01. A Blue Chip meansa) Excellent Management Professionalb) Shares of good Companiesc) Reinforced Concreted) Blue Coloured Precious Stones02. A Bridge finance is extended for overcominga) Delay in getting of the public issueb) Delay in disbursement of term loanc) Delay in disbursement of working capital for completing the documentationd) For A & Be) A, B & C03. As per SEBI guidelines , any entity /person engaged in the marketing and selling of mutual funds products is required to pass a certification test and obtain a registration number from case ofa) SEBI (Securities and Exchange Board of India)b) AMFI (Association of Mutual Funds in India )c) NSE (National Stock Exchange)d) A, B & C04. Interest charged in advance accounts as per RBI directive can not be subject to scrutiny by court. This is provided ina) Section 35A of BR Actb) Section 21(A) of BR Actc) Of BR Actd) Section 26 of RBI Act05. A floating charge meansa) Charge at the time or before the company is floatedb) Charge on all floating assets of the companyc) An equitable charge on all assets of the companyd) Any of the above.06. The charge by way of lien over goods belonging to a company must be registered with Registrar of Companies within a period ofa) 30 days of creation of lawb) This charge need not be registered as this is not hypothecation, mortgage etcc) 30 days of default in repaymentd) A or C whichever is earlier07. Hypothecation is defined ina) Hypothecation Actb) Indian Contract Actc) Transfer of Property Actd) SARFAESI Act08. The State Govt. wants to seize the goods pledged to bank as the borrower has defaulted in payment of tax. In this case,a) Govt dues enjoys priority over bank duesb) Bank dues enjoys priority over Government duesc) Both enjoys equal priorityd) The Government cannot seize the goods.09. The auctionable claim is assigned in favour of more than one assignee at different points of time. The priority of charge is determined with reference to date ofa) Execution of notice of assignmentb) Execution of the written instrument for assignmentc) Receipt of notice of assignmentd) NoA10. A Mortgage cannot be enforced in the absence ofa) Delivery of the title deedsb) Legal Opinionc) Narration in Title deeds registerd) Pecuniary obligation.11. A simple mortgage need be registered whena) The Loan amount exceed Rs.100/-b) Value of mortgaged property exceeds Rs.100/-c) A or B whichever exceeds Rs.100/-d) Both A & B12. A Mortgage of the mortgaged property is calleda) Sub-mortgageb) Second Mortgagec) Re-mortgaged) Fraudulent Mortgage13. For determining the advance amount the shares will be valued on the basis ofa) Current market priceb) Average market price for the last 12 monthsc) Face Valued) A or B whichever is lower.14. Assignment of LIC policy is done as per section…… of ……. Act.a) 132 of Transfer of Property Actb) 38, Indian Insurance Act 1938c) 138 of Contract Actd) NOA15. Government Promissory notes should be sent to public debt office to confirm genuiness ofa) The Promissory noteb) Endorsementc) Alternations, if anyd) All the above.16. Gold Loans are given only to properly introduced persons because ofa) RBI’s directivesb) Bank will lose the right to sell the gold if the pledgee’s title is defectivec) Sec.131 of Negotiable Instrument Actd) All the above.17. Reserve created out of profit from business operation is known asa) Capital Reserve b) Profit Reservec) Revenue Reserve d) Free Reserve18. The following is a Term Liabilitya) Debentures payable within a year from the date of Balance Sheetb) Preference Shares payable within a period of one year from the date of Balance Sheetc) Term Loan instalments payable in a yeard) Deposit from public payable in 2 years time.19. Investment in Shares of other companies can be classified as Current Asset only when theshares area) Quotedb) Relate to trade investmentc) A &Bd) Shares cannot be classified as Current Assets20. The following is not usually classified as Other Non Current Assetsa) Advance given to Directorsb) Tender Depositc) Receivable outstanding beyond 12 monthsd) Preliminary and Pre operative expenses21. A unit is showing a net profit of Rs.46,000/-. Dividend received Rs.8000/-. Operatingexpenses is Rs.96000/-. Find the gross profita) 134000 b) 150000 c) 14200022. A firm paid Rs.16 lacs for purchase of a business with machinery worth Rs.10 lacs andother assets worth Rs.4 lacs. In this case the difference of Rs.2 lacs is treated asa) P&L Loss on purchase of assetb) Goodwill Intangible Assetc) Fixed Asset by inflating the value of fixed assetd) Current Asset by inflating the value of current asset23. If a sum of Rs10,000/accumulates to Rs16,000/after 3 years at simple Interest , what is the rate of Interest.a) 16%b) 25%c) 23%d) 20%24. The Net Working Capital refers toa) Liquid surplusb) Borrowers Contributions from long term source to short term usec) Excess Current Asset over Current Liabilityd) All the above.25. The duration of an operating cycle in 30 days. The operating cycle in this case repeats……. times a yeara) 30 timesb) 12 timesc) 10 timesd) 52 times26. The following is not a chargeable current assetsa) Book debtb) Sparesc) Work in processd) Construction work in progress27. As per RBI guidelines, a bank is required to assess the working capital on the basis of the following methoda) Turnover Methodb) Cash Budget Methodc) MPBF of Tandon Methodd) Any Method as decided by the individual banks28. As per the Second method of lending the borrowers contribution from long term sourcea) is minimum 25% of total current assetsb) is restricted to 25% of working capital gapc) is 25% of other current liabilitiesd) any amount which the unit can bring29. Total Current Asset of a unit is Rs.300 lacs. Other Current Liabilities is Rs.200 lacs. The MPBF as per Ist Method & 2nd method can bea) 75 and 25 lacsb) 25 lacs and 75 lacsc) Rs.100 lacs & Rs.150 lacsd) Rs.20 lacs & Rs.80 lacs30. A borrower need not bring any matching contribution from long term sources in respect ofa) Export Receivablesb) Finished goods produced for a specific export orderc) Adhoc limitsd) A & B31 A Company makes a single product with a sales price of Rs.10/- and a marginal cost ofRs.6/-. Fixed Cost are Rs.60000/- p.a. In this case,Number of units at break evena) 15000b) 10000c) 6000d) none of the above.32. In the above problem, Profit Volume Ratioa) 30%b) 40%c) 50%d) 60%33. The long term use is 120% of long term source. This indicates the unit hasa) CR 1.2b) Negative TNWc) Low Capitald) Negative NWC34. Tangible Networth is computed bya) Total Tangible Asset less outside liabilitiesb) Capital, free reserves & surplus less Intangible Assetc) Networth less Intangible Assetd) All the above.35. A company has a networth of Rs.5 lacs. Term liability Rs.10 lacs, Fixed Asset of Rs.16 lacs and Current Asset Rs.25 lacs. There is no intangible asset or ONCA. It's net working capital isa) Rs. 10 lakhsb) Rs. 1 lakhc) Rs. 9 lakhd) Rs. (-) 1 lakh36. Financial leverage meansa) use leveraged lease to plan tax liabilityb) High degree of solvencyc) Law bank financed) Use of more debt capital to increase profit.37. Diversion meansa) Diversifying to activities not related to main businessb) Retrenching employeesc) Use of Current Assets for payment of Term Liabilityd) Use of Current Liabilities for long term useExamine the following balance sheet to answer the question thereafter:Liability AssetEquity Capital 200 Gross Block 1000Less: Dep 200-------Preference Share Capital 100 Net Block 800Term loan 600 Inventory 300Bank Overdraft 400 Investment in Govt. security 50Sundry Creditors 100 Preliminary expenses 100------- Receivables 150 -------1400 140038. Capital Gearing Ratioa) 0.78b) 1.20c) 0.67d) 0.8739. Debt Equity Ratio isa) 2:1b) 3:1c) 4:1d) 1:140. Total Outside Liability/TNWa) 3.67:1b) 5.50:1c) 12 : 1d) 6 : 141. Net working capitala) 100b) NILc) 200d) Cannot be calculated42. Quick Ratioa) 0.4:1b) 2.1:1c) 1.5:1d) 1:143. Total Tangible Asseta) 1400b) 1300c) 1500d) 160044. Opening stock of raw material is Rs.30 lacs, closing stock is Rs.50 lacs. Annual purchase is Rs.500 lacs. What is the average period of holding of Raw Materials?a) 2 Mb) 1.5 Mc) 1 Md) NOA45. Holding period of Receivables is calculated with reference toa) Cost of Salesb) Cost of Productionc) Gross Salesd) NOA.46. Creditors Velocity expresses thea) Maximum period for which credit is givenb) Average period of credit enjoyedc) Minimum period of credit givend) Minimum period for which credit enjoyed.47. The following is a “Means of Finance” for the cost of projecta) Leasingb) Subsidyc) Deferred Credit from Suppliersd) All the above.48. For a large and medium units DSCR should bea) Maximum 2:1 (b) Maximum 1.5:1c) Minimum 2:1 (d) Minimum 1.5:149. Variable Cost and Sale Price remaining the same, a rise in fixed cost result ina) High BEP ( High Break even point)b) Low BEPc) High Margin of Safetyd) B&C50. What is the formula for charging compound interest with Annual Compounding.a) I = Pnrb) P+Ic) A = P( 1+r)nd) Any of the 351. What is the minimum period to be allowed to drawee to decide on acceptance / rejections ofa usance billa) 2 Daysb) 48 Hoursc) 48 Hrs including public holidaysd) 48 hrs excluding public holidays52. Ramesh deposited Rs 10,000/ for 3 years . The Interest is compounded annually at 10% . What will be the amount receivable by Ramesh at the end of 3 year period.a) 13,310b) 13,000c) 12,000d) 13,30053. While calculating the value of (1+.10)3 (to the power of 3) the same can be calculateda) manuallyb) using calculatorc) using MS Exceld) all the above54. Annuities area) The annual interest payable or receivable in a debt or an investment.b) Lumpsum payment made any time during the course of a fixed period of time.c) The total amount payable annually in respect of a debt or investmentd) Series of payments (many number of cash flows) made at a specified frequency over the course of a fixed period of time55. An Annuity is an ordinary Annuity if,a) Payments are required to be made at the beginning of each period.b) Payments are required to be made at the middle of each periodc) Payments are required to be made at ordinary installmentsd) Payments are required to be made at the end of each period.56. The Marine Insurance Policy should be expressed ina) Rupeesb) US Dollarsc) Same Currency in which the LC is drawnd) Any foreign currency.57. The discount rate which equals the present value of promised flow to the current marketprice /purchase price. This is known asa) Yield to maturityb) NPVc) IRRd) Treasury bills58. The value which the bond holder gets on maturity is calleda) Maturity valueb) NAVc) the redemption valued) IRR59. This is the amount by which an asset is expected to lose its value. What is thisa) Market valueb) Wear and tearc) Depreciationd) NAP60. EEFC can be opened ina) Rupeesb) Any one of the four designated currenciesc) One of the permitted currenciesd) AMUS61. A method of calculating depreciation of an asset , which assumes that the asset will lose an equal amount of value each year is known asa) Salvage valueb) Depreciationc) Straight line Method of calculationd) Accumulated Depreciation62. A credit facility will be classified as NPA if……… remains past due for one quartera) Interestb) Instalmentc) A or Bd) A & B63. As per Prudential Accounting Norms prescribed by RBI, assets are classified into …… typea) 3b) 8c) 4d) 564. The home currency price of one unit of a foreign currency is quoted eg USD 1 = Rs43.20a) Indirect quotationb) Exchange ratec) Rate of USDd) Direct quotation65. If the rate of a currency A is known in terms of currency B and rate of Currency B in terms of Currency C , we can derive the rate of currency A interms of Currency C using the technique of cross currency.a) Exchange rateb) Cross ratec) Forward rated) None of the above66. As per NABARD guidelines the minimum Internal Rate of Return for Agricultural Project isa) 15%b) 25%c) 30%d) 18%67. In case of Direct quotation if the forward rate is more than spot rate the base currency is called as being at -----a) Discountb) Forward ratec) Spot rated) Premium68. An operation by which one can make risk free profits making use of the interest differentials between two places is called.a) Open market operationb) Profitabilityc) Free marketd) Arbitrage69. If the forward rate is less than the spot rate the base currency is said to be ata) Discountb) Premiumc) At pard) None of the above.70. The amount which the owner of the business has invested in the firm and can claim from the firm is known as ------a) Capitalb) Loanc) Term Loand) Fixed Asset.71. The amount which the firm owe to outsidersa) Assetsb) Capitalc) Liabilitiesd) Intangible assets72. A person who owes money to a firm , mostly on account of credit sales of goods is called.a) Creditorb) Debtorc) Borrowerd) lender73. The balance sheet represents an expansion of the equation as Assets = Liabilities +Capital This statement isa) Cannot be reliedb) falsec) Not acceptabled) True74. Assets minus original capital = Liabilitya) True b) Falsec) can be accepted d) None of the above.75. If a firm borrows money its capital would be reduceda) This statement is falseb) This statement is truec) The same is acceptabled) None of the above76. ---------- is the value of an established business over and above the value represented by it’s tangible assets .a) Assetsb) Liabilitiesc) Goodwilld) None of the above.77. If the partnership does not mention any method of maintaining capital account then ------- method of capital has to be used.a) Fluctuating capital accountb) Partners Current accountc) Capital accountd) Fixed capital account78. The joining of a new person into the existing partnership as a partner is calleda) Retirement of a partnerb) Resolution of a partnershipc) Good willd) Admission of a partner79. Under the -------- capital method two accounts are maintained for each partner viz current account and capital account.a) Fixed Capital Methodb) Fluctuating capital methodc) Equity capital Methodd) Preference share capital80. As per new guidelines both SLR and non SLR securities are to be classified intoa) Held to maturity.b) Available for salec) Held for tradingd) All the above .81. Amount of Investment under Securities held to maturity should not exceed --------- of Bank’s total investmenta) Twenty percentage of the Bank’s total investment (20% of total investment)b) Twenty five percentage of the Bank’s total investment (25% of total investment)c) forty nine percentage of the Bank’s total investment (49% of total investment)d) forty percentage of the Bank’s total investment (40 % of total investment)82. The form of Balance sheet and Profit and loss account of a Banking Company is prescribed in forms A and B of -------------- schedule of the Banking Regulation Act 1949.a) Secondb) Thirdc) Firstd) Fourth83. The Companies Act prohibits issue of any preference share that is -----------a) cumulativeb) redeemablec) both a and bd) Irredeemable84. The capital which is stated in the Memorandum of Association is known asa) Memorandum Capitalb) Paid up capitalc) Authorised capitald) Issued capital85. Authorised capital is also known asa) Nominal or Registered Capitalb) Equity capitalc) Preference share capitald) All the above86. When shares are issued at higher than the face value of the shares they are said to be issued at aa) Discount - b) Par- c) Premiume) None of the above87. Issue of shares at a discount should be authorized by the members by passing a resolutionin the general meeting and resolution of members should specify the rate of discountwhich should not exceed 10% of the face value of the shares Further this is subject toa) Obtention of sanction from Company Law Boardb) These shares must be issued with in 2 monthsc) Both (a) and (b)d) None of the above88. According to section 79A inserted by Companies Amendment Act 1999 --------- sharesmeans equity shares issued by the company to employees or directors at a discount orfor consideration other than cash for providing know how or making available right in theintellectual property rights or value addition, by whatever name called.a) Employees stock optionb) Equity sharesc) Sweat equityd) None of the above.89. A scheme under which the company grants option (A right but not an obligation ) to anemployee to apply for shares of the company at a pre determined price is known asa) Employees Stock Option Scheme (ESOS)b) Equity sharesc) Sweat Equityd) None of the above.90. The formation of a company is governed by the rules and regulations as contained ina) Indian Companies Actb) RBI actc) BR Actd) None of the above.91. Profit and Loss Account is one of the Final Accounts prepared by a Company. What is theother one.a) Schedules to P&L accountsb) Balance sheetc) Trading Accountd) None of the above.92. Liabilities that will arise on the happening of certain eventa) Current liabilitiesb) Term Liabilitiesc) Contingent Liabilitiesd) None of the above93. Schedule VI of the Companies Act prescribes the form ofa) Balance sheetb) Trading Accountc) Balance sheetd) None of the above.94. A computer Accounting system runs based on a set of instructions called the softwareprogrammes developed by a person who is a computer software professional and he iscalled -------a) Programmerb) Software Engineerc) IT mand) None of the above.95. Accounting software may be written in any one of the computer languages such asa) Windows, UNIX etcb) JAVA C+ etcc) COBOL, Foxpro etcd) None of the above.96. Computers are basically classified intoa) Analogue Computers and Digital computersb) Hardware and softwarec) Wipro and Infosysisd) All the above97. A Customer Service Meet should be organized at every Brancha) Once in a Fortnightb) Once in a Quarterc) Once in a Monthd) Once in a Half-Year98. Who cannot file a complaint under Consumer Protection Act?a) Banksb) State Governmentc) Public Interest Litigation Groupd) Persons receiving services free of charge99. Banking Ombudsman is appointed bya) Central Government / Ministry of Financeb) State Governmentc) IDBId) RBI100. DRT has jurisdiction relating to cases pertaining to Banks, Financial Institutions with debtamount ofa) Rs. 1 lakh and aboveb) Rs. 5 lakh and abovec) Rs. 10 lakh and aboved) Rs. 20 lakh and aboveANSWERS1) b 2) d 3) b 4) b 5) c 6) b7) d 8) b 9) b 10) d 11) a 12) a13) d 14) b 15) d 16) b 17) c 18) d19) c 20) d 21) a 22) b 23) d 24) d25) b 26) d 27) d 28) a 29) a 30) a31) a 32) b 33) d 34) d 35) d 36) d37) d 38) a 39) b 40) b 41) b 42) a43) b 44) c 45) c 46) b 47) d 48) c49) a 50) c 51) d 52) a 53) b 54) d55) d 56) c 57) a 58) c 59) c 60) c61) c 62) c 63) c 64) d 65) b 66) a67) d 68) d 69) a 70) a 71) c 72) b73) d 74) b 75) a 76) c 77) d 78) d79) a 80) d 81) b 82) b 83) d 84) c85) a 86) c 87) c 88) c 89) a 90) a91) b 92) c 93) a 94) a 95) c 96) a97) d 98) d 99) d 100) c
Friday, April 25, 2014
MODEL QUESTIONS LEGAL ASPECTS OF BANKING
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