Banking Financial Awareness · Commerce Accountancy

Credit, Debt, and Finance

1,435 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

Multiple choice

Bad debts means

  1. some people fail to pay their dues

  2. some people pay their dues before due date

  3. some people pay their dues at right time

  4. some people pay their dues after due date
Reveal answer Fill a bubble to check yourself
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 .

Multiple choice

What do you mean by prepaid expenses?

  1. Expenses paid in advance

  2. Expenses payable

  3. Expenses that are not payable

  4. Expenses paid on time
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Right answer because when company pay their expenses in advance  then we say it prepaid expenses. So it is the right answer. 

Multiple choice

CaR means

  1. Cashflow at Risk

  2. Cash at Risk

  3. Credit risk

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In derivatives market, CaR means Cashflow at Risk.

Multiple choice

Expand LIBOR.

  1. London Interbank Offer Rate

  2. Loss Interbank Offer Rate

  3. Leave Interbank Offer Rate

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

London Interbank Offer Rate is the interest rate offered by London banks on deposits made by other banks.

Multiple choice

Many times we read about the 'Prime Lending rate' charged by the banks. What is the meaning of Prime Lending rate?

  1. The rate at which banks normally give loan to their most favoured customers.
  2. The rate at which banks get money from the RBI.
  3. The rate which is paid normally by the banks on their fixed deposits kept with them for a period of five years or above.

  1. Only 1

  2. Only 2

  3. Only 3

  4. All 1, 2 and 3
Reveal answer Fill a bubble to check yourself
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).

Multiple choice

Which of the following is not a quantitative measure for credit control?

  1. Open Market operations

  2. Margin requirements for debts

  3. Bank Rate

  4. SLR variation
Reveal answer Fill a bubble to check yourself
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. 

Multiple choice

CRISIL

  1. Evaluates the credit documents of a company

  2. Provides financial assistance to industries

  3. Provides finances for rural areas

  4. Promotes exports
Reveal answer Fill a bubble to check yourself
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.