Mini Mock Test 3 - FM - RBI GR B 2019

RBI Gr B 2019|Phase 2
Finance & Management

Mini Mock Test No.3
www.edutap.co.in
Guidelines
1. The question would be displayed for a certain time (30, 40, 60 0r 90 Seconds) depending up on difficulty
level
2. Marks would be displayed above the question
3. Paragraph Based Questions have been left to save time
4. We cannot totally simulate real time environment – Idea is to help you get accustomed to exam pressure
5. Cut-Off (What is a good score?) would be told at the end of the exam
6. Please do not post answers in chat window during the test…You can do so during test discussion
7. Have Patience
Total Questions 32 = 14 (1 marker ) + 18 (2 marker)
Total Marks = 50
Time : Approx 32 Minutes
Negative Marking – 1/4th
Use Code: RBI50

Avail 50% OFF on all Phase 2 Courses www.edutap.co.in
Sample Question Marks: 1
Who is regulator of Mutual Funds?

[1] RBI
[2] SEBI
[3] Ministry of Finance
[4] Stock Exchange
Use Code: RBI50

Start of Test
Use Code: RBI50

Marks: 1
Q.1) To successfully achieve the targets, which factors need to be balanced properly
according to action centered theory?
[1] Communication, motivation and compensation
[2] Policy, performance and reward
[3] Goal, resource and behavior
[4] Task, team and individual
Use Code: RBI50

Marks: 1
Q.2) Which of the following is not true?

[1] Higher motivation often leads to higher morale of employees, but high morale
does not essentially result in greatly motivated employees.
[2] While motivation is an individual concept, morale is a group concept.
[3] The level and nature of the work highly impact the motivation of a worker,
whereas his willingness to continue with the same determines his morale.
[4] Motivation acquires primary concern in every organization, while morale is a
secondary phenomenon.
Use Code: RBI50

Marks: 1
Q.3) A process that integrates work content, the rewards, and the qualifications
required for each job in a way that meets the needs of organization as well as
employees is known as _____
[1] Job evaluation
[2] Job design
[3] Job specification
[4] Job description
Use Code: RBI50

Marks: 1
Q.4) Reliance Industries has made a move to invest in the telecom sector project,
whose estimated Profitability Index comes out to 1.30. What does this data signify?
[1] The NPV is less than 0
[2] The payback period is more than 1.3 years
[3] The project returns Rs 1.30 for every Rs 1 invested in that project
[4] That the IRR is 1.30 times that of hurdle rate
Use Code: RBI50

Marks: 1
Q.5) Significance of P/E ratio is
[1] High P/E ratio represents that the stock is providing higher earnings currently in
the market
[2] Indicates how expensive or cheap a stock is in the market
[3] P/E ratio is the only ratio to evaluate the stock as it reveals the capability of a
company to produce returns
[4] Tells how much investors are willing to pay for a stock relative to the company’s
earnings
[5] Options [2] and [4] are correct
Use Code: RBI50

Marks: 1
Q.6 Neeraj is a manager who shows a good confidence and trust on his employees but still
keeps control on decision making power. He usually invites ideas and opinions from
employees and try to make constructive use of them. This makes subordinates rather feel
free to discuss things about their work and job with Neeraj. Which leadership style is
reflected by Neeraj according to Likert’s theory of leadership?
[1] Exploitative authoritative
[2] Benevolent authoritative
[3] Consultative
[4] Democratic
Use Code: RBI50

Marks: 1
Q.7) A company is sending his one team in different states to perform TV or stage shows to
promote their newly launched eco-friendly product in the market for almost two weeks. Mr.
Ahuja, a senior employee is appointed as the team leader because he is one of the
renowned personality for his noble causes not only within the company but also in the society.
He has got many awards and recognitions also in this field on district and state level. Now he
has the power to take decisions about ways or working, assigning the task to people and taking
necessary actions at given point of time. Which leadership powers of Mr. Ahuja are reflecting
from this case?
a) Referent power b) Legitimate power c) Expert power
[1] Only b
[2] Only c
[3] Both a and b
[4] Both a and c
Use Code: RBI50

Marks: 1
Q.8) _________ theory assumes that calmness pays when the workers are angry or
on strikes and this calmness can be brought by welfare measures. Workers are like
children who are intelligent, but not fully so.
[1] Paternalistic theory
[2] Public relations theory
[3] Placating theory
[4] Philanthropic theory
Use Code: RBI50

Marks: 1
Q.9) Suppose a bank is holding a portfolio of long-maturity assets, and has financed it
with short-maturity liabilities. Which of the following risks is most obvious?
[1] Refinancing Risk
[2] Counterparty Risk
[3] Operational Risk
[4] Default Risk
[5] Sovereign Risk
Use Code: RBI50

Marks: 1
Q.10) In the month of May 2019, a High Level Committee on Deepening of Digital
Payments had submitted its report to the RBI. Which of the following persons was the
head of the committee?
[1] H.R. Khan
[2] Nandan Nilekani
[3] Kishore Sansi
[4] Aruna Sharma
[5] Sanjay Jain
Use Code: RBI50

Marks: 1
Q.11) Most of the employees in accounts department were not satisfied with the promotion
of Ram as the accounts manager. They think that Ram was undoubtedly an expert in the
taxation work but he was not good in any other activity which also forms the part of
promotion criteria. In spite of having few absences, the management has given him high
rating in all other works too just because he performed well in the taxation area. What is the
error in performance appraisal system here?
[1] Central tendency
[2] Halo effect
[3] Horn effect
[4] Spillover effect
Use Code: RBI50

Marks: 1
Q.12) People with which of the following need will focus more on collaboration over
competition?
[1] Need for achievement
[2] Need for power
[3] Need for affiliation
[4] None of the above
Use Code: RBI50

Marks: 1
Q.13) There is very subtle difference between Management and Administration. At

which level administration is carried out more than the management?
[1] Lower level
[2] Upper Level
[3] Middle Level
[4] Cannot be determined. Depends on the type of task
Use Code: RBI50

Marks: 1
Q.14) Mahesh opened a South Indian restaurant where he employed two chefs to prepare 5 types of
dishes. With increased number of customers, chefs find it difficult to complete the order in time as
they have to do all types of work from taking orders, prepare them till serving them. Mahesh
recognized this and employed three new persons to make the work easier and faster. Specified tasks
were assigned to them like one will only take orders, other will focus only to prepare the dish and next
is only to serve the food to customers. Which technique was used by Mahesh at workplace?
[1] Job rotation
[2] Job enrichment
[3] Job simplification
[4] Job enlargement
Use Code: RBI50

Marks:2
Q.15) Which of the following element is not a part of HRP Process?

[1] Layoff
[2] Induction
[3] Induction
[4] Encouraging
[5] Orientation
Use Code: RBI50

Marks: 2
Q.16) Which of the following element is not a part of Performance Management

System?
[1] Coaching
[2] Rewarding
[3] Reviewing
[4] PIPs
[5] Praising
Use Code: RBI50

Marks: 2
Q.17) Which of the following section confers power upon RBI under Banking
regulation act 1949, to direct banking companies to resolve specific stressed assets
by initiating insolvency resolution process when required?
[1] Section 24
[2] Section 18
[3] Section 35AA
[4] Section 20
[5] Section 56
Use Code: RBI50

Marks: 2
Q.18) Recently (August 2019) Union Cabinet approves eight amendments to the
Insolvency and Bankruptcy Code (IBC) that will enforce a ______ timeline for the
insolvency resolution process.
[1] 270 days
[2] 181 days
[3] 365 days
[4] 546 days
[5] 330 days
Use Code: RBI50

Marks: 2
Q.19) Slippage Ratio is defined as
[1] Increase in total NPAs during the year to total gross non-performing assets during the
year
[2] Fresh accretion of NPAs during the year to total standard assets at the beginning of the
year
[3] Increase in restructured loans during the year to total stressed assets during the year
[4] Increase in total NPAs during the year to total capital employed by the bank
[5] Fresh accretion of restructured loans during the year to total sub-standard loans during
the year
Use Code: RBI50

Marks: 2
Q.20) What is name of the model that is used by marketers to analyse and monitor
the macro-environmental (external marketing environment) factors that have an
impact on an organization?
1. SWOT
2. PESTEL
3. Porter 5 forces
4. BCG Matrix
Use Code: RBI50

Marks: 2
Q.21) Expert Committee on MSME has proposed a government sponsored Funds of
Funds of ______ to support Venture Capita/Private Equity firms investing in the
MSME sector.
[1] Rs 5,000 crore
[2] Rs 1,000 crore
[3] Rs 4,000 crore
[4] Rs 8,000 crore
[5] Rs 10,000 crore
Use Code: RBI50

Marks: 2
Q.22) Keeping in mind the managerial grid, choose the correct pair from the
following:
[1] a 2, b 4, c 3 and d 1
[2] a 3, b 4, c 1 and d 2
[3] a 2, b 3, c 4 and d 1
[4] a 1, b 3, c 4 and d 2
Use Code: RBI50

Marks: 2
Q.23) What does Beta equal to zero for a security signify?

[1] The security is less volatile than the market movements
[2] The security is more volatile than the market movements
[3] The security gives returns equal to the market returns
[4] The security gives opposite returns in comparison to market returns
[5] The security gives returns equal to risk-free return prevalent in the market
Use Code: RBI50

Marks: 2
Q.24) Which of the following is incorrect about Reserve Bank of India (Prudential Framework
for Resolution of Stressed Assets) Directions 2019?
[1] The new norm makes it lenders choice to go for legal proceedings and insolvency or not.
[2] As per the new Prudential Framework, the lenders need to take resolution action on the
first day of default.
[3] As per the new Prudential Framework, the RBI will be giving instructions to banks on
specific defaults.
[4] All the statements are true
[5] None of the statements are true
Use Code: RBI50

Marks: 2
Q.25) RBI has released its circular on 'Large Exposures Framework (LEF)' in the month
of September 2019. Through circular RBI has increased loan exposure limit of banks
to a single NBFC (excluding gold loan companies) from 15% to ______ of its capital
base.
[1] 17.5%
[2] 20%
[3] 22.5%
[4] 25%
[5] 27.5%
Use Code: RBI50

Marks: 2
Q.26) Recently (July 2019) it has been announced that Credit Guarantee
Enhancement Corporation (CGEC) will be set up in 2019-20. Which of the following
will be regulating CGEC?
[1] RBI
[2] SEBI
[3] NABARD
[4] SIDBI
Use Code: RBI50

Marks: 2
Q.27) RBI had set up an internal working group to improve MCLR transmission which
recommended linking bank lending rates to market determined external benchmark
rate. The group was headed by
[1] S. S. Mundra
[2] Chandan Sinha
[3] Janak Raj
[4] R. Gandhi
[5] N. S. Vishwanathan
Use Code: RBI50

Marks: 2
Q.28) Which of the following statement is false?

[1] More Decentralization means more span of Control
[2] More Decentralization means more delegation of work in systematic manner
[3] Clearer the delegation of Authority lesser the span of Control possible
[4] More the experience of subordinates, more the number of subordinates reporting
to a superior
Use Code: RBI50

Marks: 2
Q.29) According to Fugitive Economic Offenders Act, 2018, Central Government has
advised PSBs to obtain certified copy of the passport of promoters/directors and
other authorized signatories of companies availing of loan facilities of more than
______.
[1] Rs 25 crore
[2] Rs 50 crore
[3] Rs 10 crore
[4] Rs 100 crore
[5] Rs 500 crore
Use Code: RBI50

Marks: 2
Q.30) A collateralized borrowing and lending obligation (CBLO) is a money market instrument that
represents an obligation between a borrower and a lender as to the terms and conditions of a loan.
Which of the following statement is incorrect regarding CBLO instrument in India?
[1] Operated by the Clearing Corporation of India Ltd. (CCIL) and Reserve Bank of India (RBI)
[2] Eligible securities for collateral include Central Government securities, such as Treasury Bills
[3] Types of financial institutions eligible for CBLO membership include insurance firms, mutual funds,
nationalized banks, private banks, pension funds, and private dealers
[4] In order to borrow, members must open a Constituent SGL (CSGL) account with the CCIL which will
be used to deposit the collateral
Use Code: RBI50

Marks: 2
Q.31) According to the RBI Annual Report 2018-19, the Gross Fiscal Deficit (GFD)
target of 3% will be achieved by which of the following years?
[1] 2020-21
[2] 2021-22
[3] 2022-23
[4] 2023-24
[5] 2024-25
Use Code: RBI50

Marks: 2
Q.32) Recently (July 2019) an Inter-Ministerial Committee on Virtual Currencies has

submitted its report along with a draft bill “Banning of Cryptocurrency & Regulation of
Official Digital Currency Bill, 2019". Which of the following persons is the head of Inter-
Ministerial Committee?
[1] Subhash Chandra Garg
[2] Ajay Prakash Sawhney
[3] Ajay Tyagi
[4] B.P. Kanungo
Use Code: RBI50

Mock Test
Discussion
Score Analysis
Below 29 – Not Good Performance
30 to 34 – Good Performance
35 to 37 – Very Good Performance
38 + - Excellent Performance
Marks: 1
Q.1) To successfully achieve the targets, which factors need to be balanced properly
according to action centred theory?
[1] Communication, motivation and compensation
[2] Policy, performance and reward
[3] Goal, resource and behavior
[4] Task, team and individual
Answer: [4] Task, team and individual
Use Code: RBI50

Explanation
As per action centered theory of leadership, task, team and individual are the three
main factors that need to be balanced properly to achieve the targets.
This theory suggest that task is very important. Without it, there is no reason to have
a team made up of individuals. Any given team is made of various individuals
possessing different skills and experience, so it is up to the leader to extract best
possible performance from each of them. Forgetting about people within the team is
the most common mistake made by managers. Individuals have varying desires, fears,
motivation and experiences. Manager should carefully understand and assess these
things and give coaching and motivation to employees on that basis. So, action will be
performed successfully only when task, team and individual all are considered and
used properly.
Use Code: RBI50

Marks: 1
Q.2) Which of the following is not true?

[1] Higher motivation often leads to higher morale of employees, but high morale
does not essentially result in greatly motivated employees.
[2] While motivation is an individual concept, morale is a group concept.
[3] The level and nature of the work highly impact the motivation of a worker,
whereas his willingness to continue with the same determines his morale.
[4] Motivation acquires primary concern in every organization, while morale is a
secondary phenomenon.
Answer: [3] The level and nature of the work highly impact the motivation of a
worker, whereas his willingness to continue with the same determines his morale.
Use Code: RBI50

Explanation
The level and nature of the work highly impact the morale and attitude of a worker. If
the employee is expected to perform routine or specialized jobs, he will feel bored
and alienated. As opposite to it, a motivated employee doesn’t care much about it
and continues to give his best in whatever job he is performing.
Use Code: RBI50

Marks: 1
Q.3) A process that integrates work content, the rewards, and the qualifications
required for each job in a way that meets the needs of organization as well as
employees is known as _____
[1] Job evaluation
[2] Job design
[3] Job specification
[4] Job description
Answer: [2] Job design
Use Code: RBI50

Explanation
Job design is a core function of Human resource that consider each and every aspect
of job in order to meet both organisational and employee’s goals.
Use Code: RBI50

Marks: 1
Q.4) Reliance Industries has made a move to invest in the telecom sector project,
whose estimated Profitability Index comes out to 1.30. What does this data signify?
[1] The NPV is less than 0
[2] The payback period is more than 1.3 years
[3] The project returns Rs 1.30 for every Rs 1 invested in that project
Answer: 3
Use Code: RBI50

Explanation : 4
Profitability Index
• It is a method to calculate,
• Profitability of a proposed
corporate project,
• By comparing the cash flows
created by the project,
• To the capital investments
required for the project.
Simply, it evaluates the
investments. It is also known as
cost-benefit ratio or capital
rationing.
Marks: 1
Q.5) Significance of P/E ratio is

[1] High P/E ratio represents that the stock is providing higher earnings currently in
the market
[2] Indicates how expensive or cheap a stock is in the market
[3] P/E ratio is the only ratio to evaluate the stock as it reveals the capability of a
company to produce returns
[4] Tells how much investors are willing to pay for a stock relative to the company’s
earnings
[5] Options [2] and [4] are correct
Answer: [5] Options [2] and [4] are correct
Use Code: RBI50

Explanation
The price-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its
current share price relative to its per-share earnings. P/E ratio of 10 indicates
that investors in the stock are willing to pay Rs.10 per share for every Rs.1 of earnings
(profits) per share that the company generates. Generally Low P/E ratio means that
one must pay less price for the profits generated by the company and High P/E ratio
means that one must pay more price for the profits generated by the company. But
High P/E ratio does not necessarily means that stock is expensive and one should not
invest. High P/E ratio can also mean that people are expecting huge growth in
earnings in the coming years
Use Code: RBI50

Marks: 1
Q.6 Neeraj is a manager who shows a good confidence and trust on his employees
but still keeps control on decision making power. He usually invites ideas and
opinions from employees and try to make constructive use of them. This makes
subordinates rather feel free to discuss things about their work and job with Neeraj.
Which leadership style is reflected by Neeraj according to Likert’s theory of
leadership?
[1] Exploitative authoritative
[2] Benevolent authoritative
[3] Consultative
[4] Democratic
Answer: [3] Consultative
Use Code: RBI50

Explanation
Neeraj shows the consultative leadership in this case.

In consultative leadership style, motivation of employees is gained through rewards,
occasional punishments, and very little involvement in decision making. Lower level
employees have the freedom to take specific decisions which affect their work. Upper
management still has control over policies and decisions which affect the organization.
Inviting ideas from employees shows that Neeraj is trusting on them, motivating them
but still retains the final decision making.
Use Code: RBI50

Marks: 1
Q.7) A company is sending his one team in different states to perform TV or stage shows to
promote their newly launched eco-friendly product in the market for almost two weeks. Mr.
Ahuja, a senior employee is appointed as the team leader because he is one of the
renowned personality for his noble causes not only within the company but also in the society.
He has got many awards and recognitions also in this field on district and state level. Now he
has the power to take decisions about ways or working, assigning the task to people and taking
necessary actions at given point of time. Which leadership powers of Mr. Ahuja are reflecting
from this case?
a) Referent power b) Legitimate power c) Expert power
[1] Only b
[2] Only c
[3] Both a and b
[4] Both a and c
Answer: [3] Both a and b
Use Code: RBI50

Explanation
Both referent and legitimate powers are reflecting of Mr. Ahuja.

Many people often get confuse in these cases between expert and referent power. In
this case, Mr. Ahuja is undoubtedly expert in noble causes, but the work here is doing
marketing and it is not his expertise area. So, this power is not present here.
Legitimate power is definitely here because this team is temporary for two weeks and
after it the team will get diluted. This power is attached to the role. He is a leader till
this team exists. After this this power will not be there. Lastly, referent power is
definitely reflecting here. He is chosen as the leader due to his charismatic personality
which influence most of the people. He is a renowned personality which made people
showing trust and believe in his words and tasks. So, both referent and legitimate
powers are there.
Use Code: RBI50

Marks: 1
Q.8) _________ theory assumes that calmness pays when the workers are angry or
on strikes and this calmness can be brought by welfare measures. Workers are like
children who are intelligent, but not fully so.
[1] Paternalistic theory
[2] Public relations theory
[3] Placating theory
[4] Philanthropic theory
Answer : [3] Placating theory
Use Code: RBI50

Explanation
The Placating theory of labour welfare has placed the above opinion.
Use Code: RBI50

Marks: 1
Q.9) Suppose a bank is holding a portfolio of long-maturity assets, and has financed it
with short-maturity liabilities. Which of the following risks is most obvious?
[1] Refinancing Risk
[2] Counterparty Risk
[3] Operational Risk
[4] Default Risk
[5] Sovereign Risk
Answer: [1] Refinancing Risk
Use Code: RBI50

Explanation
"Refinancing" risk is one type of "interest rate risk." The short-term securities will
come due—and require "refinancing"—before the assets mature. Refinancing risk is
the possibility that a borrower cannot refinance by borrowing to repay existing debt.
Many types of commercial lending incorporate balloon payments at the point of final
maturity; often, the intention or assumption is that the borrower will take out a new
loan to pay the existing lenders. Most large corporations and banks face this risk to
some degree, as they may constantly borrow and repay loans. Refinancing risk
increases in periods of rising interest rates, when the borrower may not have
sufficient income to afford the higher interest rate on a new loan. Most commercial
banks provide long term loans, and fund this operation by taking shorter term
deposits. In general, refinancing risk is only considered to be substantial for banks in
cases of financial crisis, when borrowing funds, such as inter-bank deposits, may be
extremely difficult.
Use Code: RBI50

Marks: 1
Q.10) In the month of May 2019, a High Level Committee on Deepening of Digital
Payments had submitted its report to the RBI. Which of the following persons was the
head of the committee?
[1] H.R. Khan
[2] Nandan Nilekani
[3] Kishore Sansi
[4] Aruna Sharma
[5] Sanjay Jain
Answer:[2] Nandan Nilekani
Use Code: RBI50

Explanation
A High Level Committee on Deepening of Digital Payments was headed by Nandan

Nilekani.
Use Code: RBI50

Marks: 1
Q.11) Most of the employees in accounts department were not satisfied with the
promotion of Ram as the accounts manager. They think that Ram was undoubtedly
an expert in the taxation work but he was not good in any other activity which also
forms the part of promotion criteria. In spite of having few absences, the
management has given him high rating in all other works too just because he
performed well in the taxation area. What is the error in performance appraisal
system here?
[1] Central tendency
[2] Halo effect
[3] Horn effect
[4] Spillover effect
Answer: [2] Halo effect
Use Code: RBI50

Explanation
Halo effect is the main error in this appraisal system.

Halo effect is a tendency to rate a man uniformly high in other traits if he is extra-
ordinary high in one trait. If a worker has few absences, his manager might give him
high rating in all other areas of work.
Use Code: RBI50

Marks: 1
Q.12) People with which of the following need will focus more on collaboration over
competition?
[1] Need for achievement
[2] Need for power
[3] Need for affiliation
Answer: [3] Need for affiliation
Use Code: RBI50

Explanation
People with need for affiliation will focus more on building relationship with people,
team work, and prefer collaboration over competition in their life.
Use Code: RBI50

Marks: 1
Q.13) There is very subtle difference between Management and Administration. At

which level administration is carried out more than the management?
[1] Lower level
[2] Upper Level
[3] Middle Level
[4] Cannot be determined. Depends on the type of task
Answer: Upper Level
Use Code: RBI50

Explanation
At upper levels in the organization Administration is more of the work for the
employees
Use Code: RBI50

Marks: 1
Q.14) Mahesh opened a South Indian restaurant where he employed two chefs to
prepare 5 types of dishes. With increased number of customers, chefs find it difficult
to complete the order in time as they have to do all types of work from taking orders,
prepare them till serving them. Mahesh recognized this and employed three new
persons to make the work easier and faster. Specified tasks were assigned to them
like one will only take orders, other will focus only to prepare the dish and next is only
to serve the food to customers. Which technique was used by Mahesh at workplace?
[1] Job rotation
[2] Job enrichment
[3] Job simplification
[4] Job enlargement
Answer : [3] Job simplification
Use Code: RBI50

Explanation
Mahesh has done job simplification to make the work easier and faster.
Job simplification is a method whereby jobs are divided into smaller components
and subsequently assigned to workers as whole jobs. It helps in making the work
easier and completed fast. Also, not much trained people are required. A low skilled
person can also perform well by learning it during work only.
Use Code: RBI50

Marks:2
Q.15) Which of the following element is not a part of HRP Process?

[1] Layoff
[2] Induction
[3] Encouraging
[4] Orientation
Answer: [3] Encouraging
Use Code: RBI50

Explanation
Recruitment, Selecting, Hiring, Training, Induction, Orientation, Evaluation,

Promotion and Layoff are the elements of Human Resource Planning Process; while
Encouraging can be placed under Motivation process, not HRP. Hence 4 is our
answer
Use Code: RBI50

Marks: 2
Q.16) Which of the following element is not a part of Performance Management

System?
[1] Coaching
[2] Rewarding
[3] Reviewing
[4] PIPs
[5] Praising
Answer: [5] Praising
Use Code: RBI50

Explanation
Following are the elements/components of PMS:

1. Performance Planning
2. Reviewing and Performance Appraisal
3. Coaching & Feedback: Feedback on the Performance followed by personal
counselling
4. Recognizing and Rewarding Performance
5. Performance Improvement Plans
6. Potential Appraisal
Hence Praising is not an element of PMS
Use Code: RBI50

Marks: 2
Q.17) Which of the following section confers power upon RBI under Banking
regulation act 1949, to direct banking companies to resolve specific stressed assets
by initiating insolvency resolution process when required?
[1] Section 24
[2] Section 18
[3] Section 35AA
[4] Section 20
[5] Section 56
Answer: [3] Section 35AA
Use Code: RBI50

Explanation
As per MOF gazetted notification,

In exercise of the powers conferred by Section 35AA of the Banking Regulation Act,
1949 (10 of 1949), the Central Government hereby authorizes the Reserve Bank of
India to issue such directions to any banking company or banking companies which
may be considered necessary to initiate insolvency resolution process in respect of a
default, under the provisions of the Insolvency and Bankruptcy Code, 2016.
Use Code: RBI50

Marks: 2
Q.18) Recently (August 2019) Union Cabinet approves eight amendments to the
Insolvency and Bankruptcy Code (IBC) that will enforce a ______ timeline for the
insolvency resolution process.
[1] 270 days
[2] 181 days
[3] 365 days
[4] 546 days
[5] 330 days
Answer:[5] 330 days
Use Code: RBI50

Explanation
1. The Union Cabinet cleared major changes to the bankruptcy law that will enforce
a strict 330-day timeline for the insolvency resolution process, including any legal
challenges, and uphold secured creditors’ priority right on the sale or liquidation
proceeds of bankrupt companies.
2. The eight amendments to the Insolvency and Bankruptcy Code (IBC) will also aid
decision-making in the case of bankrupt entities such as property developers, which
have a large number of creditors, including homebuyers.
Use Code: RBI50

Marks: 2
Q.19) Slippage Ratio is defined as

[1] Increase in total NPAs during the year to total gross non-performing assets during
the year
[2] Fresh accretion of NPAs during the year to total standard assets at the beginning
of the year
[3] Increase in restructured loans during the year to total stressed assets during the
year
[4] Increase in total NPAs during the year to total capital employed by the bank
[5] Fresh accretion of restructured loans during the year to total sub-standard
loans during the year
Answer: [2] Fresh accretion of NPAs during the year to total standard assets at the
beginning of the year
Use Code: RBI50

Explanation
Slippage ratio is defined as total fresh accretion of NPAs during the year to total
standard assets at the beginning of the year. This ratio is significant as it indicates
proportion of fresh NPA’s formed in a particular year out of total standard assets of
the bank. Hence, the word ‘Slippage’ is used to signify its essence. This is one of the
important financial ratios to gauge a Bank’s financials.
Use Code: RBI50

Marks: 2
Q.20) What is name of the model that is used by marketers to analyse and monitor
the macro-environmental (external marketing environment) factors that have an
impact on an organization?
1. SWOT
2. PESTEL
3. Porter 5 forces
4. BCG Matrix
Answer is 2
Use Code: RBI50

Marks: 2
Q.21) Expert Committee on MSME has proposed a government sponsored Funds of

Funds of ______ to support Venture Capita/Private Equity firms investing in the
MSME sector.
[1] Rs 5,000 crore
[2] Rs 1,000 crore
[3] Rs 4,000 crore
[4] Rs 8,000 crore
[5] Rs 10,000 crore
Answer: [5] Rs 10,000 crore
Use Code: RBI50

Explanation
1. Expert Committee on MSME has proposed a Government sponsored Fund of

Funds (FoF) of ₹10,000 crore to support Venture Capita/Private Equity firms
investing in the MSME sector that will support crowd funding from venture
capital and private equity firms, which focus on investing in the MSME segment on
modified term sheets developed by SIDBI.
2. This would encourage innovation in term-sheets and product structures.
Use Code: RBI50

Marks: 2
Q.22) Keeping in mind the managerial grid, choose the correct pair from the
following:
[1] a 2, b 4, c 3 and d 1
[2] a 3, b 4, c 1 and d 2
[3] a 2, b 3, c 4 and d 1
[4] a 1, b 3, c 4 and d 2
Answer: [3] a 2, b 3, c 4 and d 1
Use Code: RBI50

Marks: 2
Q.23) What does Beta equal to zero for a security signify?
[1] The security is less volatile than the market movements
[2] The security is more volatile than the market movements
[3] The security gives returns equal to the market returns
[4] The security gives opposite returns in comparison to market returns
[5] The security gives returns equal to risk-free return prevalent in the market
Answer : [5] The security gives returns equal to risk-free return prevalent in the
market
Use Code: RBI50

Explanation
Beta of an Investment or an Asset: Indicates whether the investment is more or less

volatile than the market
Beta is between 0 and 1: The investment is less volatile than the market
Beta is less than 0 i.e. Negative Beta: Volatile investment whose price movements are
not correlated with the market
Beta more than 1: Investment is more volatile than the market
Beta = 0: Investment gives risk-free return
Beta = 1: Investment gives market returns
Use Code: RBI50

Marks: 2
Q.24) Which of the following is incorrect about Reserve Bank of India (Prudential
Framework for Resolution of Stressed Assets) Directions 2019?
[1] The new norm makes it lenders choice to go for legal proceedings and insolvency
or not.
[2] As per the new Prudential Framework, the lenders need to take resolution action
on the first day of default.
[3] As per the new Prudential Framework, the RBI will be giving instructions to banks
on specific defaults.
[4] All the statements are true
[5] None of the statements are true
Answer:[2] As per the new Prudential Framework, the lenders need to take
resolution action on the first day of default.
Use Code: RBI50

Explanation
Some of the important changes made in Reserve Bank of India (Prudential

Framework for Resolution of Stressed Assets) Directions 2019 are:
1. The lenders need not take resolution action on the first day of default. Rather,
they have to make plans on the first thirty periods of default to undertake the
resolution of the stressed assets.
2. The new norm makes it lenders choice to go for legal proceedings and insolvency
or not.
3. As per the new Prudential Framework, the RBI will be giving instructions to
banks on specific defaults.
Use Code: RBI50

Marks: 2
Q.25) RBI has released its circular on 'Large Exposures Framework (LEF)' in the month
of September 2019. Through circular RBI has increased loan exposure limit of banks
to a single NBFC (excluding gold loan companies) from 15% to ______ of its capital
base.
[1] 17.5%
[2] 20%
[3] 22.5%
[4] 25%
[5] 27.5%
Answer : [2] 20%
Use Code: RBI50

Explanation
1. Reserve Bank of India through its recent circular , has increased loan exposure
limit of banks to a single NBFC (excluding gold loan companies) from 15 per
cent to 20 per cent of its capital base.
2. According to the RBI’s circular on 'Large Exposures Framework (LEF)', banks'
exposure to a single non-banking financial company (NBFC) is restricted to 15
per cent of their available eligible capital base, while general single counter-
party exposure limit is 20 per cent, which can be extended to 25 per cent by
banks' boards under exceptional circumstances.
Use Code: RBI50

Marks: 2
Q.26) Recently (July 2019) it has been announced that Credit Guarantee
Enhancement Corporation (CGEC) will be set up in 2019-20. Which of the following
will be regulated CGEC?
[1] RBI
[2] SEBI
[3] NABARD
[4] SIDBI
Answer : [1] RBI
Use Code: RBI50

Explanation
1. In Union Budget 2019-20 Finance Minister has announced thatCredit Guarantee

Enhancement Corporation (CGEC) will be set up in 2019-20.
2. Credit Guarantee Enhancement Corporation (CGEC) will be regulated by
Reserve Bank of India (RBI).
3. The aim is to enhance the sources of capital for infrastructure financing.
Use Code: RBI50

Marks: 2
Q.27) RBI had set up an internal working group to improve MCLR transmission which
recommended linking bank lending rates to market determined external benchmark
rate. The group was headed by
[1] S. S. Mundra
[2] Chandan Sinha
[3] Janak Raj
[4] R. Gandhi
[5] N. S. Vishwanathan
Answer : [3] Janak Raj
Use Code: RBI50

Explanation
RBI had created working group to review the working of MCLR system which was
headed by Janak Raj
Use Code: RBI50

Marks: 2
Q.28) Which of the following statement is false?

[1] More Decentralization means more span of Control
[2] More Decentralization means more delegation of work in systematic manner
[3] Clearer the delegation of Authority lesser the span of Control possible
[4] More the experience of subordinates, more the number of subordinates reporting
to a superior
Answer : [3]
Use Code: RBI50

Explanation
3rd statement is false because the clearer is the delegation of Authority, it is less
work for the manager and larger can be the span of Control
Use Code: RBI50

Marks: 2
Q.29) According to Fugitive Economic Offenders Act, 2018, Central Government has
other authorized signatories of companies availing of loan facilities of more than
______.
[1] Rs 25 crore
[2] Rs 50 crore
[3] Rs 10 crore
[4] Rs 100 crore
[5] Rs 500 crore
Answer : [2] Rs 50 crore
Use Code: RBI50

Explanation
According to Fugitive Economic Offenders Act, 2018, Central Government has

other authorized signatories of companies availing of loan facilities of more than s
50 crore.
Use Code: RBI50

Marks: 2
Q.30) A collateralized borrowing and lending obligation (CBLO) is a money market instrument
that represents an obligation between a borrower and a lender as to the terms and
conditions of a loan. Which of the following statement is incorrect regarding CBLO instrument
in India?
[1] Operated by the Clearing Corporation of India Ltd. (CCIL) and Reserve Bank of India (RBI)
[2] Eligible securities for collateral include Central Government securities, such as Treasury
Bills
[3] Types of financial institutions eligible for CBLO membership include insurance
firms, mutual funds, nationalized banks, private banks, pension funds, and private dealers
[4] In order to borrow, members must open a Constituent SGL (CSGL) account with the CCIL
which will be used to deposit the collateral
Answer : [5] None of the above
Use Code: RBI50

Explanation
Collateralized borrowing and lending obligations (CBLOs) is operated by the Clearing Corporation of
India Ltd. (CCIL) and Reserve Bank of India (RBI). The CBLO is a money market segment where short-
term loans can be secured by financial institutions in order to cover their transactions. To gain access
to these funds, the financial institution must provide eligible securities as collateral. Eligible
securities for collateral include Central Government securities, such as Treasury Bills, with at least six
months left to the maturity date.
Since the repayment of loans is guaranteed by the CCIL, all borrowings are fully collateralized. The
collateral provides a safeguard against default risk by the borrower or lender’s failure to make funds
available to the borrower. The required value of collateral must be deposited and held in the custody
of the CCIL. After the deposit has been received, the CCIL facilitates trades by matching borrowing
and lending orders submitted by its members. Members of the CCIL comprise of institutions with
little to no access to the interbank call money market in India. Types of financial institutions eligible
for CBLO membership include insurance firms, mutual funds, nationalized banks, private
banks, pension funds, and private dealers. In order to borrow, members must open a Constituent SGL
(CSGL) account with the CCIL which will be used to deposit the collateral.
Use Code: RBI50

Explanation
The CBLO works like a bond in that the lender buys the CBLO, and a borrower sells
the money market instrument with interest. The CBLO facilitates borrowing and
lending for various maturities, from overnight to a maximum of one year, in a fully
collateralized environment.
Use Code: RBI50

Marks: 2
Q.31) According to the RBI Annual Report 2018-19, the Gross Fiscal Deficit (GFD)
target of 3% will be achieved by which of the following years?
[1] 2020-21
[2] 2021-22
[3] 2022-23
[4] 2023-24
[5] 2024-25
Answer : [1] 2020-21
Use Code: RBI50

Explanation
1. According to the RBI Annual Report 2018-19, the Gross Fiscal Deficit (GFD)
target of 3% will be achieved by 2020-21 in pursuance of the Fiscal
Responsibility and Budget Management (FRBM) Act, 2003.
2. The aim is to attain a central government debt to GDP ratio of 40 per cent and a
general government debt to GDP ratio of 60 per cent by 2024-25.
Use Code: RBI50

Marks: 2
Q.32) Recently (July 2019) an Inter-Ministerial Committee on Virtual Currencies has

submitted its report along with a draft bill “Banning of Cryptocurrency & Regulation of
Official Digital Currency Bill, 2019". Which of the following persons is the head of
Inter-Ministerial Committee?
[1] Subhash Chandra Garg
[2] Ajay Prakash Sawhney
[3] Ajay Tyagi
[4] B.P. Kanungo
Answer : [1] Subhash Chandra Garg
Use Code: RBI50

Explanation
1. The Government had constituted an Inter-Ministerial Committee (IMC) on

2.11.2017 to study the issues related to virtual currencies and propose specific
action to be taken in this matter.
2. The Committee has submitted its report, along with a draft bill “Banning of
Cryptocurrency & Regulation of Official Digital Currency Bill, 2019".
3. The committee was headed by finance secretary Subhash Chandra and
members include ministry of electronics and information technology secretary
Ajay Prakash Sawhney, Securities and Exchange Board of India chairman Ajay
Tyagi and RBI deputy governor B.P. Kanungo.
Use Code: RBI50

Query ?
www.edutap.co.in
Email – hello@edutap.co.in
M - 8146207241
www.edutap.co.in
www.edutap.co.in

Mini Mock Test 3 - FM - RBI GR B 2019

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Mini Mock Test 3 - FM - RBI GR B 2019

Încărcat de

Drepturi de autor:

Formate disponibile

RBI Gr B 2019|Phase 2

Finance & Management

Use Code: RBI50

Who is regulator of Mutual Funds?

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Q.2) Which of the following is not true?

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Q.13) There is very subtle difference between Management and Administration. At

Use Code: RBI50

Use Code: RBI50

Q.15) Which of the following element is not a part of HRP Process?

Use Code: RBI50

Q.16) Which of the following element is not a part of Performance Management

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Q.23) What does Beta equal to zero for a security signify?

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Q.28) Which of the following statement is false?

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Q.32) Recently (July 2019) an Inter-Ministerial Committee on Virtual Currencies has

Use Code: RBI50

Below 29 – Not Good Performance

35 to 37 – Very Good Performance

Use Code: RBI50

Use Code: RBI50

Q.2) Which of the following is not true?

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Q.5) Significance of P/E ratio is

Use Code: RBI50

Use Code: RBI50

Use Code: RBI50

Neeraj shows the consultative leadership in this case.

Use Code: RBI50

Use Code: RBI50

Both referent and legitimate powers are reflecting of Mr. Ahuja.