Banking System and Capital Market MCQ Question with Answer

Banking System and Capital Market MCQ with detailed explanation for interview, entrance and competitive exams. Explanation are given for understanding.

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Question No : 1
The best way, a bank can avoid loss is to :

lend only to individuals known to the bank
accept sound collateral
give only short-term loans
lend only to bank's old customers

Question No : 2
Which among the following is the oldest Development Financial Institution of India?


Question No : 3
In India, the first bank of limited liability managed by Indians and founded in 1881 was:

Hindustan Commercial Bank
Oudh Commercial Bank
Punjab National Bank
Punjab and Sind Bank

Question No : 4
What do you understand by Bear raid?

An attempt to bring down the price of strong short selling
Simulataneous buying of shares and debentures in view of getting more values in near future
Higher rate of price paid for the particular government share or debentures
Any of the above

Question No : 5
Private Sector Mutual Funds in India were permitted in [UP PCS 2011]


Question No : 6
How do we define the terms bull and bear with regard to stock markets?

A bull is an optimistic operator who first buys and then sells shares in expectation of the price going up; a bear is a pessimistic market operator who sells the shares in expectation of buying them back at a lower price
There is nothing significantly different as both operate in the capital market
Bull is one who first sells a share and then buys it at a lower price; bear means one who first buys and then sells it in expectation of prices going up
A bull is ready to buy any share; a bear only deals in government securities

Question No : 7
Which of the following statements regarding Regional Rural Banks (RRB) in India is/are correct ?
1. The basic aim of setting up the RRBs is to develop rural economy.
2. The area of RRBs is limited to a specific region comprising one or more districts.
3. RRBs are sponsored by Commercial Banks.
Select the correct answer using the code given below: [Asstt Commdt 2011]

1 only
1 and 2 only
2 and 3 only
1, 2 and 3