Bank Exam Questions And Answers of General Knowledge

Bank Exam Questions And Answers of General Knowledge—यदि आप Banking परीक्षा की तैयारी के लिए Bank से संबंधित प्रश्न करना चाहते है तो आप यहाँ से mock test करें।

Why Take This Mock Test?

हमारा mock टेस्ट एक वास्तविक परीक्षा का अनुभव प्रदान करता है, जिससे आप वास्तविक बैंकिंग परीक्षाओं में सामना किए जाने वाले सवालों के साथ अभ्यास कर सकते हैं। यह विभिन्न टॉपिक्स को कवर करता है ताकि आप परीक्षा के हर पहलू के लिए अच्छी तरह से तैयार हो सकें।

What Topics Are Covered?

यह mock टेस्ट निम्नलिखित महत्वपूर्ण टॉपिक पर आधारित है:

• Capital Gain
• Amortization
• Term Deposit
• Margin Trading
• Financial Leverage
• Asset Allocation
• Private Equity
• Overdraft
• Syndicate Loan
• Credit Risk
• Repo Rate
• NPA (Non-Performing Asset)
• Maturity Date
• Debenture
• LTV (Loan-to-Value)
• Working Capital
• SEBI (Securities and Exchange Board of India)
• Currency Exchange Rate
• FDI (Foreign Direct Investment)
• Treasury Bond
• Interest Rate Risk
• NAV (Net Asset Value)
• Liquid Asset
• Capital Structure
• Inflation
• GNP (Gross National Product)
• Risk Management
• Certificate of Deposit (CD)

अपने बैंक एग्जाम के लिए आत्म-विश्वास बढ़ाएं हमारे Free Online Mock Test for Bank Exam के साथ। आज ही अभ्यास शुरू करें और अपनी बैंकिंग परीक्षा में सफलता की दिशा में पहला कदम उठाएं।

General Knowledge Mock Test For Bank Exams

Question 1: What is the correct meaning of the banking term “Overdraft”?

• a) The process of depositing a cheque into an account.
• b) A type of loan given by the bank for business purposes.
• c) The ability to withdraw more money than what is available in the account.
• d) The fee charged by the bank for account maintenance.

Show Answer

An “Overdraft” is a facility provided by the bank that allows account holders to withdraw more money than they have in their accounts, up to a pre-agreed limit. This is typically considered a short-term loan, and interest is charged on the amount withdrawn beyond the available balance. It is helpful in situations where immediate funds are needed but not available in the account.

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Question 2: Which of the following is an example of a negotiable instrument?

• a) Cheque
• b) Fixed Deposit Receipt
• c) Debit Card
• d) ATM Slip

Show Answer

A cheque is a negotiable instrument, meaning it can be transferred to another party in exchange for payment. It allows the holder to transfer money to another person or entity.

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Question 3: What does the term “KYC” stand for in banking?

• a) Know Your Customer
• b) Keep Your Cash
• c) Know Your Credit
• d) Keep Your Currency

Show Answer

“KYC” stands for “Know Your Customer.” It is a process used by banks to verify the identity of their customers, ensuring the legitimacy of financial transactions and preventing money laundering.

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Question 4: What is the purpose of the Reserve Bank of India (RBI)?

• a) To issue loans to citizens
• b) To regulate and control monetary policy in India
• c) To collect taxes for the government
• d) To manage foreign investments

Show Answer

The Reserve Bank of India (RBI) is the central bank responsible for regulating the country’s monetary policy, controlling inflation, and ensuring economic stability.

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Question 5: Which of the following is a function of commercial banks?

• a) Issuing currency
• b) Controlling monetary policy
• c) Accepting deposits and granting loans
• d) Collecting taxes

Show Answer

Commercial banks accept deposits from individuals and businesses and grant loans, which are essential for facilitating day-to-day financial activities.

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Question 6: Which of the following is NOT a type of bank account?

• a) Savings Account
• b) Current Account
• c) Fixed Deposit Account
• d) Insurance Account

Show Answer

“Insurance Account” is not a type of bank account. Savings, Current, and Fixed Deposit Accounts are common types of bank accounts.

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Question 7: What does the term “CRR” stand for in banking?

• a) Cash Reserve Ratio
• b) Credit Reserve Ratio
• c) Currency Reserve Ratio
• d) Capital Reserve Ratio

Show Answer

“CRR” stands for Cash Reserve Ratio, which is the minimum percentage of deposits that a commercial bank must hold as reserves in the central bank.

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Question 8: What is the full form of ATM?

• a) Automated Teller Machine
• b) Automatic Transaction Machine
• c) Automated Transfer Machine
• d) Auto Teller Management

Show Answer

ATM stands for Automated Teller Machine, which allows customers to perform banking transactions like withdrawing money, checking account balances, etc.

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Question 9: Which of the following is a feature of a Fixed Deposit account?

• a) Higher interest rate compared to savings accounts
• b) Unlimited withdrawals
• c) Flexible deposit amounts
• d) Low interest rate

Show Answer

Fixed Deposit accounts offer a higher interest rate compared to regular savings accounts, but withdrawals are typically restricted until maturity.

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Question 10: What does “NEFT” stand for in banking?

• a) National Electronic Funds Transfer
• b) National Emergency Fund Transaction
• c) National Efficient Fund Transfer
• d) National Effective Finance Transaction

Show Answer

“NEFT” stands for National Electronic Funds Transfer, which is an electronic payment system used to transfer funds between banks in India.

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Question 11: Which document is required for KYC compliance?

• a) Passport
• b) Aadhar Card
• c) Voter ID
• d) All of the above

Show Answer

Documents such as Passport, Aadhar Card, and Voter ID are commonly used for KYC (Know Your Customer) compliance to verify identity.

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Question 12: What is the meaning of “Repo Rate”?

• a) The rate at which banks lend money to the government
• b) The rate at which the central bank lends money to commercial banks
• c) The rate at which commercial banks lend money to customers
• d) The interest rate on savings accounts

Show Answer

Repo rate is the rate at which the central bank of a country (RBI in India) lends money to commercial banks to control inflation and regulate liquidity.

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Question 13: Which of the following is a form of electronic banking?

• a) Internet Banking
• b) Mobile Banking
• c) ATM transactions
• d) All of the above

Show Answer

Electronic banking includes Internet Banking, Mobile Banking, and ATM transactions, enabling users to conduct banking activities digitally.

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Question 14: What is the full form of IFSC?

• a) Indian Financial System Code
• b) International Financial System Code
• c) Indian Finance Security Code
• d) Interbank Financial Security Code

Show Answer

IFSC stands for Indian Financial System Code, a unique code used to identify bank branches for electronic fund transfers like NEFT and RTGS.

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Question 15: What is a “Cheque Bounce”?

• a) A cheque that is processed successfully
• b) A cheque that is rejected due to insufficient funds
• c) A cheque that is held for processing
• d) A cheque that is used for international payments

Show Answer

A cheque bounces when the account holder does not have sufficient funds in their account to cover the amount written on the cheque.

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Question 16: What does “MICR” stand for?

• a) Magnetic Ink Character Recognition
• b) Money Interest Credit Ratio
• c) Mobile Investment Credit Rating
• d) Monetary International Credit Regulation

Show Answer

MICR stands for Magnetic Ink Character Recognition, a technology used to verify the legitimacy of paper cheques and prevent fraud.

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Question 17: Which of the following is NOT a type of loan?

• a) Home Loan
• b) Personal Loan
• c) Savings Loan
• d) Car Loan

Show Answer

“Saving Loan” is not a type of loan. Home, Personal, and Car Loans are common loan types provided by banks.

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Question 18: What does “RTGS” stand for in banking?

• a) Real-Time Gross Settlement
• b) Real-Time General Settlement
• c) Rapid Transfer Gross Service
• d) Real-Time Government Settlement

Show Answer

RTGS stands for Real-Time Gross Settlement, a system where funds are transferred in real-time and on a one-to-one basis without netting.

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Question 19: Which of the following is considered a “Safe Investment”?

• a) Stock Market
• b) Fixed Deposit
• c) Cryptocurrency
• d) Commodity Trading

Show Answer

Fixed deposits are considered safe investments as they offer guaranteed returns and are less risky compared to the stock market or cryptocurrencies.

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Question 20: What is the purpose of a “Credit Score”?

• a) To determine tax liabilities
• b) To measure a person’s ability to repay loans
• c) To calculate interest on savings accounts
• d) To set interest rates for fixed deposits

Show Answer

A credit score helps lenders assess a borrower’s creditworthiness and their likelihood to repay loans on time.

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Question 21: What is the meaning of “Non-Performing Asset” (NPA) in banking?

• a) An asset that cannot be transferred to another bank
• b) A loan or advance where the principal or interest payment has been overdue for 90 days or more
• c) An account that has been closed by the customer
• d) A loan that has been repaid before the due date

Show Answer

A Non-Performing Asset (NPA) refers to loans or advances for which the principal or interest payment remains overdue for 90 days or more, leading to a loss for the bank.

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Question 22: What is the role of “Credit Rating Agencies”?

• a) To determine the value of the stock market
• b) To assess the creditworthiness of individuals or companies
• c) To regulate bank interest rates
• d) To monitor international trade

Show Answer

Credit Rating Agencies evaluate the financial strength of individuals, companies, and even countries, helping lenders decide on the risk of lending to them.

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Question 23: What is a “Term Loan”?

• a) A loan that is repaid in a single payment
• b) A loan that is repaid over a fixed period of time with regular installments
• c) A loan that has no repayment schedule
• d) A loan that is given to students

Show Answer

A Term Loan is repaid over a fixed period through regular installments and is usually used for business or personal purposes like buying a house or a vehicle.

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Question 24: What does “Balance of Payment” refer to?

• a) A record of a country’s imports and exports
• b) A record of all financial transactions between a country and the rest of the world
• c) A record of payments made by individuals to banks
• d) A record of bank loans provided in a year

Show Answer

The Balance of Payment is a comprehensive record of a country’s financial transactions, including trade, investments, and payments with other countries.

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Question 25: What does “Monetary Policy” regulate?

• a) Tax rates
• b) Supply of money in the economy
• c) Stock market prices
• d) Foreign exchange rates

Show Answer

Monetary policy is implemented by the central bank to control the money supply in the economy, influencing interest rates, inflation, and overall economic stability.

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Question 26: What is “Liquidity” in financial terms?

• a) The ability to convert an asset into cash quickly
• b) The amount of loans given by banks
• c) The total investments made by a company
• d) The value of the stock market

Show Answer

Liquidity refers to how easily an asset can be converted into cash without affecting its market price. Cash is the most liquid asset, while real estate is less liquid.

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Question 27: What is the “Prime Lending Rate” (PLR)?

• a) The lowest interest rate at which a bank lends money to its most creditworthy customers
• b) The highest interest rate charged by a bank for personal loans
• c) The interest rate set for government bonds
• d) The rate at which the central bank lends to commercial banks

Show Answer

The Prime Lending Rate (PLR) is the lowest interest rate offered by banks to their most creditworthy customers, typically large corporations.

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Question 28: What is the main purpose of “Anti-Money Laundering” (AML) laws?

• a) To prevent money from being lost in the stock market
• b) To detect and prevent illegal money transfers and financial crimes
• c) To regulate the amount of money individuals can withdraw
• d) To control the use of cryptocurrency

Show Answer

Anti-Money Laundering (AML) laws are designed to detect and prevent financial crimes, including money laundering, which involves hiding the origins of illegally obtained money.

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Question 29: What is the “Capital Adequacy Ratio” (CAR)?

• a) The ratio of a bank’s loans to its total deposits
• b) The ratio of a bank’s capital to its risk-weighted assets
• c) The interest rate charged on business loans
• d) The amount of interest earned on savings accounts

Show Answer

Capital Adequacy Ratio (CAR) is a measure used to protect depositors and promote the stability of financial systems by ensuring that banks have enough capital to cover their risks.

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Question 30: What does “SWIFT” stand for in banking?

• a) Society for Worldwide International Funds Transfer
• b) Society for Worldwide Interbank Financial Telecommunication
• c) Secure Worldwide Instant Fund Transfer
• d) System for World Interbank Fast Transactions

Show Answer

SWIFT stands for Society for Worldwide Interbank Financial Telecommunication, which facilitates secure international communication between banks for financial transactions.

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Question 31: What is the meaning of “Inflation” in economic terms?

• a) A decrease in the prices of goods and services
• b) An increase in the purchasing power of money
• c) An increase in the general level of prices for goods and services
• d) A sudden rise in the supply of money

Show Answer

Inflation refers to the general increase in prices of goods and services in an economy, leading to a decrease in the purchasing power of money.

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Question 32: Which of the following is a financial instrument used to raise long-term capital?

• a) Bond
• b) Savings Account
• c) Credit Card
• d) Fixed Deposit

Show Answer

Bonds are financial instruments issued by governments or corporations to raise long-term capital from investors in exchange for periodic interest payments.

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Question 33: What is the purpose of a “Letter of Credit” (LC)?

• a) To verify a customer’s credit score
• b) To ensure that a buyer’s payment to a seller will be received on time and for the correct amount
• c) To approve a loan for a small business
• d) To provide financial information about a company

Show Answer

A Letter of Credit (LC) is a guarantee provided by a bank ensuring that the buyer’s payment to a seller will be made on time and for the correct amount, often used in international trade.

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Question 34: What is a “Syndicated Loan”?

• a) A loan that is borrowed by multiple parties
• b) A loan provided by a group of lenders to a single borrower
• c) A loan offered only to high-net-worth individuals
• d) A loan that does not require collateral

Show Answer

A Syndicated Loan is a loan provided by a group of lenders and is arranged by one or more banks to provide large amounts of capital to a single borrower, usually a corporation or government.

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Question 35: What is “Amortization” in banking?

• a) The process of increasing the interest rate over time
• b) The process of gradually reducing the outstanding balance of a loan through regular payments
• c) The creation of new accounts for high-net-worth clients
• d) The reduction of fixed deposit interest rates

Show Answer

Amortization is the process by which loan payments are made in regular installments to reduce the outstanding principal balance over time, including both interest and principal.

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Question 36: What does “LIBOR” stand for in the financial world?

• a) London Interbank Offered Rate
• b) Large Investment Bank Official Rate
• c) Low Income Banking Operation Rate
• d) Long-term International Banking Operational Rate

Show Answer

LIBOR (London Interbank Offered Rate) is the average interest rate at which major global banks lend to one another in the international interbank market for short-term loans.

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Question 37: What is a “Secured Loan”?

• a) A loan that is offered without any collateral
• b) A loan that is backed by collateral, such as property or other assets
• c) A loan that is guaranteed by the government
• d) A loan that has a fixed interest rate

Show Answer

A Secured Loan is one that is backed by collateral, such as a house, car, or other valuable assets. If the borrower defaults, the lender can seize the collateral.

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Question 38: What does “FII” stand for in banking?

• a) Foreign Institutional Investor
• b) Financial Institutional Inquiry
• c) Fixed Income Investment
• d) Foreign Income Investment

Show Answer

FII stands for Foreign Institutional Investor, which refers to an entity from outside a country that invests in that country’s financial markets, such as stocks or bonds.

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Question 39: What is the main purpose of a “Recurring Deposit” account?

• a) To allow unlimited withdrawals
• b) To enable the account holder to deposit a fixed amount of money regularly and earn interest
• c) To invest in the stock market
• d) To provide short-term loans

Show Answer

A Recurring Deposit account allows individuals to deposit a fixed amount of money on a regular basis and earn interest, making it a good saving option for small investors.

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Question 40: What is “Demat” short for in banking?

• a) Deposit Material Account
• b) Dematerialized Account
• c) Demand Managed Account
• d) Depository Managed Account

Show Answer

Demat is short for Dematerialized Account, which is used to hold shares and securities in electronic form, allowing for easy trading and transfer of stocks.

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Question 41: What is “Repo Rate” used for by the central bank?

• a) To influence the amount of money banks can lend
• b) To set interest rates for savings accounts
• c) To determine the exchange rate of the local currency
• d) To regulate the stock market

Show Answer

Repo Rate is used by the central bank to influence the money supply by setting the rate at which banks can borrow money. A higher repo rate means banks will borrow less, and a lower repo rate means they will borrow more.

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Question 42: What does “RTGS” stand for?

• a) Real-Time Gross Settlement
• b) Real-Time General Settlement
• c) Rapid Transfer Guaranteed Settlement
• d) Real-Time Government Settlement

Show Answer

RTGS (Real-Time Gross Settlement) is a system where funds are transferred in real-time and on a one-to-one basis without netting, used for high-value transactions.

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Question 43: Which of the following is NOT a type of insurance provided by banks?

• a) Life Insurance
• b) Health Insurance
• c) Vehicle Insurance
• d) Travel Insurance

Show Answer

Banks typically offer life, health, and travel insurance, but vehicle insurance is usually provided by specialized insurance companies.

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Question 44: What does “KYC” stand for in banking?

• a) Know Your Customer
• b) Keep Your Cash
• c) Key Yield Calculation
• d) Known Yearly Charges

Show Answer

KYC stands for Know Your Customer, a process used by banks to verify the identity of their clients to prevent fraud and money laundering.

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Question 45: What is the “Cash Reserve Ratio” (CRR)?

• a) The percentage of a bank’s deposits that must be kept as cash reserves with the central bank
• b) The percentage of loans that banks must maintain as reserves
• c) The amount of cash banks can keep in their vaults
• d) The rate at which banks can borrow from other financial institutions

Show Answer

CRR (Cash Reserve Ratio) is the percentage of a bank’s total deposits that must be held as reserves in the central bank, ensuring liquidity and stability.

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Question 46: What is a “Savings Account”?

• a) An account that offers high interest rates for long-term investments
• b) An account for holding and accumulating savings with interest earnings
• c) An account used for business transactions
• d) An account that provides short-term loans

Show Answer

A Savings Account is designed for individuals to deposit their savings while earning interest, and it usually allows easy access to the deposited funds.

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Question 47: What is the purpose of a “Bank Statement”?

• a) To track credit card transactions
• b) To summarize all financial transactions in a bank account over a specific period
• c) To show the balance of a fixed deposit account
• d) To provide information about loan approvals

Show Answer

A Bank Statement summarizes all transactions including deposits, withdrawals, and other account activities over a particular period, providing a detailed account of the account holder’s financial activity.

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Question 48: What is the function of “Bonds”?

• a) To offer equity shares in a company
• b) To raise capital through debt issued by governments or corporations
• c) To provide insurance coverage
• d) To facilitate international trade transactions

Show Answer

Bonds are debt instruments issued by governments or corporations to raise capital, where the issuer pays periodic interest and repays the principal at maturity.

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Question 49: What does “TDS” stand for in taxation?

• a) Tax Deducted at Source
• b) Total Direct Savings
• c) Tax Deducted System
• d) Transactional Deposit Savings

Show Answer

TDS (Tax Deducted at Source) is a tax collected by the payer from the recipient’s income and paid directly to the government, reducing the recipient’s taxable income.

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Question 50: What is “Financial Leverage”?

• a) Using debt to increase the potential return on investment
• b) The amount of cash available for investment
• c) The total value of assets owned by a company
• d) The ratio of a company’s revenue to its expenses

Show Answer

Financial Leverage refers to using borrowed funds (debt) to amplify the potential return on investment, but it also increases the risk of losses.

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Question 51: What is a “Joint Account”?

• a) An account held by two or more individuals jointly
• b) An account that provides joint insurance coverage
• c) An account that requires joint approval for transactions
• d) An account managed by a company

Show Answer

A Joint Account is held by two or more individuals, allowing them to share access and management of the funds within the account.

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Question 52: What is “Gross Domestic Product” (GDP)?

• a) The total value of goods and services produced within a country in a specific period
• b) The total revenue generated by businesses in a country
• c) The total amount of exports and imports
• d) The total savings of individuals in a country

Show Answer

Gross Domestic Product (GDP) measures the total economic output of a country, representing the value of all goods and services produced within its borders over a specified period.

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Question 53: What does “IPO” stand for?

• a) Initial Public Offering
• b) International Private Offering
• c) Immediate Purchase Option
• d) Investment Public Offering

Show Answer

IPO (Initial Public Offering) refers to the process of offering shares of a private company to the public for the first time through a stock exchange.

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Question 54: What is the “Discount Rate” in banking?

• a) The rate at which banks offer discounts on loans
• b) The rate at which the central bank lends money to commercial banks
• c) The rate at which interest is charged on savings accounts
• d) The rate at which bonds are sold at a discount

Show Answer

The Discount Rate is the interest rate charged by the central bank on short-term loans to commercial banks, influencing the money supply and economic activity.

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Question 55: What does “EFT” stand for in banking?

• a) Electronic Funds Transfer
• b) Electronic Fixed Transactions
• c) Efficient Financial Transfer
• d) Electronic Fund Transactions

Show Answer

EFT (Electronic Funds Transfer) refers to the digital transfer of funds between bank accounts, including transactions like direct deposits and online payments.

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Question 56: What is “Financial Planning”?

• a) The process of managing day-to-day financial activities
• b) The process of creating a strategy for managing finances to achieve financial goals
• c) The process of allocating funds for investments
• d) The process of tracking stock market performance

Show Answer

Financial Planning involves creating a comprehensive strategy to manage finances, including budgeting, investing, and saving to achieve long-term financial objectives.

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Question 57: What does “AML” stand for in financial regulations?

• a) Asset Management Loan
• b) Anti-Money Laundering
• c) Account Maintenance Liability
• d) Advanced Money Lending

Show Answer

AML (Anti-Money Laundering) refers to regulations and practices aimed at preventing money laundering and other financial crimes.

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Question 58: What is the “Net Asset Value” (NAV) of a mutual fund?

• a) The total market value of a fund’s assets minus its liabilities
• b) The total amount of investments held by the fund
• c) The total income generated by the fund
• d) The total value of the fund’s shares

Show Answer

NAV (Net Asset Value) represents the per-share value of a mutual fund’s assets minus its liabilities, calculated at the end of each trading day.

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Question 59: What is the primary function of “Investment Banking”?

• a) To provide personal loans to individuals
• b) To help companies raise capital and manage financial assets
• c) To offer savings and checking accounts
• d) To insure against financial losses

Show Answer

Investment Banking focuses on helping companies raise capital through securities offerings, mergers and acquisitions, and managing financial assets.

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Question 60: What is the purpose of “Forex” trading?

• a) To trade international stocks
• b) To exchange foreign currencies for investment or trade
• c) To trade commodities like gold and oil
• d) To invest in domestic real estate

Show Answer

Forex trading involves exchanging foreign currencies in the global market, used for investment or trade purposes to profit from currency fluctuations.

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Question 61: What is the “Bank Rate”?

• a) The rate at which banks lend to customers
• b) The rate at which the central bank lends to commercial banks
• c) The rate at which banks offer savings interest
• d) The rate at which banks charge for overdrafts

Show Answer

The Bank Rate is the interest rate at which the central bank lends money to commercial banks, influencing overall interest rates in the economy.

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Question 62: What is a “Credit Card”?

• a) A card that allows borrowing money up to a certain limit to make purchases
• b) A card used for saving cash securely
• c) A card that provides insurance coverage for travelers
• d) A card used exclusively for investment transactions

Show Answer

A Credit Card allows users to borrow money up to a predefined limit to make purchases or withdraw cash, which must be repaid with interest if not paid off in full.

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Question 63: What does “SBI” stand for?

• a) State Bank of India
• b) Savings Bank of India
• c) Securities Bank of India
• d) Small Business Investment

Show Answer

SBI stands for State Bank of India, one of the largest and oldest banks in India, providing a wide range of financial services.

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Question 64: What is “Net Worth”?

• a) The total value of an individual’s assets minus liabilities
• b) The total income earned over a year
• c) The total value of investments held by an individual
• d) The total cash available in a bank account

Show Answer

Net Worth is the difference between an individual’s total assets and total liabilities, representing their financial health.

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Question 65: What is “Compound Interest”?

• a) Interest calculated on the initial principal only
• b) Interest calculated on the principal plus the accumulated interest
• c) Interest earned on savings accounts
• d) Interest that is deducted from loan payments

Show Answer

Compound Interest is calculated on the initial principal as well as on the interest that has been added to it, leading to exponential growth of the investment.

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Question 66: What is “Bank Reconciliation”?

• a) The process of comparing bank statements with internal records to ensure accuracy
• b) The process of reconciling loans with the bank
• c) The process of resolving disputes between banks and customers
• d) The process of verifying the identity of bank account holders

Show Answer

Bank Reconciliation involves matching the transactions recorded in a company’s books with those on the bank statement to ensure consistency and accuracy.

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Question 67: What is “Treasury Bills” (T-Bills)?

• a) Short-term debt securities issued by the government
• b) Long-term investment bonds issued by corporations
• c) Certificates of deposit offered by banks
• d) Savings bonds issued by the central bank

Show Answer

Treasury Bills (T-Bills) are short-term debt securities issued by the government to finance its short-term needs, typically with maturities ranging from a few days to one year.

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Question 68: What is the “Yield Curve”?

• a) A graphical representation of interest rates on bonds of different maturities
• b) A chart showing the growth of bank deposits over time
• c) A diagram illustrating the cash flow of a company
• d) A graph depicting stock market trends

Show Answer

The Yield Curve is a graph that plots the interest rates of bonds with varying maturities, helping investors understand the relationship between interest rates and time.

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Question 69: What is “Equity” in financial terms?

• a) The total value of assets owned by a company minus its liabilities
• b) The amount of cash available for immediate use
• c) The total revenue earned by a business
• d) The portion of a company’s earnings paid out as dividends

Show Answer

Equity represents the value of ownership in an asset or company, calculated as the total value of assets minus liabilities.

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Question 70: What does “BSE” stand for in the Indian financial market?

• a) Bombay Stock Exchange
• b) Banking Services Exchange
• c) Bond Securities Exchange
• d) Business Sector Exchange

Show Answer

BSE stands for Bombay Stock Exchange, one of India’s leading stock exchanges, where securities and commodities are traded.

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Question 71: What is “Capital Gain”?

• a) Profit earned from the sale of assets or investments
• b) Income generated from interest on savings accounts
• c) Earnings from salary or wages
• d) Dividend income from shares

Show Answer

Capital Gain refers to the profit earned when an asset or investment is sold for more than its purchase price. It is subject to taxation based on holding period and other factors.

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Question 72: What is “Amortization”?

• a) The gradual repayment of a loan through regular payments
• b) The process of calculating annual income taxes
• c) The reduction in the value of an asset due to depreciation
• d) The issuance of new shares by a company

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Amortization refers to the gradual repayment of a loan over time through regular payments that cover both principal and interest.

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Question 73: What does “NPA” stand for in banking?

• a) Non-Performing Asset
• b) National Payment Agency
• c) New Public Account
• d) Non-Profit Account

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NPA (Non-Performing Asset) refers to a loan or advance where the borrower has not made any interest or principal repayments for a specified period.

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Question 74: What is “SEBI”?

• a) Securities and Exchange Board of India
• b) State Economic Banking Institution
• c) Stock Exchange Board of India
• d) Securities and Equity Board of India

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SEBI (Securities and Exchange Board of India) is the regulatory authority for securities markets in India, overseeing market activities and protecting investors’ interests.

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Question 75: What is “Maturity Date”?

• a) The date when a loan or investment must be repaid
• b) The date when dividends are paid out
• c) The date when interest rates are adjusted
• d) The date when a bond is issued

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Maturity Date is the date on which a financial instrument, such as a bond or loan, must be fully repaid or when the investment’s term ends.

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Question 76: What is a “Certificate of Deposit” (CD)?

• a) A savings account with a fixed interest rate and maturity date
• b) A document certifying ownership of shares in a company
• c) A type of investment fund
• d) A short-term loan agreement

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A Certificate of Deposit (CD) is a savings product with a fixed interest rate and maturity date, offering a higher return compared to regular savings accounts.

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Question 77: What does “GNP” stand for?

• a) Gross National Product
• b) Gross Net Profit
• c) General National Payment
• d) Gross New Purchase

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GNP (Gross National Product) measures the total economic output of a country, including income earned by residents abroad and excluding income earned by foreigners within the country.

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Question 78: What is “Diversification” in investment?

• a) Spreading investments across various assets to reduce risk
• b) Increasing the amount of investment in a single asset
• c) Investing only in high-risk assets
• d) The process of selling off investments

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Diversification involves spreading investments across different asset classes to reduce risk and enhance potential returns by avoiding over-concentration in one area.

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Question 79: What does “NAV” stand for in mutual funds?

• a) Net Asset Value
• b) Net Annual Value
• c) Nominal Asset Value
• d) Net Actual Value

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NAV (Net Asset Value) represents the per-share value of a mutual fund’s assets minus its liabilities, calculated daily to reflect the current value of the fund’s holdings.

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Question 80: What is “Liquid Asset”?

• a) An asset that can be quickly converted into cash without significant loss
• b) An asset that generates high returns over a long period
• c) An asset with no market value
• d) An asset that is tied up in long-term investments

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A Liquid Asset is one that can be quickly and easily converted into cash with minimal impact on its value, such as cash itself, stocks, or bonds.

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Question 81: What is “Inflation”?

• a) The rate at which the general level of prices for goods and services rises
• b) The decrease in the value of money over time
• c) The increase in government spending
• d) The rise in unemployment rates

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Inflation refers to the increase in the general price level of goods and services over time, reducing the purchasing power of money.

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Question 82: What does “LTV” stand for in mortgages?

• a) Loan-to-Value
• b) Loan-to-Volume
• c) Liquidity-to-Value
• d) Liability-to-Value

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LTV (Loan-to-Value) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased, commonly used in mortgage lending.

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Question 83: What is a “Debenture”?

• a) A type of debt instrument issued by a company
• b) A type of equity security
• c) A form of insurance policy
• d) A savings account product

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A Debenture is a type of debt security issued by a company to raise capital, usually with a fixed interest rate and repayment schedule.

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Question 84: What is “Repo Rate” used for?

• a) To control the money supply by influencing interest rates
• b) To determine the value of foreign exchange
• c) To set the minimum balance requirements for accounts
• d) To manage bank reserves

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Repo Rate is used by central banks to control the money supply and manage economic stability by influencing the interest rates at which banks borrow money.

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Question 85: What is a “Term Deposit”?

• a) A deposit held for a fixed period with a fixed interest rate
• b) A deposit with no fixed term and variable interest rates
• c) A deposit that can be withdrawn anytime
• d) A type of checking account deposit

Show Answer

A Term Deposit is a savings product where money is deposited for a fixed term, earning a fixed interest rate until maturity.

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Question 86: What is “Syndicate Loan”?

• a) A loan provided by a group of lenders to a borrower
• b) A loan given by a single financial institution
• c) A short-term loan for business operations
• d) A personal loan with high interest rates

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A Syndicate Loan is provided by a group of lenders working together to provide a large loan to a borrower, sharing the risk and responsibility.

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Question 87: What is “Currency Exchange Rate”?

• a) The rate at which one currency can be exchanged for another
• b) The rate of interest charged on currency transactions
• c) The fee for converting foreign currencies into domestic money
• d) The rate of inflation in different countries

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The Currency Exchange Rate is the rate at which one currency can be exchanged for another, determined by the foreign exchange market.

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Question 88: What does “FDI” stand for?

• a) Foreign Direct Investment
• b) Fixed Deposit Interest
• c) Financial Derivative Instrument
• d) Federal Deposit Insurance

Show Answer

FDI (Foreign Direct Investment) refers to investments made by a company or individual in one country in business interests in another country.

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Question 89: What is “Working Capital”?

• a) The difference between a company’s current assets and current liabilities
• b) The capital used for purchasing long-term assets
• c) The total capital invested by shareholders
• d) The capital used for research and development

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Working Capital is the difference between a company’s current assets and current liabilities, representing the funds available for day-to-day operations.

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Question 90: What is “Risk Management”?

• a) The process of identifying, assessing, and mitigating risks to minimize impact
• b) The practice of increasing financial risks to gain higher returns
• c) The process of managing investments in high-risk assets
• d) The technique of avoiding all types of financial risks

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Risk Management involves identifying, assessing, and taking steps to mitigate or manage potential risks to minimize their impact on financial performance.

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Question 91: What is “Margin Trading”?

• a) Borrowing money to trade securities, using existing investments as collateral
• b) Trading stocks without margin requirements
• c) Investing in bonds with high margins
• d) Trading derivatives without leverage

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Margin Trading involves borrowing funds from a broker to trade securities, using existing investments as collateral, which can amplify both gains and losses.

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Question 92: What is “Financial Leverage”?

• a) Using borrowed funds to increase the potential return on investment
• b) Increasing savings to reduce debt
• c) Reducing investment risks through diversification
• d) Managing cash flow to ensure liquidity

Show Answer

Financial Leverage involves using borrowed money to amplify the potential return on investment, which also increases the risk of losses.

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Question 93: What is “Debt-to-Equity Ratio”?

• a) The ratio of a company’s total debt to its shareholder equity
• b) The ratio of cash flow to total liabilities
• c) The ratio of total assets to total liabilities
• d) The ratio of net income to total equity

Show Answer

Debt-to-Equity Ratio measures the proportion of a company’s debt relative to its shareholder equity, indicating the level of financial leverage.

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Question 94: What is “Asset Allocation”?

• a) Distributing investments among various asset categories to manage risk
• b) Allocating funds to a single high-risk investment
• c) Investing only in stocks and bonds
• d) Dividing savings into different bank accounts

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Asset Allocation involves spreading investments across various asset categories, such as stocks, bonds, and cash, to manage risk and achieve financial goals.

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Question 95: What is “Credit Risk”?

• a) The risk that a borrower may not repay a loan or meet contractual obligations
• b) The risk of losing money in the stock market
• c) The risk of inflation affecting investment returns
• d) The risk associated with currency fluctuations

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Credit Risk is the risk that a borrower will fail to repay a loan or meet other financial obligations, potentially resulting in a loss for the lender.

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Question 96: What is a “Bond”?

• a) A fixed income instrument that represents a loan made by an investor to a borrower
• b) A type of equity security
• c) A short-term investment in stocks
• d) A form of real estate investment

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A Bond is a fixed income security where an investor loans money to a borrower, typically a corporation or government, in exchange for periodic interest payments and the return of the principal at maturity.

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Question 97: What is “Capital Structure”?

• a) The mix of a company’s debt and equity financing
• b) The allocation of a company’s resources across different projects
• c) The breakdown of a company’s expenses
• d) The organization of a company’s management team

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Capital Structure refers to the way a company finances its operations and growth through a mix of debt and equity.

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Question 98: What is “Interest Rate Risk”?

• a) The risk of loss due to changes in interest rates
• b) The risk of default on a loan
• c) The risk of currency value fluctuations
• d) The risk of inflation affecting asset values

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Interest Rate Risk is the risk that changes in interest rates will affect the value of financial instruments, such as bonds or loans.

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Question 99: What is “Treasury Bond”?

• a) A long-term debt security issued by the government
• b) A short-term debt security issued by corporations
• c) A type of savings bond
• d) A high-risk investment product

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A Treasury Bond is a long-term debt security issued by the government to raise funds, typically with maturities of 10 years or more, and offers regular interest payments.

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Question 100: What is “Private Equity”?

• a) Equity investment in private companies not listed on stock exchanges
• b) Equity in publicly traded companies
• c) Investments in government bonds
• d) Shares acquired through an initial public offering (IPO)

Show Answer

Private Equity involves investing in private companies that are not listed on public stock exchanges, often through buyouts or venture capital.