RBI Grade B Finance & Management Quiz for Phase II 2023
RBI Grade B Finance & Management Quiz for Phase II 2023

RBI Grade B Finance & Management Quiz for Phase II 2023

Finance and Management (FM) Questions with the answer. RBI Grade B Finance and Management Note PDF. RBI Grade B FM Study Material PDF. RBI Finance and Management (FM) Books, PDF, Previous Papers, Question Set, and study material. As we all know that RBI Grade B Notification 2023 is out. The Reserve Bank of India (RBI) conducted the RBI Grade B Phase I Exam for the post of Grade B (Grade ‘B’ (DR) – (General) & others). It’s the right time when you should start your RBI Grade B 2023 Phase II preparation at full pace.

If you are preparing for RBI Grade B 2023 (Phase II), you will come across a section on “Finance and Management (FM)” wherein 65 questions will be there carrying 50 marks. Here we are providing you with “Finance and Management (FM) Questions for RBI Grade B” with answers based on the latest pattern of your daily practice.

Finance and Management (FM) Questions For RBI Grade B | Set-16


1. Read the given passage and answer the questions that follow.

Capital market is a place that provides facilities for buying and selling of financial assets such as shares and debentures. Capital market comprises both primary and secondary market. The market for newly issued securities is called primary market. Secondary market is the financial market for trading of securities that have already been issued in an initial private or public offering. The secondary market refers to the market where the securities issued in the primary market are traded. In secondary market, the investor purchases an asset from another investor rather than from the issuing company Which of the following categories of members are exclusive to BSE?

  1. Jobbers
  2. Market makers
  3. Taraniwalas
  4. Badliwalas
  5. None of the above

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Correct Answer: C. Taraniwalas

Explanation: They are special category of members of the Bombay Stock Exchange. The taravaniwala may be a jobber who specializes in stocks located at the same trading post. When a jobber gives two way quotes and does the transaction, the difference he gets between these two ways spread is called Tarvani and the trader is called Tarvanivala. They make transactions on their own behalf and may act as brokers on behalf of the public.

2. Read the given passage and answer the questions that follow.
Capital market is a place that provides facilities for buying and selling of financial assets such as shares and debentures. Capital market comprises both primary and secondary market. The market for newly issued securities is called primary market. Secondary market is the financial market for trading of securities that have already been issued in an initial private or public offering. The secondary market refers to the market where the securities issued in the primary market are traded. In secondary market, the investor purchases an asset from another investor rather than from the issuing company which of the following are barred from taking commission?

  1. Stock broker
  2. Sub broker
  3. Jobber
  4. All the above
  5. None of the above

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Correct Answer: C. Jobber

Explanation: Jobbers are also members of the stock exchange who do business only for themselves. Jobbers as members of the stock exchange, deal in shares and debentures as independent operators. A jobber is a market maker who gives two-way quotes for a security at any point of time, a lower quotation for buying and a higher quotation for selling of securities. The difference between the two prices is termed as jobber’s profit. Jobbers cannot deal on behalf of public and are barred from taking commission. In India, there is no clear-cut distinction between jobbers and brokers. Here a member can act as both a broker and a jobber at the same time. Jobbers acted as market makers in the London Stock Exchange. In India jobbers are also called taravaniwalas.

3. Read the following passage and answer the question(s) that follow.
Differentiated banks are distinct from Universal Banks as they are infused as niche segments. Niche banks typically target a specific market and tailor the bank’s operations to this target market’s preferences. The differentiation could be on account of capital requirement, the scope of activities or area of operations. As such, they offer a limited range of services/products or function under a different regulatory dispensation.
Which of the following is not a function of small finance bank?

  1. Sell forex to customers
  2. Sell mutual funds
  3. Sell insurance and pensions
  4. Float subsidiaries
  5. Both A and D

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Correct Answer: D. Float subsidiaries

Explanation: SFBs are niche banks that focus and serve the needs of a certain demographic segment of the population. The objectives of setting up of small finance banks will be to further financial inclusion by (1) the provision of savings vehicles (2) supply of credit to small business units; small and marginal farmers; micro and small industries; and other unorganised sector entities, through high technology-low cost operations.
SFBs can sell forex to customers, sell mutual funds, insurance and pensions, can convert into a full-fledged bank but they cannot extend large loans nor can float subsidiaries and deal in sophisticated products.

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4. Read the given passage and answer the questions that follow based on the information mentioned in it.
In order to meet its objectives via its people, Vodafone recognize the importance of outstanding internal communication. The Vodafone team needs to be informed, engaged and enthusiastic so that they can anticipate customer needs and deliver greater quality and value, faster than anyone else. The Vodafone internal communications team was looking for a way to communicate with their people in a unique innovative, fun, and effective way. SnapComms were able to offer Vodafone such a solution. Working closely in partnership with Vodafone, SnapComms customized existing offerings and developed a new tool to meet Vodafone’s internal communications requirements. With the aid of the SnapComms tools, informed, enthusiastic, empowered staff can continue to deliver the mind-blowing experience that customers have come to expect from Vodafone. Prior to using the SnapComms tools, Vodafone were looking for ways to overcome a number of internal communications issues:

All staff emails were viewed as a junk medium due to high usage. In most cases they were ignored, in some cases they were automatically trashed. Hence cut through for important messages was difficult to achieve
Low staff survey response rates.Staff Surveys were generally posted in the intranet and a link was sent out via email. Due to the issues associated with email volumes and all staff emails, the response rate to staff surveys was low. Managers needed to chase staff in order to ensure that important employee surveys were completed. Free up team meetings. Team meetings were filled with reminders, business updates, product and service updates etc. Vodafone wanted to ensure that team meetings were efficient, effective and focused on their goals – not spending time covering off ‘housekeeping’ issues. Centrally manage the internal communication process. It was difficult to centrally manage the number and diversity of messages being put out by different areas of the business. Drive intranet usage and help people find the information they require. Vodafone were moving to a global intranet which due to its sheer size would be harder to navigate. They were looking for a tool to help direct people to the information they needed. Gather staff feedback easily. To ensure excellence in every area of the business and involve employees, Vodafone were looking for a means to easily gather staff feedback regarding everything from external contractor performance to preference on future possible brand images. Timed, targeted employee communications. To ensure employees were able to focus more on customers and less on administration, Vodafone were looking for an internal communications tool that would allow them to receive only targeted internal communications that were appropriate and beneficial to the individual and that were timed to fit in with the employee’s work flow.
________ is a process that consists of a series of decisions made to find the most optimal way(s) to deliver the message to a target audience.

  1. Strategic Communication
  2. Marketing Communication
  3. Business Communication
  4. Integrated Marketing Communication
  5. Effective Communication

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Correct Answer: B. Marketing Communication

Explanation: Marketing communication is a process that consists of a series of decisions made to find the most optimal way(s) to deliver the message to a target audience(Sissors & Baron, 2002; Sissors and Bumba, 1996). According to Rouse and Rouse (2002), effective communication means that the information is received accurately in terms of content and meaning as intended by the sender. According to Duncan (2002:8), marketing communication is a process for managing the customer relationships that drive brand value. Developments taking place in digital media has lead to increasing ways in which companies can communicate with consumers (Crosier et al., 2003). Grimes (2004) do not share the idea of advertisers appointing a main agency among their network of agencies and advises that? Operation across a range of parties is at the heart of successful marketing communication campaigns.”

5.Read the given passage and answer the questions that follow based on the information mentioned in it.
In order to meet its objectives via its people, Vodafone recognize the importance of outstanding internal communication. The Vodafone team needs to be informed, engaged and enthusiastic so that they can anticipate customer needs and deliver greater quality and value, faster than anyone else. The Vodafone internal communications team was looking for a way to communicate with their people in a unique innovative, fun, and effective way. SnapComms were able to offer Vodafone such a solution. Working closely in partnership with Vodafone, SnapComms customized existing offerings and developed a new tool to meet Vodafone’s internal communications requirements. With the aid of the SnapComms tools, informed, enthusiastic, empowered staff can continue to deliver the mind-blowing experience that customers have come to expect from Vodafone. Prior to using the SnapComms tools, Vodafone were looking for ways to overcome a number of internal communications issues:


All staff emails were viewed as a junk medium due to high usage. In most cases they were ignored, in some cases they were automatically trashed. Hence cut through for important messages was difficult to achieve
Low staff survey response rates.Staff Surveys were generally posted in the intranet and a link was sent out via email. Due to the issues associated with email volumes and all staff emails, the response rate to staff surveys was low. Managers needed to chase staff in order to ensure that important employee surveys were completed. Free up team meetings. Team meetings were filled with reminders, business updates, product and service updates etc. Vodafone wanted to ensure that team meetings were efficient, effective and focused on their goals – not spending time covering off ‘housekeeping’ issues. Centrally manage the internal communication process. It was difficult to centrally manage the number and diversity of messages being put out by different areas of the business. Drive intranet usage and help people find the information they require. Vodafone were moving to a global intranet which due to its sheer size would be harder to navigate. They were looking for a tool to help direct people to the information they needed. Gather staff feedback easily. To ensure excellence in every area of the business and involve employees, Vodafone were looking for a means to easily gather staff feedback regarding everything from external contractor performance to preference on future possible brand images. Timed, targeted employee communications. To ensure employees were able to focus more on customers and less on administration, Vodafone were looking for an internal communications tool that would allow them to receive only targeted internal communications that were appropriate and beneficial to the individual and that were timed to fit in with the employee’s work flow.
Who invented components of communication?

  1. Churchill Jr
  2. Mcshane and Glinow
  3. Mcshane and Glinow
  4. Kotler
  5. Dubrin
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Correct Answer: E. Dubrin

Explanation: For effective communication to occur, Dubrin (1997) stipulates that six components must be present: a communication source or sender, a message, a channel, a receiver, feedback and the environment.
The source (sender) is the initiator of a communication event who is usually a person attempting to send a spoken, written, sign language, or nonverbal message to another person(s). Here, the perceived authority and experience of the sender are important factors influencing how much attention the message will receive.
Message is the purpose or idea to be conveyed. Many factors influence how a message is received. Among them are clarity, the alertness of the receiver, the complexity and length of the message, and how the information is organized.
Channel (medium). This concerns the way the message is transmitted. In organizations, 5 several channels or media are usually available. More often than not, messages are either written or spoken or a combination of the two. In addition, nonverbal cues such as a smile and body gestures accompany most spoken messages. For example, there is heavy reliance on electronic transmission of messages (email) in today’s business environment.
Receiver is the other party for whom the message is intended. Communication can only be deemed to be complete when the receiver receives the message and understands it properly.
Feedback is a message/response sent back from the receiver to the sender. Without feedback, it is difficult to know whether a message has been received and understood. Thus, if the receiver takes action intended by the sender, the message is deemed to have been received satisfactorily.

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6.Which of the following is false?

  1. Stock broker can buy if he holds a certificate granted by SEBI
  2. He has to be registered in any recognized stock exchange
  3. To deal with a security listed with a stock exchange he has to be registered with that stock exchange
  4. SEBI grants certificate to the stock broker
  5. All of the above
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Correct Answer: C. To deal with a security listed with a stock exchange he has to be registered with that stock exchange

Explanation: A broker is an agent of the investor. A stockbroker is a member of a recognized stock exchange who transacts in securities. Stockbrokers are not allowed to buy, self, or deal in securities, unless they hold a certificate granted by SEBI. The stockbrokers and sub brokers regulations were issued by the SEBI through a notification in October 1992 and it had the prior approval of the Central Government
The Securities and Exchange Board of India (Stock brokers and sub brokers) Rules, 1992 defined a stockbroker simply as “a member of a recognized stock exchange” Therefore, a registered stockbroker is a member of at least one of the recognized Indian stock exchanges. The application of a stockbroker for grant of certificate is made through a stock exchange/s, of which he is a member. The stock exchange on receipt of application from a broker forwards it to the SEBI as early as possible i.e. not later than thirty days from the date of its receipt. SEBI considers it and on being satisfied that the stockbroker is eligible, it shall grant a certificate to the stockbroker and this will be intimated to the stock exchange

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7. __________, based on a mutual understanding of each other’s intentions and appreciation of the other’s wants and desires, is particularly difficult to achieve.

  1. Identification-based trust
  2. Trust propensity
  3. Benevolence
  4. Integrity
  5. Trust as a process is
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Correct Answer: A. Identification-based trust

Explanation: Identification-based trust based on a mutual understanding of each other’s intentions and appreciation of the other’s wants and desires, is particularly difficult to achieve without face-to-face interaction. Online negotiations can also be hindered because parties express lower levels of trust.

8. How many types of incentive plans exist?

  1. 9
  2. 3
  3. 6
  4. 5
  5. 4

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Correct Answer: C. 6

Explanation: Incentives are effective motivators when the objectives to be met are clearly stated upfront and when the incentives offered are desirable. Gone are the days when one type of incentive, such as money or a pat on the back, worked for everyone. A company that provides various types of incentives, tailored to individual workers, motivates employees to consistently do their best. There are 6 types of incentive plans . They are:

  • Profit or Gain-Sharing: Giving employees the chance to share in productivity gains or profits, usually through cash or stock bonuses, can motivate them to hit individual benchmarks or help reach team-wide or organizational objectives. One way to offer profit sharing is through deferred compensation. regulation.
  • Cash Bonus:  One-time bonus, in addition to regular pay increases or commission, may be paid to individuals for meeting certain milestones or performing valuable services.
  • Retention Bonus: Retention bonus-based rewards promotes employees for staying with the company for a particular amount of time or through a specific event, such as during a merger or acquisition or a crucial production period. In the case of a merger, the bonus might be paid in full or in installments three months to 18 months after the merger has closed. Almost 60 percent of companies surveyed by World at Work/Deloitte Consulting offer retention bonuses as an incentive for the employee to stay after receiving an offer from a competitor.
  • Long-term, Stock-Based Incentives:Publicly traded companies may offer long-term incentives based on the price of common stock. These incentives help align an employee’s long-term financial interest with that of the company. The most popular of these types of incentives for employees is restricted stock, which is given subject to sale restrictions or forfeiture until the employee has been with the company a specific period of time. Also popular are stock options, which allow the employee to buy shares at an agreed-upon price for a certain period of time. Performance shares — grants of actual shares of stock, payment of which is contingent on performance over a multi-year period — are sometimes offered to executives or officers.
  • Training: Offering specialized training in an area of interest is another valued incentive. The key to making this work is to allow the high-performing individual to choose the type of training they most value.
  • Recognition: Many employees thrive on being recognized in front of their peers. One example is an “Employee of the Month” program. The company recognizes the employee through signs in the lobby, emails, a special parking place and at staff meetings and in employee newsletters. Larger companies may choose employees of the month from each division and include breakfast as a group with the CEO. Recognition also can include individual or team perks, such as being able to bring a pet to work or to dress casually for a day, or prizes such as free airplane tickets to a favorite U.S. destination.

9. What is a CDO?

  1. Securitization
  2. Debt instrument
  3. Derivative instrument
  4. Mode of hedging
  5. None of the above
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Correct Answer: A. Securitization

Explanation: A CDO (collateralized debt obligation) is an investment product created by pooling many loans together. By pooling the risk, theory is that risk is diversified. In a CDO there will be a ramp up period where the debt is held on the firms balance sheet as an investment. Once they have enough loans, they will form an SPE (special purpose entity) which remove the debt from the firms balance sheet. The SPE then issues the CDO and sells it to investors. CDO’s will payout the interest earned on the loans to the CDO holder. the SPE allows the issuer to add reserves in case loans don’t pay interest sufficient to pay off the CDO holder. CDO’s are categorized under SECURITIZATION.

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10. Whom of the below was a major contributor for bureaucratic management?

  1. Fredrick Winslow Taylor
  2. Henri Fayol
  3. Max Weber
  4. Elton Mayo
  5. W. Edwards Deming

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Correct Answer: C. Max Weber

Explanation: Bureaucratic management focuses on the ideal form of organization. Max Weber was the major contributor to bureaucratic management. Based on observation, Weber concluded that many early organizations were inefficiently managed, with decisions based on personal relationships and loyalty. He proposed that a form of organization, called a bureaucracy, characterized by division of labor, hierarchy, formalized rules, impersonality, and the selection and promotion of employees based on ability, would lead to more efficient management. Weber also contended that managers’ authority in an organization should be based not on tradition or charisma but on the position held by managers in the organizational hierarchy.

Finance and Management (FM) Quizzes For RBI Grade B 2023

Set-15 Set-14 Set-13 Set-12 Set-11
Set-10 Set-9 Set-8 Set-7 Set-6
Set-5 Set-4 Set3 Set-2 Set-1

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