Tag: commercial studies

Questions Related to commercial studies

Informal sector loans include _________.

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. NABARD

  2. State Bank of India

  3. Money lenders

  4. Both (A) and (B)

Show answer
Correct Option: C

In India, the Chit funds are governed / regulated by ___________.

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. RBI

  2. Central Government

  3. State Governments

  4. Local Bodies

Show answer
Correct Option: C
Explanation:

Chit funds in India are governed by the Chit Funds Act, 1982. Under this Act, the chit fund business can be register and regulated only by the individual State Governments. Regulator of chit funds is the Registrar of Chits selected by the individual state government under Section 61 of Chit Funds Act. 

Powers of negotiation vest in the Registrar and the state government disturbed is the Appellate authority. In case of failure of a chit fund business, the task for windy up such a business also vests with the individual State Governments. 

Moreover, the Prize chits and money exchange schemes are illegal and are disqualified under the Prize Chits and Money movement Schemes (Banning) Act, 1978. Powers of investigation under this Act are vested with the disturbed state police authorities.

Thus, the correct option is C.

Select the correct statement/statements regarding 'numeraire' from the given list using the code given below:
1. It is a monetary unit for denominating international exchanges on a common basis.
2. Today the Special Drawing Rights (SDRs) of the IMF is accepted as the standard numeraire in the world.

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. Only $1$

  2. Only $2$

  3. Both $1$ and $2$

  4. Neither $1$ nor $2$

Show answer
Correct Option: A
Explanation:

The US dollar is presently being used as the numeraire for all international transactions and calculating the foreign reserves of the economies (it means that an economy may be maintaining its foreign currency. Reserves in many world currencies as per its use show its total volume in the US dollars). Similarly, all transactions of the IMF are also shown in it (including its SDRs).

 Which one of the following statement is incorrect about Reverse Mortgage? 

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. It is a kind of loan through which one can get cash flow serially in return for pledging a property to a bank.

  2. It is the conveyance of an asset by a borrower to a lender as security for a loan.

  3. This scheme originated in the USA.

  4. The eligibility criteria set by the RBI states that the person should be above $60$ years of age and own a home to avail this mortgage.

Show answer
Correct Option: B
Explanation:

The policy was implemented in India in 20072007 with the objective of providing financial security to the senior citizens who own a house. This functions just opposite to the case of 'mortgage' while borrowing money from bank to buy a housei.e., the beneficiary borrows a lump-sum loan by mortgaging his/her house and the loan is repaid in equal monthly installments (EMIs). In case the beneficiary dies before clearing the dues. his/her kins may repay the rest amount of the loan and own the house. 

Co-operation, self help and mutual help are the working principle of :

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. Commercial banks

  2. Co-operative bank

  3. NABARD

  4. Reserve Bank of India

Show answer
Correct Option: B
Explanation:

Co-operation, self help and mutual help are the working principle of Co-operative bank.

Formal sources of credit do not include _____.

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. banks

  2. cooperative societies

  3. employers

  4. none of the above

Show answer
Correct Option: C
Explanation:

1. Formal sources of credit do not include employers as there is no role of these employers all these works are related to banks and the cooperatives.
2. Employers are there merely to serve the bank staff and do the work as it is asked to do by their owner.


Indian currency was last devalued in _______.

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. 1955

  2. 1956

  3. 1991

  4. 1967

Show answer
Correct Option: C
Explanation:

In 1991, India still had a fixed exchange system, where the rupee was pegged to the value of a basket of currencies of major trading partners. India started having balance of payments problems since 1985, and by the end of 1990, it found itself in serious economic trouble. The government was close to default and its foreign exchange reserves had dried up to the point that India could barely finance three weeks’ worth of imports. As in 1966, India faced high inflation and large government budget deficits.This led the government to devalue the rupee. At the end of 1991, the Indian Rupee was devalued considerably.

India devalued its rupee in 1966 and 1991.

Which of the following is not correct about 'security' of a bank loan?

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. Banks consider personal guarantee as the primary security for the loans they forward.

  2. Collaterals in the from of fixed assets are the secondary security for a loan.

  3. Unsecured loans are supported by only primary security.

  4. Every loan forwarded by banks are supported primary and secondary securities.

Show answer
Correct Option: D
Explanation:

'Signature' of the borrower is the primary security for any loan (such loans are known as 'unsecured loans; or even 'signature loans' ). All loans might not be supported by the secondary securities (fixed assets).

Since money acts as an intermediate in the exchange process, it is called _____.

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. value for money

  2. exchange value

  3. medium of exchange

  4. none of these

Show answer
Correct Option: C
Explanation:

1. Money is the medium of exchange in the modern times.
2. It can be used as a unit of account and store of value as well.
3.money acts as an intermediate in the exchange process, it is called a medium of exchange.

Cheque is a _____.

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. money

  2. legal tender money

  3. optional money

  4. none of the above

Show answer
Correct Option: C
Explanation:
1. Cheque is an instrument in writing containing an unconditional order, addressed to a banker, sign by the person who has deposited money with the banker, requiring him to pay on demand a certain sum of money only to or to the order of a certain person or to the bearer of the instrument.
2. Optional money refers to non-legal tender money which does not enjoy any statutory backing but it is generally accepted by the people in final payments and in settlements of cash transactions. It consists of credit instruments like bills of exchange, cheques, handiest, etc.