Banking Financial Awareness ยท 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

Multiple choice

Which of the following is not a component of the COVID-19 Tourism and Hospitality Relief Fund?

  1. Working capital loans

  2. Interest subvention on loans

  3. Wage support

  4. Tax breaks
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Tax breaks are not a component of the COVID-19 Tourism and Hospitality Relief Fund.

Multiple choice

What is the tenure of loans under the ECLGS?

  1. 1 year

  2. 2 years

  3. 3 years

  4. 4 years
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The tenure of loans under the ECLGS is 4 years, including a moratorium period of 12 months.

Multiple choice

What is the risk on a parlay bet?

  1. The same as the risk on a single-game bet

  2. Higher than the risk on a single-game bet

  3. Lower than the risk on a single-game bet

  4. It depends on the number of games in the parlay
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The risk on a parlay bet is higher than the risk on a single-game bet because the odds of winning are lower. The more games you add to your parlay, the higher the potential payout, but the lower the odds of winning.

Multiple choice

Which of the following is NOT a type of federal student loan?

  1. Direct Subsidized Loan

  2. Direct Unsubsidized Loan

  3. Direct PLUS Loan

  4. Perkins Loan
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Perkins Loan is not a type of federal student loan.

Multiple choice

Which of the following is NOT a common repayment plan for federal student loans?

  1. Standard Repayment Plan

  2. Graduated Repayment Plan

  3. Extended Repayment Plan

  4. Income-Based Repayment Plan
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Income-Based Repayment Plan is not a common repayment plan for federal student loans.

Multiple choice

Which of the following is NOT a common financial concern for elderly individuals?

  1. Managing retirement savings

  2. Paying off debts

  3. Covering medical expenses

  4. Saving for a down payment on a house
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Saving for a down payment on a house is not typically a financial concern for elderly individuals, as they are likely to have already purchased a home or may not be planning to move.

Multiple choice

What is the formula for calculating the debt-to-equity ratio?

  1. Total Debt / Total Equity

  2. Total Debt / Shareholders' Equity

  3. Long-Term Debt / Total Equity

  4. Short-Term Debt / Shareholders' Equity
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The debt-to-equity ratio is calculated by dividing a company's total debt by its shareholders' equity.

Multiple choice

What is the term used to describe the sale of a property for less than the amount owed on the mortgage?

  1. Housing bubble

  2. Housing crash

  3. Foreclosure

  4. Short sale
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A short sale is the sale of a property for less than the amount owed on the mortgage.

Multiple choice

What is a retainer fee?

  1. A fee that is paid to an attorney in advance

  2. A fee that is paid to an attorney only if they win the case

  3. A fee that is paid to an attorney in installments

  4. A fee that is paid to an attorney regardless of the outcome of the case
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A retainer fee is a fee that is paid to an attorney in advance.

Multiple choice

What is the definition of 'credit information' under the Act?

  1. Any information relating to the financial position of an individual or a company

  2. Any information relating to the credit history of an individual or a company

  3. Any information relating to the repayment history of an individual or a company

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Credit information includes any information relating to the financial position, credit history, or repayment history of an individual or a company.

Multiple choice

What are the obligations of credit information companies under the Act?

  1. To maintain accurate and up-to-date credit information

  2. To ensure the confidentiality of credit information

  3. To provide consumers with access to their credit information

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Credit information companies are required to maintain accurate and up-to-date credit information, ensure the confidentiality of credit information, and provide consumers with access to their credit information.

Multiple choice

Which type of bankruptcy allows a debtor to reorganize their debts and continue operating their business?

  1. Chapter 7

  2. Chapter 11

  3. Chapter 12

  4. Chapter 13
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Chapter 11 bankruptcy is designed for businesses and individuals with large debts who want to reorganize their finances and continue operating.

Multiple choice

Which type of bankruptcy is commonly used by farmers and fishermen?

  1. Chapter 7

  2. Chapter 11

  3. Chapter 12

  4. Chapter 13
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Chapter 12 bankruptcy is specifically designed for family farmers and fishermen who are experiencing financial difficulties.

Multiple choice

What is the effect of a discharge in bankruptcy on the debtor's debts?

  1. It eliminates all unsecured debts

  2. It reduces the amount owed on secured debts

  3. It stops collection efforts by creditors

  4. It allows the debtor to keep all of their property
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A discharge in bankruptcy releases the debtor from personal liability for most unsecured debts, such as credit card debt and medical bills.

Multiple choice

Which type of bankruptcy is commonly used by individuals with high levels of secured debt?

  1. Chapter 7

  2. Chapter 11

  3. Chapter 12

  4. Chapter 13
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Chapter 13 bankruptcy allows individuals to propose a plan to repay their debts over time, including secured debts such as mortgages and car loans.