MCQs on IFMS: Indian Financial Management| Accounting MCQs
The financial system is responsible for exchanging funds
between lenders and borrowers. In India, the financial system is regulated by
independent regulators in sectors such as insurance, banking, capital markets,
and services. This system plays a crucial role in the economic growth of a
country by mobilizing surplus funds and utilizing them productively.
What is the role of the
financial system in a country?
A) To
regulate the insurance sector
B) To
mobilize surplus funds and utilize them effectively
C) To
promote non-productive activities
D) None of
the above
Answer: B
What are the features
of the Indian financial system?
A) It
encourages only savings
B) It helps
in allocation of risk
C) It
discourages investment
D) None of
the above
Answer: B
What are the major
components of the Indian financial system?
A) Financial
Institutions, Financial Markets, Financial Assets, Financial Institutions
B) Financial
Institutions, Financial Markets, Financial Instruments, Financial Services
C) Financial
Assets, Financial Services, Financial Markets, Financial Intermediaries
D) None of
the above
Answer: B
What is the role of
financial institutions in the Indian financial system?
A) To act as
intermediaries between savers and investors
B) To
regulate the financial markets
C) To
provide loans only to the government
D) None of
the above
Answer: A
How can financial
institutions be classified?
A) Into
banking institutions and non-banking financial institutions
B) Into
public and private financial institutions
C) Into
foreign and domestic financial institutions
D) None of
the above
Answer: A
What is the primary
purpose of the Reserve Bank of India?
a) To run
commercial banks in India
b) To
regulate the Indian banking industry
c) To
provide credit facilities to weaker sections
d) To
provide credit facilities to small farmers and entrepreneurs
Answer: b)
To regulate the Indian banking industry
Which of the following
is not a type of co-operative credit society in India?
a) Rural
credit societies
b) Urban
credit societies
c) Primary
agriculture societies
d)
Non-credit societies
Answer: c)
Primary agriculture societies
How many nationalized
banks were there in India after the second round of nationalization in 1980?
a) 6
b) 14
c) 20
d) 27
Answer: c)
20
What is the primary
difference between indigenous bankers and money lenders?
a)
Indigenous bankers receive deposits, while money lenders do not
b)
Indigenous bankers charge higher interest rates than money lenders
c) Money
lenders are regulated by the government, while indigenous bankers are not
d)
Indigenous bankers are primarily engaged in banking, while money lenders are
primarily engaged in money lending
Answer: d)
Indigenous bankers are primarily engaged in banking, while money lenders are
primarily engaged in money lending
What is the purpose of
regional rural banks in India?
a) To
provide credit facilities to weaker sections
b) To
provide banking services and credit to small farmers and entrepreneurs in rural
areas
c) To
regulate the Indian banking industry
d) To
operate as private firms or individuals who give loans and receive deposits
Answer: b)
To provide banking services and credit to small farmers and entrepreneurs in
rural areas
What are financial
markets?
A. Markets
for goods and services
B. Markets
for financial assets and credit instruments
C. Markets
for raw materials
D. Markets
for machinery and equipment
Answer: B
What are the functions
of financial markets?
A. To
facilitate production of goods
B. To assist
the process of balanced economic growth
C. To
provide financial convenience
D. To cater
to the various needs of the households
Answer: B, C
How many types of
organised markets are there?
A. One
B. Two
C. Three
D. Four
Answer: B
What is the maturity
period of financial assets dealt in the capital market?
A. Less than
one year
B. Between
one to two years
C. Above two
years
D. It varies
Answer: C
What is the industrial
securities market?
A. A market
for securities related to industry
B. A market
for government securities
C. A market
for short-term loans
D. A market
for real estate
Answer: A
What are financial
markets?
A) The
institutional arrangements for dealing in financial assets and credit
instruments of different types.
B) A place
where people buy and sell stocks.
C) A market
for buying and selling goods and services.
D) None of
the above.
Answer: A
What are the functions
of financial markets?
A) To
facilitate creation and allocation of credit and liquidity.
B) To serve
as intermediaries for mobilization of savings.
C) To assist
the process of balanced economic growth.
D) All of
the above.
Answer: D
What are the two types
of organized financial markets?
A) The stock
market and the bond market.
B) The
capital market and the money market.
C) The
foreign exchange market and the commodity market.
D) None of
the above.
Answer: B
What is the capital
market?
A) A market for
financial assets which have a short maturity.
B) A market
for financial assets which have a long or indefinite maturity.
C) A market
for buying and selling real estate.
D) None of
the above.
Answer: B
What is the government
securities market?
A) A market
where government securities are traded.
B) A market
for buying and selling government-owned companies.
C) A market
for buying and selling gold and silver.
D) None of
the above.
Answer: A
What is the long term
loans market?
A) A market
where short term loans are traded.
B) A market
where long term loans are traded.
C) A market
where people borrow money to buy stocks.
D) None of
the above.
Answer: B
What is the money
market?
A) Market
for long term funds
B) Market
for purely short term funds
C) Market
for trading equity shares
D) Market
for foreign exchange
Answer: B
Which market deals with
extremely short period loans repayable on demand?
A)
Commercial bills market
B) Treasury
bills market
C) Short
term loan market
D) Call
money market
Answer: D
What is the special
feature of the call money market?
A) It is a
market for Bills of Exchange
B) It is a
market for long term loans
C) It is
highly liquid
D) It deals
with government securities
Answer: C
What is a treasury
bill?
A) A market
for short term loans
B) A
promissory note or finance bill issued by the Government
C) A bill of
exchange arising out of trade transactions
D) A type of
equity share
Answer: B
Which market is
associated with the presence of stock exchanges?
A) Treasury
bills market
B) Call
money market
C)
Commercial bills market
D) Short
term loan market
Answer: B