shares , Public depositYour Answer Equity shares , Bridge loan , Public deposit

Multiple Choice Single AnswerQuestion The emphasis of the Banks and Financial institutions particularly in

India has shifted from 'Sanctions', 'Disbursements' and 'Security-orientation' to'Recovery/Recycling' and :-

Correct Answer Activity orientationYour Answer Activity orientation


infrastructural facilities are to be considered under :-Correct Answer Technical appraisalYour Answer Financial appraisal


report with additional information.Correct Answer FeasibilityYour Answer Feasibility

True/FalseQuestion A high debt equity ratio may indicate that the financial stake of the

creditors is more than that of the owners.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion The formula for Break Even Point is :-Correct Answer Fixed cost / ( Sales Price - Variables)Your Answer (Profit after tax +Depreciation + Interest)/ Interest

Multiple Choice Single AnswerQuestion Receivables is categorised under :-Correct Answer Current assets and liabilitiesYour Answer Material inputs and utilities

Multiple Choice Multiple AnswerQuestion Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Internal measure


________.Correct Answer Working capitalYour Answer Fixed assets

Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Management aspects includes :-Correct Answer Determination , Organisation Building , Person / system

orientedYour Answer Organisation Building , Person / system oriented , Promoter's

equity / stake

True/FalseQuestion Financial analysis based on accounting ratios will give mis-leading

results if the effects of changes in price level are not taken into account.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirementYour Answer Plant capacity , Quality standards , Raw material requirement

Select The Blank

Question Inflow of funds may not necessarily result in ________.Correct Answer Inflow of cashYour Answer Decrease in funds

Multiple Choice Multiple AnswerQuestion Building cost consists of :-Correct Answer Factory building , Auxiliary buildings , Administrative blockYour Answer cost of development , Factory building , Auxiliary buildings


Increase in current liabilities Decreases working capital Stability of funds

Increase in liabilities Inflow of funds Inflow of funds



Select The BlankQuestion Sometimes the term ________ is interpreted as cash equivalent i.e.

cash and marketable securities.Correct Answer FundYour Answer Fund

True/FalseQuestion Name of the finance manager comes under the Project organisation

category of the Project report.Correct Answer TrueYour Answer False


overrun.Correct Answer TrueYour Answer True

True/FalseQuestion The maximum Seed Capital assistance provided by IDBI under the

project will be restricted to 50% of the required promoter's contribution or Rs. 50lakhs whichever is lower.




General category of Project report Location of factory Reasons for costescalations

Cost aspect of the project report Consultancy fees Finance manager

Financing plan Unsecured loans Location of factory

True/FalseQuestion Trend projection method is the important technique for forecasting

demand.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability

Multiple Choice Multiple AnswerQuestion The sources of cash are :-Correct Answer Cash from operations , Sale of machinery , Issue of new

sharesYour Answer Purchase of fixed assets , Cash from operations , Sale of

machinery



project along with information on location, personnel required for variousdepartments, and their inter-relationship.


Select The BlankQuestion ________ is a current assetCorrect Answer Book debts



posture of Defensive under the SPACE approach.Correct Answer Lacks both competitive advantage as well as financial strength

and belongs to a not so attractive industry, operating in an unstable environmentYour Answer High financial strength, high industrial strength, enjoying a

competitive advantage and belonging to an attractive industry, operating in arelatively stable environmental conditions

Multiple Choice Single AnswerQuestion Management aspect of detailed project report includesCorrect Answer Organisation structureYour Answer Demand forecasting

Select The BlankQuestion ________ profitability reduces the strain on working capital.Correct Answer HighYour Answer High

Multiple Choice Multiple AnswerQuestion The following are the sources of funds :-Correct Answer Operating Profit , Non operating IncomeYour Answer Operating Profit , Operating Loss , Non operating Income

Multiple Choice Single AnswerQuestion The cash flow of all the years during the expected life of the project

are discounted at a pre-determined cut off rate and :-Correct Answer Net Present value is obtainedYour Answer Internal rate of return is obtained

Multiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-Correct Answer To find out the uses of loans raised by the business , To

indicate the financial strength and weakness of the business , To help tounderstand the changes in assets as well as asset sources which are notrevealed by the income statement

Your Answer To find out the uses of loans raised by the business , To indicatethe financial strength and weakness of the business , To help to understand thechanges in assets as well as asset sources which are not revealed by the incomestatement

Multiple Choice Single AnswerQuestion Cost of materials include :-Correct Answer Cost of components and consumable stores

Your Answer Cost of electricity

True/FalseQuestion The Detailed Project report must indicate the gestation period of the

project.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion Strategic Position and Action Evaluation Model :-Correct Answer Is an approach to hammer out an appropriate strategic

posture for a firm and its individual businessYour Answer Which is highly respected for the sophistication, maturity and

quality in its planning systems

Select The BlankQuestion Location of the factory comes under the ________ category of the

Project report.Correct Answer GeneralYour Answer General

Select The BlankQuestion Retained earnings is a source of ________ finance.Correct Answer InternalYour Answer Internal

Multiple Choice Multiple AnswerQuestion General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location

of the factoryYour Answer Name of the Industrial concern , Proposed product , Location of

the factory

Select The BlankQuestion Short term finance is normally for a period upto ________ year.Correct Answer OneYour Answer Two

Multiple Choice Single AnswerQuestion Appointments made at senior level during the half-year is

categorised under :-Correct Answer Organisation and managementYour Answer Current assets and liabilities

Select The BlankQuestion Commission outstanding is ________ of funds.

Correct Answer ApplicationYour Answer Application

Multiple Choice Single AnswerQuestion The statement which shows the movement of cash into and out of

firm's kittie is known as :-Correct Answer Cash flow statementYour Answer Profit and Loss statement

Multiple Choice Single AnswerQuestion Cost of utilities include :-Correct Answer Cost of electricityYour Answer Cost of components and consumable stores

Multiple Choice Single AnswerQuestion Marketing aspect of Detailed Project report includes :-Correct Answer Demand forecastingYour Answer Detailed Project Engineering

True/FalseQuestion In both the extreme situations of trade cycles i.e. Inflation and

depression, requirement of working capital may be high.Correct Answer TrueYour Answer False

Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors should


infrastructure , Government policies and other factorsYour Answer Proximity to raw materials and markets , Plant capacity ,

Availability of infrastructure

Project Finance assgn :01: Sushant


forecasting demand.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion The BCG Product Portfolio Matrix :-Correct Answer Is a tool for strategic ( product ) planning and

resource allocation

Your Answer Is a tool for strategic ( product ) planning and resourceallocation

Select The BlankQuestion A market survey generally is a ________ survey.Correct Answer SampleYour Answer Primary

Select The BlankQuestion ________ capital represents permanent capital.Correct Answer EquityYour Answer Equity

Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in

expectation of future benefitsYour Answer That it involves current outlay of funds in expectation

of future benefits

True/FalseQuestion Nominal maximum capacity is the capacity that is

technically attainable and this corresponds to the supplier'sguaranteed capacity.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a

projectYour Answer The total of all items of outlay associated with a

project

True/FalseQuestion There is a need for studying Project finance both for the

lenders as well as the borrowers as both of them have equal stake inmaking the Project a success.Correct Answer TrueYour Answer True


Correct Answer Managing Director , Institutional nominees ,Committees of the boardYour Answer Managing Director , Institutional nominees ,

Committees of the board

Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be

referred to as :-Correct Answer Project financeYour Answer Financial arrangement

True/FalseQuestion Debt service coverage ratio indicates whether cash earned

is sufficient for debt service.Correct Answer TrueYour Answer False


assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial

compensationYour Answer Environmental factors , Risk involved , Political issues

Multiple Choice Multiple AnswerQuestion The following are the sources of funds :-Correct Answer Operating Profit , Non operating IncomeYour Answer Operating Profit , Non operating Income

Select The BlankQuestion ________ occupies a unique position in the macro

economic development which helps in induction of new technology andfacilitates, greater efficiency as well as higher productivity.Correct Answer InvestmentYour Answer Production

True/FalseQuestion In both the extreme situations of trade cycles i.e. Inflation

and depression, requirement of working capital may be high.Correct Answer TrueYour Answer True


Question In the Detailed Project Report, Marketing aspects includes:-Correct Answer Demand forecasting , Promotion , DistributionYour Answer Demand forecasting , Promotion , Distribution

Multiple Choice Single AnswerQuestion The Projects which are undertaken to manufacture certain

products which require the products of existing units as raw material isknown as :-Correct Answer Forward Integration ProjectsYour Answer Backward Integration Projects


Management problems Lack of exposure Lack of exposureManagement Quality Initiative Person orientedManagement Perception Aspiration level/ conservative CorporateOrganisational Climate Person oriented Aspiration level/ conservative

Multiple Choice Multiple AnswerQuestion Demand technique forecasting of Commercial appraisal

includes :-Correct Answer Future demand of the product , Proper survey of the

product , Future availability and supply of the productYour Answer Future demand of the product , Proper survey of the

product , Export market , Future availability and supply of the product

Select The BlankQuestion Details regarding Administrative / controlling office comes

under the ________ category.Correct Answer GeneralYour Answer Cost aspect

Multiple Choice Multiple AnswerQuestion Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off ,

Increase in secured borrowingYour Answer Preliminary expenses written off , Increase in secured

borrowingMultiple Choice Single Answer

Question A project objective which states What "achieving it " wouldcost is known as :-

Correct Answer Finance cost aspectYour Answer Finance cost aspect

Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following

factors should be considered :-Correct Answer Proximity to raw materials and markets , Availability

of infrastructure , Government policies and other factorsYour Answer Proximity to raw materials and markets , Availability of


Multiple Choice Single AnswerQuestion The profit earned from operations of the project during life

of the project is known as :-Correct Answer Cash inflowYour Answer Profit after appropriation

Multiple Choice Multiple AnswerQuestion Financial and economic aspect of the Visit report consists

of :-Correct Answer Company's financial year , Impact of Government

policies on company operations , Comments on the last publishedaccountsYour Answer Company's financial year , Impact of Government

policies on company operations , Sales trends

Select The BlankQuestion A Project has a ________ represented by growth,

maturity and decay.Correct Answer Life cycleYour Answer Life cycle



Export market technique of Commercial appraisal Governmentprovides ample encouragement Government provides ampleencouragement

Demand Technique forecasting of Commercial appraisal Futuredemand of the product A method based on the assumption that thebehaviour of the variables would continue in similar/same directionand magnitude, as in the past

Past trend method of Commercial appraisal Adopted as a guidedepending on the consumption pattern of the society as a wholeAdopted as a guide depending on the consumption pattern of thesociety as a whole

End use method of Commercial appraisal A list of industries whereinthe product is used is made and quantity and volume is arrived at Alist of industries wherein the product is used is made and quantity andvolume is arrived at

Multiple Choice Single AnswerQuestion A project objective which states "What' is to be viewed" is

termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective


synergistic view of the project rather than looking at it only from thefinancial aspects.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion Financing plans consists of :-Correct Answer Share capital , Term loans , Internal accrualsYour Answer Share capital , Term loans , Internal accruals

Multiple Choice Single AnswerQuestion Disposition of funds includes :-Correct Answer Interest on term loansYour Answer Increase in secured borrowing

Multiple Choice Single AnswerQuestion Gross Working Capital means :-Correct Answer Current assetsYour Answer Current assets less Current liabilities


Select The BlankQuestion The Project Cycle should be in the ________ orderCorrect Answer Identification of Project - Project Appraisal -

Negotiations for loansYour Answer Identification of Project - Project Appraisal -

Negotiations for loans


Select The BlankQuestion Investors who invest in the debentures of the company

are the ________ of the company.Correct Answer CreditorsYour Answer Creditors

Select The BlankQuestion Longer the duration of production cycle, higher the

requirement of ________.Correct Answer Working capitalYour Answer Working capital

True/FalseQuestion Cost and time overrun of the project may lead to loss on

account of lost market opportunities.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion The ratio which indicates the ability of the company to

meet current obligations is termed as :-Correct Answer Current ratioYour Answer Current ratio

Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses

upon appraising the likely technical gaps consists of :-

Correct Answer Problems pertaining to the period when the projectis in operationYour Answer Problems pertaining to the period when the project is

in operation

Multiple Choice Multiple AnswerQuestion Technical appraisal is basically concerned with :-Correct Answer Technology , Layout of the plant , Design of the

plantYour Answer Technology , Layout of the plant , Design of the plant

True/FalseQuestion Market potential should be determined under the

Marketing aspect of the Project report.Correct Answer TrueYour Answer True

Select The BlankQuestion Having decided on the location and product, the promoter

takes into account the ________ that is to be adopted for producingthe product.Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology


Multiple Choice Single AnswerQuestion BCG Product Portfolio Matrix analyses products on the

basis of :-Correct Answer Relative Market share and Industry Growth rateYour Answer Relative Market share and Industry Growth rate

Multiple Choice Single AnswerQuestion Preliminary expenses include :-Correct Answer Drafting of Memorandum expensesYour Answer Drafting of Memorandum expenses


True/FalseQuestion Cost under-estimation at the project preparation and evaluation stage leads to

cost and time over run.Correct Answer TrueYour Answer True




General category of Project report Location of factory Location of factory

Cost aspect of the project report Consultancy fees Reasons for cost escalations

Financing plan Unsecured loans Finance manager

Select The BlankQuestion ________ is a current assetCorrect Answer Book debtsYour Answer Furniture


Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out of :-Correct Answer Cash Profits , Shares , DebenturesYour Answer Cash Profits , Commercial Papers



Select The BlankQuestion Commission outstanding is ________ of funds.Correct Answer ApplicationYour Answer No flow




Your Answer To find out the uses of loans raised by the business , To help tounderstand the changes in assets as well as asset sources which are not revealed by theincome statement , Helps to prepare financial statements

Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon appraising

the likely technical gaps consists of :-Correct Answer Problems faced during the Construction and Project implementationYour Answer Problems faced during the Construction and Project implementation





, Government policies and other factorsYour Answer Proximity to raw materials and markets , Plant capacity , Availability of

infrastructure


Select The Blank

Question Name and designation of the chief executive comes under the ________category.

Correct Answer GeneralYour Answer Project organisation




Multiple Choice Multiple AnswerQuestion Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written

offYour Answer Funds from operation , Funds from long term loans



Select The BlankQuestion ________ is that scarce input which financial resources alone cannot

mobilise.Correct Answer ManagementYour Answer Management




Correct Answer OneYour Answer One







Business Strength and Medium Industry Attractiveness , Average Business strength andhigh Industry attractiveness






Multiple Choice Single AnswerQuestion The cash flow of all the years during the expected life of the project are

discounted at a pre-determined cut off rate and :-Correct Answer Net Present value is obtainedYour Answer Average rate of return is obtained

Multiple Choice Single AnswerQuestion The ratio which indicates the ability of the company to meet current

obligations is termed as :-Correct Answer Current ratioYour Answer Current ratio


True/FalseQuestion In small scale organisation, requirement of working capital is quite high due


Multiple Choice Single AnswerQuestion Marketing aspect of Detailed Project report includes :-Correct Answer Demand forecastingYour Answer Demand forecasting

True/FalseQuestion The secondary data is collected through market survey, specific for the

project being appraised.Correct Answer FalseYour Answer True

True/FalseQuestion Debt service coverage ratio indicates whether cash earned is sufficient for

debt service.Correct Answer TrueYour Answer True

Select The BlankQuestion Position regarding requirement and training of operational staff comes under

the ________ category of Project report.Correct Answer Project organisationYour Answer Project organisation


Moving into new areas/product lines Diversification Projects Rehabilitation Projects

Suppliers' credit Short term finance Short term finance

Deferred credit Long term finance Long term finance

Setting up new units New Projects Diversification Projects




Multiple Choice Single AnswerQuestion The basic document for facilitating Project financing is the :-Correct Answer Detailed Project reportYour Answer Articles of Association

Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirementYour Answer Plant capacity , Quality standards , Power / telecom facilities


termed as :-Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets

Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix :-Correct Answer Which is highly respected for the sophistication, maturity and quality

in its planning systemsYour Answer Which is highly respected for the sophistication, maturity and quality in





Multiple Choice Multiple AnswerQuestion The temporary requirement of working capital can be financed out of :-Correct Answer Inter-corporate Deposits , Commercial PapersYour Answer Inter-corporate Deposits , Commercial Papers




Project Financing Help improving Corporate Return on Equity Industrial FinanceCorporation of India

Finance in international financial markets Issue of Euro bonds Issue of Euro bonds

International financial institutions World Bank Increasing emphasis on the Privateinitiative

Policy of Liberalisation, Privatisation and Globalisation Increasing emphasis on thePrivate initiative Help improving Corporate Return on Equity


Multiple Choice Single AnswerQuestion Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Management problems

Select The BlankQuestion The Project Cycle should be in the ________ orderCorrect Answer Identification of Project - Project Appraisal - Negotiations for loansYour Answer Identification of Project - Project Appraisal - Negotiations for loans



the :-Correct Answer Sales conceptYour Answer Marketing concept


market opportunities.


Multiple Choice Multiple AnswerQuestion Management qualities includes :-Correct Answer Honesty , Financial resources , InitiativeYour Answer Honesty , Initiative , Too ambitious promoters


RelationshipYour Answer Linear Relationship , Chain ratio Relationship , Exponential Relationship





Your Answer To indicate the financial strength and weakness of the business , To helpto understand the changes in assets as well as asset sources which are not revealed by theincome statement , Helps to prepare financial statements

True/FalseQuestion The maximum Seed Capital assistance provided by IDBI under the project

will be restricted to 50% of the required promoter's contribution or Rs. 50 lakhswhichever is lower.



Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspectYour Answer Strategic perspective , Time span , Finance cost aspect , Social aspect

Multiple Choice Single AnswerQuestion Strategic Position and Action Evaluation Model :-Correct Answer Is an approach to hammer out an appropriate strategic posture for a

firm and its individual businessYour Answer Which is highly respected for the sophistication, maturity and quality in




Multiple Choice Multiple AnswerQuestion Technical appraisal is basically concerned with :-Correct Answer Technology , Layout of the plant , Design of the plantYour Answer Technology , Layout of the plant , Design of the plant














Select The BlankQuestion Details regarding Administrative / controlling office comes under the

________ category.Correct Answer GeneralYour Answer Project organisation

Multiple Choice Multiple AnswerQuestion Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Quick ratio

Select The BlankQuestion Depreciation is sometimes treated as ________ funds.Correct Answer SourceYour Answer Source


Multiple Choice Single AnswerQuestion In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high growth


Select The BlankQuestion ________ is a current liability.Correct Answer Trade creditYour Answer Unsecured loans


Econometric method Mathematical representation of economic relationship Suitable forforecasting the demand for intermediate products


Secondary source of data Collected in some other context Collected in some othercontext

Leading indicators Variables that change faster than others Mathematical representationof economic relationship

Multiple Choice Multiple AnswerQuestion Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured

borrowingYour Answer Depreciation , Increase in secured borrowing





Multiple Choice Single AnswerQuestion Capital Issue expenses include :-Correct Answer Brokerage fees to registrarsYour Answer Market research expenses



Multiple Choice Single AnswerQuestion Past trend method of Commercial appraisal technique is :-Correct Answer Adopted as a guide depending on the consumption pattern of the

society as a wholeYour Answer A list of industries wherein the product is used is made and quantity and



Question Management category of Visit report consists of :-Correct Answer Managing Director , Institutional nominees , Committees of the boardYour Answer Managing Director , Electrical engineers , Committees of the board

Multiple Choice Single AnswerQuestion Sanctioned bank limits is categorised under :-Correct Answer Working capitalYour Answer Production, Sales and Profitability

Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix analyses products in terms of :-Correct Answer Business strength and Industrial AttractivenessYour Answer Business strength and Industrial Attractiveness

Multiple Choice Multiple AnswerQuestion Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability , Sales trends

Multiple Choice Single AnswerQuestion Cost of overheads include :-Correct Answer Cost of repairs and maintenanceYour Answer Cost of repairs and maintenance



Conservative under the SPACE approach.Correct Answer Limited competitive advantage, belonging to a not so attractive

industry but enjoying financial strength and operating in a relatively stable environmentYour Answer High financial strength, high industrial strength, enjoying a competitive

advantage and belonging to an attractive industry, operating in a relatively stableenvironmental conditions





Multiple Choice Single AnswerQuestion The cost of Plant and Machinery includes :-Correct Answer Cost of stores and sparesYour Answer Building and civil construction

Select The BlankQuestion The basic difference between the feasibility study report and ________ is the

level of accuracy and degree of detail.Correct Answer Detailed Project reportYour Answer Audit report

1

True/FalseQuestion The Detailed Project report spells out the modus operandi for the implementation of the Project

and the realization of the Project objectives.Correct Answer True

Your Answer True

True/FalseQuestion Production line diagrams show the organisation structure of the project along with information on

location, personnel required for various departments, and their inter-relationship.Correct Answer False

Your Answer False

Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon appraising the likely technical

gaps consists of :-Correct Answer Problems faced during the Construction and Project implementation


Multiple Choice Single AnswerQuestion In BCG Matrix "STARS" indicate :-

Correct Answer Products which enjoy a high market share as well as a high growth rate

Your Answer Products which enjoy a high market share as well as a high growth rate


Correct Answer Managing Director , Institutional nominees , Committees of the board

Your Answer Managing Director , Institutional nominees , Committees of the board

Select The BlankQuestion A Project has a ________ represented by growth, maturity and decay.

Correct Answer Life cycle

Your Answer Set of objectives



Your Answer Consumption-level method

Select The Blank

2

Question Excessive expenditures on foreign technicians leads to ________.



Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is known as :-

Correct Answer Finance cost aspect

Your Answer Time span





Correct Answer Sale of machinery , Cash from operations , Issue of new shares




Your Answer Industrial machinery

Select The BlankQuestion ________ is the summary of cash book or Receipts and Payments statement.

Correct Answer Cash flow statement

Your Answer Trial balance

Multiple Choice Single AnswerQuestion Receivables is categorised under :-

Correct Answer Current assets and liabilities

Your Answer Current assets and liabilities

True/FalseQuestion A project is unique and no two projects are similar.

Correct Answer True

3

Your Answer True


End use method of Commercialappraisal

A list of industries wherein the productis used is made and quantity andvolume is arrived at

A list of industries wherein the product isused is made and quantity and volumeis arrived at

Export market technique ofCommercial appraisal

Government provides ampleencouragement

Government provides ampleencouragement

Demand Technique forecasting ofCommercial appraisal

Future demand of the product Future demand of the product

Past trend method of Commercialappraisal

Adopted as a guide depending on theconsumption pattern of the society asa whole

Adopted as a guide depending on theconsumption pattern of the society as awhole

Multiple Choice Single AnswerQuestion A Project is a temporary endeavor to achieve some specific objectives within a :-

Correct Answer Predefined time






than looking at it only from the financial aspects.Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion Cost of utilities include :-

Correct Answer Cost of electricity

Your Answer Cost of electricity

Multiple Choice Multiple AnswerQuestion Marketing category of the Project report consists of :-

Correct Answer Target market , Market potential , Pricing policy

Your Answer Target market , Market potential , Pricing policy


4

Question In BCG Matrix "QUESTION MARKS" indicate :-



Select The BlankQuestion Location of the factory comes under the ________ category of the Project report.


Your Answer General


before setting up any project.Correct Answer True

Your Answer False

Multiple Choice Single AnswerQuestion Disposition of funds includes :-

Correct Answer Interest on term loans

Your Answer Interest on term loans



Your Answer Funds from operation



Your Answer Application

Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where

there is :-Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high

Industry attractivenessYour Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high

Industry attractiveness , Average Business Strength and Low Industry attractiveness



5


True/FalseQuestion The cost factors of the product mixed is also taken into account to arrive at cost at various levels of

production and its cost impact of the manufacturing.Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion The various aspects which need to be considered while assessing Project finance financing are :-

Correct Answer Environmental factors , Risk involved , Managerial compensation




Your Answer Detailed Project Engineering


Technical aspect of detailed projectreport

Detailed Project Engineering Detailed Project Engineering

Financial aspect of Detailed Projectreport

Profitability Profitability

Marketing aspect of Detailed Projectreport

Distribution Distribution

Management aspect of detailed projectreport

Conservativeness Conservativeness

Multiple Choice Multiple AnswerQuestion Advantages of fund flow statement are :-

Correct Answer It determines financial consequences of the business operations , It enables the firm to plan itsfinancial resources properly , It helps as a reliable guide for the future requirement of funds

Your Answer It determines financial consequences of the business operations , It enables the firm to plan itsfinancial resources properly , It helps as a reliable guide for the future requirement of funds

Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any one of the following basic

strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture


Select The Blank

6

Question Details regarding Internal accruals comes under the ________ category of Project report.

Correct Answer Financing plan

Your Answer General category

True/FalseQuestion The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength

and Industry Attractiveness.Correct Answer False

Your Answer False



Your Answer Purchase of fixed assets , Payment of long term loans , Issue of new machinery


Correct Answer Identification of Project - Project Appraisal - Negotiations for loans

Your Answer Identification of Project - Project Appraisal - Negotiations for loans

True/FalseQuestion Financial analysis based on accounting ratios will give mis-leading results if the effects of changes

in price level are not taken into account.Correct Answer True

Your Answer True

True/FalseQuestion There is a need for studying Project finance both for the lenders as well as the borrowers as both

of them have equal stake in making the Project a success.Correct Answer True

Your Answer True




True/FalseQuestion Current assets includes stock-in-process.

Correct Answer True

7

Your Answer False

Multiple Choice Multiple AnswerQuestion External sources of cash are as follows :-

Correct Answer Issue of new shares , Long term loans , Short term borrowings

Your Answer Issue of new shares , Depreciation


Correct Answer A list of industries wherein the product is used is made and quantity and volume is arrived at

Your Answer A list of industries wherein the product is used is made and quantity and volume is arrived at

Multiple Choice Single AnswerQuestion The Projects which are undertaken for further enhancing/augmenting the existing capacity is

known as :-Correct Answer Expansion Projects

Your Answer Expansion Projects

Select The BlankQuestion Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable

securities.Correct Answer Fund


1

True/FalseQuestion 1 The advantage of secondary sources of data is that it is readily and economically available.Correct Answer TrueYour Answer True

True/FalseQuestion2 In small scale organisation, requirement of working capital is quite high due to high amount

of overheads, high buying costs and high selling cost.Correct Answer TrueYour Answer True

True/FalseQuestion3 Banks and Financial Institutions, world-wide, are now financing projects with strategies and

terms that would have been hard to believe/imagine just a few years back.Correct Answer TrueYour Answer True


Multiple Choice Multiple AnswerQuestion 5 Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial RelationshipYour Answer Linear Relationship , Exponential Relationship , Polynomial Relationship



Multiple Choice Multiple AnswerQuestion 8 Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowingYour Answer Preliminary expenses written off , Increase in secured borrowing

Multiple Choice Single AnswerQuestion 9 Delay in arrival of domestic/foreign machinery and technicians may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun

Select The BlankQuestion 10 A smaller unit into which the overall requirement of capital of a company is sub-divided is

termed as ________.Correct Answer ShareYour Answer Share



2

Question 12 Sewerage and drainage cost of the project is categorised under :-Correct Answer Building costYour Answer Building cost

Multiple Choice Multiple AnswerQuestion13 Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written offYour Answer Funds from operation , Goodwill written off




Multiple Choice Single AnswerQuestion17 The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits




Select The BlankQuestion21 Longer the duration of production cycle, higher the requirement of ________.Correct Answer Working capitalYour Answer Working capital


Select The BlankQuestion23 ________ is the summary of cash book or Receipts and Payments statement.Correct Answer Cash flow statementYour Answer Trial balance

3

True/FalseQuestion24 In the BCG Matrix, the key term of Cash Cows require further commitment of funds.Correct Answer FalseYour Answer True

True/FalseQuestion25 Cost and time overrun of the project may lead to loss on account of lost market

opportunities.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion26 A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect


Multiple Choice Single AnswerQuestion 28 In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high growth rateYour Answer Products which enjoy a high market share as well as a high growth rate


True/FalseQuestion30 Production line diagrams show the organisation structure of the project along with

information on location, personnel required for various departments, and their inter-relationship.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion31 While choosing the location for a project, the following factors should be considered :-Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government

policies and other factorsYour Answer Proximity to raw materials and markets , Availability of infrastructure , Government

policies and other factors

Multiple Choice Single AnswerQuestion32 The cost which change in the same proportion in which the level of production changes is

known as :-Correct Answer Variable costYour Answer Variable cost



4

Multiple Choice Single AnswerQuestion35 Appointments made at senior level during the half-year is categorised under :-Correct Answer Organisation and managementYour Answer Organisation and management









Multiple Choice Multiple AnswerQuestion 40 General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location of the factoryYour Answer Name of the Industrial concern , Proposed product , Location of the factory



Multiple Choice Multiple AnswerQuestion43 After the SPACE chart is constructed, we would normally get any one of the following basic

strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture

Select The BlankQuestion 44 ________ occupies a unique position in the macro economic development which helps in

induction of new technology and facilitates, greater efficiency as well as higher productivity.Correct Answer InvestmentYour Answer Marketing

5


Select The BlankQuestion46 Name and designation of the chief executive comes under the ________ category.Correct Answer GeneralYour Answer General








Econometric method Mathematical representation ofeconomic relationship

Mathematical representation ofeconomic relationship


Secondary source of data Collected in some other context Collected in some other context

Leading indicators Variables that change faster thanothers

Variables that change faster thanothers

Select The BlankQuestion Details regarding Internal accruals comes under the ________ category of Project

report.Correct Answer Financing plan

Your Answer Financing plan

Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects includes :-

Correct Answer Plant capacity , Quality standards , Raw material requirement

Your Answer Plant capacity , Quality standards , Raw material requirement

Select The BlankQuestion A smaller unit into which the overall requirement of capital of a company is sub-

divided is termed as ________.Correct Answer Share

6

Your Answer Share


developed so that the financial commitment and risks associated with a project areshared between the project sponsor and the lending institutions.










calculated by the :-Correct Answer Bankers , Financial Institutions

Your Answer Bankers , Creditors , Financial Institutions







Multiple Choice Single AnswerQuestion Pre-operative expenses include :-

Correct Answer Interest on deferred payments

Your Answer Market research expenses

7

True/FalseQuestion The cost factors of the product mixed is also taken into account to arrive at cost at

various levels of production and its cost impact of the manufacturing.Correct Answer True

Your Answer True

Select The BlankQuestion Retained earnings indicates that whatever profits are earned by the company are not

distributed by it by way of ________ but are kept aside for use in future for expansionor other purpose.





Your Answer Organisation Building , Person / system oriented , Promoter's equity / stake

True/FalseQuestion The Detailed Project report spells out the modus operandi for the implementation of

the Project and the realization of the Project objectives.Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix analyses products in terms of :-

Correct Answer Business strength and Industrial Attractiveness

Your Answer Company's competitive advantage and Company's financial strength

True/FalseQuestion The emphasis of a finance manager should be on taking a synergistic view of the

project rather than looking at it only from the financial aspects.Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion After the SPACE chart is constructed, we would normally get any one of the following

basic strategic postures :-Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture


True/False

8

Question The ratios of one organisation compared with the ratios of the same organisation istermed as inter-firm comparison.


Your Answer False


information.Correct Answer Feasibility


Select The BlankQuestion Under ________ method, the forecasts are modified in the light of observed errors.

Correct Answer Exponential smoothing

Your Answer Cobb Douglas Relationship


Source of funds Depreciation Investment




True/FalseQuestion The Detailed Project report must indicate the gestation period of the project.

Correct Answer True

Your Answer True


Correct Answer True

Your Answer True




9




Multiple Choice Single AnswerQuestion The method for evaluating the profitability of industrial projects whose object is to

ascertain the period required for recovering the entire investment made in a project isknown as :-






Multiple Choice Single AnswerQuestion The rate of discount which would equate the present value of investments to the

present value of benefits over the life of the project is known as :-Correct Answer Internal rate of return





Multiple Choice Single AnswerQuestion The ratio that roughly measures the company's potential reserve of cash is termed as

:-Correct Answer Net Working capital to total assets


Multiple Choice Single AnswerQuestion The sources of funding have expanded from banks, insurance companies and

multilateral agencies to include the :-Correct Answer Capital market

Your Answer Capital market

True/False

10

Question Sensitivity analysis consists of assessing the degree of risk.

Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out of :-

Correct Answer Cash Profits , Shares , Debentures


Multiple Choice Single AnswerQuestion Sources of funds include :-

Correct Answer Increase in secured borrowing

Your Answer Increase in secured borrowing

True/FalseQuestion Nominal maximum capacity is the capacity that is technically attainable and this

corresponds to the supplier's guaranteed capacity.Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors should be considered :-

Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Governmentpolicies and other factors

Your Answer Proximity to raw materials and markets , Availability of infrastructure , Governmentpolicies and other factors




True/FalseQuestion Ratio should be computed on the basis of inter-related figures which have a cause and

effect relationship.Correct Answer True

Your Answer True

True/FalseQuestion In the BCG Matrix "DOGS" indicate products which are generally during the stage of

Decline of a Product Life Cycle.Correct Answer True

11

Your Answer True


Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship

Your Answer Linear Relationship , Chain ratio Relationship , Exponential Relationship



Your Answer Technology , Layout of the plant , Design of the plant




Select The BlankQuestion A Project has a ________ represented by growth, maturity and decay.

Correct Answer Life cycle

Your Answer Life cycle

Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following dimensions viz.:

Correct Answer Strategic perspective , Time span , Finance cost aspect

Your Answer Strategic perspective , Time span , Social aspect



Your Answer Trend Projection method , Consumption-level method , Moving Averages method

Multiple Choice Single AnswerQuestion The statement which shows the movement of cash into and out of firm's kittie is

known as :-Correct Answer Cash flow statement


12

LIST OF ATTEMPTED QUESTIONS AND ANSWERSMultiple Choice Multiple AnswerQuestion The objectives of the funds flow statement is as follows :-

Correct Answer To help to understand the changes in assets as well as asset sources which are notrevealed by the income statement , To find out the uses of loans raised by the business, To indicate the financial strength and weakness of the business

Your Answer To find out the uses of loans raised by the business , To help to understand the changesin assets as well as asset sources which are not revealed by the income statement ,Helps to prepare financial statements





Correct Answer Project finance


True/FalseQuestion The Detailed Project report spells out the modus operandi for the implementation of the

Project and the realization of the Project objectives.Correct Answer True

Your Answer True

Select The BlankQuestion As the plant capacity increase, the investment cost unit capacity ________.

Correct Answer Decreases






Correct Answer A list of industries wherein the product is used is made and quantity and volume isarrived at

Your Answer A list of industries wherein the product is used is made and quantity and volume isarrived at

13




True/FalseQuestion In small scale organisation, requirement of working capital is quite high due to high

amount of overheads, high buying costs and high selling cost.Correct Answer True

Your Answer True




Cost aspect of the project report Consultancy fees Consultancy fees


Select The BlankQuestion Longer the duration of production cycle, higher the requirement of ________.









True/FalseQuestion Trend projection method is the important technique for forecasting demand.

Correct Answer True

14

Your Answer True

True/FalseQuestion The emphasis of a finance manager should be on taking a synergistic view of the project

rather than looking at it only from the financial aspects.Correct Answer True

Your Answer True




Select The BlankQuestion The basic difference between the feasibility study report and ________ is the level of

accuracy and degree of detail.Correct Answer Detailed Project report





Select The BlankQuestion Location of the factory comes under the ________ category of the Project report.


Your Answer General







True/False

15

Question Market potential should be determined under the Marketing aspect of the Project report.

Correct Answer True

Your Answer True

Select The BlankQuestion ________ tries to have what the customer will want- where, when, in what form and at

what price.Correct Answer Marketing


Multiple Choice Single AnswerQuestion A project objective which states What "achieving it " would cost is known as :-

Correct Answer Finance cost aspect





True/FalseQuestion Nominal maximum capacity is the capacity that is technically attainable and this

corresponds to the supplier's guaranteed capacity.Correct Answer True

Your Answer True


developed so that the financial commitment and risks associated with a project areshared between the project sponsor and the lending institutions.




Correct Answer That it involves current outlay of funds in expectation of future benefits



16

Correct Answer Adopted as a guide depending on the consumption pattern of the society as a whole

Your Answer Adopted as a guide depending on the consumption pattern of the society as a whole

Multiple Choice Single AnswerQuestion The norms for providing open areas have to be strictly followed for safety of labour and

allow sufficient space for outflow of effluents safely in case of :-Correct Answer Chemical unit





Select The BlankQuestion Investors who invest in the debentures of the company are the ________ of the

company.Correct Answer Creditors


Match The Following






Multiple Choice Multiple AnswerQuestion As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds

where there is :-Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength

and high Industry attractivenessYour Answer Strong Business Strength and high Industry attractiveness , Average Business strength

and high Industry attractiveness





17

Question The industrial concern earned profits by increasing the sales volume under the :-

Correct Answer Sales concept



strength and Industry Attractiveness.Correct Answer False

Your Answer False


information.Correct Answer Feasibility


Multiple Choice Single AnswerQuestion Delay in arrival of domestic/foreign machinery and technicians may lead to :-



True/FalseQuestion Miscellaneous expenditure is written on the asset side of the Balance sheet.

Correct Answer True

Your Answer True


Correct Answer Name of the Industrial concern , Proposed product , Location of the factory

Your Answer Name of the Industrial concern , Proposed product , Location of the factory

Multiple Choice Single AnswerQuestion A Project is a temporary endeavor to achieve some specific objectives within a :-

Correct Answer Predefined time


Multiple Choice Multiple AnswerQuestion While choosing the location for a project, the following factors should be considered :-

Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Governmentpolicies and other factors

18

Your Answer Proximity to raw materials and markets , Availability of infrastructure , Governmentpolicies and other factors




Multiple Choice Single AnswerQuestion The cost which change in the same proportion in which the level of production changes

is known as :-Correct Answer Variable cost


Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon appraising the likely

technical gaps consists of :-Correct Answer Problems faced during the Construction and Project implementation


Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which focuses upon appraising the likely

technical gaps consists of :-Correct Answer Problems pertaining to the period when the project is in operation

Your Answer Problems pertaining to the period when the project is in operation


Multiple Choice Single AnswerQuestion Borrower's contribution towards Working capital is

known as :-Correct Answer Margin moneyYour Answer Margin money

Multiple Choice Multiple AnswerQuestion Building cost consists of :-Correct Answer Factory building , Auxiliary buildings ,

Administrative blockYour Answer Factory building , Auxiliary buildings ,

Administrative block

Multiple Choice Single AnswerQuestion In BCG Matrix " CASH COWS" indicate :-Correct Answer Products which have high market share but low

growth potentialYour Answer Products which have high market share but low

growth potential

Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Marketing aspects

includes :-Correct Answer Demand forecasting , Promotion , DistributionYour Answer Demand forecasting , Promotion , Distribution

Multiple Choice Single AnswerQuestion Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a

projectYour Answer The total of all items of outlay associated with a

project

True/FalseQuestion In both the extreme situations of trade cycles i.e.

Inflation and depression, requirement of working capital may behigh.



organisation category of the Project report.Correct Answer TrueYour Answer True

True/FalseQuestion It is mandatory for each unit to obtain necessary

clearance from Pollution Control Authorities before setting up anyproject.


Multiple Choice Multiple AnswerQuestion A project objective can be said to have the following

dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost

aspectYour Answer Strategic perspective , Time span , Finance cost

aspect




Management Perception Aspiration level/ conservative Aspirationlevel/ conservative



Multiple Choice Single AnswerQuestion BCG Product Portfolio Matrix analyses products on

the basis of :-Correct Answer Relative Market share and Industry Growth rateYour Answer Relative Market share and Industry Growth rate

Select The BlankQuestion ________ profitability reduces the strain on working

capital.Correct Answer HighYour Answer Stable

Multiple Choice Single AnswerQuestion The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in

expectation of future benefitsYour Answer That it involves current outlay of funds in

expectation of future benefits


assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved ,

Managerial compensation

Your Answer Environmental factors , Risk involved ,Managerial compensation


Multiple Choice Single AnswerQuestion Every project involves financial outlay which can be

referred to as :-Correct Answer Project financeYour Answer Project finance

Select The BlankQuestion As the plant capacity increase, the investment cost unit

capacity ________.Correct Answer DecreasesYour Answer Increases

Multiple Choice Multiple AnswerQuestion Debt Service coverage ratio may be considered to be

one of the most important ratios calculated by the :-Correct Answer Bankers , Financial InstitutionsYour Answer Shareholders , Bankers , Financial Institutions

Multiple Choice Single AnswerQuestion A project objective which states What "achieving it "

would cost is known as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect

True/FalseQuestion A project is unique and no two projects are similar.Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion Limitations of fund flow statement are :-Correct Answer It does not provide any new information but

only rearranges the various facts , It does not consider non-fundtransactions

Your Answer It does not provide any new information but onlyrearranges the various facts , It does not consider non-fundtransactions , It does not help in determining future requirement offunds

Multiple Choice Single AnswerQuestion The third phase of the technical appraisal which

focuses upon appraising the likely technical gaps consists of :-Correct Answer Problems pertaining to the period when the

project is in operationYour Answer Problems pertaining to the period when the project

is in operation


Multiple Choice Single AnswerQuestion It is said that a second rate project in the hands of first

rate management is better than a first rate project in the hands of :-Correct Answer Second rate managementYour Answer Second rate management

Select The BlankQuestion The company having ________, is appropriate for the

strategic posture of Defensive under the SPACE approach.

Correct Answer Lacks both competitive advantage as well asfinancial strength and belongs to a not so attractive industry,operating in an unstable environment

Your Answer Lacks both competitive advantage as well asfinancial strength and belongs to a not so attractive industry,operating in an unstable environment

Select The BlankQuestion Excessive expenditures on foreign technicians leads to

________.Correct Answer Cost and time overrunYour Answer Profit maximisation

True/FalseQuestion The 'BCG Matrix 'analysis various products of the

organisation in the terms of Business strength and IndustryAttractiveness.


Select The BlankQuestion Having decided on the location and product, the

promoter takes into account the ________ that is to be adopted forproducing the product.

Correct Answer Manufacturing process and technologyYour Answer Manufacturing process and technology

Multiple Choice Multiple AnswerQuestion Financial and economic aspect of the Visit report

consists of :-Correct Answer Company's financial year , Impact of

Government policies on company operations , Comments on thelast published accounts

Your Answer Company's financial year , Impact of Governmentpolicies on company operations , Comments on the last publishedaccounts

True/FalseQuestion Sensitivity analysis consists of assessing the degree of

risk.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion A project objective which states "What' is to be

viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective

Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should

be financed out of :-Correct Answer Cash Profits , Shares , DebenturesYour Answer Cash Profits , Shares , Debentures

True/FalseQuestion In the BCG Matrix "DOGS" indicate products which

are generally during the stage of Decline of a Product Life Cycle.Correct Answer TrueYour Answer True

True/FalseQuestion The construction of National Golden Quadrilateral can

be recognised as Project.Correct Answer TrueYour Answer True

Select The Blank

Question Under the SPACE Model, Customer loyalty isdetermined under the ________ dimension.

Correct Answer Company's competitive advantageYour Answer Company's competitive advantage

True/FalseQuestion The cost factors of the product mixed is also taken into

account to arrive at cost at various levels of production and its costimpact of the manufacturing.


True/FalseQuestion The emphasis of a finance manager should be on

taking a synergistic view of the project rather than looking at itonly from the financial aspects.



Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects

includes :-Correct Answer Plant capacity , Quality standards , Raw

material requirementYour Answer Quality standards , Raw material requirement ,

Power / telecom facilities

Multiple Choice Multiple AnswerQuestion Trend Projection method of demand forecasting

consists of :-

Correct Answer Linear Relationship , Exponential Relationship ,Polynomial Relationship

Your Answer Linear Relationship , Exponential Relationship ,Polynomial Relationship

True/FalseQuestion Market potential should be determined under the

Marketing aspect of the Project report.Correct Answer TrueYour Answer True



Select The BlankQuestion A Project has a ________ represented by growth,

maturity and decay.Correct Answer Life cycleYour Answer Life cycle

True/FalseQuestion If the organisation is a trading organisation, the

requirement of working capital will be on the lower side.Correct Answer FalseYour Answer True


True/FalseQuestion Cost under-estimation at the project preparation and evaluation stage leads to

cost and time over run.Correct Answer TrueYour Answer True





Cost aspect of the project report Consultancy fees Reasons for cost escalations

Financing plan Unsecured loans Finance manager

Select The BlankQuestion ________ is a current assetCorrect Answer Book debtsYour Answer Furniture


Multiple Choice Multiple AnswerQuestion The permanent requirement of working capital should be financed out of :-Correct Answer Cash Profits , Shares , DebenturesYour Answer Cash Profits , Commercial Papers



Select The BlankQuestion Commission outstanding is ________ of funds.Correct Answer ApplicationYour Answer No flow




Your Answer To find out the uses of loans raised by the business , To help tounderstand the changes in assets as well as asset sources which are not revealed by theincome statement , Helps to prepare financial statements

Multiple Choice Single AnswerQuestion The second phase of the technical appraisal which focuses upon appraising

the likely technical gaps consists of :-Correct Answer Problems faced during the Construction and Project implementationYour Answer Problems faced during the Construction and Project implementation





, Government policies and other factorsYour Answer Proximity to raw materials and markets , Plant capacity , Availability of

infrastructure


Select The Blank

Question Name and designation of the chief executive comes under the ________category.

Correct Answer GeneralYour Answer Project organisation




Multiple Choice Multiple AnswerQuestion Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written

offYour Answer Funds from operation , Funds from long term loans



Select The BlankQuestion ________ is that scarce input which financial resources alone cannot

mobilise.Correct Answer ManagementYour Answer Management




Correct Answer OneYour Answer One







Business Strength and Medium Industry Attractiveness , Average Business strength andhigh Industry attractiveness






Multiple Choice Single AnswerQuestion The cash flow of all the years during the expected life of the project are

discounted at a pre-determined cut off rate and :-Correct Answer Net Present value is obtainedYour Answer Average rate of return is obtained

Multiple Choice Single AnswerQuestion The ratio which indicates the ability of the company to meet current

obligations is termed as :-Correct Answer Current ratioYour Answer Current ratio


True/FalseQuestion In small scale organisation, requirement of working capital is quite high due


Multiple Choice Single AnswerQuestion Marketing aspect of Detailed Project report includes :-Correct Answer Demand forecastingYour Answer Demand forecasting

True/FalseQuestion The secondary data is collected through market survey, specific for the

project being appraised.Correct Answer FalseYour Answer True

True/FalseQuestion Debt service coverage ratio indicates whether cash earned is sufficient for

debt service.Correct Answer TrueYour Answer True

Select The BlankQuestion Position regarding requirement and training of operational staff comes under

the ________ category of Project report.Correct Answer Project organisationYour Answer Project organisation


Moving into new areas/product lines Diversification Projects Rehabilitation Projects

Suppliers' credit Short term finance Short term finance

Deferred credit Long term finance Long term finance

Setting up new units New Projects Diversification Projects




Multiple Choice Single AnswerQuestion The basic document for facilitating Project financing is the :-Correct Answer Detailed Project reportYour Answer Articles of Association

Multiple Choice Multiple AnswerQuestion In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirementYour Answer Plant capacity , Quality standards , Power / telecom facilities


termed as :-Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets

Multiple Choice Single AnswerQuestion General Electric Stop Light Matrix :-Correct Answer Which is highly respected for the sophistication, maturity and quality

in its planning systemsYour Answer Which is highly respected for the sophistication, maturity and quality in





Multiple Choice Multiple AnswerQuestion The temporary requirement of working capital can be financed out of :-Correct Answer Inter-corporate Deposits , Commercial PapersYour Answer Inter-corporate Deposits , Commercial Papers


InternationalFinance

ASSIGNMENTS

Tristar

justvishal


Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter

bank transactions?Correct Answer Clearing house for settlement and clearance for the operations

of Ads , Set up a market intelligence cell to study and monitordevelopments in Forex Market

Your Answer Clearing house for settlement and clearance for the operationsof Ads , Make additional foreign currency available to ADs atcheaper rates

Select The BlankQuestion ________ is the agency of ICC which deals with the maritime

crime.Correct Answer International Maritime Bureau

Your Answer International Maritime Bureau

Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?

Correct Answer Buffer Stock Facility

Your Answer Buffer Stock Facility

True/FalseQuestion Cross currency forward contract is not meaningful if original

contract is in Rupees to USDCorrect Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion What does a speculator accept while dealing with an option?

Correct Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment

Your Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment , The Market report of theexchange which trades the option

Multiple Choice Single AnswerQuestion Which is the most actively traded currency in the international

market today?Correct Answer US Dollar

Your Answer US Dollar


Intolerable risk Drop the investmentproject

Drop the investmentproject

Country risk analysis Cost of evluation doesnot justify analysis

Cost of evluation does notjustify analysis

Stock market analysis Banks are ahead Factors' values

Weightages % Factors' values 100% of total

Select The BlankQuestion Global capital market can be understood from the study of

________.Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings

within and outside the countryYour Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings

within and outside the country

Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will

be exchanged on :-Correct Answer Monday

Your Answer Monday

Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee

came from June 92?Correct Answer Other managed Floating

Your Answer Pegged to Single currency


Maturity of future Time when actualcommodity is delivered

Last date of exercisingoption

Note issuance facility Euronotes Euronotes

Bearer security issued incurrency other than thatof the country of issue

Eurobonds Eurobonds

Margin on future Peformance bond orsecurity deposit

Peformance bond orsecurity deposit

True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a

quasi negotiable instrument.Correct Answer False

Your Answer False

True/FalseQuestion The Prominent non banking financial institutions participating in

the FOREX markets are Pension funds, mutual funds,insurance Cos.

Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion What are margins, with reference to futures market?

Correct Answer Faith money deposited by buyers and sellers ensures liquidity ,Margin ensures solvency for honouring contracts

Your Answer Faith money deposited by buyers and sellers ensures liquidity ,Margin ensures solvency for honouring contracts

Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in

foreign exchange?Correct Answer USD 1 trillion

Your Answer USD 1 trillion

Multiple Choice Single AnswerQuestion NIF is basically an agreement :-

Correct Answer By underwriting bank to support funding for a certain period,against which borrowers can issue short term papers

Your Answer Which enables the investor to market the same in thesecondary market

Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of

seven central Banks taken togeather in mid 1992?Correct Answer USD 275 Billion

Your Answer USD 275 Billion

Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an

exporter?Correct Answer Preshipment credit beyond six months for construction and

turnkey projects abroadYour Answer Preshipment credit up to six months for construction and

turnkey projects abroad

Select The BlankQuestion Over the years ________has been the most widely accepted

currency in international capital market.Correct Answer American Dollar

Your Answer American Dollar

Select The BlankQuestion As a result of the world wars in the 20th century the ________

of most of the countries suffered heavily.Correct Answer Economies

Your Answer Currencies

Multiple Choice Single AnswerQuestion Which currency is traded in one leg of about 70% of the world's

transactions?Correct Answer US Dollar


Select The BlankQuestion ________ is the acid test for events to be included in country

risk.Correct Answer Control by Government'

Your Answer Recurrence

Select The BlankQuestion The Trans European Automated Real Time Gross Settlement

Express Transfer is popular in ________.Correct Answer Brussels

Your Answer Brussels

Multiple Choice Single AnswerQuestion What is Risk Syndication facility?

Correct Answer Sharing of risk of non payment by supplier

Your Answer Sharing risk of Non payment by the Syndicate of Banks givingloans

True/FalseQuestion If ERD > IRD hen exporter should availa Rupee finance

Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-

Correct Answer It is an undertaking given by the openers bank to pay certainsum of money , It is an undertaking given on behalf of a certainperson to another person in different country

Your Answer It is an undertaking given by the openers bank to pay certainsum of money , It is an undertaking given on behalf of a certainperson to another person in different country

Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?

Correct Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them

Your Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them

True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs,

Call and put options.Correct Answer True

Your Answer True

True/FalseQuestion There is no difference between CIP and CIF contracts except

the mode of transportation.Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion Financial management is complex process for

Correct Answer Companies which have international trade

Your Answer Companies which have international trade

Select The BlankQuestion When an Indian Company earns at least 50% of its average

turnover from a particular activity then that activity isconsidered as ________.

Correct Answer Core activity

Your Answer Primary activity

Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.

Correct Answer An Irrevocable credit

Your Answer An Irrevocable credit

True/FalseQuestion The volume of trading of Derivatives in the world trade market

is growing but still only 5% of the total.Correct Answer False

Your Answer False

Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs

50.5000/52.5050. Which is the offered rate for Rs?Correct Answer USD 1=Rs 50.5000

Your Answer USD 1=Rs 50.5000

Multiple Choice Multiple AnswerQuestion Export finance

Correct Answer Preshipment credit , Post shipment credit , Duty Draw back

Your Answer Preshipment credit , Post shipment credit , Buyers credit

Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demand

Correct Answer Which are convertible , Which have liquidity confirmed in Euromarket operations

Your Answer Which are convertible , Which have liquidity confirmed in Euromarket operations , Which have greater intrinsic value


Question What are the functions of Asian Development Bank?

Correct Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market

Your Answer Give Softloans to poorer countries in Asia , Give project financefrom resources raised in world capital market

Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?

Correct Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue

Your Answer Advertisement which lists the managers, underwriters, , List ofProviders of recently floated issue

Select The BlankQuestion Short term instruments normally issued by corporate

borrowers, forhigh values, at a discount to face value areknown as ________.

Correct Answer Euro Commercial Papers

Your Answer Euro Commercial Papers

Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for

assessing a cross border project ?Correct Answer To weed out unviable projects and rank profitable ones

Your Answer To weed out unviable projects and rank profitable ones

Multiple Choice Single AnswerQuestion Examples of hedge are:

Correct Answer Buy when you are having short position

Your Answer Buy when you are having short position

Multiple Choice Multiple AnswerQuestion What is the effect of cross currency option on the customer?

Correct Answer He gets the flexibility to exposure , He is exposed to additionalrisk of movement of rates between 3 currencies

Your Answer He gets the flexibility to exposure , He is exposed to additionalrisk of movement of rates between 3 currencies

Select The BlankQuestion Forward margin makes a currency cheaper then the currency is

at ________.Correct Answer Discount

Your Answer Discount

Multiple Choice Single AnswerQuestion Why does a person need protection from unfavourable

movement of exchange rate?Correct Answer Unfavourable fluctuations in exchange rate can wipe out the

normal business profitYour Answer Unfavourable fluctuations in exchange rate can wipe out the

normal business profit

Multiple Choice Single AnswerQuestion The capital market is said to be volatile when

Correct Answer Prices of capital market instruments change and are expectedto change drastically

Your Answer Prices of capital market instruments change and are expectedto change drastically

True/FalseQuestion JV means Joint venture and WOS means World of Security.


Your Answer False

Multiple Choice Multiple AnswerQuestion What is the criteria for an Indian Company for Direct

Investment abroad?Correct Answer Activity proposed need to be core activity , Financial

commitment in JV/WOS maximum $ 100 million or equivalentYour Answer Activity proposed need to be core activity , Financial

commitment in JV/WOS maximum $ 100 million or equivalent ,Indian co should not have been black listed

Chapter – 1 – Introduction to international capital marketsEuro currency ; domestic markets ; US Japan ; Switzerland ; UK ; Australia ; Canada ;European ; centers in ECU;

1

Chapter – 2 – International Finance Markets - the U.S. dollar Market ;The U.S. Dollar Market ; The Japanese Yen Market ; The Sterling Market ; The EuroMarket Has Been discussed in the next chapter ; Recent development in internationalFinance Markets ;

5 – 10

Chapter – 3 – International Monetary and Financial SystemThe country’s central ban agreed to buy back their currency at a certain rate of gold;Melting down of gold was freely allowed ; There was unrestricted movement of gold (i.e.import and / or export)The total money supply in the country was determined by the quantum of gold reserves inthe country

13 – 14

The international monetary fund ; quotas ; funding facilities ; regular facilities tranchepolicies ; restore Tranche credit Tranche ; extended arrangement (extended fund facility

15 – 17

(EEF) ; Standard Arrangement (enlarged Arrears Policy)Special facilities (compensatory and contingency financing facility (CCFF)Buffer stock Financing Facility ; Supplemental Reserve Policy (SRP); Reserve Tranche ;Credit Tranche ; Stand by arrangement ;Extended arrangement or extended fund facilities (EFF) special facilities ; CCFF ; Bufferstock financing Facility (BSFF) ; Supplemental resources facility (SRF) Enhancedstructural adjustment facility (ESAF) The fixed exchange rate system

18 – 19

Problems faced by the fixed exchange rate system ; failure of fixed rate system ; theEuropean monetary system (EMS) ; Economic and monetary union ; Recent developments ;post – Maastricht developments; emergence of EURO

20 – 23

The group of seven ; special drawing rights (SDRS) ; The liquidity problems (SDRS) ; theworld bank group ; the world bank; international development agency (IDA) ; internationalfinance corporation (IFC) ; The multinational investment Guarantee Agency (MIGA)

24 – 27

Chapter – 4 – External commercial borrowing – country ; company ; Equity ; Fund raising ;underwriting ; hedging ; arbitraging ; note issuance facility ; Mechanism anddocumentation ; syndicated loans ; floating rate notes ;

31 – 35

Flip – Flop FRN ; MIS – Mich FRN ; MINI Max FRN ; Capped FRNs, Perpetual FRNs;VRN structured FRNs; Terms and conditions of FRN Ero Commercial paper (ECP) ; ADRsand GDRs; GDR – Global depositary Receipts ; The roles of different parties involved inlaunching of GDRGDR – Global Depositary Receipts ; The roles of different parties involved in launching ofGDR steps involved in issuance of GDR are as follows

36 – 39

Pricing and Closing ; costs ; Advantages & Disadvantages of external commercialborrowing

40 – 41

Chapter – 5 – Documents used in International Trade ;Regulatory requirements ; operational requirements ; commercial documents ; financialdocuments transport documents ; risk covering documents ; official / regulatory documents; miscellaneous documents ; Commercial documents ; proforma invoice ; commercialinvoice ; consular invoice customs invoice ; legalized invoice ; combined certificate oforigin and value ; financial documents ; bill of exchange ;

43 – 46

The second of the same tenor and date unpaid ; the first of the same tenor and date unpaid ;or similar words ; sight B/E; Tenor ; time B/E; DP Basis ; document against Payment Basis; Documents against Acceptance Basis Transport documents; bill of lading ; received forshipment bill of lading ; on board bill of lading ;

47 – 49

Short form bill of lading ; long form bill of lading clean bill of lading ; claused bill of lading; through bill of lading ; straight bill of lading ; charter party Bill of lading ; container bill oflading container bill of lading ; combined transport B/L or Mulit Modal B/L lash bill oflading house bill of lading ; Airway bill ; Air consignment Note ; House Air way bill ;Postal Receipt ; Courier /Expected delivery service ; multimodal transport document ; riskcovering documents ; insurance policy ;

50 – 53

Insurance cover note ; official documents export declaration forms ; export certificate;Certificate of origin ; Miscellaneous documents ; packing list ; weight certificate ;certificate of analysis and quality ; certificate of inspection ; health certificate ;phytosanitary / Radiation / Fumigation

55 – 57

Chapter 6 – Methods of payment ; advance payment ; bill for collection ; open account ;barter trade ; bank guarantee ; letter of credit (L / C) Seller wants buyer wants ; parties to a

61 – 66

documentary credit ; applicant issuing bank advising ; confirming bank beneficiary ;negotiating bank ; reimbursing bankTypes of letters of credit ; revocal letter of credit ; irrevocable letter of credit ; confimedirrevocable letter of credit ; transferable l / c revolving letter of credit ; credit available byinstallments; back to back letter of credit ; anticipatory credit or red clause letter of credit ;green clause letter of credit ; deferred payment letter of credit ; standby letter of credit ;flow chart of export transaction under letter of credit

67 – 69

Flow chart of export transaction under letter of credit ; various steps in the transaction are asunder ; steps no. description

70 – 71

Chapter 7 – Export / Import Finance ; - Part I import finance ; import financing throughtrust receipts / import loans ; import financing through issuing l/ c or bank guarantee ; partII – Export Finance Timely ; adequate ; cheaper on liberal terms ; sources for raisingfinance ; own funds ; 2 friends and relative ; 3 advance payment from buyer ; 4 Trade creditfrom suppliers 5 banks and financial institutions ; pre-shipment credit (P.C)

73 – 74

Post shipment credit ; advance against cash incentives / duty draw back ; forfeiting ;rediscounting of export bills abroad ; buyer’s credit ; supplier’s credit

75 -76

Chapter – 8 – Procedure in connection with foreign investment in India – Seciton – Iforeign direct investment ; FERA ; the practice at which a company can issue shares to nonresidents ; fema ; esop ; section II – Foreign technical collaboration ;

79 – 83

General Hotel & Tourism Related Industries ; procedure for granting approval; I / Wehereby certify that ; Documentation ; Standard conditions attached to approval fortechnology agreement ; no objection ; the agreement shall be subject to Indian laws:

84 – 88

Section – III – Portfolio investment ; explanation ; the regulations regarding portfolioinvestments by NRIs / PIOs are as under ; NRI / PIOs ; Section – IV – Other investments ;Section V – procedure for opening branch / project / Liaison office ;

89 - 92

Chapter – 9 – Direct investment outside India – overseas investment division TDR ADRGDR the criteria for investment under the automatic route are as under ; JV/WOS; ODA;The schemes for overseas investment by partnership firms ; criteria for overseas investmentby a registered partnership firm under the automatic route ;

95 – 99

The procedure to be followed by a partnership firm for making investment under theautomatic route ; the procedure to be followed by partnership firms which are not eligibleunder the automatic route ; restrictions for setting up of a second generation company ;resident individual India can acquire foreign securities without prior approval in thefollowing cases ; provided that ; WOS

100 – 102

Chapter – 10 – Taxation ; Bilateral reliefUnilateral relief ; for the purpose of this provision

105 – 106

Part – 2 Forex risk management and hedging techniquesChapter – 1 Foreign exchange markets – The international Market ; survey were ; themarket ; the participants ; information and communication system ; the payment system ;the foreign exchange market in India

109 – 114

Chapter – 2 – Exchange Rates – Exchange rage quotes ; direct and indirect rates ; directrates ; indirect rates; spot and forward rates value rate; ready or cash ; value today ; TOM;spot ; forwards; glossary of market terms; Foreign exchange risks ; transactions exposure ;translation exposure ; economic exposure;

117 – 123

Translation – moving towards a consensus ; economic exposure ; an overview ; scenarioexchange rages in India ; Inward remittances export encashment of foreign currency

124 – 127

travelers cheques ; encashment of foreign currency notes; outward remittances ; imports ;issuing foreign currency travelers cheques issuing foreign currency notes ;Type of transaction exchange rate nomenclature ; Factors affecting movement of exchangerates ; summary

128 – 129

Chapter – 3 – Forward contracts - Forward cover for merchants – forward purchase cover -forward sales contract - repayment of foreign currency loans – period of delivery – crosscurrency booking (sale / Purchase ) ; utilization of the forward cover ; cancellation ;calculation of exchange rates for forward contracts

131 – 137

Cancellation ; early delivery and rollover of forward contracts ; forward sale contracts ;forward purchase contract ; early delivery ; rollover charges

138 – 141

Chapter 4 – Options and Futures – History and development ; recent trends ; key features ofoptions and futures ; premium ; maturity or expiration date ; exercise ; in the money ; at themoney ; out of the money American option European option ; underlying asset price timebefore expiration ; underlying asset price ; time before expiration the rate of interestvolatility

143- 147

Pricing and analysis ; pricing of options ; underlying asset price ; exercise price ; optionsand futures products today ; interest rate options ; foreign exchange options and futures ;equity linked options ; commodity linked futures and options

148 – 152

Chapter – 5 - SwapsWhat are swaps ; interest rate swaps ; lowering financial cost ; hedge exposure to interestrate risk ; restructuring the debt in the balance sheet ; amortizing and accreting swaps ;forward swaps ; Reversible swaps ; basis swaps

155 – 157

Currency swaps ; lowering funding cost ; entering restricted capital markets ; reducingcurrency risk ; supply demand imbalances in the markets ; amortizing currency swaps ;accreting currency swaps ; floating – for floating rate currency swaps ; interest payments ;asset swaps

158 – 161

PART 3 – AGENCIES INVOLVED IN INTERNATIONAL TRADEChapter – 1 – Export import Bank of India ; Functions of Exim Bank ; the exim bankperforms the following functions ; incidental functions ; operations programmes ; directfinancial assistance to exporters ; consultancy and technology services ; pre-shipment credit; facilities for export – oriented units ; overseas investment facility buyer credit facilities fordeemed exports small scale industry export bills rediscounting; the latest new schemes inoperation since 1992 are the following

163 – 166

Chapter – 2 – Reserve Bank of India Exchange controls in India – RBI as the exchangecontrol authority ; Authorized dealers (Ads) ; Money changers ; other receipts ; payment forimports ; other payments ; delegation to Ads; securities ; foreign currency accounts;liberalization of exchange control

169 – 173

Sodhani Committee Recommendations ; Exchange rate management ; 174 – 177Chapter – 3 – Foreign Exchange dealers association of India ; Uniform customs andpractice for collection ;

179 – 180

Chapter 4 – International chamber of commerce – ICC – WCF – IBCC – WCF 183 – 183Chapter – 5 – Export credit guarantee corporation of India ; ECGC; need for export creditinsurance ; credit insurance policies ; scr or standard policy ; turnover policy ; smallexporter policy ; specific shipment policy (short term); buyer wise policy ; specific policyfor supply contract insurance cover for buyer’s credit and line of credit

189 – 190

Services Policy ; construction works policy ; maturity factoring ; Guarantees to banks ; 191

packing credit guarantee ; export production finance guarantee ; post – shipment creditguarantee ; export finance guarantee ; export performance guarantee; export finance(overseas lending ) GuaranteePart – 4 – MiscellaneousChapter 1 – Exchange Earner’s foreign currency (EEFC)Status holder exporter ; individual professional ; others; permissible credits ; permissibledebits ;

195

Chapter 2 – Country Risk ; Quantifying country risk ; A comprehensive example ; use ofcountry risk ; assessment ;

199

Chapter 3 – International capital Budgeting - The Basic Frame work 203 – 204Chapter 4 – Incoterms – Group E departure EXW ; Group F Main carriage unpaid ; FAS ;FOB ; CFR ; CIF ; CPT ; CIP ; Group C; Group D ; Arrival DAF ; DES ; DEQ; DDU CTD/ MTO ; DDP ; delivered duty paid (CTD / MTO)

207- 212

Chapter – 5 – Actuals ; arbitrage ; bankers’ acceptance bond (BAS) ; Bearer Bond ; Bid rate; Bond ; Bull; call option ; caps ; cash commodity ; cash market ; cedel ; certificate ofdeposit (CD) class of option ; closing price ; commission ; commercial paper (CP) ; contractspecifications ; convertible bond ; coupon ; cover; delivery ; delivery month ; equity ; equityswaps ; equity collar ; Eurobond ; Euro clear ; euro commercial paper; euro –currency ;

215 – 217

Exercise price ; expiration date; floating rate note ; fundamental Analysis ; futures contracthedge ; Hybrid ; Interest Rate swap; Intermediation ; Intrinsic Value ; Libor ; Long margin; margin call maturity naked position ; note issuance facility (NIF)

218 -219

Option ; overbought ; oversold ; physical market ; position ; premium purchaser ; put option; settlement price short ; speculator ; strike price ; straight debt tap ; technical analysistranche ; tombstone volatility ; volume ; withholding tax ; yankee bond ;

220 – 221

Chapter – 1 – Introduction to international capital markets 1Ero currency market ; Domestic market ; US, Japan Switzerland ; uk, australiacanada ; european conters in ECU ; Euro ; Asian doller market ; forex marker 1SDR ; ECU ; US dollar ; German ; Swiss ; Japanees ; France ; Canada ; Australia; 2Chaper - 2 - International financial Markets - The U.S.Dollar Market ; pricing ;federal reservice board; curency ; central bank of US ; 5The Japanese Yen Market ; Mof; Long Term Prime Rate ; 1970 japanese 6The Sterling Market ; 20th 19th century 1979 ; OECD Organization for economicco-operation & development EMS Exchange rate Mechanism; FRN ; Bulldog; 7the EURO Market has been discussed in the nex chapter Recent development ininternational financial markets ; septer 11 enron 7LtCN (Long term capital Management Brazil china and mexico; 81990 ; 1980 ; severe tests financial system; securitization forces banks ; attractiveto browwerw; legal issues flexibility ; financial market development segement of ; 9swaps cash flow ; roject related; gain access to international ; marketability ; newfinancing techniques; 10Chapter – 3 – International Monetary and Financial System 131945 ; 1944 ; intenrational world Bank for reconstruciton and development; secondworld war was european ; IMF International Monetary Fund; Gold standard firstworld war 13The country's Central Bank agreed to buy back their currency at a certain rate ofgold; 13

melting down of gold was freely allowed 13There was unrestricted movement of gold (I.e. import and / export 14The total money supply in the country was determined by the quantum of goldreserves in the country 141870 ; 1914 ; 1821 ; 1834 ; 1870 ; European countries gold standard in 1933 ;1930 International Monetary Co-operation ; IBRD ; IMF ; 14popularly known as world bank IMF ; the international monetary fund 1945 ; 1971

; 25 years ; aims 15SDR ((special drawing rights ) 25% 1960 ; 1963 ; Gross domestic product; 5 years; SDR 146 bn to SDR 212 ; 45% ; 1998 ; Two parts 16Funding Facilities ; Regular Facilities ; Special facilities ; restore tranche credittranche ; compensatory and contingency financing facility (CCFF) ; 16Extended arrangement (Extended Fund Facility EEF) ; Buffer stock FinancingFacility ; 16Standard Arrangement (Enlarged Arrears Policy ) ; Supplemental Reserve Policy(Supplemental Reserve Policy (SRP 17Reserve Tranche ; Credit Tranches ; Stand - By Arrangement 17Extended arrangement or extended fund facilities (EFF) 18Special Facilities ; CCFF ; Buffer Stock Financing Facility ; BSFF ; SupplementalResource Facility (SRF) ; 1997 18Enhance Structural Adjustment Facility (ESAF) ; The fixed exchange rate systemUS dollars 35 ounce of gold 19Problem faced by the fixed exchange rate system ; 1960 ; value apprehension ;delay in adjustment 20failure of fixed rate system ; the european monetary system (EMS) EuropeanCommunity 20Currency Snake ; 1973 ; EMS EC ECU European Currency Unit ; SDR ; ERM ; DM; matrix german bundesbank 21EM ; PST ; ERM ; Economic and monetary Union ;


True/FalseQuestion Integrated branches of Commercial banks handle forex

transactions as well as options, swaps, futures, arbitrageoperations

Correct Answer True

Your Answer True



Your Answer False

Select The BlankQuestion The rate of interest on rupee finance for exports is not

exceeding ________ less than PLR.

Correct Answer 0.025

Your Answer 50 basis points over LIBOR



Your Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment

Multiple Choice Single AnswerQuestion In the syndicated loan arrangement the borrower has to execute

:-Correct Answer Single Principal loan agreement

Your Answer Single Principal loan agreement

True/FalseQuestion At Least one principal Lender bank is essential for issue of the

ADR or GDR.Correct Answer False

Your Answer True

Multiple Choice Single AnswerQuestion US financial system is the freest system because

Correct Answer Institutions can introduce new products and instuments at theprice of their choice.

Your Answer Institutions can introduce new products and instuments at theprice of their choice.

Multiple Choice Single AnswerQuestion In a coupon swap who is called the buyer?

Correct Answer One who pays the fixed rate of interest

Your Answer One who pays the fixed rate of interest

True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate

quotation.Correct Answer False

Your Answer False

Select The BlankQuestion For setting up joint ventures abroad or equity participation

abroad, EXIM bank provides funds under ________ Scheme.Correct Answer Overseas investment facility

Your Answer Overseas investment facility

Multiple Choice Single AnswerQuestion Under the automatic route of Direct Investment Abroad, what is

the restriction on market purchases?Correct Answer 50% of the net worth of the investing company

Your Answer 50% of the net worth of the investing company

Multiple Choice Single AnswerQuestion What are the powers of money changers?

Correct Answer Purchase and sell foreign currency notes and travellers cheques

Your Answer Purchase and sell foreign currency notes and travellers chequesand also Give export finance

Select The BlankQuestion Any company involved in foreign exchange transactions is

exposed to ________ risk.Correct Answer Currency

Your Answer Currency

Multiple Choice Multiple AnswerQuestion What are the features of Settlement price ?

Correct Answer Price established by the clearing house at the end of eachtrading session , It is used to determine the net gain, loss,margin call and next days price limits

Your Answer Price established by the clearing house at the end of eachtrading session , It is used to determine the net gain, loss,margin call and next days price limits

Multiple Choice Multiple AnswerQuestion What are the activities of ICC?

Correct Answer Aribtration and dispute resolving , Canvass for open tradecombat commercial crime

Your Answer Aribtration and dispute resolving , Canvass for open tradecombat commercial crime , Increased Govt regulation ofBusiness

True/False

Question Cause of increase in cost of public issues Underwriting fees ,selling commission

Correct Answer True

Your Answer False

Select The BlankQuestion The currency swaps used ________.

Correct Answer To lower the risk of currency exposure

Your Answer To lower the risk of currency exposure

True/FalseQuestion The Option period in the forward contract is at the option of the

Banker, hence the bank has to be very conservative in quotingrates.


Your Answer True

Multiple Choice Multiple AnswerQuestion Which factors affect the exchange rates in short time period?

Correct Answer Demand and supply, interest rates, inflation, , Sentiment,Speculation

Your Answer Demand and supply, interest rates, inflation, , Sentiment,Speculation , GDP,Balance of trade andpayment,Unemployment


Departure EXW EXW

Main carriage paid CFR CFR

Main carriage unpaid FAS FAS

Arrival DES DES

Multiple Choice Multiple AnswerQuestion Sterling Market is attractive for an international investor because

Correct Answer Gilts offer higher attractive margin , Choice of issuing mediumterm and long term bonds

Your Answer Gilts offer higher attractive margin , Choice of issuing mediumterm and long term bonds , Linking of issues to currency swaps

True/FalseQuestion In red clause credit some clauses are printed in Red ink.

Correct Answer True

Your Answer False





50.5000/52.5050. Which is the bid rate for USD?Correct Answer USD 1=Rs 50.5000





Multiple Choice Multiple AnswerQuestion Criteria for investment abroad under automatic route :-

Correct Answer Activity for investment is core activity of Indian Company. , TotalFinancial commitment in JV/WOS as per prescribed ceiling

Your Answer Activity for investment is core activity of Indian Company. , TotalFinancial commitment in JV/WOS as per prescribed ceiling

Multiple Choice Multiple AnswerQuestion Who can issue the Certificate of Inspection?

Correct Answer Export Inspection Council , Person authorised by Importer.

Your Answer Export Inspection Council , Person authorised by Importer.


Question Large number of exporters from which country are enjoying theprivilege of receiving up front cash from importers in Russia?

Correct Answer United Kingdom

Your Answer United Kingdom

True/FalseQuestion In developed markets, speculators play important role in

determining the trend of currency rates.Correct Answer True

Your Answer True

Select The BlankQuestion In US Capital Market a Company prepares all the necessary

documents in advance of the public issue under the facilityknown as ________.

Correct Answer Shelf Registration

Your Answer Shelf Registration

Select The BlankQuestion In Overseas market the forward rate is generally quoted on the

basis of ________.Correct Answer Fixed date

Your Answer Calendar month

Select The BlankQuestion Forward Margin makes a currency costlier then the currency is

at ________.Correct Answer Premium


Multiple Choice Multiple AnswerQuestion These are the parties to the documentary credit :-

Correct Answer Negotiating Bank, advising bank , Reimbursing bank,Confirming bank

Your Answer Negotiating Bank, advising bank , Reimbursing bank,Confirming bank

Multiple Choice Multiple AnswerQuestion What are the functions of Asian Development Bank?



Multiple Choice Single AnswerQuestion Fixed, Floating or Limited flexibility are used in the context of

Correct Answer Exchange Rates

Your Answer Exchange Rates

Select The BlankQuestion In mid 1992 ________ rejected the ratification of Maastricht

treatyCorrect Answer Denmark

Your Answer UK

Multiple Choice Multiple AnswerQuestion Under the liberalisation through FEMA, what can an AD offer to

the clients, without the prior permission of RBI or Government?Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and

collars, and forward rate agreementsYour Answer Hedges, interest rate swaps, currency swaps. , Caps and

collars, and forward rate agreements

Multiple Choice Single AnswerQuestion To whom is an AD required to report the cancellation of forward

contracts?Correct Answer No one at all.

Your Answer To Reserve Bank of India, fortnightly

Select The BlankQuestion ECGC provides cover to an Indian contractor for construction

work abroad under ________.Correct Answer Construction works policy

Your Answer Export Performance Guarantee

True/FalseQuestion The Negotiating bank examines the documents submitted by the

seller and makes payment if they comply the terms andconditions of the LC.

Correct Answer True

Your Answer True


Question What was the official foreign currency reserve of the group ofseven central Banks taken togeather in mid 1992?

Correct Answer USD 275 Billion


Multiple Choice Multiple AnswerQuestion What are the sources of raising funds for exports?

Correct Answer Suppliers credit , Forfaiting

Your Answer Suppliers credit , Forfaiting




Multiple Choice Single AnswerQuestion Name the common forex derivatives :-

Correct Answer Options, futures

Your Answer Options, futures

True/FalseQuestion Country risk analysis is a futile exercise in the background of

cost of analysis.Correct Answer True

Your Answer False

Select The BlankQuestion Even after liberalisation of exchange controls, the Euro sterling

market remained volatile because of uncertainties in UK andgyrations of sterling against major ________ countries

Correct Answer OECD

Your Answer OECD


Issues linked withLIBOR,LIBID,LIMEAN

FRNs FRNs

Issue of bonds withoutfixed rate of interest,linked to short terminterest rate in the globalmarket

FloatingRate Note FloatingRate Note

Issue of loansinternationally,througharranger, underwriter,comanager, for a largeamount for sharing risk oflending

Syndicated Loans Syndicated Loans

Equity issues in theforeign markets either asdirect investments orportfolio investments.

American or GlobalDepository Receipts



Multiple Choice Single AnswerQuestion Proforma Invoice, Commercial Invoice, Consaular Invoice are

which type of documents?Correct Answer Commercial Documents

Your Answer Commercial Documents

True/FalseQuestion Charter party bills of lading are generally not acceptable to

bankers as security because Sea Charters are full of problems.Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion Why does a Transaction exposure arise?

Correct Answer Trading flows , Dividend or capital flows

Your Answer Trading flows , Dividend or capital flows

Multiple Choice Single AnswerQuestion If a dealer of securities is quoting rate as 200-250 then the rate

200 signifies which rate with reference to him?Correct Answer Bid rate

Your Answer Bid rate

Select The BlankQuestion A Documentary credit issued on the strength of another

documentary credit is known as ________.Correct Answer Back to Back credit

Your Answer Back to Back credit



Your Answer Which are convertible , Which have liquidity confirmed in Euromarket operations

True/False

Question Tranche' is a managed issue of securities in smallerdenominations.

Correct Answer True

Your Answer False



Your Answer True





Multiple Choice Multiple AnswerQuestion Which events can lead to materialisation of country risk?

Correct Answer Change in Government policies , Change in Government rulesand laws

Your Answer Change in Government policies , Change in Government rulesand laws , Unpredicted Earthquake, Tsunami waves

Multiple Choice Multiple AnswerQuestion What is a 'speculator'?

Correct Answer Trader who is neither hedger nor arbitragor , He takes risks forprofit

Your Answer Trader who is neither hedger nor arbitragor , He takes risks forprofit

Select The BlankQuestion The major industrial power whose economy was not affected

after the II world war was ________.Correct Answer USA

Your Answer USA




Multiple Choice Multiple AnswerQuestion What do you understand by Commercial Risk?

Correct Answer Protracted default by the buyer , Insolvency of the buyer

Your Answer Protracted default by the buyer , Insolvency of the buyer

Select The BlankQuestion Legalised invoice is also called ________ invoice.

Correct Answer Visaed

Your Answer Visaed



Your Answer Monday

True/FalseQuestion The American Dollar market comprises of the domestic segment

of USD the offshore segment of USD.Correct Answer True

Your Answer True


LastStage Form a single currency Meet in Maastricht inNetherland

The First stage in theEuropeand and MonetaryUnion (EMU)

Free movement of capitalin EC

Establish EURO Bank

Stage II in EMU Establishment ofEuropean MonetaryInstitute

Establishment of EuropeanMonetary Institute

Stage III in EMU Members to meet theconvergence criteria andfix the exchange rates

Members to meet theconvergence criteria andfix the exchange rates

Select The Blank

Question Under the ________ standard the Country's Central Bankpromised to buy back the currency at certain rate of Gold.

Correct Answer Gold

Your Answer Gold

True/FalseQuestion An Indian exporting goods to New York receives dollars in New

York.Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion The factors which affect the performance of an option are:-

Correct Answer Underlying asset price , Time before expiration, rate of interest

Your Answer Underlying asset price , Time before expiration, rate of interest

Multiple Choice Multiple AnswerQuestion Which contracts are used for transportation by road?

Correct Answer FCA , CPT

Your Answer FCA , CPT , CFR

True/FalseQuestion Bid rate is bidders buying rate and offered rate is bidders selling

rate.Correct Answer True

Your Answer False


Cancellation of contractsabove USD 500000

ECD ECD

Forward Purchasecontract currency atpremium

Presume earliest delivery Presume earliest delivery

Forward purchasecontract currency atdiscount

Presume latest delivery Presume latest delivery

Exchange margins FEDAI FEDAI



Your Answer Other managed Floating

Multiple Choice Multiple AnswerQuestion Which two countries were included to convert the group of five

into the group of seven?Correct Answer Italy , Canada

Your Answer Canada , Italy

Multiple Choice Single AnswerQuestion Who can open an EEFC account?

Correct Answer Individuals , firms, companies, resident in India

Your Answer Individuals , firms, companies, resident in India

Multiple Choice Single AnswerQuestion Method of advance payment is not disadvantageous to :-

Correct Answer The seller

Your Answer The seller

Multiple Choice Single AnswerQuestion What is the immediate cause for the growth of futures and

options in the last two decades?Correct Answer Increase in volatile trading conditions

Your Answer Increase in volatile trading conditions

Multiple Choice Single AnswerQuestion What do you mean by a derivative?

Correct Answer One which has been derived from other fundamentalinstruments

Your Answer Derived from Mathematical expressions

Multiple Choice Single AnswerQuestion "Currency Snake"

Correct Answer Plus or minus movement of exchange rate around the parity rate

Your Answer Currency of European Country in the early 70's



Your Answer False

Multiple Choice Single AnswerQuestion In which currency can the EEFC account be opened?

Correct Answer Any Convertible currency

Your Answer Any Convertible currency

Multiple Choice Multiple AnswerQuestion Criteria for Direct investment abroad under normal route :-

Correct Answer Viability of the proposal, and excellent track record of business ,Experience and expertise of promoters, benefit to the country

Your Answer Total Financial commitment in JV/WOS as per prescribed ceiling, Activity for investment is core activity of Indian Co.

Select The BlankQuestion ________ enables bankers to extend purchase, negotiation or

discount of export bills.Correct Answer Post shipment credit guarantee

Your Answer Post shipment credit guarantee

Multiple Choice Single AnswerQuestion For setting up a joint venture or WOS abroad, Indian banks

operating in India need a clearance :-Correct Answer Under Banking Regulation Act

Your Answer Under Banking Regulation Act




True/FalseQuestion Indian companies are now allowed to freely invest abroad up to

$1.5 million, raised through GDE or EEFC without priorpermission from RBI.


Your Answer False




True/FalseQuestion Terms in an Irrevocable credit can not be alterred at all.


Your Answer True

Select The BlankQuestion Position in a currency is said to be ________, when sales equal

purchases.Correct Answer Square

Your Answer Square

Multiple Choice Multiple AnswerQuestion How is the entry into any conuntry's money market or capital

market is restricted?Correct Answer Because of different tax systems , Because of different credit

standardsYour Answer Because of different tax systems , Because of different credit

standards

Select The BlankQuestion The currency notes and coins of individual countries

participating in "Euro" have ceased to be a legal tender from________.

Correct Answer 2002

Your Answer 2002

Select The BlankQuestion Partnership firm not eligible for Overseas Direct Investment

needs to apply to RBI Approval in form ________.

Correct Answer ODI

Your Answer ODI

Multiple Choice Single AnswerQuestion Where does the word derivative originate from?

Correct Answer Mathematics

Your Answer Mathematics

Select The BlankQuestion To make the export more competitive and remunerative, the

Indian Govt extends ________ facility.Correct Answer Cash Incentives

Your Answer Cash Incentives

Multiple Choice Single AnswerQuestion The financial system of any country consists of

Correct Answer Network of commercial banks, domestic and foreign investmentbanks, NBFCs, etc

Your Answer The Central bank, IMF and world bank


Select The BlankQuestion Association of several scheduled commercial banks for forex

business is ________.Correct Answer Foreign Exchange Dealers Association of India

Your Answer Foreign Exchange Dealers Association of India

True/FalseQuestion Installment credit is issued for specific quantities of goods to be

shipped every week or month.Correct Answer True

Your Answer True

Select The BlankQuestion Combined Certificate of Origin and Value are required by

________.Correct Answer Commonwealth Countries

Your Answer Commonwealth Countries

Select The BlankQuestion The creditworthiness of the futures seller and the futures buyer

is ________ because of the presence of the Futures exchange.Correct Answer Irrelevant

Your Answer Irrelevant

Select The BlankQuestion When interest rate changes by 0.05 per cent then it has

changed ________ basis points.Correct Answer 50

Your Answer 5

Multiple Choice Multiple AnswerQuestion What were the primary objectives of the group of seven

countries?Correct Answer Bring down the external value of US Dollar , Bring some stability

to exchange rates of all the countriesYour Answer Bring down the external value of US Dollar , Bring some stability

to exchange rates of all the countries


Question The crisis in global capital market in 2002-04 was due to

Correct Answer Collapse of Enron , Collapse of Argentina's currency board ,The war against terrorism

Your Answer Collapse of Enron , Collapse of Argentina's currency board

Multiple Choice Multiple AnswerQuestion Mr A sells an option conferring the right to buy a kilogram of

silver at Rs 8000/- for next six months means :-Correct Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in

next 6 months, even if the price goes up, , The buyer of optioncan sell silver to Mr A at 8000/- per Kg, in next 6 months, even ifthe price goes down.

Your Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, innext 6 months, even if the price goes up, , Mr A has choice ofselling or not selling silver on his own

Multiple Choice Multiple AnswerQuestion Major investors in NIF are :-

Correct Answer Commercial Banks , Non banking Finance companies ,Insurance Companies

Your Answer Commercial Banks , Non banking Finance companies ,Insurance Companies

True/FalseQuestion With the advent of futures and Options there is no need for

additional instruments of risk hedging.Correct Answer False

Your Answer False

Select The BlankQuestion During the fixed rate exchange system prevailing in India, the

intervention currency was ________.Correct Answer Sterling Pound

Your Answer USDollar

Multiple Choice Single AnswerQuestion What help does EXIM Bank provide under the scheme 'Direct

Financial assistance to exporters'?Correct Answer Funds are provided under deferred payment terms to Indian

exporter for credit to foreign buyerYour Answer Funds are provided under deferred payment terms to Indian

exporter for credit to foreign buyer


Question What is a bill of lading?

Correct Answer Transport document representing movement of goods by water.

Your Answer Transport document representing movement of goods by water.

Multiple Choice Single AnswerQuestion Which controls are not permitted by IMF?

Correct Answer Current account controls

Your Answer Exchange controls

Multiple Choice Multiple AnswerQuestion What are the objectives of International Chamber of

Commerce?Correct Answer Champion the global economy as a force of economic growth ,

Creating of job and prosperityYour Answer Champion the global economy as a force of economic growth ,

Creating of job and prosperity

True/FalseQuestion Yankee bond is issued for domestic borrowers.


Your Answer True




Your Answer Clearing house for settlement and clearance for the operationsof Ads , Set up a market intelligence cell to study and monitordevelopments in Forex Market

True/FalseQuestion An AD can book a forward contract for a part of the amount of

Sale ContractCorrect Answer True

Your Answer False

True/FalseQuestion Sterling FRNs are issued in Europe, USA ,Asia


Your Answer True


Bond basis to moneymarket basis

Bond basisx 360/365 Bond basisx 360/365

3 months LIBOR +2 % PA Floating rate Floating for floating ratecurrency swap

15% P.A. Fixed rate Fixed rate

Money market basis tobond basis

Money market basis x365/360


Select The BlankQuestion In Indian interbank market forward rates are generally quoted on

the basis of ________.Correct Answer Calendar month


Multiple Choice Single AnswerQuestion In case of syndication of loans the amount of loan and currency

is finalised by :-Correct Answer Borrower

Your Answer Underwriter of the syndicate

Multiple Choice Single AnswerQuestion European currency Unit

Correct Answer Basket of Currencies of members of EMS

Your Answer Basket of Currencies of members of EMS

Select The BlankQuestion The counter party in option is ________.

Correct Answer The exchange

Your Answer Trustworthy corporation, who hedges the risks of marketuncertainty

Multiple Choice Single AnswerQuestion A Spot Transaction between Japanese Yen and Sterling carried

out on Friday in Singapore, the settlement day will be

Correct Answer Following Tuesday if it is a working day in all the three centers

Your Answer Following Tuesday if it is a working day in all the three centers

Select The BlankQuestion EEFC account holder is allowed to have ________ facility.

Correct Answer Cheque book and nomination

Your Answer Cheque book and nomination

Multiple Choice Multiple AnswerQuestion A Usance bill of exchange may be drawn in 2 ways. Which are

they?Correct Answer Documents against payment , Documents against acceptance

Your Answer Documents against payment , Documents against acceptance

Multiple Choice Single AnswerQuestion Why have futures and options come into existence?

Correct Answer To avoid business risk.

Your Answer To avoid business risk.

True/FalseQuestion In an interest rate swap if the payment schedules are identical,

only diffrence between the two payments is delivered.Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion What are the main causes of fluctuations in Exchange rates?

Correct Answer Market demand and supply, sentiments , Governmentregulatios, fiscal policies, political instabilities

Your Answer Government regulatios, fiscal policies, political instabilities ,Market demand and supply, sentiments , The purchasing powerof currency changes every second

Multiple Choice Single AnswerQuestion What do you understand by a swap?

Correct Answer 2 counter parties agree to exchange streams of payments overa period of time

Your Answer 2 counter parties agree to exchange streams of payments overa period of time

True/FalseQuestion Import finance is nomally available at rates of interest cheaper

than domestic finance rates.Correct Answer False

Your Answer False

Multiple Choice Single AnswerQuestion A weight list, a packing list used in international trade are which

type of documents?Correct Answer Operational Documents

Your Answer Operational Documents

Multiple Choice Multiple AnswerQuestion What do you understand by 'Foreign Exchange Risk'?

Correct Answer The change in value of currency alters the home currency valueof an asset , liability, , The change in value of currency alters thehome currency value of profit, loss, or future cash flows

Your Answer The change in value of currency alters the home currency valueof an asset , liability, , The change in value of currency alters thehome currency value of profit, loss, or future cash flows



turnkey projects abroadYour Answer Preshipment credit beyond six months for construction and


Multiple Choice Single AnswerQuestion Which Indian Co. is not eligible to make investment abroad

under automatic route?Correct Answer Co which is caution listed by RBI

Your Answer Co which is caution listed by RBI

True/FalseQuestion Naked position is when investor does not hedge against market

risk.Correct Answer True

Your Answer True


Question In DAF, the frontier means :-

Correct Answer Frontier of exporter's country , Frontier of importer's country

Your Answer Frontier of exporter's country , Frontier of importer's country





European option On or after maturity On or after maturity

Out of money Loss Profit

In the money Profit Loss

American option Before maturity Before maturity




True/FalseQuestion PP Form is required when exports are made to any country by

post parcel on value payable basis.Correct Answer False

Your Answer False


turnover from a particular activity then that activity is consideredas ________.


Your Answer Core activity

Multiple Choice Single AnswerQuestion How many Countries participated in the third survey on Foreign

Exchange, coordinated by BIS in 1992?Correct Answer 26

Your Answer 26

Select The BlankQuestion Indian Co. intending to make investment under Automatic route

needs to submit form ________ to RBI with enclosures.Correct Answer ODA

Your Answer ODA

Multiple Choice Single AnswerQuestion In International trade, Advance payment means :-

Correct Answer Providing up front cash

Your Answer Providing up front cash


Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter bank

transactions?Correct Answer Clearing house for settlement and clearance for the operations of

Ads , Set up a market intelligence cell to study and monitordevelopments in Forex Market

Your Answer Clearing house for settlement and clearance for the operations ofAds , Make additional foreign currency available to ADs atcheaper rates









Your Answer True


Correct Answer The exercise or strike price, the amount , The expiration date andtime, the method of payment

Your Answer The exercise or strike price, the amount , The expiration date andtime, the method of payment , The Market report of the exchangewhich trades the option




Match The Following


Intolerable risk Drop the investment project Drop the investment project

Country risk analysis Cost of evluation does notjustify analysis








Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will be

exchanged on :-Correct Answer Monday

Your Answer Monday





Maturity of future Time when actual commodityis delivered

Last date of exercising option


Bearer security issued incurrency other than that ofthe country of issue

Eurobonds Eurobonds

Margin on future Peformance bond or securitydeposit

Peformance bond or securitydeposit

True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a quasi

negotiable instrument.


Your Answer False


the FOREX markets are Pension funds, mutual funds, insuranceCos.

Correct Answer True

Your Answer True









Your Answer Which enables the investor to market the same in the secondarymarket







Your Answer Preshipment credit up to six months for construction and turnkeyprojects abroad




Select The BlankQuestion As a result of the world wars in the 20th century the ________ of

most of the countries suffered heavily.Correct Answer Economies





Select The BlankQuestion ________ is the acid test for events to be included in country risk.

Correct Answer Control by Government'








True/False

Question If ERD > IRD hen exporter should availa Rupee finance

Correct Answer True

Your Answer True


Correct Answer It is an undertaking given by the openers bank to pay certain sumof money , It is an undertaking given on behalf of a certain personto another person in different country

Your Answer It is an undertaking given by the openers bank to pay certain sumof money , It is an undertaking given on behalf of a certain personto another person in different country




True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs, Call

and put options.Correct Answer True

Your Answer True

True/FalseQuestion There is no difference between CIP and CIF contracts except the

mode of transportation.Correct Answer True

Your Answer True











True/FalseQuestion The volume of trading of Derivatives in the world trade market is

growing but still only 5% of the total.Correct Answer False

Your Answer False
















Select The BlankQuestion Short term instruments normally issued by corporate borrowers,

forhigh values, at a discount to face value are known as________.



Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for assessing

a cross border project ?Correct Answer To weed out unviable projects and rank profitable ones






Correct Answer He gets the flexibility to exposure , He is exposed to additional riskof movement of rates between 3 currencies

Your Answer He gets the flexibility to exposure , He is exposed to additional riskof movement of rates between 3 currencies

Select The BlankQuestion Forward margin makes a currency cheaper then the currency is at

________.Correct Answer Discount


Multiple Choice Single AnswerQuestion Why does a person need protection from unfavourable movement

of exchange rate?

Correct Answer Unfavourable fluctuations in exchange rate can wipe out thenormal business profit

Your Answer Unfavourable fluctuations in exchange rate can wipe out thenormal business profit


Correct Answer Prices of capital market instruments change and are expected tochange drastically

Your Answer Prices of capital market instruments change and are expected tochange drastically



Your Answer False

Multiple Choice Multiple AnswerQuestion What is the criteria for an Indian Company for Direct Investment

abroad?Correct Answer Activity proposed need to be core activity , Financial commitment

in JV/WOS maximum $ 100 million or equivalentYour Answer Activity proposed need to be core activity , Financial commitment

in JV/WOS maximum $ 100 million or equivalent , Indian coshould not have been black listed


Correct Answer Advertisement which lists the managers, underwriters, , Listof Providers of recently floated issue

Your Answer Advertisement which lists the managers, underwriters, , Listof Providers of recently floated issue

True/FalseQuestion Out of 15 member countries in European Union 12 countries

commiteed themselves for a single currency.Correct Answer False

Your Answer False

True/FalseQuestion The volume of trading of Derivatives in the world trade

market is growing but still only 5% of the total.Correct Answer False

Your Answer False

Select The BlankQuestion A Credit can be a confirmed credit only if it is also

________.Correct Answer An Irrevocable credit






Stock market analysis Banks are ahead Banks are ahead

Weightages % Factors' values Factors' values

Select The BlankQuestion Over the years ________has been the most widely

accepted currency in international capital market.Correct Answer American Dollar


Multiple Choice Single AnswerQuestion What is the meaning of a country risk?

Correct Answer Risk of events in a particular country which may cause lossto a person dealing with that country

Your Answer Risk of events in a particular country which may cause lossto a person dealing with that country

Multiple Choice Multiple AnswerQuestion Which common details will be available in any bill of

Lading?Correct Answer Names of consigner, consignee , The port of loading and

unloading, contract of shipmentYour Answer Names of consigner, consignee , The port of loading and

unloading, contract of shipment

Multiple Choice Single AnswerQuestion What help does EXIM Bank provide under the scheme

'Direct Financial assistance to exporters'?Correct Answer Funds are provided under deferred payment terms to Indian


Your Answer Funds are provided under deferred payment terms to Indianexporter for credit to foreign buyer


PP Form Export Declaration form Export Declaration form

Health Certificate Fumigation certificate Fumigation certificate

Certificate of Inspection As per importersrequirement

As per importersrequirement

Certifiate of Origin Export Promotion Council Export Promotion Council

Select The BlankQuestion Even after liberalisation of exchange controls, the Euro

sterling market remained volatile because of uncertainties inUK and gyrations of sterling against major ________countries

Correct Answer OECD

Your Answer OECD

Multiple Choice Single AnswerQuestion How many INCOTERMS are there in "Departure" Group?

Correct Answer One

Your Answer Two

Multiple Choice Single AnswerQuestion What is a bill of lading?

Correct Answer Transport document representing movement of goods bywater.

Your Answer Transport document representing movement of goods bywater.

True/FalseQuestion The American Dollar market comprises of the domestic

segment of USD the offshore segment of USD.Correct Answer True

Your Answer True

Select The BlankQuestion The creditworthiness of the futures seller and the futures

buyer is ________ because of the presence of the Futures

exchange.

Correct Answer Irrelevant


Multiple Choice Single AnswerQuestion What was the collective assessment of International

financial market about the country risk of many cnuntries inthe last decade?

Correct Answer Whatever it was, was disastrously wrong.

Your Answer Whatever it was, was disastrously wrong.


market is restricted?Correct Answer Because of different tax systems , Because of different

credit standardsYour Answer Because of different tax systems , Because of different

credit standards

True/FalseQuestion Till August 1994 India was following the Indirect Methodof

Rate quotation.Correct Answer False

Your Answer True

Select The BlankQuestion In Indian interbank market forward rates are generally

quoted on the basis of ________.Correct Answer Calendar month


Select The BlankQuestion Rupee was liberalised on ________ account in 1993, and

on current account in 1994.Correct Answer Trade

Your Answer Trade

Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian

Rupee came from June 92?Correct Answer Other managed Floating


Multiple Choice Multiple AnswerQuestion Which of these are considered as miscellaneous

documents?Correct Answer Packing list , Weight certificate

Your Answer Packing list , Weight certificate



Your Answer True

Select The BlankQuestion ECGC provides cover to an Indian contractor for

construction work abroad under ________.Correct Answer Construction works policy

Your Answer Construction works policy

Multiple Choice Single AnswerQuestion Equity can be raised internationallly by a company through

:-Correct Answer Fund raising, underwriting, hedging , arbitration operations

Your Answer Fund raising, underwriting, hedging , arbitration operations

Multiple Choice Single AnswerQuestion How many Countries participated in the third survey on

Foreign Exchange, coordinated by BIS in 1992?Correct Answer 26

Your Answer 26


Correct Answer True

Your Answer True

True/FalseQuestion Prior approval of RBI is needed for payment of all imports.


Your Answer True


Correct Answer Underlying asset price , Time before expiration, rate ofinterest

Your Answer Underlying asset price , Time before expiration, rate ofinterest



Your Answer Management of external risk


abroad, EXIM bank provides funds under ________Scheme.

Correct Answer Overseas investment facility




Your Answer Advance against cash incentives



commitment in JV/WOS maximum $ 100 million orequivalent

Your Answer Activity proposed need to be core activity , Financialcommitment in JV/WOS maximum $ 100 million orequivalent

Multiple Choice Multiple AnswerQuestion External Commercial Debt market :-

Correct Answer Prevails in Domestic market of foreign country , Prevails inoffshore markets

Your Answer Prevails in Domestic market of foreign country , Prevails inoffshore markets





Correct Answer The change in value of currency alters the home currencyvalue of an asset , liability, , The change in value ofcurrency alters the home currency value of profit, loss, orfuture cash flows

Your Answer The change in value of currency alters the home currencyvalue of an asset , liability, , The change in value ofcurrency alters the home currency value of profit, loss, orfuture cash flows , Certainty of an event which wouldhappen in favour of the importer/ exporter

Multiple Choice Single AnswerQuestion For a spot transaction carried out on Tuesday, where both

centers have holiday on Wednesday, currencies will beexchanged on :-

Correct Answer Thursday if it is a working day at both the centers

Your Answer Friday

Multiple Choice Single AnswerQuestion Which details about forward contracts do the Exchange

Controls verify ?Correct Answer Particulars of cancellation of forward cover for the

equivalent of USD 500,000Your Answer Particulars of cancellation of forward cover for the

equivalent of USD 500,000

True/FalseQuestion In the forward rate quotations between two currencies,

when one currency is at discount the other currency is atpremium.

Correct Answer True

Your Answer True


Correct Answer Which are convertible , Which have liquidity confirmed inEuro market operations

Your Answer Which are convertible , Which have liquidity confirmed inEuro market operations

Select The BlankQuestion A Bill of exchange payable 45 days from date of shipment,

is a means of ________ from seller to the buyer.Correct Answer Credit

Your Answer Credit






________.Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt

Borrowings within and outside the countryYour Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt

Borrowings within and outside the country

True/FalseQuestion Import finance is nomally available at rates of interest

cheaper than domestic finance rates.Correct Answer False

Your Answer False

Multiple Choice Multiple AnswerQuestion Major s in NIF are :-


Your Answer Commercial Banks , Non banking Finance companies



Your Answer Denmark

True/FalseQuestion Indian companies are now allowed to freely invest abroad

up to $1.5 million, raised through GDE or EEFC withoutprior permission from RBI.


Your Answer True













Your Answer True





Question Which is the most actively traded currency in the internationalmarket today?

Correct Answer US Dollar















Your Answer Monday









Eurobonds Eurobonds





Your Answer False



Correct Answer True

Your Answer True















turnkey projects abroadYour Answer Preshipment credit up to six months for construction and turnkey

projects abroad

















Question What is Risk Syndication facility?




Correct Answer True

Your Answer True









Your Answer True

True/FalseQuestion There is no difference between CIP and CIF contracts except

the mode of transportation.Correct Answer True

Your Answer True


Question Financial management is complex process for












Your Answer False





























Select The Blank

Question Forward margin makes a currency cheaper then the currency isat ________.

Correct Answer Discount











Your Answer False


abroad?Correct Answer Activity proposed need to be core activity , Financial



Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter bank

transactions?Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set

up a market intelligence cell to study and monitor developments in ForexMarket

Your Answer Clearing house for settlement and clearance for the operations of Ads ,Make additional foreign currency available to ADs at cheaper rates

Select The BlankQuestion ________ is the agency of ICC which deals with the maritime crime.

Correct Answer International Maritime Bureau





True/FalseQuestion Cross currency forward contract is not meaningful if original contract is in

Rupees to USDCorrect Answer True

Your Answer True


Correct Answer The exercise or strike price, the amount , The expiration date and time, themethod of payment

Your Answer The exercise or strike price, the amount , The expiration date and time, themethod of payment , The Market report of the exchange which trades theoption

Multiple Choice Single AnswerQuestion Which is the most actively traded currency in the international market

today?Correct Answer US Dollar








Select The Blank

Question Global capital market can be understood from the study of ________.

Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within andoutside the country

Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within andoutside the country



Your Answer Monday

Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee came from

June 92?Correct Answer Other managed Floating



Maturity of future Time when actual commodityis delivered




Eurobonds Eurobonds



True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a quasi

negotiable instrument.Correct Answer False

Your Answer False

True/FalseQuestion The Prominent non banking financial institutions participating in the

FOREX markets are Pension funds, mutual funds, insurance Cos.Correct Answer True

Your Answer True


Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Marginensures solvency for honouring contracts

Your Answer Faith money deposited by buyers and sellers ensures liquidity , Marginensures solvency for honouring contracts

Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in foreign

exchange?Correct Answer USD 1 trillion



Correct Answer By underwriting bank to support funding for a certain period, against whichborrowers can issue short term papers

Your Answer Which enables the investor to market the same in the secondary market

Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of seven

central Banks taken togeather in mid 1992?Correct Answer USD 275 Billion


Multiple Choice Single AnswerQuestion What Preshipment facility is granted by EXIM Bank to an exporter?

Correct Answer Preshipment credit beyond six months for construction and turnkeyprojects abroad

Your Answer Preshipment credit up to six months for construction and turnkey projectsabroad

Select The BlankQuestion Over the years ________has been the most widely accepted currency in

international capital market.Correct Answer American Dollar


Select The BlankQuestion As a result of the world wars in the 20th century the ________ of most of

the countries suffered heavily.

Correct Answer Economies








Select The BlankQuestion The Trans European Automated Real Time Gross Settlement Express

Transfer is popular in ________.Correct Answer Brussels




Your Answer Sharing risk of Non payment by the Syndicate of Banks giving loans


Correct Answer True

Your Answer True


Correct Answer It is an undertaking given by the openers bank to pay certain sum ofmoney , It is an undertaking given on behalf of a certain person to anotherperson in different country

Your Answer It is an undertaking given by the openers bank to pay certain sum ofmoney , It is an undertaking given on behalf of a certain person to anotherperson in different country


Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operationabroad , Payment to EOUs in India for services rendered by them

Your Answer Payment of hotel bills abroad, payment for expenses on Heart operationabroad , Payment to EOUs in India for services rendered by them

True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs, Call and put

options.Correct Answer True

Your Answer True

True/FalseQuestion There is no difference between CIP and CIF contracts except the mode of

transportation.Correct Answer True

Your Answer True




Select The BlankQuestion When an Indian Company earns at least 50% of its average turnover from

a particular activity then that activity is considered as ________.Correct Answer Core activity





True/FalseQuestion The volume of trading of Derivatives in the world trade market is growing

but still only 5% of the total.


Your Answer False








Correct Answer Which are convertible , Which have liquidity confirmed in Euro marketoperations

Your Answer Which are convertible , Which have liquidity confirmed in Euro marketoperations , Which have greater intrinsic value


Correct Answer Give Softloans to poorer countries in Asia , Give project finance fromresources raised in world capital market

Your Answer Give Softloans to poorer countries in Asia , Give project finance fromresources raised in world capital market


Correct Answer Advertisement which lists the managers, underwriters, , List of Providers ofrecently floated issue

Your Answer Advertisement which lists the managers, underwriters, , List of Providers ofrecently floated issue

Select The BlankQuestion Short term instruments normally issued by corporate borrowers, forhigh

values, at a discount to face value are known as ________.Correct Answer Euro Commercial Papers


Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for assessing a cross

border project ?Correct Answer To weed out unviable projects and rank profitable ones






Correct Answer He gets the flexibility to exposure , He is exposed to additional risk ofmovement of rates between 3 currencies

Your Answer He gets the flexibility to exposure , He is exposed to additional risk ofmovement of rates between 3 currencies

Select The BlankQuestion Forward margin makes a currency cheaper then the currency is at

________.Correct Answer Discount


Multiple Choice Single AnswerQuestion Why does a person need protection from unfavourable movement of

exchange rate?Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal

business profitYour Answer Unfavourable fluctuations in exchange rate can wipe out the normal

business profit


Correct Answer Prices of capital market instruments change and are expected to changedrastically

Your Answer Prices of capital market instruments change and are expected to changedrastically



Your Answer False

Multiple Choice Multiple AnswerQuestion What is the criteria for an Indian Company for Direct Investment abroad?

Correct Answer Activity proposed need to be core activity , Financial commitment inJV/WOS maximum $ 100 million or equivalent

Your Answer Activity proposed need to be core activity , Financial commitment inJV/WOS maximum $ 100 million or equivalent , Indian co should not havebeen black listed














Your Answer True










Country risk analysis Cost of evluation doesnot justify analysis










Your Answer Monday




Match The Following





Bearer security issued incurrency other than thatof the country of issue

Eurobonds Eurobonds





Your Answer False


the FOREX markets are Pension funds, mutual funds,insurance Cos.

Correct Answer True

Your Answer True









Your Answer Which enables the investor to market the same in thesecondary market






turnkey projects abroadYour Answer Preshipment credit up to six months for construction and














Select The Blank

Question The Trans European Automated Real Time Gross SettlementExpress Transfer is popular in ________.

Correct Answer Brussels






Correct Answer True

Your Answer True









Your Answer True

True/False

Question There is no difference between CIP and CIF contracts exceptthe mode of transportation.

Correct Answer True

Your Answer True





turnover from a particular activity then that activity isconsidered as ________.






True/FalseQuestion The volume of trading of Derivatives in the world trade market

is growing but still only 5% of the total.Correct Answer False

Your Answer False
















Select The BlankQuestion Short term instruments normally issued by corporate

borrowers, forhigh values, at a discount to face value areknown as ________.










Question What is the effect of cross currency option on the customer?











Correct Answer Prices of capital market instruments change and are expectedto change drastically

Your Answer Prices of capital market instruments change and are expectedto change drastically



Your Answer False






True/False

Question Integrated branches of Commercial banks handle forextransactions as well as options, swaps, futures, arbitrageoperations

Correct Answer True

Your Answer True



Your Answer False

Select The BlankQuestion The rate of interest on rupee finance for exports is not

exceeding ________ less than PLR.Correct Answer 0.025




Your Answer The exercise or strike price, the amount , The expiration dateand time, the method of payment

Multiple Choice Single AnswerQuestion In the syndicated loan arrangement the borrower has to execute

:-Correct Answer Single Principal loan agreement




Your Answer True


Correct Answer Institutions can introduce new products and instuments at theprice of their choice.

Your Answer Institutions can introduce new products and instuments at theprice of their choice.




True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate

quotation.Correct Answer False

Your Answer False


abroad, EXIM bank provides funds under ________ Scheme.Correct Answer Overseas investment facility


Multiple Choice Single AnswerQuestion Under the automatic route of Direct Investment Abroad, what is

the restriction on market purchases?Correct Answer 50% of the net worth of the investing company




Your Answer Purchase and sell foreign currency notes and travellers chequesand also Give export finance





Question What are the features of Settlement price ?




Correct Answer Aribtration and dispute resolving , Canvass for open tradecombat commercial crime

Your Answer Aribtration and dispute resolving , Canvass for open tradecombat commercial crime , Increased Govt regulation ofBusiness

True/FalseQuestion Cause of increase in cost of public issues Underwriting fees ,

selling commissionCorrect Answer True

Your Answer False




True/FalseQuestion The Option period in the forward contract is at the option of the

Banker, hence the bank has to be very conservative in quotingrates.


Your Answer True


Correct Answer Demand and supply, interest rates, inflation, , Sentiment,Speculation

Your Answer Demand and supply, interest rates, inflation, , Sentiment,Speculation , GDP,Balance of trade andpayment,Unemployment

Match The Following


Departure EXW EXW



Arrival DES DES





Correct Answer True

Your Answer False












Your Answer Activity for investment is core activity of Indian Company. , TotalFinancial commitment in JV/WOS as per prescribed ceiling




Multiple Choice Single AnswerQuestion Large number of exporters from which country are enjoying the

privilege of receiving up front cash from importers in Russia?Correct Answer United Kingdom


True/FalseQuestion In developed markets, speculators play important role in

determining the trend of currency rates.Correct Answer True

Your Answer True





Select The BlankQuestion In Overseas market the forward rate is generally quoted on the

basis of ________.Correct Answer Fixed date


Select The BlankQuestion Forward Margin makes a currency costlier then the currency is

at ________.

Correct Answer Premium



Correct Answer Negotiating Bank, advising bank , Reimbursing bank,Confirming bank

Your Answer Negotiating Bank, advising bank , Reimbursing bank,Confirming bank









Your Answer UK


the clients, without the prior permission of RBI or Government?Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and

collars, and forward rate agreementsYour Answer Hedges, interest rate swaps, currency swaps. , Caps and

collars, and forward rate agreements

Multiple Choice Single AnswerQuestion To whom is an AD required to report the cancellation of forward

contracts?Correct Answer No one at all.





True/FalseQuestion The Negotiating bank examines the documents submitted by the

seller and makes payment if they comply the terms andconditions of the LC.

Correct Answer True

Your Answer True













True/FalseQuestion Country risk analysis is a futile exercise in the background of

cost of analysis.

Correct Answer True

Your Answer False



Correct Answer OECD

Your Answer OECD



FRNs FRNs

Issue of bonds withoutfixed rate of interest,linked to short terminterest rate in the globalmarket


Issue of loansinternationally,througharranger, underwriter,comanager, for a largeamount for sharing risk oflending


Equity issues in theforeign markets either asdirect investments orportfolio investments.




Multiple Choice Single AnswerQuestion Proforma Invoice, Commercial Invoice, Consaular Invoice are

which type of documents?Correct Answer Commercial Documents

Your Answer Commercial Documents

True/FalseQuestion Charter party bills of lading are generally not acceptable to

bankers as security because Sea Charters are full of problems.

Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion Why does a Transaction exposure arise?

Correct Answer Trading flows , Dividend or capital flows

Your Answer Trading flows , Dividend or capital flows




Select The BlankQuestion A Documentary credit issued on the strength of another

documentary credit is known as ________.Correct Answer Back to Back credit

Your Answer Back to Back credit



Your Answer Which are convertible , Which have liquidity confirmed in Euromarket operations

True/FalseQuestion Tranche' is a managed issue of securities in smaller

denominations.Correct Answer True

Your Answer False



Your Answer True





Multiple Choice Multiple AnswerQuestion Which events can lead to materialisation of country risk?

Correct Answer Change in Government policies , Change in Government rulesand laws

Your Answer Change in Government policies , Change in Government rulesand laws , Unpredicted Earthquake, Tsunami waves

Multiple Choice Multiple AnswerQuestion What is a 'speculator'?

Correct Answer Trader who is neither hedger nor arbitragor , He takes risks forprofit

Your Answer Trader who is neither hedger nor arbitragor , He takes risks forprofit



Your Answer USA




Multiple Choice Multiple AnswerQuestion What do you understand by Commercial Risk?

Correct Answer Protracted default by the buyer , Insolvency of the buyer

Your Answer Protracted default by the buyer , Insolvency of the buyer



Your Answer Visaed



Your Answer Monday

True/FalseQuestion The American Dollar market comprises of the domestic segment

of USD the offshore segment of USD.Correct Answer True

Your Answer True


LastStage Form a single currency Meet in Maastricht inNetherland

The First stage in theEuropeand and MonetaryUnion (EMU)

Free movement of capitalin EC

Establish EURO Bank

Stage II in EMU Establishment ofEuropean MonetaryInstitute

Establishment of EuropeanMonetary Institute

Stage III in EMU Members to meet theconvergence criteria andfix the exchange rates

Members to meet theconvergence criteria andfix the exchange rates

Select The BlankQuestion Under the ________ standard the Country's Central Bank

promised to buy back the currency at certain rate of Gold.Correct Answer Gold

Your Answer Gold



Your Answer True


Question The factors which affect the performance of an option are:-



Multiple Choice Multiple AnswerQuestion Which contracts are used for transportation by road?

Correct Answer FCA , CPT

Your Answer FCA , CPT , CFR

True/FalseQuestion Bid rate is bidders buying rate and offered rate is bidders selling

rate.Correct Answer True

Your Answer False



ECD ECD









Multiple Choice Multiple AnswerQuestion Which two countries were included to convert the group of five

into the group of seven?Correct Answer Italy , Canada

Your Answer Canada , Italy




Multiple Choice Single AnswerQuestion Method of advance payment is not disadvantageous to :-

Correct Answer The seller

Your Answer The seller



Your Answer Increase in volatile trading conditions

Multiple Choice Single AnswerQuestion What do you mean by a derivative?

Correct Answer One which has been derived from other fundamentalinstruments

Your Answer Derived from Mathematical expressions

Multiple Choice Single AnswerQuestion "Currency Snake"

Correct Answer Plus or minus movement of exchange rate around the parity rate

Your Answer Currency of European Country in the early 70's



Your Answer False






Your Answer Total Financial commitment in JV/WOS as per prescribed ceiling, Activity for investment is core activity of Indian Co.



Your Answer Post shipment credit guarantee

Multiple Choice Single AnswerQuestion For setting up a joint venture or WOS abroad, Indian banks

operating in India need a clearance :-Correct Answer Under Banking Regulation Act

Your Answer Under Banking Regulation Act




True/FalseQuestion Indian companies are now allowed to freely invest abroad up to

$1.5 million, raised through GDE or EEFC without priorpermission from RBI.


Your Answer False




True/False

Question Terms in an Irrevocable credit can not be alterred at all.


Your Answer True



Your Answer Square




standards

Select The BlankQuestion The currency notes and coins of individual countries

participating in "Euro" have ceased to be a legal tender from________.

Correct Answer 2002

Your Answer 2002

Select The BlankQuestion Partnership firm not eligible for Overseas Direct Investment

needs to apply to RBI Approval in form ________.Correct Answer ODI

Your Answer ODI

Multiple Choice Single AnswerQuestion Where does the word derivative originate from?

Correct Answer Mathematics

Your Answer Mathematics



Your Answer Cash Incentives

Multiple Choice Single AnswerQuestion The financial system of any country consists of

Correct Answer Network of commercial banks, domestic and foreign investmentbanks, NBFCs, etc

Your Answer The Central bank, IMF and world bank


Select The BlankQuestion Association of several scheduled commercial banks for forex

business is ________.Correct Answer Foreign Exchange Dealers Association of India

Your Answer Foreign Exchange Dealers Association of India



Your Answer True




Select The BlankQuestion The creditworthiness of the futures seller and the futures buyer is

________ because of the presence of the Futures exchange.Correct Answer Irrelevant


Select The BlankQuestion When interest rate changes by 0.05 per cent then it has changed

________ basis points.Correct Answer 50

Your Answer 5





Multiple Choice Multiple AnswerQuestion The crisis in global capital market in 2002-04 was due to

Correct Answer Collapse of Enron , Collapse of Argentina's currency board , Thewar against terrorism

Your Answer Collapse of Enron , Collapse of Argentina's currency board

Multiple Choice Multiple AnswerQuestion Mr A sells an option conferring the right to buy a kilogram of

silver at Rs 8000/- for next six months means :-Correct Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in

next 6 months, even if the price goes up, , The buyer of optioncan sell silver to Mr A at 8000/- per Kg, in next 6 months, even ifthe price goes down.

Your Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, innext 6 months, even if the price goes up, , Mr A has choice ofselling or not selling silver on his own



Your Answer Commercial Banks , Non banking Finance companies ,Insurance Companies

True/FalseQuestion With the advent of futures and Options there is no need for

additional instruments of risk hedging.Correct Answer False

Your Answer False

Select The BlankQuestion During the fixed rate exchange system prevailing in India, the

intervention currency was ________.Correct Answer Sterling Pound

Your Answer USDollar

Multiple Choice Single AnswerQuestion What help does EXIM Bank provide under the scheme 'Direct

Financial assistance to exporters'?Correct Answer Funds are provided under deferred payment terms to Indian

exporter for credit to foreign buyerYour Answer Funds are provided under deferred payment terms to Indian





Multiple Choice Single AnswerQuestion Which controls are not permitted by IMF?

Correct Answer Current account controls

Your Answer Exchange controls

Multiple Choice Multiple AnswerQuestion What are the objectives of International Chamber of Commerce?

Correct Answer Champion the global economy as a force of economic growth ,Creating of job and prosperity

Your Answer Champion the global economy as a force of economic growth ,Creating of job and prosperity

True/FalseQuestion Yankee bond is issued for domestic borrowers.


Your Answer True





True/FalseQuestion An AD can book a forward contract for a part of the amount of

Sale Contract

Correct Answer True

Your Answer False

True/FalseQuestion Sterling FRNs are issued in Europe, USA ,Asia


Your Answer True


Bond basis to moneymarket basis

Bond basisx 360/365 Bond basisx 360/365

3 months LIBOR +2 % PA Floating rate Floating for floating ratecurrency swap

15% P.A. Fixed rate Fixed rate

Money market basis tobond basis



Select The BlankQuestion In Indian interbank market forward rates are generally quoted on

the basis of ________.Correct Answer Calendar month


Multiple Choice Single AnswerQuestion In case of syndication of loans the amount of loan and currency

is finalised by :-Correct Answer Borrower

Your Answer Underwriter of the syndicate




Select The BlankQuestion The counter party in option is ________.

Correct Answer The exchange

Your Answer Trustworthy corporation, who hedges the risks of marketuncertainty


out on Friday in Singapore, the settlement day will beCorrect Answer Following Tuesday if it is a working day in all the three centers

Your Answer Following Tuesday if it is a working day in all the three centers

Select The BlankQuestion EEFC account holder is allowed to have ________ facility.

Correct Answer Cheque book and nomination

Your Answer Cheque book and nomination

Multiple Choice Multiple AnswerQuestion A Usance bill of exchange may be drawn in 2 ways. Which are

they?Correct Answer Documents against payment , Documents against acceptance

Your Answer Documents against payment , Documents against acceptance

Multiple Choice Single AnswerQuestion Why have futures and options come into existence?

Correct Answer To avoid business risk.

Your Answer To avoid business risk.

True/FalseQuestion In an interest rate swap if the payment schedules are identical,

only diffrence between the two payments is delivered.Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion What are the main causes of fluctuations in Exchange rates?

Correct Answer Market demand and supply, sentiments , Government regulatios,fiscal policies, political instabilities

Your Answer Government regulatios, fiscal policies, political instabilities ,Market demand and supply, sentiments , The purchasing powerof currency changes every second

Multiple Choice Single AnswerQuestion What do you understand by a swap?

Correct Answer 2 counter parties agree to exchange streams of payments over aperiod of time

Your Answer 2 counter parties agree to exchange streams of payments over aperiod of time



Your Answer False



Your Answer Operational Documents


Correct Answer The change in value of currency alters the home currency valueof an asset , liability, , The change in value of currency alters thehome currency value of profit, loss, or future cash flows

Your Answer The change in value of currency alters the home currency valueof an asset , liability, , The change in value of currency alters thehome currency value of profit, loss, or future cash flows





Multiple Choice Single AnswerQuestion Which Indian Co. is not eligible to make investment abroad

under automatic route?Correct Answer Co which is caution listed by RBI

Your Answer Co which is caution listed by RBI

True/False

Question Naked position is when investor does not hedge against marketrisk.

Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion In DAF, the frontier means :-

Correct Answer Frontier of exporter's country , Frontier of importer's country

Your Answer Frontier of exporter's country , Frontier of importer's country





European option On or after maturity On or after maturity

Out of money Loss Profit

In the money Profit Loss

American option Before maturity Before maturity




True/FalseQuestion PP Form is required when exports are made to any country by

post parcel on value payable basis.Correct Answer False

Your Answer False

Select The Blank

Question When an Indian Company earns at least 50% of its averageturnover from a particular activity then that activity is consideredas ________.


Your Answer Core activity



Your Answer 26

Select The BlankQuestion Indian Co. intending to make investment under Automatic route

needs to submit form ________ to RBI with enclosures.Correct Answer ODA

Your Answer ODA





Correct Answer True

Your Answer True


Multiple Choice Multiple AnswerQuestion Which functions does the Bill of Lading

serve?Correct Answer It is a document of title to goods.

, It is receipt of goodsYour Answer It is a document of title to goods. ,

It is receipt of goods

Multiple Choice Single AnswerQuestion A Bank quotes interest rate of 9.50/10.00

for six months dollar deposit, here the bid rate is :-

Correct Answer 9.50% P.A.

Your Answer 9.50% P.A.

Multiple Choice Single AnswerQuestion What is Sovereign Risk?Correct Answer Risk of lending to the government

of a countryYour Answer Risk of lending to the government of a

country

Multiple Choice Single AnswerQuestion How does ICC help poor countries?Correct Answer Attract Foreign Direct investments

togeather with UNCTADYour Answer Attract Foreign Direct investments

togeather with UNCTAD

Multiple Choice Multiple AnswerQuestion As per BIS, recovery from the recent

crisis in global capital market was mainly due toCorrect Answer Rapid and appropriate policy

response in US and other countries , Increase inForeign Direct Investments , free flow of credit

Your Answer Rapid and appropriate policy responsein US and other countries , Increase in Foreign DirectInvestments , free flow of credit

True/FalseQuestion Out of 15 member countries in European

Union 12 countries commiteed themselves for a singlecurrency.


True/FalseQuestion In red clause credit some clauses are

printed in Red ink.Correct Answer TrueYour Answer True

True/FalseQuestion Transfer of funds for investment abroad

is allowed freely.Correct Answer TrueYour Answer False

Select The BlankQuestion EEFC account holder is allowed to have

________ facility.Correct Answer Cheque book and nominationYour Answer Credit card, safe custody, safe

deposit locker without any fee

Select The BlankQuestion Fixed interest rate Eurobond without the

option to convert to equity is known as ________.Correct Answer Straight Debt

Your Answer Interest rate swap

True/FalseQuestion An Indian importing goods from USA pays

dollars in India.Correct Answer FalseYour Answer True


PP Form Export Declaration form Export Declarationform

Health Certificate Fumigation certificate ExportDeclaration form

Certificate of Inspection As per importers requirementExport Declaration form

Certifiate of Origin Export Promotion Council ExportDeclaration form

Multiple Choice Multiple AnswerQuestion For issuing a Documentary credit The

applicant is required to provide to the issuing bankdetails about

Correct Answer The purchase-sales contract, themode of payment, the tenor of payment , The documentsrequired, the names of authorities who would issue thedocuments

Your Answer The purchase-sales contract, the modeof payment, the tenor of payment , The track record ofthe buyer and seller

Multiple Choice Multiple AnswerQuestion The characteristics of an International

documentary credit are :-Correct Answer It is an undertaking given by the

openers bank to pay certain sum of money , It is anundertaking given on behalf of a certain person toanother person in different country

Your Answer It is an undertaking given on behalfof a certain person to another person in differentcountry , It is a stamped agreement and is not validunless it is signed by the issuer

True/FalseQuestion CFR = FOB plus freight paid by seller +

insurance paid by seller.Correct Answer FalseYour Answer True

Select The BlankQuestion Even after liberalisation of exchange

controls, the Euro sterling market remained volatilebecause of uncertainties in UK and gyrations ofsterling against major ________ countries

Correct Answer OECDYour Answer OPEC

True/FalseQuestion Integrated branches of Commercial banks

handle forex transactions as well as options, swaps,futures, arbitrage operations


Multiple Choice Single AnswerQuestion Which of them are special funding

facilities of IMF ?Correct Answer Buffer Stock FacilityYour Answer Supplemental Reserve Policy

Multiple Choice Multiple AnswerQuestion What are the sources of raising funds for

exports?Correct Answer Suppliers credit , ForfaitingYour Answer Suppliers credit , Forfaiting , Buyers

credit , Foreign currency or Rupee finance

True/FalseQuestion Normally the forward contracts are booked

for making huge profits.Correct Answer FalseYour Answer False

True/FalseQuestion Head office of ICC is in Paris because of

its First President Eliance Clementel.Correct Answer TrueYour Answer False

Select The BlankQuestion A ________ Bill of lading does not

specify the terms and conditions of carriage.Correct Answer Short FormYour Answer Short Form

Multiple Choice Single AnswerQuestion What is the volume of the world's total

speculative transactions?Correct Answer Roughly 90 % of the total turnoverYour Answer 70% of the total turnover

True/FalseQuestion Till August 1994 India was following the

Indirect Methodof Rate quotation.Correct Answer FalseYour Answer False

Select The BlankQuestion For setting up joint ventures abroad or

equity participation abroad, EXIM bank provides fundsunder ________ Scheme.

Correct Answer Overseas investment facilityYour Answer Overseas investment facility

Multiple Choice Single AnswerQuestion Mr P has exported goods in May 2005 and

is expecting payment of Euro 25000 by the last week ofSept 2005. Give details of the forward contract he canbook :-

Correct Answer He can book a sale contract anytime from May 2005 till Mid Sept 2005, for Euro 25000or less, for maturity last week of Sept.

Your Answer He can book a contract for ForwardPurchase, any time from May 2005 till Mid Sept 2005,for Euro 25000 or less, for maturity last week ofSept.

Select The BlankQuestion In US Capital Market a Company prepares

all the necessary documents in advance of the publicissue under the facility known as ________.

Correct Answer Shelf RegistrationYour Answer Shell Registration

Multiple Choice Multiple AnswerQuestion Which common details will be available in

any bill of Lading?Correct Answer Names of consigner, consignee , The

port of loading and unloading, contract of shipmentYour Answer Names of consigner, consignee , The

port of loading and unloading, contract of shipment ,The name of the vessel , The date of transportationand contract of transportation

Select The BlankQuestion Under the ________ standard the Country's

Central Bank promised to buy back the currency atcertain rate of Gold.

Correct Answer GoldYour Answer Interest

Select The BlankQuestion Short term instruments normally issued by

corporate borrowers, forhigh values, at a discount toface value are known as ________.

Correct Answer Euro Commercial PapersYour Answer ADRs

Select The BlankQuestion The type of trade where a country sells

orange juice in return for cars is known as ________.Correct Answer Counter TradeYour Answer Non money trade

Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC

accounts?Correct Answer Payment of hotel bills abroad,

payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them

Your Answer Payment to EOUs in India for servicesrendered by them , Payment of Gifts of GBP 5000 peryear per donor

Multiple Choice Multiple AnswerQuestion Under the liberalisation through FEMA,

what can an AD offer to the clients, without the priorpermission of RBI or Government?

Correct Answer Hedges, interest rate swaps,currency swaps. , Caps and collars, and forward rateagreements

Your Answer Caps and collars, and forward rateagreements , Good and competitive exchange rates andcross currency rates

Multiple Choice Multiple AnswerQuestion Sterling Market is attractive for an

international investor becauseCorrect Answer Gilts offer higher attractive

margin , Choice of issuing medium term and long termbonds

Your Answer Choice of issuing medium term and longterm bonds , Less controls and less formalities to becompleted , Linking of issues to currency swaps

Multiple Choice Single AnswerQuestion Under which contracts the seller pays the

import duty for the buyer?Correct Answer DDPYour Answer DDP

True/FalseQuestion PP Form is required when exports are made

to any country by post parcel on value payable basis.Correct Answer FalseYour Answer True

Multiple Choice Multiple AnswerQuestion What were the immediate causes of

converting the group of 5 into group of 7 and convenetheir meeting in late 1985?

Correct Answer Many Industries in USA had becomeuncompetitive with imports , In USA the Tradeprotectionnism had increased

Your Answer Many Industries in USA had becomeuncompetitive with imports , In USA the Tradeprotectionnism had increased , The heads of G5insisted to have a meeting , Failure of IMF to control

the exchange rates

Multiple Choice Single AnswerQuestion What are the powers of money changers?Correct Answer Purchase and sell foreign currency

notes and travellers chequesYour Answer Purchase and sell foreign currency

notes and travellers cheques, give import and exportfinance

Multiple Choice Single AnswerQuestion Who can open an EEFC account?Correct Answer Individuals , firms, companies,

resident in IndiaYour Answer Individuals , firms, companies,

resident in India

Multiple Choice Single AnswerQuestion What is the role of ICC towards WTO?Correct Answer To provide world business

recommendations to WTOYour Answer To further the cause of WTO


Swap price Difference in prices of two legs of buyingand selling Quoting rate for both buying and selling acurrency

Euro Market Market in Euro currencies Market in Eurocurrencies

Making market Quoting rate for both buying and sellinga currency Difference in prices of two legs of buyingand selling

Spread Price difference between bid and offer Maket of'Euro'

Select The BlankQuestion Position in a currency is said to be

________, when sales equal purchases.Correct Answer SquareYour Answer Awkward

Select The BlankQuestion Hotels and Airline companies are allowed

to receive payments in Indian rupees from foreigntourist without insisiting on ________.

Correct Answer Encashment certificateYour Answer Encashment certificate

Multiple Choice Multiple AnswerQuestion Why is Bill of Exchange a Quasi

Negotiable Instrument?Correct Answer It represents title to goods , It

is issued under Sale of Goods actYour Answer It represents title to goods , It is

issued under Transportation act , It is issued underBill of exchange act

Multiple Choice Single AnswerQuestion Which details about forward contracts do

the Exchange Controls verify ?Correct Answer Particulars of cancellation of

forward cover for the equivalent of USD 500,000Your Answer Details of all contracts booked and

cancelled beyond a specified limit

Multiple Choice Single AnswerQuestion In the context of International economy

,the period between 1920s and 1930s is known asCorrect Answer Great DepressionYour Answer Great Depression

Multiple Choice Multiple AnswerQuestion What do you understand by Commercial

Risk?Correct Answer Protracted default by the buyer ,

Insolvency of the buyerYour Answer Protracted default by the buyer ,

Insolvency of the buyer


1

Chapter – 2 – International Finance Markets - the U.S. dollar Market ;The U.S. Dollar Market ; The Japanese Yen Market ; The Sterling Market ; The Euro MarketHas Been discussed in the next chapter ; Recent development in international FinanceMarkets ;

5 – 10

Chapter – 3 – International Monetary and Financial SystemThe country’s central ban agreed to buy back their currency at a certain rate of gold; Meltingdown of gold was freely allowed ; There was unrestricted movement of gold (i.e. import and /or export)The total money supply in the country was determined by the quantum of gold reserves in thecountry

13 – 14

The international monetary fund ; quotas ; funding facilities ; regular facilities tranchepolicies ; restore Tranche credit Tranche ; extended arrangement (extended fund facility(EEF) ; Standard Arrangement (enlarged Arrears Policy)Special facilities (compensatory and contingency financing facility (CCFF)Buffer stock Financing Facility ; Supplemental Reserve Policy (SRP); Reserve Tranche ;Credit Tranche ; Stand by arrangement ;

15 – 17

Extended arrangement or extended fund facilities (EFF) special facilities ; CCFF ; Bufferstock financing Facility (BSFF) ; Supplemental resources facility (SRF) Enhanced structuraladjustment facility (ESAF) The fixed exchange rate system

18 – 19


20 – 23


24 – 27

Chapter – 4 – External commercial borrowing – country ; company ; Equity ; Fund raising ;underwriting ; hedging ; arbitraging ; note issuance facility ; Mechanism and documentation; syndicated loans ; floating rate notes ;

31 – 35


36 – 39

Pricing and Closing ; costs ; Advantages & Disadvantages of external commercial borrowing 40 – 41Chapter – 5 – Documents used in International Trade ;Regulatory requirements ; operational requirements ; commercial documents ; financialdocuments transport documents ; risk covering documents ; official / regulatory documents ;miscellaneous documents ; Commercial documents ; proforma invoice ; commercial invoice; consular invoice customs invoice ; legalized invoice ; combined certificate of origin andvalue ; financial documents ; bill of exchange ;

43 – 46

The second of the same tenor and date unpaid ; the first of the same tenor and date unpaid ; orsimilar words ; sight B/E; Tenor ; time B/E; DP Basis ; document against Payment Basis ;Documents against Acceptance Basis Transport documents; bill of lading ; received forshipment bill of lading ; on board bill of lading ;

47 – 49

Short form bill of lading ; long form bill of lading clean bill of lading ; claused bill of lading ;through bill of lading ; straight bill of lading ; charter party Bill of lading ; container bill oflading container bill of lading ; combined transport B/L or Mulit Modal B/L lash bill oflading house bill of lading ; Airway bill ; Air consignment Note ; House Air way bill ; PostalReceipt ; Courier /Expected delivery service ; multimodal transport document ; risk coveringdocuments ; insurance policy ;

50 – 53

Insurance cover note ; official documents export declaration forms ; export certificate;Certificate of origin ; Miscellaneous documents ; packing list ; weight certificate ; certificateof analysis and quality ; certificate of inspection ; health certificate ; phytosanitary / Radiation/ Fumigation

55 – 57

Chapter 6 – Methods of payment ; advance payment ; bill for collection ; open account ;barter trade ; bank guarantee ; letter of credit (L / C) Seller wants buyer wants ; parties to adocumentary credit ; applicant issuing bank advising ; confirming bank beneficiary ;negotiating bank ; reimbursing bank

61 – 66

Types of letters of credit ; revocal letter of credit ; irrevocable letter of credit ; confimedirrevocable letter of credit ; transferable l / c revolving letter of credit ; credit available byinstallments; back to back letter of credit ; anticipatory credit or red clause letter of credit ;

67 – 69

green clause letter of credit ; deferred payment letter of credit ; standby letter of credit ; flowchart of export transaction under letter of creditFlow chart of export transaction under letter of credit ; various steps in the transaction are asunder ; steps no. description

70 – 71

Chapter 7 – Export / Import Finance ; - Part I import finance ; import financing through trustreceipts / import loans ; import financing through issuing l/ c or bank guarantee ; part II –Export Finance Timely ; adequate ; cheaper on liberal terms ; sources for raising finance ;own funds ; 2 friends and relative ; 3 advance payment from buyer ; 4 Trade credit fromsuppliers 5 banks and financial institutions ; pre-shipment credit (P.C)

73 – 74

Post shipment credit ; advance against cash incentives / duty draw back ; forfeiting ; rediscounting of export bills abroad ; buyer’scredit ; supplier’s credit

75 -76

Chapter – 8 – Procedure in connection with foreign investment in India – Seciton – I foreigndirect investment ; FERA ; the practice at which a company can issue shares to non residents; fema ; esop ; section II – Foreign technical collaboration ;

79 – 83

General Hotel & Tourism Related Industries ; procedure for granting approval; I / We herebycertify that ; Documentation ; Standard conditions attached to approval for technologyagreement ; no objection ; the agreement shall be subject to Indian laws:

84 – 88


89 - 92

Chapter – 9 – Direct investment outside India – overseas investment division TDR ADRGDR the criteria for investment under the automatic route are as under ; JV/WOS; ODA; Theschemes for overseas investment by partnership firms ; criteria for overseas investment by aregistered partnership firm under the automatic route ;

95 – 99

The procedure to be followed by a partnership firm for making investment under theautomatic route ; the procedure to be followed by partnership firms which are not eligibleunder the automatic route ; restrictions for setting up of a second generation company ;resident individual India can acquire foreign securities without prior approval in thefollowing cases ; provided that ; WOS

100 – 102

Chapter – 10 – Taxation ; Bilateral reliefUnilateral relief ; for the purpose of this provision

105 – 106

Part – 2 Forex risk management and hedging techniquesChapter – 1 Foreign exchange markets – The international Market ; survey were ; the market; the participants ; information and communication system ; the payment system ; the foreignexchange market in India

109 – 114

Chapter – 2 – Exchange Rates – Exchange rage quotes ; direct and indirect rates ; direct rates; indirect rates; spot and forward rates value rate; ready or cash ; value today ; TOM; spot ;forwards; glossary of market terms; Foreign exchange risks ; transactions exposure ;translation exposure ; economic exposure;

117 – 123

Translation – moving towards a consensus ; economic exposure ; an overview ; scenarioexchange rages in India ; Inward remittances export encashment of foreign currencytravelers cheques ; encashment of foreign currency notes; outward remittances ; imports ;issuing foreign currency travelers cheques issuing foreign currency notes ;

124 – 127

Type of transaction exchange rate nomenclature ; Factors affecting movement of exchangerates ; summary

128 – 129


131 – 137


138 – 141

Chapter 4 – Options and Futures – History and development ; recent trends ; key features ofoptions and futures ; premium ; maturity or expiration date ; exercise ; in the money ; at themoney ; out of the money American option European option ; underlying asset price timebefore expiration ; underlying asset price ; time before expiration the rate of interest volatility

143- 147

Pricing and analysis ; pricing of options ; underlying asset price ; exercise price ; options andfutures products today ; interest rate options ; foreign exchange options and futures ; equitylinked options ; commodity linked futures and options

148 – 152

Chapter – 5 - SwapsWhat are swaps ; interest rate swaps ; lowering financial cost ; hedge exposure to interest raterisk ; restructuring the debt in the balance sheet ; amortizing and accreting swaps ; forwardswaps ; Reversible swaps ; basis swaps

155 – 157


158 – 161

PART 3 – AGENCIES INVOLVED IN INTERNATIONAL TRADEChapter – 1 – Export import Bank of India ; Functions of Exim Bank ; the exim bankperforms the following functions ; incidental functions ; operations programmes ; directfinancial assistance to exporters ; consultancy and technology services ; pre-shipment credit ;facilities for export – oriented units ; overseas investment facility buyer credit facilities fordeemed exports small scale industry export bills rediscounting; the latest new schemes inoperation since 1992 are the following

163 – 166

Chapter – 2 – Reserve Bank of India Exchange controls in India – RBI as the exchangecontrol authority ; Authorized dealers (Ads) ; Money changers ; other receipts ; payment forimports ; other payments ; delegation to Ads; securities ; foreign currency accounts;liberalization of exchange control

169 – 173

Sodhani Committee Recommendations ; Exchange rate management ; 174 – 177Chapter – 3 – Foreign Exchange dealers association of India ; Uniform customs and practicefor collection ;

179 – 180

Chapter 4 – International chamber of commerce – ICC – WCF – IBCC – WCF 183 – 183Chapter – 5 – Export credit guarantee corporation of India ; ECGC; need for export creditinsurance ; credit insurance policies ; scr or standard policy ; turnover policy ; small exporterpolicy ; specific shipment policy (short term); buyer wise policy ; specific policy for supplycontract insurance cover for buyer’s credit and line of credit

189 – 190

Services Policy ; construction works policy ; maturity factoring ; Guarantees to banks ;packing credit guarantee ; export production finance guarantee ; post – shipment creditguarantee ; export finance guarantee ; export performance guarantee; export finance(overseas lending ) Guarantee

191

Part – 4 – MiscellaneousChapter 1 – Exchange Earner’s foreign currency (EEFC) 195

Status holder exporter ; individual professional ; others; permissible credits ; permissibledebits ;Chapter 2 – Country Risk ; Quantifying country risk ; A comprehensive example ; use ofcountry risk ; assessment ;

199

Chapter 3 – International capital Budgeting - The Basic Frame work 203 – 204Chapter 4 – Incoterms – Group E departure EXW ; Group F Main carriage unpaid ; FAS ;FOB ; CFR ; CIF ; CPT ; CIP ; Group C; Group D ; Arrival DAF ; DES ; DEQ; DDU CTD /MTO ; DDP ; delivered duty paid (CTD / MTO)

207- 212

Chapter – 5 – Actuals ; arbitrage ; bankers’ acceptance bond (BAS) ; Bearer Bond ; Bid rate ;Bond ; Bull; call option ; caps ; cash commodity ; cash market ; cedel ; certificate of deposit(CD) class of option ; closing price ; commission ; commercial paper (CP) ; contractspecifications ; convertible bond ; coupon ; cover; delivery ; delivery month ; equity ; equityswaps ; equity collar ; Eurobond ; Euro clear ; euro commercial paper; euro –currency ;

215 – 217

Exercise price ; expiration date; floating rate note ; fundamental Analysis ; futures contracthedge ; Hybrid ; Interest Rate swap; Intermediation ; Intrinsic Value ; Libor ; Long margin ;margin call maturity naked position ; note issuance facility (NIF)

218 -219

Option ; overbought ; oversold ; physical market ; position ; premium purchaser ; put option ;settlement price short ; speculator ; strike price ; straight debt tap ; technical analysis tranche ;tombstone volatility ; volume ; withholding tax ; yankee bond ;

220 – 221

Chapter – 1 – Introduction to international capital markets 1Ero currency market ; Domestic market ; US, Japan Switzerland ; uk, australiacanada ; european conters in ECU ; Euro ; Asian doller market ; forex marker 1SDR ; ECU ; US dollar ; German ; Swiss ; Japanees ; France ; Canada ; Australia; 2Chaper - 2 - International financial Markets - The U.S.Dollar Market ; pricing ;federal reservice board; curency ; central bank of US ; 5The Japanese Yen Market ; Mof; Long Term Prime Rate ; 1970 japanese 6The Sterling Market ; 20th 19th century 1979 ; OECD Organization for economicco-operation & development EMS Exchange rate Mechanism; FRN ; Bulldog; 7the EURO Market has been discussed in the nex chapter Recent development ininternational financial markets ; septer 11 enron 7LtCN (Long term capital Management Brazil china and mexico; 81990 ; 1980 ; severe tests financial system; securitization forces banks ; attractiveto browwerw; legal issues flexibility ; financial market development segement of ; 9swaps cash flow ; roject related; gain access to international ; marketability ; newfinancing techniques; 10Chapter – 3 – International Monetary and Financial System 131945 ; 1944 ; intenrational world Bank for reconstruciton and development; secondworld war was european ; IMF International Monetary Fund; Gold standard firstworld war 13The country's Central Bank agreed to buy back their currency at a certain rate ofgold; 13melting down of gold was freely allowed 13There was unrestricted movement of gold (I.e. import and / export 14The total money supply in the country was determined by the quantum of goldreserves in the country 141870 ; 1914 ; 1821 ; 1834 ; 1870 ; European countries gold standard in 1933 ;1930 International Monetary Co-operation ; IBRD ; IMF ; 14

popularly known as world bank IMF ; the international monetary fund 1945 ; 1971; 25 years ; aims 15SDR ((special drawing rights ) 25% 1960 ; 1963 ; Gross domestic product; 5 years; SDR 146 bn to SDR 212 ; 45% ; 1998 ; Two parts 16Funding Facilities ; Regular Facilities ; Special facilities ; restore tranche credittranche ; compensatory and contingency financing facility (CCFF) ; 16Extended arrangement (Extended Fund Facility EEF) ; Buffer stock FinancingFacility ; 16Standard Arrangement (Enlarged Arrears Policy ) ; Supplemental Reserve Policy(Supplemental Reserve Policy (SRP 17Reserve Tranche ; Credit Tranches ; Stand - By Arrangement 17Extended arrangement or extended fund facilities (EFF) 18Special Facilities ; CCFF ; Buffer Stock Financing Facility ; BSFF ; SupplementalResource Facility (SRF) ; 1997 18Enhance Structural Adjustment Facility (ESAF) ; The fixed exchange rate systemUS dollars 35 ounce of gold 19Problem faced by the fixed exchange rate system ; 1960 ; value apprehension ;delay in adjustment 20failure of fixed rate system ; the european monetary system (EMS) EuropeanCommunity 20Currency Snake ; 1973 ; EMS EC ECU European Currency Unit ; SDR ; ERM ; DM; matrix german bundesbank 21EM ; PST ; ERM ; Economic and monetary Union ;

FEDAI does not require RBI permission to frame and revise rules ofbusiness

True

FalseCorporates are allowed to raise funds abroad up to $ 15 million as short term finance if they have EPCG license.

True

FalseWho books an option forward contract?

b)

c)

d)

Party who is not definite about crystallisation of delivery date

Party who is speculator

Party who wants to make more profit

Party who wants to accommodate the other party

India is a founder member ofIMF

.Which causes may force a country to restrict importsor restrict transfer of payments?

a)

b)

c)

d)

Economic difficulties

Balance of payment problemssuch as non availability ofexchange reserves

Strike by banks employees

Non availability of appropriatetransfer technology with banks

Buyer's Credit 4 1. Available to sellerabroad

2. Seller's 1 2. Export Finance

Credit

3. Usance LC 6 3. Discounting exportreceivables

4. Forfaiting 3 4. Available to Buyerabroad

5. Seller paid only onmaturity date

6. Import finance

International Finance_6

- 1 -


Multiple Choice Single AnswerQuestion What do you mean by a derivative?Correct Answer One which has been derived from other fundamental instrumentsYour Answer One which has been derived from other fundamental instruments

Multiple Choice Multiple AnswerQuestion With reference to ECB, fund raising activity includes :-Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of sharesYour Answer Syndicate loans, issue of shares , Floating rate notes, bonds, debentures

Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the

offered rate for Rs?Correct Answer USD 1=Rs 50.5000Your Answer USD 1=Rs 50.5000


Merchant banking Portfolio management Note issuing and underwrting facility

Securitization Issue of debt in the form of tradeable security Issue of debt in the form of tradeable security

Prime borrower Highest credit rating Venture capital

Traditional banking service Loans and cash credit against security Highest credit rating

Select The BlankQuestion A Bill of exchange payable 45 days from date of shipment, is a means of ________ from seller

to the buyer.Correct Answer CreditYour Answer Intimation of shipment

Select The BlankQuestion A Credit can be a confirmed credit only if it is also ________.Correct Answer An Irrevocable creditYour Answer An Irrevocable credit

Multiple Choice Single AnswerQuestion Who introduced the worlds first exchange traded currency futures?Correct Answer Chicago Mercantile ExchangeYour Answer Bretton woods Agreement

Multiple Choice Single AnswerQuestion Name the members of Exchange Banks association :-Correct Answer Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar,Your Answer All banks at any business center

True/FalseQuestion In developed markets, speculators play important role in determining the trend of currency

rates.Correct Answer TrueYour Answer True


- 2 -

Multiple Choice Multiple AnswerQuestion What are the objectives of International Chamber of Commerce?Correct Answer Champion the global economy as a force of economic growth , Creating of job and

prosperityYour Answer Champion the global economy as a force of economic growth , Creating of job and

prosperity

Multiple Choice Single AnswerQuestion Under which contracts the seller pays the import duty for the buyer?Correct Answer DDPYour Answer DDU

Multiple Choice Multiple AnswerQuestion In which cases can a Resident Individual in India acquire foreign securities without prior

approval?Correct Answer Gift from a person outside India, or Inheritance from a person resident in or outside

India , Security issued under Cashless employees stock option schemeYour Answer Gift from a person outside India, or Inheritance from a person resident in or outside India ,

Security issued under Cashless employees stock option scheme

Multiple Choice Single AnswerQuestion The document formulated by the borrower of syndicated loan, and the arranger, which contains

details of individual shares etc of co-lenders is known as :-Correct Answer Memorandum of informationYour Answer Memorandum of information

Multiple Choice Multiple AnswerQuestion Why does a Transaction exposure arise?Correct Answer Trading flows , Dividend or capital flowsYour Answer Trading flows , Dividend or capital flows


LastStage Form a single currency Form a single currency

The First stage in the Europeand and Monetary Union (EMU) Free movement of capital in EC Freemovement of capital in EC

Stage II in EMU Establishment of European Monetary Institute Establishment of European MonetaryInstitute

Stage III in EMU Members to meet the convergence criteria and fix the exchange rates Members to meetthe convergence criteria and fix the exchange rates

Multiple Choice Single AnswerQuestion Value date means the date on which :-Correct Answer Delivery of both the currencies will be madeYour Answer Delivery of both the currencies will be made

True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate quotation.Correct Answer FalseYour Answer True


- 3 -

Select The BlankQuestion Global capital market can be understood from the study of ________.Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the

countryYour Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the

country

Multiple Choice Single AnswerQuestion A Specific date forward contract can be booked so as to be :-Correct Answer Payable on a specific date of the calendar monthYour Answer Payable on a specific date of the calendar month

True/FalseQuestion ECGC offers isurance protection to Indian exporters againt payment risks.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion What is a bill of lading?Correct Answer Transport document representing movement of goods by water.Your Answer Transport document representing movement of goods by water.

Multiple Choice Multiple AnswerQuestion Which document is used for transportation by air, rail, road, marine?Correct Answer Multimodal transport document , Combined Transport documentYour Answer Multimodal transport document , Combined Transport document

True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.Correct Answer FalseYour Answer False

Select The BlankQuestion After the second world war many countries adopted the route of ________ to give facelift to

sagging economies.Correct Answer Devaluation of their currenciesYour Answer Devaluation of their currencies

Multiple Choice Multiple AnswerQuestion What do you understand by Commercial Risk?Correct Answer Protracted default by the buyer , Insolvency of the buyerYour Answer Insolvency of the buyer , Risk of strikes due to which commercial activity is haulted

Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,

Payment to EOUs in India for services rendered by themYour Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment

of Gifts of GBP 5000 per year per donor

Multiple Choice Single AnswerQuestion A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the

settlement day will beCorrect Answer Following Tuesday if it is a working day in all the three centersYour Answer Following Tuesday if it is a working day in all the three centers


- 4 -

Multiple Choice Multiple AnswerQuestion Name the services provided by 'Reuter 3000' in forex market:-Correct Answer Quotation of forex rates, interest rates , Electronic broking by matching the ratesYour Answer Quotation of forex rates, interest rates , Calculate and quote rates for transactions

Multiple Choice Single AnswerQuestion What do you understand by a forex option?Correct Answer Right and not the obligation to take or give future delivery of an agreed quantity at

certain priceYour Answer Right and not the obligation to take or give future delivery of an agreed quantity at certain

price

True/FalseQuestion Integrated branches of Commercial banks handle forex transactions as well as options, swaps,

futures, arbitrage operationsCorrect Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion Financial management is complex process forCorrect Answer Companies which have international tradeYour Answer Companies which have international trade

Select The BlankQuestion The ________is a Floating rate index for swaps.Correct Answer US Commercial paper rateYour Answer US Commercial paper rate

True/FalseQuestion Services of a Paying bank are taken when currencies of exporters country or the importers

country is not involved in the transaction.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion Which two countries were included to convert the group of five into the group of seven?Correct Answer Canada , ItalyYour Answer Canada , Italy

Multiple Choice Multiple AnswerQuestion Which factors influence the valuation of cash flows?Correct Answer Incomplete capital market , Availability of projkect specific concessional finance,Your Answer Availability of projkect specific concessional finance, , volatility of exchange rates

True/FalseQuestion PP Form is required when exports are made to any country by post parcel on value payable

basis.Correct Answer FalseYour Answer False

True/FalseQuestion Sandby credis are introduced by US Banks because they were not permitted to issue on demand

guarantees.Correct Answer TrueYour Answer True


- 5 -

Select The BlankQuestion The international liquidity problem was tackled effectively by a reserve asset known as

________.Correct Answer Special drawing rightYour Answer Floating exchange

True/FalseQuestion Cross currency forward contract is not meaningful if original contract is in Rupees to USDCorrect Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion For a spot transaction carried out on Tuesday, where both centers have holiday on Wednesday,

currencies will be exchanged on :-Correct Answer Thursday if it is a working day at both the centersYour Answer Thursday if it is a working day at both the centers

Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will be exchanged on :-Correct Answer MondayYour Answer Monday

Select The BlankQuestion During the fixed rate exchange system prevailing in India, the intervention currency was

________.Correct Answer Sterling PoundYour Answer Indian Rupees

Multiple Choice Single AnswerQuestion Inhow many groups are INCOTERMS classified?Correct Answer FourYour Answer Four

Multiple Choice Single AnswerQuestion The Direct Investment abroad through share swap arrangement under normal route is permitted

in a :-Correct Answer JV/WOSYour Answer Holding Co

Multiple Choice Single AnswerQuestion Samuraibonds areCorrect Answer Foreign yen bonds issued to non resident entities in Japanese MarketYour Answer Foreign yen bonds issued to non resident entities in Japanese Market

Select The BlankQuestion The large flow of money internationally was caused primarily by the oil price hikes engineered

by ________.Correct Answer OPEC countriesYour Answer European Countries

True/FalseQuestion Proposal for Investment abroa by Indian not falling under automatic route are submitted to

Exchange Control Department of RBI.Correct Answer TrueYour Answer True


- 6 -


Multiple Choice Single AnswerQuestion What do you mean by a derivative?Correct Answer One which has been derived from other fundamental instrumentsYour Answer One which has been derived from other fundamental instruments

Multiple Choice Multiple AnswerQuestion With reference to ECB, fund raising activity includes :-Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of sharesYour Answer Syndicate loans, issue of shares , Floating rate notes, bonds, debentures


offered rate for Rs?Correct Answer USD 1=Rs 50.5000Your Answer USD 1=Rs 50.5000


Merchant banking Portfolio management Note issuing and underwrting facility

Securitization Issue of debt in the form of tradeable security Issue of debt in the form of tradeable security

Prime borrower Highest credit rating Venture capital

Traditional banking service Loans and cash credit against security Highest credit rating

Select The BlankQuestion A Bill of exchange payable 45 days from date of shipment, is a means of ________ from seller

to the buyer.Correct Answer CreditYour Answer Intimation of shipment


Multiple Choice Single AnswerQuestion Who introduced the worlds first exchange traded currency futures?Correct Answer Chicago Mercantile ExchangeYour Answer Bretton woods Agreement

Multiple Choice Single AnswerQuestion Name the members of Exchange Banks association :-Correct Answer Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar,Your Answer All banks at any business center

True/FalseQuestion In developed markets, speculators play important role in determining the trend of currency

rates.Correct Answer TrueYour Answer True


- 7 -

Multiple Choice Multiple AnswerQuestion What are the objectives of International Chamber of Commerce?Correct Answer Champion the global economy as a force of economic growth , Creating of job and

prosperityYour Answer Champion the global economy as a force of economic growth , Creating of job and

prosperity

Multiple Choice Single AnswerQuestion Under which contracts the seller pays the import duty for the buyer?Correct Answer DDPYour Answer DDU

Multiple Choice Multiple AnswerQuestion In which cases can a Resident Individual in India acquire foreign securities without prior

approval?Correct Answer Gift from a person outside India, or Inheritance from a person resident in or outside

India , Security issued under Cashless employees stock option schemeYour Answer Gift from a person outside India, or Inheritance from a person resident in or outside India ,

Security issued under Cashless employees stock option scheme


details of individual shares etc of co-lenders is known as :-Correct Answer Memorandum of informationYour Answer Memorandum of information



LastStage Form a single currency Form a single currency

The First stage in the Europeand and Monetary Union (EMU) Free movement of capital in EC Freemovement of capital in EC

Stage II in EMU Establishment of European Monetary Institute Establishment of European MonetaryInstitute

Stage III in EMU Members to meet the convergence criteria and fix the exchange rates Members to meetthe convergence criteria and fix the exchange rates

Multiple Choice Single AnswerQuestion Value date means the date on which :-Correct Answer Delivery of both the currencies will be madeYour Answer Delivery of both the currencies will be made

True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate quotation.Correct Answer FalseYour Answer True


- 8 -



country

Multiple Choice Single AnswerQuestion A Specific date forward contract can be booked so as to be :-Correct Answer Payable on a specific date of the calendar monthYour Answer Payable on a specific date of the calendar month

True/FalseQuestion ECGC offers isurance protection to Indian exporters againt payment risks.Correct Answer TrueYour Answer True


Multiple Choice Multiple AnswerQuestion Which document is used for transportation by air, rail, road, marine?Correct Answer Multimodal transport document , Combined Transport documentYour Answer Multimodal transport document , Combined Transport document

True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.Correct Answer FalseYour Answer False

Select The BlankQuestion After the second world war many countries adopted the route of ________ to give facelift to

sagging economies.Correct Answer Devaluation of their currenciesYour Answer Devaluation of their currencies

Multiple Choice Multiple AnswerQuestion What do you understand by Commercial Risk?Correct Answer Protracted default by the buyer , Insolvency of the buyerYour Answer Insolvency of the buyer , Risk of strikes due to which commercial activity is haulted

Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,

Payment to EOUs in India for services rendered by themYour Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment

of Gifts of GBP 5000 per year per donor

Multiple Choice Single AnswerQuestion A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the

settlement day will beCorrect Answer Following Tuesday if it is a working day in all the three centersYour Answer Following Tuesday if it is a working day in all the three centers


- 9 -

Multiple Choice Multiple AnswerQuestion Name the services provided by 'Reuter 3000' in forex market:-Correct Answer Quotation of forex rates, interest rates , Electronic broking by matching the ratesYour Answer Quotation of forex rates, interest rates , Calculate and quote rates for transactions

Multiple Choice Single AnswerQuestion What do you understand by a forex option?Correct Answer Right and not the obligation to take or give future delivery of an agreed quantity at

certain priceYour Answer Right and not the obligation to take or give future delivery of an agreed quantity at certain

price

True/FalseQuestion Integrated branches of Commercial banks handle forex transactions as well as options, swaps,

futures, arbitrage operationsCorrect Answer TrueYour Answer True


Select The BlankQuestion The ________is a Floating rate index for swaps.Correct Answer US Commercial paper rateYour Answer US Commercial paper rate

True/FalseQuestion Services of a Paying bank are taken when currencies of exporters country or the importers

country is not involved in the transaction.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion Which two countries were included to convert the group of five into the group of seven?Correct Answer Canada , ItalyYour Answer Canada , Italy

Multiple Choice Multiple AnswerQuestion Which factors influence the valuation of cash flows?Correct Answer Incomplete capital market , Availability of projkect specific concessional finance,Your Answer Availability of projkect specific concessional finance, , volatility of exchange rates

True/FalseQuestion PP Form is required when exports are made to any country by post parcel on value payable

basis.Correct Answer FalseYour Answer False

True/FalseQuestion Sandby credis are introduced by US Banks because they were not permitted to issue on demand

guarantees.Correct Answer TrueYour Answer True


- 10 -

Select The BlankQuestion The international liquidity problem was tackled effectively by a reserve asset known as

________.Correct Answer Special drawing rightYour Answer Floating exchange

True/FalseQuestion Cross currency forward contract is not meaningful if original contract is in Rupees to USDCorrect Answer TrueYour Answer True



Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will be exchanged on :-Correct Answer MondayYour Answer Monday

Select The BlankQuestion During the fixed rate exchange system prevailing in India, the intervention currency was

________.Correct Answer Sterling PoundYour Answer Indian Rupees

Multiple Choice Single AnswerQuestion Inhow many groups are INCOTERMS classified?Correct Answer FourYour Answer Four

Multiple Choice Single AnswerQuestion The Direct Investment abroad through share swap arrangement under normal route is permitted

in a :-Correct Answer JV/WOSYour Answer Holding Co

Multiple Choice Single AnswerQuestion Samuraibonds areCorrect Answer Foreign yen bonds issued to non resident entities in Japanese MarketYour Answer Foreign yen bonds issued to non resident entities in Japanese Market

Select The BlankQuestion The large flow of money internationally was caused primarily by the oil price hikes engineered

by ________.Correct Answer OPEC countriesYour Answer European Countries




- 11 -


- 1 -


Select The BlankQuestion A Documentary credit issued on the strength of another documentary credit is known as

________.Correct Answer Back to Back creditYour Answer Back to Back credit

True/FalseQuestion The Option period in the forward contract is at the option of the Banker, hence the bank has to

be very conservative in quoting rates.Correct Answer FalseYour Answer True

True/FalseQuestion JV means Joint venture and WOS means World of Security.Correct Answer FalseYour Answer True

Select The BlankQuestion The rate of interest on rupee finance for exports is not exceeding ________ less than PLR.Correct Answer 0.025Your Answer 50 basis points over LIBOR

True/FalseQuestion The working of the IBRD and IMF in recent has blurred the difference between the twoCorrect Answer TrueYour Answer True



country

Multiple Choice Single AnswerQuestion In case the value date happens to be a holiday then the settlement is done :-Correct Answer On the next working dayYour Answer On the next spot day(third day)

Select The BlankQuestion Legalised invoice is also called ________ invoice.Correct Answer VisaedYour Answer Visaed

True/FalseQuestion The volume of trading of Derivatives in the world trade market is growing but still only 5% of

the total.Correct Answer FalseYour Answer False

Select The BlankQuestion An exchange rate for $ was48.2050, it is now 48.2075, then one says that it has moved

________ basis pointsCorrect Answer 25


- 2 -

Your Answer 0.0025


Select The BlankQuestion Profitability of a project in China to an Indian may be enhanced by ________.Correct Answer Concessionary finance available in ChinaYour Answer Concessionary Finance available in India

Multiple Choice Single AnswerQuestion A country needs external commercial borrowings to :-Correct Answer Meet the adverse balance of payments positionYour Answer Meet the adverse balance of payments position


Maturity of future Time when actual commodity is delivered Last date of exercising option


Bearer security issued in currency other than that of the country of issue Eurobonds Peformance bond orsecurity deposit

Margin on future Peformance bond or security deposit Time when actual commodity is delivered

Multiple Choice Single AnswerQuestion A Bank quotes interest rate of 9.50/10.00 for six months dollar deposit, here the bid rate is :-Correct Answer 9.50% P.A.Your Answer 9.50 divided by 6 =1.58% P.A.

Multiple Choice Multiple AnswerQuestion With reference to ECB, fund raising activity includes :-Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of sharesYour Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of shares

Multiple Choice Single AnswerQuestion In which of the funding facilities the repayment period is between 3 to 5 years ?Correct Answer C.C.F.F.Your Answer Stand By Arrangement

Multiple Choice Multiple AnswerQuestion Why is Bill of Exchange a Quasi Negotiable Instrument?Correct Answer It represents title to goods , It is issued under Sale of Goods actYour Answer It represents title to goods , It is issued under Sale of Goods act

Multiple Choice Multiple AnswerQuestion What do you understand by 'Foreign Exchange Risk'?Correct Answer The change in value of currency alters the home currency value of an asset , liability, ,

The change in value of currency alters the home currency value of profit, loss, or future cash flowsYour Answer The change in value of currency alters the home currency value of an asset , liability, ,

Inability to control various factors contributing to International trade


- 3 -


details of individual shares etc of co-lenders is known as :-Correct Answer Memorandum of informationYour Answer Participation certificate


Multiple Choice Single AnswerQuestion What is the volume of the world's total speculative transactions?Correct Answer Roughly 90 % of the total turnoverYour Answer 70% of the total turnover

Multiple Choice Multiple AnswerQuestion A Forward purchase contract was booked with an authorised dealer and subsequently cancelled

.It :-Correct Answer Can be booked again with another dealer , Can be booked again with the same dealerYour Answer Can be booked again with another dealer , Can be booked again with the same dealer

True/FalseQuestion Floating rate notes are traded in secondary market also.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion What were the immediate causes of converting the group of 5 into group of 7 and convene their

meeting in late 1985?Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade

protectionnism had increasedYour Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade

protectionnism had increased



Select The BlankQuestion Over the years ________has been the most widely accepted currency in international capital

market.Correct Answer American DollarYour Answer American Dollar

Multiple Choice Single AnswerQuestion When was the first currency swap introduced in world market?Correct Answer 1970Your Answer 1970

Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demandCorrect Answer Which are convertible , Which have liquidity confirmed in Euro market operations


- 4 -

Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , whichhave greater gold parity

Multiple Choice Single AnswerQuestion Under which method of payments is the buyer not required to pay till he gets the possession of

the documents?Correct Answer Documents against payment terms specified in the bill of exchangeYour Answer Documents against payment terms specified in the bill of exchange

Multiple Choice Single AnswerQuestion How does ECGC protect banker's against risks for export finance?Correct Answer Issuing various guarantees covering different risks connected with exports at nominal

premiumYour Answer Issuing various guarantees covering different risks connected with exports at nominal

premium


Select The BlankQuestion In Indian interbank market forward rates are generally quoted on the basis of ________.Correct Answer Calendar monthYour Answer Calendar month

Select The BlankQuestion Fixed interest rate Eurobond without the option to convert to equity is known as ________.Correct Answer Straight DebtYour Answer Straight Debt

True/FalseQuestion Yankee bond is issued for domestic borrowers.Correct Answer FalseYour Answer False

Multiple Choice Single AnswerQuestion Examples of hedge are:Correct Answer Buy when you are having short positionYour Answer Buy when you are expecting fall in prices


offered rate for Rs?Correct Answer USD 1=Rs 50.5000Your Answer USD 1=Rs 50.5000 + margin



Multiple Choice Single AnswerQuestion What is LIBOR?Correct Answer Rate of interest for inter bank lending of funds for various maturities


- 5 -

Your Answer Interest rate in Money Market in London

Multiple Choice Multiple AnswerQuestion The various arms of World Bank are:Correct Answer International Development Agency , Multinational Investment Guarantee AgencyYour Answer International Development Agency , Multinational Investment Guarantee Agency , Asian

Development Bank

True/FalseQuestion The American Dollar market comprises of the domestic segment of USD the offshore segment

of USD.Correct Answer TrueYour Answer False


Cancellation of contracts above USD 500000 ECD ECD

Forward Purchase contract currency at premium Presume earliest delivery Presume earliest delivery

Forward purchase contract currency at discount Presume latest delivery Presume latest delivery


Multiple Choice Single AnswerQuestion Value date means the date on which :-Correct Answer Delivery of both the currencies will be madeYour Answer Value of currency will be paid in terms of goods or commodities

Multiple Choice Multiple AnswerQuestion How is the entry into any conuntry's money market or capital market is restricted?Correct Answer Because of different tax systems , Because of different credit standardsYour Answer Because of different tax systems , Because of protectionism

Multiple Choice Single AnswerQuestion What are the functions of Export Import Bank of India?Correct Answer Finance functions and development functionsYour Answer Finance functions and development functions

Multiple Choice Single AnswerQuestion A weight list, a packing list used in international trade are which type of documents?Correct Answer Operational DocumentsYour Answer Bipartite documents



1

Chapter – 2 – International Finance Markets - the U.S. dollar Market ;The U.S. Dollar Market ; The Japanese Yen Market ; The Sterling Market ; The EuroMarket Has Been discussed in the next chapter ; Recent development in internationalFinance Markets ;

5 – 10

Chapter – 3 – International Monetary and Financial SystemThe country’s central ban agreed to buy back their currency at a certain rate of gold;Melting down of gold was freely allowed ; There was unrestricted movement of gold (i.e.import and / or export)The total money supply in the country was determined by the quantum of gold reserves inthe country

13 – 14

The international monetary fund ; quotas ; funding facilities ; regular facilities tranchepolicies ; restore Tranche credit Tranche ; extended arrangement (extended fund facility(EEF) ; Standard Arrangement (enlarged Arrears Policy)Special facilities (compensatory and contingency financing facility (CCFF)Buffer stock Financing Facility ; Supplemental Reserve Policy (SRP); Reserve Tranche ;Credit Tranche ; Stand by arrangement ;

15 – 17

Extended arrangement or extended fund facilities (EFF) special facilities ; CCFF ; Bufferstock financing Facility (BSFF) ; Supplemental resources facility (SRF) Enhanced structuraladjustment facility (ESAF) The fixed exchange rate system

18 – 19


20 – 23


24 – 27

Chapter – 4 – External commercial borrowing – country ; company ; Equity ; Fund raising ;underwriting ; hedging ; arbitraging ; note issuance facility ; Mechanism anddocumentation ; syndicated loans ; floating rate notes ;

31 – 35


36 – 39

Pricing and Closing ; costs ; Advantages & Disadvantages of external commercialborrowing

40 – 41

Chapter – 5 – Documents used in International Trade ;Regulatory requirements ; operational requirements ; commercial documents ; financialdocuments transport documents ; risk covering documents ; official / regulatory documents ;miscellaneous documents ; Commercial documents ; proforma invoice ; commercialinvoice ; consular invoice customs invoice ; legalized invoice ; combined certificate oforigin and value ; financial documents ; bill of exchange ;

43 – 46

The second of the same tenor and date unpaid ; the first of the same tenor and date unpaid ; 47 – 49

or similar words ; sight B/E; Tenor ; time B/E; DP Basis ; document against Payment Basis; Documents against Acceptance Basis Transport documents; bill of lading ; received forshipment bill of lading ; on board bill of lading ;Short form bill of lading ; long form bill of lading clean bill of lading ; claused bill of lading; through bill of lading ; straight bill of lading ; charter party Bill of lading ; container bill oflading container bill of lading ; combined transport B/L or Mulit Modal B/L lash bill oflading house bill of lading ; Airway bill ; Air consignment Note ; House Air way bill ;Postal Receipt ; Courier /Expected delivery service ; multimodal transport document ; riskcovering documents ; insurance policy ;

50 – 53

Insurance cover note ; official documents export declaration forms ; export certificate;Certificate of origin ; Miscellaneous documents ; packing list ; weight certificate ; certificateof analysis and quality ; certificate of inspection ; health certificate ; phytosanitary /Radiation / Fumigation

55 – 57

Chapter 6 – Methods of payment ; advance payment ; bill for collection ; open account ;barter trade ; bank guarantee ; letter of credit (L / C) Seller wants buyer wants ; parties to adocumentary credit ; applicant issuing bank advising ; confirming bank beneficiary ;negotiating bank ; reimbursing bank

61 – 66

Types of letters of credit ; revocal letter of credit ; irrevocable letter of credit ; confimedirrevocable letter of credit ; transferable l / c revolving letter of credit ; credit available byinstallments; back to back letter of credit ; anticipatory credit or red clause letter of credit ;green clause letter of credit ; deferred payment letter of credit ; standby letter of credit ; flowchart of export transaction under letter of credit

67 – 69

Flow chart of export transaction under letter of credit ; various steps in the transaction are asunder ; steps no. description

70 – 71

Chapter 7 – Export / Import Finance ; - Part I import finance ; import financing throughtrust receipts / import loans ; import financing through issuing l/ c or bank guarantee ; part II– Export Finance Timely ; adequate ; cheaper on liberal terms ; sources for raising finance ;own funds ; 2 friends and relative ; 3 advance payment from buyer ; 4 Trade credit fromsuppliers 5 banks and financial institutions ; pre-shipment credit (P.C)

73 – 74

Post shipment credit ; advance against cash incentives / duty draw back ; forfeiting ;rediscounting of export bills abroad ; buyer’s credit ; supplier’s credit

75 -76

Chapter – 8 – Procedure in connection with foreign investment in India – Seciton – I foreigndirect investment ; FERA ; the practice at which a company can issue shares to nonresidents ; fema ; esop ; section II – Foreign technical collaboration ;

79 – 83

General Hotel & Tourism Related Industries ; procedure for granting approval; I / Wehereby certify that ; Documentation ; Standard conditions attached to approval fortechnology agreement ; no objection ; the agreement shall be subject to Indian laws:

84 – 88


89 - 92

Chapter – 9 – Direct investment outside India – overseas investment division TDR ADRGDR the criteria for investment under the automatic route are as under ; JV/WOS; ODA;The schemes for overseas investment by partnership firms ; criteria for overseas investmentby a registered partnership firm under the automatic route ;

95 – 99

The procedure to be followed by a partnership firm for making investment under theautomatic route ; the procedure to be followed by partnership firms which are not eligible

100 – 102

under the automatic route ; restrictions for setting up of a second generation company ;resident individual India can acquire foreign securities without prior approval in thefollowing cases ; provided that ; WOSChapter – 10 – Taxation ; Bilateral reliefUnilateral relief ; for the purpose of this provision

105 – 106

Part – 2 Forex risk management and hedging techniquesChapter – 1 Foreign exchange markets – The international Market ; survey were ; themarket ; the participants ; information and communication system ; the payment system ;the foreign exchange market in India

109 – 114

Chapter – 2 – Exchange Rates – Exchange rage quotes ; direct and indirect rates ; directrates ; indirect rates; spot and forward rates value rate; ready or cash ; value today ; TOM;spot ; forwards; glossary of market terms; Foreign exchange risks ; transactions exposure ;translation exposure ; economic exposure;

117 – 123

Translation – moving towards a consensus ; economic exposure ; an overview ; scenarioexchange rages in India ; Inward remittances export encashment of foreign currencytravelers cheques ; encashment of foreign currency notes; outward remittances ; imports ;issuing foreign currency travelers cheques issuing foreign currency notes ;

124 – 127

Type of transaction exchange rate nomenclature ; Factors affecting movement of exchangerates ; summary

128 – 129


131 – 137


138 – 141

Chapter 4 – Options and Futures – History and development ; recent trends ; key features ofoptions and futures ; premium ; maturity or expiration date ; exercise ; in the money ; at themoney ; out of the money American option European option ; underlying asset price timebefore expiration ; underlying asset price ; time before expiration the rate of interestvolatility

143- 147

Pricing and analysis ; pricing of options ; underlying asset price ; exercise price ; optionsand futures products today ; interest rate options ; foreign exchange options and futures ;equity linked options ; commodity linked futures and options

148 – 152

Chapter – 5 - SwapsWhat are swaps ; interest rate swaps ; lowering financial cost ; hedge exposure to interestrate risk ; restructuring the debt in the balance sheet ; amortizing and accreting swaps ;forward swaps ; Reversible swaps ; basis swaps

155 – 157


158 – 161

PART 3 – AGENCIES INVOLVED IN INTERNATIONAL TRADEChapter – 1 – Export import Bank of India ; Functions of Exim Bank ; the exim bankperforms the following functions ; incidental functions ; operations programmes ; directfinancial assistance to exporters ; consultancy and technology services ; pre-shipment credit; facilities for export – oriented units ; overseas investment facility buyer credit facilities for

163 – 166

deemed exports small scale industry export bills rediscounting; the latest new schemes inoperation since 1992 are the followingChapter – 2 – Reserve Bank of India Exchange controls in India – RBI as the exchangecontrol authority ; Authorized dealers (Ads) ; Money charges ; other receipts ; payment forimports ; other payments ; delegation to Ads; securities ; foreign currency accounts;liberalization of exchange control

169 – 173

Sodhani Committee Recommendations ; Exchange rate management ; 174 – 177Chapter – 3 – Foreign Exchange dealers association of India ; Uniform customs and practicefor collection ;

179 – 180

Chapter 4 – International chamber of commerce – ICC – WCF – IBCC – WCF 183 – 183Chapter – 5 – Export credit guarantee corporation of India ; ECGC; need for export creditinsurance ; credit insurance policies ; scr or standard policy ; turnover policy ; smallexporter policy ; specific shipment policy (short term); buyer wise policy ; specific policyfor supply contract insurance cover for buyer’s credit and line of credit

189 – 190

Services Policy ; construction works policy ; maturity factoring ; Guarantees to banks ;packing credit guarantee ; export production finance guarantee ; post – shipment creditguarantee ; export finance guarantee ; export performance guarantee; export finance(overseas lending ) Guarantee

191

Part – 4 – MiscellaneousChapter 1 – Exchange Earner’s foreign currency (EEFC)Status holder exporter ; individual professional ; others; permissible credits ; permissibledebits ;

195

Chapter 2 – Country Risk ; Quantifying country risk ; A comprehensive example ; use ofcountry risk ; assessment ;

199

Chapter 3 – International capital Budgeting - The Basic Frame work 203 – 204Chapter 4 – Incoterms – Group E departure EXW ; Group F Main carriage unpaid ; FAS ;FOB ; CFR ; CIF ; CPT ; CIP ; Group C; Group D ; Arrival DAF ; DES ; DEQ; DDU CTD/ MTO ; DDP ; delivered duty paid (CTD / MTO)

207- 212

Chapter – 5 – Actuals ; arbitrage ; bankers’ acceptance bond (BAS) ; Bearer Bond ; Bid rate; Bond ; Bull; call option ; caps ; cash commodity ; cash market ; cedel ; certificate ofdeposit (CD) class of option ; closing price ; commission ; commercial paper (CP) ; contractspecifications ; convertible bond ; coupon ; cover; delivery ; delivery month ; equity ; equityswaps ; equity collar ; Eurobond ; Euro clear ; euro commercial paper; euro –currency ;

215 – 217

Exercise price ; expiration date; floating rate note ; fundamental Analysis ; futures contracthedge ; Hybrid ; Interest Rate swap; Intermediation ; Intrinsic Value ; Libor ; Long margin; margin call maturity naked position ; note issuance facility (NIF)

218 -219

Option ; overbought ; oversold ; physical market ; position ; premium purchaser ; put option; settlement price short ; speculator ; strike price ; straight debt tap ; technical analysistranche ; tombstone volatility ; volume ; withholding tax ; yankee bond ;

220 – 221


- 1 -


Multiple Choice Multiple AnswerQuestion Which functions does the Bill of Lading

serve?Correct Answer It is a document of title to goods.

, It is receipt of goodsYour Answer It is a document of title to goods. ,

It is receipt of goods



Correct Answer 9.50% P.A.Your Answer 9.50% P.A.

Multiple Choice Single AnswerQuestion What is Sovereign Risk?Correct Answer Risk of lending to the government

of a countryYour Answer Risk of lending to the government of a

country

Multiple Choice Single AnswerQuestion How does ICC help poor countries?Correct Answer Attract Foreign Direct investments

togeather with UNCTADYour Answer Attract Foreign Direct investments

togeather with UNCTAD

Multiple Choice Multiple AnswerQuestion As per BIS, recovery from the recent

crisis in global capital market was mainly due toCorrect Answer Rapid and appropriate policy

response in US and other countries , Increase inForeign Direct Investments , free flow of credit

Your Answer Rapid and appropriate policy responsein US and other countries , Increase in Foreign DirectInvestments , free flow of credit

True/FalseQuestion Out of 15 member countries in European

Union 12 countries commiteed themselves for a singlecurrency.


True/FalseQuestion In red clause credit some clauses are

printed in Red ink.Correct Answer TrueYour Answer True

True/FalseQuestion Transfer of funds for investment abroad


- 2 -

is allowed freely.Correct Answer TrueYour Answer False

Select The BlankQuestion EEFC account holder is allowed to have

________ facility.Correct Answer Cheque book and nominationYour Answer Credit card, safe custody, safe

deposit locker without any fee

Select The BlankQuestion Fixed interest rate Eurobond without the

option to convert to equity is known as ________.Correct Answer Straight DebtYour Answer Interest rate swap

True/FalseQuestion An Indian importing goods from USA pays

dollars in India.Correct Answer FalseYour Answer True


PP Form Export Declaration form Export Declarationform

Health Certificate Fumigation certificate ExportDeclaration form



Multiple Choice Multiple AnswerQuestion For issuing a Documentary credit The

applicant is required to provide to the issuing bankdetails about

Correct Answer The purchase-sales contract, themode of payment, the tenor of payment , The documentsrequired, the names of authorities who would issue thedocuments

Your Answer The purchase-sales contract, the modeof payment, the tenor of payment , The track record ofthe buyer and seller

Multiple Choice Multiple AnswerQuestion The characteristics of an International

documentary credit are :-Correct Answer It is an undertaking given by the

openers bank to pay certain sum of money , It is an


- 3 -

undertaking given on behalf of a certain person toanother person in different country

Your Answer It is an undertaking given on behalfof a certain person to another person in differentcountry , It is a stamped agreement and is not validunless it is signed by the issuer

True/FalseQuestion CFR = FOB plus freight paid by seller +

insurance paid by seller.Correct Answer FalseYour Answer True

Select The BlankQuestion Even after liberalisation of exchange

controls, the Euro sterling market remained volatilebecause of uncertainties in UK and gyrations ofsterling against major ________ countries

Correct Answer OECDYour Answer OPEC

True/FalseQuestion Integrated branches of Commercial banks

handle forex transactions as well as options, swaps,futures, arbitrage operations


Multiple Choice Single AnswerQuestion Which of them are special funding

facilities of IMF ?Correct Answer Buffer Stock FacilityYour Answer Supplemental Reserve Policy

Multiple Choice Multiple AnswerQuestion What are the sources of raising funds for

exports?Correct Answer Suppliers credit , ForfaitingYour Answer Suppliers credit , Forfaiting , Buyers

credit , Foreign currency or Rupee finance

True/FalseQuestion Normally the forward contracts are booked

for making huge profits.Correct Answer FalseYour Answer False

True/FalseQuestion Head office of ICC is in Paris because of

its First President Eliance Clementel.Correct Answer TrueYour Answer False

Select The BlankQuestion A ________ Bill of lading does not

specify the terms and conditions of carriage.


- 4 -

Correct Answer Short FormYour Answer Short Form

Multiple Choice Single AnswerQuestion What is the volume of the world's total

speculative transactions?Correct Answer Roughly 90 % of the total turnoverYour Answer 70% of the total turnover

True/FalseQuestion Till August 1994 India was following the

Indirect Methodof Rate quotation.Correct Answer FalseYour Answer False

Select The BlankQuestion For setting up joint ventures abroad or

equity participation abroad, EXIM bank provides fundsunder ________ Scheme.

Correct Answer Overseas investment facilityYour Answer Overseas investment facility

Multiple Choice Single AnswerQuestion Mr P has exported goods in May 2005 and

is expecting payment of Euro 25000 by the last week ofSept 2005. Give details of the forward contract he canbook :-

Correct Answer He can book a sale contract anytime from May 2005 till Mid Sept 2005, for Euro 25000or less, for maturity last week of Sept.

Your Answer He can book a contract for ForwardPurchase, any time from May 2005 till Mid Sept 2005,for Euro 25000 or less, for maturity last week ofSept.

Select The BlankQuestion In US Capital Market a Company prepares

all the necessary documents in advance of the publicissue under the facility known as ________.

Correct Answer Shelf RegistrationYour Answer Shell Registration

Multiple Choice Multiple AnswerQuestion Which common details will be available in

any bill of Lading?Correct Answer Names of consigner, consignee , The

port of loading and unloading, contract of shipmentYour Answer Names of consigner, consignee , The

port of loading and unloading, contract of shipment ,The name of the vessel , The date of transportationand contract of transportation

Select The BlankQuestion Under the ________ standard the Country's

Central Bank promised to buy back the currency atcertain rate of Gold.


- 5 -

Correct Answer GoldYour Answer Interest

Select The BlankQuestion Short term instruments normally issued by

corporate borrowers, forhigh values, at a discount toface value are known as ________.

Correct Answer Euro Commercial PapersYour Answer ADRs

Select The BlankQuestion The type of trade where a country sells

orange juice in return for cars is known as ________.Correct Answer Counter TradeYour Answer Non money trade

Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC

accounts?Correct Answer Payment of hotel bills abroad,

payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them

Your Answer Payment to EOUs in India for servicesrendered by them , Payment of Gifts of GBP 5000 peryear per donor

Multiple Choice Multiple AnswerQuestion Under the liberalisation through FEMA,

what can an AD offer to the clients, without the priorpermission of RBI or Government?

Correct Answer Hedges, interest rate swaps,currency swaps. , Caps and collars, and forward rateagreements

Your Answer Caps and collars, and forward rateagreements , Good and competitive exchange rates andcross currency rates

Multiple Choice Multiple AnswerQuestion Sterling Market is attractive for an

international investor becauseCorrect Answer Gilts offer higher attractive

margin , Choice of issuing medium term and long termbonds

Your Answer Choice of issuing medium term and longterm bonds , Less controls and less formalities to becompleted , Linking of issues to currency swaps

Multiple Choice Single AnswerQuestion Under which contracts the seller pays the

import duty for the buyer?Correct Answer DDPYour Answer DDP

True/FalseQuestion PP Form is required when exports are made


- 6 -

to any country by post parcel on value payable basis.Correct Answer FalseYour Answer True

Multiple Choice Multiple AnswerQuestion What were the immediate causes of

converting the group of 5 into group of 7 and convenetheir meeting in late 1985?

Correct Answer Many Industries in USA had becomeuncompetitive with imports , In USA the Tradeprotectionnism had increased

Your Answer Many Industries in USA had becomeuncompetitive with imports , In USA the Tradeprotectionnism had increased , The heads of G5insisted to have a meeting , Failure of IMF to controlthe exchange rates

Multiple Choice Single AnswerQuestion What are the powers of money changers?Correct Answer Purchase and sell foreign currency

notes and travellers chequesYour Answer Purchase and sell foreign currency

notes and travellers cheques, give import and exportfinance

Multiple Choice Single AnswerQuestion Who can open an EEFC account?Correct Answer Individuals , firms, companies,

resident in IndiaYour Answer Individuals , firms, companies,

resident in India

Multiple Choice Single AnswerQuestion What is the role of ICC towards WTO?Correct Answer To provide world business

recommendations to WTOYour Answer To further the cause of WTO


Swap price Difference in prices of two legs of buyingand selling Quoting rate for both buying and selling acurrency

Euro Market Market in Euro currencies Market in Eurocurrencies

Making market Quoting rate for both buying and sellinga currency Difference in prices of two legs of buyingand selling

Spread Price difference between bid and offer Maket of'Euro'


- 7 -

Select The BlankQuestion Position in a currency is said to be

________, when sales equal purchases.Correct Answer SquareYour Answer Awkward

Select The BlankQuestion Hotels and Airline companies are allowed

to receive payments in Indian rupees from foreigntourist without insisiting on ________.

Correct Answer Encashment certificateYour Answer Encashment certificate

Multiple Choice Multiple AnswerQuestion Why is Bill of Exchange a Quasi

Negotiable Instrument?Correct Answer It represents title to goods , It

is issued under Sale of Goods actYour Answer It represents title to goods , It is

issued under Transportation act , It is issued underBill of exchange act

Multiple Choice Single AnswerQuestion Which details about forward contracts do

the Exchange Controls verify ?Correct Answer Particulars of cancellation of

forward cover for the equivalent of USD 500,000Your Answer Details of all contracts booked and

cancelled beyond a specified limit

Multiple Choice Single AnswerQuestion In the context of International economy

,the period between 1920s and 1930s is known asCorrect Answer Great DepressionYour Answer Great Depression

Multiple Choice Multiple AnswerQuestion What do you understand by Commercial

Risk?Correct Answer Protracted default by the buyer ,

Insolvency of the buyerYour Answer Protracted default by the buyer ,

Insolvency of the buyer


- 1 -














Your Answer True







- 2 -















Your Answer Monday









Eurobonds Eurobonds


- 3 -





Your Answer False



Correct Answer True

Your Answer True














- 4 -



turnkey projects abroadYour Answer Preshipment credit up to six months for construction and turnkey

projects abroad




Select The BlankQuestion As a result of the world wars in the 20th century the ________ of

most of the countries suffered heavily.Correct Answer Economies














- 5 -



Correct Answer True

Your Answer True







True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs, Call

and put options.Correct Answer True

Your Answer True



Your Answer True




- 6 -











Your Answer False












- 7 -

Question What are the functions of Asian Development Bank?






















- 8 -











Your Answer False


abroad?Correct Answer Activity proposed need to be core activity , Financial commitment

in JV/WOS maximum $ 100 million or equivalentYour Answer Activity proposed need to be core activity , Financial commitment

in JV/WOS maximum $ 100 million or equivalent , Indian coshould not have been black listed







Your Answer Visaed

True/FalseQuestion The working of the IBRD and IMF in recent has blurred the

difference between the twoCorrect Answer True

Your Answer False


the clients, without the prior permission of RBI or Government?Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars,

and forward rate agreementsYour Answer Hedges, interest rate swaps, currency swaps. , Caps and collars,

and forward rate agreements , Good and competitive exchangerates and cross currency rates

Select The BlankQuestion ________Bill of lading must specify the name of the ship.

Correct Answer "On Board"

Your Answer "On Board"



Your Answer General market investments

Multiple Choice Single AnswerQuestion In the context of International economy ,the period between

1920s and 1930s is known asCorrect Answer Great Depression

Your Answer Great Depression


Departure EXW EXW



Arrival DES DES

Multiple Choice Single AnswerQuestion What is the statutory requirement about receivables of exports

from India?Correct Answer The export receivables must be repatriated within six months of

the date of shipment.Your Answer The export receivables must be repatriated within six months of

the date of shipment.

True/FalseQuestion An exporter expecting payment in$ next month will book a

forward purchase contract.Correct Answer False

Your Answer True

Multiple Choice Multiple AnswerQuestion The characteristics of IDA Loan are:

Correct Answer It gives loans to poorer countries , The rate of interest is zeropercent , The repayment period is very long 40 years

Your Answer It gives loans to poorer countries , The rate of interest is zeropercent , The repayment period is very long 40 years

Multiple Choice Multiple AnswerQuestion What is the duty of the AD while booking a forward contract?

Correct Answer Verify the suitable documentary evidence, and that the customeris exposed to risk , Ensure that a genuine transaction exists

Your Answer Verify the suitable documentary evidence, and that the customeris exposed to risk , Ensure that a genuine transaction exists ,Protect the customer fully from exchange risk



Your Answer Viability of the proposal, and excellent track record of business ,Experience and expertise of promoters, benefit to the country ,Total Financial commitment in JV/WOS as per prescribed ceiling

Multiple Choice Single AnswerQuestion When was the first currency swap introduced in world market?

Correct Answer 1970

Your Answer 1970



Correct Answer True

Your Answer True



Your Answer Export Inspection Council , Person authorised by Importer. ,Reserve Bank of India



ECD FEDAI





Exchange margins FEDAI ECD

True/FalseQuestion Both futures and options are traded on a public exchange.


Your Answer True






Your Answer GBP 300 billion

Multiple Choice Single AnswerQuestion A Bank quotes interest rate of 9.50/10.00 for six months dollar

deposit, here the bid rate is :-Correct Answer 9.50% P.A.

Your Answer 9.50 divided by 6 =1.58% P.A.



Your Answer True




standards , Because of protectionism

True/False

Question The American Dollar market comprises of the domestic segmentof USD the offshore segment of USD.

Correct Answer True

Your Answer True

Multiple Choice Multiple AnswerQuestion The major cost components of NIF are :-

Correct Answer Underwriters fees , Margins of notes

Your Answer Underwriters fees , Documentation charges , Issue registrationfees

True/FalseQuestion FRN's issued with ceiling on interest beyond which the issues is

not required to pay interest is known as Mini-Max FRNCorrect Answer True

Your Answer False



Your Answer Optional documents

Select The BlankQuestion The credit which does not constitute a legally binding

undertaking between the bank and the beneficiary is ________.Correct Answer Revocable Credit

Your Answer Revocable Credit









Your Answer True

True/FalseQuestion In an already booked forward contract, a person may seek early

delivery, extension in period, or cancellation.Correct Answer True

Your Answer True

Multiple Choice Single AnswerQuestion A Run on gold gold by a country means

Correct Answer Exchange of reserve currency in to gold

Your Answer Exchange of gold into Reserve Currency




Multiple Choice Single AnswerQuestion The Direct Investment abroad through share swap arrangement

under normal route is permitted in a :-Correct Answer JV/WOS

Your Answer JV/WOS

Select The BlankQuestion FRNs are issued for a maturity period of ________ and are

normally redeemed in one shot.Correct Answer 5-7 years

Your Answer 5-7 years

True/False

Question Bid rate is bidders buying rate and offered rate is bidders sellingrate.

Correct Answer True

Your Answer True

True/FalseQuestion Corporates are allowed to raise funds abroad up to $ 15 million

as short term finance if they have EPCG license.Correct Answer True

Your Answer False



within and outside the countryYour Answer IMF, World Bank and local markets







Correct Answer OECD

Your Answer OECD

Multiple Choice Multiple AnswerQuestion For issuing a Documentary credit The applicant is required to

provide to the issuing bank details aboutCorrect Answer The purchase-sales contract, the mode of payment, the tenor of

payment , The documents required, the names of authoritieswho would issue the documents

Your Answer The purchase-sales contract, the mode of payment, the tenor ofpayment , The documents required, the names of authoritieswho would issue the documents , Authority who will issue thedocuments


Question The crisis in global capital market in 2002-04 was due to


Your Answer Collapse of Enron , Collapse of Argentina's currency board , Thewar against terrorism




Select The BlankQuestion "Flip-Flop', 'Mini-Max', 'Capped' 'Perpetual' are the various types

of ________.Correct Answer Floating Rate Note (FRN)

Your Answer Floating Rate Note (FRN)




Multiple Choice Single AnswerQuestion Bank with lowest Bid for fees etc and which undertakes the

responsibility of loan syndication is called :-Correct Answer The lead bank- leadmanager- arranger

Your Answer The lead bank- leadmanager- arranger


Multiple Choice Multiple AnswerQuestion Which functions does the Bill of Lading serve?Correct Answer It is a document of title to goods. , It is receipt of goodsYour Answer It is a document of title to goods. , It is receipt of goods



Correct Answer 9.50% P.A.Your Answer 9.50% P.A.

Multiple Choice Single AnswerQuestion What is Sovereign Risk?Correct Answer Risk of lending to the government of a countryYour Answer Risk of lending to the government of a country

Multiple Choice Single AnswerQuestion How does ICC help poor countries?Correct Answer Attract Foreign Direct investments togeather with UNCTADYour Answer Attract Foreign Direct investments togeather with UNCTAD

Multiple Choice Multiple AnswerQuestion As per BIS, recovery from the recent crisis in global capital market was mainly due toCorrect Answer Rapid and appropriate policy response in US and other countries , Increase in

Foreign Direct Investments , free flow of creditYour Answer Rapid and appropriate policy response in US and other countries , Increase in

Foreign Direct Investments , free flow of credit

True/FalseQuestion Out of 15 member countries in European Union 12 countries commiteed themselves

for a single currency.Correct Answer FalseYour Answer True

True/FalseQuestion In red clause credit some clauses are printed in Red ink.Correct Answer TrueYour Answer True

True/FalseQuestion Transfer of funds for investment abroad is allowed freely.Correct Answer TrueYour Answer False

Select The BlankQuestion EEFC account holder is allowed to have ________ facility.Correct Answer Cheque book and nominationYour Answer Credit card, safe custody, safe deposit locker without any fee

Select The BlankQuestion Fixed interest rate Eurobond without the option to convert to equity is known as

________.Correct Answer Straight DebtYour Answer Interest rate swap

True/FalseQuestion An Indian importing goods from USA pays dollars in India.Correct Answer FalseYour Answer True

Match The FollowingQuestion Correct Answer Your AnswerPP Form Export Declaration form Export Declarationform

Health Certificate Fumigation certificate Export

Declaration form



Multiple Choice Multiple AnswerQuestion For issuing a Documentary credit The applicant is required to provide to the issuing

bank details aboutCorrect Answer The purchase-sales contract, the mode of payment, the tenor of payment , The

documents required, the names of authorities who would issue the documentsYour Answer The purchase-sales contract, the mode of payment, the tenor of payment , The

track record of the buyer and seller

Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It

is an undertaking given on behalf of a certain person to another person in different countryYour Answer It is an undertaking given on behalf of a certain person to another person in

different country , It is a stamped agreement and is not valid unless it is signed by the issuer

True/FalseQuestion CFR = FOB plus freight paid by seller +insurance paid by seller.Correct Answer FalseYour Answer True

Select The BlankQuestion Even after liberalisation of exchange controls, the Euro sterling market remained

volatile because of uncertainties in UK and gyrations of sterling against major ________ countriesCorrect Answer OECDYour Answer OPEC

True/FalseQuestion Integrated branches of Commercial banks handle forex transactions as well as

options, swaps, futures, arbitrage operationsCorrect Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?Correct Answer Buffer Stock FacilityYour Answer Supplemental Reserve Policy

Multiple Choice Multiple AnswerQuestion What are the sources of raising funds for exports?Correct Answer Suppliers credit , ForfaitingYour Answer Suppliers credit , Forfaiting , Buyers credit , Foreign currency or Rupee finance

True/FalseQuestion Normally the forward contracts are booked for making huge profits.


True/FalseQuestion Head office of ICC is in Paris because of its First President Eliance Clementel.Correct Answer TrueYour Answer False

Select The BlankQuestion A ________ Bill of lading does not specify the terms and conditions of carriage.Correct Answer Short FormYour Answer Short Form


True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate quotation.Correct Answer FalseYour Answer False

Select The BlankQuestion For setting up joint ventures abroad or equity participation abroad, EXIM bank

provides funds under ________ Scheme.Correct Answer Overseas investment facilityYour Answer Overseas investment facility

Multiple Choice Single AnswerQuestion Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by

the last week of Sept 2005. Give details of the forward contract he can book :-

Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, forEuro 25000 or less, for maturity last week of Sept.

Your Answer He can book a contract for Forward Purchase, any time from May 2005 till MidSept 2005, for Euro 25000 or less, for maturity last week of Sept.

Select The BlankQuestion In US Capital Market a Company prepares all the necessary documents in advance

of the public issue under the facility known as ________.Correct Answer Shelf RegistrationYour Answer Shell Registration

Multiple Choice Multiple AnswerQuestion Which common details will be available in any bill of Lading?Correct Answer Names of consigner, consignee , The port of loading and unloading, contract

of shipmentYour Answer Names of consigner, consignee , The port of loading and unloading, contract of

shipment , The name of the vessel , The date of transportation and contract of transportation

Select The BlankQuestion Under the ________ standard the Country's Central Bank promised to buy back the

currency at certain rate of Gold.Correct Answer GoldYour Answer Interest

Select The BlankQuestion Short term instruments normally issued by corporate borrowers, forhigh values, at a

discount to face value are known as ________.Correct Answer Euro Commercial PapersYour Answer ADRs

Select The BlankQuestion The type of trade where a country sells orange juice in return for cars is known as

________.Correct Answer Counter TradeYour Answer Non money trade

Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation

abroad , Payment to EOUs in India for services rendered by them

Your Answer Payment to EOUs in India for services rendered by them , Payment of Gifts ofGBP 5000 per year per donor

Multiple Choice Multiple AnswerQuestion Under the liberalisation through FEMA, what can an AD offer to the clients, without

the prior permission of RBI or Government?Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward

rate agreementsYour Answer Caps and collars, and forward rate agreements , Good and competitive exchange

rates and cross currency rates

Multiple Choice Multiple AnswerQuestion Sterling Market is attractive for an international investor becauseCorrect Answer Gilts offer higher attractive margin , Choice of issuing medium term and long

term bondsYour Answer Choice of issuing medium term and long term bonds , Less controls and less

formalities to be completed , Linking of issues to currency swaps

Multiple Choice Single AnswerQuestion Under which contracts the seller pays the import duty for the buyer?Correct Answer DDPYour Answer DDP

True/FalseQuestion PP Form is required when exports are made to any country by post parcel on value

payable basis.Correct Answer FalseYour Answer True

Multiple Choice Multiple AnswerQuestion What were the immediate causes of converting the group of 5 into group of 7 and

convene their meeting in late 1985?Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the

Trade protectionnism had increasedYour Answer Many Industries in USA had become uncompetitive with imports , In USA the

Trade protectionnism had increased , The heads of G5 insisted to have a meeting , Failure of IMFto control the exchange rates

Multiple Choice Single AnswerQuestion What are the powers of money changers?Correct Answer Purchase and sell foreign currency notes and travellers chequesYour Answer Purchase and sell foreign currency notes and travellers cheques, give import and

export finance

Multiple Choice Single AnswerQuestion Who can open an EEFC account?Correct Answer Individuals , firms, companies, resident in IndiaYour Answer Individuals , firms, companies, resident in India

Multiple Choice Single AnswerQuestion What is the role of ICC towards WTO?Correct Answer To provide world business recommendations to WTOYour Answer To further the cause of WTO

Select The BlankQuestion Position in a currency is said to be ________, when sales equal purchases.Correct Answer SquareYour Answer Awkward

Select The BlankQuestion Hotels and Airline companies are allowed to receive payments in Indian rupees from

foreign tourist without insisiting on ________.Correct Answer Encashment certificateYour Answer Encashment certificate

Multiple Choice Multiple AnswerQuestion Why is Bill of Exchange a Quasi Negotiable Instrument?Correct Answer It represents title to goods , It is issued under Sale of Goods actYour Answer It represents title to goods , It is issued under Transportation act , It is issued

under Bill of exchange act

Multiple Choice Single AnswerQuestion Which details about forward contracts do the Exchange Controls verify ?Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000Your Answer Details of all contracts booked and cancelled beyond a specified limit

Multiple Choice Single AnswerQuestion In the context of International economy,the period between 1920s and 1930s is

known asCorrect Answer Great DepressionYour Answer Great Depression

Multiple Choice Multiple AnswerQuestion What do you understand by Commercial Risk?Correct Answer Protracted default by the buyer, Insolvency of the buyerYour Answer Protracted default by the buyer, Insolvency of the buyer


True/FalseQuestion Tranche' is a managed issue of securities in smaller

denominations.Correct Answer True

Your Answer True



Your Answer Payment of hotel bills abroad, payment for expenses on Heartoperation abroad , Payment to EOUs in India for servicesrendered by them , Payment of Gifts of GBP 5000 per year perdonor





Select The BlankQuestion The creditworthiness of futures exchange is maintained through

imposition of ________.Correct Answer Margin

Your Answer Penalty

Select The BlankQuestion After the second world war many countries adopted the route of

________ to give facelift to sagging economies.Correct Answer Devaluation of their currencies

Your Answer Change of governments

True/FalseQuestion FEDAI does not require RBI permission to frame and revise

rules of business


Your Answer True



Your Answer Deficit

Multiple Choice Multiple AnswerQuestion Underwriters are more attracted to NIF issue because of :-

Correct Answer Lesser risks , Increased returns , Easy marketability features

Your Answer Lesser risks , Increased returns , Easy marketability features



Your Answer True

Multiple Choice Single AnswerQuestion What is the Indian Govt's obligation of becoming member of

IMF?Correct Answer Ensure orderly exchange arrangement, promote stable

exchange rateYour Answer Introduce gold standard in exchange rate



Your Answer Preshipment credit , Post shipment credit



Your Answer Specific shipment policy





Banks are ahead


Weightages % Factors' values Drop the investmentproject



Your Answer Austria

Multiple Choice Multiple AnswerQuestion Name the services provided by 'Reuter 3000' in forex market:-

Correct Answer Quotation of forex rates, interest rates , Electronic broking bymatching the rates

Your Answer Quotation of forex rates, interest rates , Electronic broking bymatching the rates , Demat securities

Multiple Choice Multiple AnswerQuestion What options does the merchant have while booking a forward

contract?Correct Answer Delivery on a Fixed date, within six months , Delivery on a date

between two days separated by a period of maximum one monthYour Answer Delivery on a Fixed date, within six months , Delivery on a date

between two days separated by a period of maximum one month

Multiple Choice Single AnswerQuestion What is the volume of the world's total speculative transactions?

Correct Answer Roughly 90 % of the total turnover

Your Answer Roughly 90 % of the total turnover

True/FalseQuestion ECGC offers isurance protection to Indian exporters againt

payment risks.Correct Answer True

Your Answer True

True/FalseQuestion CFR = FOB plus freight paid by seller + insurance paid by seller.


Your Answer False



Your Answer Gilts offer higher attractive margin , Choice of issuing mediumterm and long term bonds

Multiple Choice Multiple AnswerQuestion In a documentary credit the word document means :-

Correct Answer Specified documents of title, transportation, insurance , Specifiedcertificates, and other papers required as per the regulations inthe buyers country

Your Answer Specified documents of title, transportation, insurance

Multiple Choice Single AnswerQuestion What is the meaning of right to buy or sell the future contract?

Correct Answer An Option

Your Answer A future



Your Answer Maturity Factoring

True/FalseQuestion An Indian importing goods from USA pays dollars in India.


Your Answer True


York.

Correct Answer True

Your Answer True

Select The BlankQuestion A Dealer bought USD at 47.5000, in morning and the USD is

quoted in the noon at 1 USD =48.2000/49.7000, then he has theopportunity for ________.

Correct Answer Arbitrage

Your Answer Swap

Multiple Choice Single AnswerQuestion The Direct Investment abroad through share swap arrangement

under normal route is permitted in a :-Correct Answer JV/WOS

Your Answer JV/WOS







Your Answer 26


out on Friday in Singapore, the settlement day will beCorrect Answer Following Tuesday if it is a working day in all the three centers

Your Answer Following Thursday if it is a working day in all the three centers



Your Answer Proforma

Multiple Choice Single AnswerQuestion Who are the members of the Special committee on Indian Direct

Investments abroad, for normal route?Correct Answer Representatives of Ministry of finance, Ministry of Economic

affairs, Ministry of Commerce and RBIYour Answer Representatives of Ministry of finance, Ministry of Economic

affairs, Ministry of Commerce and RBI

Select The BlankQuestion For opening JV/WOS in Nepal, Bhutan, the ceiling for financial

commitment per annum is ________.Correct Answer Rs. 350 crore

Your Answer Rs. 350 crore

Select The BlankQuestion The price at which a person may purchase or sell the underlying

________.Correct Answer Exercise or strike price

Your Answer Market price



Your Answer True

Multiple Choice Multiple AnswerQuestion The participants in the Forex Markets are :-

Correct Answer Non banking entities wishing to exchange currencies, , Banksand their clients , Speculators, arbitragers

Your Answer Non banking entities wishing to exchange currencies, , Banksand their clients , Speculators, arbitragers





True/False

Question Transfer of funds for investment abroad is allowed freely.

Correct Answer True

Your Answer False







Multiple Choice Single AnswerQuestion Who books an option forward contract?

Correct Answer Party who is not definite about crystallisation of delivery date

Your Answer Party who is speculator

Multiple Choice Single AnswerQuestion What is a "Received for shipment" bill of lading ?

Correct Answer It is not considered by the banks as a good security for financing.

Your Answer It is considered a very safe document



Your Answer Faith money deposited by buyers and sellers ensures liquidity ,Margin ensures solvency for honouring contracts , Given bybuyer or seller as commission

Multiple Choice Single AnswerQuestion How does ICC access Govt and influence Governmental

decisions?Correct Answer Through national committees

Your Answer Through national committees


Investment underAutomatic route

Form ODA Form ODA

Proposal under nonautomatic route

RBI Form NAR

Proposal under Normalroute

Special Committee Special Committee

Investment bypartnerships not in coreactivity

form ODI form ODI



Your Answer It is an undertaking given by the openers bank to pay certainsum of money , It is an unconditional undertaking

True/FalseQuestion Services of a Paying bank are taken when currencies of

exporters country or the importers country is not involved in thetransaction.


Your Answer True





Select The BlankQuestion Exim acts as ________ for Government, RBI and IDBI .

Correct Answer An agent

Your Answer Authorised dealer



Your Answer Public Limited companies without international presence



Your Answer Anticipatory Credit

Multiple Choice Multiple AnswerQuestion Which of these are considered as miscellaneous documents?

Correct Answer Packing list , Weight certificate

Your Answer Packing list , Insurance cover note , PP Form

Select The BlankQuestion In ________ transaction the delivery is postponed from the

agreed date.Correct Answer Rollover

Your Answer Forward



Correct Answer True

Your Answer False

Multiple Choice Multiple AnswerQuestion World Bank gives loans for

Correct Answer Structural Adjustments , Infrastructure projects , BOP problems

Your Answer Structural Adjustments , BOP problems , Long term Workingcapital

Select The BlankQuestion The credit which does not constitute a legally binding

undertaking between the bank and the beneficiary is ________.Correct Answer Revocable Credit

Your Answer Transferable credit

Multiple Choice Multiple AnswerQuestion What non funded facilities are granted by Export Import Bank of

India?Correct Answer Guarantee for Bid bond, execution of export project, for

borrowings abroad, for retention of money , Advance paymentGuarantee, performance guarantee

Your Answer Advance payment Guarantee, performance guarantee , Letter ofcredits



Your Answer False

Multiple Choice Single AnswerQuestion What is a coupon swap?

Correct Answer Swap contract exchange of fixed rate payment system for afloating rate system

Your Answer Exchange of fixed deposits to equity



Your Answer True

True/FalseQuestion The credit rating of World Bank is high in the world Capital

market because it operates at the debt equity ratio of 1:2Correct Answer False

Your Answer True


Certifiate of Origin Export Promotion Council Risk covering Document


Health Certificate Fumigation certificate Finance document

Certificate of Inspection As per importersrequirement

As per importersrequirement



Your Answer True




Multiple Choice Single AnswerQuestion The 'On Board' bill of lading means bill of lading evidencing that

:-Correct Answer The goods are put on board a ship for shipment

Your Answer A bill of lading evidencing terms and conditions of carriageprinted on it


Netherlands Guilder Franc

Germany Mark Peseta

Ireland Punt Dollar

Luxemberg Franc Guilder

Multiple Choice Multiple AnswerQuestion The World Bank Group Consists of

Correct Answer International Development Association , International financeCorporation , Multinational Investment Guarantee Agency

Your Answer Multinational Investment Guarantee Agency , MultinationalInsurance Guarantee Agency





Correct Answer True

Your Answer False

True/FalseQuestion Floating rate notes are traded in secondary market also.

Correct Answer True

Your Answer True




Multiple Choice Multiple AnswerQuestion The investor is in the money when :-

Correct Answer The exercise price is below the spot price for a call option , Theexercise price is above the spot price for a put option

Your Answer The exercise price is below the spot price for a call option , Theexercise price is above the spot price for a put option , The

exercise price is above the spot price for a call option

True/FalseQuestion The working of the IBRD and IMF in recent has blurred the

difference between the twoCorrect Answer True

Your Answer True

Select The BlankQuestion For importing goods in India RBI insists on ________ value.

Correct Answer CIF

Your Answer FOB



Your Answer Surplus

Select The BlankQuestion FRNs are issued for a maturity period of ________ and are

normally redeemed in one shot.Correct Answer 5-7 years

Your Answer Up to 1 year

Multiple Choice Multiple AnswerQuestion What are the functions of International Finance Corporation?

Correct Answer Help private enterprise by financing projects , Provide technicalassistance to private enterprise

Your Answer Help private enterprise by financing projects , Provide technicalassistance to private enterprise




Select The Blank

Question A Documentary credit issued on the strength of anotherdocumentary credit is known as ________.

Correct Answer Back to Back credit

Your Answer Green clause credit

Multiple Choice Single AnswerQuestion Value date means the date on which :-

Correct Answer Delivery of both the currencies will be made

Your Answer Value of currency will be paid in terms of goods or commodities

True/FalseQuestion FEDAI does not require RBI permission to frame and revise

rules of businessCorrect Answer False

Your Answer True



Your Answer UK



Your Answer Non banking Finance companies , Insurance Companies ,Individual investors abroad

Multiple Choice Multiple AnswerQuestion The crisis in global capital market in 2002-04 was due to


Your Answer Collapse of Argentina's currency board , The war againstterrorism



Your Answer Activity for investment is core activity of Indian Company. , CreditRating of the CO to be A++

Multiple Choice Multiple AnswerQuestion How does a company use swap to restructure debt, in its

balance sheet?Correct Answer By resorting to floating rate from fixed rate , By resorting to fixed

rate from floating rateYour Answer By resorting to floating rate from fixed rate , By resorting to fixed

rate from floating rate , Prepayment of existing debts

Select The BlankQuestion ________ is the price at which the market maker is prepared to

borrow the money.Correct Answer Bid rate

Your Answer Selling price

Multiple Choice Single AnswerQuestion Which type of Convertibility of Rupee launched in March 1992 ?

Correct Answer Limited convertibility

Your Answer Limited convertibility

Multiple Choice Multiple AnswerQuestion A Forward purchase contract was booked with an authorised

dealer and subsequently cancelled .It :-Correct Answer Can be booked again with another dealer , Can be booked again

with the same dealerYour Answer Can be booked again with another dealer , Can be booked only

for un booked portion of the contract.

Multiple Choice Single AnswerQuestion Name the members of Exchange Banks association :-

Correct Answer Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar,

Your Answer Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar,





Question What do you call a 'decreasing principal swap'?

Correct Answer Amortizing swap

Your Answer Amortizing swap

Multiple Choice Single AnswerQuestion When does a bank have an absolute advantage, in respect of

interest rate swaps?Correct Answer When it has advantage under fixed interest system as well as

floating interest rate systemYour Answer When it has advantage under fixed interest system as well as

floating interest rate system



Your Answer By underwriting bank to support funding for a certain period,against which borrowers can issue short term papers

1

Multiple Choice Multiple AnswerQuestion What schemes have been floated by RBI for facilitating Inter bank transactions?

Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up amarket intelligence cell to study and monitor developments in Forex Market

Your Answer Clearing house for settlement and clearance for the operations of Ads , Makeadditional foreign currency available to ADs at cheaper rates







True/FalseQuestion Cross currency forward contract is not meaningful if original contract is in Rupees to

USDCorrect Answer True

Your Answer True


Correct Answer The exercise or strike price, the amount , The expiration date and time, the methodof payment

Your Answer The exercise or strike price, the amount , The expiration date and time, the methodof payment , The Market report of the exchange which trades the option

Multiple Choice Single AnswerQuestion Which is the most actively traded currency in the international market today?





Country risk analysis Cost of evluation does not justifyanalysis

Cost of evluation does not justifyanalysis


2


Select The BlankQuestion Global capital market can be understood from the study of ________.

Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside thecountry

Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside thecountry

Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will be exchanged on :-

Correct Answer Monday

Your Answer Monday

Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee came from June 92?

Correct Answer Other managed Floating



Maturity of future Time when actual commodity isdelivered



Bearer security issued incurrency other than that of thecountry of issue

Eurobonds Eurobonds



True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable

instrument.Correct Answer False

Your Answer False

True/FalseQuestion The Prominent non banking financial institutions participating in the FOREX markets

are Pension funds, mutual funds, insurance Cos.Correct Answer True

Your Answer True


3

Question What are margins, with reference to futures market?

Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensuressolvency for honouring contracts

Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensuressolvency for honouring contracts

Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in foreign exchange?

Correct Answer USD 1 trillion





Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of seven central Banks

taken togeather in mid 1992?Correct Answer USD 275 Billion



Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad

Your Answer Preshipment credit up to six months for construction and turnkey projects abroad




Select The BlankQuestion As a result of the world wars in the 20th century the ________ of most of the

countries suffered heavily.Correct Answer Economies


Multiple Choice Single AnswerQuestion Which currency is traded in one leg of about 70% of the world's transactions?

4






Select The BlankQuestion The Trans European Automated Real Time Gross Settlement Express Transfer is

popular in ________.Correct Answer Brussels






Correct Answer True

Your Answer True


Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is anundertaking given on behalf of a certain person to another person in differentcountry

Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is anundertaking given on behalf of a certain person to another person in differentcountry


Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them

Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,Payment to EOUs in India for services rendered by them

True/FalseQuestion Funding Options in domestic yen market are Futures, FRAs, Call and put options.

5

Correct Answer True

Your Answer True



Your Answer True




Select The BlankQuestion When an Indian Company earns at least 50% of its average turnover from a

particular activity then that activity is considered as ________.Correct Answer Core activity





True/FalseQuestion The volume of trading of Derivatives in the world trade market is growing but still

only 5% of the total.Correct Answer False

Your Answer False

Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is

the offered rate for Rs?Correct Answer USD 1=Rs 50.5000





6


Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations

Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations ,Which have greater intrinsic value


Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resourcesraised in world capital market

Your Answer Give Softloans to poorer countries in Asia , Give project finance from resourcesraised in world capital market


Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recentlyfloated issue

Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recentlyfloated issue


discount to face value are known as ________.Correct Answer Euro Commercial Papers


Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for assessing a cross border

project ?Correct Answer To weed out unviable projects and rank profitable ones






Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement ofrates between 3 currencies

Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement ofrates between 3 currencies

Select The Blank

7

Question Forward margin makes a currency cheaper then the currency is at ________.



Multiple Choice Single AnswerQuestion Why does a person need protection from unfavourable movement of exchange rate?

Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit

Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit


Correct Answer Prices of capital market instruments change and are expected to change drastically

Your Answer Prices of capital market instruments change and are expected to change drastically



Your Answer False


Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOSmaximum $ 100 million or equivalent

Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOSmaximum $ 100 million or equivalent , Indian co should not have been black listed

15 – 1013 – 1415 – 1718 – 1920 – 2324 – 2731 – 3536 – 3940 – 4143 – 4647 – 4950 – 5355 – 5761 – 6667 – 6970 – 7173 – 7475 -7679 – 8384 – 88

8

89 - 9295 – 99100 – 102105 – 106

109 – 114117 – 123124 – 127128 – 129131 – 137138 – 141143- 147148 – 152155 – 157158 – 161

163 – 166169 – 173174 – 177179 – 180183 – 183189 – 190191

195199203 – 204207- 212215 – 217218 -219220 – 221

Chapter – 1 – Introduction to international capital markets 1Ero currency market ; Domestic market ; US, Japan Switzerland ; uk,australia canada ; european conters in ECU ; Euro ; Asian doller market; forex marker 1SDR ; ECU ; US dollar ; German ; Swiss ; Japanees ; France ; Canada ;Australia; 2Chaper - 2 - International financial Markets - The U.S.Dollar Market ;pricing ; federal reservice board; curency ; central bank of US ; 5The Japanese Yen Market ; Mof; Long Term Prime Rate ; 1970 japanese 6The Sterling Market ; 20th 19th century 1979 ; OECD Organization foreconomic co-operation & development EMS Exchange rate Mechanism;FRN ; Bulldog; 7the EURO Market has been discussed in the nex chapter Recentdevelopment in international financial markets ; septer 11 enron 7LtCN (Long term capital Management Brazil china and mexico; 81990 ; 1980 ; severe tests financial system; securitization forces banks ;attractive to browwerw; legal issues flexibility ; financial marketdevelopment segement of ; 9swaps cash flow ; roject related; gain access to international ;marketability ; new financing techniques; 10Chapter – 3 – International Monetary and Financial System 131945 ; 1944 ; intenrational world Bank for reconstruciton anddevelopment; second world war was european ; IMF International 13

9

Monetary Fund; Gold standard first world war

The country's Central Bank agreed to buy back their currency at acertain rate of gold; 13melting down of gold was freely allowed 13There was unrestricted movement of gold (I.e. import and / export 14The total money supply in the country was determined by the quantumof gold reserves in the country 141870 ; 1914 ; 1821 ; 1834 ; 1870 ; European countries gold standardin 1933 ; 1930 International Monetary Co-operation ; IBRD ; IMF ; 14popularly known as world bank IMF ; the international monetary fund1945 ; 1971 ; 25 years ; aims 15SDR ((special drawing rights ) 25% 1960 ; 1963 ; Gross domesticproduct; 5 years ; SDR 146 bn to SDR 212 ; 45% ; 1998 ; Two parts 16Funding Facilities ; Regular Facilities ; Special facilities ; restore tranchecredit tranche ; compensatory and contingency financing facility (CCFF); 16Extended arrangement (Extended Fund Facility EEF) ; Buffer stockFinancing Facility ; 16Standard Arrangement (Enlarged Arrears Policy ) ; SupplementalReserve Policy (Supplemental Reserve Policy (SRP 17Reserve Tranche ; Credit Tranches ; Stand - By Arrangement 17Extended arrangement or extended fund facilities (EFF) 18Special Facilities ; CCFF ; Buffer Stock Financing Facility ; BSFF ;Supplemental Resource Facility (SRF) ; 1997 18Enhance Structural Adjustment Facility (ESAF) ; The fixed exchange ratesystem US dollars 35 ounce of gold 19Problem faced by the fixed exchange rate system ; 1960 ; valueapprehension ; delay in adjustment 20failure of fixed rate system ; the european monetary system (EMS)European Community 20Currency Snake ; 1973 ; EMS EC ECU European Currency Unit ; SDR ;ERM ; DM ; matrix german bundesbank 21EM ; PST ; ERM ; Economic and monetary Union ;Top of Form



options, swaps, futures, arbitrage operationsCorrect Answer True

Your Answer True



Your Answer False

Select The BlankQuestion The rate of interest on rupee finance for exports is not exceeding ________ less than

PLR.Correct Answer 0.025

10



Correct Answer The exercise or strike price, the amount , The expiration date and time, the methodof payment

Your Answer The exercise or strike price, the amount , The expiration date and time, the methodof payment

Multiple Choice Single AnswerQuestion In the syndicated loan arrangement the borrower has to execute :-

Correct Answer Single Principal loan agreement


True/FalseQuestion At Least one principal Lender bank is essential for issue of the ADR or GDR.


Your Answer True


Correct Answer Institutions can introduce new products and instuments at the price of their choice.

Your Answer Institutions can introduce new products and instuments at the price of their choice.




True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate quotation.


Your Answer False


provides funds under ________ Scheme.Correct Answer Overseas investment facility



11

Question Under the automatic route of Direct Investment Abroad, what is the restriction onmarket purchases?

Correct Answer 50% of the net worth of the investing company




Your Answer Purchase and sell foreign currency notes and travellers cheques and also Give exportfinance

Select The BlankQuestion Any company involved in foreign exchange transactions is exposed to ________ risk.

Correct Answer Currency



Correct Answer Price established by the clearing house at the end of each trading session , It is usedto determine the net gain, loss, margin call and next days price limits

Your Answer Price established by the clearing house at the end of each trading session , It is usedto determine the net gain, loss, margin call and next days price limits


Correct Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime

Your Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime ,Increased Govt regulation of Business

True/FalseQuestion Cause of increase in cost of public issues Underwriting fees , selling commission

Correct Answer True

Your Answer False




True/FalseQuestion The Option period in the forward contract is at the option of the Banker, hence the

bank has to be very conservative in quoting rates.

12


Your Answer True


Correct Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation

Your Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation , GDP,Balanceof trade and payment,Unemployment


Departure EXW EXW



Arrival DES DES


Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long termbonds

Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long termbonds , Linking of issues to currency swaps


Correct Answer True

Your Answer False





the bid rate for USD?Correct Answer USD 1=Rs 50.5000


13





Correct Answer Activity for investment is core activity of Indian Company. , Total Financialcommitment in JV/WOS as per prescribed ceiling

Your Answer Activity for investment is core activity of Indian Company. , Total Financialcommitment in JV/WOS as per prescribed ceiling




Multiple Choice Single AnswerQuestion Large number of exporters from which country are enjoying the privilege of receiving

up front cash from importers in Russia?Correct Answer United Kingdom


True/FalseQuestion In developed markets, speculators play important role in determining the trend of

currency rates.Correct Answer True

Your Answer True

Select The BlankQuestion In US Capital Market a Company prepares all the necessary documents in advance of

the public issue under the facility known as ________.Correct Answer Shelf Registration


Select The BlankQuestion In Overseas market the forward rate is generally quoted on the basis of ________.

Correct Answer Fixed date


Select The BlankQuestion Forward Margin makes a currency costlier then the currency is at ________.

14

Correct Answer Premium



Correct Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank

Your Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank


Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raisedin world capital market

Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raisedin world capital market




Select The BlankQuestion In mid 1992 ________ rejected the ratification of Maastricht treaty

Correct Answer Denmark

Your Answer UK

Multiple Choice Multiple AnswerQuestion Under the liberalisation through FEMA, what can an AD offer to the clients, without

the prior permission of RBI or Government?Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate

agreementsYour Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate

agreements

Multiple Choice Single AnswerQuestion To whom is an AD required to report the cancellation of forward contracts?

Correct Answer No one at all.


Select The BlankQuestion ECGC provides cover to an Indian contractor for construction work abroad under

________.Correct Answer Construction works policy

15


True/FalseQuestion The Negotiating bank examines the documents submitted by the seller and makes

payment if they comply the terms and conditions of the LC.Correct Answer True

Your Answer True







Select The BlankQuestion Forward margin makes a currency cheaper then the currency is at ________.






True/FalseQuestion Country risk analysis is a futile exercise in the background of cost of analysis.

Correct Answer True

Your Answer False


volatile because of uncertainties in UK and gyrations of sterling against major________ countries

Correct Answer OECD

Your Answer OECD

16



FRNs FRNs

Issue of bonds without fixed rateof interest, linked to short terminterest rate in the global market


Issue of loansinternationally,through arranger,underwriter,co manager, for alarge amount for sharing risk oflending


Equity issues in the foreignmarkets either as directinvestments or portfolioinvestments.

American or Global DepositoryReceipts

American or Global DepositoryReceipts

Bottom of Form

1


Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a marketintelligence cell to study and monitor developments in Forex Market

Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additionalforeign currency available to ADs at cheaper rates









Your Answer True


Correct Answer The exercise or strike price, the amount , The expiration date and time, the method ofpayment

Your Answer The exercise or strike price, the amount , The expiration date and time, the method ofpayment , The Market report of the exchange which trades the option









2







Your Answer Monday








Bearer security issued in currencyother than that of the country ofissue

Eurobonds Eurobonds





Your Answer False

True/FalseQuestion The Prominent non banking financial institutions participating in the FOREX markets are

Pension funds, mutual funds, insurance Cos.Correct Answer True

Your Answer True


3








Correct Answer By underwriting bank to support funding for a certain period, against which borrowerscan issue short term papers








Select The BlankQuestion Over the years ________has been the most widely accepted currency in international

capital market.Correct Answer American Dollar


Select The BlankQuestion As a result of the world wars in the 20th century the ________ of most of the countries

suffered heavily.Correct Answer Economies




4












Correct Answer True

Your Answer True


Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is anundertaking given on behalf of a certain person to another person in different country

Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is anundertaking given on behalf of a certain person to another person in different country





Correct Answer True

Your Answer True

5



Your Answer True




Select The BlankQuestion When an Indian Company earns at least 50% of its average turnover from a particular

activity then that activity is considered as ________.Correct Answer Core activity





True/FalseQuestion The volume of trading of Derivatives in the world trade market is growing but still only

5% of the total.Correct Answer False

Your Answer False


the offered rate for Rs?Correct Answer USD 1=Rs 50.5000






6




Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raisedin world capital market

Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raisedin world capital market







Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for assessing a cross border project

?Correct Answer To weed out unviable projects and rank profitable ones










7










Your Answer False


Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum$ 100 million or equivalent

Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum$ 100 million or equivalent , Indian co should not have been black listed




True/FalseQuestion Out of 15 member countries in European Union 12 countries commiteed themselves for

a single currency.Correct Answer False

Your Answer False



Your Answer False

Select The Blank

8

Question A Credit can be a confirmed credit only if it is also ________.







Stock market analysis Banks are ahead Banks are ahead

Weightages % Factors' values Factors' values




Multiple Choice Single AnswerQuestion What is the meaning of a country risk?

Correct Answer Risk of events in a particular country which may cause loss to a person dealing withthat country

Your Answer Risk of events in a particular country which may cause loss to a person dealing withthat country

Multiple Choice Multiple AnswerQuestion Which common details will be available in any bill of Lading?

Correct Answer Names of consigner, consignee , The port of loading and unloading, contract ofshipment

Your Answer Names of consigner, consignee , The port of loading and unloading, contract ofshipment

Multiple Choice Single AnswerQuestion What help does EXIM Bank provide under the scheme 'Direct Financial assistance to

exporters'?Correct Answer Funds are provided under deferred payment terms to Indian exporter for credit to

foreign buyerYour Answer Funds are provided under deferred payment terms to Indian exporter for credit to

foreign buyer



9

Health Certificate Fumigation certificate Fumigation certificate

Certificate of Inspection As per importers requirement As per importers requirement

Certifiate of Origin Export Promotion Council Export Promotion Council


volatile because of uncertainties in UK and gyrations of sterling against major________ countries

Correct Answer OECD

Your Answer OECD

Multiple Choice Single AnswerQuestion How many INCOTERMS are there in "Departure" Group?

Correct Answer One

Your Answer Two




True/FalseQuestion The American Dollar market comprises of the domestic segment of USD the offshore

segment of USD.Correct Answer True

Your Answer True

Select The BlankQuestion The creditworthiness of the futures seller and the futures buyer is ________ because of

the presence of the Futures exchange.Correct Answer Irrelevant


Multiple Choice Single AnswerQuestion What was the collective assessment of International financial market about the country

risk of many cnuntries in the last decade?Correct Answer Whatever it was, was disastrously wrong.

Your Answer Whatever it was, was disastrously wrong.

Multiple Choice Multiple AnswerQuestion How is the entry into any conuntry's money market or capital market is restricted?

10

Correct Answer Because of different tax systems , Because of different credit standards

Your Answer Because of different tax systems , Because of different credit standards

True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate quotation.


Your Answer True

Select The BlankQuestion In Indian interbank market forward rates are generally quoted on the basis of

________.Correct Answer Calendar month


Select The BlankQuestion Rupee was liberalised on ________ account in 1993, and on current account in 1994.

Correct Answer Trade

Your Answer Trade




Multiple Choice Multiple AnswerQuestion Which of these are considered as miscellaneous documents?

Correct Answer Packing list , Weight certificate

Your Answer Packing list , Weight certificate


Correct Answer True

Your Answer True

Select The BlankQuestion ECGC provides cover to an Indian contractor for construction work abroad under

________.Correct Answer Construction works policy

Your Answer Construction works policy

11

Multiple Choice Single AnswerQuestion Equity can be raised internationallly by a company through :-

Correct Answer Fund raising, underwriting, hedging , arbitration operations

Your Answer Fund raising, underwriting, hedging , arbitration operations

Multiple Choice Single AnswerQuestion How many Countries participated in the third survey on Foreign Exchange, coordinated

by BIS in 1992?Correct Answer 26

Your Answer 26


Correct Answer True

Your Answer True

True/FalseQuestion Prior approval of RBI is needed for payment of all imports.


Your Answer True




Multiple Choice Single AnswerQuestion What is the immediate cause for the growth of futures and options in the last two

decades?Correct Answer Increase in volatile trading conditions

Your Answer Management of external risk

Select The BlankQuestion For setting up joint ventures abroad or equity participation abroad, EXIM bank provides

funds under ________ Scheme.Correct Answer Overseas investment facility


Select The BlankQuestion To make the export more competitive and remunerative, the Indian Govt extends

________ facility.

12

Correct Answer Cash Incentives

Your Answer Advance against cash incentives



Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum$ 100 million or equivalent

Multiple Choice Multiple AnswerQuestion External Commercial Debt market :-

Correct Answer Prevails in Domestic market of foreign country , Prevails in offshore markets

Your Answer Prevails in Domestic market of foreign country , Prevails in offshore markets





Correct Answer The change in value of currency alters the home currency value of an asset , liability, ,The change in value of currency alters the home currency value of profit, loss, or futurecash flows

Your Answer The change in value of currency alters the home currency value of an asset , liability, ,The change in value of currency alters the home currency value of profit, loss, or futurecash flows , Certainty of an event which would happen in favour of the importer/exporter

Multiple Choice Single AnswerQuestion For a spot transaction carried out on Tuesday, where both centers have holiday on

Wednesday, currencies will be exchanged on :-Correct Answer Thursday if it is a working day at both the centers

Your Answer Friday

Multiple Choice Single AnswerQuestion Which details about forward contracts do the Exchange Controls verify ?

Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000

Your Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000

True/FalseQuestion In the forward rate quotations between two currencies, when one currency is at

discount the other currency is at premium.

13

Correct Answer True

Your Answer True



Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations

Select The BlankQuestion A Bill of exchange payable 45 days from date of shipment, is a means of ________

from seller to the buyer.Correct Answer Credit

Your Answer Credit



Your Answer Preshipment credit beyond six months for construction and turnkey projects abroad




True/FalseQuestion Import finance is nomally available at rates of interest cheaper than domestic finance

rates.Correct Answer False

Your Answer False


Correct Answer Commercial Banks , Non banking Finance companies , Insurance Companies

Your Answer Commercial Banks , Non banking Finance companies

Select The BlankQuestion In mid 1992 ________ rejected the ratification of Maastricht treaty

Correct Answer Denmark

Your Answer Denmark

14

True/FalseQuestion Indian companies are now allowed to freely invest abroad up to $1.5 million, raised

through GDE or EEFC without prior permission from RBI.Correct Answer False

Your Answer True


Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up amarket intelligence cell to study and monitor developments in Forex Market

Your Answer Clearing house for settlement and clearance for the operations of Ads , Makeadditional foreign currency available to ADs at cheaper rates







True/FalseQuestion Cross currency forward contract is not meaningful if original contract is in Rupees

to USDCorrect Answer True

Your Answer True


Correct Answer The exercise or strike price, the amount , The expiration date and time, themethod of payment

Your Answer The exercise or strike price, the amount , The expiration date and time, themethod of payment , The Market report of the exchange which trades the option




Match The Following

15








Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outsidethe country

Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outsidethe country



Your Answer Monday









Eurobonds Eurobonds





Your Answer False

16

True/FalseQuestion The Prominent non banking financial institutions participating in the FOREX

markets are Pension funds, mutual funds, insurance Cos.Correct Answer True

Your Answer True














Correct Answer Preshipment credit beyond six months for construction and turnkey projectsabroad





Select The BlankQuestion As a result of the world wars in the 20th century the ________ of most of the

countries suffered heavily.

17

Correct Answer Economies















Correct Answer True

Your Answer True


Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It isan undertaking given on behalf of a certain person to another person in differentcountry

Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It isan undertaking given on behalf of a certain person to another person in differentcountry



18



Correct Answer True

Your Answer True



Your Answer True




Select The BlankQuestion When an Indian Company earns at least 50% of its average turnover from a

particular activity then that activity is considered as ________.Correct Answer Core activity





True/FalseQuestion The volume of trading of Derivatives in the world trade market is growing but still

only 5% of the total.Correct Answer False

Your Answer False

Multiple Choice Single AnswerQuestion Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which

is the offered rate for Rs?Correct Answer USD 1=Rs 50.5000


19








Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resourcesraised in world capital market

Your Answer Give Softloans to poorer countries in Asia , Give project finance from resourcesraised in world capital market


Correct Answer Advertisement which lists the managers, underwriters, , List of Providers ofrecently floated issue

Your Answer Advertisement which lists the managers, underwriters, , List of Providers ofrecently floated issue

Select The BlankQuestion Short term instruments normally issued by corporate borrowers, forhigh values, at

a discount to face value are known as ________.Correct Answer Euro Commercial Papers









20

Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movementof rates between 3 currencies

Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movementof rates between 3 currencies




Multiple Choice Single AnswerQuestion Why does a person need protection from unfavourable movement of exchange

rate?Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business

profitYour Answer Unfavourable fluctuations in exchange rate can wipe out the normal business

profit


Correct Answer Prices of capital market instruments change and are expected to changedrastically

Your Answer Prices of capital market instruments change and are expected to changedrastically



Your Answer False


Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOSmaximum $ 100 million or equivalent

Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOSmaximum $ 100 million or equivalent , Indian co should not have been black listed


Multiple Choice Multiple AnswerQuestion Which functions does the Bill of Lading serve?Correct Answer It is a document of title to goods., It is receipt of goodsYour Answer It is a document of title to goods. ,It is receipt of goods

Multiple Choice Single AnswerQuestion A Bank quotes interest rate of 9.50/10.00for six months dollar deposit, here the

bid rate is :-Correct Answer 9.50% P.A.Your Answer 9.50% P.A.


21

Question What is Sovereign Risk?Correct Answer Risk of lending to the governmentof a countryYour Answer Risk of lending to the government of acountry

Multiple Choice Single AnswerQuestion How does ICC help poor countries?Correct Answer Attract Foreign Direct investments togeather with UNCTADYour Answer Attract Foreign Direct investments togeather with UNCTAD

Multiple Choice Multiple AnswerQuestion As per BIS, recovery from the recent crisis in global capital market was mainly

due toCorrect Answer Rapid and appropriate policy response in US and other countries , Increase

inForeign Direct Investments , free flow of creditYour Answer Rapid and appropriate policy response in US and other countries , Increase in

Foreign DirectInvestments , free flow of credit

True/FalseQuestion Out of 15 member countries in European Union 12 countries commiteed

themselves for a single currency.Correct Answer FalseYour Answer True

True/FalseQuestion In red clause credit some clauses are printed in Red ink.Correct Answer TrueYour Answer True

True/FalseQuestion Transfer of funds for investment abroad is allowed freely.Correct Answer TrueYour Answer False

Select The BlankQuestion EEFC account holder is allowed to have ________ facility.Correct Answer Cheque book and nominationYour Answer Credit card, safe custody, safe deposit locker without any fee

Select The BlankQuestion Fixed interest rate Eurobond without the option to convert to equity is known as

________.Correct Answer Straight DebtYour Answer Interest rate swap

True/FalseQuestion An Indian importing goods from USA pays dollars in India.Correct Answer FalseYour Answer True


PP Form Export Declaration form Export Declaration formHealth Certificate Fumigation certificate Export Declaration formCertificate of Inspection As per importers requirement Export Declaration formCertifiate of Origin Export Promotion Council Export Declaration form


22

Question For issuing a Documentary credit The applicant is required to provide to theissuing bankdetails aboutCorrect Answer The purchase-sales contract, the mode of payment, the tenor of payment ,

The documents required, the names of authorities who would issue the documentsYour Answer The purchase-sales contract, the mode of payment, the tenor of payment ,

The track record of the buyer and seller

Multiple Choice Multiple AnswerQuestion The characteristics of an International documentary credit are :-Correct Answer It is an undertaking given by the openers bank to pay certain sum of

money , It is anundertaking given on behalf of a certain person to another person in different countryYour Answer It is an undertaking given on behalf of a certain person to another person in

differentcountry , It is a stamped agreement and is not valid unless it is signed by the issuer

True/FalseQuestion CFR = FOB plus freight paid by seller + insurance paid by seller.Correct Answer FalseYour Answer True

Select The BlankQuestion Even after liberalization of exchange controls, the Euro sterling market remained

volatilebecause of uncertainties in UK and gyrations of sterling against major ________ countriesCorrect Answer OECDYour Answer OPEC


options, swaps,futures, arbitrage operationsCorrect Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?Correct Answer Buffer Stock FacilityYour Answer Supplemental Reserve Policy

Multiple Choice Multiple AnswerQuestion What are the sources of raising funds for exports?Correct Answer Suppliers credit , ForfaitingYour Answer Suppliers credit , Forfaiting , Buyers credit , Foreign currency or Rupee

finance

True/FalseQuestion Normally the forward contracts are booked for making huge profits.Correct Answer FalseYour Answer False

True/FalseQuestion Head office of ICC is in Paris because of its First President Eliance Clementel.Correct Answer TrueYour Answer False

Select The BlankQuestion A ________ Bill of lading does not specify the terms and conditions of carriage.

23

Correct Answer Short FormYour Answer Short Form


True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate quotation.Correct Answer FalseYour Answer False


provides fundsunder ________ Scheme.Correct Answer Overseas investment facilityYour Answer Overseas investment facility

Multiple Choice Single AnswerQuestion Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by

the last week of Sept 2005. Give details of the forward contract he canbook :-Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, for

Euro 25000or less, for maturity last week of Sept.Your Answer He can book a contract for Forward Purchase, any time from May 2005 till Mid

Sept 2005,for Euro 25000 or less, for maturity last week of Sept.

Select The BlankQuestion In US Capital Market a Company prepares all the necessary documents in

advance of the public issue under the facility known as ________.Correct Answer Shelf RegistrationYour Answer Shell Registration

Multiple Choice Multiple AnswerQuestion Which common details will be available in any bill of Lading?Correct Answer Names of consigner, consignee , The port of loading and unloading,

contract of shipmentYour Answer Names of consigner, consignee , The port of loading and unloading, contract

of shipment ,The name of the vessel , The date of transportation and contract of transportation

Select The BlankQuestion Under the ________ standard the Country's Central Bank promised to buy back

the currency at certain rate of Gold.Correct Answer GoldYour Answer Interest

Select The BlankQuestion Short term instruments normally issued by corporate borrowers, forhigh values,

at a discount to face value are known as ________.Correct Answer Euro Commercial PapersYour Answer ADRs

Select The BlankQuestion The type of trade where a country sells orange juice in return for cars is known as

24

________.Correct Answer Counter TradeYour Answer Non money trade

Multiple Choice Multiple AnswerQuestion Which debits are permitted to EEFC accounts?Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation

abroad ,Payment to EOUs in India for services rendered by themYour Answer Payment to EOUs in India for services rendered by them , Payment of Gifts of

GBP 5000 per year per donor

Multiple Choice Multiple AnswerQuestion Under the liberalisation through FEMA, what can an AD offer to the clients,

without the priorpermission of RBI or Government?Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and

forward rateagreementsYour Answer Caps and collars, and forward rate agreements , Good and competitive

exchange rates and cross currency rates

Multiple Choice Multiple AnswerQuestion Sterling Market is attractive for an international investor becauseCorrect Answer Gilts offer higher attractive margin , Choice of issuing medium term and longtermbondsYour Answer Choice of issuing medium term and long term bonds , Less controls and lessformalities to be completed , Linking of issues to currency swaps

Multiple Choice Single AnswerQuestion Under which contracts the seller pays the import duty for the buyer?Correct Answer DDPYour Answer DDP

True/FalseQuestion PP Form is required when exports are made to any country by post parcel on valuepayable basis.Correct Answer FalseYour Answer True

Multiple Choice Multiple AnswerQuestion What were the immediate causes of converting the group of 5 into group of 7 andconvenetheir meeting in late 1985?Correct Answer Many Industries in USA had become uncompetitive with imports , In USA

the Tradeprotectionnism had increasedYour Answer Many Industries in USA had become uncompetitive with imports , In USA the

Tradeprotectionnism had increased , The heads of G5 insisted to have a meeting , Failure of IMF tocontrolthe exchange rates

Multiple Choice Single AnswerQuestion What are the powers of money changers?Correct Answer Purchase and sell foreign currency notes and travellers chequesYour Answer Purchase and sell foreign currency notes and travellers cheques, give import

and export

25

finance

Multiple Choice Single AnswerQuestion Who can open an EEFC account?Correct Answer Individuals , firms, companies, resident in IndiaYour Answer Individuals , firms, companies, resident in India

Multiple Choice Single AnswerQuestion What is the role of ICC towards WTO?Correct Answer To provide world business recommendations to WTOYour Answer To further the cause of WTO

Match The FollowingQuestion Correct Answer Your Answer-Swap price Difference in prices of two legs of buying and selling Quoting rate for both buyingand selling a currency-Euro Market Market in Euro currencies Market in Euro currencies-Making market Quoting rate for both buying and sellinga currency Difference in prices of twolegs of buying and selling-Spread Price difference between bid and offer Maket of 'Euro'

Select The BlankQuestion Position in a currency is said to be ________, when sales equal purchases.Correct Answer SquareYour Answer Awkward

Select The BlankQuestion Hotels and Airline companies are allowed to receive payments in Indian rupees

from foreigntourist without insisiting on ________.Correct Answer Encashment certificateYour Answer Encashment certificate

Multiple Choice Multiple AnswerQuestion Why is Bill of Exchange a Quasi Negotiable Instrument?Correct Answer It represents title to goods , It is issued under Sale of Goods actYour Answer It represents title to goods , It is issued under Transportation act , It is issued

underBill of exchange act

Multiple Choice Single AnswerQuestion Which details about forward contracts do the Exchange Controls verify ?Correct Answer Particulars of cancellation of forward cover for the equivalent of USD

500,000Your Answer Details of all contracts booked and cancelled beyond a specified limit

Multiple Choice Single AnswerQuestion In the context of International economy ,the period between 1920s and 1930s is

known asCorrect Answer Great DepressionYour Answer Great Depression

Multiple Choice Multiple AnswerQuestion What do you understand by Commercial Risk?Correct Answer Protracted default by the buyer, Insolvency of the buyerYour Answer Protracted default by the buyer, Insolvency of the buyer

26


Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a marketintelligence cell to study and monitor developments in Forex Market

Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additionalforeign currency available to ADs at cheaper rates









Your Answer True


Correct Answer The exercise or strike price, the amount , The expiration date and time, the method ofpayment

Your Answer The exercise or strike price, the amount , The expiration date and time, the method ofpayment , The Market report of the exchange which trades the option









27







Your Answer Monday









Eurobonds Eurobonds



True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.


Your Answer False

True/FalseQuestion The Prominent non banking financial institutions participating in the FOREX markets are

Pension funds, mutual funds, insurance Cos.Correct Answer True

Your Answer True


28


Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvencyfor honouring contracts

Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvencyfor honouring contracts





Correct Answer By underwriting bank to support funding for a certain period, against which borrowerscan issue short term papers


Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of seven central Banks taken

togeather in mid 1992?Correct Answer USD 275 Billion








Select The BlankQuestion As a result of the world wars in the 20th century the ________ of most of the countries

suffered heavily.Correct Answer Economies




29





Select The BlankQuestion The Trans European Automated Real Time Gross Settlement Express Transfer is popular

in ________.Correct Answer Brussels






Correct Answer True

Your Answer True


Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is anundertaking given on behalf of a certain person to another person in different country

Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is anundertaking given on behalf of a certain person to another person in different country





Correct Answer True

Your Answer True

30

True/FalseQuestion There is no difference between CIP and CIF contracts except the mode of transportation.

Correct Answer True

Your Answer True




Select The BlankQuestion When an Indian Company earns at least 50% of its average turnover from a particular

activity then that activity is considered as ________.Correct Answer Core activity







Your Answer False


offered rate for Rs?Correct Answer USD 1=Rs 50.5000






31




Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised inworld capital market

Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised inworld capital market







Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for assessing a cross border project

?Correct Answer To weed out unviable projects and rank profitable ones










32










Your Answer False



Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum$ 100 million or equivalent , Indian co should not have been black listed

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