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Indian Financial System Interview Questions & Answers - Learning Mode

Indian Financial System Interview Questions & Answers - Learning Mode

Indian Financial System means supply funds to various sectors and activities of the economy in ways that promote the fullest possible utilization of resources without the destabilizing consequence of price level changes or unnecessary interference with individual desires.

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Subcategories for Indian Financial System Interview Questions & Answers - Learning Mode

Following are sub categories for which Interview Questions & Answers are available under Indian Financial System Interview Questions & Answers - Learning Mode. Please select the appropriate sub-category:-

Commercial Banks Interview Questions & Answers (19) Learning Mode | Exam Mode

Financial Instituions Interview Questions & Answers (8) Learning Mode | Exam Mode

Financial Services Interview Questions & Answers (48) Learning Mode | Exam Mode

Regulatory Institutions Interview Questions & Answers (18) Learning Mode | Exam Mode


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Indian Financial System Interview Questions & Answers - Learning Mode
Try Indian Financial System Interview Questions & Answers - Exam Mode
Question: What is a Financial System?

Answer: The term financial system is a set of inter-related activities/services working together to achieve some predetermined purpose or goal. It includes different markets, the institutions, instruments, services and mechanisms which influence the generation of savings, investment capital formation and growth. Source:
Question: State the characteristics of Money Market?

Answer: 1.It is market purely for short-term funds or financial assets called near money.
2. It deals with financial assets having a maturity period up to one year only.
3.It deals with only those assets which can be converted into cash readily without loss and with minimum transaction cost.
4.Generally transactions take place through phone i.e., oral communication. Relevant documents and written communications can be exchanged subsequently. There is no formal place like stock exchange as in th Source:
Question: State the objectives of Financial System?

Answer: ◾Help in Management Decision Making.
◾Provide Information to Potential and Present Investors to Make Their Investment Decisions.
◾Meet Legal Obligations.
◾Forecast Future Performance.
◾To Carry Out Performance Appraisal and Exercise Control. Source:
Question: State the classification of Financial Services?

Answer: 1)Fund Based Services
c)Bills Discounting
d)Venture Capital
2)Fee Based Services
a)Portfolio Management
b)Loan Syndication
c)Corporate Counseling
d)Foreign Collabration Source:
Question: What is a Money Market?

Answer: A money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. The money market is used by participants as a means for borrowing and lending in the short term, from several days to just under a year. Source:
Question: State the difference between Capital and Money Market?

Answer: A capital market is a component of a financial market that allows long-term trading of debt and equity-backed securities. Long-term borrowing or lending is done by investors or corporations that have large amounts of wealth at their disposal.
Money market is a component of financial market where short-term borrowing can be issued. This market includes assets that deal with short-term borrowing, lending, buying and selling. The short-term ensures that the borrowing and lending period has a le Source:
Question: State the meaning of Capital Market?

Answer: Capital market is a market where buyers and sellers engage in trade of financial securities like bonds, stocks, etc. The buying/selling is undertaken by participants such as individuals and institutions.
Question: State the defects in an Indian Money Market?

Answer: 1. Narrow coverage
2. Imbalance between demand and supply
3. Lack of co-ordination
4. Only domestic coverage Source:
Question: Describe the classification of Financial System?

Answer: a)Financial Institutions
b)Financial Markets
c)Financial Instruments
d)Financial Services Source:
Question: What are Financial Assets?

Answer: A financial asset is a tangible liquid asset that derives value because of a contractual claim of what it represents. Stocks, bonds, bank deposits and the like are all examples of financial assets. Unlike land, property, commodities or other tangible physical assets, financial assets do not necessarily have physical worth.

Question: Give the objectives of Money Market?

Answer: ◾To provide a parking place to employ short-term surplus funds.
◾To provide room for overcoming short-term deficits.
◾To enable the Central Bank to influence and regulate liquidity in the economy through its intervention in this market.
◾To provide a reasonable access to users of Short-term funds to meet their requirements quickly, adequately and at reasonable costs.
Question: What is the meaning of Financial Intermediaries?

Answer: A financial intermediary is an entity that acts as the middleman between two parties in a financial transaction. While a commercial bank is a typical financial intermediary, this category also includes other financial institutions such as investment banks, insurance companies, broker-dealers, mutual funds and pension funds. Financial intermediaries offer a number of benefits to the average consumer including safety, liquidity and economies of scale. Source:
Question: State the features of Financial Instruments?

Answer: 1.Easy transferability
2.Ready market
3.Possess liquidity
4.Possess security value
5.Enjoy tax status
6.Carry risk
7.Facilitate futures trading
8.Less handling costs
9.Risk and return proportionate
10.Maturity period variations

Question: Define Financial Services?

Answer: Facilities such as saving accounts, checking accounts, confirming, leasing, and money transfer, provided generally by banks, credit unions, and finance companies.Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Source:
Question: State the suggestions to overcome from the defects of Indian Money Market?

Answer: a)Control the Un-organized sector
b)Banking Facilities
c)Allow non-banking Institutions
d)Harmony of Sub markets
e)More participants and instruments Source:
Question: Give the difference between Primary and Secondary Market?

Answer: The place where fresh issue of shares is made is known as Primary Market.
The place where formerly issued securities are traded is known as Secondary Market. Source:
Question: What are Financial Markets?

Answer: The financial market is a broad term describing any marketplace where buyers and sellers participate in the trade of assets such as equities, bonds, currencies and derivatives. Financial markets are typically defined by having transparent pricing, basic regulations on trading, costs and fees and market forces determining the prices of securities that trade. Source:
Question: State the features of Capital Market?

Answer: a)Mobilization of savings and acceleration of capital formation
b)Promotion of industrial growth
c)Raising long term capital
d)Proper channelization of funds Source:
Question: State the functions of Financial System?

Answer: 1)Pooling of funds
2)Capital formation
3)Facilitates payment
4)Provides liquidity
5)Short and long term needs
6)Risk function Source:


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Latest 20 Questions
Payment of time- barred debt is: (a) Valid (b) Void (c) Illegal (d) Voidable
Consideration is defined in the Indian Contract Act,1872 in: (a) Section 2(f) (b) Section 2(e) (c) Section 2(g) (d) Section 2(d)
Which of the following is not an exception to the rule, "No consideration, No contract": (a) Natural love and affection (b) Compensation for involuntary services (c) Completed gift (d) Agency
Consideration must move at the desire of: (a) The promisor (b) The promisee (c) The promisor or any other party (d) Both the promisor and the promisee
An offer which is open for acceptance over a period of time is: (a) Cross Offer (b) Counter Offer (c) Standing Offer (d) Implied Offer
Specific offer can be communicated to__________ (a) All the parties of contract (b) General public in universe (c) Specific person (d) None of the above
_________ amounts to rejection of the original offer. (a) Cross offer (b) Special offer (c) Standing offer (d) Counter offer
A advertises to sell his old car by advertising in a newspaper. This offer is caleed: (a) General Offer (b) Special Offer (c) Continuing Offer (d) None of the above
In case a counter offer is made, the original offer stands: (a) Rejected (b) Accepted automatically (c) Accepted subject to certain modifications and variations (d) None of the above
In case of unenforceable contract having some technical defect, parties (a) Can sue upon it (b) Cannot sue upon it (c) Should consider it to be illegal (d) None of the above
If entire specified goods is perished before entering into contract of sale, the contract is (a) Valid (b) Void (c) Voidable (d) Cancelled
______________ contracts are also caled contracts with executed consideration. (a) Unilateral (b) Completed (c) Bilateral (d) Executory
A offers B to supply books @ Rs 100 each but B accepts the same with condition of 10% discount. This is a case of (a) Counter Offer (b) Cross Offer (c) Specific Offer (d) General Offer
_____________ is a game of chance. (a) Conditional Contract (b) Contingent Contract (c) Wagering Contract (d) Quasi Contract
There is no binding contract in case of _______ as one's offer cannot be constructed as acceptance (a) Cross Offer (b) Standing Offer (c) Counter Offer (d) Special Offer
An offer is made with an intention to have negotiation from other party. This type of offer is: (a) Invitation to offer (b) Valid offer (c) Voidable (d) None of the above
When an offer is made to the world at large, it is ____________ offer. (a) Counter (b) Special (c) General (d) None of the above
Implied contract even if not in writing or express words is perfectly _______________ if all the conditions are satisfied:- (a) Void (b) Voidable (c) Valid (d) Illegal
A specific offer can be accepted by ___________. (a) Any person (b) Any friend to offeror (c) The person to whom it is made (d) Any friend of offeree
An agreement toput a fire on a person's car is a ______: (a) Legal (b) Voidable (c) Valid (d) Illegal
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