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.
1) IFSC code is used to identify the specific branch taking part in the four primary Electronic Funds Settlement Systems in India. _________ is not a part of these four systems.
a) Electronic Clearing System (ECS)
b) Real Time Gross Settlement (RTGS)
c) National Electronic Funds Transfer (NEFT)
d) Immediate Payment Service Systems (IMPS)
e) Centralised Funds Management System (CFMS)
2) CRISIL is a ___________________.
a) Banking supervisory agency
b) Small Finance Bank
c) Internet banking portal
d) Credit Rating Agency
e) Investment Fund
3) ___________ is currency that moves regularly, and quickly, between financial markets, so investors ensure they are getting the highest short-term interest rates available.
a) Fire Money
b) Ice Money
c) Cold Money
d) Frozen Money
e) Hot Money
4) ‘CBLO’ is a money market instrument operated by ____________.
c) Ministry of Finance
5) Motif of Sanchi Stupa can be seen on the reverse side of _______ note.
a) Rs. 10
b) Rs. 50
c) Rs. 200
d) Rs. 500
e) Rs. 2000
6) In February 2019, the Asian Development Bank has bought a 14% stake in __________ for ₹ 137 Crore.
a) Mahindra & Mahindra Financial Services
b) Sundaram Finance
c) Manapuram Finance
d) Muthoot Finance
e) Annapurna Finance
7) Recently, the Reserve Bank of India has set Ways and Means limit for government at ₹ 75000 Crore. Which among the following is true about Ways and Means Advances (WMA)?
a) WMA is a temporary loan facility only to central government.
b) WMA has to be vacated after 30 days.
c) The interest rate on WMA would be Reverse repo rate.
d) The interest rate on the overdrafts would be 2% more than the Repo rate.
e) All the above are true
8) Recently, the International Monetary Fund has cut India’s growth forecast for the financial year 2019-20 to _______.
9) What is the current Marginal Standing Facility Rate (MSF) of Reserve Bank of India?
10) The National Payments Corporation of India has slashed the usage fees to _________ for UPI transactions up to ₹ 1000.
a) 10 Paisa
b) 25 Paisa
c) 50 Paisa
d) 74 Paisa
e) 100 Paisa
1) Answer: a)
IFSC stands for Indian Financial System Code. It is a 11-digit alpha-numeric code that uniquely identifies a bank branch participating in any RBI regulated funds transfer system. The IFSC code helps to transfer money using,
- Real Time Gross Settlement (RTGS)
- National Electronic Funds Transfer (NEFT)
- Immediate Payment Service Systems (IMPS)
- Centralised Funds Management System (CFMS)
2) Answer: d)
Indian credit rating industry has evolved over a period of time.
Indian credit rating industry mainly comprises of CRISIL, ICRA, CARE, ONICRA, FITCH & SMERA. CRISIL is the largest credit rating agency in India, with a market share of greater than 60%.
It is a full-service rating agency offering its services in manufacturing, service, financial and SME sectors.
3) Answer: e)
Hot money is currency that moves regularly, and quickly, between financial markets, so investors ensure they are getting the highest short-term interest rates available.
It refers to funds that are controlled by investors who actively seek short-term returns.
Hot money continuously shifts from countries with low-interest rates to those with higher rates; these financial transfers affect the exchange rate if there is a high sum and also potentially impact a country’s balance of payments.
4) Answer: d)
‘Collateralized Borrowing and Lending Obligation (CBLO)’, as the name implies facilitates in a collateralized environment, borrowing and lending of funds to market participants who are admitted as members in CBLO Segment.
CBLO is conceived and developed by ‘Clearing Corporation of India Ltd (CCIL)’.
It is hosted and maintained by Clear Corp Dealing Systems (India) Ltd, a fully owned subsidiary of CCIL.
5) Answer: c)
6) Answer: e)
The Asian Development Bank (ADB) has bought a 14% stake in micro-financier Annapurna Finance for ₹ 137 Crore.
ADB’s investment in the Bhubaneswar-based Annapurna is an equity expansion, while a few of the existing investors raised their holding in the MFI through secondary market deals totalling ₹ 75 Crore.
7) Answer: d)
In Ways and Means Advance, the interest rate on the overdrafts would be 2% more than the repo rate.
WMA is a temporary loan facility provided by the Reserve Bank of India to the central and state governments to meet their temporary mismatches in the receipts and Payments.
It has to be vacated after 90 days and the interest rate for WMA is currently charged at the repo rate.
When the WMA limit is crossed the government takes recourse to overdrafts, which are not allowed beyond 10 consecutive working days.
The interest rate on overdrafts is 2% more than the repo rate.
8) Answer: b)
The International Monetary Fund (IMF) has cut India’s growth forecast for 2019-20 from 7.5% to 7.3%.
It has further projected the country to grow at 7.5% in 2020-21, supported by the continued recovery of investment & robust consumption.
9) Answer: b)
The current Marginal Standing Facility Rate is 6.25%.
10) Answer: a)
The National Payments Corporation of India has slashed usage fees to 10 paisa from 25 paisa for Unified Payments Interface transactions up to ₹1,000 for small transactions to expand the system’s adoption among banks and payment service providers.
The charge for transactions above ₹1,000 has been retained at 50 paisa.