Practice Financial Management Questions and Answers

• Operating risk is most likely to increase as a result of:
• A company fails to accrue wages for march that will be paid in April. The company’s year-end balance sheet liabilities:
• Which category of operational risk events encompasses losses from KYC and guideline breaches?
• Which of the following is not an external factor leading to credit risk?                    ...
• What does ‘R’ in CRILC stand for?                             ...
• For identification and measurement of operational risk, how many loss events have been identified?
• Which of the following term is used to describe the conditions imposed by the lender on the borrower that certain activities  will or  will  not be  ca...
• Price risk is the risk of a decline in the value of a security or a portfolio. How can one transfer price risk?
• What are the Over the counter (OTC) derivatives considered risky?
• The risk that loss may arise on account of trading in SLR and other securities by a bank is classified as ______
• When should a risk be avoided?
• Systemic risk may arise due to ______
• Which of the following are the components that are required to be estimated for credit risk quantification? 1. Probability of default 2. Expected Loss 3. E...
• As per the guidelines of RBI, what is the risk weight for the housing loans with LTV Ratio (Loan to Value Ratio) lesser than 80%
• Where the aggregate exposure of the banking system is ₹5 crore or more, borrowers can open current accounts with any one of the banks with which it has C...
• What does cash flow means in accounting parlance?
• A rate at which RBI (Reserve Bank of India) lends to commercial banks by purchasing securities:
• ……………………………………………. allows the RBI to absorb liquidity (deposit) from commercial banks without giving government securitie...
• The Basel III capital regulations are based on which of mutually reinforcing Pillars
• Which of the following ratios can help compare the operational efficiency of different entities?
• How much provision is required for an asset which is there in a doubtful category upto 12 months?
• What is the provisioning requirement for a standard asset for fund based facilities of Farm Credit to agricultural activities, individual housing loans and...
• Which of the following is not one of the pillars of Basel III?
• Which of the following is NOT a correctly matched strategy to mitigate the given risk?
• In risk management (Basel framework) advanced internal ratings-based (A-IRB) approach is used for measurement of?
• Legal risk in a bank can lead to which of the following?                       I.        claims against institution,      ...
• Which of the following risk can reduce the value of a bond or other fixed rate investments?
• Which of the following statement is incorrect?
• Which of the following committee oversees the credit/counterparty risk and country risk in a bank?
• Which of the following risk is made up of transaction risk, default risk and portfolio risk?
• Internal Capital Adequacy Assessment Process (ICAAP) is a requirement under ______ of Basel norms.
• Which of the following will be the features of Zero Risk?                       I.        It does not have any uncertainty with...
• Animesh enters into a short position in a forward contract where the forward price is Rs.25 and spot price at maturity is Rs.30. What will be Animesh’s p...
• Which of the following statements is not correct?
• Vivek is a foreign exchange dealer. He enters into a forex position and forgets to square the over bought position in a foreign currency. Which of the foll...
• ABC Bank Ltd has extended a Rs.10 crore loan at 5% over the repo rate. The loan is to be repaid in equal quarterly instalments. The bank’s funding of the...
• Strategic Risk can be classified as _______
• When a Bank sanctions a loan to a large borrower, which of the following risks it may not face?
• Given the following information, what will be the capital charge for operational risk as per Basic indicator approach, for year 1 and year 2? ...
• The Basel III capital regulations were implemented in India with effect from _________ and have been fully implemented as on____________.