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October 20, 2016

IBPS RRB Officers Scale I Exam Previous Paper (Reading Comprehension - 13th September 2015)

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Friends, here we are sharing the Reading Comprehension Questions asked in English Section of  IBPS RRB Officers Scale I & II Exams held on 13th September 2015. Try to solve these on your own and check with the answers given at the end of the questions. Happy Reading :)

IBPS RRB Officers Previous Papers

Directions (1-10) : Read the following passage carefully and answer the given questions. Certain words/phrases have been given in bold to help you locate them while answering some of the questions. 

Virtual currencies are growing in popularity. While the collective value of virtual currencies is still a fraction of the total U.S. Dollars in circulation, the use of virtual currencies as a payment mechanism of transfer of value is gaining momentum. Additionally, the number of entities (issuers, exchangers and intermediaries, to name just a few) that engage in virtual currency transactions is increasing and these entities often need access to traditional banking services.

Virtual currencies are digital representations of value that function as a medium of exchange, a unit of account and a store of value (buy now redeem later policy). In many cases, virtual currencies are "convertible" currencies; they are not legal lenders, but they have an equivalent value in real currency. Despite what seems to be a tremendous interest in virtual currencies their overall value is still extremely small relative to other payment mechanisms, such as cash, cheques and credit and debit cards. The virtual currency landscape includes many participants from the merchant that accepts the virtual currency, to the intermediary that exchanges the virtual currency on behalf of the merchant, to the exchange that actually converts the virtual currency to the real currency to the electronic wallet provider that holds the virtual currency on behalf of its owner. Accordingly, opportunities abound for community banks to, provide services to entities engaged in virtual currency activities. Eventually, it is also possible that community banks may find themselves holding virtual currency on their own balance sheets.

Launched in 2009, Silicon is currently the largest and most popular virtual currency. However, many other virtual currencies have emerged over the past few years, such as Litecoin, Dogecoin, Peercoin and these provide even more anonymity to its users than that provided by Bitcoin.

As the virtual currency landscape is fraught with dangers, what important risks should community bankers consider ?

The most significant is compliance risk- a subset of legal risk. Specifically, virtual currency administrators or legal exchangers may present risks similar to other money transmitters, as well in presenting their own unique risks. Quite simply, many users of virtual currencies do so because of the perceptions that transactions conducted using virtual currencies are anonymous. The less-than trans-parent nature of the transactions, may make it more difficult for a financial institution to truly know and understand the activities of its customer and whether the customer's activities are legal. Therefore, these transactions may present a higher risk for banks and require additional due diligence and monitoring.

Another important risk for community banks to consider is credit risk. How should a community bank respond if a borrower wants to specifically post Bitcoin or another virtual currency as col-lateral for a loan? For many, virtual currencies are simply another form of cash, so it is not hard to analyse that bankers will face such a scenario at some point. In this case, caution is appropriate. Bankers should carefully weigh the pros and cons of extending any loan secured by Bitcoin or other virtual currencies (in whole or in part), or where the source of loan repayment is in some way dependent on the virtual currency. For one, the value of Bitcoin in particular has been volatile. Then, the collateral value could fluctuate widely from day-to-day. Bankers also need to think about control over the ac-count. 'How does the banker control access to a virtual wallet, and how can it control the borrower's access to the virtual wallet ? In the event of a loan default, the bank would need to take control of the virtual currency. This would require access to the borrower's virtual wallet and private key. All of this suggests that the loan agreement needs to be carefully crafted and that additional steps need to be taken to ensure the bank has a perfected lift on the virtual currency.

Virtual currencies bring with them, both opportunities and challenges, and they are likely here to stay. Although, it is too early to determine just how prevalent they will be in the coming years, we too expect that the virtual participants in the virtual currency ecosystem will increasingly intersect with the banking industry.

  1. Which of the following is the meaning of the phrase `fraught with dangers' as mentioned in the passage ? 
    1. Healthy 
    2. Tensed 
    3. Evil 
    4. Risky 
    5. Stable 
  2. Which of the following is most nearly the most opposite in meaning to the word 'VOLATILE' as used in the passage ?
    1. suitable 
    2. expensive
    3. temporary 
    4. delicate 
    5. stable 
  3. Which of the following can be a suitable title for the passage ? 
    1. Why virtual currencies work well in developing countries
    2. Virtual currency and risk involved in its employment 
    3. Reasons to convert real currency into virtual currency 
    4. Role of participants involved in handling real currency 
    5. Virtual Currency-An exercise in futility
  4. As mentioned in the passage, banks may face which of the following risks while dealing with virtual currencies ? 
      • (A) Since these transactions are largely untraceable, virtual currencies may be misused for criminal activities. 
      • (B) The price of virtual cur-rencies including Bitcoin is subject to significant fluctuations.
      • (C) There are few designated ATMs from which one can withdraw such currencies. 
    1. Only A
    2. Both A and B 
    3. Only B
    4. Only C 
    5. Both B and C 
  5. The author in the given passage  _________________
    1. criticises community banks which cater to consumers handling virtual currencies. 
    2. wants to do completely do away with real currency. 
    3. is optimistic but cautious about the employment of virtual currencies. 
    4. urges the Government of his country to take legal action against those involved in virtual currencies.
    5. is upset over the present economic situation in his country. 
  6. As mentioned in the passage, which of the following is/are the characteristics of virtual currencies ?
      • (A) They are equivalent in value to other payment mechanisms. 
      • (B) They cannot be destroyed. 
      • (C) They can be used as a lat-er date as a medium of exchange.
    1. Only A
    2. Both B and C
    3. Only B 
    4. Only C 
    5. Both A and B
  7. Which of the following is most nearly the same in meaning to the word 'GAINING' as used in the passage ? 
    1. attaining 
    2. withdrawing
    3. highlighting 
    4. talking 
    5. increasing 
  8. Which of the following is most nearly the same in meaning to the word 'CRAFTED' as used in the passage ? 
    1. designed 
    2. stitched 
    3. stoned 
    4. stack 
    5. divulged 
  9. Which of the following statements is true in the context of the passage ? 
    1. Most entities such as money exchangers do not access to traditional banking services. 
    2. The value of virtual currencies is more than that of the real currency. 
    3. Bitcoin provides most privacy in comparison to recently introduced virtual currencies. 
    4. Community banks can play a crucial role while catering to entities engaged in dealing with virtual currencies. 
    5. None of the given statements is true. 
  10. Which of the following is most nearly the opposite in meaning to the word 'ANONYMITY' as used in the passage ? 
    1. ambiguity 
    2. surface
    3. beauty 
    4. darkness 
    5. visibility 
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