Professional Documents
Culture Documents
c. Vostro account
d. Forex account
e. Overseas account
10. Which of the following is not the settlement method for bank loans?
a. Pre-closure
b. Assignment
c. Participation
d. Sub participation
e. Securities repository
11. The process of transferring obligation from one party to another is called
12. The purchase of any stock for immediate delivery is a __ market transaction.
a. Futures
b. Spot
c. Forward
d. Stock
e. Option
13. In the historical simulation method of VaR calculation:
a. Return are assumed to be not normally distributed
b. No assumption is made about the distribution
c. Random returns are generated to calculate VaR
d. Return are assumed to be normally distributed
e. Returns are not required at all.
14. What happens when interest rate fall:
a. Bond prices increase
b. Bond prices decrease
c. Bond prices do not change
d. Economy goes into deflation
e. Interest rate never fall, they always go up.
15. If the price of a security on day 1&2 is $102 and $100 respectively. The return
is
a. -2%
b. 2%
c. -1.96%
d. Very high
e. 1-2%
16. If you invest $1000 for 3 years at 7% compound interest, how much will you
have at the end of the 3 years?
a. $1225
b. None of listed option
c. $1000
d. $1070
e. $1270
17. The trade finance the term LC stands for;
a. Letter of commercials
b. Letter of credit worthiness
c. Letter of credit
d. Letter of commerce
e. Letter of complaints
18. What is need for banks in the society?
a. Small investor are protected, hence it is a low risk investment avenue.
b. Banks are in the best position to lend out money at competitive
c. Depositors are participant in primary and secondary markets.
d. All of listed options.
19. A is more risk averse investor than B .therefore.
a. For the same return, B tolerates lesser risk than B.
b. For the same return, A tolerates higher rate of return.
c. For the same return, A tolerates lower rate of return.
d. For the same return, A takes higher risk.
20. Liquidity issues of credit can be addressed by:a. Sweep facility
b. Structured lending to client
c. All
d. Short term credit facilities
e. Overdraft
21. Which is associated with purpose of regulating financial institution?
a. None
b. To provide stability of money supply.
c. To serve certain social objectives.
d. To prevent failure of any financial institution.
e. To offset moral hazard incentive provided by deposit insurance and
other guarantees.
22. Fastest method for calculating VaR.
a. Monte- Carlo simulation.
b. All equal time with software.
c. Variance-Covariance matrix.
d. Combination of Monte- Carlo and Historical Simulation.
e. Withdrawal
24. If the 5 bids available for stock are 64, 65, 63, 62.5 and 66 which one u will
sell? -> 66
25. When a bank issue a loan its liabilities & reserves increases by the amount of
the loan.
a. True
b. False
26. If the corporate isnt able to raise money from the market to pay off some
loans the risk can be refer.
a. Market risk
b. Interest rate risk
c. Commodity risk
d. Operational risk
e. Liquidity risk
27. On the trading day at the NYSE a broker undertakes the following trades
Buy 100 IBM shares for $10.00 each
Sell 50 IBM shares for $10.50 each
Buy 100 MFST share for $20.00 each
Sell 20 IBM shares $11 each
Sell 10 MFST share at 20.50 each
Sell 30 IBM shares for 9.00 each
How much did the broker pay out to the exchange in total in case of (i) Gross
settlement system (ii) Net Settlement System?
a. (i) $1780 (ii) $3000
b. (i) 0 for IBM, $1795 for MSFT (ii) $1780.
c. (i) $3000 (ii) $1780
d. None
e. (i) $1780 (ii) 0 for IBM, $1795 for MSFT
28. US export and Europe import agree to carry out the transaction of goods
word $100000 under a confirmed term LC with a maturity date of 60 days from
the time of shipment. The acceptance commission @ 1.5 % PA equals
A)
B)
C)
D)
E)
$2500
$3000
$300
none
$250
A) Issuing Bank
B) Reimbursement Bank
C) Beneficiary Bank
D) Seller
E) Buyer
31. While providing security lending services to its clients which risk will a
custodian have to manage for its clients
A) Liquidity risk
B) Both Credit risk and interest rate risk
C) Interest rate risk
D) Credit risk
E) Both credit risk and liquidity risk.
32. If the price of securities on day 1 and 2 are $100 and $102 respectively
.Returns is
A) A very high
B) 2
C) -1
D) -2
E) 1
33. Following are the list of risk that Cognizant faces at organizational level
A) Currency risk
B) Attrition
C) Credit risk
D) All of the above
E) Protective legislation by US/UK
34. Which of the following is not a core private banking function?
A) Client management
B) Deposit Mobilization
C) Investment analysis and advice
D) Research
E) Sales and Marketing
35. A mutual fund with investment objective of achieving high capital growth
approaches investor services firm for advice. The firm advices the mutual fund
to invest 80% of the fund in govt debt and 20% in equity. The allocation towards
debt advised by the firm
A) Cannot be determined
B) is too high
C) Is about right
D) is too low
36. Which of the following operations can be done on a LC?
500000
100000
400000
600000
Can not be determined
45. HPPL shares are currently selling for $25 each. You bought 200 shares one
year ago at $24 each and received dividend payment as $1.50 per share what was
total dollar capital gain this year
A)
B)
C)
D)
E)
200
500
None
300
400
d. Hire Purchase
e. Auto loans
48. I deposited 100 in a bank .Bank loan out 90 out of it to someone else, who
then invest the money in setting u a new factory. This process is called
A) Monetary policy
B) None
C) Money multiplier effect
D) Profit making tendency of a bank
E) Fiscal policy
49. Capital adequacy ratio refers to
A) Amount of bank capital expressed as % of the risk weighted credit exposure &
market risk.
B) Amount of bank capital expressed as % of the risk weighted credit exposure
C) Amount of bank capital expressed as % of the risk weighted credit exposure &
operational risk.
D) Amount of bank capital expressed as % of the risk weighted credit
exposure operational risk & market risk.
E) None
50. Which of the following is not a treasury management system?
A) Calypso
B) Summit
C) Wall street system
D) Front arena
E) Flex cube
51. Syndicate helps in all of the following activity but
A) Managing large bond issues
B) Raising huge money from the bank
C) Managing large capital raising act
D) Managing conflict between investment banks.
E) IPO distribution.
52. All of the following statements concerning US govt securities are correct
EXCEPT
A) Treasury bills have their interest paid in a lump sum at maturity
B) None
C) Treasury bills have greater interest risk than either treasury bond or
treasury note
D) Treasury note has maturity dates up to 10 yrs
E) Treasury bonds have maturity dates up to 30 yrs
53. In defined benefit plan the benefit is expressed as ________ and in defined
contribution plan the benefit is expressed as an ________
A) Account balance , Annuity
B) Annuity , Annuity
Cash projection
Investment manages universe
Asset allocation
Fund administration
Asset / liabilities analysis
d. Oil Futures
e. Put Options
74. Some banks pay interest on Checking A/c while many do not.
a. True
b. False
75. The advising bank is called as trusted bridge between the ___________ &
__________ when they do not have active relationship. Options wrong
a. Beneficiary Bank & Reimbursing Bank
b. Importer Exporter
c. Reimbursing Bank & Beneficiary Bank
d. Issuing Bank & Confirming Bank
The advising bank is used as a trusted bridge between the applicants bank and the
beneficiarys bank when they do not have an active relationship.
76. Which of the following according to you has resulted in defining contribution
plans gaining popularity over defined benefit plans
a. DC plans fix the monthly contribution from the employee making his financial
planning easier.
b. DC plans are seen by employees as investment which to accumulate
retirement income.
c. All
d. Employer increasing wants employees to share responsibility for retirement
77. ________is typically largest part of spread and is paid to broker\dealer or
that actually took clients order
a. Salary
b. Manager fee
c. Wage
d. Concession
e. Underwriter
78. NASD is not an SRO for
a. Listed market
b. Over the counter market
c. Third market
d. Fourth market
79. High net worth individuals generally have ____________.
a. Market capitalization more than $200000
b. All
c. Net worth greater than $500000
d. Household income of max $50000 year.
80. Which is true about retail banking?
a. The business focuses on small no. of high net worth individuals.
b. The business focuses on small and medium enterprises.
A)
B)
C)
D)
E)
Commercial bankers
Investment Bankers
None
Company Management
Company Management and Investment Bankers
2. Client Partner
3. Commercial Paper
4. Commodity Put options
5. Credit Provision
102 What are the risks associated with the Hedge funds? Marks: 3
1. All of the above
2. High exposures in derivatives
3. High Leveraging
4. High Speculation
103. The trade terms 15/2 net 30indicates that _____. Marks: 3
a. 2% discount is offered if payment is made within 15 days.
b. 15% discount is offered if payment is made within 2 days; the payment
should however be made in 30 days.
c. 30% discount is offered if payment is made before 15 of the month.
d. 15% discount is offered if payment is made between 2 & 30 days;
e. 15% discount is offered if payment is made within 30 days.
104. A bank is required to hold reverses at least equal to a pre-scribed fraction of
its total deposit liabilities.
a. True
b. False
105 What term is used to describe n LC that remains valid for years thereby
eliminating the cost of separate LCs for each transaction with a regular client?
(not sure bout the answer)
a. Irrevocable LC
b. None
c. Red clause
d. Revolving LC
e. Evergreen clause
106 Who appoints investment manager to manage a benefit plan?
a. Plan sponsor
b. Plan administrator
c. Fund trustee
d. None
e. Government
107 A company would pay the interest on what portion of loan?
a. Committed amount
b. Either disbursed or committed loan
c. Unused amount of loan
d. Disbursed amount
e. None
108 In the exchange on a particular trading there is a buy market order for 100
CTSH shares and two sell market orders for 50 and 40 CTSH shares each, can
the buy order be matched against the two sell orders.
a. Yes
b. No
c. Yes, but if prices on the buy & sell side match.
109 If the limit = $2000, margin = 20% and asset value = $2000 then drawing
power for an open ended loan is equal to?
a. None
b. $1600
c. $2200
d. $2400
e. $2000
110 Risk cannot be migrated by
a. Setting risk limits
b. Hedging
c. Diversification
d. Arbitrage
e. Insurance
111 A fixed income analyst will analyze all but
a. Municipal bonds
b. Bonds of govt. sponsed enterprise
c. Corporate bonds
d. US treasuries
e. Shares
112 In benefit administration what are the relationships that exits between the
plan administrator and the investment manager, and between Trustee and the
investment manager.
a. None
b. Plan administrator & trustee both have outsourced plan administration as well
as fund management to investment manager
c. Any
d. Plan administrator gives investment instruction to investment manager
while trustee appoints the investment manager.
e. Trustee gives investment instruction to investment manager, while plan
administrator appoints the investment manager.
113 Which entity provides credit scores that are used by issuers to process card
application?
a. Issuer processor
b. Collection agency
c. Issuing bank
d. Authorization engine
e. Credit bureau.
114 CPI stands for which of the following?
a. Consolidated Price index
b. Consument popularity index
c. Consumer product index
d. Consumer price index
e. None
115 A bank decides to sanction only 10% of the loan sought by a company. The
company goes and pledges extra assets with the bank and the bank then agree to
sanction 50% of the loan sought. The company has indulged in the process of
a. Credit scoring
b. Credit increase
c. Credit incrementation
d. Credit revision
e. Credit enhancement.
116 FX spot deal assumes maturity of how many business days ahead ?
a) 4
b) 5
c) 3
d) 1
e) 2
117 Which of the following is best VaR estimation Model?
a) Monte- Carlo
b) Historical
c) Variance-Covariance
d) Variance-Covariance and Monte- Carlo
118 Which of them represent company is incorporated in USA?
a) Plc
b) Pte
c) Ltd
d) Inc
119 Which of the factors affect the choice of payment methods?
a) Govt. guarantee Program
b) Time frame
c) All
d) Cost of financing
e) Exporter fund.
120 Organization level risk appetite is determined by:
a) Risk management
b) Front office
c) Back office
d) Trade
e) Board of director
121 Risk management is function of:
a) Traders
b) Back office
c) Specialist
d) Front office
e) Mid office