caiibrmmodelquestionsravi

caiibrmmodelquestionsravi - OBJECTIVE TYPE QUESTIONS FOR...

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OBJECTIVE TYPE QUESTIONS FOR PRACTICE (COVERS ALL MODULES) Net Interest income is (i) Interest earned on advances (ii) Interest earned on investments (iii) Total interest earned on advances and investment (iv) Difference between interest earned and interest paid Interest rate risk is a type of (i) Credit risk (ii) Market risk (iii) Operational risk (iv) All the above European opinion can be exercised on any day at the option of the buyer on or before the expiry of the option. (i) True (ii) False What is the beta factor for corporate finance under Standardized approach ? (i) 15% (ii) 18% (iii) 12% (iv) None of the above A bank suffers loss due to adverse market movement of a security. The security was however held beyond the defeasance period. What is the type of the risk that the bank has suffered ? (i) Market Risk (ii) Operational Risk (iii) Market Liquidation Risk (iv) Credit Risk 1
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The June 1999 Basle Committee on Banking Supervision issued proposals for reform of its 1988 Capital Accord (the Basle II Proposals). These proposals contained MAINLY. (I) Settlement risk management (II) Capital requirements (III) Supervisory review (IV) The handling of hedge funds (V) Contingency plans (VI) Market discipline (i) I, III and VI (ii) II, IV and V (iii) I, IV and V (iv) II, III and VI Which of the following is not a type of credit risk ? (i) Default risk (ii) Credit spread risk (iii) Intrinsic risk (iv) Basis risk 8% Government of India security is quoted at RS 120/- The current yield on the security, will be---- (i) 12% (ii) 9.6% (iii) 6.7% (iv) 8% Risk of a portfolio with over exposure in steel sector will be (i) More than systematic risk (ii) Equal to intrinsic risk (iii) Less than intrinsic risk (iv) None of these A company declares RS 2/- dividend on the equity share of face value of RS 5/-. The share is quoted in the market at RS 80/- the dividend yield will be---- (i) 20% (ii) 4% (iii) 40% 2
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2.5% How many accounts have suffered rating migration in the following table Rating Migration of 100 A Rated Accounts Migration between 31.03.06 and 31.03.07 Last Rating No. of Accounts Present Rating A++ A+ A B+ B C Default A 100 1 1 79 10 4 3 2 (i) 2 (ii) 19 (iii) 21 (iv) 25 The risk that arises due to worsening of credit quality is (i) Intrinsic Risk (ii) Credit spread Risk (iii) Portfolio risk (iv) Counterparty risk A debenture of face value of As. 100 carries a coupon of 15%. If the current yield is 12.5%. What is the current market price ? (i) Rs.100 (ii) Rs.120 (iii) Rs.150 (iv) Rs.125 In order to develop an capability to actively manage an credit portfolio one must have in place the following: (a) Credit Rating Model (or models for different categories of loans and advances) (b) Develop and maintain necessary data on defaults of borrowers rating category wise, i.e., ‘Rating Migration’. (i)
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This note was uploaded on 04/29/2011 for the course FIN 1 taught by Professor Prakash during the Spring '11 term at IIT Bombay.

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caiibrmmodelquestionsravi - OBJECTIVE TYPE QUESTIONS FOR...

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