Banking Financial Awareness · Commerce Accountancy
Credit, Debt, and Finance
1,382 Questions
This topic covers essential concepts of credit, debt, and finance including bankruptcy, debt recovery, and financial acts. These questions are frequently asked in banking and IBPS exams. Test your knowledge of financial terminology and loan classifications.
Debt recovery actsBankruptcy filing proceduresFinancial classificationsMedium term financeCredit loss management
Credit, Debt, and Finance Questions
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Term loan to a large scale industry
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Vehicle loan to urbanites
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Loans for real estates
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Loans to weaker sections of society
D
Correct answer
Explanation
Micro credit is the extension of very small loans to those in poverty, designed to support entrepreneurship and alleviate poverty among weaker sections of society.
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Expenses paid in advance
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Payable expenses, but not paid
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Expenses which are not yet payable
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Expenses already paid
B
Correct answer
Explanation
Right answer because outstanding expenses means payable expenses which are not paid yet by company.
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some people fail to pay their dues
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some people pay their dues before due date
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some people pay their dues at right time
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some people pay their dues after due date
A
Correct answer
Explanation
Right answer because when some people fails to pay their dues then we say it bad debts. So, it is the right answer .
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Japan Factoring Company
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Tokyo Hire Purchase Company
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Japan Leasing Corporation
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Tokyo Finance Corporation
C
Correct answer
Explanation
Japan Leasing Corporation, a subsidiary of the Long Term Credit Bank of Japan, filed for bankruptcy/insolvency in the late 1990s.
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Cashflow at Risk
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Cash at Risk
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Credit risk
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None of these
A
Correct answer
Explanation
In derivatives market, CaR means Cashflow at Risk.
A
Correct answer
Explanation
To cover the financing loss there are 3 methods.
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London Interbank Offer Rate
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Loss Interbank Offer Rate
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Leave Interbank Offer Rate
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None of these
A
Correct answer
Explanation
London Interbank Offer Rate is the interest rate offered by London banks on deposits made by other banks.
A
Correct answer
Explanation
Regulatory guidelines for Housing Finance Companies (HFCs) limit individual exposure to a certain percentage of their net owned funds to manage risk.
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2 times
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3 times
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5 times
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No limit
D
Correct answer
Explanation
There is no specific regulatory limit on the extent of loans commercial banks can provide to housing finance companies relative to their own net owned funds.
D
Correct answer
Explanation
Housing Finance Companies are required to maintain a minimum Capital Adequacy Ratio (CAR) of 12 percent as per NHB guidelines.
C
Correct answer
Explanation
Regulatory norms for HFCs specify exposure limits for groups to ensure diversification and risk management, set at 30 percent of net owned funds.
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Only 1
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Only 2
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Only 3
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All 1, 2 and 3
A
Correct answer
Explanation
The Prime Lending Rate (PLR) is the benchmark interest rate at which commercial banks lend to their most creditworthy or favored customers. It is not the rate at which banks borrow from the RBI (that is the Repo Rate).
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Open Market operations
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Margin requirements for debts
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Bank Rate
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SLR variation
B
Correct answer
Explanation
Margin requirements for debts are not a quantitative measure for credit control. Margin Debits is the dollar value of securities purchased on margin within an account. Margin debt carries an interest rate, and the amount of margin debt will change daily as the value of the underlying securities changes.
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Evaluates the credit documents of a company
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Provides financial assistance to industries
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Provides finances for rural areas
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Promotes exports
A
Correct answer
Explanation
CRISIL evaluates the credit documents of a company. CRISIL IS A GLOBAL ANALYTICAL COMPANY PROVIDING RATINGS, RESEARCH, AND RISK AND POLICY ADVISORY SERVICES. It is a credit rating agency in India which checks the credit documents of a company.