Everything From A Single Para English Aptitude Test- The Hindu Editorial 06/09/2019

The Hindu Editorial

Everything From A Single Para English Aptitude Test- The Hindu Editorial 06/09/2019

These Questions Completely based on Single “The Hindu” Editorial. The purpose to start this is to make you read the same paragraph again and again to understand the different types of questions like comprehension, cloze test, sentence arrangement, sentence improvement, vocab, antonyms, synonyms, fillers (all based on single paragraph) etc. Reading this paragraph while practicing these questions will help you understand.

The Hindu Editorial : 06 September 2019

Subject: Interesting, but risky: On RBI’s floating rate loans diktat

Title: RBI’s diktat to banks could spur borrowing but may pressure lenders’ margins
The Reserve Bank of India (RBI) has finally decided that it needs to address the problem of inadequate interest rate transmission head on.
In a circular to banks on Wednesday, it directed lenders to link all new floating rate loans given to borrowers in the personal, retail and micro, small and medium enterprise (MSME) categories to external benchmarks, including the repo rate, with effect from October 1.
While giving banks the relative freedom to choose the specific external benchmark, including yields on the 3-month and 6-month Treasury Bills published by the Financial Benchmarks India Pvt. Ltd., the central bank made it clear that lenders would need to adopt a uniform benchmark within a loan category.
Banks have also, crucially, been given the leeway to determine their spread over the benchmark rate with a caveat that changes to the credit risk premium can only be made when the borrower’s credit assessment undergoes a substantial change.
That the inadequate transmission of policy rate moves has been an abiding conundrum for the RBI is well known. In 2015, then Governor Raghuram Rajan decided that the system used by banks to price their loans needed to be changed and so introduced the Marginal Cost of Funds based Lending Rate (MCLR) regime.
In October 2017, an internal study group of the RBI recommended the adoption of external benchmarks to ensure effective policy transmission, after observing that the MCLR too had failed to deliver.
Policymakers, in fact, have been so vexed with poor transmission — against a total of 75 basis points (bps) reduction in the RBI’s repo rate between February and June, the weighted average lending rate on fresh rupee loans at banks eased only by 29 bps — that Monetary Policy Committee member Chetan Ghate in August cited the issue as reason to oppose the proposed 35-bps cut and instead voted for a 25-bps reduction.
“By a large cut (35 bps) I feel we will be burning through monetary policy space without much to show for it. While the real economy needs some support, we should wait for more transmission to happen,” he said at the MPC’s rate setting meeting, the minutes show.
Though the latest move will surely lower the interest cost on new floating rate loans availed by borrowers to buy cars or homes, it may force banks to start cutting the interest rate they pay deposit holders or risk seeing their margins shrink.
And while the RBI wants to try and nudge an uptick in credit for becalmed personal consumption and borrowing by beleaguered MSMEs, the success of the measure will ultimately be determined by a regaining of confidence by consumers to spend and a conviction by industry to invest.

Directions (1-3) Choose the similar meaning
Q1. Caveat
a)caution
b)prepare
c)global
d)all
e)None

Q2. Leeway
a)region
b)prefers
c)upfront
d)freedom
e)None

Q3. Conundrum
a)roast
b)bungle
c)dilemma
d)all
e)None

Directions: (4-5) choose the opposite meaning
Q4. Uptick
a)foreclose
b)deduction
c)thrill
d)all
e)None

Q5. Vexed
a)transference
b)unequivocal
c)virus
d)all
e)None

Direction (6-7): Which of the following phrases given below each sentence should replace the phrase printed in bold letters to make the sentence meaningfully correct. Choose the best option among the five given alternatives that reflect the correct use of phrase in the context of the grammatically correct sentence. If the sentence is correct as it is, mark “No Error” as your answer.
Q6. Although the latest move will surely lower the interest cost on new floating rate loans availed by borrowers to buy cars or homes.
a)Though the latest
b)although the latest
c)despite the latest
d)although the latest
e)None

Q7. RBI recommended the adoption of external benchmarks to ensure effective policy transmission, after observing that the MCLR too had failed to deliver.
a)to had failed
b)too had failed
c)very had failed
d)so, had failed
e)None

Directions (8-10): In the passage given below there are blanks which are numbered from 8 to 10. They are to be filled with the options given below the passage against each of the respective numbers. Find out the appropriate word in each case which can most suitably complete the sentence without altering its meaning. If none of the words given in options fits in, mark ‘None of these’ as your answer choice.
That the inadequate ………….8……….of policy rate moves has been an ……….9………. conundrum for the RBI is well known. In 2015, then Governor Raghuram Rajan decided that the system used by banks to price their loans needed to be changed and so introduced the Marginal Cost of Funds based Lending Rate (MCLR) regime. In October 2017, an internal study group of the RBI ………..10……….the adoption of external benchmarks to ensure effective policy transmission, after observing that the MCLR too had failed to deliver.
Q8.
a)diffusion
b)emanation
c)axle
d)transmission
e)None

Q9.
a)dispatch
b)testimonial
c)abiding
d)all
e)None

Q10.
a)gruesome
b)recommended
c)bungle
d)all
e)None

Directions (11-12): Read each of the following sentences to find out if there is any grammatical error in it. The error, if any, will be in one part of the sentence. The number (A, B, C or d) of this part is your answer. If there is no error in the statement, then mark option (e) as your answer choice.
Q11. Banks have also, crucially, been given the leeway to determine(a)/ their spread over the benchmark rate with a caveat that changes to the credit(b)/ risk premium can only be made when the borrower’s credit(c)/ assessment undergoes a substantial change(d)/(e)/
a) A
b) B
c) C
d) D
e) E

Q12. By a large cut(a)/ I feel we will be burning(b)/ through monetary policy(c)/ space without much to show for it(d)/(e)/
a) A
b) B
c) C
d) D
e) E

Directions (13-15): Rearrange the following sentences (a), (b), (c), (d), and (e) in the proper sequence to form a meaningful paragraph and then answer the questions given below.
a) And while the RBI wants to try and nudge an uptick in credit for becalmed personal consumption and borrowing by beleaguered MSMEs.
b) Though the latest move will surely lower the interest cost on new floating rate loans availed by borrowers to buy cars or homes.
c) It may force banks to start cutting the interest rate they pay deposit holders or risk seeing their margins shrink.
d) By a large cut (35 bps) I feel we will be burning through monetary policy space without much to show for it.
e) While the real economy needs some support, we should wait for more transmission to happen,” he said at the MPC’s rate setting meeting, the minutes show.
Q13. Which is the Second step after rearrangement? 
a) A
b) B
c) C
d) D
e) E

Q14. Which is the Third step after rearrangement?
a) A
b) B
c) C
d) D
e) E

Q15. Which is the Fourth step after rearrangement?
a) A
b) B
c) C
d) D
e) E

Directions (16-17): In each of the following sentences, there is a blank space. Below each such sentence, there are four options with one word each. Fill up the blank with the word that makes the sentence grammatically and contextually correct. If none of the four words is your answer, choose option (e) as your answer choice.
Q16. The central bank made it clear that lenders would need to adopt a …………… benchmark within a loan category.
a)mediation
b)dispatch
c)uniform
d)all
e)None

Q17. The Reserve Bank of India (RBI) has finally decided that it needs to address the problem of inadequate interest rate ………… head on.
a)daub
b)transmission
c)conveyance
d)all
e)None

Directions (18-20): Answer the questions given below based on the passage.
Q18. According to passage what is the period of Treasury bill duration?
a)3 month
b)6 month
c)182 days
d)both a & b
e)None

Q19. According to passage why banks have to cut their interest rates?
a)borrowers to buy cars or homes,
b)adopt a uniform benchmark within a loan category
c)changes to the credit risk premium
d)introduction of the Marginal Cost of Funds
e)None

Q20. Which of the following statements is/are true in context of the passage above?
(I)increase the interest cost on new floating rate loans availed by borrowers to buy cars or homes,
(II)MCLR too had failed to deliver.
(III)the failure of the measure will ultimately be determined by a regaining of confidence by consumers to spend and a conviction by industry to invest.
a) Only (II)
b) Both (I) and (II)
c) Both (II) and (III)
d) All are incorrect
e) None

Answers With Explanation

Ans.1, a it means a warning or proviso of specific stipulations, conditions, or limitations.
Ans.2, d it means the amount of freedom to move or act that is available.
Ans.3, c it means a confusing and difficult problem or question.
Ans.4, b Uptick means a small increase or slight upward trend. Deduction means the action of deducting or subtracting something.
Ans.5, b Vex means (of a problem or issue) difficult and much debated; problematic. Unequivocal means leaving no doubt; unambiguous.
Ans.6, a Although and though both mean ‘in spite of something’. They are subordinating conjunctions. This means that the clause which they introduce is a subordinate clause, which needs a main clause to make it complete:

[main clause]
Everyone enjoyed the trip to the final
although
[subordinate clause]
we lost the match!
[subordinate clause]
Though it was rainy
[main clause]
we put on our jackets and went for a walk
In spoken English Though is more common than although in general and it is much more common than although in speaking. For emphasis, we often use even with though (but not with although).
Ans.7, b We use too and very to modify the meaning of adjectives and adverbs. Too and Very are used in front of an adjective or adverb.

Too means ‘more than necessary’ or ‘more than you want’.

I don’t like this pub. It is too noisy and there are too many people.
Very intensifies the strength of adjective or adverb and can not be used with ‘extreme’ adjectives (‘Hot is a standard adjective, but ‘Boiling’ is an extreme adjective)
It is very hot today.
Ans.8, d it means the action or process of transmitting something or the state of being transmitted.
Ans.9, c it means (of a feeling or memory) lasting a long time; enduring.
Ans.10, b it means advised or suggested as good or suitable.
Ans.11, a use has in place of have. Have is the conjugation of to have that’s used when speaking in the first person (I, we), the second person (you), or the third person plural (they). Take, for example, the following sentence: “They have two dogs.”
Ans.12, e no error.
Ans.13, e is correct. Because the correct sequence is DEBCA.
Ans.14, b is correct.
Ans.15, c is correct.
Ans.16, c it means remaining the same in all cases and at all times; unchanging in form or character.
Ans.17, b it means the action or process of transmitting something or the state of being transmitted.
Ans.18, d according to passage d is correct.
Ans.19, a according to passage a is correct.
Ans.20, a according to passage a is correct.

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