Bank Financial Management mock test with old question most imp question 5 year old question. Question multiple choice questions and answers prepared by senior officer’s click on finish test after attend all the question to know your result with right wrong answer

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Q - 1 .Back testing is done to

• Test a model
• Compare model results and actual performance
• Record performance
• None of the above

Q - 2 .Risk mitigation results in ...... 1.Reduction of downside potential 2.Reduction in profit potential 3.Which of the following is true?

• All the statements are correct
• Statement 1 is correct
• Statement 2 is correct
• Both are incorrect

Q - 3 .If the strike price is more than the forward rate in case of a call option, the option is known to be ......

• ATM
• ITM
• OTM
• none of these

Q - 4 .RTGS has been fully activated by RBI from ....... Where the settlements are on ...... basis rather than ...... day end settlement of cheques in clearing house.

• August 2003, net, gross
• October 2004, gross, net
• October 2004, net, gross
• August 2004, gross, net

Q - 5 .Treasury bill is issued for 91 days to 364 days by GOI 91 days t bill is auction on weekly basis for amount Rs... crore.

• 100
• 200
• 500
• 1000

Q - 6 .A bank funds its assets from a pool of composite liabilities. Apart from credit and operational risks, it faces...

• Basis risk
• Mismatch risk
• Market risk
• Liquidity risk

Q - 7 .If the exporter has opted for commercial and political risks cover, failure of the LC opening bank in respect of exports against LC will be covered for the banks with World Rank up to ...... as per latest Banker's almana

• 1000
• 2000
• 15000
• 25000

Q - 8 .Select the incorrect statement.

• The contract size in futures market is USD 1000 and all settlements take place in Dollars.
• The contract size in interest rate futures market is Rs 2 lacs.
• If an exporter needs to hedge receivables of USD 560,700, he would need to buy 561 forward sale contracts of USD 1000 each, aggregating to USD 561,000. The small difference is called basis risk.
• all are correct

Q - 9 .Call money refers to placement of fund ...

• same day
• overnight
• next day
• Two days

Q - 10 .FEDAI rules provide that in case of unpaid usance bills, the period of crystalization is ......th day after the ...... at the prevailing ...... rate.

• 21, NTP, TT buying
• 30, NTP, TT selling
• 30, NTP, TT buying
• 30, NDD, TT selling

Q - 11 .Risk arising on account of human errors, technical faults, infrastructure breakdown, faulty systems and procedures or lack of internal controls is called as ......

• Exchange Risk
• Operational Risk
• Market Risk
• Legal Risk

Q - 12 .Since all assets and liabilities in the banking book are held until maturity, maturity mismatch between assets and liabilities result in excess or shortage of liquidity. This is known as ...... risk.

• market
• interest
• operational
• liquidity

Q - 13 .Which of the following shipments out of India are exempt from export declaration forms?

• Goods or software, when accompanied by a declaration by the exporter that they are not more than USD 50000 in value
• Gifts of goods, valuing not over Rs.50000 along with declaration of exports
• Gifts of goods, valuing not over Rs.500000 along with declaration of exports
• Goods not exceeding in value USD 10000 per transaction exported to Myanmar under bilateral trade agreement

Q - 14 .Unanticipated withdrawal / non-renewal of deposits in wholesale or retail segment is called ......

• funding risk
• time risk
• call risk
• market risk

Q - 15 .Which is not an approach to measure Credit Risk?

• Basic Indicator Approach
• Standardized approach
• IRB (Internal Rating Base Foundation approach
• IRB (Internal Rating Base Advanced approach

Q - 16 .How many Diamond Dollar Accounts can an Exporter maintain?

• Only one
• Two accounts
• It is matter of discretion for the bank
• Five

Q - 17 .Pre shipment finance in foreign currency is called ......

• EBRD
• EEFC
• PSEF
• PCFC

Q - 18 .An import bill not retired by the importer should be crystallized by the bank on what day?

• On 21st day from the date of Bill of Lading
• On the 10th day from the receipt of documents at the counters of the bank
• On the expiry of five banking days
• On the day of receipt of the Bill

Q - 19 .Exchange rate risk can be avoided by entering into a ......

• swap
• forward rate contract
• option contract
• either b or c

Q - 20 .If the strike price is less than the forward rate in case of a call option, the option is known to be ......

• ATM
• ITM
• OTM
• none of these

Q - 21 .Return on Zero-Risk investment would be ...... as compared to other oppurtunities available in the market.

• High
• Low
• Equal
• Either Low or High

Q - 22 .Currently RBI has extended fixed rate Repo of ___ days to improve liquidty of banks.

• 30
• 60
• 90
• 120

Q - 23 .you have given the following information, in summary about the profit & loss a/c of the c bank, Interest earning Rs 120000 cr, Other income Rs 1800 cr, Profit on sale of fixed assets Rs 120 cr, Income from sale of third party products Rs 80 cr, On expenses side, Interest expenses are Rs 8200 cr, Operating expences Rs 3400 cr, Provisions of Rs 1600cr. The allocation of capital for market risk under basel-II would be ......

• 11250 cr
• 90000 cr
• 5000 cr
• 6000 cr

Q - 24 .Asset in doubtful category for 2 years  Rs. 500000/- Realization value of security  Rs. 300000/- What will be the provision requirement?

• Rs. 500000/-
• Rs. 320000/-
• Rs. 200000/-
• Rs. 175000/-

Q - 25 .Concessional rate of interest for post-shipment finance is allowed for __ days in case of demand bills.

• 21
• 25
• 90
• 180

Q - 26 .Which is not a function of the Mid Office ?

• Risk management for forex dealing operations
• Look after the compliance of various guidelines/instructions
• Processing of Deals, Account, reconciliation etc
• None of the above

Q - 27 .India switched to a floating exchange rate regime in ......

• 1973
• 1977
• 1993
• 1997

Q - 28 ....... scheme is available for payments specified in foreign currency (US dollar, Pound Sterling, Euro , etc).

• packing credit insurance
• export finance gurantee
• transfer gurantee
• exchange fluctuation risk cover scheme

Q - 29 .FEDAI is a ..... body.

• Statutory
• Non-statutory
• Self oriented body
• Non-profit making body

Q - 30 .Which of the following is external cost of currency?

• interest rate
• exchange rate
• both of these
• none of these

Q - 31 .Indexed return on CP is used as a benchmark rate for _____ - term advances.

• short
• mid
• long
• all of these

Q - 32 .For attaining a comparison or ratio between two quantities that are linked together through another and consist of a series of equations, which of the following is used:

• Chain Rule
• Per Cent
• Per Mile
• Value Date

Q - 33 .Globalization refers to ......

• Full convertibility of all currencies in the world
• Removal of all trade barriers in the world
• The process of integrating domestic market with global markets, characterized by free capital flows and minimum regulatory intervention
• Fixed rate of exchange for all currencies of the world

Q - 34 .The minimum amount for which a CD can be issued is Rs ......

• 1 lac
• 2 lacs
• 5 lacs
• 10 lacs

Q - 35 .The risk of settlement that arises due to time zone differences is known as ......

• credit
• operational
• herstatt
• reputation

Q - 36 .Which of the currencies is not been quoted as indirect rates ?

• GBP
• YEN
• EURO
• AUD

Q - 37 .Basis Risks are type of ......

• Interest Rate Risk
• Market Risk
• Credit Risk
• Operational Risk

Q - 38 .When the strike price is below the spot price for the call option, the option is ......

• at the money
• out of money
• in the money
• any of the above

Q - 39 .Government securities are issued by ......

• RBI on behalf of GOI
• GOI
• SEBI on behalf of RBI
• CCIL on behalf of GOI

Q - 40 .Select the incorrect statement (s) from the following (if any). NRI can acquire property by purchase out of balances held in NRE accounts. NRI cannot invest in any partnership firm as owners / partners. NRI can acquire shares on repatriable basis. NRI cannot acquire shares or property by way of inheritance from a person resident outside India.

• 1 & 2
• 1 & 3
• 2 & 3
• 2 & 4

Q - 41 .A bond with a coupon rate of 9% maturing in 2015 and trading at Rs 180 will have yield of & ...

• 0%
• 0%
• 0%
• 0%

Q - 42 .Buying or selling an asset only for the purpose of making profit from movement of the asset price over a period of time is known as ......

• leveraging
• speculation
• arbitrage
• deployment

Q - 43 .RBI may impose a penalty of Rs ...... for contravention of any direction under FEMA u/s 11(3) of FEMA 199This penalty is extended up to Rs ...... per day in case of continuing contravention.

• 1000, 1000
• 5000, 2000
• 10000, 2000
• 100000, 5000

Q - 44 .The validity period of packing credit insurance is ......

• 3 months
• 6 months
• 1 year
• 15 months

Q - 45 .Which method is also known as variance / covariance matrix method?

• historical simulation method
• monte carlo simulation method
• correlation method
• all of these

Q - 46 .Concessional rate of interest in post shipment finance is valid for first ...... days.

• 30
• 60
• 90
• 180

Q - 47 .In a perfect market, with no restriction on finance and trade, the ...... is the basic factor in arriving at the forward rate.

• Fixed exchange rate
• Interest factor
• Interst rate differentials
• Floating Exchange rate

Q - 48 .A claim of Rs. 49 lacs has been settled by ECGC in favour of a bank against default of Rs. 70 lacs. Subsequently the bank realizes Rs. 15 lacs with the collaterals available to the loan. What will be actual amount settled by ECGC after realization of security by the bank?

• Rs. 49 lacs
• Rs. 42.5 lacs
• Rs. 38.5 lacs
• Rs. 34 lacs

Q - 49 .With volatility, it is possible to estimate ...... of the target variable with a resonable accuracy.

• upside potential
• downside potential
• both a and b
• none of these

Q - 50 .What is the limit up to which an individual is permitted to remit overseas without the approval of RBI?

• USD 100000
• USD 200000
• USD 500000
• There is no such limit

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