Banking Terms — Set 5

Correct Answer: B. Initial Public Offering

• **Initial Public Offering** = An **Initial Public Offering** (IPO) is the process by which a private company sells its stocks to the general public to go public. • **Public investors** — An IPO allows the company to raise capital from public investors for the first time. • 💡 Wrong-option analysis: [Initial Price Offering]: This is an incorrect expansion for IPO; [International Profit Option]: This is an incorrect expansion for IPO; [Internal Payment Order]: This is an incorrect expansion for IPO.

Correct Answer: B. International Bank for Reconstruction and Development

• **International Bank for Reconstruction and Development** = The **International Bank for Reconstruction and Development** (IBRD) is an international financial institution that offers loans to middle-income developing countries. • **World Bank Group** — IBRD is one of the two main organizations forming the World Bank Group. • 💡 Wrong-option analysis: [International Board for Reconstruction and Development]: This is similar but incorrect, as 'Bank' is the correct term; [Indian Bank for Rural Development]: This refers to a domestic Indian institution (like NABARD), not an international one; [International Bureau of Rural Development]: This is an incorrect expansion for IBRD.

Correct Answer: A. Association of Mutual Funds in India

• **Association of Mutual Funds in India** = The **Association of Mutual Funds in India** (AMFI) is the industry body for mutual funds in India. • **1995** — AMFI was incorporated in **1995** and promotes best practices and investor awareness. • 💡 Wrong-option analysis: [Agency for Mutual Fund Investments]: This is an incorrect expansion for AMFI; [Association of Monetary and Fiscal Institutes]: This is an incorrect expansion for AMFI; [Authority of Money and Finance in India]: This is an incorrect expansion for AMFI.

Correct Answer: C. Foreign Exchange Dealers' Association of India

• **Foreign Exchange Dealers' Association of India** = **Foreign Exchange Dealers' Association of India** (FEDAI) is an association of banks that deals in the foreign exchange markets in India. • **Rules and guidelines** — FEDAI sets the rules and guidelines for foreign exchange transactions among its member banks. • 💡 Wrong-option analysis: [Financial Exchange Development Agency of India]: This is an incorrect expansion for FEDAI; [Fiscal Equity and Development Authority of India]: This is an incorrect expansion for FEDAI; [Foreign Exchange and Debt Authority of India]: This is an incorrect expansion for FEDAI.

Correct Answer: C. Special Drawing Rights

• **Special Drawing Rights** = **Special Drawing Rights** (SDR) is an international reserve asset created by the IMF to supplement its member countries' official reserves. • **1969** — The IMF created SDRs in **1969**, and their value is based on a basket of major currencies. • 💡 Wrong-option analysis: [Standard Debt Rate]: This is an incorrect expansion for SDR; [Systematic Debt Relief]: This is an incorrect expansion for SDR; [Statutory Deposit Record]: This is an incorrect expansion for SDR.

Correct Answer: B. Comptroller and Auditor General

• **Comptroller and Auditor General** = CAG is an authority established by Article 148 of the Constitution of India. • **Article 148** — establishes the Comptroller and Auditor General to audit government accounts. • 💡 Wrong-option analysis: [Commission for Audit and Governance]: Incorrect full form; CAG is a constitutional office. [Central Audit Group]: Not the official name for India's auditing authority. [Central Authority of Governance]: Does not represent the constitutional role of CAG.

Correct Answer: D. Wholesale Price Index

• **Wholesale Price Index** = WPI measures and tracks the changes in the price of goods at the wholesale level. • **Inflation trends** — WPI is an important indicator for monitoring inflation trends in an economy. • 💡 Wrong-option analysis: [World Price Index]: An incorrect full form for WPI. [Weekly Price Index]: Not the standard economic term for WPI. [Worker Profit Index]: Unrelated to the actual economic measure of WPI.

Correct Answer: C. Cash Reserve Ratio

• **Cash Reserve Ratio** = CRR is the share of Net Demand and Time Liabilities that banks must maintain as cash balance with the central bank. • **Money supply** — CRR is a vital tool for regulating the money supply in an economy. • 💡 Wrong-option analysis: [Credit Rating Record]: Not the correct full form for CRR in banking. [Capital Redemption Reserve]: A different financial term, unrelated to banking's CRR. [Current Revenue Ratio]: An incorrect full form for CRR.

Correct Answer: D. Employees' Provident Fund

• **Employees' Provident Fund** = EPF is a mandatory savings scheme for employees managed by the EPFO. • **Retirement planning** — Both the employer and employee contribute to this fund for the employee's retirement. • 💡 Wrong-option analysis: [Electronic Pension Fund]: Not the correct full form for EPF. [Employees' Profit Fund]: Incorrect term; it's a provident fund for savings. [Estimated Pension Fund]: Not the official name for EPF.

Correct Answer: B. Consumer Price Index

• **Consumer Price Index** = CPI measures the weighted average of prices of a basket of consumer goods and services. • **Inflation and cost of living** — CPI is widely used to measure changes in inflation and the cost of living. • 💡 Wrong-option analysis: [Common Price Index]: Not the correct full form for CPI in economics. [Current Profit Index]: An incorrect economic term. [Capital Progress Index]: Does not represent the standard economic measure of CPI.