Question
Price risk is the risk of a decline in the value of a
security or a portfolio. How can one transfer price risk?Solution
Hedging means reducing or controlling risk. This is done by taking a position in the futures market that is opposite to the one in the physical market with the objective of reducing or limiting risks associated with price changes.
A unit has Total Current Assets ₹200 crore and Current Liabilities (other than bank) ₹60 crore. As per MPBF–I, minimum margin is 25% of TCA. What ...
A bank has a funded loan exposure of ₹80 crore carrying 100% risk weight. It has also issued a bank guarantee of ₹40 crore with credit conversion fa...
A company reported net profit before tax of Rs.36,100. It has raised debt capital of Rs.250,000 through 13% debentures. What is the interest coverage ra...
Which insurance firm recently launched Emerging Opportunity Fund, which will invest in mid-cap companies and emerging market leaders with the potential ...
A company shows Profit after Tax ₹14 crore, Depreciation ₹10 crore, Increase in Working Capital ₹6 crore and Term Loan repayment due next year ₹...
Bank’s group exposure limit is 25% of capital funds. Current exposure is 24%. New proposal is ₹3%. What should be done?
A doubtful asset (D1) has secured portion of ₹40 crore and unsecured portion of ₹20 crore. The secured portion has remained doubtful for less than o...
An account has interest overdue 95 days, but principal serviced regularly. Stock statements not submitted for 4 months. What is the correct classification?
A term loan installment and interest both remain overdue for more than 90 days. However, interest has been serviced once during this period but principa...
A bank has Tier I ₹800 cr, Tier II ₹200 cr, RWA ₹10,000 cr. What is the CRAR?