AHSEC| CLASS 12| FINANCE| SOLVED PAPER - 2017| H.S. 2ND YEAR
2017
FINANCE
Full Marks: 100
Pass Marks: 30
Time: Three hours
The figures in the margin indicate full marks for the questions.
1. Answer as directed: 1x8=8
(a) In which year Lead Bank Scheme was introduced?
Ans:- December 1969.
(b) What do you mean by unit banking?
Ans:- Unit banking is a system where the operations of a bank are limited to a single office located in a particular area. A unit bank has virtually no branches.
(c) Write the full form of NBFI.
Ans:- Non-banking financial institution.
(d) What is Secondary Market?
Ans:- The secondary market is one in which securities of companies are traded among investors. This means, investors can freely buy and sell securities without interference from the issuing company. In such transactions between investors, the issuing company does not participate in income generation. Furthermore, share valuation is based on the performance of the share in the market.
(e) The word ‘hundi’ is borrowed from Sanskrit word hund which means ‘to collect’.
(f) Money Market is the market for short term fund. (State whether True or False)
(g) Asian Development Bank was established in 1956/1960/1966. (Choose the correct answer)
(h) RBI is the apex monetary institution of India.
2. Name the two non-bank financial institutions of India. 2
Ans:- IDBI: Industrial Development Bank of India.
SIDC: State Industrial Development Corporation.
3. What is bank rate? 2
Ans:- Bank rate is the rate at which the Reserve Bank of India (RBI) provides loans to commercial banks without keeping any security. There is no agreement on repurchase that will be prepared or agreed to without any collateral. RBI allows short-term loans with the presence of collateral.
4. What is Mutual Fund? 2
Ans:- A mutual fund is a pool of investments by different investors in securities such as debt, equity or both. In simple words, it collects money from investors such as individuals and institutions and invests them in bonds, stocks or other short-term investment schemes.
Generally, a fund manager oversees this fund and charges a minimum amount for it which is called the expense ratio. Furthermore, the Securities and Exchange Board of India or SEBI regulates and controls the mutual fund industry like the security markets.
5. Name two submarkets of Indian money market. 2
Ans:- There are two sub-markets of the Indian money market:-
(i) Call Money Market: Call money market refers to the market for extremely short term loans, such as one day to fourteen days. These loans are repaid on demand at the option of the lender or the borrower.
(ii) Collateralized loan market: This is another important component of the money market. The market which deals with collateralized loans, i.e. loans backed by collateral securities like stocks, bonds, etc. is called collateralized loan market.
6. Who is collecting banker? 2
Ans:- A collecting banker is one who collects cheques and other negotiable instruments deposited by his customers and credits the amount to the customer's account.
A collecting banker acts as an intermediary between the paying banker and his customer in collecting the proceeds of a cheque from the paying banker and crediting the same to the customer's account.
7. Discuss the various agency services rendered by commercial bank. 3
Ans:- The various agency services provided by commercial banks are discussed below:-
(i) Remittance of funds: Banks help their customers to transfer money from one place to another through cheques, drafts etc.
(ii) Collection and payment of credit instruments: Banks collect and pay various credit instruments like cheques, bills of exchange, promissory notes etc.
(iii) Buying and selling of securities: Banks buy and sell various securities like shares, stocks, bonds, debentures, etc. on behalf of their customers. Banks neither provide any advice to their customers regarding these investments nor charge them any fee for their service, but only act as brokers.
(iv) Income tax consultancy: Sometimes bankers employ income tax experts not only to prepare income tax returns for their clients but also to help them in obtaining income tax refunds in appropriate cases.
(v) Acting as trustee and executor: Banks safeguard the wills of their customers and execute them after their death.
(vi) Acting as representative and correspondent: Sometimes banks act for their customers as their representative and correspondent. They obtain passports, passengers, tickets, secure passage for their clients and receive letters on their behalf.
8. Write a brief note about the money market. 3
Ans:- Money market refers to those institutional arrangements that provide facilities to borrowers who require short-term funds. In the money market, money can be borrowed for short periods of one day, one week, one month, 3 to 6 months on the basis of various types of instruments, such as bills of exchange banker's acceptance etc., which is called "pass money". It is said. Is. , then money market is a type of market, which helps or guides the public to invest their surplus money in industrial concerns and helps people to take loans through banks.
According to Crowther, "Currency market is a collective name given to various firms and institutions that trade different grades of currencies."
9. What are the main objectives of IMF? 3
Ans:- The main objectives of IMF are:-
(i) Promotion of International Monetary Cooperation: The main objective of the Fund was to promote international monetary cooperation through a permanent institution that provides machinery for consultation and cooperation on international monetary problems.
(ii) Balanced development of international trade: One of the main objectives of the Fund was to facilitate the expansion and balanced development of international trade and to promote and maintain high levels of employment and real incomes and contribute to development. of the productive resources of all members.
(iii) Stability in exchange rates: Another important objective of the IMF was to promote exchange stability, maintain orderly exchange arrangements among members and avoid competitive exchange depreciation.
(iv) Establishment of a multilateral system of trade and payments: Another objective of the establishment of the IMF was to assist in the establishment of a multilateral system of payments in respect of existing transactions between members and to eliminate foreign exchange restrictions which would hinder the world.
(v) Developing confidence of members: Another objective of the IMF was to develop confidence in members by making funds and resources available under adequate safeguards, thus providing an opportunity to correct mis adjustments in the balance of payments without resorting to destructive measures. Had to provide. Had to do. Of national or international prosperity.
(vi) Eliminating the balance of payments deficit: Another objective of the establishment of the IMF was to eliminate the balance of payments deficit. The IMF arranges necessary loans from foreign exchange reserves to overcome the balance of payments deficit.
10. State any three differences between Bill of Exchange and Cheque. 3
Ans:- There are three differences between bill of exchange and cheque:-
(i) A bill of exchange can be drawn on any person including a banker. Cheque: It can be issued only by a banker.
(ii) A bill of exchange requires the acceptance of the drawee. Cheque: This does not require any approval.
(iii) A bill of exchange to a grace period of three days unless it is payable on demand. Cheque: It is not entitled to any grace period.
11. Draw a specimen copy of Bill of Exchange. 3
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