Money and Credit Test

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Money and Credit Test - 4

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Weekly Quiz Competition

Question 1
1 / -0

Lenders demand a security against loans, it is known as

A
Credit security

B
Collateral

C
security of credit

D
loan’s worth

Solution

Collateral is an asset that the borrower owns (such as land, building, vehicle, livestocks, deposits, with banks) and uses this as a guarantee to a lender until the loan is repaid.If the borrower fails to repay the loan, the lender has the right to sell the asset or the collateral to obtain the payment.
Question 2
1 / -0

Which of these is not a part of terms of credit?

A
Interst rate

B
lender’s house

C
collateral

D
documentation requirement

Solution

Terms of credit includes collateral, interest rate and documentation requirement. Therefore lender's house is the only item among the mentioned items which is not a part of terms of credit.
Question 3
1 / -0

Formal sources of credit do not include

A
Banks

B
cooperatives

C
Traders

D
SHG’s

Solution

Trader are a part of informal source of credit as they are not governed by RBI or any other government body and they can give loan on any condition and at higher rate of interest. The other three are the formal sources of credit as they are governed by RBI.
Question 4
1 / -0

Informal credit sector loans include:

A
Banks

B
moneylenders

C
NABARD

D
SHG’s

Solution

Moneylenders are a part of informal source of credit as they are not governed by RBI or any other government body and they can give loan on any condition and at higher rate of interest. The other three are the formal sources of credit as they are governed by RBI or any other govt. body.
Question 5
1 / -0

Banks and cooperatives need to lend more to borrowers because

A
borrowers wish to set up enterprises

B
high cost of borrowing from informal sources

C
borrowers need more money but cannot ask

D
there is no other credit option

Solution

High cost of borrowing from informal sector decreases the borrowing power of borrowers, banks and cooperatives provides loan at a reasonable rate.Therefore banks and cooperatives need to lend more to borrowers.
Question 6
1 / -0

In urban areas, Poor households take loan from ________

A
informal sector

B
formal sector

C
cooperatives

D
banks

Solution

Poor households don’t have any collateral, which they could use as a guarantee to a lender until the loan is repaid. so they take loans from informal sources of credit.
Question 7
1 / -0

Poor are unable to get bank loans because of

A
lack of trust on banks

B
High rates of interest

C
Absence of collateral

D
Complex procedure

Solution

Banks give loans on the basis of terms of credit and collateral is one of the parts of terms of credit, sice the poor do not have collateral which they could use as a guarantee to a lender until the loan is repaid. so, they do not get bank loans.
Question 8
1 / -0

In a SHG, most of the important decisions regarding savings and loan activities are taken by

A
government

B
non-government organisation

C
group leaders

D
group members

Solution

A SHG is a village-based financial intermediary committee usually composed of 10–20 local women or men. The members of the SHG has full control over its working and operations and they take most of the important decisions regarding savings and loan activities.
Question 9
1 / -0

_________ is the success story that met the credit needs of the poor, at reasonable rates, in Bangladesh.

A
Cooperative Bank

B
common bank

C
Grameen Bank

D
Reserve Bank

Solution

Grameen Bank of Bangladesh was founded in october 1983. It is one of the biggest success stories in reaching the poor to meet their credit needs at reasonable rates.
Question 10
1 / -0

Money is accepted as a medium of exchange because the currency is authorised by

A
People of the country

B
World bank

C
Central bank

D
The government of the country

Solution

In a country, the government authorises a standard currency as medium of exchange in the country and it legalises money as a medium of payment that cannot be refused in settling transactions. In India the first paper currency was introduced in 1861 by the govt.

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Re-Attempt Weekly Quiz Competition

Money and Credit Test - 4

Result

Money and Credit Test - 4

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Rank

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SHARING IS CARING

Question 1

Credit security

Collateral

security of credit

loan’s worth

Solution

Question 2

Interst rate

lender’s house

collateral

documentation requirement

Solution

Question 3

Banks

cooperatives

Traders

SHG’s

Solution

Question 4

Banks

moneylenders

NABARD

SHG’s

Solution

Question 5

borrowers wish to set up enterprises

high cost of borrowing from informal sources

borrowers need more money but cannot ask

there is no other credit option

Solution

Question 6

informal sector

formal sector

cooperatives

banks

Solution

Question 7

lack of trust on banks

High rates of interest

Absence of collateral

Complex procedure

Solution

Question 8

government

non-government organisation

group leaders

group members

Solution

Question 9

Cooperative Bank

common bank

Grameen Bank

Reserve Bank

Solution

Question 10

People of the country

World bank

Central bank

The government of the country

Solution

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