MCQs for JAIIB Preparations | Money Markets | Quiz 1

Money Markets is the Thirtieth Unit (Unit 30) under Module D: Financial Products and Services of Paper – I (Indian Economy & Indian Financial System)

If you are appearing for the Upcoming JAIIB Exams, it is important to understand the fundamental concepts of the Topics and clear your doubts. We have prepare and collected some fundamental questions and answers in the form of MCQ Questions and Answers arranged into multiple Quizzes having 10 Questions in each Quiz. It can help you to understand the topics. A solid fundamental understanding will build your confidence and encourage you to think critically and enables you to answer the JAIIB MCQ Questions correctly in the Exam and increase your chances to pass the exam with flying colors. It is advisable to practice these Questions and Answers on regular basis to raise your confidence Level.

Practice MCQ Question and Answer – Money Markets

Quiz 1

1. What is the typical maturity range of instruments traded in the money market ?





….
Answer is (b)
Overnight to 1 year

2. Which of the following are functions of the money market ?  

  1. Providing long-term capital to businesses
  2. Balancing demand and supply for short-term funds
  3. Offering an avenue for central bank intervention
  4. Facilitating efficient borrowing and lending of short-term funds  




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Answer is (c)
Balancing demand and supply for short-term funds
Offering an avenue for central bank intervention
Facilitating efficient borrowing and lending of short-term funds

3. The central bank notices that inflation is rising in the economy. To control the inflation, it decides to reduce the amount of liquidity in the financial system. Through which market is the central bank most likely to intervene to achieve this ?





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Answer is (b)
Money Market

4. What is the typical duration of borrowing in the call money market ?





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Answer is (a)
1 day

5. The interest rates in the call/notice/term money markets depend on:

  1. Government regulations
  2. Supply and demand for funds between lenders and borrowers
  3. International currency markets
  4. Stock market trends 




….
Answer is (b)
Supply and demand for funds between lenders and borrowers

6. A bank needs to borrow funds overnight to manage its daily liquidity requirement. Which market should the bank access ?





….
Answer is (d)
Call Money Market

7. Which of the following money markets should a Bank approach if it needs to borrow funds for a period of 30 days to manage short-term liquidity needs ?





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Answer is (a)
Term Money Market

8. Which of the following is NOT a function of the money market ?





….
Answer is (a)
Providing long-term financing to businesses

9. Which type of Financial Instruments are traded in Money Market ?

  1. Bonds with a maturity over 1 year
  2. Instruments that are close substitutes for money
  3. Equity shares
  4. Real estate assets




….
Answer is (d)
Instruments that are close substitutes for money

10. The term money market is for lending and borrowing for a period of:





….
Answer is (b)
Derivatives market

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Quiz Numbers

1

Read More: MCQ Type Questions and Answers from Paper – I (Indian Economy & Indian Financial System)

Module A: Indian Economic Architecture

  • An overview of Indian Economy
  • Sectors of the Indian Economy
  • Economic Planning in India & NITI Aayog
  • Role of Priority Sector and MSME in the Indian Economy
  • Infrastructure including Social Infrastructure
  • Globalisation – Impact on India
  • Economic Reforms
  • Foreign Trade Policy, Foreign Investments and Economic Development
  • International Economic Organizations (World Bank, IMF, etc.)
  • Climate change, Sustainable Development Goals (SDGs)
  • Issues facing Indian Economy

Module B – Economic Concepts Related to Banking

  • Fundamentals of Economics, Microeconomics, Macroeconomics and Types of Economies
  • Supply and Demand
  • Money Supply and Inflation
  • Theories of Interest
  • Business Cycles
  • Monetary Policy and Fiscal Policy
  • System of National Accounts and GDP Concepts
  • Union Budget

Module C – Indian Financial Architecture

  • Indian Financial System – An Overview
  • Indian Banking Structure
  • Banking Laws – Reserve Bank of India Act, 1934 & Banking Regulation Act, 1949
  • Development Financial Institutions
  • Micro Finance Institutions
  • Non-Banking Financial Companies (NBFCs)
  • Insurance Companies
  • Indian Financial System – Regulators and Their Roles
  • Reforms & Developments in the Banking sector

Module D – Financial Products and Services

  • Financial Markets
  • Money Markets
  • Capital Markets and Stock Exchanges
  • Fixed Income Markets – Debt and Bond Markets
  • Foreign Exchange Markets
  • Interconnection of Markets and Market Dynamics
  • Merchant Banking Services
  • Derivatives Market
  • Factoring, Forfaiting and Trade Receivables Discounting System (TReDS)
  • Venture Capital
  • Lease Finance and Hire Purchase
  • Credit Rating and Credit Scoring
  • Mutual Funds
  • Insurance Products
  • Pension Products
  • Para Banking and Financial Services Provided by Banks
  • Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs)