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.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Investment of Insurance Companies And IRDA Regulations. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Investment of Insurance Companies And IRDA Regulations knowledge to the test? Let's get started with our carefully curated MCQs!

Investment of Insurance Companies And IRDA Regulations MCQs | Page 13 of 16

Discover more Topics under IC 89 Management Accounting

Q121.
What are the two broad categories of investment avenues?

a.

Stocks and bonds

b.

Equity and debt

c.

Financial assets and real assets

d.

Short-term and long-term

Discuss
Answer: (c).Financial assets and real assets Explanation:Investment avenues basically come under two broad categories: financial assets and real assets.
Q122.
How is the Rate of Return on an investment determined?

a.

By multiplying the annual income with the price at the end

b.

By subtracting the price at the beginning from the price at the end

c.

By dividing the annual income by the price at the beginning

d.

By using a complex formula involving market trends

Discuss
Answer: (c).By dividing the annual income by the price at the beginning Explanation:The formula for determining the Rate of Return on an investment: Rate of Return = [Annual income + (Price at end - Price at Beginning)) / Price at Beginning.
Q123.
How is Risk on Investment defined?

a.

Probability of financial gain on investment

b.

Probability of achieving investment goals

c.

Probability of loss of expected return on investment

d.

Probability of short-term market fluctuations

Discuss
Answer: (c).Probability of loss of expected return on investment Explanation:Risk on Investment can be defined as the chance of loss of expected return on investment.
Q124.
Why is marketability/liquidity considered an important factor for investment decisions?

a.

To maximize initial tax benefits

b.

To rectify errors in investment decisions

c.

To reduce the overall risk of investment

d.

To ensure continuing tax benefits

Discuss
Answer: (b).To rectify errors in investment decisions Explanation:Marketability/liquidity is essential for investors to rectify possible errors or mistakes in earlier investment decisions.
Q125.
What are the three types of Tax Benefits associated with investments?

a.

Short-term, medium-term, and long-term benefits

b.

Initial tax benefit, continuing tax benefits, and terminal tax benefits

c.

Personal, corporate, and capital gains tax benefits

d.

Direct and indirect tax benefits

Discuss
Answer: (b).Initial tax benefit, continuing tax benefits, and terminal tax benefits Explanation:Tax Benefits are of three types: Initial tax benefit, Continuing Tax benefits, and Terminal Tax Benefits.
Q126.
What are Government Securities also known as?

a.

High-risk securities

b.

Zero Coupon Bonds

c.

Gilt-edged securities

d.

Variable Coupon Rate Securities

Discuss
Answer: (c).Gilt-edged securities Explanation:Government Securities are also known as gilt-edged securities.
Q127.
What is the recommended reporting structure for the Investment Department in an insurance company?

a.

The Chief Investment Officer (CIO) reports to the CFO (Chief Financial Officer)

b.

The CFO reports to the CEO (Chief Executive Officer)

c.

The Front Office, Mid Office, and Back Office report directly to the CEO

d.

The CFO and CIO report to the Chief Risk Officer

Discuss
Answer: (b).The CFO reports to the CEO (Chief Executive Officer) Explanation:The Front Office headed by the Chief Investment Officer (CIO) reports to the CEO, while the Mid Office and Back Office, with separate responsible officers, are under the supervision and control of the CFO.
Q128.
How is data transfer between Front Office and Back Office recommended to be carried out?

a.

Through manual intervention to ensure accuracy

b.

On a real-time basis without manual intervention

c.

By relying on multiple Data-Entry Systems

d.

Through periodic batch processing

Discuss
Answer: (b).On a real-time basis without manual intervention Explanation:The transfer of data and information from Front Office to Back Office should be electronic without manual intervention, i.e., on a real-time basis.
Q129.
What is emphasized regarding the integration of multiple Data-Entry Systems in investment functions?

a.

Integration is not necessary for efficient operations

b.

Integration should have flaws to ensure flexibility

c.

Integration should be without any fault and without any manual intervention

d.

Integration is required only for the Back Office

Discuss
Answer: (c).Integration should be without any fault and without any manual intervention Explanation:If multiple Data-Entry Systems are in place for carrying out investment functions, all such systems need to be integrated without a flaw or fault and without any manual intervention.
Q130.
What role does the Chief Financial Officer (CFO) play in the reporting structure of the investment department?

a.

The CFO supervises the Front Office and Back Office.

b.

The CFO directly reports to the CEO.

c.

The CFO oversees the entire investment department.

d.

The CFO is responsible for trading guidelines.

Discuss
Answer: (a).The CFO supervises the Front Office and Back Office. Explanation:The Front Office headed by the Chief Investment Officer (CIO) reports to the CEO, while the Mid Office and Back Office are under the supervision and control of the CFO.
Page 13 of 16