Practice Financial Management Questions and Answers

• Banks will not be able to mitigate risks in their credit portfolio, if they
• Customer service in a bank branch has been disrupted for 2 hours, due to failure of the central server. What type of risk is this?
• Which of the following is not a Pillar concept of Basel accords?
• ______ measures the sensitivity of an option to change in risk-free rates.
• Financial Risk can be defined as _________
• A bank borrows Rs.50 crore from call money market on a daily basis and uses that to give a loan of Rs.30 crore to a AAA rated client (i.e. zero default pro...
• What are two methods by which Credit Risk can be measured by?
• The extent of cumulative cash flow mismatches could be arrived as under ______
• Which of the following is correct regarding Reinvestment Risk?                               i.        When Interest Ra...
• A bank has failed to meet its obligation on account of a payment on due date due to its incapacity to pay. What kind of risk it is?
• 1.    Which of the following is correct regarding Supervisory review Process (SRP)? 1.    Supervisors should review and evaluate banks ICAAP 2.   ...
• Which of the following models can be used to calculate the value of call and put option?
• If an individual is unable to pay back the overdraft taken by him, which of the following risk is the bank facing?
• A Legal Entity Identifier is a __ character identifier that identifies distinct legal entities that engage in financial transactions. It is developed by __...
• The approximate percentage change in a bond’s price for a 1% change in yield to maturity is given by:
• What is C in PNCPS
• Which of the following types of risks are not covered in BASEL II/III
• What is the minimum Common Equity Tier 1 to be kept by the banks as per RBI guidelines of BASEL Norms?
• Which of the following risks are addressed by Asset Liability Management ?
• What will be the bond’s duration if the price of the bond fell by 5% as a result of 0.4% rise in the market yield?
• Which of the following category of assets would be a NPA account?
• Which of the following is not a part of the Tier 1 Capital of a bank?
• How much provision is required for an asset which is there in a doubtful category 1-3 years?
• For which of the following has the Risk-Based Internal Audit (RBIA) system been mandated by RBI?
• FCCB is a type of Bond. What does second ‘C’ in FCCB denote?
• Which of the following statements about Mortgage are not true? 1. Under a mortgage, the legal ownership of the asset can be transferred to the lender if th...
• The introduction of the Standing Deposit Facility was recommended by ____ committee.
• The balances with bank will be categorized in which time bucket in the ALM statement?
•  Foreign Exchange transactions which may expose bank to transaction exposure are A.    Purchase or Sale of goods in foreign currency B.    Loan repa...
• The right but not the obligation to sell the underlying asset is called ________
• Revaluation reserve are included as Tier II capital at a _______ discount for the purpose of capital adequacy ratio.
• Risk associated with a portfolio is always less than the weighted average of risks of individual items in the portfolio due to _______           ...
• An effective system of internal control for interest rate risk includes: A.    strong control environment B.    An adequate process for identifying a...
• The Net Interest Income (NII) can be insulated from the volatility of interest rate by ______ of assets and liabilities closely.
• The Risk of prepayments of loans and bonds and or premature withdrawal of deposits is called ________
• Which amongst the following is not true about GANTT project management?
• A trader carries an average inventory of Rs. 40,000. His inventory turnover ratio is 8 times. If he sells goods at a profit of 20% on Revenue from operatio...
• How much interest subvention is provided under PM SVaNIDHI Scheme to the borrowers
• Which type of loan is not required to be paid back during the life time of a borrower?
• To enhance the customer experience through integrated services on its digital platform the public sector bank Indian bank has launched a bouquet of digital...