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Interview Questions on Financial System

  1. What do you understand by Financial. System?
    Ans: For every economy, capital and its formation is necessary for growth. Financial system will servethis purpose.

  2. How does it serve?
    Ans: Mobilisation of surplus savings from all available quarters, may from eneral public is a major task.

  3. How does it happen
    Ans: Initially, surplus/savings is mobilised by banking sector, corporates will go for issue of shares or debt bonds. This savings become capital or investment. This generates profits and from profits again savings will generate.

  4. Tell me the types of markets we have in our system?
    Ans: Money Market, Capital Market and Debt Market.

  5. Please expand SEBI?
    Ans: Securities and Exchange Board of India.

  6. What is Equity?
    Ans: Equity is ownership interest of holders in company's stocks.

  7. What is a share or equity share?
    Ans: Equity share represents a fraction of sum total of entire share amount of a company.

  8. What are the advantages in holding shares?
    Ans: It is an investment. Share holder may get dividend.

  9. What is a debenture?
    Ans: Debenture is a debt incurred and acknowledged by the company with a fixed rate of interest and terms of repayment.

  10. What is a bond?
    Ans: Bond is also an acknowledgement of indebtedness and carries interest. But it is unsecured compared to debenture.

  11. Mutual Funds are formed as...?
    Ans: Trusts.

  12. How does a Mutual Fund function?
    Ans: Mutual funds are managed by expert fund managers, who pool up funds from public and invest in various securities.

  13. What do you understand by NAV?
    Ans: It is Net Asset Value (NAV). It is the market value of each unit of a particular scheme.

  14. Who regulates mutual funds?
    Ans: SEBI.

Hope you found it useful!!! Thanks and all the best.

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