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Test: Financial and Securities Markets - 1 - B Com MCQ


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10 Questions MCQ Test - Test: Financial and Securities Markets - 1

Test: Financial and Securities Markets - 1 for B Com 2024 is part of B Com preparation. The Test: Financial and Securities Markets - 1 questions and answers have been prepared according to the B Com exam syllabus.The Test: Financial and Securities Markets - 1 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Financial and Securities Markets - 1 below.
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Test: Financial and Securities Markets - 1 - Question 1

Which money market instrument is issued by the Central Government and has maturities of 91 days, 182 days, and 364 days?

Detailed Solution for Test: Financial and Securities Markets - 1 - Question 1
Treasury Bills (T-Bills) are issued by the Central Government with maturities of 91 days, 182 days, and 364 days. They are short-term debt instruments used for government borrowing.
Test: Financial and Securities Markets - 1 - Question 2

What is the primary objective of the Reserve Bank of India (RBI)?

Detailed Solution for Test: Financial and Securities Markets - 1 - Question 2
The primary objective of the Reserve Bank of India (RBI) is to ensure monetary stability in India. This includes controlling inflation and managing economic growth through various monetary policy measures.
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Test: Financial and Securities Markets - 1 - Question 3

What does the term "Repo Rate" refer to in the context of the Reserve Bank of India (RBI)?

Detailed Solution for Test: Financial and Securities Markets - 1 - Question 3
The "Repo Rate" refers to the rate at which the Reserve Bank of India (RBI) lends money to commercial banks in India. It is a key policy rate used by RBI to control liquidity and credit in the economy.
Test: Financial and Securities Markets - 1 - Question 4
Which money market instrument is issued by corporations and financial institutions to raise short-term funds?
Detailed Solution for Test: Financial and Securities Markets - 1 - Question 4
Certificate of Deposits (CDs) are money market instruments issued by corporations and financial institutions to raise short-term funds. They are similar to promissory notes and have fixed maturity periods.
Test: Financial and Securities Markets - 1 - Question 5
What is the primary role of the Discount and Finance House of India (DFHI) in the Indian money market?
Detailed Solution for Test: Financial and Securities Markets - 1 - Question 5
The primary role of the Discount and Finance House of India (DFHI) in the Indian money market is to develop an active secondary market in money market instruments. It deals in various money market instruments and plays a crucial role in their trading.
Test: Financial and Securities Markets - 1 - Question 6
Which money market instrument is unsecured and issued by companies and financial institutions at a discounted rate from their face value?
Detailed Solution for Test: Financial and Securities Markets - 1 - Question 6
Commercial Papers (CP) are unsecured money market instruments issued by companies and financial institutions at a discounted rate from their face value. They are typically used for short-term financing.
Test: Financial and Securities Markets - 1 - Question 7
What is the primary function of the Money Market Mutual Funds (MMMFs) in the Indian money market?
Detailed Solution for Test: Financial and Securities Markets - 1 - Question 7
The primary function of Money Market Mutual Funds (MMMFs) in the Indian money market is to provide short-term investment options to individual investors. They invest in a variety of money market instruments on behalf of investors.
Test: Financial and Securities Markets - 1 - Question 8
What is the primary advantage of Treasury Bills (T-Bills) as an investment?
Detailed Solution for Test: Financial and Securities Markets - 1 - Question 8
The primary advantage of Treasury Bills (T-Bills) as an investment is that they have zero risk weightage. Since they are issued by the government, they are considered to be free of credit risk.
Test: Financial and Securities Markets - 1 - Question 9
What is the minimum amount for which Treasury Bills (T-Bills) are available in India?
Detailed Solution for Test: Financial and Securities Markets - 1 - Question 9
Treasury Bills (T-Bills) are available for a minimum amount of Rs. 25,000 in India. This is the minimum investment amount for individuals, firms, trusts, institutions, and banks.
Test: Financial and Securities Markets - 1 - Question 10
Which money market instrument is used for short-term borrowing and lending among banks and financial institutions, with transactions involving the sale and repurchase of securities?
Detailed Solution for Test: Financial and Securities Markets - 1 - Question 10
Repurchase Agreements (Repos) are used for short-term borrowing and lending among banks and financial institutions. They involve the sale and repurchase of securities, typically government securities, as collateral.
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