Spelling Test-16 (Level-2)

Spelling-Tests

These tests are a check for your learning and your level with respect to the basic vocabulary skills.
Directions for individual questions: Identify the word which is correctly spelled.

Bank PO RC: Passage-3

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Congratulations - you have completed Bank PO RC: Passage-3.You scored %%SCORE%% out of %%TOTAL%%.Your performance has been rated as %%RATING%%

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Question 1

Which of the following measures had been adopted by private Corporations in restructions in restructuring process?

A	Exchange of bonds for ownership rights with shareholders.
B	Providing debt relief to bond holders without raising the interest rate.
C	Settling the debt in exchange of reserves.
D	Borrowing from banks by mortgaging equity shares.
E	None of these

Question 1 Explanation:

This answer is clearly mentioned in the end of the first paragraph. ‘Debt-equity swaps are exchange of bonds or bank loans for ownership rights to equity. Such debt-equity swaps have formed part of private corporations restructuring process for some time.’

Question 2

Which of the following is the recommendation of the author to stabilize the interest rates?

A	State Government should stop borrowing from Central Government.
B	The debt restructuring should be done at bare minimum level.
C	The foreign debts should be swapped immediately.
D	The debt-equity swap should be banned.
E	None of these

Question 3

Which of the following best describes the notion of debt conversion?

A	It is a relatively simple theory.
B	To substitute high interest debts with low interest debts.
C	The awarding of ownership right to mortgaged assets to the debtor.
D	Reduction of liabilities of the creditor
E	None of these

Question 3 Explanation:

The answer to this question is present word by word in the first paragraph itself. ‘The basic notion of debt swap/conversion is relatively simple.’

Question 4

What is the suggestion of the author to the State Governments?

A	Borrow from the market and pay Central Government immediately.
B	Pay market debts first, there after think for-Central Government.
C	Swap the domestic debt with foreign debt.
D	Present a balanced budget.
E	None of these

Question 4 Explanation:

There is no direct suggestion that the author provides to the reader in the passage. Hence the answer is none of these.

Question 5

What will happen if government decides to issue fresh bonds in a deficit situation?

A	The microeconomic equilibrium will shift to negative side.
B	The price of initial bonds will decrease.
C	This step will mess up the economy completely.
D	The Interest rates will start increasing.
E	None of these

Question 5 Explanation:

‘Government will have to issue fresh bonds, which in turn may push up the interest rate.’ The line is taken from the second last paragraph. So, the answer is directly given in the passage as well as the options so the correct choice is option (d).

Question 6

Which factors may raise the inflation rate on domestic side?
(A) If accumulated internal debts start getting monetised.
(B) If Interest rates start reducing for public borrowings.
(C) If debt swap is done through issue of bonds in a deficit situation.

A	Only (A)
B	Only (B)
C	Only (A) and (B)
D	Either (A) or (C)
E	Both (A) and (C)

Question 7

In order to achieve expansion of money supply the Central Government should-

A	Exchange public debts with foreign debts.
B	Swap foreign debts with Issue of bonds.
C	Convert debts through money financing.
D	Insist on State government for pre-payment of debts.
E	Not clearly mentioned in the passage.

Question 8

Which of the following will be the consequences If domestic bonds are issued In a balanced budget?
(A) A current account surplus will be displayed.
(B) Real Interest rate will get appreciation.
(C) Discounts received by the Government will become independent.