Tuesday, May 5, 2015

Day 20 - Questions


Day 20 - Money Market Instruments (Non-governmental)

( Money Market Instruments - Call and Notice Money, Certificate of Deposits, Commercial Papers, Inter-Corporate Deposits, etc )


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1.  If the tenor of transactions in Money Market is 2 to 14 days, then it is known as -
a.  Call Money Market
b.  Notice Money Market
c.  Term Money Market
d.  None of the above

2.  Which of the following is a Money Market Instrument?
a.  Call Money
b.  T-Bills
c.  Collateralized Borrowing and Lending Obligations (CBLO)
d.  All are Money Market Instruments

3.  Repo borrowings by commercial banks from RBI generally have a tenure of -
a.  1 day to 30 days
b.  1 day to 90 days
c.  1 day to 180 days
d.  1 day to 365 days

4.  Which of the following is true regarding Marginal Standing Facility (MSF)?
a.  Tenure is 1 day, and 1% of NDTL of banks is eligible for borrowing
b.  Tenure is 1 day, and 2% of NDTL of banks is eligible for borrowing
c.  Tenure is 30 days, and 1% of NDTL of banks is eligible for borrowing
d.  Tenure is 30 days, and 2% of NDTL of banks is eligible for borrowing

5.  Which of the following is false regarding borrowings of commercial banks from RBI under Bank rate?
a.  Long term borrowing, i.e., 90 days to 1 year
b.  Collateral is needed
c.  Bank rate is generally greater than Repo rate
d.  All are true

6.  Repo and Reverse Repo together is known as -
a.  Liquidity Assessment Facility
b.  Liquidity Adjustment Facility
c.  Liability Assessment Facility
d.  Liability Adjustment Facility

7.  Call Money deals with -
a.  Overnight funds
b.  funds of 2 to 14 days tenure
c.  funds of 15 days to 1 year tenure
d.  None of the above

8.  Call, Notice and Term Money are used by -
a.  Scheduled Commercial Banks, excluding RRBs
b.  Cooperative Banks, other than Land Development Banks
c.  Primary Dealers
d.  All of the above

9.  Which financial entities can issue Certificate of Deposits (CDs)
a.  Scheduled Commercial Banks, excluding RRBs
b.  Financial Institutions permitted by RBI
c.  Both (a) and (b)
d.  None of the above

10.  Certificate of Deposits issued by banks -
a.  are of min. Rs. 1 lakh and multiple thereof, with maturity of 7 days to 1 year
b.  are of min. Rs. 5 lakh and multiple thereof, with maturity of 7 days to 1 year
c.  are of min. Rs. 1 lakh and multiple thereof, with maturity of 1 month to 1 year
d.  are of min. Rs. 5 lakh and multiple thereof, with maturity of 1 month to 1 year

11.  Commercial Papers (CPs) are issued by -
a.  Corporate, with a good rating from CRA, which is registered with SEBI
b.  Primary Dealers
c.  Financial Institutions
d.  All of the above

12.  What is the minimum amount of CPs?
a.  Rs. 1 lakh
b.  Rs. 2 lakh
c.  Rs. 5 lakh
d.  Rs. 10 lakh

13.  Which of the following instrument can be issued by any corporate?
a.  Certificate of Deposits (CDs)
b.  Commercial Papers (CPs)
c.  Inter-Corporate Deposits (ICDs)
d.  Gilt-edged securities

14.  Which of the following arrangement is correct regarding risks (more risk to low risk) of instruments?
a.  CD > CP > ICD
b.  CD > ICD > CP
c.  ICD > CP > CD
d.  CP > ICD > CD

15.  Which of the following is/are collateralized lending?
a.  lending under repo rate
b.  lending under reverse repo rate
c.  lending under bank rate
d.  both (a) and (b)





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