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Advanced Wealth Management Course (IIBF) - Paper 1

Part I: Ch 2:Participants in the Indian Fin System

Q1.

Which of the following has an intermediary correctly paired with the financial market in which it usually operates?

Stockbroker and short-term money market

Investment bank and debt market

Derivative dealer and fixed interest market

Co-operative bank and international money transfer

Q2.

Life insurance companies are required to maintain policyholder assets in statutory assets.

True

False

Q3.

Which of the following statements is the most accurate?

Retail financial services are largely provided by investment banks, while other banks concentrate on wholesale financial services.

Wholesale financial services are structured and tailored for households and small/medium size enterprises.

Retail financial services are largely structured to meet the needs of individuals and small to medium corporations.

Wholesale financial services are commonly provided by banks, mutual funds and Non-banking financial services.

Q4.

An intermediary serves as an agent between lenders and borrowers; once they are brought together, the lender acquires a direct financial claim on the borrower.

True

False

Q5.

(I) Fund managers have specialist skills in investing large pools of money. (II) In direct financing, the lender is bearing all the risk, although they may offset this to an extent by taking a charge over the borrower’s assets.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

Q6.

The cost of intermediation is the fee charged by the intermediary through the imposition of interest rates and other charges.

False

True

Q7.

(I) Financial intermediaries are able to match lenders directly with borrowers. (II) The distinction between the wholesale and retail market is linked to the size and nature of the transaction.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

Q8.

_____________ usually underwrite equity issues.

Custodians

Trading members

Trustees

Stockbrokers

Q9.

____________ handles the issue of Government securities and also performs open market operations in securities.

RBI

SEBI

AMC

Banks

Q10.

(I) In India, the financial system is based mainly on indirect funds flow. (II) RBI is empowered to provide emergency liquidity support in the event of threats to the stability of the financial system.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

Q11.

_______________, which specializes in providing financial services to the wholesale market.

Banks

Investment banks

Finance companies

None of the above

Q12.

Which of the following investment option/s available to the retail investor.

Fixed Deposits

Debentures

Mutual funds

Both A and B

All A, B and C

Q13.

Acquisitions are currently administered by

SEBI

RBI

SCRA

None of the above

Q14.

Liquid mutual funds have given retail investors access to wholesale interest rates by pooling investor’s fund.

True

False

Q15.

(I) The role of the financial intermediary in foreign exchange dealing is to pool the risk of adverse exchange movements. (II) Funds at call in general pay a higher rate than funds committed for a specific term.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

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