LIC AAO Mains 2019- Financial and Insurance Market Questions

Dear Aspirants,

LIC AAO Mains 2019- Financial and Insurance Market Questions

As we know, LIC has released both the vacancies of AAO (Assistant Administrative Officer) & ADO (Apprentice Development Officer). Insurance Market & Financial Awareness is a newly introduced section which will be asked in both the exams. LIC AAO mains 2019 is scheduled to be held on 28th June. While LIC ADO Prelims 2019 is scheduled to be held on 6th & 13th July. Here is a quiz on Insurance Market & Financial Awareness being provided by Adda247 for free to let you practice the best of latest pattern Questions for LIC examination for sure shot selection.

Q1. The financial assistance of loans of Rs. 10000 by a bank to very a small borrower will be called-?

Business Finance

Government Finance

Micro Finance

Small Finance

KYC Finance

Solution:

The financial assistance of loans of Rs. 10000 by a bank to very a small borrower will be called Microfinance.

Q2. What is an Indian Depository Receipt (IDR)?

A deposit account with a public sector bank

A depository account with any of the depositories in India

An instrument in the form of depository receipt created by an Indian depository against underlying equity shares of the issuing company

An instrument in the form of deposit receipt issued by Indian depositories

None of the given options is true

Solution:

An IDR is an instrument denominated in Indian Rupees in the form of a depository receipt created by a Domestic Depository (custodian of securities registered with the Securities and Exchange Board of India) against the underlying equity shares of issuing company to enable foreign companies to raise funds from the Indian securities Markets.

Q3. Many times, we read about future trading in newspapers. What is ‘future trading’?
I. It is nothing but a trade between any two stock exchanges, wherein it is decided to purchase the stocks of each other on a fixed price throughout the year.
II. It is an agreement between two parties to buy or sell an underlying asset in the future at a predetermined price.
III. It is an agreement between stock exchanges that they will not trade the stocks of each other under any circumstances in future or for a given period of time.
Select the correct answer using the codes given below

Only I

Only II

Only III

II and III

None of the given options is true

Solution:

It is an agreement between two parties – a buyer and a seller – wherein the former agrees to purchase from the latter, a fixed number of shares or an index at a specific time in the future for a pre-determined price.

Q4. Which of the following cannot be called as a debt instrument as referred in financial transactions?

Certificate of deposits

Bonds

Stocks

Commercial Papers

None of the given options is true

Solution:

Debt instruments are assets that require a fixed payment to the holder, usually with interest. Examples of debt instruments include bonds (government or corporate), mortgages, Commercial Paper and Certificate of Deposits.

Q5. In the capital market, the term arbitrage is used with reference to-

purchase of securities to cover the sale

sale of securities to reduce the loss on purchase

simultaneous purchase and sale of securities to make profits from price

variation in different markets

None of the given options is true

Solution:

Arbitrage is basically buying a security in one market and simultaneously selling it in another market at a higher price, profiting from the temporary difference in prices. This is considered risk-free profit for the investor/trader.

Q6. Equity schemes managed strong NAV gains which boost their assets’ was a new in some financial newspapers. What is the full form of NAV used as in above headlines?

Nill Accounting Variation

Net Accounting Venture

Net Asset Value

New Asset Venture

Normal Asset Venture

Solution:

Equity schemes managed strong Net Asset Value (NAV) gains which boost their assets’ was a new in some financial newspapers.

Q7. SEBI is a/an-

advisory body

statutory body

constitutional body

non-statutory body

registered as a society

Solution:

Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India. It was established in the year 1988 and given statutory powers on 30 January 1992 through the SEBI Act, 1992.

Q8. Which of the following bodies promoted Securities Trading Corporation of India Limited (STCI) jointly with the public sector banks?

SEBI

TRAI

NABARD

RBI

IRDAI

Solution:

STCI Finance Ltd. (formerly known as Securities Trading Corporation of India Limited), is a systemically important non-deposit taking NBFC registered with Reserve Bank of India. Presently STCI Finance Ltd is classified as a loan NBFC.

Q9. Commercial paper are issued by-

company to a bank

banks to companies

bank to banks

company to its suppliers

None of the above

Solution:

Commercial paper is an unsecured form of promissory note that pays a fixed rate of interest. It is typically issued by large banks or corporations to cover short-term receivables and meet short-term financial obligations, such as funding for a new project.

Q10. Which of the following can be identified as a demat account?

Accounts which can have zero balance

Accounts opened to facilitate repayment of loan

Accounts in which shares of companies are traded in electronic form

Accounts maintained by mutual fund companies for investors

None of the given options is true

Solution:

Dematerialized account number is quoted for all transactions to enable electronic settlements of trades to take place. Every shareholder will have a Dematerialized account for the purpose of transacting.

Q11. General Insurance Corporation (GIC) of India is a state owned enterprise in India. Where is the head office of GIC?

Kolkata

Chennai

New Delhi

Mumbai

Hyderabad

Solution:

GIC of India is a state owned enterprise in India. The head office of GIC is in Mumbai.

Q12. Life Insurance Corporation of India is an Indian state-owned insurance group and investment company. In which year LIC was founded?

1956

1952

1961

1935

1955

Solution:

Life Insurance Corporation of India is an Indian state-owned insurance group and investment company headquartered in Mumbai. It was founded in 1956.

Q13. General Insurance Corporation (GIC) of India was incorporated on _________________________ under the Companies Act, 1956 as a private company limited by shares.

01st July 1955

01st April 1935

22nd November 1972

12th April 1992

12th November 1992

Solution:

General Insurance Corporation of India (GIC) was formed in pursuance of Section 9(1) of GIBNA. It was incorporated on 22 November 1972 under the Companies Act, 1956 as a private company limited by shares. GIC was formed for the purpose of superintending, controlling and carrying on the business of general insurance.

Q14. LIC was formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. _______________ from the Government of India.

Rs. 10 crore

Rs. 50 crore

Rs. 100 crore

Rs. 1 crore

Rs. 5 crore

Solution:

LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

Q15. Who is present Chairman-cum-Managing Director of GIC?

Tajinder Mukherjee

Alice G Vaidyan

TL Alamelu