JAIIB IE & IFS Practice Questions

Q1. Which of the following will further the financial Q4. What is the correct formula of GNP (Gross
inclusion in the country. National Product)?
I. Priority sector lending (a) GNP = GDP - Net factor income from abroad
II. Open market operations (b) GNP = GDP + Net factor income from abroad
III. Peer to Peer lending (c) GNP = GDP + Net factor income from abroad
IV. Direct benefit transfer of subsidies Select the (d) GNP = Net factor income from abroad - GDP
correct code.
(a) I and III only Q5. The Primary Dealers system in the govt. was
(b) II and IV only introduced in the _____ year by ____ :
(c) I, III and IV only (a) 1995, RBI
(d) All the above (b) 1994, SEBI
(c) 1995, SEBI
Q2. Consider the following statements regarding (d) 1951, PFRDA
'Micro Finance Institutions'
I. They are non-deposit taking NBFCs with at least Q6. Choose one correct statement from the
85% of its loans extended without collateral. following:
II. They shall maintain a capital adequacy ratio as Underemployment occurs —
prescribed by RBI. Which of the following (a) when people are not willing to work.
statements is/ are correct? (b) when people are working slowly.
(a) I only (c) when people are working less than what they
(b) II only are capable of doing.
(c) Both I and II (d) when people are not paid for their jobs.
(d) Neither I nor II
Q7. Which of the following statement is TRUE for
Q3. Which of the following statements is true about Capital Market?
the Primary and Secondary Markets? (a) Primary markets deal with trade of new issues
(a) The primary market is regulated by the of stocks and other securities
Securities and Exchange Board of India (SEBI) (b) Secondary market deals with the exchange of
and secondary market is regulated by the existing or previously-issued securities
Reserve Bank of India (RBI). (c) Both (a) and (b)
(b) A Secondary market is a financial market in (d) None of the above
which new issues of a security, such as a bond
or a stock, are sold to initial buyers by the Q8. During the time of direct British control from
corporation or government agency borrowing 1858 to 1947, the colonial government’s official
the funds. transfer of monies to the United Kingdom were
(c) The first organised stock exchange was set up in referred as ___________
Bombay in 1895. (a) Salary for home
(d) An important financial institution that assists in (b) House Charges
the initial sale of securities in the primary (c) Home charges
market is the investment bank. (d) None of the above

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Q9. Which of the following statement is TRUE for Q13. Green bonds are the bonds issued by any
Economic Planning in India? _______.
(A) India adopted a system of five yearly planning (i) Sovereign entity
to address its various socioeconomic problems (ii) Inter-governmental groups or alliances
(B) The Indian government adopted five year plan (iii) Corporates
starting from first year plan in 1951 (a) Only (i) and (ii)
(a) A only (b) Only (i) and (iii)
(c) Only (ii) and (iii)
(b) B only
(d) (i), (ii) and (iii)
(c) Both A and B
(d) Neither A nor B
Q14. Migration is often the outcome of a series of
factors that are worsened by changing
Q10. India has one of the world’s _____ growing environmental conditions as well as developmental
economies, it also has one of the most _____ societies and demographic situations. What are those
(a) slowest, equal factors?
(b) fastest, equal (i) Economic
(c) slowest, unequal (ii) Social
(d) fastest, unequal (iii) Political
(a) Only (i) and (ii)
Q11. Which of the following has/have occurred in (b) Only (i) and (iii)
India after its liberalization of economic policies in (c) Only (ii) and (iii)
1991? (d) (i), (ii) and (iii)
1. Share of agriculture in GDP increased
Q15. What were the reasons for introducing the
enormously
economic reforms in 1991?
2. Share of India’s exports in world trade increased
(i) Reduce in foreign exchange reserve
3. FDI inflows increased
(ii) The negative balance of payments
4. India’s foreign exchange reserves increased (iii) Increase in Deflation
enormously (a) Only (i) and (ii)
(a) 1 and 4 only (b) Only (i) and (iii)
(b) 2, 3 and 4 only (c) Only (ii) and (iii)
(c) 2 and 3 only (d) (i) (ii) and (iii)
(d) 1, 2, 3 and 4
Q16. Which section of the Companies Act 2013
Q12. Which of the following statements is true with provides legal support for CSR in India?
respect to the Annual Financial Statement? (a) Section 135
I. The budget document relates to the receipts and (b) Section 235
expenditures of the next five years of the (c) Section 295
government. (d) Section 195
II. Annual Financial Statement runs for a financial
Q17. India aims to achieve the target of net zero
year from 1 March to 28 February
emissions by which year?
(a) Only I
(a) 2030
(b) Only II (b) 2040
(c) Both I and II (c) 2050
(d) Neither I nor II (d) 2070

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Q18. Which of the following is not applicable for a Q21. Which among the following is/are the correct
worker, who works in the organised sector? functions performed by the money market?
(a) He/She gets a regular salary at the end of the (a) It provides an equilibrating mechanism for
month demand and supply of short-term funds.
(b) He/She is not paid for leave (b) It enables borrowers and lenders of short-term
(c) He/She gets medical allowance funds to fulfil their borrowing and investment
(d) He/She got an appointment letter stating the requirements, at an efficient market clearing
terms and conditions of work when he/she price.
joins work.
(c) It provides an avenue for central bank
intervention in influencing both quantum and
Q19. Read the following statements carefully and
cost of liquidity in the financial system, thereby
choose the correct option in relation to the topic
transmitting monetary policy impulses to the
“Foreign Exchange Market”.
real economy.
Statement 1: Post liberalisation, in the 1990s, also,
the economy was opened to a great extent and India (d) All of the above
became practically convertible on the current
account. Q22. What is the maximum tenor for Long-Term
Statement 2: This led to increasing turnovers in the Repo Operations (LTRO)?
forex market, which rose from approximately USD (a) 1 year
6 billion daily in 2000 to USD 70 billion daily, at (b) 3 years
present. (c) 5 years
(a) Statement 1 is correct and Statement 2 is (d) 10 years
incorrect
(b) Statement 1 is incorrect and Statement 2 is Q23. Which of the following statements is not true
correct about the banking system?
(c) Both the Statements are correct Statement- I - Purpose of the balance-of-trade
(d) Both the Statements are incorrect accounts is to account for money flows between
one country and the rest of the world.
Q20. Fill in the blanks. Statement- II - IMF lends to developing countries,
A financial market is a place where financial
helping them invest in their infrastructure, such as
products are bought and sold. The financial market
new roads, dams, electric power plants, etc.
in India evolved and grew rapidly as a consequence
Statement- III - The World Bank helps countries
of the _______measures taken in the_____. There are
finance a balance-of-payments deficit. The World
different segments in the financial market like
Bank has a cache of gold and foreign currencies that
money market, debt market, forex market and
insurance market. The financial market has a it can lend.
number of important functions for the growth of Statement- IV - Balance-of-payments deficit causes
the economy and price discovery is one of its a surplus of currency on the international exchange
important functions. markets.
(a) Privatization, 1980s (a) Statement- I
(b) Globalization, 1990s (b) Statement- II
(c) Liberalization, 1990s (c) Statement- I & IV
(d) Privatization, 1990s (d) Statement- II & III

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Q24. Which of the following is/are Qualified (a) Hard Currency
Institutional Buyers (QIBs) ? (b) Fiat Money
I. Scheduled commercial banks (c) Fiduciary Money
II. Foreign institutional investor registered with (d) Representative Money
SEBI
III. Venture capital funds registered with SEBI Q29. Consider the given statement and choose the
IV. State Industrial Development Corporations option which is closely related to this statement. “It
was enacted in 2003 to bring transparency and
(a) Only I and IV
accountability in the conduct of the fiscal and
(b) Only I
monetary actions of the government.”
(c) Only I and II
(a) SARFAESI Act
(d) All I, II, III, IV (b) IBC
(c) FRBM Act
Q25. Consider the following statement and choose (d) Finance Commission
the correct answer.
I. The BOP deficit indicates a country's export is Q30. Which of the following statements is not true
more than its import. about money?
II. The BOP statement helps the government to Statement- I - Money cannot act as a convenient
decide on fiscal and trade policies. unit of account
(a) Only I Statement- II - At higher interest rates, demand for
(b) Only II money comes down.
(c) Both I and II Statement- III - India got its central bank in 1965.
(d) Neither I nor II Its name is 'The Central Bank of India'.
Statement- IV - The currency issued by the central
bank can be held by the public or by the commercial
Q26. Fill in the blanks.
banks and is called the 'high-powered money' as it
The money value of all final goods and services
acts as a basis for credit creation.
produced in each sector during a particular year (a) Statement III
provides the total production of the sector for that (b) Statement I & II
year And the sum of production in the three sectors (c) Statement II & III
gives what is called the _______________ of a country. (d) Statement I, IV & III
(a) NDP
(b) GDP Q31. Which of the following statements are correct
(c) National Income regarding the business cycle
(d) Net National Value I. Business cycles occur periodically although
they do not exhibit the same regularity.
Q27. 'Zero Hunger' is related to which of the II. Business cycles have distinct phases of
following sustainable development goals (SDGs) ? expansion, peak, contraction, and trough.
(a) SDG 1 III. Business cycles are exceedingly complex
phenomena
(b) SDG 5
IV. Business cycles have serious consequences on
(c) SDG 4
the well-being of society.
(d) SDG 2
(a) Only I
(b) Only I and IV
Q28. RBI has recently launched it’s digital currency, (c) Only II, III, and IV
CBDC. The RBI’s digital rupee will be treated as (d) all of the above
_________.
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Q32. Which of the following statements is/are Q37. Find the correct match:
representing characteristics of Business cycle? (a) Science of Material Well-being – Adam Smith
1. Business cycles are highly unpredictable (b) Science of Wealth – A.C. Pigou
2. A business cycle shows a wave-like movement (c) Economics is the science, which studies human
3. During boom period production capacities are behavior as a relationship between ends and
fully utilized
scarce means which have alternative uses –
4. Business cycles are pervasive in their effects.
Robbins
5. Cyclical fluctuations are recurring in nature
(d) None of the above
(a) Only 1, 2 & 3
(b) Only 2, 4 & 5
(c) All except 5 Q38. Which of the following is not one of the central
(d) All questions that the study of economics is supposed
to answer?
Q33. Which of the following is the correct (a) What to produce?
combination of minimum capital requirement for (b) When are goods produced?
setting up a Bank? (c) Who consumes what?
(a) Payment Bank = Rs 100 crores (d) How are goods produced?
(b) Small Finance Bank = Rs 200 crores
(c) Private Sector Bank = Rs 500 crores Q39. The term ‘Economics’ owes its origin to the
(d) All are correct
Greek word
(a) Aikonomia
Q34. Which of the following financial
products/services is/are not supervised by NPCI? (b) Wikonomia
(a) IMPS (c) Oikonomia
(b) RTGS (d) None of the above
(c) NFS
(d) NACH Q40. Price theory is an important constituent of
________ economics.
Q35. Which among the following is not TRUE (a) Developmental
regarding the Merchant Banks? (b) Micro
1. Merchant Banks are registered by SEBI (c) Welfare
2. Merchant Banks primarily deal with debt and (d) Macro
debt related finance
3. Merchant Banks are management oriented
Q41. Contraction in demand is the result of:
4. Merchant Banks are mainly financiers
(a) (1) and (2) (a) Decrease in the income of purchasers.
(b) (2) and (3) (b) Increase in the price of the good concerned.
(c) (2) and (4) (c) Decrease in number of consumers
(d) (4) only (d) Increase in the price of other goods

Q36. Financial market integration does not Q42. A movement along the demand curve of
contribute in: watches is best described as:
(a) Improving monetary policy transmission in the (a) A decrease in demand
economy. (b) An increase in demand
(b) Reducing arbitrage opportunities. (c) A change in demand
(c) Reducing competition in the market.
(d) A change in quantity demanded
(d) Efficient allocation of funds.
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Q43. In the last four decades, India has faced the Q46. Under the Prime Minister Suraksha Bima
following major shocks Yojana (PMSBY), the scheme is available to people
(i) The 1991 balance of payments (BoP) crisis in the age group of:
(ii) The 2008 global financial crisis (a) 14 to 60 years
(iii) The COVID-19 pandemic (b) 15 to 64 years
(a) Only (i) and (ii) (c) 15 to 59 years
(b) Only (i) and (iii) (d) 18 to 70 years
(c) Only (ii) and (iii)
(d) (i) (ii) and (iii) Q47. Atal Pension Yojana is a pension scheme that
is not focused on:
Q44. Choose the correct statement: (a) Unorganized sector workers
(b) Organized sector workers
Statement 1: As income increases, the consumer
(c) Gig workers
will go in for superior goods and consequently the
(d) Platform workers
demand for inferior goods will fall.
Statement 2: When income increases the money
Q48. What do CICs stand for?
spent on necessaries of life may not increases in the
(a) Credit Information Commission
same proportion. (b) Criteria Information Commission
(a) Both the statements are correct (c) Credit Information Companies
(b) Both the statements are incorrect (d) None of the above
(c) Only statement 1 is correct
(d) Only statement 2 is correct Q49. What is a derivative?
(a) Whose value changes in response to the change
Q45. The penalty for non-compliance with CSR in a specified interest rate, security price,
provisions are ...... commodity price, foreign exchange rate, index
i. At least Rs. 1 crore for the defaulting company of prices or rates, a credit rating or credit index,
ii. At least Rs. 2 lakhs for each defaulting officer or similar variable (called the ‘underlying’)
iii. Imprisonment provision of maximum three (b) That requires no initial net investment or little
years for defaulting officers initial net investment relative to other types of
(a) Only (i) and (ii) contracts that have a similar response to
(b) Only (i) and (iii) changes in market conditions
(c) Only (ii) and (iii) (c) That is settled at a future date
(d) (i), (ii) and (iii) (d) All of the above

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 Solutions
S1. Ans.(c) S26. Ans.(b)
S2. Ans.(c) S27. Ans.(d)
S3. Ans.(d) S28. Ans.(b)
S4. Ans.(c) S29. Ans.(c)
S5. Ans.(a) S30. Ans.(a)
S6. Ans.(c) S31. Ans.(d)
S7. Ans.(c) S32. Ans.(d)
S8. Ans.(c) S33. Ans.(d)
S9. Ans.(c) S34. Ans.(b)
S10. Ans.(d) S35. Ans.(c)
S11. Ans.(b) S36. Ans.(c)
S12. Ans.(d) S37. Ans.(c)
S13. Ans.(d) S38. Ans.(b)
S14. Ans.(d) S39. Ans.(c)
S15. Ans.(a) S40. Ans.(a)
S16. Ans.(a) S41. Ans.(b)
S17. Ans.(d) S42. Ans.(d)
S18. Ans.(b) S43. Ans.(d)
S19. Ans.(c) S44. Ans.(a)
S20. Ans.(c) S45. Ans.(a)
S21. Ans.(d) S46. Ans.(d)
S22. Ans.(b) S47. Ans.(a)
S23. Ans.(d) S48. Ans.(c)
S24. Ans.(d) S49. Ans.(d)
S25. Ans.(c)

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