International Commerce Olympiad

1. A business firm cannot touch but only experience the service rendered by a transporter or any other service provider. This statement refers to which of the following characteristic of a service:

(a) Inseparability (b) Intangibility

Ans: (b) Intangibility

2. Reserve Bank of India is which type of Bank:

(a) Commercial Bank (b) Cooperative Bank

Ans: (d) Central Bank

3. Principle of Subrogation states that

(a) The insurer steps into the shoes of the insured after compensation for damage has been paid for.

(b) All the insurers contribute for the loss suffered.

(d) The insured must take reasonable steps to ensure reduction of loss.

Ans: (a) The insurer steps into the shoes of the insured after compensation for damage has been paid for.

4. Which warehouse is licensed by the government to accept imported goods prior to payment of tax and customs duty:

(a) Public Warehouse (b) Government Warehouse

Ans: (c) Bonded Warehouse

5. Which is the fastest mode of communication out of the following?

(a) Letter (b) E-mail

Ans: (b) E-mail

6. Commercial banks give loans in the form of

(a) Recurring deposits (b) Current account

Ans: (d) Overdraft

7. You have to export a consignment of iron ore to France. Which mode of transport will you choose to send it:

(a) Sea (b) Air

7. (a) Sea

8. Which of the following accounts is normally operated by a Salaried person for managing his/her salary and expenses each month:

(a) Savings Account (b) Fixed Deposit Account

Ans: (a) Savings Account

9. Multiple option deposit accounts offer combined features of:

(a) Savings account and Current Account.

(b) Savings Account and Fixed Deposit Account.

(d) Recurring deposit account and Fixed Deposit Account.

Ans: (b) Savings Account and Fixed Deposit Account.

10. What is the minimum amount of money that can be transferred from one bank account to another using Real Time Gross Settlement (RTGS):

(a) ₹ 2 lacs (b) ₹ 1 lacs

Ans: (a) ₹ 2 lacs

11. Which of the following is NOT a benefit of E-Banking?

(a) E-Banking provides 365 days of 24 × 7 banking facilities to its customers.

(b) Customers can make some of the permitted transactions from the office or house or while travelling via mobile telephone.

(d) Being technology intensive it results in less human interface and thus requires less manpower, which contributes to increasing underemployment in banking sector in India.

Ans: (d) Being technology intensive it results in less human interface and thus requires less manpower, which contributes to increasing underemployment in banking sector in India.

12. While entering into a contract of life insurance the insured hid the fact that he suffered from cancer from the insurer. Which fundamental principle of Insurance is being violated in this case?

(a) Utmost good faith (b) Insurable Interest

Ans: (a) Utmost good faith

13. Which of the following statements is true?

(a) Measurement of loss is possible in case of life insurance.

(b) Marine Insurance has an element of protection as well as investment.

(d) Life Insurance policy does not have a surrender value

Ans: (c) The duration of Fire Insurance policy usually does not exceed one year.

14. Which of the following types of accounts is normally opened by a business to deal with daily business transactions through bank?

(a) Savings Account (b) Fixed Deposit Account

Ans: (c) Current Account

15.Which of the following statements is true about NEFT (National Electronic Funds Transfer)?

(a) Under this Scheme, individuals, firms and corporate can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country participating in the Scheme.

(b) The upper limit for transfer of funds in this scheme is ₹ 1,00,000.

(d) Funds are transferred 24 hours each day.

Ans: (a) Under this Scheme, individuals, firms and corporate can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country participating in the Scheme.

16. Match the Name of the Banking Service in Column-I with its definition in Column-II:

Column-I Column-II

(Name of Banking Service) (Definition)

(A) Bank draft (i) It allows account holder to withdraw more than the balance.

(B) Banker’s Cheque (Pay Order) (ii) An order by one branch of bank to

another in a different city to pay a specified sum to a beneficiary.

another in the same city to pay a specified sum to a beneficiary.

(D) Cash Credit (iv) It is an arrangement under which a customer a bank or financial institution is allowed an advance up to certain limit against limit credit granted by bank.

Choose from the following options:

(a) A-(iv); B-(i); C-(iii); D-(ii) (b) A-(ii); B-(i); C-(iv); D-(iii)

Ans: (d) A-(ii); B-(iii); C-(i); D-(iv)

17. ‘It refers to the right of the insurer to stand in the place of the insured, after settlement of a claim.” This statement involves which principle?

(a) Indemnity (b) Contribution

Ans: (c) Subrogation

18. Which of the following is NOT a correct element of a Life Insurance Contract?

(a) The life insurance contract must have all the essentials of a valid contract

(b) Life insurance contract is a contract of Indemnity.

(d) The contract of life insurance is a contract of utmost good faith.

Ans: (b) Life insurance contract is a contract of Indemnity.

19. ‘In this type of bank account the depositor gets the flexibility of withdrawing money at the time of need and also earns higher interest on surplus funds.’ What type of bank account is it?

(a) Current Account (b) Savings Account

Ans: (d) Multi Option Deposit Account

20. Paying through which of the following instruments does not reduce the bank balance at the time of transaction:

(a) Debit Card (b) Credit Card

Ans: (b) Credit Card

21. An insurance company compensated a person for his stolen car. Later on the car was traced by the police and the same was taken over by the insurance company. Which fundamental principle of insurance has been followed?

(a) Utmost Good faith (b) Contribution

Ans: (d) Subrogation

22. Which of the following risk is never covered by a contract of Life Insurance?

(a) Death due to fire (b) Natural Death

Ans: (c) Accidental disability

23. Which of the following postal service was discontinued in 2011?

(a) Parcel Service (b) Registered Post

Ans: (c) Under Postal Certificate (UPC)

24. A regular short term loan subject to a limit based on credit worthiness given by a bank to a business normally to meet working capital requirements is known as:

(a) Bank overdraft (b) Cash Credit

Ans: (a) Bank overdraft

25. A company has to make immediate payment of ₹ 10 lakhs to a party for receiving a consignment of raw material to fulfill an urgent order. Which of the following is the quickest way of remitting this money to the bank account of the concerned party?

(a) Bank Draft (b) Banker’s Cheque

Ans: (d) RTGS

26. A person is not compensated twice for the same risk even if he/she has taken two insurance policies for it. The total amount of claim cannot be more than the loss incurred. Which Principle of insurance is involved here?

(a) Mitigation (b) Insurable Interest

Ans: (c) Contribution

27. Which of the following accounts is normally opened in a Bank/Post office by a person to provide for long term savings whose duration is 15 years and can be extended thereafter?

(a) Recurring Deposit (b) Public Provident Fund

27. (b)

28. Which of the following statements is incorrect with respect to Fire insurance?

(a) It has element of protection only

(b) Insured must have insurable interest in the subject matter of insurance

(d) Principle of indemnity applies

Ans: (c) It is not the actual loss but insured value is payable by insurance company

29. What is the minimum amount for an electronic transfer of funds in case of RTGS?

(a) ₹ 2,00,000 (b) ₹ 20,000

Ans: (a) ₹ 2,00,000

30. “It is the type of deposit account in which the deposit in excess of a particular limit automatically gets converted into fixed deposit”. This deposit is related to:

(a) Recurring Deposit Account

(b) Fixed Deposit Account

(d) Saving Account

Ans: (c) Fixed Deposit Account

31. Match the following: in column-I Types of services in column-II Features are given:

Column-I Column-II

A. Social Service (i) Economic motive

B. Personal Service (ii) Round the clock

C. Business Service (iii) Voluntary Service

D. E-service (iv) Different experience by different people

Choose the correct option:

(a) A-(ii); B-(iv); C-(i); D-(iii) (b) A-(iii); B-(iv); C-(i); D-(ii)

Ans: (b) A-(iii); B-(iv); C-(i); D-(ii)

32. Following are the statements referring to examples of insurable interest:

1. Trustee holding the property on the behalf of others

2. A company insuring the life of brand ambassador

3. Father taking insurance policy in the name of his son

4. Wife taking insurance policy in the name of her husband Choose the correct statement:

(a) 1, 2, 3 are correct 4 is incorrect

(b) 1 and 2 are incorrect but 3 and 4 are correct

(d) All are correct

Ans: (b) 1 and 2 are incorrect but 3 and 4 are correct

33. In which of the following types of accounts, a depositor can deposit a fixed amount every month for a fixed period?

(a) Multiple Options Deposit Account

(b) Recurring Deposit Account

(d) Fixed Deposit Account

Ans: (b) Recurring Deposit Account

34. Which of the following instruments/method help us to make payment but does not affect our bank balance?

(a) Debit Card (b) Spot Finance

Ans: (b) Spot Finance

35. The minimum transaction value for NEFT is:

(a) 5 Lakhs (b) 2 Lakhs

Ans: (d) No minimum limit

36. ‘X’Account is a combination of ‘Y’Account and ‘Z’Account. ‘X’Account is a type of ‘Y’ Account in which the amount of deposit in excess of particular limit gets automatically transferred to ‘Z’ Account.

All “X’, ‘Y and ‘Z’ type of Accounts can be opened in Commercial Banks. X, Y and Z can be identified as following:

(a) Recurring Deposit, Savings Deposit and Fixed Deposit respectively

(b) Fixed Deposit, Multiple-Option Deposit and Savings Deposit respectively

(d) Savings Deposit, Fixed Deposit, Current Deposit respectively

Ans: (c) Multiple-Option Deposit, Savings Deposit and Fixed Deposit respectively

37. Super Insurance Company and Sum Assured of ₹ 5 Lakhs from Duper Insurance Company. Fire broke out in the godown and goods worth ₹ 4 Lakhs were destroyed.

Ranbeer claimed ₹ 5 Lakhs each from both Super and Duper Insurance Companies. Identify the Principle of Insurance violated:

(a) Principle of Indemnity (b) Principle of Contribution

Ans: (d) Both (a) and (b)

38. Tata Sky, Airtel and Dish TV are examples of:

(a) VSAT Services (b) Fixed Line services

Ans: (c) DTH services

39. Arrange the following types of Bank accounts in descending order of interest rates:

(i) Savings Deposit Account (ii) Current Deposit Account

(iii) Recurring Deposit Account (iv) Fixed Deposit Account Choose the correct option:

(a) (i), (ii), (iii), (iv) (b) (iv), (iii), (ii), (i)

Ans: (c) (iv), (iii), (i), (ii)

40. Ramashankar has opened a bank account wherein a fixed amount is deposited with the bank for a fixed period of time at regular intervals whereas Farhan has opened a special kind of account with bank wherein he will not get any interest but will be able make any number of withdrawals, even more than the amount deposited.

Identify the type of accounts opened by Ramashankar and Farhan respectively:

(a) Fixed A/c and Recurring A/c

(b) Recurring A/c and Current A/c

(d) Fixed A/c and Multiple Option Deposit A/c

Ans: (b) Recurring A/c and Current A/c

41. Roshan Singh Chauhan had purchased a bus for ₹ 40,00,000 to be used as a private sector vehicle. It was insured under a comprehensive insurance policy issued by an insurance company. The bus met with an accident, for which insurance was claimed. The insurance company appointed a surveyor, who assessed the loss at ₹ 1,00,500 and this amount was paid to Roshan Singh Chauhan. Identify the principle of insurance followed in the above case.

(a) Principle of Subrogation (b) Principle of indemnity

Ans: (b) Principle of indemnity

42. In which type of insurance, presence of insurable interest is not necessary at the time of taking the policy?

(a) Fire Insurance (b) Accident Insurance

Ans: (c) Marine Insurance

43. The following principle of insurance is not applicable to Life Insurance:

(a) Indemnity (b) Subrogation

Ans: (d) All of the above

44. Roshan got his building insured against fire for ₹ 20 lacs. A portion of building caught fire and it was estimated that an expense of ₹ 8 lacs will be required to restore the building to its original condition. How much money will Roshan get from the insurance company?

(a) ₹ 20 lacs (b) ₹ 8 lacs

Ans: (b) ₹ 8 lacs

45. Sohail has opened a special kind of account with bank wherein the amount of deposit in excess of a particular limit automatically gets converted into fixed deposit whereas Soumil being a salaried employee has chosen the type of account in which flexibility for deposits is there and cheque facility is available. Identify the type of accounts opened by Sohail and Soumil respectively:

(a) Current A/c and Saving A/c

(b) Multiple Option Deposit A/c and Saving A/c

(d) Recurring A/c and Multiple Option Deposit A/c

Ans: (b) Multiple Option Deposit A/c and Saving A/c

46. Puneet has taken a fire insurance policy for his factory from three insurance companies – LIC ₹ 4 lakh; ICICI – ₹ 8 lakh; IDBI – ₹ 4 lakh. Due to fire he suffered a loss of ₹ 16 lakh. In which ratio the compensation will be given by the insurance companies to Puneet?

(a) 1 : 2 : 1 (b) 3 : 9 : 3

Ans: (a) 1 : 2 : 1

47. Amar insured his goods for ₹ 2,50,000 against fire. His stock was getting spoiled and hence, could not be sold, so he thought of some crooked method of getting the money. He himself contacted one of his trustworthy employees and asked him to set fire to the goods. The insurance company accepted claim for only ₹ 1,00,000. Amar wanted to make some more money by selling the burnt goods. Which of the following principle prohibits him from doing so?

(a) Principle of Insurable interest (b) Principle of Subrogation

Ans: (b) Principle of Subrogation

48. Jai Malhotra took fire insurance policy for the stock of goods kept in his warehouse. The stock amounted to ₹ 5,50,000. The goods worth ₹ 4,50,000 got damaged. The reason of damage was seepage of water and poor packaging

of the products. However, Jai and his team made all the efforts to minimise the amount of loss. Which of the following statements is correct about the compensation in this case?

(a) The compensation of ₹ 4,50,000 can be claimed. The relevant principle is principle of Indemnity.

(b) The compensation of ₹ 5,50,000 can be claimed. The relevant principle is principle of mitigation of loss.

(d) No compensation can be claimed. The relevant principle is principle of subrogation

Ans: (c) No compensation can be claimed. The relevant principle is principle of causa proxima.

49. Which of the following statement is correct about RTGS and NEFT?

(i) RTGS and NEFT both are ways of Electronic Funds Transfer

(ii) NEFT is suitable for high value transactions and RTGS is suitable for low value transactions

(iii) NEFT operates on hourly batches and RTGS operates on real time basis

(iv) NEFT and RTGS both facilitate intra and inter-bank transfer of funds, within and across the city.

Choose the correct answer:

(a) (i), (iii) and (iv) are correct (b) (i) and (ii) are correct

Ans: (a) (i), (iii) and (iv) are correct