Credit, Debt, and Finance

The lender of last resort is the central bank that provides emergency liquidity to commercial banks facing financial crises or temporary liquidity shortages. This prevents bank failures and maintains financial stability. It does not refer to government aid to farmers or commercial bank lending.

Right answer because long term creditors depend upon the Net Profit ratio in a company.

The limit for acceptance of deposit has been based on the credit rating of the company, the NBFC's not having net owned funds of Rupees 25 lakh are not entitled to accept deposits.

Dear money policy refers to a tight monetary policy where credit is restricted and expensive. Money becomes available with difficulty (due to restrictions) and at high interest rates (due to policy-induced rate increases). This is contrasted with cheap money policy where credit is easily available at low rates. Both conditions - difficulty in access and high cost - characterize dear money.

Correct answer :- (1) Call rate

CRR stands for Cash Reserve Ratio - the percentage of deposits banks must maintain with the Central Bank (RBI in India). It is a monetary policy tool used to control money supply and inflation. Credit Reserve Ratio and other variations are incorrect terms.

Charge can be a hypothecation where the possession of the security is with the borrower.

The provision of bad debts is made out of the current year's profits based on the convention of conservatism. This convention means that all the risks inherent in a business must be taken into account. If there is a possibility of loss, it should be taken into account at the earliest. So, there is a possibility that some amount may not be paid by debtors, therefore a provision is made for it to cover that loss.

Correct; crisp sentence without any ambiguity. It shortens 'declaration by Portugal' to 'Portugal's declaration'. Also, the use of 'latter' clarifies that it is Portugal, not the European Union that is being talked about.

A debenture is a bond issued by a company under its seal, acknowledging a debt and containing provisions as regards repayment of the principal and interest. Debentures can be issued for cash, or for considerations other than cash or as a colleteral security.Dividends are paid out of profits to the owners (equity or preference shareholders) of the company and the issue od debentures is not to replace dividend paid by the company.

Debentures is a type of secured loan taken by the company and the debentures are issued at par, or at discount or on premium and the amount is to be paid back on maturity.Generally, a debentureholer will be paying the call money due to receive interest for the same. Debentures are not forefeited due to non payment of calls.

The borrowing policy in an offer document must disclose the purpose, circumstances, regulatory limits, and potential risks to AMC and unit holders. However, it does not need to disclose the specific names of lenders, as this is commercially sensitive information and not relevant for investors' decision-making.

SEBI regulations mandate that AMCs must dispatch redemption proceeds within 10 working days. If this deadline is not met, investors are entitled to receive interest for the delay period. This protects investors from undue delays in receiving their money.

CDSC stands for Contingent Deferred Sales Charge, a type of back-end load fee charged by some mutual funds when shares are sold within a specified time period. The charge decreases over time and eventually disappears, designed to encourage long-term investment and discourage early redemption.

Deep discount bonds are issued at a significant discount to their face value and make no interest payments during their term. At maturity, the bondholder receives the full face value, with the difference between issue price and redemption value representing the investor's return.