Tag: loans from banks and financial institutions

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Questions Related to loans from banks and financial institutions

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Formal sources of credit do not include _____.

  1. banks

  2. cooperative societies

  3. employers

  4. none of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

1. Formal sources of credit do not include employers as there is no role of these employers all these works are related to banks and the cooperatives.
2. Employers are there merely to serve the bank staff and do the work as it is asked to do by their owner.


Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Indian currency was last devalued in _______.

  1. 1955

  2. 1956

  3. 1991

  4. 1967
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In 1991, India still had a fixed exchange system, where the rupee was pegged to the value of a basket of currencies of major trading partners. India started having balance of payments problems since 1985, and by the end of 1990, it found itself in serious economic trouble. The government was close to default and its foreign exchange reserves had dried up to the point that India could barely finance three weeks’ worth of imports. As in 1966, India faced high inflation and large government budget deficits.This led the government to devalue the rupee. At the end of 1991, the Indian Rupee was devalued considerably.

India devalued its rupee in 1966 and 1991.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Which of the following is not correct about 'security' of a bank loan?

  1. Banks consider personal guarantee as the primary security for the loans they forward.

  2. Collaterals in the from of fixed assets are the secondary security for a loan.

  3. Unsecured loans are supported by only primary security.

  4. Every loan forwarded by banks are supported primary and secondary securities.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

'Signature' of the borrower is the primary security for any loan (such loans are known as 'unsecured loans; or even 'signature loans' ). All loans might not be supported by the secondary securities (fixed assets).

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Since money acts as an intermediate in the exchange process, it is called _____.

  1. value for money

  2. exchange value

  3. medium of exchange

  4. none of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

1. Money is the medium of exchange in the modern times.
2. It can be used as a unit of account and store of value as well.
3.money acts as an intermediate in the exchange process, it is called a medium of exchange.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Cheque is a _____.

  1. money

  2. legal tender money

  3. optional money

  4. none of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
1. Cheque is an instrument in writing containing an unconditional order, addressed to a banker, sign by the person who has deposited money with the banker, requiring him to pay on demand a certain sum of money only to or to the order of a certain person or to the bearer of the instrument.
2. Optional money refers to non-legal tender money which does not enjoy any statutory backing but it is generally accepted by the people in final payments and in settlements of cash transactions. It consists of credit instruments like bills of exchange, cheques, handiest, etc.
Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

For the development of a country the credit should be _____.

  1. For a short period

  2. Easily available

  3. Cheap and affordable

  4. For a long period
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Economic growth is prerequisite for the economic development of the country.
Cheap and affordable credit (low-interest rates) is one of the prerequisites for economic growth of any country. 

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

An asset that a borrower uses as a guarantee is called _____.

  1. collateral

  2. debit card

  3. credit card

  4. deposits
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
  • Collateral is an asset taken by the banks / money lenders for lending money to its customers.
  • Collateral is a type of a security taken by the banks from its customers.
  • Collateral can be in the form of fixed deposit, property documents, etc.
Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

In rural areas farmers take credit for _____.

  1. family

  2. health

  3. crop production

  4. education
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
  • In rural areas farmers take credit for crop production.
  • Farmers usually lend from from co-operative societies or banks or from money lenders if banks are not available.
  • Usually, co-operative banks charge lower interest rates as compared to money lenders.
Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Paper notes and coins are accepted as a medium of exchange because they are _____.

  1. Light in weight

  2. Easy to carry

  3. Authorised by the government

  4. Issued by the Resrve Bank of India
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
  • In Modern times paper notes and coins are used as medium of exchange.
  • Paper notes and coins are printed and circulated by RBI in India except One Rupee notes and coins.
  • One Rupee coins are printed by the Finance Ministry.
  • Only paper notes and coins printed by Government are authorised to use.