Questions on Banking and Finance PDF

1. Any overwriting in cheques needs to be confirmed by: Drawer Drawee Payee 2. In cheques, the amount is paid to: Drawer Drawee Payee 3. No cheque book or 3rd party mandate is provided for which accounts: Illiterate Account Joint Account...

1. Any overwriting in cheques needs to be confirmed by: Drawer Drawee Payee 2. In cheques, the amount is paid to: Drawer Drawee Payee 3. No cheque book or 3rd party mandate is provided for which accounts: Illiterate Account Joint Account Minor Account 4. Banking business carried over a large network of business is known as: Universal Banking Branch Banking Commercial Banking 5. The third stage of money laundering is known as: Placement Layering Integration 6. How many times in a year does frequent return of cheques lead to closure of account? 2 4 6 7. AML helps to detect and report suspicious activities: True False 8. What is the second stage of money laundering? Layering  Integration Placement 9. Banks can pay a stale cheque only in case of stolen cheques: True False 10. Cheque Truncation system helps in better cash management: True False 11. In a cheque, when two lines are drawn on the left-hand upper corner, it is: Bearer Cheque Crossing Cheque Order Cheque 12. An instrument in writing containing an unconditional order is: Promissory Note Bills of Exchange Cheque 13. The maker of the instrument is known as: Payee Drawer Drawee 14. Primary function of a bank is: Accepting Deposits Lending Both A & B 15. Negotiable instruments are credit instruments that are not transferable: True False 16. Only a lost or stolen cheque can be stopped: True  False 17. An act of writing a person's name on the back of the instrument is known as: Endorsement Endorser Endorsee 18. Account Opening Considerations are: Authority Identity Respectability All of the Options 19. The maker in case of cheques is: Drawer Drawee Payee 20. Signing on the back of the instrument only is known as: Blank Endorsement Special Endorsement 21. Any cheque that is torn or damaged is known as: Mutilation Material Alteration 22. Signing on the back of the instrument with direction to pay the amount is known as: Blank Endorsement Special Endorsement 23. When a cheque is crossed: Credited into Account Cash Amount is Paid 24. Deposits that circulate as money leading to a net increase in the money supply is known as:  Credit Creation Savings Fixed Deposit 25. What are the features of a negotiable instrument? Transferability Good Title Right to Sue All of the Options 26. Accounts for minors will be opened as: Minor Account Special Account Parent A/C Minor 27. If negotiable instrument is easily transferred by endorsement or delivery it is known as: Transferability Good Title Right to Sue 28. Special accounts are: Minor Account Current Account Call Deposit 29. System of cheque clearance and settlement between banks is known as: Cheque Truncation System Cheque Endorsement 30. Banker in case of cheques is known as: Holder Drawer Drawee 31. Money when placed into the system is known as: Layering Integration  Placement 32. A post-dated cheque was issued before its due date by the bank, and the drawer makes a stop payment for that cheque, who is liable? Bank Drawer 33. KYC is known as: Know Your Customer Knowledgable Customer 34. Accounts preferred by businessmen are: Fixed Deposit Saving Account Current Account 35. Due to the mental incapacity of the customer, account closure is done according to law: True False 36. While stopping the payment of stolen cheques, only the details of the cheques have to be provided by the client: True False 37. Process by which the original source of illegal money is concealed is known as: Money Laundering Legal Money 38. A person is moving out of the country. In this case, the request for closing the account is provided by: Customer Request Discretion of the Bank Required by Law 39. Closure of account due to a common concern known as unsatisfactory conduct is done after taking approval from regulatory authorities. The unsatisfactory conduct is: Money Laundering Death of customer Mental Incapacity 40. Paying bank dishonors the cheque when the funds are insufficient: True False 41. An instrument in writing containing an unconditional undertaking is: Cheque Bill of Exchange Promissory Note 42. Paying Bank is liable to make payment in case of a forged signature when it is proved that no gross negligence was done by the drawer: True False 43. Financial conglomerate functioning as financial supermarkets is: Branch Banking Commercial Banking Universal Banking 44. Stale cheques are any cheques that are older than: 5 6 7 45. The person who transfers an instrument is known as: Endorser Endorsee 46. A minor is a person as per Hijra calendar with age below: 21  18 16 47. When the name of a specific bank is written in space between 2 parallel lines, it is: General Crossing Special Crossing 48. The bank on which the cheque is drawn is known as: Paying Bank Collecting Bank 49. Which account has no concept of survivorship? Joint Account Minor Account Illiterate Account 50. Any changes made in cheques are known as: Material Alteration Mutilation 51. Offering of financial services to individual or personal customers is known as: Corporate Banking Business Banking Retail Banking SME Banking 52. Which type of loan is an unsecured loan? Auto Loan Personal Loan Corporate Loan Mortgage Loan 53. The repayment of a Personal Loan must not exceed: 12 Months 24 Months 48 Months  60 Months 54. Investments with high risks are expected to provide high returns: True False 55. The product that is used as a retirement tool for steady income is: Bond Funds General Insurance Life Insurance Equity Funds 56. ATMs are used to process card payments at retail shops: True False 57. The objective of taking general insurance is to plan for retirements: True False 58. An insurance policy that provides both death and investment option is: Variable Life Whole Life Policy Term Life Policy All of them 59. Cards that are enabled with the top-up facility are: Credit Cards Debit Cards Prepaid Cards All of them 60. Mr. Ahmed has a salary of Dhs 10,000. The maximum amount of PL he can take is: 50,000 100,000 150,000 200,000 61. Third Party guarantee should be exercised by one party in case of non- performance by the other party: True False 62. The stage where the loan is actually disbursed to the customer is: Collections Credit approval Credit monitoring Credit administration 63. The interest on a Credit Card is less than a Personal Loan: True False 64. A life insurance policy that does not have a cash value is: Endowment Life Whole Life Term Life 65. Which one of the following funds is the least risky investment? Equity Funds Bond Funds Money Market Funds Balanced Funds 66. Which of the following cannot be used as collateral? Bank Deposits Life Insurance Stocks and Shares 67. A rider that offers monthly income to the nominee on the death of the life assured. Term Rider Premium Rider Disability Rider Illness Rider 68. Maximum amount in a mortgage loan in retail banking. 5 Million 10 Million 12 Million No Limit 69. Which is not part of the 5Cs of the credit decision? Cost Capacity Character Collateral 70. Cheque books are issued to: Savings Account Fixed Deposit Current Account All of them 71. Benefits of Investment Products: Professionalism Diversification Affordability All of them 72. Prior notice to be given to banks before withdrawal: Call Deposit Savings Account Fixed Deposit Recurring Deposit 73. Unlimited deposits and unlimited withdrawals are allowed in: Savings Account Fixed Deposit Call Deposit Current Account 74. The ratio that measures the firm's ability to meet current obligations: Activity ratio  Liquidity ratio Profitability ratio Leverage ratio 75. Investments where funds are equally distributed between bonds and equity: Money Market Funds Balanced Funds Bond Funds Equity Funds 76. The financial statement that is prepared to understand the revenue and expenditure of a corporate: Balance Sheet Income Statement Statement of Cash Flow Statement of Retained Earnings 77. Banking service used for periodic payments towards utility bills and insurance services: SWIFT Facility Direct Debit Standing Order All of them 78. Investment fund that provides monthly income to investors from coupons and dividends of shares: Income Funds Guaranteed Funds Balanced Funds Bond Funds 79. Recommend (best) account where you save regularly to build up a fixed sum over a period of time: Savings Account Fixed Deposit Recurring Deposit Call Deposit 80. Banking service that is used to transfer funds inside and outside the country: Standing Order Remittance Facility Direct Debit Facility All of them 81. Channels of banking reduce the cost to a bank as well as the customer: True False 82. In a mortgage relationship, the mortgagor has the right to enforce the security in case of loan default: True False 83. A debenture is a written acknowledgment of debts issued by individuals: True False 84. The repayment of a car loan must not exceed: 12 Months 24 Months 48 Months 60 Months 85. The stage where business and financial analysis are done on a customer: Sales Credit Approval Credit Administration Credit Monitoring 86. Defines the constitution, powers, and activities of a company: Board of Directors Articles of Association Commercial Companies Law Memorandum of Association 87. Civil Code or Civil transaction law pertains to commercial transactions: True False 88. Banks in UAE are required to send a bank statement to the customer __________, unless there is an agreement to the contrary: Every 1 month Every 3 months Will only send if customer asks Banks Discretion 89. Mr. A has taken a loan from FAB Bank. In this example, FAB will be: Debtor Creditor Principal Agent 90. Banks hire lockers to their customers. Legally, the bank is a: Bailor Bailee Lessor Lessee 91. Every interaction between the bank and the customer is called a transaction: True False 92. All agreements are contracts, but all contracts are not agreements: True False 93. The UAE national shareholding means, at least ___ % of the capital in companies under CCL must be held by UAE Nationals: 25% 50% 51% 100% 94. Mr. B has given his cheque for collection to the bank. Legally, the bank is a: Agent Principal Debtor Creditor 95. An implied contract is the one in which the agreement is made in words or spoken: True False 96. A promise binds the maker unless he dies or becomes bankrupt: True False 97. Rights of the customer are duties of a banker: True False 98. _____________ may be an act of doing something or not doing something or a promise to do or not do something: Promise Offer Acceptance Consideration 99. A contract which has no legal effect is known as: Void Contract Valid Contract Voidable Contract Non-Binding Contract 100. The one who owes is called a "Debtor": True False 101. An authority in writing given by a person to a bank to operate a specific account: Agency General POA Specific POA Bank Mandate 102. An advertisement is considered as an offer: True False 103. The share of ____________ company is offered to the general public for subscription: Private Limited Company Limited Liability Company Simple Commandite Company None 104. The primary function of a commercial bank is to: Accept deposits Give Loans Both A and B None 105. The sum specified in the contract representing the actual loss, when there is a breach of contract: Penalty Damages Liquidated Damages Specific Performance 106. The bank shall have the right to withhold the financial securities deposited and refrain from returning the same until recovery of its right: Set off Clause Power of Attorney Bank Mandate Banker's Lien 107. The termination of a contractual relationship between the parties is known as: Breach of a Contract Dissolution of a Contract Both None 108. Order of the court restraining a person from doing some act: Specific Performance Penalty Injunction None 109. A contract formed by one party making a false statement to the other to induce the latter into it. The contract is formed by: Coercion Duress Mistake Misrepresentation 110. Which of the following POA is unlimited in scope and allows the agent to do any financial transaction on behalf of the principal? General POA Special POA Bank Mandate All of them 111. ABC and Company is a natural person: True False 112. A company in the free zone with only one shareholder is known as: Holding Company Free Zone Company Free Zone Establishment Single Commandite Company 113. ___________ defines internal rules of behavior of the company:  Board Resolution Board of Directors Articles of Association Memorandum of Association 114. _____ is used when the bank takes physical possession of any movable assets: Mortgage Hypothecation Pledge None