Financial Markets & Institutions PYQs

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1. Prelims 2026Q56Financial Markets & Institutions

   Which of the following statements about Real-World Assets (RWA) Tokenization are correct ?

   1.Tokenization is the process of turning real world assets into digital tokens using blockchain technology.

   2.Tokenization of real world assets offers 24 × 7 access, promoting financial inclusion.

   3.Tokenization of real world assets will allow the access to high growth investment opportunities for individuals in India.

   Select the answer using the code given below :

   a1, 2 and 3b2 and 3 onlyc1 and 2 onlyd1 and 3 only
2. Prelims 2026Q57Financial Markets & Institutions

   A bond whose proceeds are used only to finance or refinance a combination of both environmental and social projects is called :

   aGreen BondbSocial BondcSustainability BonddSovereign Bond
3. Prelims 2026Q58Financial Markets & Institutions

   Which of the following statements about M1xchange’s role in Micro, Small & Medium Enterprises (MSMEs) financing is/are correct ?

   1.M1xchange provides collateral based loans to MSMEs.

   2.M1xchange facilitates discounting of invoices and Bills of Exchange for MSMEs.

   3.M1xchange functions as a credit rating agency for MSMEs.

   Select the answer using the code given below :

   a1, 2 and 3b2 onlyc2 and 3 onlyd1 only
4. Prelims 2026Q61Financial Markets & Institutions

   Which of the following statements about insurance in aviation sector is/are correct ?

   1.‘Aviation Hull Insurance’ covers the physical aircraft, including the body, engine, and on-board equipment.

   2.Under the Montreal Convention, adopted in 1999 by over 130 countries, including India, airlines are strictly liable to pay compensation to the family/nominee of every deceased passenger without requiring the family to prove fault.

   Select the answer using the code given below :

   a1 onlyb2 onlycBoth 1 and 2dNeither 1 nor 2
5. Prelims 2026Q62Financial Markets & Institutions

   Which of the following statements about Crowdfunding is/are correct ?

   1.Crowdfunding is solicitation of funds (small amount) from multiple investors through a web-based platform or social networking site for a specific project.

   2.Small and Medium Enterprises (SMEs) are able to raise funds at lower cost of capital without undergoing rigorous procedures.

   Select the answer using the code given below :

   a1 onlyb2 onlycBoth 1 and 2dNeither 1 nor 2
6. Prelims 2026Q63Financial Markets & Institutions

   With reference to different Committees in India, consider the following details :

   Sl. No.	Committee	Objective	Organization under which it was formed
   1.	R.N. Malhotra Committee	Comprehensive reforms of Insurance sector in India	Insurance Regulatory and Development Authority of India
   2.	L.C. Gupta Committee	Preparing a roadmap for the introduction of derivatives trading in India	Securities and Exchange Board of India
   3.	Urjit R. Patel Committee	Preparing a roadmap for reforming bank lending to the Housing sector	Reserve Bank of India
   4.	Y.H. Malegam Committee	Preparing a roadmap for reforms in Microfinance sector in India	Reserve Bank of India

   In which of the above rows are all the details correctly matched ?

   a2 onlyb2 and 3c1, 3 and 4d2 and 4
7. Prelims 2025Q1Financial Markets & Institutions

   With reference to investments, consider the following :

   I.Bonds

   II.Hedge Funds

   III.Stocks

   IV.Venture Capital

   How many of the above are treated as Alternative Investment Funds?

   aOnly onebOnly twocOnly threedAll the four
8. Prelims 2025Q4Financial Markets & Institutions

   Consider the following statements :

   I.The Reserve Bank of India mandates all the listed companies in India to submit a Business Responsibility and Sustainability Report (BRSR).

   II.In India, a company submitting a BRSR makes disclosures in the report that are largely non-financial in nature.

   Which of the statements given above is/are correct?

   aI onlybII onlycBoth I and IIdNeither I nor II
9. Prelims 2025Q7Financial Markets & Institutions

   Consider the following statements :

   Statement I :

   As regards returns from an investment in a company, generally, bondholders are considered to be relatively at lower risk than stockholders.

   Statement II :

   Bondholders are lenders to a company whereas stockholders are its owners.

   Statement III :

   For repayment purpose, bondholders are prioritized over stockholders by a company.

   Which one of the following is correct in respect of the above statements?

   aBoth Statement II and Statement III are correct and both of them explain Statement IbBoth Statement I and Statement II are correct and Statement I explains Statement IIcOnly one of the Statements II and III is correct and that explains Statement IdNeither Statement II nor Statement III is correct
10. Prelims 2025Q8Financial Markets & Institutions

    Consider the following statements :

    I.India accounts for a very large portion of all equity option contracts traded globally thus exhibiting a great boom.

    II.India’s stock market has grown rapidly in the recent past even overtaking Hong Kong’s at some point of time.

    III.There is no regulatory body either to warn the small investors about the risks of options trading or to act on unregistered financial advisors in this regard.

    Which of the statements given above are correct?

    aI and II onlybII and III onlycI and III onlydI, II and III
11. Prelims 2024Q40Financial Markets & Institutions

    With reference to the Indian economy, "Collateral Borrowing and Lending Obligations" are the instruments of :

    aBond marketbForex marketcMoney marketdStock market
12. Prelims 2024Q42Financial Markets & Institutions

    Consider the following statements :

    1.In India, Non-Banking Financial Companies can access the Liquidity Adjustment Facility window of the Reserve Bank of India.

    2.In India, Foreign Institutional Investors can hold the Government Securities (G-Secs).

    3.In India, Stock Exchanges can offer separate trading platforms for debts.

    Which of the statements given above is/are correct ?

    a1 and 2 onlyb3 onlyc1, 2 and 3d2 and 3 only
13. Prelims 2024Q43Financial Markets & Institutions

    In India, which of the following can trade in Corporate Bonds and Government Securities ?

    1.Insurance Companies

    2.Pension Funds

    3.Retail Investors

    Select the correct answer using the code given below :

    a1 and 2 onlyb2 and 3 onlyc1 and 3 onlyd1, 2 and 3
14. Prelims 2024Q44Financial Markets & Institutions

    Consider the following :

    1.Exchange-Traded Funds (ETF)

    2.Motor vehicles

    3.Currency swap

    Which of the above is/are considered financial instruments ?

    a1 onlyb2 and 3 onlyc1, 2 and 3d1 and 3 only
15. Prelims 2024Q51Financial Markets & Institutions

    Consider the following statements :

    Statement-I :

    If the United States of America (USA) were to default on its debt, holders of US Treasury Bonds will not be able to exercise their claims to receive payment.

    Statement-II :

    The USA Government debt is not backed by any hard assets, but only by the faith of the Government.

    Which one of the following is correct in respect of the above statements ?

    aBoth Statement-I and Statement-II are correct and Statement-II explains Statement-IbBoth Statement-I and Statement-II are correct, but Statement-II does not explain Statement-IcStatement-I is correct, but Statement-II is incorrectdStatement-I is incorrect, but Statement-II is correct
16. Prelims 2023Q21Financial Markets & Institutions

    Consider the following statements :

    Statement–I :

    Interest income from the deposits in Infrastructure Investment Trusts (InvITs) distributed to their investors is exempted from tax, but the dividend is taxable.

    Statement–II :

    InvITs are recognized as borrowers under the ‘Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002’.

    Which one of the following is correct in respect of the above statements?

    aBoth Statement–I and Statement–II are correct and Statement–II is the correct explanation for Statement–IbBoth Statement–I and Statement–II are correct and Statement–II is not the correct explanation for Statement–IcStatement–I is correct but Statement–II is incorrectdStatement–I is incorrect but Statement–II is correct
17. Prelims 2023Q25Financial Markets & Institutions

    Consider the following markets :

    1.Government Bond Market

    2.Call Money Market

    3.Treasury Bill Market

    4.Stock Market

    How many of the above are included in capital markets?

    aOnly onebOnly twocOnly threedAll four
18. Prelims 2023Q73Financial Markets & Institutions

    In the context of finance, the term ‘beta’ refers to

    athe process of simultaneous buying and selling of an asset from different platformsban investment strategy of a portfolio manager to balance risk versus rewardca type of systemic risk that arises where perfect hedging is not possibleda numeric value that measures the fluctuations of a stock to changes in the overall stock market
19. Prelims 2022Q5Financial Markets & Institutions

    With reference to the Indian economy, what are the advantages of “Inflation-Indexed Bonds (IIBs)” ?

    1.Government can reduce the coupon rates on its borrowing by way of IIBs.

    2.IIBs provide protection to the investors from uncertainty regarding inflation.

    3.The interest received as well as capital gains on IIBs are not taxable.

    Which of the statements given above are correct ?

    a1 and 2 onlyb2 and 3 onlyc1 and 3 onlyd1, 2 and 3
20. Prelims 2022Q9Financial Markets & Institutions

    With reference to the expenditure made by an organisation or a company, which of the following statements is/are correct ?

    1.Acquiring new technology is capital expenditure.

    2.Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure.

    Select the correct answer using the code given below :

    a1 onlyb2 onlycBoth 1 and 2dNeither 1 nor 2
21. Prelims 2022Q63Financial Markets & Institutions

    Consider the following statements :

    1.In India, credit rating agencies are regulated by Reserve Bank of India.

    2.The rating agency popularly known as ICRA is a public limited company.

    3.Brickwork Ratings is an Indian credit rating agency.

    Which of the statements given above are correct ?

    a1 and 2 onlyb2 and 3 onlyc1 and 3 onlyd1, 2 and 3
22. Prelims 2022Q65Financial Markets & Institutions

    With reference to Convertible Bonds, consider the following statements :

    1.As there is an option to exchange the bond for equity, Convertible Bonds pay a lower rate of interest.

    2.The option to convert to equity affords the bondholder a degree of indexation to rising consumer prices.

    Which of the statements given above is/are correct ?

    a1 onlyb2 onlycBoth 1 and 2dNeither 1 nor 2
23. Prelims 2021Q6Financial Markets & Institutions

    Indian Government Bond Yields are influenced by which of the following?

    1.Actions of the United States Federal Reserve

    2.Actions of the Reserve Bank of India

    3.Inflation and short-term interest rates

    Select the correct answer using the code given below.

    a1 and 2 onlyb2 onlyc3 onlyd1, 2 and 3
24. Prelims 2021Q13Financial Markets & Institutions

    With reference to India, consider the following statements :

    1.Retail investors through demat account can invest in ‘Treasury Bills’ and ‘Government of India Debt Bonds’ in primary market.

    2.The ‘Negotiated Dealing System-Order Matching’ is a government securities trading platform of the Reserve Bank of India.

    3.The ‘Central Depository Services Ltd.’ is jointly promoted by the Reserve Bank of India and the Bombay Stock Exchange.

    Which of the statements given above is/are correct?

    a1 onlyb1 and 2c3 onlyd2 and 3
25. Prelims 2020Q60Financial Markets & Institutions

    In India, under cyber insurance for individuals, which of the following benefits are generally covered, in addition to payment for the loss of funds and other benefits ?

    1.Cost of restoration of the computer system in case of malware disrupting access to one’s computer

    2.Cost of a new computer if some miscreant wilfully damages it, if proved so

    3.Cost of hiring a specialized consultant to minimize the loss in case of cyber extortion

    4.Cost of defence in the Court of Law if any third party files a suit

    Select the correct answer using the code given below :

    a1, 2 and 4 onlyb1, 3 and 4 onlyc2 and 3 onlyd1, 2, 3 and 4
26. Prelims 2020Q70Financial Markets & Institutions

    With reference to the Indian economy, consider the following statements :

    1.‘Commercial Paper’ is a short-term unsecured promissory note.

    2.‘Certificate of Deposit’ is a long-term instrument issued by the Reserve Bank of India to a corporation.

    3.‘Call Money’ is a short-term finance used for interbank transactions.

    4.‘Zero-Coupon Bonds’ are the interest bearing short-term bonds issued by the Scheduled Commercial Banks to corporations.

    Which of the statements given above is/are correct ?

    a1 and 2 onlyb4 onlyc1 and 3 onlyd2, 3 and 4 only
27. Prelims 2019Q67Financial Markets & Institutions

    Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of the Indian stock market without registering themselves directly?

    aCertificate of DepositbCommercial PapercPromissory NotedParticipatory Note
28. Prelims 2018Q56Financial Markets & Institutions

    Consider the following statements :

    1.The Reserve Bank of India manages and services Government of India Securities but not any State Government Securities.

    2.Treasury bills are issued by the Government of India and there are no treasury bills issued by the State Governments.

    3.Treasury bills are issued at a discount from the par value.

    Which of the statements given above is/are correct ?

    a1 and 2 onlyb3 onlyc2 and 3 onlyd1, 2 and 3
29. Prelims 2017Q29Financial Markets & Institutions

    Who among the following can join the National Pension System (NPS) ?

    aResident Indian citizens onlybPersons of age from 21 to 55 onlycAll State Government employees joining the services after the date of notification by the respective State GovernmentsdAll Central Government employees including those of Armed Forces joining the services on or after 1st April, 2004
30. Prelims 2016Q8Financial Markets & Institutions

    With reference to 'IFC Masala Bonds', sometimes seen in the news, which of the statements given below is/are correct?

    1.The International Finance Corporation, which offers these bonds, is an arm of the World Bank.

    2.They are the rupee-denominated bonds and are a source of debt financing for the public and private sector.

    Select the correct answer using the code given below.

    a1 onlyb2 onlycBoth 1 and 2dNeither 1 nor 2