RBI Grade B Finance & Management Quiz for Phase II 2021
RBI Grade B Finance & Management Quiz for Phase II 2021
Finance and Management (FM) Questions with the answer. RBI Grade B Finance and Management Notes 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 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 2021 Phase II preparation with full pace.
If you are preparing for RBI Grade B 2021 (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.
RBI Grade B Finance & Management Questions with Answer| Set-2
1. Which management theory states that there is no best way to lead a company or to take decisions? A. FHB Theory
B. Changing minds theory
C. Systems theory
D. Contingency theory
E. Just in time
Explanation: The Fiedler Contingency Model was created in the mid-1960s by Fred Fiedler, a scientist who studied the personality and characteristics of leaders. A contingency theory is an organizational theory that claims that there is no best way to organize a corporation, to lead a company, or to make decisions. Instead, the optimal course of action is contingent (dependent) upon the internal and external situation. A contingent leader effectively applies their own style of leadership to the right situation.
2. In the banking context, what do you mean by evergreening of loans?
A. Loans which are evergreen and standard and which are being repaid on time.
B. Loans in which interest is not required to be paid for a certain point of time
C. Loans in which principal is not required to be paid for a certain point of time
D. Loans in which the entire outstanding loan is waived off by the government just by paying a lump sum payment at once
E. None of These
Correct Answer: C. Loans in which principal is not required to be paid for a certain point of time
Explanation: A loan that does not require the principal amount to be paid off within a specified period of time. Evergreen loans are usually in the form of a short-term line of credit that is routinely renewed leaving the principal remaining outstanding for the long term.
An evergreen loan is also known as a revolving loan. This means you can use it, pay the money back and use it again. The loan is reviewed by the lender annually. If you meet the criteria for renewal, the loan is continued. This can go on indefinitely until you or the bank decides to cancel the loan. As long as you pay and can support the loan, the bank won’t take any action to close it.
3. “Basel III” is a comprehensive set of reform measures, developed by the Basel Committee on Banking Supervision, to strengthen the regulation, supervision and risk management of the banking sector. Which of the following is not the aim of Basel III measures? A. Improving the banking sector’s ability to absorb shocks arising from financial and economic stress, whatever be the source
B. Issuing guidelines for central bank Regulator on inflation control
C. Improving risk management and governance
D. Strengthening bank’s transparency and disclosures
E. All are the aim of Basel III measures
Correct Answer: B. Issuing guidelines for central bank Regulator on inflation control
Explanation: Basel III is an international regulatory accord that introduced a set of reforms designed to improve the regulation, supervision and risk management within the banking sector. The Basel Committee on Banking Supervision published the first version of Basel III in late 2009, giving banks approximately three years to satisfy all requirements. Largely in response to the credit crisis, banks are required to maintain proper leverage ratios and meet certain minimum capital requirements to absorb shocks arising from financial and economic stress.
Basel III is part of the continuous effort to enhance the banking regulatory framework. It builds on the Basel I and Basel II documents, and seeks to improve the banking sector’s ability to deal with financial stress, improve risk management, and strengthen the banks’ transparency. A focus of Basel III is to foster greater resilience at the individual bank level in order to reduce the risk of system-wide shocks.
4. _________ is a cognitive bias in which an observer’s overall impression of a person, company, brand, or product influences the observer’s feelings and thoughts about that entity’s character or properties. A. Halo effect
B. Scalar chain
C. Unity of command
D. Gang plank
E. None of these
Explanation: The halo effect is a cognitive bias in which an observer’s overall impression of a person, company, brand, or product influences the observer’s feelings and thoughts about that entity’s character or properties.It was named by psychologist Edward Thorndike in reference to a person being perceived as having a halo. Subsequent researchers have studied it in relation to attractiveness and its bearing on the judicial and educational systems. The halo effect is a specific type of confirmation bias, wherein positive feelings in one area cause ambiguous or neutral traits to be viewed positively. Edward Thorndike originally coined the term referring only to people; however, its use has been greatly expanded especially in the area of brand marketing
The halo effect works in both positive and negative directions (the horns effect): If the observer likes one aspect of something, they will have a positive predisposition toward everything about it. If the observer dislikes one aspect of something, they will have a negative predisposition toward everything about it.
5. ___________ is a job design technique wherein there is an increase in the number of tasks associated with a certain job. In other words, it means increasing the scope of one’s duties and responsibilities. The increase in scope is quantitative in nature and not qualitative and at the same level.
A. Job enrichment
B. Job rotation
C. Job Analysis
D. Job Description
E. Job enlargement
Explanation: Job enlargement is a job design technique wherein there is an increase in the number of tasks associated with a certain job. In other words, it means increasing the scope of one’s duties and responsibilities. The increase in scope is quantitative in nature and not qualitative and at the same level. Job enlargement is a horizontal restructuring method that aims at increase in the workforce flexibility and at the same time reducing monotony that may creep up over a period of time. It is also known as horizontal loading in that the responsibilities increase at the same level and not vertically.
6. The communication network in which all subordinates under a supervisor communicate through supervisor only is _____ A. Single Chain
B. Inverted V
C. Wheel
D. Free Flow
E. None of these
Explanation: In Wheel pattern, one of the best pattern while compare to other three. The leader has direct contact with all the group members and there are no communication problems, time issue and feedback from the group members. But all the group members can’t connect with one another.
7. ________ is the formal line of authority which moves from highest to lowest rank in a straight line. This chain specifies the route through which the information is to be communicated to the desired location/person.
A. Scalar chain
B. Fayol’s ladder
C. Gang plank
D. Espirit De Corp
E. None of these
Explanation: Scalar chain is the formal line of authority which moves from highest to lowest rank in a straight line. This chain specifies the route through which the information is to be communicated to the desired location/person. Fayol emphasized that every information in the organization must flow according to this chain to facilitate clear communication of orders of the superiors and feelings of the subordinates. This chain must be strictly followed in the organization. Fayol also stated that there should be no overlapping of steps during the communication process.
8. Which of the following ratios should be considered when a Bank is approached by a company for a loan of Rs. 10 lakhs for working capital purposes? A. Liquidity Ratio
B. Solvency Ratio
C. Proprietary Ratio
D. All of these
E. None of the above
Explanation: Liquidity ratios are most useful when they are used in comparative form. This analysis may be performed internally or externally. For example, internal analysis regarding liquidity ratios involves utilizing multiple accounting periods that are reported using the same accounting methods. Comparing previous time periods to current operations allows analysts to track changes in the business. In general, a higher liquidity ratio indicates that a company is more liquid and has better coverage of outstanding debts. Alternatively, external analysis involves comparing the liquidity ratios of one company to another company or entire industry. This information is useful to compare the company’s strategic positioning in relation to its competitors when establishing benchmark goals. Liquidity ratio analysis may not be as effective when looking across industries, as various businesses require different financing structures. Liquidity ratio analysis is less effective for comparing businesses of different sizes in different geographical locations.
9. Which management theory was proposed by Maslow?
A. Theory X
B. Theory Z
C. Physiological needs model
D. Need hierarchy model
E. Self actualisation need model
Explanation: Maslow’s (1943, 1954) hierarchy of needs is a motivational theory in psychology comprising a five tier model of human needs, often depicted as hierarchical levels within a pyramid. Maslow stated that people are motivated to achieve certain needs and that some needs take precedence over others. Our most basic need is for physical survival, and this will be the first thing that motivates our behaviour. Once that level is fulfilled the next level up is what motivates us, and so on
Safety needs – protection from elements, security, order, law, stability, freedom from fear.
Love and belongingness needs – friendship, intimacy, trust and acceptance, receiving and giving affection and love. Affiliating, being part of a group (family, friends, work).
Esteem needs – achievement, mastery, independence, status, dominance, prestige, self-respect, and respect from others.
Self-Actualization needs – realizing personal potential, self-fulfilment, seeking personal growth and peak experiences.
10. Total Quality management is defined as a continuous effort by the management as well as employees of a particular organization to ensure long term customer loyalty and customer satisfaction. Name the four categories of TQM? A. Strength-Weakness-Opportunities-Threat
B. Plan-Do-Study-Act
C. Strength-Do-Study-Act
D. Plan-Develop-Control-Accentuate
E. None of the above
Explanation: The PDSA or the Plan-Do-Study-Act technique is a famous QI or Quality Improvement Tool or Initiative that helps organizations enhance the quality of their products and services. The PDSA technique hinges on the iterative process wherein each cycle begins with planning the quality improvement, actualizing the method or the process for QI, studying the results to determine whether the QI was successful or not, and then acting upon the feedback for the next cycle to incorporate such feedback The PDSA Cycle is a systematic series of steps for gaining valuable learning and knowledge for the continual improvement of a product or process. This means that the emphasis on continuous improvement of products and services through iterative cycles starting with planning and then performing the steps needed to enhance the quality, studying the results to determine what went right and what went wrong, and lastly, incorporating the feedback into the next cycle to make the process better lies at the heart of the PDSA technique.
