LIC AAO 2019 – Financial Awareness Questions (Day – 31)

Dear Aspirants, LIC AAO is one the most important exam in the competitive examination. LIC AAO mains exam consists of four sections i.e. Reasoning ability, Data Analysis & Interpretation, General knowledge & Current affairs and Insurance & Financial Market Awareness. Insurance & Financial Market Awareness section comprises of 30 questions.  Insurance & Financial Market Awareness questions plays an important role in boosting up the score in mains examination and also helps in interview. Here we are providing new series of Practice Questions on Financial awareness. Aspirants can make use of it, to improve score in Insurance & Financial Market Awareness section.

[WpProQuiz 6012]

1) In India, an Asset Reconstruction Company is regulated by?





e) RBI

2) Narrow Money is the term in monetary aggregates, which is represented by?

a) M1

b) M2

c) M3

d) M4

e) M5

3) Which among the following commodity exchange has launched India’s first commodity options in gold?

a) National Spot Exchange Limited (NSEL)

b) Indian Commodity Exchange Limited (ICEX)

c) National Commodity & Derivatives Exchange Limited (NCDEX)

d) Multi-Commodity Exchange of India Ltd (MCX)

e) Securities and Exchange Board of India (SEBI)

4) What should be the minimum processing capacity of the Currency Chests according to the latest notification of the RBI?

a) 5,50,000 pieces banknotes/day

b) 4,40,000 pieces banknotes/day

c) 2,20,000 pieces banknotes/day

d) 6,60,000 pieces banknotes/day

e) 7,70,000 pieces banknotes/day

5) The branches of selected banks authorized by the RBI to stock rupee notes and coins for the circulation in the economy is known as________

a) Blue Chip

b) Front Office

c) Currency Chest

d) Holding Company

e) None of these

6)Which bank becomes the first lender to impose charges On UPI transactions, namely, Paytm, Google Pay, PhonePe?

a) ICICI Bank

b) City Union Bank

c) Kotak Mahindra Bank

d) Lakshmi Vilas Bank

e) None of these

7)What is the limit of Ways and Means Advances (WMA) set up by Reserve Bank of India(RBI) for the first half of the financial year 2019-20?

a) Rs.90000 crore

b) Rs.75000 crore

c) Rs.25000 crore

d) Rs.50000 crore

e) None of these

8) Under which project, Indian Navy has initiated the process to build six lethal submarines worth over Rs.50000 crore?

a) Project – 75I

b) Project – 50I

c) Project – 06I

d) Project – 70I

e) None of these

9) How much dividend will be paid by RBI to the government this year?

a) Rs 28000 crore

b) Rs 25000 crore

c) Rs 27000 crore

d) Rs 31000 crore

e) Rs 45000 crore

10) Recently, the central government infused how much amount into 12 Public Sector Banks?

a) Rs 47521 crore

b) Rs 48239 crore

c) Rs 45125 crore

d) Rs 51254 crore

e) Rs 58254 crore


1) Answer: e)

The leading problem in the country right now is alarming volume of Non-Performing Assets with the banking system. Several attempts were made to tackle NPAs. A serious such step was the creation of dedicated institutions called Asset Reconstruction Companies or ARCs that purchases bad assets or NPAs from banks at a negotiable price and helps banks to clean up their balance sheets (by removing the NPAs). RBI has got the power to regulate the ARCs.

2) Answer: a)

Different measures of money supply. Not all of them are widely used and the exact classifications depend on the country. M0 and M1, also called narrow money, normally include coins and notes in circulation and other money equivalents that are easily convertible into cash. M2 includes M1 plus short-term time deposits in banks and 24-hour money market funds. M3 includes M2 plus longer-term time deposits and money market funds with more than 24-hour maturity. The exact definitions of the three measures depend on the country. M4 includes M3 plus other deposits. The term broad money is used to describe M2, M3 or M4, depending on the local practice.

3) Answer: d)

The Multi-Commodity Exchange of India Ltd (MCX) launched India’s first commodity options in gold, giving stakeholders a new set of financial instruments to hedge their price risks. Launched by Union Finance Minister ArunJaitley in New Delhi on the auspicious day of Dhanteras, the gold options received an encouraging response on Day 1.

4) Answer: d)

Processing capacity of 6,60,000 pieces of banknotes per day. For those situated in the hilly/ inaccessible places, capacity of 2,10,000 pieces of banknotes per day

5) Answer: c)

Currency Chest is a bank branch authorised by RBI to hold the money for distribution of money to other bank branches. It acts as an extended arm of RBI for the circulation of currency in the economy.

6) Answer: c)

Starting from 1st May, 2019, India’s private sector bank, Kotak Mahindra Bank would become the first lender to levy charges on peer-to-peer (P2P) UPI transactions available across all platforms, namely, Paytm, Google Pay, PhonePe, Trucaller Pay among others. For Kotak Mahindra Bank’s account holders, the first 30 peer-to-peer UPI fund transfer would be free of cost. Once a person exceeds 30 UPI transactions, he will be charged Rs. 2.50 per transaction for of Rs. 1000 or less. For transfers exceeding Rs. 1000, the bank will charge Rs. 5 plus 18% GST. No additional charges have been imposed upon reception of money via UPI for merchant transactions or bill payments.

7) Answer: b)

The Reserve Bank of India has set the limits for Ways and Means Advances (WMA) to Rs. 75000 crore for the first half of the financial year 2019-20 (April 2019 to September 2019). As and when the government of India utilises 75% of the WMA limit, the central bank would activate fresh floatation of market loans. The rate of interest issued on the Ways and Means Advances (WMA) will be Repo Rate while the overdraft will exceed the Repo Rate by flat 2%. The WMA needs to be vacated after 90 days.

8) Answer: a)

Under the ambitious Project75-India, the Indian Navy desires to build 6 standard diesel-electric submarines. These submarines would be 50% massive in size than the Scorpene class submarines which are under-construction at the Mazagon Dockyards Limited. This would incur an overall cost of Rs. 50,000 crore. Since the maritime force needs the boats to have minimum 12 Land Attack Cruise Missiles (LACM) and Anti-Ship cruise missiles (ASCM), it wants the diesel-electric submarines to be furnished with heavy-duty firepower.

9) Answer: a)          

RBI will pay an interim dividend of Rs 28000 crore to the government, a move that will help the Centre keep fiscal deficit in check.

10) Answer: b)

The Central Government approved recapitalisation of 12 public sector banks with an infusion of Rs 48,239 crore.


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