HomeMock TestState PCSSSCHSSCDSSSBRO/ARO

Money and Banking (part – II)

📆 September 24, 2024

Total Questions: 268

151. 'Dalal Street' is situated at : [U.P.P.C.S. (Mains) 2012]

Correct Answer: (c) Mumbai
Solution:'Dalal Street' is a street in downtown Mumbai, that housed the Bombay Stock Exchange (BSE). It received the name Dalal Street after the Bombay Stock Exchange moved there in 1874.

152. Term 'Bull' and 'Bear' are associate with which branch of commercial activity : [U.P.P.C.S. (Pre) 2002, M.P.P.C.S. (Pre) 1998]

Correct Answer: (c) Share Market
Solution:In investing world, the terms 'bull' and 'bear' are frequently used to refer to stock market conditions. Bull market and bear market are said to be two opposite phases in a stock market. In a bull market, stock prices continue to rise over a period of time, whereas in a bear market, prices continue to decline over a period of time.

The market rise can be attributed to several factors such as a positive economic outlook, strong corporate earnings, etc. and vice versa in the case of a declining market.

One of the commonly accepted definitions of bull and bear market phases is that when the stock price rises 20% or more from its recent low or 52-week low, it is said to have entered a bull phase. On the other hand, as and when a stock falls 20% or more from its recent peak or 52-week high, it is said to have entered a bear phase.

153. In the parlance of financial investment, the term 'bear' denotes : [U.P.S.C (Pre) 2010]

Correct Answer: (a) An investor who feels that the price of a particular security is going to fall
Solution:Bears are the investors who expect the prices of securities to fall and they sell the securities and buy again when the prices actually fall

154. Which among the following is not a speculator in the stock exchange ? [U.P.RO./A.R.O. (Pre) 2017, U.P.P.C.S. (Mains) 2004]

Correct Answer: (a) Broker
Solution:Speculators are the one who work with stock exchanges for earning profit through speculations. They attempt to predict price changes and extract profit from the price moves in an asset in the short run.

There are 4 types of speculators in a stock exchange. They are Bulls, Bears, Stags and Lame Ducks. Share brokers are authorized members of the stock exchanges. They execute trades on behalf of the customers at the exchange and charges commission for rendering their services.

155. Insider trading is related to : [U.P.P.C.S. (Mains) 2007, U.P.P.C.S. (Mains) 2009, U.P.P.C.S. (Mains) 2017]

Correct Answer: (a) Share market
Solution:Insider trading is related to share market. It is the buying or selling of a publicly traded company's stock in share market by someone who has non-public, material information about that stock. It is illegal when the material information is still non-public, and this comes with stern penalties and harsh consequences. Insider trading is an unfair and illegal practice in the stock market, wherein other investors are at a great disadvantage due to the lack of important insider non-public information about a company.

156. In the context of finance, the term 'beta' refers to : [U.P.S.C (Pre) 2023]

Correct Answer: (d) a numeric value that measures the fluctuations of a stock to changes in the overall stock market
Solution:In the context of finance, the term 'beta' refers to a numeric value that measures the fluctuations of a stock to changes in the overall stock market. Beta (B) is a measure of the volatility- or systematic risk of a security or portfolio compared to the market as a whole. Beta index compares changes in the benchmark index with the effects of stock market variations on a particular share price. Shares with a beta value of 1 are regarded as a generally secure investment option, while a security that is comparatively more stable is a low beta stock i.e. has a beta rating below 1. Equities having a beta value larger than 1, or high beta stocks are often known as volatile stocks. The slightest adjustment in stock market indicators have a big influence on them.

157. Capital Market means : [U.P.P.C.S. (Pre) 2008]

Correct Answer: (a) Share market
Solution:Capital market is a place where buyers and sellers indulge in trade (buying/selling) of financial securities like bonds, stocks, etc. The trading is undertaken by participants such as individuals and institutions. Capital market trades mostly in long-term securities. The magnitude of a nation's capital markets is directly interconnected to the size of its economy which means that ripples in one corner can cause major waves somewhere else. Capital market consists of two types i.e. Primary and Secondary.

Primary Market: Primary market is the market for new shares or securities. A primary market is one in which a company issues new securities in exchange for cash from an investor (buyer). It deals with trade of new issues of stocks and other securities sold to the investors.

Secondary Market: Secondary market deals with the exchange of prevailing or previously-issued securities among investors. Once new securities have been sold in the primary market, an efficient manner must exist for their resale. Secondary markets give investors the means to resell/trade existing securities. Another important division in the capital market is made on the basis of the nature of security sold or bought, i.e. Stock market and bond market.

158. Consider the following markets : [U.P.S.C (Pre) 2023]

1. Government Bond Market
2. Call Money Market
3. Treasury Bill Market
4. Stock Market

How many of the above are included in capital market.?

Correct Answer: (b) Only two
Solution:Among the given markets, Government Bond Market and Stock Market are included in capital markets, while other two Call Money Market and Treasury Bill Market, are part of money markets. Hence, option (b) is the correct answer.

159. The most volatile part of the Organized Money Market in India is : [R.A.S./R.T.S. (Pre) 2018]

Correct Answer: (c) Call Money Market
Solution:Call/notice money market deals in short-term finance repayable on demand, with a maturity period varying from overnight to 14 days. The call/notice money market forms an important segment of the Indian money market. Under call money market, funds are transacted on an overnight basis and under notice money market, funds are transacted for a period between 2 days and 14 days. Call money market is the most volatile part of the organized money market in India as the interest rate paid on call money loans, known as the call rate, is highly volatile. It is the most sensitive section of the money market and the changes in the demand for and supply of call loans are promptly reflected in call rates.

160. Which of the following is not a participant in the India's money market : [U.P.P.C.S. (Pre) 1999]

Correct Answer: (d) RBI
Solution:Money market is an integral part of the financial system and includes instruments that provide short-term funds with maturity ranging from overnight to one year. Money market generally includes short-term unsecured (uncollateralized) interbank loans, secure (collateralized) loans (including re- purchase agreements), treasury bills (T-bills), commercial papers (CPs), and certificates of deposit (CDs). Participants in India's money market currently include commercial banks, co-operative banks, PDs (Primary Dealers), development finance institutions, insurance companies, mutual funds, NBFCs, corporates, etc. RBI is not a participant in the India's money market. The RBI undertakes monetary operation un- der the Liquidity Adjustment Facility (LAF) etc. and man- ages liquidity in the banking system.
Home  | Mock Test  | State PCS  | SSC  | HSSC  | DSSSB  | RO/ARO  | 
© 2024 Mock Test 365 | All Rights Reserved