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Advanced Wealth Management Course (IIBF) - Paper 6

Ch 5: Risk-Return-Liquidity of Various Financial Products

Q1.

Kisan Vikas Patra doubles your money in

Six years

Eight years seven months

Seven years

Five years six months

Q2.

Banks discount bills drawn by corporate entities and these are re-discounted by banks in the money market in the form of:

Derivative Usance Promissory Note

Commercial Paper

Usance Promissory Note

None of the above

Q3.

“AA” credit rating of an instrument means:

Adequate safety

Moderate safety

Highest safety

High safety

Q4.

The minimum size of a “Certificate of Deposit”:

Should not be less than Rs. 3 lakhs

Should not be less than Rs. 2 lakhs

Should not be less than Rs. 1 lakh

Should not be less than Rs. 5 lakhs

Q5.

“Commercial Paper” is:

Issued by a development bank on account of refinancing the loans provided by commercial banks

Issued by a bank in favour of a company which can be traded in the market

Issued by Reserve Bank of India in favour of a bank for extracting money from the money market

Issued by a company whose tangible net worth is not less than Rs. 4 crore

Q6.

The repayment of a bank deposit is ensured by:

Central Government

Deposit Insurance and Guarantee Corporation upto Rs. one lac per account only

Reserve bank of India

None of the above

Q7.

Post Office issues “National Saving Certificate”:

For a fixed period of 6 years only

For a fixed period of 10 years only

For any period upto 10 years as per the choice of the depositor

For three years and five years

Q8.

Fixed Deposit of a bank can be paid pre-maturely:

Only if contains pre-maturity clause in the receipt

If it has run at least upto one year

At any time during the period of deposit

None of the above

Q9.

A “Bond” is:

A deposit given by an individual to a company which can be encashed only after one year

A form of loan taken by a Bank from RBI

A deposit given by an individual to a company which can be encashed on demand

A loan by a buyer to the issuer of the bond

Q10.

Time Deposit of a Post office is issued for a period:

For 5 years only

For 1 to 10 years

For 3 years only

Between 1 and 5 years

Q11.

Treasury Bills are:

Issued by Central Government on favour of RBI for borrowing money from the market

Short term promissory notes issued by RBI on behalf of Central Government to raise funds to meet shortfalls in revenue collections.

Issued by RBI to banks when they deposits money in RBI for CRR purposes

None of the above

Q12.

The maturity period of CDs issued by banks

Should not be less than 7 days and not more than 1 year

Should not be less than 1 year and not more than 3 years

Should not be less than 15 days and not more than 1 year

Should not be less than 1 year and not more than 2 years

Q13.

Participation Certificates are:

Long term papers issued by banks to raise funds from other banks

Short term papers issued by scheduled commercial banks to raise funds from other banks against big loan portfolios

An unsecured money market instrument issued in the form of a promissory note

Short term promissory notes issued by RBI on behalf of Central Government

Q14.

“BB” credit rating of an instrument means:

Moderate safety

Adequate safety

Inadequate safety

High safety

Q15.

Under Short Term Money Market, funds are borrowed or lent for a maximum period of

14 days

7 days

30 days

15 days

Q16.

A bond’s real yield is:

Nominal yield plus inflation

Coupon rate minus market price

Nominal yield minus inflation

Coupon rate plus market price

Q17.

The minimum investment in Post Office Senior Citizen Scheme is:

Rs. 500

Rs. 1000

Rs. 2000

Rs. 5000

Q18.

(I) Hindu Undivided Families are not eligible to invest in Post Office Senior Citizen Scheme. (II) Participation Certificates are issued for 90 to 180 days.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

Q19.

The minimum investment in KVP is:

Rs. 1000

Rs. 500

Rs. 100

Rs. 5000

Q20.

The maturity period of a NSC scheme is:

5 years

5 years 6 months

8 years 6 months

6 years

Q21.

(I) The minimum investment in a Post-Office MIS is Rs. 5,000 for single account. (II) Post-Office MIS can be traded in the secondary market.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

Q22.

The minimum monthly installment in case of Recurring deposit (RD) with ICICI is:

Rs. 10

Rs. 100

Rs. 500

Rs. 1000

Q23.

(I) Post Office recurring deposit account (RDA) has a fixed tenure of 5 years. (II) The minimum investment in Post Office RDA is Rs. 100.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

Q24.

The effective interest rate on an Annual Reducing Balance method is approximately 0.7% higher than the Monthly Reducing Balance Method.

True

False

Q25.

“C” credit rating of an instrument means:

High Risk

Substantial Risk

In Default

Highest Risk

Q26.

(I) Infrastructure bonds are termed as Tax-Saving Bonds. (II) The “Derivative Usance Promissory Note” (DUPN) maturity should not exceed 120 days.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

Q27.

The maturity period of CDs issued by FIs

Should not be less than 7 days and not more than 1 year

Should not be less than 90 days and not more than 3 years

Should not be less than 30 days and not more than 1 year

Should not be less than 1 year and not more than 3 years

Q28.

(I) The duration of a bond issue usually varies between 1 and 5 years. (II) Only a scheduled bank can act as an Issuing and Paying Agent (IPA) for issuance of CP.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

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