Online Test Series & Free Mock Tests For Competitive Exams in India

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Prof. Mohd. Shamim D/o. Commerce

Aligarh Muslim University

DEPARTMENT OF COMMERCE

- A

^LIGARH

M

^USLIM

UNIVERSITY

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Online Test Series & Free Mock Tests For Competitive Exams in India

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In India for the first time demonetisation announced in which year ?

A. 1962 B. 1999 C.1946 D.1974 C

According to various sources what is the total percentage of 500 and 1000 notes in the total currency ?

A. 50% B. 30% C. 43% D. 86%

DOn which date Prime minister of India announced Demonetisation ?

A. 08,Nov. B.13,Nov. C. 09,Nov D. 19,Nov A

Q. When did the said currency cease to be the legal tender in India ?

Answer - From 9th of Nov ( after 12:00 midnight )

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Q. What is the main motive behind this big move ?

Answer - to curb black money, terror funding and stop the use of fake currency available in the market.

Q. When was first time such decision taken in Indian history ?

Answer - On 12 Jan 1946.

Q. Which currency was demonetized that time ? Answer - Currency notes of 1,000 and 10,000

Q. When were the same measures taken place after 1946?

Answer - 16th January 1978 by Janata Party Q. Which currency was affected that time ? Answer - Rs, 1000, 5,000 and 10,000

Q. When did 25 paisa lose its existence ? Answer - June 30, 2011

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Q. What was the total currency in circulation in India on 28th October 2016 ?

Answer - 17.77 lakh crore

Q. In the annual report of Reserve Bank of India of 31st

March 2016, how much currency denomination of Rs 500/

and Rs 1000/ was in circulation ?

Ans - 14.18 lakh crore out of total 16.42 lakh crore Q. Who is Shantikanta Das ?

Answer - Economic Affairs Secretary

Q. Whose signature is there on the new notes ?

a. Prime Minister Modi b. President Pranab Mukherjee c.

Governor of the RBI Urjit Patel Answer - c

Q. What is the last date of tendering old currency ? Ans - Dec 30, 2016

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Q. How much money could have been exchanged with the legal one ?

Answer - Rs 4,000 up to 14th Nov and after that it was up to 4,500.

Q. How much money can a person deposit in his bank account ?

Ans- Up to Rs. 2,50,000

Q. Which news paper had previously given the news of this demonetization ?

Ans - Gujarati Newspaper called Akila on 1st April 2016

Q. Which agency shall receive the banned Old Currency after 30th of Dec 2016 ?

Ans- Reserve Bank of India

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The Indian currency system was converted into a

decimal system by ……….. which was brought into force from 1 April, 1957.

A. Banking Companies Act, 1946 B. Coinage Act 1956

C. Indian Coinage Act 1955

D. Banking Regulation Act 1949 E. None of these

Answer – 3. Indian Coinage Act 1955 Explanation :

The Indian currency system was converted into a decimall system by Indian Coinage Act 1955which was brought into force from 1 April, 1957. The Old system of rupee, annas

and paise was replaced by rupee and paise system 1 Rupee = 16 Annas and 1 Annas = 12 paise

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Answer – 4. Mahatma Gandhi Series.

Explanation :

In India Currency notes of denomination Rs.1,2,5,10,50,500 and 1000 are in circulation This series which began in 1996 is called as Mahatma Gandhi Series.All notes above 1 rupee denomination was introduced by RBI

In India Currency notes of denomination Rs.1,2,5,10,50,500 and 1000 were in circulation. This series of number is called as A. British Series

B. Indian Currency Series C. Ambedkar Series

D. Mahatma Gandhi Series.

E. None of these

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All the currency notes except ……….. bear the signature of the Governor of the RBI.

A. One Rupee note

B. Hundred Rupee note C. Five Rupee note

D. Two Rupee note E. None of these

Answer – 1.One Rupee note Explanation :

One rupee note is signed controlled by Ministry of finance and signed by the Finance Secretary

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Distribution and administration of all currency is done by the ……… as an agent of the GOI.

A. RBI

B. World Bank C. SBI

D. Finance Department E. None of these

Answer – 1.RBI Explanation :

RBI – Reserve Bank of India

Founded in April 1, 1935 at Kolkata

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In ………. became a member of IMF and the exchange value of the rupee came to be fixed by IMF standards.

A. 1947 B. 1950 C. 1956 D. 1987

D. None of these

Answer – A.1947

The International Monetary Fund (IMF) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty

around the world.

HQ – Washington, D.C.,Dc

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Paper currency in India was introduced in ……….

by the British government

A. 1919 B. 1890 C. 1920 D. 1861 E. None

……….. refers to the withdrawal of currency from circulation which is done to ambush black market

currency and unaccounted money.

A. Devaluation B. Decentralisation C. Denomination D. Demonetization E. None of these

D. Demonetization

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The first bank in India managed by Indians was the ………

A. RBI B. Oudh Commerical Bank

C. Corporation Bank D. Bank of India E. None of these

Oudh Commerical Bank founded in 1881. It was a bank of limited liability

After Independence of India, how many times

demonetization of bank note has been done by GOI/RBI?

A) 1 B) 2 C) 3 D) 4

Option B

On 12 Jan 1946, 16 Jan, 1978 and 9 November 2016.

Overall 3 times.

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In which year Rs. 5,000 note was demonetised?

A) 1946 B) 1978 C) 1982 D) 2016

Option B 1978- Rs 1,000, Rs 5,000 and Rs 10,000 RBI can withdraw the legal tender character of bank notes as per ________ of RBI Act, 1934

A) Section 24(1) B) Section 24(2) C) Section 26(2) D) Section 28(2)

Option C: RBI can withdraw the legal tender character of bank notes as per Section 26(2) of RBI Act, 1934

What was the deadline for non- resident Indians to deposit Specified Bank Notes(SBN) (Demonetization of 2016)?

A) July 1, 2017 B) July 31, 2017 C) June 1, 2017 D) June 30, 2017.

Option D: till June 30, 2017.

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Who among the following RBI governors was not the

governor of RBI during which demonetisation took place in India?

A) Urjit Patel B) I. G. Patel

C) M. Narasimham D) C. D. Deshmukh

Option C: 1946- C. D. Deshmukh; 1978- I. G. Patel ; 2017- Urjit Patel

During demonetization period, RBI instructed banks to provide at least ___ percent of cash to rural area

(Demonetization of 2016)?

A) 20% B) 25% C) 30% D) 40%

Option D: 40%

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2. Literature Review

Objectives of the Study

The objectives of the study are:

1- To study the impact of demonetization process on the performance of Nifty50 and its sectorial indices.

2- To compare the impact of demonetization

process among sectorial indices of Nifty50.

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3. Methodology

(Research sample, data collection, measurement, data analysis)

Literature Review

No Studies country Journal Variables Size Time

limit Data

Methods And Applied Tests

Results

1

(Chelladurai &

V.Sornaganesh, 2016)

Demonetisation, Unified Payment Interface &

Cashless Economy

India

Internation al Journal ofInformative

& Futuristic Research

impact of

demonetisation on the society, Stock market , Non-Banking Finance

Companies ,

Professionals , FMCG, SME sector, and e- commerce Industry

N.A N.A N.A

Descriptiv

e and

theoretic al

Citizens faced some challenges due to demonetisation but it was a good move that may reduce black money and has huge impact on India.

2

(Singh & Singh, 2016) Impact of Demonetization

on Indian

Economy

India

Internation al Journal of Science Technology andManageme nt

experience of impact of demonetization in some countries, and on Indian economy, probable consequences of the demonetization

N.A N.A N.A Graph andpercentile

Demonetization could have a meaningful impact on India if the money finds its way in the economy

3

(Bayero, 2015) Effects of Cashless Economy Policy on Financial Inclusion in Nigeria: An Exploratory Study

Nigeria

Procedia - Social and Behavioral Sciences

Cashless Economy Policy;

financial inclusion;

electronic payment;

payment infrastructure;

awareness; customer value proposition;

business mode

230 N.A

cross section al survey

Descriptiv e

statistics regressio n

Financial Inclusion have strong significant relationship with Awareness, Infrastructure and Consumer but there is no significant relationship with Business Model of Financial Service Providers

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(National Institute of Public Finance and Policy New Delhi, 2016) Demonetisation : Impact on the Economy

India

National Institute of Public Finance and Policy, New Delhi

demonetization,

cashless transactions,

credit, tax evasion N.A N.A N.A

Descriptiv

e and

theoretic al

Short run and medium-term impacts which expected to affect the economy as a result of demonetization should be evaluated

5 (Worthington,

2014) The Europe

Internation al Journal of Retail &

Distributio plastic payment N.A N.A N.A Graph

and a less cash society by plastic card will continue to grow in

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3. Methodology

Literature Review

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(Emengini & Alio, 2014) Cashless Economy and Financial Statement Reporting in Nigeria

Nigeria

European Journal of Accounting Auditing and Finance Research

Cashless, Financial system, Financial Reporting, Economy, Business Transaction

N.A N.A

Question naire and oral intervie w

Z – test statistics and Chi- square

&secondary

Stakeholders place more credence for financial statements emanated from cashless economy because they are more complied with auditing standards, effective performance of business transactions, more reduced tax evasion, and less revenue leakages.

7 (Adu, 2016) Cashless Policy and its Effects on

the Nigerian Economy Nigeria

European Journal of Business, Economics andAccountancy

Information Technology, Computer, Automated Teller Machine. positive and negative effects of cashless policy

N.A N.A N.A Descriptive and theoretical

Electronic banking as it requires commitment of huge financial resources on telecommunication facilities, constant electricity and computer technology but it has a strong influence on the development of payment system.

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(Kaur, 2017)

Demonetization: Impact on Cashless Payment System

India

International Journal of Science Technology andManagement

Demonetization, Electronic

Payment System. N.A N.A N.A Descriptive

andtheoretical

Demonetization affects the economy through the liquidity side

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(Ezeamama et al., 2014) The Impact of Central Bank of Nigeria Cashless Policy in Nigeria Economy

Nigeria

IOSR Journal of Business andManagement (IOSR-JBM)

Cashless economy, Cashless

policy 500 N.A Question

naire

Graph and percentile Percentages

cashless policy may curb cash related corruption, reduce cash related robbery, therefore decrease risk of carrying cash, attract more foreign investors, increase employment

10

(Osazevbaru & Yomere, 2015) Benefits and Challenges of Nigeria’s Cash-Less Policy

Nigeria

Kuwait Chapter of Arabian Journal of Business and Management Review

Economic reforms, Banking sector, Payment channels,

ATM, Payment terminal N.A N.A secondar y data

Descriptive andtheoretical

Cash-less policy offers huge benefits to the banking sector whereas income based on cash-less setting is higher than in cash based arrangement

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(Muyiwa et al., 2013) Impact of Cashless Economy in Nigeria

Nigeria

Greener Journal of Internet, Information andCommunicati on Systems

Cashless economy, Cashless

policy 500 N.A Question

naire

Descriptive statistics regression

cashless policy may curb cash related corruption, reduce cash related robbery, therefore decrease risk of carrying cash, attract more foreign investors, increase employment

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3. Methodology

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(Olelewe & E., 2014) Challenges Facing the Sustainability of Cashless Policy towards the Management of the Family Economy among Staff and Students of University of Nigeria, Nsukka, Chijioke

Nigeria Educational Research International

Cashless policy, challenges, economic development,

mobile and internet banking 490 N.A Question naire

Descriptive statistics One-way ANOVA

Poor interconnectivity of network servers as a major challenge for efficient using of mobile banking services and some other several challenges such as insecurity of personal data and online frauds still facing banks’ customers which results to delay in payment.

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(Ovat, 2012) The Central Bank ofNigeria’sCashless Policy in Nigeria: Benefits and Challenges

Nigeria

Journal of Economics andSustainable Development

Cashless Policy, Central Bank

of Nigeria. N.A N.A secondary

data

Descriptive

andtheoretical periodic review of the policy to iron out the thorny issues

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(Mieseigha & Ogbodo, 2013) An Empirical Analysis of the Benefits of Cashless Economy on Nigeria’s Economic Development

Nigeria Research Journal of Finance and Accounting

Cash-based economy, Cashless economy, Economic development, E- payment.

468 N.A questionn aires

Chi-square and (ANOVA) tests

Positive impact and significant relationship found between cashless economy and economy development from one hand and accountability, transparency, and reduction cash- related fraud from the other.

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(Ejiofor & Rasaki, 2012) Realizing the Benefits and Challenges of Cashless Economy in Nigeria: IT Perspective

Nigeria

International Journal of Advances in Computer Science and Technology

ATM, Cashless, Electronic payment systems, Internet Banking

N.A

N.A secondary data

Descriptive andtheoretical

Despite cashless risks and glaring bottlenecks; consumers are ready to embrace the new policy of cashless economy

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(Matthew &

Anyanwaokoro, 2016) Cashless Economic Policy in Nigeria: A Performance Appraisal of The Banking Industry

Nigeria

IOSR Journal of Business andManagement (IOSR-JBM)

Cashless policy, e-payment, Payment channels, ROA

N.A 2009-

2014 secondary data

Paired Samples Test

While some benefits associated with cashless policy which include; reduced cash handling cost; reduced risk of cash related crimes, reduced revenue leakages and increased convenience but still some challenges were found which include; prevalence of e-fraud, infrastructural deficits, erratic power supply.

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(Okoye & Ezejiofor, 2013) An Appraisal of Cashless Economy Policy in Development of Nigerian Economy

Nigeria Research Journal of Finance and Accounting

cashless economy, financial stability, Policy development

and Nigerian economy 68 N.A questionn aire which

ANOVA and

chi –

square

Cyber fraud and illiteracy are major

problems may hamper the

implementation of the policy. Policy will help fight against money laundering, corruption, and reduce the risk of carrying cash.

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(Muhibudeen & HALADU, 2015) The Impact of Cashless Policy Tools on Money Circulating Outside Nigerian Banks

Nigeria

International Journal of Business, Economics and Law

Cashless Policy, Automated Teller Machine, Web-Based Transactions, Mobile Banking Transaction, Point- of-Sale, Cheques and Currency in Circulation

N.A 2009-

2012 Secondar y

Descriptive statistics regression ANOVA

Cashless Policy tools does not affect currency circulation outside Nigerian banks

(Odior & Banuso, 2012) Graph and Cashless Nigeria seems to have some

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Hypotheses of the Study

Based on the literature review and objectives of the study demonstrated above, the hypotheses of the study are:

H01: There is no significant impact of demonetization process on the performance of Nifty50 and its sectorial indices

H02: There is no significant differences of the impact

of demonetization process among sectorial indices of

Nifty50

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Data Collection

Demonetization Event

Pre 90 Days Post 90 Days

Closing prices Closing prices

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Statistical tools and Methods

Objectives Hypotheses Tests

performance of Nifty and its sectorial indices

Pre- post

Pre & post are not different

Paired Sample T

test

No differences among sectorial

indices Comparing ANOVA

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3. Methodology

Results and Discussion

1- Descriptive statistics

Index Period N Mean Median Maximum Minimum Std.

Deviation NIFTY Pre 90 8625.06 8634.125 8952.5 8127.85 150.4385

Post 90 8458.781 8394.75 9160.05 7908.25 361.3946 NIFTY Auto Index Pre 90 9735.547 9881.675 10458.65 8618.85 462.7495 Post 90 9472.689 9629.225 10191.95 8681.6 412.6019 NIFTY Bank Index Pre 90 19207.43 19294.98 20426.2 17561.55 603.2667 Post 90 19307.32 19077.45 21249.9 17655.55 1073.056 NIFTY energy Index Pre 90 9546.246 9538 10201.65 8512.9 411.3213 Post 90 10492.26 10458.95 11573.85 9657.8 563.7843 NIFTY Fina. Services Index Pre 90 7898.667 7935.425 8385.85 7157.25 256.7424 Post 90 7796.405 7627.325 8601.15 7175.35 417.1547 NIFTY FMCG Index Pre 90 22010.44 21999.88 23186.15 21195.9 435.2032 Post 90 21359.1 21215.33 23500.25 19592.85 1104.791 NIFTY IT Index Pre 90 10599.91 10530.8 11222.2 9809.75 385.6876 Post 90 10212.44 10198.53 10900.75 9434.6 377.0811 NIFTY Media Index Pre 90 2850.796 2860.925 3127.8 2524 133.6936 Post 90 2774.462 2747.425 3113.8 2493.8 188.8761 NIFTY Metal Index Pre 90 2523.703 2541.275 2781 2115.85 146.6302 Post 90 2905.716 2935.1 3189.4 2536.2 192.6657 NIFTY Pharma Index Pre 90 11527.99 11561.08 11936.65 10606 236.5773 Post 90 10570.92 10561.25 11132.05 9889.3 271.0782 NIFTY Private Bank Index Pre 90 10784.63 10779.48 11501.2 9887.9 309.5088 Post 90 10685.56 10537.75 11786.7 9743.15 613.7194 NIFTY PSU Bank Index Pre 90 3035.278 3078.325 3323.35 2693.2 159.0773 Post 90 3191.288 3181.775 3450.45 2910.65 144.272 NIFTY Realty Index Pre 90 206.4228 206.525 214.65 189.75 4.413699

Post 90 179.3444 178.9 208 153.85 14.57299

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103 0

5000 10000 15000 20000 25000

Descriptive Statistics

Maximum Minimum

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3. Methodology

Results and Discussion 2- Technical analysis

7200 7400 7600 7800 8000 8200 8400 8600 8800 9000 9200 9400

08-Jul-16 08-Aug-16 08-Sep-16 08-Oct-16 08-Nov-16 08-Dec-16 08-Jan-17 08-Feb-17 08-Mar-17

Figure 1 Nifty 50 Index

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3. Methodology

0 2000 4000 6000 8000 10000 12000

CLOSING PRICES

DATE

Figure (2)NIFTY Auto Index

0 5000 10000 15000 20000 25000

Closing Price

Date Figure (3)NIFTY Bank Index

6000 6500 7000 7500 8000 8500 9000

Closing Prices

Date

Figure (5) Nifty Financial Services

17000 18000 19000 20000 21000 22000 23000 24000

Closing Price

Date Figure (6) Nifty FMCG

8500 9000 9500 10000 10500 11000 11500

Closing Price

Date Figure (7) Nifty IT

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106 0

500 1000 1500 2000 2500 3000 3500

Closing Prices

Date Figure (8) Nifty Media

0 500 1000 1500 2000 2500 3000 3500

Closing Prices

Date Figure (9) Nifty Metal

0 2000 4000 6000 8000 10000 12000 14000

Closing Prices

Date Figure(10) Nifty Pharma

0 2000 4000 6000 8000 10000 12000 14000

Closing

Date

Figure (11) Nifty Private Banks

0 500 1000 1500 2000 2500 3000 3500 4000

Closing

Date Figure (12) Nifty PSU Bank

0 50 100 150 200 250

Closing

Date Figure (13) Nifty Realty

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3. Methodology

2- Paired t test

Paired sample T test of nifty and its sectorial indices for pre and post demonetization event

Pre and post Mean Diff. S.D. of

diff.

t-

statistic Prob. Result

Nifty post - Nifty Pre -166.28 362.92 -4.35 0.0000 Sig.

NIFTY Auto Index post - NIFTY Auto Index Pre -262.86 321.45 -7.76 0.0000 Sig.

NIFTY Bank Index post - NIFTY Bank Index Pre 99.89 1072.26 0.88 0.3792 Insig.

NIFTY energy Index post - NIFTY energy Index Pre 946.01 283.62 31.64 0.0000 Sig.

NIFTY Financial Services Index post - NIFTY Financial

Services Index Pre -102.26 424.68 -2.28 0.0247 Sig.

NIFTY FMCG Index post - NIFTY FMCG Index Pre -651.35 1327.14 -4.66 0.0000 Sig.

NIFTY IT Index post - NIFTY IT Index Pre -387.47 701.59 -5.24 0.0000 Sig.

NIFTY Media Index post - NIFTY Media Index Pre -76.33 150.31 -4.82 0.0000 Sig.

NIFTY Metal Index post - NIFTY Metal Index Pre 382.01 156.56 23.15 0.0000 Sig.

NIFTY Pharma Index post - NIFTY Pharma Index Pre -957.06 361.97 -25.08 0.0000 Sig.

NIFTY Private Bank Index post - NIFTY Private Bank Index

Pre -99.07 622.46 -1.51 0.1346 Insig.

NIFTY PSU Bank Index post - NIFTY PSU Bank Index Pre 156.01 206.6816 7.16 0.0000 Sig.

NIFTY Realty Index post - NIFTY Realty Index Pre -27.08 15.60155 -16.47 0.0000 Sig.

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3. Methodology

3- Anova

Analysis of Variance of Nifty and its Sectorial Indices for Post Demonetization Event Test for Equality of Means Between Series

Included observations: 90

Method df Value Probability

Anova F-test (12, 1157) 11557.25 0.0000

Welch F-test* (12, 417.45) 42335.26 0.0000

Analysis of Variance

Source of Variation df Sum of Sq. Mean Sq.

Between 12 4.10 3.42

Within 1157 3.42 295849.4

Total 1169 4.14 35391569

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Conclusion

1.The study found that Nifty 50 dropped after the announcement of demonetization.

2.P value of paired sample T test is less than 0.01 (P <

0.01) which is highly significant at the level of 99%.

3.the results reveal that most of Sectorial Indices of Nifty 50 sloped down post demonetization event and the significance of the statistical results are varied

from one sector to another.

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Recommendations

1. Periodic review of the policy should be made to iron out the negative impact of demonetization.

2. Evaluate the impact of demonetization on the short,

medium, and long run to avoid any grey areas for any

future policy regarding cashless economy.

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Limitations & Future Research

• Three months pre and three months post demonetization period.

• Other variables have not been investigated in this study.

• It is only limited to the impact of demonetization process on Nifty 50 and its sectorial indices

•Future studies may focus individually on the sectors of

Nifty 50 to investigate deeply how demonetization affected every individual sector.

•Future studies may compare Nifty and Sensex or any other

market index

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