Finance Management (FM) Questions for RBI Grade B Phase 2 Exam
Finance Management (FM) Questions for RBI Grade B Phase 2 Exam

RBI Grade B Finance Management (FM) Questions for Phase 2

RBI Grade B Finance Management (FM) Questions for Phase 2 exam. RBI Grade B Finance and Management Note PDF. RBI Grade B FM Study Material PDF. RBI Finance and Management (FM) Books, PDF, Previous Papers, Question Set, and study material. As we all know that RBI Grade B Notification 2024 is out. The Reserve Bank of India (RBI) conducted the RBI Grade B Phase I Exam for the post of Grade B (Grade ‘B’ (DR) – (General) & others). It’s the right time when you should start your RBI Grade B Phase 2 preparation at full pace.

If you are preparing for RBI Grade B (Phase 2), you will come across a section on “Finance and Management (FM)” wherein 65 questions will be there carrying 50 marks. Here we are providing you with “Finance and Management (FM) Questions for RBI Grade B” with answers based on the latest pattern of your daily practice.

RBI Grade B Finance Management (FM) Questions | Test-9

1. Higher inventory turnover ratio is indicated by

A. Inventory management is efficient and sales were high due to overstocking items
B. Inventory management was inefficient but sales were high due to overstocking items
C. Inventory management is inefficient and sales were low due to lack of inventory
D. The inventory is being managed efficiently or sales were low due to lack of inventory
E. None of the above

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Correct Answer: A. Inventory management is efficient and sales were high due to overstocking items

Explanation-It indicates efficient management of inventory because more frequently the stock is sold, lesser amount of money is required to finance the inventory.

2. Which of the following form of financing became increasingly popular globally post financial crisis of 2008?

A. Crowd Funding
B. Peer2Peer Lending
C. Venture Capital
D. Incubators
E. Fin-Tech Startups

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Correct Answers: B. Peer2Peer Lending

Explanation- P2P lending, a form of crowd funding, has become increasingly popular globally post financial crisis of 2008. P2P based lending platform seeks to connect interested investors and borrowers with matching requirements without any involvement of a formal financial institution, unlike other Fin-tech companies which act as intermediaries between the banks and borrowers. It caters to the borrowers without the need for collaterals and at affordable rates which are lower than the bank rates.

3. The main objective of budgetary control is
A. To define the goal of the firm
B. To coordinate different departments
C. To plan to achieve its goals
D. Both A and B
E. All of the above

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Correct Answers: C. To plan to achieve its goals

Explanation- The budgetary control aims at the maximization of profits of the enterprise.To achieve this goal, proper planning and coordination of different functions are undertaken. There is legal control over different capital and revenue expenditures.

A Complete Book for RBI Grade B Finance Management (FM) – 2000+ Questions with Detailed Answers

4. Derivatives are financial instruments to hedge risk. It derives its value from which of the following?
A. Exchange Determined
B. Fixed By SEBI
C. Underlying
D. Market Determined
E. None of the above

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Correct Answer – C. Underlying

Explanation-Derivatives derive their names from their respective underlying assets.Derivatives are financial instruments that have values derived from other assets like stocks, bonds, or foreign exchange. Derivatives are sometimes used to hedge a position (protecting against the risk of an adverse move in an asset) or to speculate on future moves in the underlying instrument.

5. Debenture Redemption Reserve (DRR) is required in case of _____.

A. Financial institution regulated by RBI
B. Banking company Private as well as public
C. listed companies
D. Housing Finance company
E. None of the above

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Correct Answer: C. listed companies

Explanation- As per the Companies (Share Capital and Debentures) Rules 2014, all listed companies, NBFCs, HFCs and unlisted companies were to create a DRR with 25 per cent of the value of outstanding debentures from their profits.

6. Which of the following components is not a part of Carroll’s CSR Pyramid?

A. Social
B. Philanthropic
C. Ethical
D. Economic
E. None of the above

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Correct Answer: A. Social

Explanation: The CSR pyramid with four components was published by Carroll in 1979.

The four components are in order of rank- Economic, Legal, Ethical and Philanthropic.

Carroll stated that CSR is the behaviour of firms that is economically sustainable, follows the law, is ethical and caters to social responsibility and charity.

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7. Who is the founder of Transformational theory of leadership?

A. Herbert Spencer
B. Thomas Carlyle
C. James MacGregor Burns
D. James Scouller
E. None of these

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Correct Answer – C. James MacGregor Burns

Explanation: Transformational model of leadership is the final theory of leadership that has attracted a lot of interest in recent years.James MacGregor Burns has developed the theory of Transformational leadership.

8. What do you mean by Leaf in a decision tree?

A. Nodes that do not split further
B. The entire population or sample
C. A sub section of entire tree
D. A node which is sub divided into sub nodes
E. A node where decision should be made

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Correct Answers: A. Nodes that do not split further

Explanation-There are various terms in decision tree model:
Root node, Splitting, decision node, leaf, pruning, branch, parent and child node.

Leaf is the node that do not split further. It is also called terminal node.

9. Being honest, sincere, ethical, and being ambitious are the example of _______
A. Terminal Values
B. Instrumental Values
C. Organisational Values
D. Affective values
E. None of the above

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Correct Answer – B. Instrumental Values

Explanation-Instrumental values are the acceptable modes of conductor that are known to be the means of achieving the terminal values.Its example includes Being honest, sincere, ethical, and being ambitious.

10. Which of the following is a 4 – stage training evaluation model?
A. Daniel Goleman
B. Clayton
C. Kirkpatric
D. Joseph Shumpeter
E. None of these

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Correct Answer – C. Kirkpatric

Explanation-The Kirkpatrick Four-Level Training Evaluation Model is designed to objectively measure the effectiveness of training. The model was created by Donald Kirkpatrick in 1959, with several revisions made since then.The four levels are Reaction, Learning, Behavior, and Results

Get Complete RBI Grade B Study Material – Previous Year Papers PDF, eBooks & Online Quizzes

Finance & Management (FM) Quizzes For RBI Grade B

Set-20 Set-19 Set-18 Set-17 Set-16
Set-15 Set-14 Set-13 Set-12 Set-11
Set-10 Set-9 Set-8 Set-7 Set-6
Set-5 Set-4 Set-3 Set-2 Set-1

We already published “A Complete Book for RBI Grade B Finance & Management (FM)”. You can Download this EBook through the below link-

FM eBook 203 1

RBI Grade B Exam – Important Links

RBI Grade B Phase-I Mock Test Papers PDF – Download eBook Now
Official Notification Apply Online Exam Pattern & Syllabus
Previous Year Cut-Off Marks Previous Year Questions Paper best books for RBI Grade B
RBI Grade B Phase-I Cracker eBook  Finance & Management (FM) eBook  Economic & Social Issues (ESI) eBook 
Descriptive Book for RBI Grade B How to Prepare for RBI Grade B FM Practice Questions
ESI Practice Questions RBI Grade B Result RBI Grade B Admit Card
Get Complete RBI Grade B 2024 Study Material – Previous Year Papers PDF, eBooks & Online Quizzes ➡ ➡ ➡

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