Banking Financial Awareness ยท Economics

Financial Markets and Instruments

1,955 Questions

Financial markets and instruments cover mutual funds, risk management, portfolio optimization, and investment strategies. These topics are critical for banking and financial awareness sections in competitive exams. Practice these questions to understand operational risk, asset valuation, and market regulations.

Portfolio optimizationOperational risk managementMutual funds valuationInvestment income typesHedging strategies

Financial Markets and Instruments Questions

Multiple choice

Which of the following types of funds do(es) not belong to the government?

  1. Consolidated funds

  2. Contingency fund

  3. Private accounts

  4. Public accounts

  5. Capital accounts
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The part of national economy made up of private enterprises. It includes the personal sector (households) and corporate sector (companies), and is responsible for allocating most of the resources within an economy.

Multiple choice

VaR means

  1. Value at risk

  2. Variable at risk

  3. Vision at risk

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

VaR means Value at risk.

Multiple choice

The purpose of VaR is to:

  1. minimize the risk

  2. maximize the risk

  3. maximize the loss

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

In derivatives, the purpose of VaR is to minimize the risk.

Multiple choice

VaR is calculated for

  1. short term

  2. long term

  3. very short period

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

In derivatives market, VaR is calculated for short term.

Multiple choice

Expand BOPM.

  1. Bionomial Option Pricing model

  2. Black-Scholes model

  3. Bank option pricing model

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

It decribes the options of pricing the portfolio.

Multiple choice

Which of the following are correct regarding methods of dealing with a risky transaction for a business entity? a. It may take preventive measures to deal with risks. b. It may transfer its own risk to another entity. c. It may decide against entering risky transactions. d. It may assume risks in advance. e. It may share risks.

  1. Only a, b and c

  2. Only d and e

  3. Only a, c, and d

  4. Only c, d and e

  5. All of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

These are correct. Rest are also correct.

Multiple choice

The funds flow statement does not present

  1. estimation of working capital requirement

  2. uses of working capital

  3. sources of working capital

  4. net change in working capital
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A funds flow statement shows the sources and applications of funds, but it does not provide an estimation of future working capital requirements; that is a budgeting or planning task.

Multiple choice

A portfolio management program is

  1. never included in other financial management package

  2. another name for a personal financial management package

  3. used to track the fluctuating value of investment holdings

  4. normally used to track personal budget items and write cheques to pay bills
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Portfolio management software is specifically designed to track investments, monitor their performance, and calculate the fluctuating value of holdings.