RBI OFFICER GRADE ‘B’ ONLINE EXAM Held on : 25.08.2013 (Part-II)

Total Questions: 50

1. Which of the following statements is/are correct regarding the issuance of Tax Free Bonds in India?

(1) They usually pay lower coupons than corporate bonds
(2) They enjoy a better credit rating than corporate bonds
(3) They are generally issued by government backed entities
(4) The interest received on these bonds is tax-free
(5) All of these

Correct Answer: (5) All of these

Solution:Tax free bonds have emerged as highly popular investment option among investors due to the taxation benefit that they offer. These bonds, generally issued by government backed entities, are exempt from taxation on the interest income received from such instruments under the Income Tax Act, 1961. Tax-exempt bonds usually pay lower
coupons than corporate bonds as they enjoy a better credit rating and the interest
received is tax-free.

2. When a payment is made through RTGS/NEFT, the customer/remitter receives an acknowledgement of the payment made. What is the form of that acknowledged-gement?

(1) Downloadable acknowledgement slip from the Reserve Bank of India website
(2) Email
(3) SMS
(4) Both 2 and 3
(5) All of 1, 2 and 3

Correct Answer: (4) Both 2 and 3

Solution:Once a payment is made, the remitting bank receives a message from the Reserve
Bank that money has been credited to the receiving bank. Once the funds are credited to
the account of the beneficiary bank, the remitting customer gets a confirmation
from his bank either by an e-mail or SMS.

3. The Monetary Policy Statement 2013-14, released by the Re- serve Bank of India on 3 May 2013, expressed concerns over Current Account Deficit (CAD) as the biggest risk to Indian economy. What percentage of Gross Domestic Product (GDP) was comprised by CAD in Quarter 3 (December quarter) of 2012-2013?

(1) 4.2 per cent
(2) 5.1 per cent
(3) 5.9 per cent
(4) 6.2 per cent
(5) 6.7 per cent

Correct Answer: (5) 6.7 per cent

Solution:As per the Monetary Policy Statement 2013-14 of the Reserve Bank of India, CAD,
which is the difference between the inflow and outflow of foreign currency, had
touched a record high of 6.7 per cent in the December quarter of last fiscal year. The
CAD in 2012-13 fiscal is likely to be around 5 per cent of the GDP.

4. Which telecom company of India provides networking services in Africa?

(1) Bharti Airtel
(2) Tata Teleservices
(3) Vodafone India
(4) Reliance Communications
(5) Idea Cellular

Correct Answer: (1) Bharti Airtel

Solution:Airtel Africa is a subsidiary of Indian telecommunications company Airtel that operates
in 17 countries across Africa. It operates a GSM network in all countries, providing 2G or 3G depending upon the country of operation.

5. As per the revised estimates of poverty line in India which were released in July 2013, what was the percentage of people below poverty line in the country as a whole in 2011- 2012?

(1) 15.3 per cent
(2) 21.9 per cent
(3) 25.7 per cent
(4) 37.2 per cent
(5) 41.8 per cent

Correct Answer: (2) 21.9 per cent

Solution:According to the new estimates, there has been a sharp reduction in both absolute
numbers of poor, as well as the poverty ratio. The poverty ratio has declined to 21.9 percent in 2011-12 from 37.2 percent in 2004-05.

6. The Prime Minister of China paid a three-day visit to India in May 2013. Who is he?

(1) Li Peng
(2) Zhu Rongji
(3) Wen Jiabao
(4) Li Keqiang
(5) Hua Guofeng

Correct Answer: (4) Li Keqiang

Solution:Chinese premier Li Keqiang paid a three-day visit to India in May 2013. Li succeeded Wen Jiabao as the Prime Min- ister of China in March 2013.

7. Which of the following statements is/are not correct regarding Headline Inflation in India?

(1) It is a measure of the total inflation within an economy
(2) It doesn't take account of service sector
(3) It differs from core inflation
(4) It is also known as underlying inflation
(5) Wholesale Price Index is considered as the headline inflation indicator in India

Correct Answer: (4) It is also known as underlying inflation

Solution:Headline inflation also called as WPI inflation is a measure of the total inflation
within an economy. It differs from core inflation (also called non-food-manufacturing inflation or underlying inflation), which excludes factors such as food and energy costs.

8. What does ALM stand for in the banking industry?

(1) Application Lifecycle Management
(2) Asset Liability Management
(3) Application for Loan Management
(4) Asset Loss Management
(5) None of these

Correct Answer: (2) Asset Liability Management

Solution:In the banking sector, asset and liability management(often abbreviated ALM) is the
practice of managing risks that arise due to mismatches between the assets and liabilities. It is the management of structure of balance sheet (liabilities and assets) in such away that the net earnings from interest is maximized within the overall risk-preference.

9. The full form of IFSC is

(1) Indian Financial System Code
(2) Instant Fund for System Change
(3) Internet Foreign Sales Code
(4) Indian Foreign Service Compliance
(5) Indian Forward Securities Commission

Correct Answer: (1) Indian Financial System Code

Solution:The Indian Financial System Code (IFSC) is an alphanumeric code that uniquely
identifies a bank-branch participating in the two main electronic funds settlemen
systems in India. The funds settlement systems are: real time gross settlement (RTGS)
and the national electronic funds transfer (NEFT) systems.

10. Oscar Award winning movie 'Slumdog Millionaire' was an adaptation of the novel Q & A. who authored this novel?

(1) Arundhati Ghosh
(2) Jhumpa Lahiri
(3) Chetan Bhagat
(4) Vikas Swarup
(5) Kaushal Kishore

Correct Answer: (4) Vikas Swarup

Solution:

Q & A is a novel by Vikas Swarup, an Indian diplomat. Set in India, it tells the story of Ram Mohammad Thomas, a young waiter who becomes the biggest quiz show winner in history, only to be sent to jail on accusations that he cheated. In 2008, the book was adapted into the multiple Oscar-winning movie Slumdog Millionaire.

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