Question : Which of the following is a feature of a non-performing asset (NPA)?
Option 1: High credit rating
Option 2: Low risk
Option 3: Interest income is not received for a certain period of time
Option 4: None of the above
Correct Answer: Interest income is not received for a certain period of time
Solution : The correct answer is (c). Interest income is not received for a certain period of time is a feature of a non-performing asset (NPA).
A non-performing asset refers to a loan or advance where the borrower has failed to make interest or principal payments for a specified period, typically 90 days or more. When an asset is classified as an NPA, the lender, such as a bank, may stop receiving interest income from that asset until the borrower resolves the outstanding payments. This interruption in interest income is a key characteristic of an NPA.
Question : Which of the following is a feature of a money market instrument?
Option 1: High credit risk
Option 2: long maturity period
Option 3: Low liquidity
Option 4: Low interest rate
Question : Which of the following is a feature of a treasury bill?
Option 2: High interest rate
Option 3: Fixed maturity period
Option 4: No liquidity risk
Question : Which of the following is a feature of a commercial paper?
Option 1: Low liquidity
Option 2: High credit rating requirement
Option 3: High interest rate
Option 4: No fixed maturity period
Option 1: Fixed maturity period
Option 2: High liquidity
Option 3: Low interest rate
Option 4: No credit risk
Question : Which of the following is a feature of a certificate of deposit (CD)?
Option 1: High liquidity
Option 2: Low interest rate
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