1.

Risk Matrices was developed by:- JP Morgan, Bank of California, Credit Suisse, SBI
2. Research analyst may recommend to :- buy, hold and sell
3. Reducing CRR for banks would have impact on:a. Increased money supply
b. Reduced interest rates
c. Reduced money supply in the economy
d. Profitability of firms
e. None
4. ___ is the largest part of spread and is paid to broker/dealer that actually took the
clients order
a. Salary
b. Wage
c. Managers fee
d. Concession
e. Underwriters allowance
5. What is the term used to indicate the arrangement of large borrowing for a corporate
by a group of lenders?
a. Syndicate
b. Secondary
c. Assignment
d. None
e. Allocation
6. If a price of share changes from 65 to 60 this can be attributed to:
a. Market risk
b. Interest rate risk
c. Credit risk
d. Operational risk
e. Liquidity risk
7. Under corporate stock repurchase program
a. Corporate purchase their own shares from shareholders
8. Private banking providing risk management services strives to:a. Eliminate risk and maximize returns
b. Eliminate risk without worrying about returns
c. Reduce risk and optimize returns
d. Avoid risk and returns
e. All
9. Which will have highest interest rate
a. 3 months deposit with min balance of $4000
b. 12 months -> $1000
c. Cannot determine
d. 6 months -> $2000
e. 6 months -> $1000
10. One would go for bank deposits because
a. Money easily available
b. Interest earned
c. Insurance cover available

d. All
11. Basic 4 parties involved in any transaction using letter of credit are following except
a. Issuing bank
b. Buyer
c. Reimbursement bank
d. Seller
e. Beneficiary bank
12. From sellers point of view which method has least risk
a. LC
b. Direct debit
c. Documentary collection
d. Counter trade
e. Cash in advance
13. ABC rated as AA+ and XYZ rated D. Who gets loan from bank
a. Equally unlikely
b. Equally likely
c. ABC
d. XYZ
e. None
14. Which of the following can be done on LC?
a. Negotiate
b. Purchase
c. Acceptance
d. Discount
e. All
15. Which is not the settlement method for bank loans?
a. Pre-closure
b. Assignment
c. Participation
d. Sub participation
e. Securities repository
16. Which is correct hierarchy of corporate ratings (high to low)?
a. AAA,AA+,BBB,D
17. Purchase as $40. A year later got dividend $2. Sold at $48. What is holding period
return?
a. 10%
b. 25%
c. 45%
d. 50%
e. None
18. Inflation- 8%. Future value of 100 units of money after 2 years:
a. 118.8
b. Exactly 100
c. Exactly 200
d. Around 109
e. None

19. Brokerage firms are regulated by

a. SEC
b. Industry wide SROs
c. State regulatory Agency
d. All
20. Odd man out:a. SEC
b. NYSE
c. NASDAQ
d. LSE
e. NSE
21. From investor stand point a debenture issued by excellent company will appear risky
than share of preferred stock issued by excellent company
a. True
b. False
22. Risk associated with hedge funds:a. High exposure in derivatives
b. All
c. High speculation
d. High leveraging
23. Not a feature of private banking:a. High investment in technology
b. Lot of research
c. Commercial lending
d. Specialist advice
e. Understanding capital and investment needs
24. Which of the following affects the choice of payment method
a. All
b. Government guarantee method
c. Exporters fund
d. Time frame
e. Cost of financing
25. Which risk may bring gains and losses?
a. Credit risk and interest rate risk
b. All
c. Liquidity risk and foreign exchange risk
d. Credit risk and foreign exchange risk
26. Bankers acceptance differs from sight draft in that
a. Sight drafts are negotiable instruments
b. Bankers acceptance demand immediate payments
c. Bank can raise funds by selling acceptance
d. Bank acceptance reduces banks lending capacity
e. None
27. Formal legal commitment to extend credit up to some maximum amount over a
period of time is a description of
a. Line of credit

b. Irrevocable credit
c. Letter of credit
d. Revolving credit agreement
e. Trade credit
28. Odd man out
a. None
b. Auto loans
c. Demat
d. Hire purchase
e. Personal loan
29. A choice quote is a price
a. At which a firm is ready to buy or sell
b. Where firm has a choice of deciding the security to take
c. A option and it also means when bid is equal to offer
d. When bid=offer
30. A bank gets a deposit of $1000 assuming CRR=10% and that is circulates through 2
more banks, leading to following money multiplier effect:a. Create a reserve of $100
b. Create a reserve of $190
c. None
d. Loans of $1710
e. Loans of $2439
31. Security settlement is function of
a. Specialist
b. Traders
c. Back office
d. Front office
e. Mid office
32. Which of these instruments is not included as part of asset servicing services and the
category Pricing/ Holdings Valuation which includes accurate pricing, rating etc.
a. Equities
b. Certificate of participation
c. Government securities
d. Certificate of deposit
e. Services may be provided for all
33. Which of the following is involved in retails brokerage business in US
a. E-trade
b. Charles Schwab
c. Sallie Mae
d. Federal reserve
e. a and b both
34. Measures of performance of an investment portfolio are all of the following except:a. Risk adjusted return
b. Style maps score
c. Profit/loss on portfolio
d. Alpha

e. Up/down market analysis

35. Interest rate spread:a. Current rate floor
b. Cap current rate
c. Current rate-base rate
d. Base rate-floor rate
e. None
36. Who insures stocks in stock market
a. Security and exchange commission
b. Federal deposit insurance corporation
c. Us department of treasury
d. None
37. NASD is not an SRO for
a. 4th market
b. 3rd market
c. Listed market
d. 2nd market
e. OTC market
38. Which of the following loan requires the amount of interest that would be earned on
the loan to be paid upfront by borrower:a. Discounted loans
b. True discount
c. Capitalized
d. Demand
e. Amortized
39. Limit = $2000 Margin=20% Asset value=2000
a. Drawing power = 1600
40. Over the counter market is also called
a. Unlisted market
b. 2nd , unlisted and OTC market
c. Unlisted
d. Super
e. 2nd market
41. 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
42. Standby letter is _____ secure than documentary collection and cheaper than ____
a. More, commercial LOC
43. Total spread of underwriting = 500000 and manager fee = 100000 and distributed in
syndicate=?
a. 600,000
b. 400,000
c. 100000

d. 500000
e. Cannot determine
44. Price of 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%
45. Which is not an option
a. Call
b. Put
c. Swaption
d. Oil futures
e. Leaps
46. question on top 10 US bank read page number 52
47. ACH transaction involves
a. Cash
b. Electronic data
c. Docs
d. Checks and drafts
e. All
48. Interest rates falls
a. Bond prices increase
b. Bond prices decrease
c. Do not change
d. Economy goes to deflation
49. Rate at which bank purchases US dollars against home currency is :a. Bid
b. Indirect
c. Direct
d. Cross currency
e. Ask rate
50. Offer price is the price at which the firm
a. Intends to buy
b. Intends to sell
c. Trades in securities
d. None
51. Presence of risk implies
a. Standard deviation of return is 0
b. Uncertainties of final outcome
c. Final wealth is lower
d. Investment gain
52. Company would pay interest on what portion of the loan?
a. Disbursed amount
b. Committed amount
c. Both

d. Either
e. None
53. Odd man out?
a. Equity
b. Stocks
c. Shares
d. Convertible bonds
e. Common stock
54. A bank cannot cover the money demanded by depositor, then it goes out to
a. Federal reserve bank
55. Institutions involved in benefit administration process, discussing plans
a. Sponsor
b. Custodian
c. Plan administration
d. Record keeper
e. Participant
56. Which of the following eliminates both country risk and commercial risk?
a. Both standby LOC and LOC
57. When bank goes to the fed to borrow funds then the interest rate charged by fed is
known as
a. Prime rate
b. Bond rate
c. Discount rate
d. Federal rate
58. CP full form in corporate lending
a. commercial paper
59. when was US PATRICAT ACT passed
a. 2001
60. Risk averse
a. less risk/avoid risk
61. full form of EMI. Ans)
Equated Monthly Installment.
62. if day 1and day 2 share price is $100 and $102. return is
a. 2%
63. if day 1and day 2 share price is $102 and $100. return is
a. -1.96%
64. if share price of cognizant changes fronm $65 to $60 ,risk is
a .market risk
67. which of the following is online settlement method
a.RTGS
68. how much you will get at end of 3 years if you deposits $1000 at 7% compound
interest
a. $1225

69. you bought 200 shares at $24. now share price is $ 25 and you got dividend of
$1.50 your total return is
a. $500
70. if u buy share at price$ 40 and now share price is $ 48 and u got dividend of $2
per share ur total return in % is
a. 25%
71. Which of the following is true for The Fed funds rate
a.
It is cost of borrowing immediately available funds for one day.
72. corporate bonds are
a. always secured
73. fastest method in calculating VaR
A. covariance method
74. full form of VaR
a. value at risk
75. if one day var is $ 1M, calculate var for 9 days
a. $3M
76. Which of the following is not a repayment method?
Ans .collatral
78. in credit scores who is involved?
a. Credit Bureau
79.
ATM stands for
1) Automatic Transaction Machine; Almost anytime banking
2) Automated Teller Machine; Remote location transactions
3) Automatic Transaction Machine; Fund transfer between accounts
4)
Automated Teller Machine; Direct Deposit
5) Automatic Transaction Machine; Personal Banking
80. A Revocable LC (Letter of Credit)
can be revoked without the consent of the Exporter
can be revoked without the consent of the Exporters bank
can be revoked without the consent of the Importers bank
cant be revoked with the consent of the Advising bank
cant be revoked without the consent of Exporter.
81. Which of the following are disadvantages of using LC (Letter of Credit)?(check box)
a. Time consuming
b. Costly
c. Specific and Binding
d. Deals with documents and not with products
e. Credit Line tied up.
82. Capital adequacy ratio refers to
a. Amount of banks capital expressed as percentage of the risk weighted credit
exposure, operational risk & market risk
83. Banker acceptances are ________________ credit investment created by
___________ and used for financing imports, exports and domestic shipping
Long term; financial firms

Long term; non-financial firms

Short term; non-financial firms
Short term; financial firms
Medium terms; banks

84.

Mutual funds
a. Are less riskier than individual stocks as the fund managers invest in a
diversified portfolio
85. Warrants
a. Warrants are call options variants of equity. They are usually offered as bonus or
sweetener
86.
bank are least interested in giving a personal
a. credit scores
b. document verification
87.
difference between lease & hire purchase
a. all
88. To compare the cost of different Mortgages deals one should look at the
a. APR
89.
securitizing cash flows fromfuture monthly sale of oil explored from its specified
offshore
a.
asset securtisation
90.
not a Treasury Management Systems Inter-bank
91. pre shipment loans
a. Banks provide Pre-shipment finance - working capital for purchase of raw materials,
processing and packaging of the export commodities.
92.
93.
95.

function of A card Association

a. security/risk management
funtions of private banking
not a Personal Investment Companies and private bank

96.
risk associated with hedge funds
97. function of CORPORATE FINANCE
a. all
98.
sales and brokers responds to which department when institution transfer their
custody service from one to another
a. Transition management
99. two questions from Netting and RTGS from pdf at page number 180-181
100. who is at risk in defind benefit
a. employer
101. difference between DB (defined benefit) and DC (defined contribution)
102. BAFT stands for
Bankers Acceptance for Factoring Transactions
Bankers Association for Foreign Trade

 Bankers Acceptance for Foreign transactions

Bankers Association for Forfaiting & Factoring transaction
Bankers association for Factoring Trade.
103. Corporate loans are .. Secured or unsecured , secured, unsecured
104. Pick odd one out ..
1) merril lynch
2) george soros
3) bell graham
4) bill gates
5) warren buffet
105. not investment bank
1) bear starter
2) lehmen brothers
3) icici securities
4) goldman sachs
106. newyork, delhi, Jakarta, thimpu --- > least risk in investing
107. US, india, Pakistan, burma, Bhutan -- > beneficial for loan purpose
108. Which of the following is the most profitable for Credit Card Company?
1) Customers who always pay in time
2) Customers who never pay
3) Customers who default but finally pay
4) all of the listed options
5) None of the listed Options
6) Customer who pays minimum due
109. Which is not the charge type ??
Pledge, hypothecation, lien, collateral
110. Money Multiplier effect would imply
1) An increase in the total money lent out into the system
2) An increase in the total money in the bank reserves in the system
3) A decrease in the total money in the bank reserves in the system
4) Both An increase in the total money lent out into the system and An increase in
the total money in the bank reserves in the system
5) Both An increase in the total money lent out into the system and a decrease in the
total money in the bank reserves in the system
111. Which of the following is associated with the purpose of regulating financial
institutions?
1) To provide stability of the money supply
2) To serve certain social objectives
3) To prevent failure of any financial institution
4) To offset the moral hazard incentives provided by deposit insurance and other
guarantees.
5) Both To serve certain social objectives and To offset the moral hazard incentives
provided by deposit insurance and other guarantees.
112. Private banking is a fee driven business

113. Purely competitive financial market not characterized by,

1) govt. regulation
2) cost effective trading
3) full information
4) many traders
114. Open ended loan allow the borrower to borrow additional amount subject to the
maximum amount less then a set value.
1) True
2) False
115. investment bank assists in merger & aqisition..
1) Structure and deals
2) All
3) smooth transaction
4) structure and deals
116. card association do ??
1. Security/Risk management
2. Issue cards
3. Set credit limits
4. Set interest rates
117. which is not a pre shipment loan
1. bill discounting
2. row material
118. nominal rate 8% , rate of inflation 2%, real rate of inflation ???
1. 6%
2. 10%
119. two way quote for share the bid
120. funding cost goes up due to Hardening interest rate
Risk ???
121. Federal funds rate: The rate domestic banks charge one another on overnight loans
to meet Federal Reserve requirements. This rate tracks very closely to the discount rate,
but is usually slightly higher.
122 . Warrant is combination of ..
1. equities & futures
2. call & put options
3. call options
123. KYC refers to
1. checking old account
2. checking sponsors credentials
3. checking of credential of the customer

4. checking of bank credential by the federal bank

124. STP stands for ..
125. Price weighted index
Dow Jones Industrial Average

126. involved in IPO prospectus

1. invester banks
2. commercial banks
3. investor banks & corporate management
4. corporate management
5. none
127. 4.8% interest per annum- same as
1. 0.4% per month & 1.6% per quarter
2. 0.4% per month & 1.2% per quarter
3. none