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.

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Investment of Insurance Companies And IRDA Regulations MCQs | Page 9 of 16

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Q81.
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.
Q82.
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.
Q83.
As per Regulation 13, provision on investment management, for applications received, with local cheques payable at par at the place where the premium is received, before cut-off Time (3.00pm) on a business day, what will be the applicable NAV?

a.

The opening NAY of same day

b.

The closing NAY of same day

c.

The opening NAY of next day

d.

The closing NAY of next day

Discuss
Answer: (b).The closing NAY of same day Explanation:For applications received with local cheques payable at par at the place where the premium is received, before the cut-off time (3:00 pm) on a business day, the applicable NAV would be the closing NAV of the same day.
Q84.
As per Directives for Investment in Alternative Investment Funds for insurers, what is the permissible limit of exposure to a single AIF or venture fund for insurers?

a.

Not more than 1 percent of fund size

b.

Not more than 5 percent of fund size

c.

Not more than 10 percent of fund size

d.

Not more than 20 percent of fund size

Discuss
Answer: (c).Not more than 10 percent of fund size Explanation:The permissible limit of exposure to a single Alternative Investment Fund (AIF) or venture fund for insurers is not more than 10 percent of the fund size.
Q85.
What positive feature do Preference Shares have?

a.

Unlimited voting rights

b.

Fixed rate of return and redeemable after a fixed period

c.

Guaranteed dividend payments

d.

High market liquidity

Discuss
Answer: (b).Fixed rate of return and redeemable after a fixed period Explanation:Preference shares have the positive feature of bonds, including a fixed rate of return and redeemability after a fixed period, along with voting rights.
Q86.
What does Par Value refer to in the context of bonds?

a.

Market value of the bond

b.

The value of the bond at the time of issue

c.

The promised face value of the bond at maturity

d.

The interest payable to the bondholder

Discuss
Answer: (c).The promised face value of the bond at maturity Explanation:Par Value refers to the face value of the bond and the amount the issuer promises to pay at the time of maturity.
Q87.
What is Coupon Rate in the context of bonds?

a.

The market interest rate

b.

The rate of return on investment

c.

The rate of interest payable to the bondholder

d.

The rate of tax on bond income

Discuss
Answer: (c).The rate of interest payable to the bondholder Explanation:Coupon Rate refers to the rate of interest payable to the bondholder.
Q88.
When does Maturity date of a bond occur?

a.

At the time of issue

b.

After the bondholder receives interest payments

c.

When the principal amount is payable by the borrower to the bondholder

d.

On the date of purchase

Discuss
Answer: (c).When the principal amount is payable by the borrower to the bondholder Explanation:Maturity date refers to the date when the principal amount of borrowings is payable by the borrower to the bondholder.
Q89.
What is the characteristic of Money Market Investments in terms of maturity?

a.

Maturity of more than one year

b.

Maturity of exactly one year

c.

Maturity of less than one year

d.

No fixed maturity

Discuss
Answer: (c).Maturity of less than one year Explanation:Money Market Investments are debt instruments with a maturity of less than one year at the time of issue, including Treasury Bills, Commercial papers, and Certificate of Deposits.
Q90.
How are Mutual Fund Investment schemes broadly classified?

a.

Profit and non-profit schemes

b.

Equity and hybrid schemes

c.

Short-term and long-term schemes

d.

Active and passive investment schemes

Discuss
Answer: (b).Equity and hybrid schemes Explanation:Mutual fund Investment schemes are broadly classified into Equity Schemes, Debt Schemes, and Balanced funds, among others.
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