Daily JAIIB Quiz 31 Oct 2026

Price discovery occurs through buyers and sellers interacting to establish market prices. Prices reflect expected returns, risk, liquidity and information, though they are not always perfectly accurate or stable.

Call money is overnight. Notice money is for more than overnight and up to 14 days under the conventional classification. Term money generally exceeds 14 days, subject to the applicable framework.

Treasury Bills are short-term government securities normally issued at a discount and redeemed at face value. The return is the difference between purchase price and redemption value; they normally do not pay periodic coupons.

Commercial Paper is an unsecured money-market instrument issued by eligible issuers to raise short-term funds. Investors bear issuer credit risk because it is unsecured.

A repo is a sale of securities with an agreement to repurchase later. Economically, it functions as secured borrowing or lending, with securities serving as collateral.

Current yield = Annual coupon ÷ Market price × 100 = 70/875 × 100 = 8%. It excludes capital gain or loss at redemption, so it differs from yield to maturity.

This is a secondary-market transaction: existing securities change hands and proceeds generally go to the seller. In a primary issue, the issuer raises funds by issuing securities.

The application amount is blocked in the applicant‘s bank account rather than transferred immediately to the issuer. After allotment, the required amount is debited and excess funds are released under the applicable process.

FEMA provides India‘s legal framework for foreign exchange management, facilitating external trade and payments and promoting orderly development and maintenance of the foreign exchange market.

Concerns about LIBOR included its reliance on submissions and the lack of sufficiently active underlying transactions for some settings. Many alternatives are more directly transaction-based, such as SOFR for US dollars. The benchmark depends on currency and product.

The ACU facilitates clearing and settlement of eligible payments among participating countries, supporting regional trade and economising on foreign exchange settlement. Transactions follow ACU rules and country requirements.

Financial contagion is the spread of financial stress across markets, institutions or countries through direct exposures, common investors, liquidity pressures or confidence effects.

A lead manager coordinates issue management, due diligence, disclosures, intermediaries and regulatory compliance under the applicable SEBI framework. It does not guarantee investors a profit.

SEBI is the primary securities-market regulator for merchant bankers under applicable securities laws and regulations. RBI regulates banks and other activities within its statutory remit.

Buying USD forward for the payment date locks in an agreed exchange rate and reduces uncertainty about the rupee cost. It may also prevent benefiting from favourable exchange-rate movements, and counterparty risks remain.

A CDS transfers specified credit risk: the protection buyer pays a premium and the seller pays if a defined credit event occurs under the contract. Counterparty, basis and liquidity risks may remain.

It establishes standard contractual terms for OTC derivatives, including events of default, termination and close-out netting, alongside schedules, confirmations and related documentation. Enforceability depends on applicable law.

Forfaiting commonly involves purchasing export receivables, often medium-term, on a non-recourse basis. Factoring more often involves short-term receivables and may include collection and ledger services.

TReDS facilitates financing or discounting eligible MSME trade receivables through an electronic platform connecting sellers, buyers and financiers. Financing is subject to acceptance, participation and transaction terms.

Venture capital provides risk capital to high-growth, high-uncertainty businesses, often through equity or equity-linked investment. It may support growth but dilute founder ownership and involve investor governance rights.