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CFA Level I Economy & Banking Awareness Questions
Practise economy & banking awareness (general awareness) for the CFA Program Level I: 10 multiple-choice questions, each with the correct answer and a worked explanation. Click an option to check it, or “New questions” for another set.
Economy & Banking Awareness practice
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Q1.Opportunity cost is:
Show answer & explanation
Answer: C — The value of the next best alternative forgone
It is the benefit given up by choosing one option over the next best.
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Q2.A bear market is characterised by:
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Answer: B — Falling prices
A bear market is a sustained decline in asset prices (often 20% or more).
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Q3.The ‘lender of last resort’ in an economy is usually the:
Show answer & explanation
Answer: D — Central bank
Central banks provide emergency liquidity to banks.
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Q4.The Goods and Services Tax (GST) in India was introduced on:
Show answer & explanation
Answer: B — 1 July 2017
GST was rolled out on 1 July 2017.
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Q5.The repo rate is the rate at which:
Show answer & explanation
Answer: B — The central bank lends to commercial banks
Repo is the rate at which the central bank lends short-term funds to banks against securities.
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Q6.Which ratio measures a bank’s capital against its risk-weighted assets?
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Answer: B — CAR (CRAR)
Capital Adequacy Ratio = capital ÷ risk-weighted assets (Basel norms).
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Q7.Which body regulates the securities market in India?
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Answer: D — SEBI
The Securities and Exchange Board of India (SEBI).
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Q8.Which type of account typically earns no interest in India?
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Answer: C — Current account
Current accounts for businesses usually pay no interest.
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Q9.The headquarters of the World Bank is in:
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Answer: A — Washington, D.C.
The World Bank Group is based in Washington, D.C.
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Q10.When the demand for a good rises as income rises, the good is a:
Show answer & explanation
Answer: D — Normal good
Normal goods have positive income elasticity.
How to approach economy & banking awareness questions
Know what each regulator does (RBI, SEBI, IRDAI, PFRDA), the policy tools (repo, CRR, SLR) and the definitions behind GDP, inflation and fiscal deficit. Check current rates in the latest official releases.
About CFA Level I
CFA Program Level I — conducted by CFA Institute. Investment tools, quantitative methods, economics, ethics and financial reporting fundamentals.
Original practice questions written for this site in the style and difficulty of each exam’s syllabus. They are not past papers and the site is not affiliated with any exam body. Exam patterns, marking schemes and syllabi change — always check the latest official notification.
CFA Level I practice topics
| Topic | Section | Question source |
|---|---|---|
| Accounting & Finance | Finance | Calculated + question bank |
| Simple & Compound Interest | Quantitative aptitude | Calculated (new numbers every set) |
| Probability & Combinatorics | Mathematics | Calculated (new numbers every set) |
| Averages & Statistics | Quantitative aptitude | Calculated (new numbers every set) |
| Economy & Banking Awareness | General awareness | Question bank |