Investment of Insurance Companies And IRDA Regulations MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Investment of Insurance Companies And IRDA Regulations, a fundamental topic in the field of IC 89 Management Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Investment of Insurance Companies And IRDA Regulations MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Investment of Insurance Companies And IRDA Regulations mcq questions that explore various aspects of Investment of Insurance Companies And IRDA Regulations problems. Each MCQ is crafted to challenge your understanding of Investment of Insurance Companies And IRDA Regulations principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 89 Management Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Investment of Insurance Companies And IRDA Regulations MCQs are your pathway to success in mastering this essential IC 89 Management Accounting topic.

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Investment of Insurance Companies And IRDA Regulations MCQs | Page 11 of 16

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Q101.
In what manner are shareholders' funds beyond the Solvency Margin treated in terms of investment?

a.

They are invested based on the pattern applicable to policyholders' funds

b.

They have a separate custody account with identified scrips

c.

They are excluded from any investment activities

d.

They are invested solely in government securities

Discuss
Answer: (b).They have a separate custody account with identified scrips Explanation:Shareholders' funds beyond the Solvency Margin shall have a separate custody account with identified scrips for both life insurers and general insurers.
Q102.
When should the insurer confirm the implementation of Internal/Concurrent Audit observations to the Authority?

a.

Along with the Quarterly Investment Returns

b.

In FORM 3

c.

In FORM 4

d.

In the annual audit report

Discuss
Answer: (c).In FORM 4 Explanation:The insurer shall, along with Quarterly Investment Returns filed with the Authority, confirm in FORM 4 that the Internal/Concurrent Audit observations, up to the quarter preceding the quarter to which the Returns are filed, are placed before the Audit Committee for its recommendation and action taken.
Q103.
Which of the following is a financial asset?

a.

Equity shares

b.

Debentures

c.

G-Secs

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Equity shares represent ownership in a company and are considered financial assets. Debentures are long-term debt instruments issued by companies, and they fall under the category of financial assets. G-Secs are debt securities issued by the government, and they are also classified as financial assets.
Q104.
___________ reflects volatility of return on an investment relative to market swings.

a.

Variance

b.

Alpha

c.

Beta

d.

Standard deviation

Discuss
Answer: (c).Beta Explanation:Beta reflects the volatility of return on an investment relative to market swings. A beta greater than 1 indicates higher volatility than the market, while a beta less than 1 suggests lower volatility.
Q105.
How are Government Securities issued in the market?

a.

At a premium only

b.

At face value only

c.

At a discount only

d.

At face value, at a premium, or at a discount depending on interest rates

Discuss
Answer: (d).At face value, at a premium, or at a discount depending on interest rates Explanation:Government securities can be issued at face value, at a premium, or at a discount depending on the interest rates in the market.
Q106.
Why do Government Securities provide investors with adequate liquidity?

a.

They have variable coupon rates

b.

They are backed by the RBI

c.

They are issued by the Central Government

d.

They are freely and easily tradable in the secondary market

Discuss
Answer: (d).They are freely and easily tradable in the secondary market Explanation:Government securities provide investors with liquidity because they are freely and easily tradable in the secondary market.
Q107.
What is a unique characteristic of the interest payment on Government Securities?

a.

Paid annually

b.

Paid quarterly

c.

Paid monthly

d.

Paid half-yearly

Discuss
Answer: (d).Paid half-yearly Explanation:Investors receive interest payment on the face value of government securities on a half-yearly basis.
Q108.
Which of the following Government securities are rooted with derivatives, such as call options and put options?

a.

Securities with embedded derivatives

b.

Zero coupon bonds

c.

Securities with variable coupon rates

d.

Securities with fixed coupon rates

Discuss
Answer: (a).Securities with embedded derivatives Explanation:These government securities have embedded derivatives, such as call options or put options. Embedded derivatives are components within a financial instrument that have characteristics of standalone derivatives.
Q109.
What is the maximum period of maturity for money market instruments?

a.

Two years

b.

One year

c.

Three years

d.

Five years

Discuss
Answer: (b).One year Explanation:Money market instruments are short-term debt instruments that have maturities typically ranging from overnight to one year. These instruments are designed for short-term funding and liquidity management.
Q110.
What is the limit of investment in immovable property covered under Section 27A(1 )(n) of the IRDA regulations in case of General Insurer?

a.

1% of the Investment Assets

b.

2% of the Investment Assets

c.

3% of the Investment Assets

d.

5% of the Investment Assets

Discuss
Answer: (c).3% of the Investment Assets Explanation:The limit of investment in immovable property covered under Section 27A(1)(n) of the IRDA regulations for a General Insurer is 3% of the Investment Assets.
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