Banking Awareness

>>IPO - Initial public offer is issue of stocks for the first time in the market.

>>Intangible assets – Assets which can’t be seen but have value for business. For example – Goodwill.

>>Indemnity – A legal contract under which one party promises to pay another for any losses incurred to them by their acts.

>>Interest rate risk – Risk that value of financial assets will deteriorate because of fall in interest rate. For example value of bonds decreases with decrease in interest rate.

>>Junk fund – A fund which invests investor’s money in junk investments means high risk investments which high returns.

>>Monopoly - A situation in market where there are many buyers but a single seller exist.

>>Money market - Market dealing in short term lending and borrowing of funds. Also known as Cash market.

>>Monetary policy - Set of actions by Central bank of a country ( RBI in case of India) to control the supply of money. These actions included increase in interest rate, open market purchases,changing commercial bank's reserve funds ratio (SLR) etc.

>>Marginal cost - Additional cost to produce an extra unit of product.

Insurance Q&A

1.Which of the following types of companies/ organisations issue ULIP?
Insurance companies Banks NABARD RBI

2.All of the following is true regarding ULIPs EXCEPT:
Unit Holders acn choose between different kind of funds. Life insurers provide Guarantee for all unit values Units may be purchased by payment of single premium or via regular premium payments ULIP policy structure is transparent with regards to insurance expenses components.

3.Insurance business in India is regulated by which of the following authorities?
NFCG IRDA CII FICCI

4.“A contract that pledges payment of an agreed upon amount to the person (or his/her nominee) on the happening of an event covered against” is technically known as
Death coverage Life Insurance Savings for future Provident Fund

5.As we know, the Government is paying much attention to “Micro Finance” these days. Which of the following is one of the examples of Micro Finance?
Insurance for life Investment in Mutual Funds Self Help Groups Letter of Credit

Important Insurance Terms

A policy designed to provide coverage under a single limit for two or more items (e.g. building and/or contents), two or more locations, or a combination of items and/or locations. – Blanket Insurance

Period between the subscription date of an insurance–cum–pension policy and the time at which the first installment of pension is received is called as deferment period. – Deferment Period

An insurance contract that provides an annuity for a certain number of years, irrespective of whether the insured is alive or dead. – Annuity Certain

The premiums on all policies which a company has issued in some period of time. – Written Premiums

Insurers that are created and wholly–owned by one or more non–insurers, to provide owners with coverage. A form of self-insurance. – Captives

A broad commercial policy that covers all liability exposures of a business that are not specifically excluded. Coverage includes product liability, completed operations, premises and operations, and independent contractors. – Commercial general liability (CGL)