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 9 of 16

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Q81.
What is a key feature of Government Securities that makes them attractive to investors?

a.

High risk

b.

Backed and guaranteed by the government

c.

Variable coupon rates

d.

Market volatility

Discuss
Answer: (b).Backed and guaranteed by the government Explanation:Government securities are considered risk-free as they are backed and guaranteed by the government.
Q82.
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.
Q83.
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.
Q84.
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.
Q85.
Do Government Securities attract Tax Deduction at Source (TDS)?

a.

Yes

b.

No

c.

May be Yes or No

d.

Can't say

Discuss
Answer: (b).No Explanation:Government securities do not attract TDS (Tax Deduction at Source).
Q86.
What are the two main types of income that an insurance company needs to consider when dealing with Government Securities?

a.

Operating income and financing income

b.

Revenue Income and Capital gains

c.

Dividend income and interest income

d.

Rental income and royalty income

Discuss
Answer: (b).Revenue Income and Capital gains Explanation:An insurance company needs to consider Revenue Income and Capital gains when dealing with Government Securities.
Q87.
How does the treatment of interest income from Government Securities depend on?

a.

Market demand

b.

Time and terms of purchase and sales of securities

c.

Government regulations

d.

Inflation rate

Discuss
Answer: (b).Time and terms of purchase and sales of securities Explanation:The treatment of interest income from Government Securities depends on the time and terms of purchase and sales of securities.
Q88.
What is the specific consideration for an insurance company when dealing with income from Government Securities?

a.

Political stability

b.

Time value of money

c.

Inflation rate

d.

Revenue Income and Capital gains

Discuss
Answer: (d).Revenue Income and Capital gains Explanation:Insurance companies need to specifically consider Revenue Income and Capital gains when dealing with income from Government Securities.
Q89.
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.
Q90.
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.
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