Practice Financial Management Questions and Answers

• Which of the following is correct regarding Risk Adjusted Returns on investment?       I.         It is the process where a Risk in a business...
• The bank bought a 5 year G-Sec with YTM of 7.6% and plans to sell them in 2 weeks. The bond could not be sold within 2 weeks due to over sight and as a res...
• Which of the following instruments do not contain Zero Risk?
• Which of the following is correct regarding Strategic Risk?               i.        A Risk arising from adverse business decisions   ...
• What is the alpha factor set by Basel Committee relating to the industry wide level of required capital for operational risk, under the Basic Indicator App...
• Which of the following is NOT an objective of Basel III guidelines?  A.    Improve risk management and governance in banks B.    Improve the ability...
• Which of the following type of Preference share will not be treated as Tier II capital?
• Which of the following best describes the position of an investor who is under an obligation to buy the underlying asset in a futures position?
• Which of the following measures reflects the ratio of change in the price of call option to the change in the price of the underlying stock?
• When the spot price of a Call Option is less than the strike Price of an Option, the Option is said to be _______
• In terms of banking capital reserve, Tier II's capital loss absorption capacity is____ that of Tier I capital.  
• HDFC Bank is a systemically important Bank. As such, it has to maintain additional Common Equity Tier 1 of ________ as a percentage of its Risk-Weighted As...
• If ABC Bank is encouraging its home loan borrowers to shift to a floating rate option, the bank is likely to be _______
• Which of the following investment of banks are not marked-to-market?
• The Asset Liability Management (ALM) Statement is to be prepared by every bank and is a regulatory requirement. It shows the maturity time-wise break-up of...
• Mr. Sumant imported mobile handset parts for his mobile assembling unit in Tamil Nadu from an exporter in China. He has to pay USD 1,00,000 to the exporter...
• YTM of a Bond is not affected by
• Which of the following is true about Duration of a bond?
• The Board of the Bank had set the tolerance levels for the interest rate risk. The bank assesses and monitors the risk against the guidelines. Who should t...
• In the case of a forward contract , the actual risk arises and is managed on:
• Net interest position of the bank has which of the following characteristics?
• Above what amount of aggregate exposure banks have to furnish credit information to Central Repository of Information on Large Credits (CRILC) under PCR?
• RBI has mandated the Legal Entity Identifier (LEI) code as a key measure to improve the quality and accuracy of financial data systems for better risk mana...
• What is the risk weight for the housing loans with LTV Ratio (Loan to Value Ratio) lesser than 80%?
• In a securitization, the issuer of asset-backed securities is best describes as the:
• In a repurchase agreement, the percentage difference between the repurchase price and amount borrowed is equal to:
• As per the BASEL Regulations, Banks shall maintain a minimum Pillar 1 Capital to Risk-weighted Assets Ratio (CRAR) of ………………………………�...
• What is the full form of MCLR?
• With respect to the futures transactions, the purpose of margin is to”
• A risk-averse investor is best described as an individual as:
• ASBA is an important mechanism in the IPO process to prevent refunding in case of unsuccessful allotment. What is the full form of ASBA?
• Which type of reserves are not to be included for the calculation of Capital for Capital adequacy norms?
• Which of the following Investment Banks were allowed to fail during global financial crisis of 2007-09?
• A protection against financial losses in the future is called:
• Which of the following is/are the basic component(s) of financial risk?
• Who can be the participants in the Call Money Market 1.    Scheduled Commercial Banks (excl Local Area Banks) 2.    Small Finance Banks and Payment B...
• What will the duration of the bond if the current market value of a bond is Rs.102.50 and the market value decreased by Rs.2.50 when the interest rates inc...
• MNO Ltd got its bond rated by a credit rating agency. The rating given to the bond was lsquo;AA-lsquo;. What does this rating indicate?
• Which of the following statement with respect to Risk weight for banks is correct?                       I.        The risk we...
• What is the Cash reserve ratio (CRR) as of May 2022?