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Management Questions

Management Questions

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Published by Rohit Rajput

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Published by: Rohit Rajput on Jun 17, 2010
Copyright:Attribution Non-commercial


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1.Net Interest income isa.Interest earned on advances
Interest earned on investments
 Total interest earned on advances and investment
d.Difference between interest earned and interest paid
2.Interest rate risk is a type of a.Credit risk
b.Market ris
c.Operational riskd.All the above3.European opinion can be exercised on any day at the option of thebuyer on or before the expiry of the option.
c.Noned.Cant Say
4.What is the beta factor for corporate finance under Standardizedapproach ?a.15%
c.12%d.None of the above5.A bank suffers loss due to adverse market movement of a security. The security was however held beyond the defeasance period. What isthe type of the risk that the bank has suffered?a.Market Risk
b.Operational Ris
c.Market Liquidation Riskd.Credit Risk
Which of the following is not a type of credit risk?a.Default risk
b.Credit spread risk 
c.Intrinsic riskd.Basis risk
7.8% Government of India security is quoted at RS 120/- The currentyield on the security, will be----a.12%b.9.6%
d.8%8.Risk of a portfolio with over exposure in steel sector will be
a.More than systematic risk 
b.Equal to intrinsic riskc.Less than intrinsic riskd.None of these9.A company declares RS 2/- dividend on the equity share of face valueof RS 5/-. The share is quoted in the market at RS 80/- the dividendyield will be----a.20%b.4%c.40%
10.The risk that arises due to worsening of credit quality isa.Intrinsic Risk
b.Credit spread Risk 
c.Portfolio riskd.Counterparty risk11.A debenture of face value of As. 100 carries a coupon of 15%. If thecurrent yield is 12.5%. What is the current market price?a.Rs.100
c.Rs.150d.Rs.12512.An increase in cash reserve ratio will cause yield curve toa.Shift downwardb.Remain unchangedc.Become steeper
d.Become flatter
13.The model that combines five financial ratios using reportedaccounting information and equity values to produce on objectivemeasure of borrower’s financial health is
a.Altman’s 2 score
b.‘Credit Metricsc.Credit Risk +d.None of the above14.A bank holds a security that is rated A+. The rating of the securitymigrates to A. What is the risk that the bank has faced ?a.Market riskb.Operational riskc.Market liquidation risk
d.Credit ris15.When interest rates go up, prices of fixed interest bonds –
a.Go up
Go down
c.Remain unchanged
d.Cant Say
16.VaR is not enough to assess market risk of a portfolio. Stress testing isdesirable becausea.It helps in calibrating VaR moduleb.It helps as an additional risk measure
c.It helps in assessing risk due to abnormal movement of market parameters
d.It is used as VaR measure is not accurate enough17.A transaction where financial securities are issued against the cashflow generated from a pool of assets is called
b.Credit Default Swapsc.Credit Linked Notesd.Total Return Swaps18.Growth Fund is a mutual fund thata.assures growth in incomeb.invests in fixed income securitiesc.gives fixed return
d.invests primarily in equities

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