MOCK TEST BANKING AND OTHER COMPETITIVE EXAMINATIONS QUESTIONS WITH EXAMPLES AND EXPLANATIONS

 

2. 

In the question below a sentence is given with four words highlighted These four words may not be in their correct positionThe sentence is then followed by options with the correct combinationof words that should replace each other inorder to make the sentence grammatically and contextually correct. Find the correct combination of the words that replace each other

i) The revised model gives greater weight to recent observations because older data may amplify (A) current conditions and obscure (B) structural breaks thereby reducing (C) rather than increasing (D) forecast error.

1.AB 

2.CD  

3.AC & BD

4. AB  &  CD 

5.No interchange required.

ii) Despite the bond's high rating, investors should not assume that its  liquidity (A) is negligible (B) while its default risk (C) is ample (D). 

1. AC

2. BD

3. AB & CD

4. AD

5. No interchange required

iii) To reduce procyclical lending, the framework seeks to reward(A) capital buffers during expansions and build (B)  banks that release (C) them when conditions deteriorate (D)

1. AB

2. BC 

3. AD & BC

4. CD

5. No interchange required.

protected

C. By providing unlimited insurance

D. By preventing banks from giving loans

4. Deposit insurance particularly protects ordinary depositors because they may:

A. Have excessive knowledge of banking

B. Have unlimited financial resources

C. Lack the knowledge or resources to assess a bank's financial condition

D. Own several banks

5. Which of the following is NOT mentioned as a benefit of deposit insurance?

A. Strengthening public confidence

B. Contributing to financial stability

C. Preventing panic among depositors

D. Increasing bank profitability

6. According to the passage, effective deposit insurance should be combined with:

A. Higher taxation and strict currency controls

B. Sound banking regulation and responsible management

C. More bank branches and higher interest rates

D. Increased government borrowing

7. Which of the following best expresses the central idea of the passage?

A. Banks should provide unlimited insurance to depositors.

B. DICGC is responsible for regulating all banks in India.

C. Deposit insurance protects depositors and promotes confidence and financial stability.

D. Ordinary depositors are responsible for assessing the financial condition of banks.