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Sources of Business Finance Test - 17

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Sources of Business Finance Test - 17
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Weekly Quiz Competition
  • Question 1
    1 / -0
    Commercial bank creates ___________.
    Solution
    A commercial bank is that financial institution whose primary function is to accept deposit from people and offers loan for the purpose of consumption or investment. The main function of commercial bank is to create credit through the primary deposits which the bank receives from the public in order to provide more credit to the public by the way of multiplying these deposits into a greater sum of money through the process of credit creation. 
  • Question 2
    1 / -0
    Commercial banks create _________.
    Solution

    Credit  money refers to that money whose value of money (face-value) is greater than the commodity value (intrinsic value) of money. Bank draft, promissory notes etc. are common examples of credit money. These are created by commercial banks in order to add more efficiency in cash transactions by reducing its cost as in these type of money the face value of money is much more higher than its commodity value. For example, a bank draft for 1 lakh rupees. 

  • Question 3
    1 / -0
    The shares of a company are________. 
    Solution
    The shares of a company are transferable as the shares can be trade between buyers and sellers of the shares of the stock of the company at a mutually agreed price.
    Hence, option (A) is the correct answer.
  • Question 4
    1 / -0
    Withdrawals are not permitted from the ________ accounts.
    Solution
    Fixed Deposit account is opened for depositing money for a fixed period of time. Withdrawals are usually not permitted till the expiry of the deposit. However, premature withdrawal is allowed following the terms and conditions of the deposit availed.
    Withdrawal of money is permitted from savings, current, and cash credit accounts.
  • Question 5
    1 / -0
    Bank is a ________ institution.
    Solution
    The bank is a financial institution. It accepts deposits from lenders and gives loans to the borrowers. Banks help to improve the financial stability of an economy.
    Hence, option (A) is the correct answer.
  • Question 6
    1 / -0
    CRR means ________.
    Solution

    Cash Reserves Ratio refers to the proportion of total deposits of the commercial banks which they must keep as reserves with the central bank in the form of cash. Cash reserve ratio is determined by central bank so that they can control the amount of credit creation of the commercial banks.

  • Question 7
    1 / -0
    Which of the following is the odd one?
  • Question 8
    1 / -0
    Which of the following statement is true?
  • Question 9
    1 / -0
    Given a reserve ratio of 20% an initial deposit of Rs. 1000 in a banking system would create secondary deposit of Rs ________.
  • Question 10
    1 / -0
    Debenture holders are entitled to _________.
    Solution
    Debentures are issued to the public as a contract of repayment of money borrowed from them. These debentures are for a fixed period and a fixed interest rate that is payable yearly or half-yearly. Debentures holders are entitled to interest as their return on investments.
    Therefore, C is the correct option.
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