IBPS Bank PO Exam – Practice Quiz (Set 3 – 20 Questions)
Attempt the following questions and click “Show Answer” to reveal the correct option.
Q1. “Inflation” in an economy is best described as:
- Increase in production of goods and services
- Decrease in general price level of goods and services
- Increase in general price level of goods and services over a period of time
- Increase in foreign exchange reserves
Correct Answer: C) Increase in general price level of goods and services over a period of time
Q2. “Open Market Operations (OMO)” are conducted by RBI mainly to:
- Regulate foreign trade
- Buy and sell government securities to control liquidity
- Issue new currency notes
- Provide subsidies to banks
Correct Answer: B) Buy and sell government securities to control liquidity
Q3. Which of the following instruments is used by RBI as a quantitative tool of monetary policy?
- Margin requirements
- Moral suasion
- Credit rationing
- Cash Reserve Ratio (CRR)
Correct Answer: D) Cash Reserve Ratio (CRR)
Q4. “Bridge Loan” is generally taken to:
- Finance long-term infrastructure projects only
- Provide short-term funds until a long-term financing arrangement is finalized
- Repay government taxes
- Invest in foreign securities
Correct Answer: B) Provide short-term funds until a long-term financing arrangement is finalized
Q5. “White Label ATMs” are:
- ATMs owned and operated by banks only
- ATMs owned and operated by non-bank entities
- ATMs exclusively for foreign currency transactions
- ATMs installed inside bank branches only
Correct Answer: B) ATMs owned and operated by non-bank entities
Q6. “SWIFT” is primarily related to:
- Domestic NEFT transfers
- International financial messaging and fund transfers
- Retail internet banking only
- Rural credit monitoring
Correct Answer: B) International financial messaging and fund transfers
Q7. “T/Re(f)erm Deposit” can be best described as:
- A deposit that can be withdrawn on demand
- A deposit with fixed maturity and fixed interest rate
- A deposit linked to equity market
- A deposit that earns no interest
Correct Answer: B) A deposit with fixed maturity and fixed interest rate
Q8. “LAF” in the context of RBI’s operations stands for:
- Liquidity Adjustment Facility
- Loan and Finance
- Local Adjustment Fund
- Long-term Advance Facility
Correct Answer: A) Liquidity Adjustment Facility
Q9. “Balance of Payments (BoP)” of a country records:
- Only exports and imports of goods
- Only capital flows
- All economic transactions between residents of a country and the rest of the world
- Only government borrowings
Correct Answer: C) All economic transactions between residents of a country and the rest of the world
Q10. In the context of risk in banking, “Credit Risk” refers to:
- Risk of loss due to changes in interest rates
- Risk of loss due to failure of a counterparty to meet obligations
- Risk of frauds by employees
- Risk of operational failure of IT systems
Correct Answer: B) Risk of loss due to failure of a counterparty to meet obligations
Q11. “Know Your Customer (KYC)” norms are primarily designed to:
- Ensure high profit for banks
- Prevent money laundering and identity theft
- Determine the interest rate on deposits
- Regulate foreign exchange rates
Correct Answer: B) Prevent money laundering and identity theft
Q12. “Risk-weighted assets” in banking are used in calculation of:
- Net interest margin
- CRR requirement
- Capital adequacy ratio (CRAR/CRAR)
- Profit after tax
Correct Answer: C) Capital adequacy ratio (CRAR/CRAR)
Q13. Which of the following types of risk is associated with failure of processes, people, and systems?
- Market risk
- Operational risk
- Credit risk
- Liquidity risk
Correct Answer: B) Operational risk
Q14. “Call Money Market” deals with:
- Long-term government bonds
- Short-term funds lent and borrowed between banks for 1 to 14 days
- Retail loans only
- Foreign currency loans
Correct Answer: B) Short-term funds lent and borrowed between banks for 1 to 14 days
Q15. In banking, “Hypothecation” refers to:
- Charge created on movable property where possession is with the lender
- Charge created on immovable property
- Charge created on movable property where possession remains with the borrower
- Loan given without any security
Correct Answer: C) Charge created on movable property where possession remains with the borrower
Q16. “Green Banking” primarily focuses on:
- Providing only online services
- Promoting environmentally sustainable practices in banking operations
- Issuing green-colored credit cards
- Providing loans only to agriculture sector
Correct Answer: B) Promoting environmentally sustainable practices in banking operations
Q17. “Letter of Credit (LC)” is commonly used in:
- Retail savings deposits
- International trade transactions
- Personal loans
- Employee salary accounts
Correct Answer: B) International trade transactions
Q18. “Factoring” is a financial service related to:
- Foreign exchange trading
- Purchase of receivables of a client by a financial intermediary
- Issuing shares to the public
- Providing lockers to customers
Correct Answer: B) Purchase of receivables of a client by a financial intermediary
Q19. “Bridge financing” is typically arranged for:
- Covering temporary cash flow mismatches
- Long-term plant and machinery purchase only
- Foreign exchange reserves management
- Government tax payments
Correct Answer: A) Covering temporary cash flow mismatches
Q20. In IBPS PO interview, “STAR” technique is best used for:
- Answering situational/behavioral questions (Situation, Task, Action, Result)
- Calculating interest
- Preparing GK notes
- Designing bank marketing campaigns
Correct Answer: A) Answering situational/behavioral questions (Situation, Task, Action, Result)
