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[Solution] – The 10 PM Daily Quiz – 18 April, 2016

We posted 7 questions in 10 PM Daily Quiz on 18th April, 2016. Thanks for the amazing response. These questions will help you polish concepts based on current affairs. In case you have not attempted them, please attempt them by clicking below.

Q.1) Which of the following are instances of wilful default?

  1. The unit has defaulted in meeting its payment / repayment obligations to the lender even when it has the capacity to honour the said obligations.
  2. The unit has defaulted in meeting its payment / repayment obligations to the lender and has not utilised the finance from the lender for the specific purposes for which finance was availed of but has diverted the funds for other purposes.
  3. The unit has defaulted in meeting its payment / repayment obligations to the lender and has also disposed off or removed the movable fixed assets or immovable property given for the purpose of securing a term loan without the knowledge of the bank / lender.

Select the correct answer using the codes given below:

a) 1 and 2 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2 and 3

Answer-d

Explanation:- Wilful Default: A ‘wilful default’ would be deemed to have occurred if any of the following events is noted:

(a) The unit has defaulted in meeting its payment / repayment obligations to the lender even when it has the capacity to honour the said obligations.

(b) The unit has defaulted in meeting its payment / repayment obligations to the lender and has not utilised the finance from the lender for the specific purposes for which finance was availed of but has diverted the funds for other purposes.

(c) The unit has defaulted in meeting its payment / repayment obligations to the lender and has siphoned off the funds so that the funds have not been utilised for the specific purpose for which finance was availed of, nor are the funds available with the unit in the form of other assets.

(d) The unit has defaulted in meeting its payment / repayment obligations to the lender and has also disposed off or removed the movable fixed assets or immovable property given for the purpose of securing a term loan without the knowledge of the bank / lender.

The identification of the wilful default should be made keeping in view the track record of the borrowers and should not be decided on the basis of isolated transactions / incidents. The default to be categorised as wilful must be intentional, deliberate and calculated.

Lender: The term ‘lender’ covers all banks / FIs to which any amount is due, provided it is arising on account of any banking transaction, including off balance sheet transactions such as derivatives, guarantees and letters of credit.

Unit: The term ‘unit’ includes individuals, juristic persons and all other forms of business enterprises, whether incorporated or not. In case of business enterprises (other than companies), banks / FIs may also report the names of those persons who are in charge and responsible for the management of the affairs of the business enterprise.


Q.2) Consider the following pairs

        Organisation                                            Report

  1. International Monetary Fund                 World Economic Outlook  
  2.  World Bank                                          World Development Report                   
  3.   World Bank                                         Economic Outlook  

Which of the above are correctly matched

a) 1 only
b) 1 and 3 only
c) 1 and 2 only
d) 1, 2 and 3

Answer- c

Explanation:- The World Economic Outlook (WEO) is a survey conducted and published by the International Monetary Fund. It is published biannually and partly updated two times a year. It portrays the world economy in the near and medium context, with projections for up to four years into the future. WEO forecasts include key macroeconomic indicators, such asGDP, inflation, current account and fiscal balance of more than 180 countries around the globe. It also deals with major economic policy issues.

Economic Outlook is a twice-yearly analysis (available for online viewing, download, and in print) published by the Organisation for Economic Co-operation and Development(OECD) with economic analysis and forecasts for future economic performance of OECD countries.] The main version is in English, and it is also published in French andGerman. The OECD also publishes Monthly Economic Indicators (updated every month) to complement the twice-yearly Economic Outlook.

The World Development Report (WDR) is an annual report published since 1978 by the World Bank. Each WDR provides in-depth analysis of a specific aspect of economic development. Past reports have considered such topics as agriculture, youth, equity, public services delivery, the role of the state, transition economies, labour, infrastructure,health, the environment, risk management, and poverty. The reports are the Bank’s best-known contribution to thinking about development.


Q.3) Which of the following is considered as hazardous sector for the purpose of the Factories act, as per the new amendments

  1. Coal
  2. Cement
  3. Leather
  4. Iron and steel
  5. Petroleum

Select the correct answer using the codes given below:

a) 1, 3 and 5 only
b) 2, 4 and 5 only
c) 1, 2, and 4 only
d) 1, 2, 3, 4 and 5

Answer- d

Explanation:Proposed amendments in the Factories Act

  • The proposed law will apply to all factories that employ at least 40 workers.
  • All factories that manufactures or deals with hazardous substance and processes and dangerous operations (sectors like coal, gas, iron and steel, petroleum, cement and leather) will be covered under this Act even if they employ a single worker.
  • Registration of factories will also be made online and entrepreneurs will only have to submit a self-certified declaration on the safety, health and welfare standards of the factory to get approvals for setting up a factory.

Q.4) Monopolies and Restrictive Trade Practices Act, 1969 (MRTP) was repealed and replaced by which of the following Act?

a) Consumer Protection Act
b) Competition Act
c) Indian Trademark Act
d) None of the above

Answer-b

Explanation:- The Diffence between the MRTP Act 1969 and The Competition Act 2002 is as follows –

The MRTP Act was enacted in the Pre Liberalisation era whereas the Competition Act is enacted in the Post Liberalisation era;

The Object of the old Act was to prevent the economic concentration in one Common detriment, curbing unfair trade practices, ane to check monopolistic activities, on the other hand the object of the new Act is to promote and Sustaining Competition in the market and to to ensure the freedom of trade and to protect the interest of the consumer in whole;

The MRTP Commission has the advisory role only whereas the later has some effective role including that of initiating suo moto actions and impose punishments to the entities having some adverse effect in the market.


Q.5) When the water reserves available in sources such as aquifers, lakes and reservoirs fall below the statistical average, it is referred as

a) Meteorological drought
b) Agricultural drought
c) Hydrological drought
d) Ecological drought

Answer – c

Explanation

  • Meteorological drought is brought about when there is a prolonged time with less than average precipitation. Meteorological drought usually precedes the other kinds of drought.
  • Agricultural droughts are droughts that affect crop production or the ecology of the range. This condition can also arise independently from any change in precipitation levels when soil conditions and erosion triggered by poorly planned agricultural endeavors cause a shortfall in water available to the crops.
  • Hydrological drought is brought about when the water reserves available in sources such as aquifers, lakes and reservoirs fall below the statistical average. Hydrological drought tends to show up more slowly because it involves stored water that is used but not replenished.

Ecological drought is generally defined as the prolonged and widespread deficit in soil moisture, or biologically available water, that imposes multiple stresses in terrestrial and aquatic ecosystems.


Q.6) Consider the following statements regarding International Development Association

  1. Offers concessional loans and grants to the world’s poorest developing countries
  2. IDA funds are meant for countries with per capita income up to $ 1260.

Select the correct answer using the codes below

a) 1 only
b) 2 only
c) Both are true
d) Neither is true

Answer- c

Explanation

IDA

The International Development Association (IDA) is an international financial institution which offers concessional loans and grants to the world’s poorest developing countries. The IDA is a member of the World Bank Group and is headquartered in Washington, D.C., United States. It was established in 1960 to complement the existing International Bank for Reconstruction and Development by lending to developing countries which suffer from the lowest gross national income, from troubled creditworthiness, or from the lowest per capita income. Together, the International Development Association and International Bank for Reconstruction and Development are collectively generally known as the World Bank, as they follow the same executive leadership and operate with the same staff.

These funds are available to countries with per capita income, as computed under the World Bank atlas methodology that adjusts nominal income for purchasing power, of up to $1,260, a threshold India has crossed convincingly with a per capita income of around $1,500. So, strictly speaking, India is not eligible for funds support from the IDA, but the bank faces a dilemma in stopping access to a country that is home to a very large number of poor.


Q.7)Consider the following statements regarding Venture Capital

  1. Venture capital (VC) is money that is provided to seed well established companies
  2. Venture capital funds invest in companies in exchange for equity in the companies they invest in

Select the correct answer using the codes below

a) 1 only
b) 2 only
c) Both are true
d) Neither is true

Answer -b

Explanation

Who is a Venture Capitalist

Venture capital (VC) is money that is provided to seed early-stage, emerging growth companies. Venture capital funds invest in companies in exchange for equity in the companies they invest in, which usually have a novel technology or business model in high technology industries, such as biotechnology and IT. Venture Capitalist is the person who provides capital.

 

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