1. The terms such as ‘placement, layering, integration of funds’ are related to which among the following?
[A] Fiscal Management
[B] Financial Stability
[C] Money Laundering
[D] Capital Market Trading
Show Answer
Correct Answer: C [Money Laundering]
Notes:
The process of laundering money generally involves three steps: placement, layering, and integration. Placement refers to injecting the “dirty money” into the legitimate financial system. Layering conceals the source of the money through a series of transactions and bookkeeping tricks. in Integration, the now-laundered money is withdrawn from the legitimate account to be used for desired purposes.
2. Through open market operations , RBI plays a very important role in which of the following markets?
[A] Gilt edged market
[B] Primary market
[C] Secondary market
[D] None of the above
Show Answer
Correct Answer: A [Gilt edged market]
Notes:
It’s a market for Gilt–edged Securities. These are high quality debt securities with very high credit worthiness issued by corporates or governments and hence they are named such. The probability of the organisation defaulting on interest and principle repayment is very low.
3. In which year India launched Targeted Public Distribution System ?
[A] 1995
[B] 1996
[C] 1997
[D] 1998
Show Answer
Correct Answer: C [1997]
Notes:
The Targeted Public Distribution System (TPDS) replaced the erstwhile PDS from June 1997. Under the new system a two tier subsidized pricing system was introduced to benefit the poor.
4. What does FDI trigger list comprises of _______?
[A] List of country-specific FDI restrictions
[B] List of all FDI proposals
[C] Permissions required to make FDI in India
[D] investors with suspected illegal sources of funds or linkages, sensitive areas (like aviation, telecommunications etc) and sensitive locations (like Jammu & Kashmir) for special scrutiny.
Show Answer
Correct Answer: D [investors with suspected illegal sources of funds or linkages, sensitive areas (like aviation, telecommunications etc) and sensitive locations (like Jammu & Kashmir) for special scrutiny.]
Notes:
The FDI trigger list in India includes investors with suspected illegal sources of funds or linkages, as well as sensitive areas like aviation and telecommunications, and sensitive locations such as Jammu & Kashmir. This scrutiny is part of India’s efforts to safeguard national security and economic interests. The Foreign Direct Investment (FDI) policy is regulated by the Department for Promotion of Industry and Internal Trade (DPIIT) in India, which aims to attract foreign investment while ensuring compliance with national regulations.
5. Progressive Taxation is most closely associated to the base which the tax proposals are generally developed is ______?
[A] Expediency Theory
[B] Cost of service approach
[C] Ability to pay approach
[D] Concentration approach
Show Answer
Correct Answer: C [Ability to pay approach]
Notes:
The correct answer is “Ability to pay approach.” Progressive taxation is designed so that individuals with higher incomes pay a larger percentage of their income in taxes compared to those with lower incomes. This approach is based on the principle that those who have a greater ability to pay should contribute more to fund public services and social programs. Historically, this concept aligns with the ideas of economists like Adam Smith, who advocated for equitable taxation based on individual financial capacity.
6. International Rubber Study Group is located at?
[A] Kua La Lumpur
[B] Singapore
[C] Phnom Penh
[D] London
Show Answer
Correct Answer: B [Singapore]
Notes:
The headquarters of International Rubber Study Group are located in Singapore. It was established in 1944 in London but was relocated in Singapore in 2008.
7. The P/E is one of the most talked about ratios in the stock market. What does P/E refer to____?
[A] Profit to Expenditure
[B] Price to Earning
[C] Profit to Earning
[D] Provisional to Estimates
Show Answer
Correct Answer: B [Price to Earning]
Notes:
The P/E ratio, or Price to Earnings ratio, is a key financial metric used to evaluate a company’s valuation. It is calculated by dividing the market price per share by the earnings per share (EPS). A high P/E ratio may indicate that a stock is overvalued or that investors expect high growth rates in the future, while a low P/E may suggest undervaluation or poor growth prospects. The P/E ratio is widely used by investors to compare the relative value of companies within the same industry.
8. The green shoe option is a clause in the underwriting agreement of an IPO, which allows to ___?
[A] Sell additional shares
[B] Record Investor demands
[C] Purchase the shares back from Investors
[D] None of them
Show Answer
Correct Answer: A [ Sell additional shares ]
Notes:
The green shoe option is a clause in the underwriting agreement of an IPO, which allows to sell additional shares, usually 15%, to the public if the demand exceeds expectations and the stock trades above its offering price. This option, also known as the over-allotment provision. It gets its name from the Green Shoe company, which was the first company to allow such an option.
9. If a company has “Trade Receivables”, this implies that __:
[A] It has made a sale but yet to collect payments
[B] It has received payments but yet to make a delivery
[C] It has received an order but yet to make delivery
[D] None of the above is a correct definition
Show Answer
Correct Answer: A [ It has made a sale but yet to collect payments ]
Notes:
If a company has receivables, this means it has made a sale but has yet to collect the money from the purchaser.
10. What is the main industry of MENA region of the World?
[A] Manufacturing
[B] Petroleum
[C] Mines and Minerals
[D] Tourism and Hospitality
Show Answer
Correct Answer: B [Petroleum]
Notes:
MENA refers to Middle East and North Africa. The population is some 381 million equal to 6% of the total world population, if we consider all the countries included commonly. Obviously, Petroleum is the major industry.
