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- JAIIB CAIIB STUDY MATERIALS
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Bank Financial Management
In terms of article 3 of UCP 600, if nothing is mentioned, LC will be treated as what type of LC?

Ans - b
..........................................................
How forward rates are calculated?

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a. By adding a mark up to spot rates
c. By deducting premium or discount from spot rates

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a. Revocable LC
b. Irrevocable LC
c. Confirmed LC
d. Back to back LC

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Ans - d
..........................................................

Ans - d

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a. Profit of Rs. 20000
b. Profit of Rs. 600
c. Loss of Rs. 20600
d. Loss of Rs. 600

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Mr. Raj purchases a call option for 500 shares of A with strike price of Rs. 140 having maturity after 03
months at a premium of Rs. 40. On maturity, shares of A were priced at Rs. 180. Taking interest cost @
12% p.a. What is the profit/lost for the individual on the transaction?

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Explanation.

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This is call option, so it is assumed that,
He will purchase 500 shares of A at a price of 140
Total value of shares is = 70000
Then he will sell the total shares in the market at a price of 180.
500 × 180 = 90000
So profit of 20000 in the transaction. .
But he has to pay the premium for call options.
Which is 40 × 500 = 20000

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- JAIIB CAIIB STUDY MATERIALS
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Which is not an approach to measure Credit Risk?

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a. Basic Indicator Approach
b. Standardized approach
c. IRB (Internal Rating Based. Foundation approach
d. IRB (Internal Rating Based. Advanced approach

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In total,
= 20000 - 20600
= - 600
.............................................

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And the fund interest cost will be, 12% p.a. So for 03 months 12/4=3%)
= 20000 × 3/100 = 600
= 20000 + 600
= 20600

Ans - a
.............................................

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Under Standard Approach retail and SME exposures attract a uniform Risk weightage of ......

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a. 50%
b. 75%
c. 80%
d. 85%

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Ans - b
.............................................

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A bank holds a security that is rated A+. The rating of the security migrates to A. What is the risk that the
bank has faced?

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a. Market risk
b. Market liquidation risk
c. Operational risk
d. Credit risk
Ans - d
.............................................
Which is not an approach to measure Operational Risk?
a. Basic Indicator Approach

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- JAIIB CAIIB STUDY MATERIALS
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b. Standardized approach
c. IRB Foundation approach
Ans - c
.............................................

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a. Yield curve risk
b. Embedded option risk
c. Mismatch risk
d. Basis risk

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Premature payment of a term loan will result in ......

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Ans - b
.............................................

In a rising interest rate scenario, the risk of erosion of Nil is on account of

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a. Advances with floating rate of interest and deposits with fixed rate of interest
b. Deposits with floating rates and advances with fixed rates
c. Deposits with floating rates and advances with floating rates
d. Deposits with fixed rates and advances with fixed rates

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Ans - b
.............................................

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Derivatives can be used to hedge aggregate risks as reflected in the asset-liability mismatches. In this
case a dynamic management of hedge is necessary' because

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a. The risks are dynamic
b. New hedging tools arrive in the market
c. The composition of assets and liabilities is always changing
d. A close monitoring of hedge is an RBI requirement

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Ans - c
.............................................

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The participants in the derivatives market generally exchange the following agreement
a. IFEMA
b. ICON
c. ISDA
d. A stamped agreement devised by respective banks

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.com murugan0501@gmail..... 50000 iib Ans .com... Credit derivatives segregate from the assets through instruments known as and transfer the risk from the owner to another person who is in a position to absorb the credit risk for kt es t. 400000/. NPAs...www. m oc An advance of Rs....25... Remain unaffected c.... 55000 d.....b .... Income..jaiibcaiibmocktest... warrants... Improve if assets are revalued downwards c..org.... Improve if assets are revalued upward b........jaiibcaiibmocktest........ admin@jaiibcaiibmocktest. admin@jaiibcaiibmocktest...has been declared sub standard on 31/05/2014.... So... Good assets....... Para – 5.. consideration d..b ...c .. 250000/-.. 75000 c... securitization...ja = 15% of 250000 + 25% of of 150000 = 37500 + 37500 = 75000 .. Undergo change only if liabilities are remaining constant Ans ..... .....pdf” Page .........CAIIB DISCUSSION murugan0501@gmail.com Facebook Groups .............. It is covered by securities with realizable value of Rs.....b ca Explanation : iib Sub standard assets will attract provision of 15 % for secured portion and 25 % for unsecured portion...... 150000 b..... Please refer “http://rbidocs.com.. a fee c..c a................... 09994452442 ...... The credit risk.JAIIB CAIIB STUDY MATERIALS ..........in/rdocs/notification/PDFs/62MCIRAC290613. credit default swaps... discount Ans ...... The bad assets.4.. w If a company revaluates its fixed assets.....com......... 09994452442 om Ans ..... www.rbi.. commission b....com. the current ratio of the company will: w w a.. What will be the total provision in the account as on 31/03/2015? a.

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... 15 lacs with the collaterals available to the loan...com..000 b... actual amount settled by ECGC = Rs.5 lacs d...000 and credited Service Revenue for 35... 38... ABC Co.00000 and to ...www........ Supplies Ans .. Rs. The service was billed at the agreed upon amount of 35. 09994452442 om A claim of Rs...b .....com murugan0501@gmail.. Rs..5 lacs So.... Rs.000 c.. 70 lacs. w w Which of the following would not be a current asset? a..JAIIB CAIIB STUDY MATERIALS .. the settlement amount will be..... iib 70% of Rs.5 lacs ... So.....com.. What will be actual amount settled by ECGC after realization of security by the bank? t.. 15 lacs was realised through the security held..com Facebook Groups . debited Accounts Receivable for 35..000 d.jaiibcaiibmocktest... 09994452442 . 55 Lacs only from ECGC. 55 lacs = 5500000 x 70/100 = 38. Rs.. 49 lacs has been settled by ECGC in favour of a bank against default of Rs... admin@jaiibcaiibmocktest.. Decrease Assets By 35... www..CAIIB DISCUSSION murugan0501@gmail.... follows the accrual basis of accounting and performs a service on account (on credit) in December.. Increase Owner's (Stockholders') Equity By 35..000..... Decrease Owner's (Stockholders') Equity By 35... Accounts Receivable b.... So....com.. 42..com.. None of these w Ans ... Prepaid Insurance d.... 38... 49 lacs on default of 70 Lacs (That is 70% of the default amount) m oc But Subsequent to that settlement. Subsequently the bank realizes Rs.....c a......jaiibcaiibmocktest...... 34 lacs kt es Ans .. the claim amount from ECGC should be..... Land c.....5 lacs c. admin@jaiibcaiibmocktest......ja iib a. ca ABC Co. 49 lacs b. And the ECGC had settled only 70 % of the claim amount. Rs.....c Explanation : ECGC had settled Rs......b .000.... The effect of this entry on the balance sheet of ABC is to increase assets by 35.....

b .. Owner's/Stockholders' Equity Increases b...JAIIB CAIIB STUDY MATERIALS .c a........ 25% of there Tier-I Capital or USD 10 million whichever is lower Ans .. Either a or b d................. 25% of there Tier-I Capital or USD 10 million whichever is higher d................ 5% b...CAIIB DISCUSSION murugan0501@gmail.... The treasury is run by a few specialist staff engaged in high value transaction per trn size generally not being ....... None of the above kt es Ans ...... 25% of there Tier-I Capital or USD 10 million c.. 8% c.com..... 09994452442 .. Note Payable Due In Two Years b... Unearned Revenue c.jaiibcaiibmocktest... the asset Cash decreases by 50..........c .... RBI has permitted banks to borrow and invest through their overseas correspondents in foreign currency subject to ... total capital ratio should not be lower than...000 dividend........com..... admin@jaiibcaiibmocktest.ja Ans ... 09994452442 om Which of the following would normally be a current liability? t...jaiibcaiibmocktest.com..www.... Both a and b d.................... w w w a........ admin@jaiibcaiibmocktest.......b .. 12% .com Facebook Groups . a...... m oc When an owner draws 50..............com murugan0501@gmail..........000 from a sole proprietorship or when a corporation declares and pays a 50...... None of the above Ans ...com.. www.... 25% of there Tier-I Capital b..c . What is the other effect on the balance sheet? iib As per the Basel-II norms... 10% d.....000..... iib ca a... Owner's/Stockholders' Equity Decreases c..

.. term money d.. months. admin@jaiibcaiibmocktest.. profit c.....com. 6 to 9 d. Tom transactions m oc Ans ...... notice money b................. Spot transactions d.. Rs 20 Million c..... a & b iib Ans ..c Ans ............. Placement of funds for overnight is called ............com Facebook Groups . w .. kt es All the exchange rates quoted on the screen or in print are for mentioned unless otherwise a..... 09994452442 ...jaiibcaiibmocktest.....JAIIB CAIIB STUDY MATERIALS ................... of short term nature with a tenure of ....jaiibcaiibmocktest......c ........... a..com murugan0501@gmail..... Forward transactions b.......d . ca iib a.ja a......... Rs 10 Million b...com. The difference between buying and selling rate is called ...........CAIIB DISCUSSION murugan0501@gmail. spread b. 1 to 3 b....... 09994452442 om a...com..... 9 to 12 www. 3 to 6 c........b . None of these t. Cash transactions c..c ...www..... Rs 50 Million d........... call money c. all the above w Ans ........ admin@jaiibcaiibmocktest...........com.. w Treasury discount bills of exchange. a only d..

Non-profit making body Ans ................. Ans ... Branch level b.c a.....com.. 09994452442 ...........jaiibcaiibmocktest.. 10 b.....JAIIB CAIIB STUDY MATERIALS .......b ...... www...... Probability is mapped on scale of ...... Self oriented body d................ ... 4 c..d .www.. 6 Ans ....CAIIB DISCUSSION murugan0501@gmail..... kt es t.jaiibcaiibmocktest.... Regional/Zonal level c... 30 d.......... w FEDAI is a ............... The recognition of insurance mitigation is limited to ..com Facebook Groups ..............c ............... Statutory b.... w w a....................com. iib a......% of total Operational Risk Capital Charge calculated under AMA..ja iib a................. Non-statutory c....b ..... 09994452442 om Ans ... body......... None of these ca portfolio risk is called the risk at .... 3 b.... 20 c....... m oc Under AMA approach (Estimated Probability of Occurrence).com murugan0501@gmail. admin@jaiibcaiibmocktest..... 50 Ans ........ 5 d......c .. Aggregated level d........com...com. admin@jaiibcaiibmocktest.............

...com Facebook Groups .........a .......www.... admin@jaiibcaiibmocktest. 3508 Crores www..... On the 10th day from the receipt of documents at the counters of the bank c...450 Gross income for 2nd year before previous year ....com.JAIIB CAIIB STUDY MATERIALS .com. 30 th kt es Ans .. 09994452442 .. On the day of receipt of the Bill Ans ..15 Horizontal adjustment ..CAIIB DISCUSSION murugan0501@gmail.com. iib A bank has compiled following data for computing its CRAR as on 30 Sep 2014 w w .day... Rs.c a...... 4585 Crores b......190 Vertical adjustment . 3701 Crores d... after the day of receipt if not yet paid. On the expiry of five banking days d....390 w The capital required for credit risk at minimum required rate as per RBI is ...8... 11 th c........... Rs. On 21st day from the date of Bill of Lading b. 4383 Crores c..35.... 09994452442 om Sight bills drawn under import letters of credit would be crystallized on the.495 Gross income for the year before previous year .......... a. An import bill not retired by the importer should be crystallized by the bank on what day? m oc a..10 Total capital charge for options .jaiibcaiibmocktest... t.. Rs......com murugan0501@gmail.........500 Exposure on retail assets ....com.. admin@jaiibcaiibmocktest... 10 th b..........700 Total eligible financial collaterals available for retail assets . Rs.1200 Capital charge for general market risk net position .b ...450 Capital charge for specific risk ...70 Gross income for the previous year ....... 15 th d..ja iib ca Tier I capital 2500 Tier ii capital 2000 RWA for credit risk other than retail assets (including 2000 crores of commercial real estate .jaiibcaiibmocktest..

....... kt es Total Risk weighted assets for market risk is . 7156 Crores m oc Ans .... admin@jaiibcaiibmocktest..................22 % d...... Rs..com Facebook Groups ..... 9553 Crores c..com murugan0501@gmail. Rs... a....... 09994452442 t..CAIIB DISCUSSION murugan0501@gmail....c Ans .com.... 9.... Rs..09=4944 ..35 % b..... 9833 Crores b.049 ..JAIIB CAIIB STUDY MATERIALS .ja 1335/3=885/......a iib Total weighted assets for operational risk is ......... ca iib Ans .23 % w om Ans .. 7156 Crores .. 4500/55902=8............... 8952 Crores d....05 % c.....com. admin@jaiibcaiibmocktest......... 4944 Crores b..jaiibcaiibmocktest.. Rs. 4323 Crores c........b 41125+9833+4944=55902..www........... 10................. www.c (As per RBI......... Rs....com. 9553 Crores d...... Rs.... Rs.a Total Risk weighted assets for market risk = 450+190+15+10+150+70=885/.09=9833 Crores ...... a. Uniform Risk weight asset is 75 % of retail asset portfolio except NPAs) = 8700-1200=7500 @ 75% =5625 35500+5625=41125 @ 9%= 3701 Crs .. The CRAR of the bank as on 30th Sept 2014 is …… w w a...... 8... Rs. 7.......com.. 09994452442 ...jaiibcaiibmocktest...

.. it gains 2% by interest rate margin here....com Facebook Groups ....c Explanation : Bank borrows US \$ for 3 months @ 3% Same it will invest in CP for 3 months @ 5% So. .. Rs..c All foreign currency inward remittances upto ..www..... 2.com murugan0501@gmail..CAIIB DISCUSSION murugan0501@gmail.... 3% c.... 854 Crores.... So..jaiibcaiibmocktest.... 3354-2500=854 Tier I capital will be short fall by Rs... 09994452442 . 50000 equivalent b...0% and swaps the same in to INR for 03 months for deployment in CPs @ 5%.c ............. Tier I capital adequacy ratio should be atleast 6 %) RWA is 55902 6 % of 55902 = 55902 x 6/100 = 3354........com..... admin@jaiibcaiibmocktest....... as per FEDAI guidelines.JAIIB CAIIB STUDY MATERIALS .. 2% b... w w a.. USD 5000 d...ja A bank borrows US \$ for 03 months @ 3.. be converted immediately into Indian Rupees? ca iib a. What is the margin(gain/loss) generated by the bank in the transaction? w Ans . USD 10000 c.. www......c a.5%... 09994452442 om The bank compares its tier I CRAR with minimum require tier I CRAR and finds t..5% ....... kt es Ans ...5% d. Tier I capital is 2500.. £ 1000 iib Ans .com. The 3 months premium on US \$ is 0... None of these m oc (As per RBI... Its tier I CRAR is more and exceeds requirement by 675 Crs b.....jaiibcaiibmocktest... Its tier I CRAR falls short by Rs 854 Crs d. 1.com..com. admin@jaiibcaiibmocktest.. Its tier I CRAR is more and exceeds requirement by 355 Crs c.........

.50000 along with declaration of exports www. valuing not over Rs..0. admin@jaiibcaiibmocktest. it has pay 0. 09994452442 kt es a.......................... Reasonable time not exceeding 7 days c. Which of the following shipments out of India are exempt from export declaration forms? a. Fixed exchange rate b. 21 days b....5 % = 1. Goods or software.......CAIIB DISCUSSION murugan0501@gmail. Floating Exchange rate ca Ans . m oc Ans ............. What is the time available for issuing bank for examination of documents under UCP600? w a..... Authorized dealar t...com Facebook Groups . Gifts of goods.....ja iib A Bank received an LC for USD 2 Mio issued by MT 700 and opened on Jan 25...com.5% extra because US \$ will be costly by 0...JAIIB CAIIB STUDY MATERIALS . So it will reduce bank gain by 0...0% .........com......... Five banking days w w Ans .........5%. admin@jaiibcaiibmocktest........5% ...www...c Which of the following is not a Foreign Exchange markets participant? om But when bank repay its borrowing in \$...d .... .. is the basic factor in arriving at the forward rate.com....................... iib In a perfect market..jaiibcaiibmocktest...................... Commercial Banks c...com murugan0501@gmail..... 2011......... with no restriction on finance and trade... when accompanied by a declaration by the exporter that they are not more than USD 50000 in value b.....b ......jaiibcaiibmocktest...... Interest rate differentials d.. Reasonable time not exceeding 7 banking days d........ a...... Interest factor c...... 09994452442 ..... Investment Funds/Banks d.5% as US \$ is at premium..... The credit calls for shipment of 200 tonnes of good quality wheat cultivated in Punjab..com. the ......d . 2......... Central Banks b...

. borrowing from RBI nil... admin@jaiibcaiibmocktest........ Goods not exceeding in value USD 10000 per transaction exported to Myanmar under bilateral trade agreement Ans ......... AUD iib Which of the currencies are not been quoted as indirect rates? w w w Ans .CAIIB DISCUSSION murugan0501@gmail..com.. The Forward price of a currency against another can be worked out with the following factors: ca Ans .......... Legal m oc Ans .d .........com......... admin@jaiibcaiibmocktest.c Failure of the counter party during the course of the settlement (due to time zone differences between the two currencies to be exchanged)is the ... 1110 cr. Market c.... YEN c. c... d.......................... term deposit from public 30800 cr.. The Interest rate differentials for the currencies..jaiibcaiibmocktest....ja a.c . Reserve 2150 cr.. term deposits from banks 1300 cr... the future period for which the price is worked out......com.. valuing not over Rs.............. SB deposit 20500 cr....jaiibcaiibmocktest....... t....b ...com murugan0501@gmail..... demand deposit 6500 cr....... Spot price of the currencies involved b.......500000 along with declaration of exports d....c .... Operational b.. 09994452442 om c........ All of these .. iib a..... accrued 20 cr.e.. Data relating to balance sheet as on 14 Mar 2014 banks reveals its capital at Rs. sub ordinatted debt 200 cr and credit balance in suspense a/c 30 cr (Total Being 63000) Total amt of liabilities not to be included in computing DTLs in RS www.... borrowing from other institutions 200 cr.. GBP b... EURO d...com Facebook Groups ....................com. The term i.......www......... risk....... 09994452442 .. bills payable 50 Cr..... kt es a.. Gifts of goods.......... refinance from NABARD 150 cr.......JAIIB CAIIB STUDY MATERIALS ............ Settlement d.

2915 2905 1749 3150 w Ans ..d Total amount of DTL on which CRR is to be maintained cr cr cr cr m oc a.........com......www....jaiibcaiibmocktest. admin@jaiibcaiibmocktest... 1500 CRS T1 + T2 CAPITAL RS 3500 CRS RSA RS 22500 CRS RSL RS 21000 CRS DA WT MODIFY DURATION OF ASSETS 1.......... 67100 kt es (1100+2150+150+1300=4700) In time liabilities capital and reserve + refinance from NABARD + term deposit of banks are not to be included .. if the rate of CRR is 5% w w 5% of amt of DTL that is 58300 and 5% is 2915 ...JAIIB CAIIB STUDY MATERIALS .a .. 4700 cr t...............ja A B C D iib Bank would require to maintain average CRR amounting to ....10 www.com.....jaiibcaiibmocktest. 4600 cr d...com.. 3300 cr c..c ca iib =6500+20500+30800+200+50+20+200+30 =58300 other than those not included while calculating DTL ...c Ans ......80 DL WT MODIFY DURATION OF LIABILITY 1......com..... Ans ........ admin@jaiibcaiibmocktest............ 09994452442 om a. 63000 c...com Facebook Groups . 09994452442 .... 3250 cr b............ NET WORTH RS........... 58300 d....CAIIB DISCUSSION murugan0501@gmail. ..com murugan0501@gmail............... 58100 b...

.....com murugan0501@gmail.JAIIB CAIIB STUDY MATERIALS . admin@jaiibcaiibmocktest....com.99 c.... What is the limit for crystallisation period? www...com...73 c....77 ... NONE DWAP = DA-W*DL = FIRST CALCULATE W=RSL/RSA=21000/22500=.56 ....933 = 1......933*1.....33 d... w a..com... 3...... 9. 0..... 0...jaiibcaiibmocktest. 15 c..428 ..10 = 0...99 ....www......CAIIB DISCUSSION murugan0501@gmail..a iib a. 0...com... 09994452442 .c a......... 5......68 d....b Modified duration = DGAP*leverage ratio = 0....... 6.14 Ans ........jaiibcaiibmocktest..97 b.... 6.. 4...80-..........ja MODIFY DURATION OF EQUITY IS w w Ans ..com Facebook Groups ..43 = 5. admin@jaiibcaiibmocktest...........933*6. 09994452442 om DURATION OF GAP FOR BANK IS ESTAMATED AT t...43 b.77 b.62 d....a iib ca LEVERAGE RATIO = RSA/(TIER1+TIERII) = 22500/3500 = 6.. m oc LEVERAGE RATIO IS kt es Ans ..... 14.

..... =300 × 50 = 15000 Total profit or loss = 600000 .. 2000 having maturity after 02 months for Rs.com. On maturity.. 60 days t..com. ........ none of the above m oc Ans .....jaiibcaiibmocktest.www..com... admin@jaiibcaiibmocktest..... chain rule d........ kt es A proportion per thousand is called as .. Profit of Rs.jaiibcaiibmocktest............... 50...b ..... 15 days b.. a.. 30000 b....d ....... per cent b.....com Facebook Groups .. per mile c........15000 = 15000 ... admin@jaiibcaiibmocktest... 09994452442 om a..... www.. shares of A were priced at Rs..JAIIB CAIIB STUDY MATERIALS . X purchases a put option for 300 shares of A with strike price of Rs..com............. 300 × 1900 = 570000 So profit of 30000 in the transaction.. 30 days c..... iib a.. What is the profit/lost for the individual on the transaction (without taking the interest cost and exchange commission into calculation)? w This is put option. 1900.. He will sell 300 shares of A at a price of 2000 Total value of shares is = 600000 w w Then he will buy the total shares in the market at a price of 1900. so it is assumed that.. 45 days d..... Loss of Rs. 15000 b iib Mr. Profit of Rs... Loss of Rs.....com murugan0501@gmail..CAIIB DISCUSSION murugan0501@gmail.. 09994452442 . But he has to paid Rs..... 15000 c...570000 .. ca ... 30000 d. 50 per share to buy put options..................ja Explanation.c Ans .....

..com.com Facebook Groups ....c .......CAIIB DISCUSSION murugan0501@gmail.com..........com..... om a.....JAIIB CAIIB STUDY MATERIALS ... Lesser risk capital b....... Market Risk c.jaiibcaiibmocktest. m oc a. 09994452442 Under Basel II.. and (c) d............jaiibcaiibmocktest..... It is used as VaR measure is not accurate enough iib Ans . None of them c... 09994452442 .......com murugan0501@gmail..com.. It helps in calibrating VaR module b..... Interest Rate Risk b...... Stress testing is desirable because ca iib a.... The capital as specified by the regulatory authority is required to be maintained d............. capital requirement under the accord is t... admin@jaiibcaiibmocktest.......... Cost reductions in operations c..... and (b) Ans .... It helps in assessing risk due to abnormal movement of market parameters d......... All of them b...... a.www. The maximum capital that is required to be maintained b................... Credit Risk d. The minimum capital that is required to be maintained c.a ... It helps as an additional risk measure c. www. Competitive edge w w Which of the following is true a..... VaR is not enough to assess market risk of a portfolio. Operational Risk Ans ....ja Rewards of proper management of operational risks are w a........ a........... None of the above kt es Basis Risks are type of ....a .....c ........... admin@jaiibcaiibmocktest.c Ans . ....

jaiibcaiibmocktest.. admin@jaiibcaiibmocktest..... Economies where interest rates are free d...... bills purchased = 20000.. In perfect markets where the currencies are fully convertible and the markets are highly liquid m oc Ans ... term loans-20000 and fixed assets 3100.55000 Crores b...... Current account deposit 30000. on the assets side the cash .a . the strike price is more than the market price c... Rs.... Rs. bill purchased and investments are affected by change in interest rate.... Controlled economies b.. w Rate sensitivities assets of the bank are a... Developing economies c..com........ LIBOR and RBI reference rate Ans ..com Facebook Groups .. bal with banks-15000.......6900. the market price is equal to the strike price d...... Spot rate and Tom rate d..75000 Crores c.c Forward rates fully reflect interest rate differentials only in kt es a.. Inflation rates in both the countries c... 09994452442 om b.com murugan0501@gmail....JAIIB CAIIB STUDY MATERIALS ...d .... SB and TD are affected by change in interest rate. Rs....... answer the following questions.. ...... admin@jaiibcaiibmocktest..95000 Crores www......investment-15000...b .. w Cash credit..jaiibcaiibmocktest......... a put option can never be in the money ca Ans ..... Saving bank deposit 3000..ja iib The balance sheet of x bank provide the following information as on 31 Mar 2014 Rs (in Cr) Capital 1000. w Based on the data given above.. Earning assets out of total assets are 90000 cr.. cash credit-20000....... Term deposit 30000 and borrowings 3000.. Reserves-6000... Total-100000.com.85000 Crores d....... A put option is in the money (ITM) if iib a.com.. 09994452442 ...CAIIB DISCUSSION murugan0501@gmail. the strike price is less than market price b.....www. Rs. Term loans carry fixed interest rate........ t....com..

.60000 Crores d.......com murugan0501@gmail.... w 'Nostro' accounts are w w a...93000 Crores c.. Rs..............com.................63000 Crores b.. zero gap Ans ...jaiibcaiibmocktest. m oc The above bank has ..... Current accounts denominated in foreign currency maintained by banks with their correspondent banks in the home country of the currency d............ Ans ... positive gap b.. admin@jaiibcaiibmocktest...www......................ja iib a....c ...CAIIB DISCUSSION murugan0501@gmail...70000 Crores kt es Ans ..............c . 8000 Crores a.com Facebook Groups .... Accounts of foreign banks with Indian banks c........ admin@jaiibcaiibmocktest......b .. Rs.com.... Rs..... Rate sensitive liabilities of the bank are t.. 7000 Crores a. Short term investments with AAA rated foreign banks Ans .......a ...... Rs... Rs....... 1000 Crores a.... Rs.jaiibcaiibmocktest......com......... Rs................. 10000 Crores ca Tier-I capital of the bank iib liabilities is more than assets since negative ...JAIIB CAIIB STUDY MATERIALS ....com......b .. a. marginal gap d... Accounts meant for reconciliation b............. 09994452442 .. negative gap c..c a.... 09994452442 om Ans .......... Rs. www......

com.. 1... which of the following risks the branch is taking? w w w 1..... All of them b. admin@jaiibcaiibmocktest.com.. 4 and 5 only Ans ...... www. 2.. Interest rate risk 3.d ....a ... Total cash held.... receipts and payments c.... August 1993 c. 09994452442 Notice money refers to kt es In India............ Liquidity risk 2.. Funds placed for periods in excess of 3 months but not exceeding 1 year d..www.. Credit risk 5................ admin@jaiibcaiibmocktest. lines utilized and unutilized d..... 1.............. 1. Operational risk a.. Liquidity risk is reflected as ca iib a...jaiibcaiibmocktest........ 4 and 5 only d....com....a . Maturity mismatch.ja A branch sanctions Rs 1 crore loan to a borrower....c Ans ... Placement of funds beyond overnight but not exceeding 14 days c.. om a..... Committed lines.... market for currency futures commenced in t.. .... The market yet to commence operations d.. 2 and 3 only c.......com murugan0501@gmail.com...com Facebook Groups ... Market risk 4..................jaiibcaiibmocktest...b .... The currency futures markets were existing for a long time but were lying dormant Ans ...........JAIIB CAIIB STUDY MATERIALS ... Funds placed after giving a notice of placement m oc a....... cash inflow and outflow b.... NPAs..... August 2008 b.. 09994452442 ...... Funds placed overnight b...CAIIB DISCUSSION murugan0501@gmail.... total assets and performing loans iib Ans ....

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- JAIIB CAIIB STUDY MATERIALS
- CAIIB DISCUSSION

om

Asset in doubtful category for 4 years – Rs. 500000/Realization value of security – Rs. 300000/What will be the provision requirement?

t.c

a. Rs. 500000/b. Rs. 290000/c. Rs. 180000/d. Rs. 150000/-

kt
es

Ans - a
.............................................

12% government of India security is quoted at RS 120. If interest rates go down by 1%, the market price
of the security will be?

m
oc

a. 120
b. 133.3
c. 109
d. 140

iib

Ans – b
Explanation :

ca

Current Yield = Coupon Rate x 100/CMP
Current Yield = 12 x 100/120 = 10%

.ja

iib

Now, Interest rate goes down by 1% (That is 9%). By applying the same formula, we get :
9 = 12 x 100/CMP
CMP = 1200/9 = 133.3
.............................................
Counter party Risk is a type of ......

w

w

w

a. Interest Rate Risk
b. Market Risk
c. Credit Risk
d. Operational Risk

Ans - c
.............................................
1988 Capital Accord framework accounted for

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- JAIIB CAIIB STUDY MATERIALS
- CAIIB DISCUSSION

om

1. Credit risk
2. Market Risk
3. Operational risk
4. Defined capital component
Which of the following is true?

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es

t.c

a. All of them
b. 1,2 and 4
c. 1,3 and 4
d. 1,2 and 3
Ans - b
.............................................

m
oc

Back testing is done to

Ans - b
.............................................

.ja

iib

a. Interest Rate Risk
b. Market Risk
c. Credit Risk
d. Operational Risk

ca

Communication Risk is a type of ......

iib

a. Test a model
b. Compare model results and actual performance
c. Record performance
d. None of the above

Ans - d
.............................................

w

Basis Risks are type of ......

w

w

a. Interest Rate Risk
b. Market Risk
c. Credit Risk
d. Operational Risk
Ans - a
.............................................

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- JAIIB CAIIB STUDY MATERIALS
- CAIIB DISCUSSION
VaR is not enough to assess market risk of a portfolio. Stress testing is desirable because

t.c

Ans - c
.............................................

om

a. It helps in calibrating VaR module
b. 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 enough

What are the total risk weighted assets?

iib

a. Rs. 7250 crores
b. Rs. 8750 crores
c. Rs. 9000 crores
d. Rs. 7800 crores
Ans – b

iib

ca

RWA of mkt risk
=200/.08=2500
RWA ops risk
=100/.08=1250

m
oc

Based on the data given above, answer the following questions.

kt
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Given that Tier I capital is Rs. 500 crores and Tier II capital Rs. 800 crores and further given that RWA for
credit risk Rs. 5000 crores, capital charge for market risk and operational risk Rs. 200 crores and Rs. 100
respectively, answer the following questions if the regulatory CAR is 8%.

w

.ja

Total RWA = RWA credit risk+ RWA mkt risk+ RWA ops risk
= 5000+2500+1250
= 8750
.............................................

w

w

What are the risk weighted assets for market risk?
a. Rs. 1000 crores
b. Rs. 1500 crores
c. Rs. 2000 crores
d. Rs. 2500 crores
Ans –d

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com.08 =2500 ....com Facebook Groups ...........1486 0... What are the risk weighted assets for operational risk? kt es t.... 14.. Rs 2000 Cr c..com........1282 ......85 % ca Ans . 09994452442 om 200/. Rs 1000 Cr b. What is the Tier-I CRAR? iib a...........com murugan0501@gmail.....71% d...jaiibcaiibmocktest......29 % b... admin@jaiibcaiibmocktest.... 10. admin@jaiibcaiibmocktest..c iib TIER-I CRAR=Eligible tier-1 capital/(Total RWAs) = 500/8750 = 5........ja What is the total capital adequacy ratio? w Ans – c Total CRAR = Eligible Total capital/(Total RWAs) = 000/8750 = 11.. Rs 2500 Cr Ans – c m oc 100/....CAIIB DISCUSSION murugan0501@gmail.....42 % c....1143 0........JAIIB CAIIB STUDY MATERIALS ..... 5.....com. 09994452442 ..1111 0.. 11.................com...... w w 0.......42 % www...71% ..... Rs 1250 Cr d..c a...www..jaiibcaiibmocktest.08 = 1250 Ans ..

...com......com murugan0501@gmail...... . 500Crore is taken for calculation (500+500=1000).... answer the following questions......... So.......www.a..com........... 09994452442 om (Remember here tier-II capital does not exceed 100 % of tier-I capital......com Facebook Groups .....com..com. of 300 p n c p share 400 subordinate debt 300 r....jaiibcaiibmocktest..... admin@jaiibcaiibmocktest. 300 prov and conti res 200 reveluation of res..............ja iib Tier-2 capital ? a) 900 b) 800 c) 750 d) 610 kt es t..c Bank has paid up capital 100 free res... ....... w w Capital fund ? a) 895 b) 1250 c) 1410 d) 1575 Ans – c www. Tier-II of Rs.........w.................CAIIB DISCUSSION murugan0501@gmail... 09994452442 . Case study for calculation of capital for market risk m oc Based on the data given above...... Tier-1 capital ? iib a) 900 b) 800 c) 750 d) 610 ca Ans – b .JAIIB CAIIB STUDY MATERIALS .............jaiibcaiibmocktest..... for credit and operational risk 10000 for market risk 4000 w Ans – d ... admin@jaiibcaiibmocktest....

..... Rewards of proper management of operational risks are ......com........ admin@jaiibcaiibmocktest.. The risk arising owing to non-enforceability of contract against a counter party is the .75 % c) 10........com murugan0501@gmail.. 09994452442 om hint : Formula : Tier 1 + Tier 2 ... None of them c..com.......com.... a.. Capital adequacy ratio ? Ans – d CAR = T1+T2/RWA .a .................. and (c) d.............................50 % d) 10. Legal www...com Facebook Groups . Cost reductions in operations c......jaiibcaiibmocktest.... a...... and (b) Ans .....07 % iib a) 900 b) 950 c) 1000 d) 1250 ca Ans – a ....... Competitive edge Which of the following is true w w w a....... risk ? kt es t......... m oc Minimum capital to support credit and opr..www......CAIIB DISCUSSION murugan0501@gmail. All of them b..........jaiibcaiibmocktest..JAIIB CAIIB STUDY MATERIALS .............c a) 9 % b) 9...... risk... admin@jaiibcaiibmocktest. a.com.....ja iib a................... Lesser risk capital b. 09994452442 ..

Market Risk d.......a ..jaiibcaiibmocktest... kt es a... 09994452442 om b................ Dealer's Margin b.......com. ...... Such risk to the buyer is called w a... Liquidity The gap between the buying rate and selling rate of a currency is called as .... Arbitration c...Category I b...... Authorised Person . Buyer risk c. Shipping Risk w w Ans ............... Hedging b.. Seller Risk b.Category III d.....JAIIB CAIIB STUDY MATERIALS ...d ...... Credit d.jaiibcaiibmocktest.....CAIIB DISCUSSION murugan0501@gmail..com murugan0501@gmail...... Authorised Person ...........c Ans ....com Facebook Groups . None of the above t..com........Category II c...www. Authorised Person .......c .............. Operations in forex carried to cover the risk of fluctuations in forex rates is called as ......... Ans ...c m oc ...... admin@jaiibcaiibmocktest. the goods have been delivered at some other destination......com.ja The seller of goods shipped the goods on time but due to some mistake...... Exchange Margin c.. a..... Authorised Person ..............com. Swap www. ca a... admin@jaiibcaiibmocktest. Systematic c.. Bid-Ask Spread d................... 09994452442 ....Category IV iib Entities which are authorised only to buy foreign currency notes and traveller's cheques are known as …… iib Ans ...................

admin@jaiibcaiibmocktest.57 Aug .0529(0.1971 .97 Sep .... 40....... Exchange Margin . The spot rate is 34. 35.....0988 w b w Solution : Bill Buying rate will be applied....0..80/90.com Facebook Groups . 28. 35. Speculation om Ans ...c ...65/.. 44... Find Bill Buying Rate t.0988 d.. Spot Rate = 34...... Ans ...6000 Less Forward Discount 1M (0......a m oc a.. 34. 09994452442 ....1..20 days...com murugan0501@gmail. 36..15 Less Exchange Margin O..3500) Less Exchange Margin 0......6000/6500 Forward 1M=3500/3000 2M=5500/3000 3M=8500/8000 Transit Period .529) i..1971 b.1971 kt es Spot Rate .ja iib On 15th June......0512 www. Forward differentials: July .jaiibcaiibmocktest....e..c Solution : ca iib ans: Bill Buying Rate (Ready) : Bill Date +20 days Spot Rate = 35.15%...com.2500) = 35...15% of 35...com.. .......jaiibcaiibmocktest..15% (0.e.80 Less discount ...1971 c....com.0988 b.CAIIB DISCUSSION murugan0501@gmail. 33..40/1. Customer presented a sight bill for USD 100000 for Purchase under LC..65 = 34.35. ...15%..00/..... 34.1.37 How much amount will be credited to the account of the Exporter? w a.... Transit period is 20 days and Exchange margin is 0..1971 d.15% i...0988 c..www.com..3500-..6000-. 09994452442 d.... admin@jaiibcaiibmocktest..JAIIB CAIIB STUDY MATERIALS .

..21 b..... Value Ans ..00 by TT for credit to your exporter's account......80-0. 55................... i.... 09994452442 . We shall have to quote rate to the customer on the basis of market buying rate... 09994452442 om =34... admin@jaiibcaiibmocktest.JAIIB CAIIB STUDY MATERIALS ......... Tom c...... meaning that market buys USD at Rs 55......Bank commission b ca Explanation : ....jaiibcaiibmocktest...60-0...21.. being advance payment for exports (credit received in Nostro statement received from New York correspondent)...21-Bank commission c... What rate you will take to quote to the customer...com.........com.. NZD b.21 and sells at Rs 55.... Spot b..21/25? iib a.25.com Facebook Groups ... Euro Ans ..... to arrive at the TT Buying Rate applicable for the customer transaction.... less our margin....... m oc Inflow of USD 200.a .com murugan0501@gmail.e........ if the market is 55......000............ All rates quoted in foreign exchange are generally ____ rates... www..c a.....0988 . as applicable. Say when USD/Rs is being quoted as 55.. 55......... 55... admin@jaiibcaiibmocktest.... 55.25.. kt es t..........21/25........com...25 d...... GBP d........ USD c... .....CAIIB DISCUSSION murugan0501@gmail.... w Which of the following curency is not quoted as indirect quote (rate)? w w a..www.com............jaiibcaiibmocktest. Forward d..........ja iib It will be purchase of USD from customer for which USD will have to be sold in the market.............0512 =34..b . 55.

2014 date of credit to nostro account 29.10.com.com.280 (iii) Rs.jaiibcaiibmocktest.com.600 (ii) Rs. What will be the notional due date of the bill submitted by the exporter: 5. 2410000.2014 25.20 = Rs.e. for the bill submitted by the exporter: ca iib (i) Rs.less 12% for insurance and freight cost i. admin@jaiibcaiibmocktest.10. Total interest on the export bill discounted.com Facebook Groups .98.10. 09994452442 Now answer the following: om 1.720 30.90. 22.2014 27.9.53.00 @ 48.00 (for value of the order.85 (iii) 47. 09994452442 .000 kt es 2.c (i) Rs. 19.10.2014 .912 (iv) Rs.www.89 (ii) 47.000 (iii) Rs.com murugan0501@gmail.200 = Rs. 19.96 3.10.10.21.54. will be charged up to.15.ja (i) (ii) (iii) (iv) iib 4.jaiibcaiibmocktest. What is the amount that the bank allows as PCL to the exporter against the given export order.10. notional due date 25.00) www.600. What is the amount of post shipment advance allowed by the bank under FUBD.2014 30.20.10. Rs.00 tendered by the exporter: m oc (i) 47.530. 15. considering insurance and freight costs of 12%.52. Less margin 25% i.20.CAIIB DISCUSSION murugan0501@gmail..00 balance Rs 15.90.e Rs.com.000. 18.000.JAIIB CAIIB STUDY MATERIALS .91 (iv) 47.800. admin@jaiibcaiibmocktest. 19.2014 value date of credit 27. 1: USD 50.200. t.2014 date of realisation 30.800 (iv) Rs. 24. 289. What exchange rate will the bank apply for purchase of the export bill for USD 48.00 .2014 w w w (i) (ii) (iii) (iv) Ans.728 (ii) Rs. 21.

.. total 55 days from 31........com....... 345312........768.. ..10 www..a . None of the above ca What is the beta factor for corporate finance under Standardised approach? ..700 Total eligible financial collaterals available for retail assets .080. admin@jaiibcaiibmocktest....com..Bill buying rate on 31.. 15% b.... admin@jaiibcaiibmocktest... LORO d..e.8. 23. i. VOSTRO c. 18% c.56... account..450 Capital charge for specific risk .b .96 =Rs. Mirror kt es Ans 5: Interest is charged up to the date the funds have been credited to the banks nostro account...e...com....com...com murugan0501@gmail.000..00 @ 47..89 .. 09994452442 om Ans.e.......com Facebook Groups ..85 plus 4 paise premium for 30 days...2014..00 = Rs 19.190 Vertical adjustment .2014 i... 09994452442 . 2: 47.jaiibcaiibmocktest... iib Ans ....8.2014 plus 30 days plus 25 days.8..2014.47..2008 ....00 t..... Ans 3: USD 48. 12% d....8.jaiibcaiibmocktest. 25..ja Ans . the effective date of credit is the value date of credit. iib a. 27. A bank has compiled following data for computing its CRAR as on 30 Sep 2014 w w w Tier I capital 2500 Tier ii capital 2000 RWA for credit risk other than retail assets (include 2000 crores of commercial real estate .3..10....15 Horizontal adjustment .. NOSTRO b.10. i. Rs.c Ans 4: Bill submitted on 31....CAIIB DISCUSSION murugan0501@gmail... this being a DA bill................1200 Capital charge for general market risk net position ..JAIIB CAIIB STUDY MATERIALS .....2014 "Our account is with you" refers to ........drawn on 30 days DA plus normal transit period of 25 days 31. m oc a..35.....www....e. less 15% margin on DA bill..500 Exposure on retail assets ...00........ i.02.

.. 9833 Crores b...... 4323 Crores c....JAIIB CAIIB STUDY MATERIALS ... kt es a.com...495 Gross income for the year before previous year ......... Rs... Rs......450 Gross income for 2nd year before previous year .... 9553 Crores c..... ca iib a..com Facebook Groups .70 Gross income for the previous year ..ja Total Risk weighted assets for market risk w w = 450+190+15+10+150+70 = 885/.... 3701 Crores d... Rs. Rs.09 = 9833 Crores ... 7156 Crores iib Total Risk weighted assets for market risk is .. Rs. 09994452442 .c m oc = 8700-1200=7500 @ 75% =5625 35500+5625=41125 9%= 3701 Crs .. answer the following questions..com.... Ans .com.jaiibcaiibmocktest..... Rs....390 The capital required for credit risk at minimum required rate as per RBI is .. w Total weighted assets for operational risk is …… a.. Rs... Rs. Rs..www... 4944 Crores b.. 9553 Crores d. admin@jaiibcaiibmocktest...... Ans .. admin@jaiibcaiibmocktest... 09994452442 om Total capital charge for options .. 4585 Crores b... 8952 Crores d.c Based on the data given above.jaiibcaiibmocktest...CAIIB DISCUSSION murugan0501@gmail...a .......com murugan0501@gmail... 7156 Crores www.com. 3508 Crores t... Rs. 4383 Crores c........ Rs. Rs.

com Facebook Groups . All of these www. Its tier I CRAR is more and exceeds requirement by 355 Crs c.. Tier I capital adequacy ratio should be atleast 6 %) RWA is 55902 6 % of 55902 = 55902 x 6/100 = 3354...........049 .......... w Banking books does not include which of the following..23 % t.. All deposit and loans b. 09994452442 Ans . a.com.JAIIB CAIIB STUDY MATERIALS ...com..... All borrowings c.www.. .c w w .. 7.35 % b......jaiibcaiibmocktest........ 10..05 % c..... So... 8........... admin@jaiibcaiibmocktest.09 =4944 ..com murugan0501@gmail. 3354-2500=854 Tier I capital will be short fall by Rs..com........a om 1335/3 =885/.22 % d... Its tier I CRAR falls short by Rs 854 Crs d....... 854 Crores...... Capital d... Tier I capital is 2500...CAIIB DISCUSSION murugan0501@gmail. 9.. kt es a.........com..jaiibcaiibmocktest....b m oc 41125+9833+4944 = 55902 4500/55902 = 8... Its tier I CRAR is more and exceeds requirement by 675 Crs b...... None of these iib Ans ... admin@jaiibcaiibmocktest. 09994452442 .....ja (As per RBI................. iib The bank compares its tier I CRAR with minimum require tier I CRAR And finds ca a...c The CRAR of the bank as on 30th Sept 2013 is …… Ans ....

................ if Time horizon is more.... Volatility will be ...... Higher the risk-lower would be risk premium c.com murugan0501@gmail..... 09994452442 .......... Futures c...........c .. Less c... More b.............jaiibcaiibmocktest......com......... Entering into Forward Contracts b..............CAIIB DISCUSSION murugan0501@gmail.com..... Systemic risk is the risk of www..com..... Interest Rate Risk b....www... admin@jaiibcaiibmocktest................. Derivatives of Interest Rate Swaps d.jaiibcaiibmocktest...... Higher the risk-higher would be risk premium b... admin@jaiibcaiibmocktest....................... Lower the risk-higher would be risk premium d. None of these Ans . Operational Risk c.. Which of the following statements is correct? m oc a.......... None of the statements is correct kt es t.. w w w a........b .....com..com Facebook Groups ........ 09994452442 om Ans ........a .. Liquidity Risk d... iib a.d .. None of these ca Which of the following risk is managed at Unit level? ......... Equal d...................a .. Forex Risk can be reduced by Ans ... Both a and b iib Ans ..c a......JAIIB CAIIB STUDY MATERIALS .ja Ans ...

...www... What will be the modified duration? w w a) 8.......com Facebook Groups .. ......com murugan0501@gmail.......JAIIB CAIIB STUDY MATERIALS .com. Failure of two banks simultaneously due to bankruptcy of one bank c.. Failure of entire banking system d. w A bond having a McCauley’s duration of 8 Yr is yielding 10% at present.4% c..c . Where a group of banks fail due to contagion effect t.com..4 % iib Solution : ....com.c Ans ..jaiibcaiibmocktest..... Failure of a bank. Because this will decrease the market price or value...8181 b) 8.....2727 Ans . Decrease in yield by 2% m oc Ans .. . admin@jaiibcaiibmocktest. www. Answer is increase in yield by 2 % ...... What is the worst case scenario over 25 days? a...........2323 c) 7.jaiibcaiibmocktest..d Modified duration is McCauley's duration discounted by one period yield to maturity Here we are talking McCauley's duration is 8 years...4% b... kt es A bank’s G sec portfolio has 100 day VaR at 95% confidence level of 4% based on yield. Increase in yield by 2% d.........CAIIB DISCUSSION murugan0501@gmail.. admin@jaiibcaiibmocktest..... 4 = one day VaR × square root of 100 4 = one day VaR × 10 One day VaR = 0.. So one day Var is..com.....4 × suare root of 25 = 0. 09994452442 .......4 × 5 =2% In worst case scenario yield will always increase...ja iib ca 25 day VaR = 0.5353 d) 7.....c 100 day VaR is 4 %. Increase in yield by 0... Decrease in yield by 0.. which is not adhering to regulations b. 09994452442 om a.......

. None of the above w Ans ................. 250 c.. Total number of members is: a...... iib a.... Tier – III Capital d.2727 ... 09994452442 om Modified duration =McCauley's duration / ( 1 + yield ) = 8 /(1 + 10%) = 8/(1 +0............ 350 t.com murugan0501@gmail.......jaiibcaiibmocktest. Credit Risk d.................... admin@jaiibcaiibmocktest..... 12 d.......com.. Tier – I Capital b.......b .......JAIIB CAIIB STUDY MATERIALS ......CAIIB DISCUSSION murugan0501@gmail. Risk of Reduction in Mark-to-Market value of equities is .b . 300 d.................... 11 c........... kt es a....1) = 8/(1.. 09994452442 .c Tier III capital will be limited to ....... 200 b.. admin@jaiibcaiibmocktest.. 10 b....... Interest Rate Risk b..www... Operational Risk ca Ans ... w w Central Bank Governors of G-10 countries participate in the Basel Committee on Banking Supervision....com...... Market Risk c..com Facebook Groups .................jaiibcaiibmocktest.com......1) = 7.. iib Redeemable Cumulative Preference shares comes under . Tier – II Capital c..com.ja a......% of bank’s Tier –I Capital m oc Ans ..............b .... 13 www.........

...com.. 0... 8...... 8.. ...com...76 c.c iib Hair cut for collateral under banks FDR is 0....... 09994452442 om Ans . What should be Hair cut for credit risk mitigation? ca iib a. www..CAIIB DISCUSSION murugan0501@gmail.19 d.. 8. 30 lakhs Ans .b Explanation : Risk capital = 200 million* 0..... There is no maturity mismatch. 09994452442 ............... admin@jaiibcaiibmocktest.... ...com...............08*2........... What will be the annualized yield of the treasury bill face value Rs..76 ...............com Facebook Groups .....33= 37..........b Explanation : Fv-pp/pp x 365/85 [(100000-98000)/98000) x (365/85) = 8..12 million w Ans .33 is the factor to be used while calculating risk capital .... 1 lac with maturity after 85 days which is being traded at Rs 98000/-? m oc Ans ....28 million 2.26 An exposer of Rs 100 lakhs is backed by lien on fixed deposit of Rs 30 lakhs.www........jaiibcaiibmocktest......59 b.00 lakh d.00 million (d) 39...67 million (b) 37... admin@jaiibcaiibmocktest... 70 lakhs b.70 lakh c..c a...jaiibcaiibmocktest. 8.ja What is the risk capital if the traded value is of 200 million and volatility is 8%? w w (a) 18..28 million (c) 16..com murugan0501@gmail............d . kt es t......com............JAIIB CAIIB STUDY MATERIALS ........ 0..............

.. Derivatives of Interest Rate Swaps d. 1000*7% / 2 = 35.. w a.... PVIF (3%...296 + 1000 * 0..661 t...72 b....jaiibcaiibmocktest. ... admin@jaiibcaiibmocktest..36 .. Diversification of Advances w w Ans .com..JAIIB CAIIB STUDY MATERIALS ... Entering into Forward Contracts c.CAIIB DISCUSSION murugan0501@gmail..... None of the above iib Ans .296......... kt es Ans ... So..14)=.......14)=11.......... Higher the risk in a business.04 Explanation : m oc Bond valuation=i (PVIFAkd. capital requirement under the accord is ca iib a......jaiibcaiibmocktest... higher would be capital requirement www.... 09994452442 ..36 c.c a.. The maximum capital that is required to be maintained b....84 d..ja Interest rate Risk can be reduced by .com murugan0501@gmail.. 35*11.. 09994452442 om If the YTM is 6% and the coupon rate of 7% is payable semi-annually.... The minimum capital as specified by the regulatory authority is required to be maintained d......com.........36 + 661 = 1056...... Accepting Collaterals b. Rs 1056... Higher the risk in a business....n) + F (PVIFkd.....n) Since..c ..661 = 395.... Rs 1112.... it is semi annually.......... 1231..b Under Basel II.. Rs.c . the value of the bond to be ? (PVIFA (3%. Rs 1451. Which of the following statements is correct? a...... higher would be return expectation b.....com..com......com Facebook Groups . The minimum capital that is required to be maintained c... admin@jaiibcaiibmocktest..www..

...com....... ans the following qtns Its net profit would be . Rs..... 38 Cr b.. a.........80 PBIDT .. Rs...60 Long term Loans .....ja Paid up capital (for 2 crore share with face value of Rs 10) . None of the statements is correct Premature payment of a term loan will result in which type of interest rate risk ? kt es a.10 Tax .... 50 c......12 Depreciation . 100 ca Ans .....com. Yield curve risk c.....com murugan0501@gmail................20 Reserve . admin@jaiibcaiibmocktest. Rs....b ...... 75 d..c .... iib a..........jaiibcaiibmocktest.......com....10 w On this basis.. 09994452442 . 09994452442 om c. 42 Cr www.. m oc Ans ... Embedded option risk d...08 Price earning ratio ..com. Tier – II capital should not be more than .JAIIB CAIIB STUDY MATERIALS .CAIIB DISCUSSION murugan0501@gmail.....50 Paid interest .jaiibcaiibmocktest.www. 40 Cr c....... Mismatch risk t...... 25 b..c Ans ..... Higher the risk in a business....... iib ABC co has following data as on 31-03-2014 Value in cr w w ...% of Total Capital..... Basis risk b.. admin@jaiibcaiibmocktest........com Facebook Groups .... higher would be capital requirement and higher would be return expectation d.b ...

..... Rs..JAIIB CAIIB STUDY MATERIALS .... 40 cr d.... Rs.jaiibcaiibmocktest.... a..CAIIB DISCUSSION murugan0501@gmail.... Rs.... 10 cr b.... Rs...... Rs....... 20 cr a..... 30 cr a. 80 cr m oc Ans – c .com........ admin@jaiibcaiibmocktest... 30 cr c......com.ja Ans – d iib a.......... 200 cr a.............. Rs... 40 cr a....... admin@jaiibcaiibmocktest. 10 cr ca The earning per share would be .... w w Market price of the share of the co.....com Facebook Groups ... kt es Book value of shares of the company as on 31-03-2014 a.jaiibcaiibmocktest... 20 Cr om Ans – d t... iib Book value of shares = (paid up capital + reserve)/no of shares = (20+60)/2 = 40 .com............ Rs. 50 cr a...... Rs.......com.... 09994452442 .. w EPS=NPAT/paid up capital* face value = 20/20*10 = 10 .. Rs....com murugan0501@gmail.www. 100 cr a.. Rs.. Rs. Rs. Rs......c PBIDT-I-D-T = 50-12-10-8 = 20 cr ....... 300 cr Ans – b www. 09994452442 d...

. Answer the following based on the data given above........com. term deposit from public 30800 cr.....JAIIB CAIIB STUDY MATERIALS ... 58300 d. Total amt of liabilities not to be included in computing DTLs in Rs m oc a..... borrowing from RBI nil.jaiibcaiibmocktest. refinance from NABARD 150 cr....... if the rate of CRR is 5% www. Rs.d ca In time liabilities capital and reserve + refinance from NABARD + term deposit of banks not to be included iib 1100+2150+150+1300 =4700 .c Data relating to balance sheet as on 14 Mar 2014 banks reveals its capital at Rs 1110 cr.. sub ordinatted debt 200 cr and credit balance in suspance a/c 30 cr (Total Being 63000) iib Ans ..... borrowing from other institutions 200 cr.. bills payable 50 Cr........... demand deposit 6500cr..... 58100 b.. 63000 c.. admin@jaiibcaiibmocktest... 67100 w w Ans – c 6500+20500+30800+200+50+20+200+30=58300 other than those not included while calculating DTL ..jaiibcaiibmocktest....... 09994452442 ......com............ Rs...com... admin@jaiibcaiibmocktest........ja Total amount of DTL on which CRR is to be maintained cr cr cr cr w a.....CAIIB DISCUSSION murugan0501@gmail.. 3250 cr b.....com murugan0501@gmail. 09994452442 om Market price = PER * EPS = 10*10 = 100 ....... 4600 cr d.. reserve 2150 cr. 4700 cr kt es t. Rs..SB deposit 20500 cr. 3300 cr c. accured 20 cr.com....www. ....... Bank would required to maintain average CRR amounting to...com Facebook Groups ............... Rs. term deposits from banks 1300 cr.........

.. Banks' board of directors b.. RBI c..com Facebook Groups ...e Rs.......ja iib a... so 25% of realization value Rs...com murugan0501@gmail.. Assets b.....www......CAIIB DISCUSSION murugan0501@gmail.............. 50 d. ..com.... BCBG ca The ultimate responsibility for designing and implementation of ICAAP lies with ......jaiibcaiibmocktest........ admin@jaiibcaiibmocktest.... Rs............... 2905 c........ 2915 b......... 40 b... FEDAI d... 09994452442 om a... 120 in the doubtful-I cat and the realization value of security is Rs..... what will be the provision requirement? m oc a. admin@jaiibcaiibmocktest..... Liabilities c...... Owner's/Stockholders' Equity d. Rs...jaiibcaiibmocktest...com. w Deferred credits will appear on the balance sheet with the w w a.......... If there is an assets of Rs.......... www.... None of the above Ans – b ......... Rs..100 i.. 1749 d. 60 Ans – b iib Since it a doubtful-I cat asset. Rs..... 09994452442 . 45 c.. 25 and 100% of short Fall that is 120-100=20 so ans will be 20+25=45 ...........com....c = 5% of 58300 = 2915 ... Ans – a .. 3150 Ans – c kt es t....... 100 only....com...JAIIB CAIIB STUDY MATERIALS .........

............ None iib Ans .... Uncertainties resulting in adverse variation of profitability or outright losses b....... 09994452442 What is the most critical function of Risk Management? om a. Exchange rate risk b.com............... Controlling the level of risk to an organization's capacity t.. ECA c.com murugan0501@gmail. Estimating the costs of risk d...d .. .... Down ...d .... Default risk and systematic risk b.... Interest rate risk d.....CAIIB DISCUSSION murugan0501@gmail..com............... Uncertainties that result in outright losses c................... Which of the followings are Components of portfolio risk are? a..JAIIB CAIIB STUDY MATERIALS .... CSU d.. admin@jaiibcaiibmocktest..com. Variations in net cash flows w w Ans . None Ans .....b ..a ...... Uncertainties in cash flow d.............jaiibcaiibmocktest.. 09994452442 .ja Financial Risk is defined as w a....... Identification of risks c..... Time difference risk c....c Ans ..com Facebook Groups ...... admin@jaiibcaiibmocktest...... CRAR b.... kt es What kind of risk on settlements is covered by 'Herstatt Risk' for which BCBS was formed? m oc a....com.www...... In case of Domestic banks risk weights are assigned depends on? ca iib a..... Measurement of risk b......... Concentration risk and intrinsic risk www....jaiibcaiibmocktest.gradation and concentration risk c...........

...d .... Basis risk b....jaiibcaiibmocktest..... None of these Ans ..c . what would be the impact on price of the bond? a) Bond price would go up by 4.......com.... Liquidity risk d... admin@jaiibcaiibmocktest...b www..... OTC iib Which of following instruments not eligible for Credit risk Mitigation? w Ans ............................ w w A bond having duration of 8 Yr is yielding 10% at present....... m oc A bank funds its assets from a pool of composite liabilities......com. Cash b.. iib a. admin@jaiibcaiibmocktest. Market risk d.JAIIB CAIIB STUDY MATERIALS .jaiibcaiibmocktest... Mismatch risk c....c a........... Apart from credit and operational risks.... Interest rate risk b...www..... Life Insurance d.......com Facebook Groups .. If yield increase by ..................com murugan0501@gmail.CAIIB DISCUSSION murugan0501@gmail. 09994452442 d... it faces.....82% d) Bond price would fall by 2..ja a...........60%. Liquidity risk ca Ans ....36% b) Bond price would fall by 4...... Gold c......... 09994452442 .....d . Default risk and down -gradation risk om Ans ....36% c) Bond price would go up by 2.. Strategic Risk is a type of kt es t.a ... Operational risk c........82% Ans ... ..com....com.....

..7.. 3 Month Forward Buying Rate will be applied.....e..1) = 8/(1..com..2727 om Facebook Groups kt es % change in price =.. Asset in doubtful-I category – Rs... 20 days + 2M.....0521(0.....c Modified duration is McCauley's duration discounted by one period yield to maturity Here we are talking McCauley's duration is 8 years.JAIIB CAIIB STUDY MATERIALS ... 09994452442 .... Spot Rate = 35. 500000/Realization value of security – Rs...8500) Less Exchange Margin (.modified duration × yield change m oc = .... Exchange Margin ...jaiibcaiibmocktest.6976 d.. iib Spot Rate ..20 days and 2 M Forward.....1971 c.. admin@jaiibcaiibmocktest..36 % decrease in price..60%) = (-)4..8500-.. .6000 Less Forward Discount of 3M (.....6979 Ans.... 400000/- www.1) = 7. 31...jaiibcaiibmocktest..CAIIB DISCUSSION murugan0501@gmail... ..com.15% of 34. 31.. 35..com.. admin@jaiibcaiibmocktest...0521) i..www..com murugan0501@gmail.... Rs.)means decrease in price 4.35... iib ca a..36% ( ..20 days... 500000/b.2727× (0...1971 b. ..... Find 2 M Forward Buying Rate.... Modified duration =McCauley's duration / ( 1 + yield ) = 8 /(1 + 10%) = 8/(1 +0.. Rs.. 09994452442 t......com.. it is having Transit Period .6000-...3636 % = (-) 4...... 34...com ......0..ja Explanation : w w w Bcz..6976 Ans – d ... 400000/What will be the provision requirement? a.7500) = 34......6000/6500 Forward 1M=3500/3000 2M=5500/3000 3M=8500/8000 Transit Period . 34.15%..

. Market Risk 3...... Operational risk 4........ja Ans ..JAIIB CAIIB STUDY MATERIALS .c ......... 1...2 and 4 c. Interest rate risk 3. 2...... 1....c A branch sanctions Rs 1 crore loan to a borrower............ Credit Risk d...jaiibcaiibmocktest.....com... 2 and 3 only c....... 4 and 5 only d. Operational risk m oc a.c .....com... Credit risk 2.. All of them b.. Market risk 4. 200000/Ans . 1...com Facebook Groups ... admin@jaiibcaiibmocktest... Credit risk 5.....com murugan0501@gmail......www...... admin@jaiibcaiibmocktest..... Defined capital component w Which of the following is true? a.d . 1.... Rs......2 and 3 www. Operational Risk ca Counter party Risk is a type of ... 1...... iib Ans .. Market Risk c.. 1.. Liquidity risk 2.........com.. All of them b....jaiibcaiibmocktest..... 4 and 5 only iib a. Rs..... ..... Interest Rate Risk b.... 180000/d..... t.CAIIB DISCUSSION murugan0501@gmail.... which of the following risks the branch is taking? kt es 1.... 1988 Capital Accord framework accounted for w w 1.... 09994452442 .. 09994452442 om c...com.3 and 4 d.

admin@jaiibcaiibmocktest.. 130 and shares of B were priced at Rs......com Facebook Groups .... m oc a..com..... Profit of Rs... Raj purchases a call option for 400 shares of A with strike price of Rs...... What is the profit/lost for the individual on the transaction (without taking the interest cost and exchange commission into calculation)? w ... He will purchase 400 shares of A at a price of 100 Total value of shares is = 40000 Then he will sell the total shares in the market at a price of 130...... Back testing is done to kt es t....com..c a... Communication Risk is a type of ..www.. 200 having maturity after 03 months for Rs. admin@jaiibcaiibmocktest. 09994452442 om Ans .......b .... 4000 d.. Operational Risk iib Ans .. None of the above Ans ...com murugan0501@gmail...... Test a model b. 20 and also buy a put option for 200 shares of B with strike price of Rs.... On maturity... 100 having maturity after 03 months for Rs.. Loss of Rs.......... iib ca Mr.. so it is assumed that.com...... Compare model results and actual performance c....... 09994452442 ... 30...........jaiibcaiibmocktest.ja a... Record performance d.. Market Risk c.. 180.... Credit Risk d. Loss of Rs. First one is a call option.............. 4000 b.... Profit of Rs.b ..... shares of A were priced at Rs.JAIIB CAIIB STUDY MATERIALS .com. Interest Rate Risk b.....d . 400 × 130 = 52000 But he paid the premium for call options @ 20 × 400 = 8000 So profit in this first transaction will be www... 2000 b w w Explanation.. 2000 c......jaiibcaiibmocktest.....CAIIB DISCUSSION murugan0501@gmail..

.8000 =4000 (Profit of Rs.com Facebook Groups ... 2000) ... Call Option c......................ja ...com.....40000 ..com murugan0501@gmail. 09994452442 . Notes Payable could not appear as a line on the balance sheet in which classification? a........CAIIB DISCUSSION murugan0501@gmail.com. 09994452442 om 52000 ...JAIIB CAIIB STUDY MATERIALS ............... 30 per share to buy put options...c ...com.. iib Taking advantage by selling and buying of a currency in two different markets to take advantage of price differential prevailing at these markets is called as ... Speculation iib Ans ....jaiibcaiibmocktest..www. so it is assumed that.....com...jaiibcaiibmocktest... admin@jaiibcaiibmocktest. 4000-2000 = 2000 (Profit of Rs....... Hedging b.. Current Assets www......... Future Option Ans ........ admin@jaiibcaiibmocktest........c Second one is a put option.. ca a... w w w a. 200 × 180 = 36000 But he has to paid Rs........ Right to sell at a fixed price on or before a fixed date in an option is called as ....... =30 × 200 = 6000 So profit in this transaction will be 40000 .. Arbitration c....6000 = -2000 (loss of Rs. 2000) m oc So taking both the transactions...b ....... 4000) kt es t......36000 .. Put Option d. He will sell 200 shares of A at a price of 200 Total value of shares is = 40000 Then he will buy the total shares in the market at a price of 180. Option b.. Swap d....

admin@jaiibcaiibmocktest...............CAIIB DISCUSSION murugan0501@gmail..com. www..... None of these Ans – d .000 b...com.. Tier-II capital is restricted to 100% of tier-I capital b.20 = 19.. t.ja Ans .. Tier–III capital will be limited to 250% of tier–I capital d........ Rs..000 c. Current Liabilities c....... None of the above Ans – c ...... admin@jaiibcaiibmocktest... No Liability d.JAIIB CAIIB STUDY MATERIALS .... 3 Crores. w w As per basel-II norms which one is not correct? a..........com......... the CC account with o/s balance of Rs 1....... Long term subordinate debit may not exceed 50% of tier I Capital c. hired Juanita Perez to begin working on January 2 at a monthly salary of 40.d w = 15+3+1.... Long-term Liabilities d.... ABC's balance sheet of December 31 will kt es show a liability of m oc a.com murugan0501@gmail...... The bank has also subscribed to the bonds issued by the borrower company amounting to Rs.jaiibcaiibmocktest............ 16.......000.. What will be the amount that will become NPA on account of this company? .. 40...... 4. Rs..com Facebook Groups ... 09994452442 om b. There is no default in payment of interest and installment in the term loan and bonds...20 Crores c..........20 Crores d.20 .. 19.20 Crores ca iib A company enjoys cash credit account with a bank...20 Crs is required to be classified as NPA.. 09994452442 . ABC Co. It also has a term loan account with o/s balance of Rs..jaiibcaiibmocktest. As on 31-03-2014..www... iib a....... None of the above Ans – a .. Rs.. 15 Crores as on 31-03-2014.... Rs..com.....80..c On December 1.... 1. 4.............................20 Crores b.

... 09994452442 . Credit Risk mitigation d.00.. ABC has current liabilities of 3. Operational Risk exposure....000 c.... 7... 110 d. 150 Ans – d Since it a doubtful-III Cat asset..000 and total assets of 15...000. Rs..... 75%..... b.jaiibcaiibmocktest. has current assets of 5..... iib a....00. 95 c...00....com. 12........ t.... ca Under Standardized method within each business line gross income is broad indicator for .com murugan0501@gmail.www.ja Ans – b ..JAIIB CAIIB STUDY MATERIALS . admin@jaiibcaiibmocktest. Capital Risk exposure b... 3.000.00... 100% kt es Ans – a .00.. Rs.. ABC Co........ c.. 150 only in the doubtful-III cat and the realization value of security is Rs....... w w a.... Rs........000 d....c a........com Facebook Groups .....000 b.. 09994452442 om Under Standard Approach retail and SME exposures attract a uniform Risk weightage of . www.... 50 b..00. 50% c.... Rs......com......00.000 and total liabilities of 8......jaiibcaiibmocktest..com...... 2. admin@jaiibcaiibmocktest... w If there is an assets of Rs.... what will be the provision requirement..... Financial Risk Exposure .000 iib Ans – c .... 100 only.com.... What is the amount of ABC's owner's equity? m oc a...CAIIB DISCUSSION murugan0501@gmail......00. 85% d..

......... so 40% realization value of Rs.... Rs. what will be the provision requirement ? w w Since it a doubtful-II Cat asset..... Rs... 40 b.. 70 ca If there is an assets of Rs... Rs.. the board of directors will accept the project if ..c a...... both a & b d........ Pay Back Period is greater than target period iib Ans – b .. None of the above www.....com.. 50 c.. 150 is the right ans. admin@jaiibcaiibmocktest..... 15% d........www..... Ans – c iib ... Internal Rate of Return is less than cost of capital d..... 10% c... So. 20% Ans – c . 5% b. 09994452442 om 100% provision is required for the entire asset....... 60 d.........com........ Benefit Cost Ratio is less than one b...jaiibcaiibmocktest. kt es t.. Cumulative negative mismatches maximam charges taken for the period of 8-14 days in ALM risk will be .com.com murugan0501@gmail.JAIIB CAIIB STUDY MATERIALS ............CAIIB DISCUSSION murugan0501@gmail.........ja a..... 120 only in the doubtful-II cat and the realization value of security is Rs....com Facebook Groups .. Net Present Value is greater than zero c.......... a...com..40 and 100% of short Fall that is 120-100=20 so ans will be 40+20=60 .. 100 i...... Statement Of Financial Position c.. m oc On the recommendations of the Finance Manager. 100 only......... 09994452442 .....e Rs.........jaiibcaiibmocktest..... w Another name for the balance sheet is a........... Statement Of Operations b..... Rs. .. admin@jaiibcaiibmocktest.............

.00..000 Crores. 10....... admin@jaiibcaiibmocktest.. that is 50000 50000 = 460000 × r /100 50000/460000 = r / 100 0.... The balance sheet heading will specify a kt es t..com murugan0501@gmail...jaiibcaiibmocktest.................. m oc A bank has deposits worth 5... None of the above Ans – b . The interest rate on this is 10%..com.com... 11...jaiibcaiibmocktest.........JAIIB CAIIB STUDY MATERIALS .. www..ja iib From 500000 8 % should be made for SLR requirements So available fund for making loans(asset) = 500000 ...... Bank has to lend money at that interest rate which will cover this cost of funding..67% b. What will be the effective cost to deposit? a. 11..... Point In Time c..... 10.......40000 = 460000 w For this fund 460000 Bank is paying 10 % on 500000 Cost of fund is 50000 w w So in order to avoid any loss.8% of 500000 = 500000 ..... 09994452442 om Ans – b .www.CAIIB DISCUSSION murugan0501@gmail.87% c..37% d.... both a & b d.........b ca Explanation : ... Period Of Time b.67% iib Ans ...c a..87 % .. 09994452442 ...........com Facebook Groups .................com........ admin@jaiibcaiibmocktest... SRR to be maintained by the bank is 8%.1087 = r / 100 r = 10...com.....

.... Euro-rupee deposit b. 09994452442 om Buffer capital means..... None of the above w Ans – c ..... All of these iib Which of the following is an asset account? m oc Which of the following is a category or element of the balance sheet? iib Ans – b ....com....com.. admin@jaiibcaiibmocktest................... Gains c....... 35% c.. 75% d.......CAIIB DISCUSSION murugan0501@gmail...... Accounts Payable b......com.... ....... w w a....... a.... Expenses b.com Facebook Groups ...........jaiibcaiibmocktest.JAIIB CAIIB STUDY MATERIALS ....... Prepaid Insurance c..............c a.com murugan0501@gmail.... ca a.......... Unearned Revenue d.www. 100% b..jaiibcaiibmocktest... a... None of these kt es Ans – c ....... Petro-dolllar deposit www.. 09994452442 ....... To cover total credit and market risk c...com. Liabilities d............ To take over other banks b... t.. To cover uncertainties related to the market d. An FCNR deposit received from NRI in US \$ can be viewed by the bank as............. admin@jaiibcaiibmocktest.ja Basel-II prescribes that the housing loan portfolio shall be given the risk weight of............ Losses Ans – c .......

...... Mirror iib "Your account is with us" refers to . www..................com.......... 09994452442 ................ LORO d.. admin@jaiibcaiibmocktest..... a..... Direct exchange rate b..... Credit c........... t. it fails to settle.com..d .... admin@jaiibcaiibmocktest.. Rupee-dollar deposit d.b .... The value of the currency is decided supply and demand factors for a particular currency under..com.......jaiibcaiibmocktest...com.. None of these Ans – a .. NOSTRO b.......... Liquidity Risk c.... Floating exchange rate Ans . settlement Risk b.. Either a or b d.. Indirect exchange rate c.......... account... VOSTRO c...... Fixed exchange rate d. Pre-settlement Risk d................ja a..... Due to delay in receipt of expected funds in nostro account............................................. Debit b..CAIIB DISCUSSION murugan0501@gmail. w w w Ans ............ What kind of risk has arisen? iib a.......... Mismatch Risk ca Ans ... m oc A Party enters into a contract for sale of dollars and receives the rupees from the counter party..www.JAIIB CAIIB STUDY MATERIALS . Euro-dollar deposit Ans – d .... 09994452442 om c..com murugan0501@gmail.....c What is the normal balance for an asset account? kt es a..jaiibcaiibmocktest.........a ............ ......com Facebook Groups .....

2682 for effecting import payment....jaiibcaiibmocktest.. ....3965/75.e..... 55..6985 c..16/18. Compute Rate for Customer.. (Bill Selling Rate)... Rate would be 77....com..... at which we can get GBP at market rates... i.. admin@jaiibcaiibmocktest...com.jaiibcaiibmocktest.com murugan0501@gmail. (1.1140....... Thus the interbank rate for the transaction can be taken as 77. The GBP/INR rate would be 77.. Buy or sale price d.. Strike Price Ans ... 09994452442 .... Mirror kt es t. 77. 76.....1542 = 77..18).........c ... Add Margin 0.. we need to buy USD against Rupee.5480 b..com.com Facebook Groups .. ignore cash discount/premium....d .. To buy GBP we need to give USD and to get USD.000.. admin@jaiibcaiibmocktest.ja Ans . account. VOSTRO c....20%.. m oc a. NOSTRO b.JAIIB CAIIB STUDY MATERIALS .......... At the given rates.1140 + 0.. we need to buy GBP..... www....2682 .... iib ca a.3975 USD and USD can be bought at Rs.... "Their account is with them" refers to .. Ans ...c a........ 09994452442 om An option may be exercised and the underlying stock may be bought or sold at a price... This price is called as ...... GBP/USD 1... Buy Price b.. 76.com... 77... sell Rupee..1140 d..3975 x 55.. iib Retirement of import bill for GBP 100..20% 0. GBP can be bought at 1..1542.www...d Explanation : w w w For retirement of import bill in GBP.00 by TT Margin 0.. LORO d..CAIIB DISCUSSION murugan0501@gmail.......18.... Sale Price c. USD/INR 55........1140...

Mirror Ans .. None of the above iib Ans .JAIIB CAIIB STUDY MATERIALS .. VOSTRO c........ 09994452442 .........jaiibcaiibmocktest.. Operating Expenses b........ Discount d... Loss Probabilities c.................. Profit Potential and probability of occurrence d..com..com. Charge b..ja Which is not to be taken into account for pricing? w w a. ..c .. ca a. Profit Probabilities d......... account...... which type of risk arises When banks have more earnings assets than paying liabilities ? a.c a.. NOSTRO b... admin@jaiibcaiibmocktest. Potential Losses and Profit Potential b... Premium c....com.......... Capital Charges w Ans .......jaiibcaiibmocktest....com Facebook Groups ........................ They are . admin@jaiibcaiibmocktest.......d ...... m oc a...b .com murugan0501@gmail.............. Operational www.............www....... LORO d.... 09994452442 om The cost one pay for an option is called as ......... iib Downside potential has 2 components....com... Liquidity b............ t..CAIIB DISCUSSION murugan0501@gmail.....b ..... Potential Losses and probability of occurrence c. A shadow account of the NOSTRO account maintained by the opening bank is called as . Margin kt es Ans .

............. What is the risk that the bank is facing? w w w a. Medium-risk investment c. a.. Risk can be mitigate through . Statements 2 and 3 are correct d.. a.............. Market risk b... All the statements are correct b. Statements 1 and 2 are correct c.com....... Market Ans ..... Internal generation of capital 3............jaiibcaiibmocktest........ Cost of capital 2.ja Ans ...... Asset liquidation risk d.. Loss provision iib Which of the following is True? iib ca a.CAIIB DISCUSSION murugan0501@gmail..........a ....... Low-risk investment b.....com... m oc Capital charge component of pricing accounts for kt es t......c ......... Statements 3 and 1 are correct .... 09994452442 om c......d . Crystilization www.........com Facebook Groups ......JAIIB CAIIB STUDY MATERIALS ....... 09994452442 .......... admin@jaiibcaiibmocktest.. admin@jaiibcaiibmocktest.. Operational risk c...com murugan0501@gmail.......d ...............c Investment in Post Office time deposit is 1. High-risk investment d................jaiibcaiibmocktest..com.. Interest rate d.. Market liquidity risk Ans ....www.com. Zero-risk investment Ans .. A bank expects fall in price of a security if it sells it in the market..

..c .......22 d.com..........22 c..c ...... Market Risk c........com murugan0501@gmail........ Accepting Collaterals b.....CAIIB DISCUSSION murugan0501@gmail..... Investment in government securities b........c Which of the following risk is managed at Portfolio level? m oc Ans ...JAIIB CAIIB STUDY MATERIALS ........5%..... Credit Derivatives c. Zero variation in cash flow from investment d............ Diversification c...com Facebook Groups .. If Daily Volatility is 1........ what will be the monthly Volatility ? iib a.. b & c ans .........com.............b . admin@jaiibcaiibmocktest... Zero-risk investment implies a....33 ca Ans ..... admin@jaiibcaiibmocktest. Diversification of Advances w w w Ans .............com...... 8. 9......... 09994452442 om b........... Credit Risk b...... Portfolio risk d.. 9...b ..... Liquidity Risk d.......C . Operational Risk t.. 09994452442 ... iib Credit Risk can't be mitigated by .jaiibcaiibmocktest... ..... Investment in bank fixed deposit Ans ........www..33 b. kt es a. Entering into Forward Contracts d............. www....ja a..... Investment in zero coupon bonds c....jaiibcaiibmocktest... 8...........com......

Capital Charge kt es Ans ............. The most important and well pronounced risk in treasury is w w w a...jaiibcaiibmocktest... hedge d.... Liquidity risk c............ 09994452442 om Which of the following is not included in pricing ? t....c . Credit risk b. iib ca a........b ...............com.com........ 15% Ans ......jaiibcaiibmocktest.JAIIB CAIIB STUDY MATERIALS .........c . m oc a. Cost of Deploying funds b. While the exposure limits are generally left to the banks discretion.........com Facebook Groups ........... The following limits in treasury are meant for controlling market risk a.www.......... admin@jaiibcaiibmocktest.... 5% c.. RBI has imposed which ceiling of total business in a year with individual brokers. 2% b..... admin@jaiibcaiibmocktest... Counter party interbank exposure limits www........ 10% d.... Market risk d... Operating Expenses c......com.. 09994452442 . swap c...........CAIIB DISCUSSION murugan0501@gmail.c .com murugan0501@gmail. Profit Probabilities d......... iib Protection of risk in a transaction usually through derivatives product is called...ja Ans ....... Embedded option risk Ans .c a........com. arbitrage .... insurance b............

................c As per Basel–II norms which of the following approach is adopted in India..... 09994452442 . Select wrong match kt es a......jaiibcaiibmocktest.... Market risk .... using (i)Feb/380 calls versus (ii) March 320/ calls ? 3...com... admin@jaiibcaiibmocktest..e....A blank means no quotation is available w 1.......CAIIB DISCUSSION murugan0501@gmail........ overnight open position limit and stop loss limits d. Operational – basic indicator approach c.......standard duration approach d.....com murugan0501@gmail....JAIIB CAIIB STUDY MATERIALS .. None of these m oc Ans – d ...com.... None of these ca Ans – b ..www......com Facebook Groups .. List out the options which are out-of-the-money. admin@jaiibcaiibmocktest... An Asset is ..... t.... Credit risk . Inflow of funds d... 09994452442 om b.. Sources of funds b. risk and reward) of selling a call against the 5000 shares held.com... Settlement and pre-settlement limits c. 350 Calls Puts Strike Price Jan Feb March Jan 300 50 55 320 36 40 43 3 340 18 20 21 8 360 6 9 16 18 380 4 5 6 . Intra-day..jaiibcaiibmocktest.....c .. Stock Price : Rs..... maximum loss and break-even associated with the strategy of simultaneously buying say March/340 call while selling March/ 360 call? www...... What are the relative pros and cons (i.... 2... Overseas borrowing limit prescribed by RBI Ans .... Use of funds c...com.....standard approach b............... iib a. Feb 5 11 21 43 March 7 23 - w w .. Show how to calculate the maximum profit..ja iib ABC Ltd Option Quotes.

0465 -0.00) = 1. i.07 σ =0.40 √￣0. The risk however is that the firm will forfeit the gains that it would have enjoyed if the share price rises above Rs.0282 + 0. 380 per share. risk-free rate is 8 percent and the standard deviation is 0. if stock price goes above Rs. When s is greater than 360.40)2 ln + 0. w w w . It should however be prepared to forfeit the gains if the share price remains above Rs.320.05) = 1 – 0.20) = 0.4404 www. 09994452442 5. So long as the share price hovers between R.jaiibcaiibmocktest.4801 = 0.2 = 0.25 360 2 d1 = 0.25 r = 0.com.25￣￣ = -0. iib 3) Let s be the stock price.1535 Using normal distribution table N (0.0465) = 0.320. thus limiting the upper value of the portfolio to Rs.JAIIB CAIIB STUDY MATERIALS . it will earn a call premium of Rs.com. What should be value of the March/360 call as per the Black-Scholes Model? Assume that t=3 months.215.15) = 0.5000 + (0. it simultaneously writes March 360 call and buys March 320/put? kt es Solution: 1) Calls with strike prices 360 and 380 are out –of –the.07 + x 0.40 350 (0.000 now.0465/0.ja 5) S0 = 350 E =360 t =0.com.5000 = 0. m oc 2) (i) If the firm sells Feb/380 call on 5000 shares.e. 15 The maximum loss will be the initial investment .5 The break even will occur when the gain on purchased call equals the net premium paid i.5185 N ( . 380. What should be the value of the March/360 put if the put-call parity is working? om 4.0. if for instance.5199 – 0. the firm can execute the put option and ensure that its portfolio value does not go below Rs. What are the implications for the firm. both the calls will be exercised and the profit will be { s-340-p1} – { s-360. it will earn a call premium of Rs. the call will be exercised and the stocks in the portfolio will have to be delivered/ sold to meet the obligation.e.CAIIB DISCUSSION murugan0501@gmail. p1-p2 = Rs. 345 iib ca 4) If the stock price goes below Rs.0500) x (0.5000 N (0.25. (ii) If the firm sells March 320 calls on 5000 shares. s-340 = p1 – p2 =5 Therefore s= Rs.www.com Facebook Groups . the firm will lose Rs. However. 0465 d2 = 0.000 now.com murugan0501@gmail.com. 320 and Rs. 320 per share. admin@jaiibcaiibmocktest.40 x Ö 0. 09994452442 .0375) / 0.p2 } = Rs.5199 Therefore N( 0.4207 N ( -0. 380.money.0.40 t.5000) = 0. admin@jaiibcaiibmocktest.25 = ( -0. 380. p1 and p2 the call premia for March/ 340 and March/ 360 calls respectively.c 6.jaiibcaiibmocktest. 1 (net premium received) per pair of call and put.

.93 ..c 6) If put.480 – 155...... we have P0 = C0 – S0 + E/ert Value of the March/360 put = 26.. Treasury in the normal course will manage w w w a..JAIIB CAIIB STUDY MATERIALS ..30 = Rs.... 01765 = 353.....4404 – 0.. In December ABC will debit Cash for 10.b ........ 25 = 360 / 1. Accounts Receivable (asset) b..0500) x(0.18 -350 + 353...1535) = 0.. admin@jaiibcaiibmocktest. ABC uses the accrual basis of accounting.......... Prepaid Services (asset) c.75 = Rs.... All funds raised through deposits b.4390 E / ert = 360 / e0... Liquidity d...000 in December for ABC to perform services for Jay in 45 days...75 x 0.com.....CAIIB DISCUSSION murugan0501@gmail..... Unearned Revenues (liability) ......... Debit b..18 Ans – b ........com.. admin@jaiibcaiibmocktest. Either a or b d......75 C0 = 350 x 0. Merchant book and Trading book c....jaiibcaiibmocktest.0465/0...www....... All deployment of funds through advances Ans ..5185 – 353.....4207 + ( 0. None of these kt es What is the normal balance for contra asset accounts? t.jaiibcaiibmocktest.. What will be the other account involved in the December accounting entry prepared by ABC (and what type of account is it)? iib ca a.07 x 0........... 26... Credit c. 09994452442 m oc a...........4390 = 181........ ALM book.4207) = 0..... Having a common dealing room www.... What is the important operational feature of integrated treasury ? a.com murugan0501@gmail. 10..29.........call parity is working...com.. Service Revenues (revenue) d...........com Facebook Groups ......000... 09994452442 .....com.....ja Ans – a ... om Therefore N ( -0....... iib Client Jay pays ABC Co..

.......d ....com Facebook Groups ... Foreign Exchange Regulation Act c. 09994452442 Ans ..b ... admin@jaiibcaiibmocktest. a placement in Rupee denominated commercial paper to lending in USD in global interbank market and also being to source funds in global markets and swap the funds into domestic currency or vice versa..... In unrelated fashion d.. Probable loss in a portfolio within a time horizon at a given confidence level c..... Loss or profit in a trading activity d.... admin@jaiibcaiibmocktest.....com. Both the above d...........c om b.................... Removal of all trade barriers in the world www.............. Value at risk( VaR) is a statistical measure to capture ca iib a. Globalization refers to a.... Full convertibility of all currencies in the world b..com................... Operational risk in treasury iib Ans ....jaiibcaiibmocktest..a ....com..... depending on market opportunities d. None of these Ans . 09994452442 ..... As determined by bond issuer w w Ans ........ja Yield and price of a bond move w a. In direct proportion c.... All the above m oc a....... Actual loss in portfolio b......... Having a common Mid/back offices c..........a .......com.jaiibcaiibmocktest... In inverse proportion b. Looking for interest arbitrage across currency markets and be in a position to shift swiftly.. Foreign Exchange Management Act b...CAIIB DISCUSSION murugan0501@gmail...com murugan0501@gmail......JAIIB CAIIB STUDY MATERIALS .www... kt es Which act relating to foreign exchange has replaced earlier one ? t.... ...........

.......com Facebook Groups ... kt es a. 09994452442 om c...... A loss of Rs 1000 d.... What is the profit or loss suffered due to increase in yield? w w w a..CAIIB DISCUSSION murugan0501@gmail.. commercial bank m oc Ans .... A loss of Rs 625 Ans ..... A profit of Rs 1000 b........... iib ca a.. Risk mitigation results in 1. Statement 2 is correct d......... Statement 1 is correct c....000? www.....d ......... admin@jaiibcaiibmocktest....... 09994452442 .....com murugan0501@gmail............. The yield on the bond has increased by 5 basis points.c ....www. Reduction of downside potential 2..com..... Fixed rate of exchange for all currencies of the world For the organization point of view treasury is considered to be .........com..... Investment centre b..000 with 95% confidence level......... characterized by free capital flows and minimum regulatory intervention d. Both are incorrect ..jaiibcaiibmocktest.....jaiibcaiibmocktest.. The process of integrating domestic market with global markets.. In a period of six months (125 working days) how many times the loss on the portfolio may exceed Rs 500..com.. Reduction in profit potential iib Which of the following is True? t.......... 1 day VaR of a portfolio is Rs 500... service centre d................. Fund management department c....com.... An 8-year 8% semi-annual bond has a BPV of Rs 125..........ja Ans .c ... A profit of Rs 625 c...... admin@jaiibcaiibmocktest..c Ans ....JAIIB CAIIB STUDY MATERIALS ........a .. All the statements are correct b.

.. 6 days d..c ..... Gap Risk d..5%. 5 days c...... 1..c ..... 0..........CAIIB DISCUSSION murugan0501@gmail.. local currency is fixed...... admin@jaiibcaiibmocktest............JAIIB CAIIB STUDY MATERIALS .... 09994452442 ....... 3..com..jaiibcaiibmocktest. liquidity Risk b.. 7 days t....www.. admin@jaiibcaiibmocktest... In direct quotes......... local currency is variable............ borrowing and lending... www. 4.. 4 days b. Mismatch Risk c..... In indirect quotes........... In direct quotes.. ... kt es Daily volatility of a stock is 0.....jaiibcaiibmocktest. What is its 10-day volatility? a..........a . local currency is fixed.. Movement Risk iib When mismatched is created in assets and liabilities on account of forward purchase and sales...... 09994452442 om a.....com..... None of these m oc Ans . ca a......... 2.com. local currency is variable....such mismatch is called: iib Ans . 5% b..58% d.....ja Select the incorrect sentence / sentences from the following: w 1..............com. In indirect quotes.......... w w a) 1 and 2 b) 1 and 3 c) 2 and 3 d) 2 and 4 Ans .c Ans .com murugan0501@gmail.....c ............com Facebook Groups ..25% c........

....com....... 100 d...... Mirror Ans .............com murugan0501@gmail..... At the maturity of the contract the FI takes delivery of the shares. out of money c. 09994452442 Date on which the option is automatically exercised is called as .......... 09994452442 .d ... any of the above Ans ........ admin@jaiibcaiibmocktest.....www.......... the spot price of the stock decreases by Rs 3... NOSTRO b. Rs.com. 103 c..... admin@jaiibcaiibmocktest... in the money d......... at the money b......jaiibcaiibmocktest.... the option is . w w w a....... Final date m oc a..... What is the acquisition cost to the FI per share? iib ca a.........com Facebook Groups . Maturity date d..... Rs. Ans .. for citi bank is called as .. 107 b. SBI account with citi bank in New Jersey in US \$.com..... VOSTRO c...ja ans : c ...JAIIB CAIIB STUDY MATERIALS ..............jaiibcaiibmocktest......c ..................... Last date b... iib A financial institution buys a specified no of futures at NSE on a stock Rs 100 each when spot price of the stocks Rs 110... LORO d.. a.. kt es SBI account with citi bank in New Jersey in US \$ is called as ..... When the strike price is below the spot price for the call option. During the period. Rs.c om a...... Expiry date c...com. account.... t. NOSTRO www. account......a .CAIIB DISCUSSION murugan0501@gmail.. 97 .. Rs..............

.2420 d.... in the money d.......... Assuming that the USD/INR interbank market is at 56.. ca iib a...ja Ans . at the money b.... out of money c.... 56..CAIIB DISCUSSION murugan0501@gmail....com. wants to fund his account by purchase of Rs........ admin@jaiibcaiibmocktest... against US dollars....c .com.....a .... 09994452442 om b... what rate would be quoted to the correspondent..........00 million...........jaiibcaiibmocktest.2380 b....... i.. and hence the XYZ Bank would quote the lower of the two rates........2425 a Answer The transaction is to sell Rs 10... The value of the currency is decided by supply and demand factors for a particular currency in ____ rates mechanism.00 million.... NOSTRO b. 56.. www. VOSTRO c..2380/2420...... kt es t......... VOSTRO c....2400 c..com Facebook Groups .. ...www.....com murugan0501@gmail. 56......... is used by BOB... SBI account with citi bank in New Jersey in US \$... 56. account.. LORO d.... w w w a. 09994452442 .....c XYZ Bank’s foreign correspondent maintaining a Nostro Rupee account with XYZ bank. admin@jaiibcaiibmocktest... any of the above iib When the strike price is equal to the spot price for the call option.....com.. 10.....jaiibcaiibmocktest. LORO d.JAIIB CAIIB STUDY MATERIALS ...2380 (Sell low maxim)..... the option is ....e........... 56. ignoring exchange margin? m oc a............... For BOB this account is called as ..b . against US dollars. Mirror Ans .com......... Mirror Ans ... .

Fixed b.. a........c Ans ............. UK b......... admin@jaiibcaiibmocktest. admin@jaiibcaiibmocktest.. 15...... CHAPS is a payment system in .8% c.. Both a and b d.......b .......... UK b. China w w Ans ........ ca iib a. Hong Kong d....b .. kt es CHIPS is a payment system in .....jaiibcaiibmocktest...com Facebook Groups .. year iib Ans ...com...com..com... US c........ w ... 158% www..JAIIB CAIIB STUDY MATERIALS ....... 1..... None of these t..... Hong Kong d. a.b .a ...CAIIB DISCUSSION murugan0501@gmail.................www.... week b.............. US c......................ja a...... month c.... 09994452442 om a... find the volatility per day..... FEDAI requires banks to undertake profit / loss evaluation of forex positions at the end of each ______... Floating c.com murugan0501@gmail.. quarter d.............58% b....... 09994452442 ...............com.jaiibcaiibmocktest.. If the volatility per annum is 25% and the number of trading days per annum is 252....... China m oc Ans ...

5% c.............. kt es I) Settlement risk management II) Capital requirements III) Supervisory review IV) The handling of hedge funds V) Contingency plans VI) Market discipline m oc a. 9% and 4.a ..d ... Foreign outward remittances in transit c.... 0. I...c ............. 8% and 4% b. IV and V c.www..JAIIB CAIIB STUDY MATERIALS ..10 om Ans .. 09994452442 d.com Facebook Groups .com.b .........ja Ans ......... II.................. I...III and VI b... These proposals contained MAINLY.com....... . respectively. The salient feature of convertible bond is www......2007 should be ... iib a..... Time deposits b.. w The exemptions from DTL include w w a..... 09994452442 ....com...........03.....com............c The June 1999 Basle Committee on Banking Supervision issued proposals for reform of its 1988 Capital Accord (the Basle II Proposals)...0% d... t.IV and V d..jaiibcaiibmocktest................ admin@jaiibcaiibmocktest.......jaiibcaiibmocktest............. 9% and 4.CAIIB DISCUSSION murugan0501@gmail... Overseas borrowings Ans ..com murugan0501@gmail....... III and VI iib Ans ....... II. 12% and not specified ca As per Reserve Bank of India directives the Minimum Capital Adequacy Ratio and minimum Tier I capital the Modern Bank is required to maintain as on 31. admin@jaiibcaiibmocktest.. Transactions in CBLO with CCIL d.....

.......CAIIB DISCUSSION murugan0501@gmail.......com.... Option to convert the bond in to equity on a fixed date or during a fixed period and the price is predetermined c... August 2003. net...........b .ja RTGS has been fully activated by RBI from .....com Facebook Groups ..b .. admin@jaiibcaiibmocktest..... .....d ..... of their NDTL? a. 09994452442 om a.... SLR and CRR iib Ans ...... net w Ans ... August 2004.... Repo and reverse repo rates b...jaiibcaiibmocktest....jaiibcaiibmocktest...........com.................... RBI pays interest on the cash balances in excess of which of the following to bank... gross b...... w w a.com murugan0501@gmail... Centralization of all back office operations of forex branches d. Automatic reinvestment in another bond on maturity d......... kt es Integrated Treasury in Banking set up refers to m oc a...... securities market and foreign exchange operations Ans . Computerization of all treasury operations c... 2% b........ Absence of coupon t. gross.... October 2004.............. October 2004.... Where the settlements are on ......com.. basis rather than .. The liquidity corridor that RBI uses to control short term interest rates is defined/dictated by ca iib a. Computerization of all bank branches b. Conversion of physical bonds into demat form b..www... 09994452442 .... Integration of money market. admin@jaiibcaiibmocktest..... gross d... 3% www.... gross....c Ans .... day end settlement of cheques in clearing house....com.. net.JAIIB CAIIB STUDY MATERIALS .. Call money market c.... Bank rate d.....a ........ net c...

...JAIIB CAIIB STUDY MATERIALS .... m oc The following institutions facilitate delivery vs.com...... 09994452442 Ans ................ w w Given the following Probability of occurrence = 4 Potential financial impact = 4 Impact of internal controls = 0% What is the estimated level of operational risk? a........ Cash transactions c... Their Head office branches b.jaiibcaiibmocktest...www....com.com Facebook Groups ............................... NDS c...... IDRBT b.. 3 www.......... admin@jaiibcaiibmocktest.. NSDL and CSDL d...com......... 09994452442 ..d ..CAIIB DISCUSSION murugan0501@gmail...... Front office and IT department d.........com murugan0501@gmail...c .. Spot transactions d..... Mid office and back office w Ans ...... RBI expects banks to facilitate functional segregation between .ja a..... payment(DVP)for secondary market deals in equity and debt paper iib a.......... Forward transactions b....c ......com. Front office...jaiibcaiibmocktest... 6% kt es a........ 5% d.b .. admin@jaiibcaiibmocktest.. iib For ensuring effective risk control....c All the exchange rates quoted on the screen or in print are for mentioned unless otherwise om c............. Tom transactions Ans ... NEFT ca Ans ... t. Treasury and Head office c.

.. None of the above ca a......com. w w a. Bank b... funding risk b.. call risk d..................61 iib Ans ... 09994452442 om b. HAD and M. calculate standard deviation of business b 01 yr 02 yr 03 yr 04 yr 05 yr 3 8 1 6 4 iib Cash flow Business b m oc kt es a......com...........com....a . 0 d... 2 c. 3...c ........ Supervisor c....CAIIB DISCUSSION murugan0501@gmail.. LGD.....com Facebook Groups ... 09994452442 ............ 2....... who provide the input for LGD. Under advanced IRB approach. 4 Ans ................... gap or mismatch risk w Ans .. admin@jaiibcaiibmocktest.com.........jaiibcaiibmocktest....b ... admin@jaiibcaiibmocktest. 4.....40 c... The Net Interest Income has been replaced by www.www.......com murugan0501@gmail..........ja The risk arises due to crystallization of contingent liabilities...jaiibcaiibmocktest.........c Capital charge for credit risk requires input for PD.. time risk c..... t........b .JAIIB CAIIB STUDY MATERIALS ... ..... Function provided by BCBS d.. Ans ......70 d... 4.. As per the Reserve Bank of India in the draft guidelines for implementation of the new capital adequacy framework has modified the Gross Income definition slightly.40 b..

....... 3 c... Which of following documents does not contains Zero risk ? m oc Ans ..... Risk adjusted return on investment www..... it is called as? a...a ......com Facebook Groups . 09994452442 om a........... Investments in shares b. Return on investment b..... admin@jaiibcaiibmocktest.......com.....b ........ Net Profit b....b ..............ja Return on Zero-Risk investment would be ........ Investment in term deposit d. Either Low or High w w Ans .com...... 2 iib Ans ..JAIIB CAIIB STUDY MATERIALS ..... Risk netted return on equity c.com.............. 09994452442 ...... as compared to other oppurtunities available in the market....... kt es a.... 4 b....jaiibcaiibmocktest..com........... Interest Expended t............ ..... w a.. Equal d.c Ans . Low c....jaiibcaiibmocktest.a . When return on business is worked out by netting the risk in business..www. Investment in government bonds From the operational risk management point of view banking business lines have been grouped in how many major heads? ca iib a... High b............ Investment in bonds and debentures c... Operating Profit c....CAIIB DISCUSSION murugan0501@gmail....... 5 d... admin@jaiibcaiibmocktest..com murugan0501@gmail. No Changes made d......

71 to XYZ Bank USD Nostro account........ ignoring exchange margin? Calculate amount of USD XYZ Bank would receive in its USD Nostro account... 177815... i.com.....e...07 c.... Liquidity Risk Ans ... 09994452442 d..... wants to fund his account by purchase of Rs.00 million.... 175438............ Funding Risk c.. 177803...... at the money b................ Assuming that the USD/INR interbank market is at 56.... Risk based system om Ans .2380/2420. w w a. 178571............71 d..... iib a....... against US dollars. in the money d.... Credit Risk b..... 10000000/56... out of money c..com murugan0501@gmail.com Facebook Groups ........com.... m oc XYZ Bank’s foreign correspondent maintaining a Nostro Rupee account with XYZ bank..00 million.com. Hence the XYZ Bank would quote the lower of the two rates......... against US dollars.....b ...... 09994452442 .jaiibcaiibmocktest. www...JAIIB CAIIB STUDY MATERIALS . if the deal is struck.CAIIB DISCUSSION murugan0501@gmail. the foreign bank would pay Rs.com..c . 56.. kt es t..2380.... w When the strike price is below the spot price for the put option....c ......... admin@jaiibcaiibmocktest.... If the deal is struck.c iib Explanation : ....2380 = USD 177815..43 ca Ans . risk.......jaiibcaiibmocktest.....c a....... Embedded Option Risk d... 10.ja The transaction is to sell Rs 10...www.. any of the above Ans .60 b... the option is ... ...... Pre-payment of Loan Amount or Withdrawal of deposit amount will add .... admin@jaiibcaiibmocktest.... what rate would be quoted to the correspondent..

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- CAIIB DISCUSSION

om

A Bank received an LC for USD 2 Mio issued by MT 700 and opened on Jan 25, 2013. The credit calls for
shipment of 200 tonnes of good quality wheat cultivated in Punjab. By default, whether the provisions
of UCP 600 apply to this credit?

kt
es

Ans - b
..........................................................

t.c

a. Yes, UCP 600 applies to this credit
b. No, UCP 600 does not apply
c. Only certain articles of UCP 600 apply to the credit
d. Yes, UCP 600 applies with permission from ICC

TARGET is a payment system in ......

m
oc

a. UK
b. US
c. Europe
d. China
Ans - c
.............................................

ca

iib

a. at the money
b. out of money
c. in the money
d. any of the above

iib

When the strike price is above the spot price for the put option, the option is ......

.ja

Ans - c
.............................................

SBI maintains USD account with Bank of America, New York. When it conducts transactions through this
account, it passes entries in its books at Mumbai through the ...... account

w

w

w

a. Nostro account
b. Vostro account
c. Loro account
d. Mirror account

Ans - a
..........................................................
The quotation of 1 Rs = \$ 0.01667 in Indian Rupee is an example of ________

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a. Direct quotation
b. Indirect quotation
c. Competitive quotation
d. Aggressive quotation

Who is eligible to take Export turnover policy from ECGC?

kt
es

a. Exporters with turnover not exceeding Rs 10 lakhs per year
b. Exporters who contribute not less than Rs. 10 lakhs towards premium
c. Exporters with turnover exceeding Rs 10 lakhs per year
d. Exporters who contribute not more than Rs. 10 lakhs towards premium

t.c

Ans - b
..........................................................

m
oc

Ans - b
..........................................................

which of the following is not a free currency in the foreign exchange market?

iib

a. USD
b. Rupee
c. EUR
d. None of these

ca

Ans - b
.............................................

.ja

a. over night
b. two days
c. 7 days
d. 14 days

iib

Notice money refers to placement of funds for period not exceeding ...

w

w

Ans - d
.............................................

w

Term money refers to placement of funds for period not exceeding ...
a. 01 yr
b. 02 yr
c. 03 yr
d. 05 yr

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Ans - a
.............................................
Treasury Bills are issued by ...

Ans - b
.............................................

kt
es

t.c

a. RBI
b. GOI
c. IMF
d. IRDA

which of the following statement is not correct relating to TOD and TOM

m
oc

a. Rates are generally quoted at discount to the spot rate
b. Rates are less favorable to the buyer of the currency
c. Rates are generally quoted at a premium to the spot rate
d. None of these

iib

Ans - c
.............................................

The interest rate differential is added to the spot rate of

iib

ca

a. Low interest yielding currency
b. High interest yielding currency
c. Both
d. None of these

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Ans A
.............................................

Call money refers to placement of fund ...

w

w

w

a. same day
b. overnight
c. next day
d. Two days

Ans - b
.............................................
Buying of USD (with Rupees) in the market and selling same in forward market or vice versa is called ...

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...... Duration method kt es t....... 3..JAIIB CAIIB STUDY MATERIALS . a....d .....jaiibcaiibmocktest.com.....c ....www..jaiibcaiibmocktest.... b & d only c. Forward contracts d.c a.... admin@jaiibcaiibmocktest. Both 1 and 2 d. Basis Point Value 2.. Call risk c.. What is its McCauley's duration? w a.... a & c only d..05% b..77% c... Its modified duration is 5 years..... Time risk b.com....... None of these Ans ......ja A bond with remaining maturity of 5 years is presently yielding 6%. Only 1 b.com Facebook Groups ....... admin@jaiibcaiibmocktest.. Price risk www. 5. Only 2 c....com............. Options ca iib a..... Swaps b..... All of them iib Ans . 09994452442 om Methods of assessment of Market risk are ... 09994452442 .... Which of the following is the liquidity risk ? a.. 1...com murugan0501@gmail. Which of the following derivatives are the off balance sheet exposure ? m oc a..b..com...... 6..... & d only b... Futures c.........00% w w Ans .CAIIB DISCUSSION murugan0501@gmail......c ..... 5.... .30% d......

. w So.....5.com..... 500000 b.. no provision need be made towards the guaranteed portion... 225000 d..jaiibcaiibmocktest.c . 2 lacs. Rs.com murugan0501@gmail.. admin@jaiibcaiibmocktest.aspx?id=7357#pron".. w Explanation : Outstanding balance = Rs.9...5 Advance covered by Credit Guarantee w Fund Trust For Micro And Small Enterprises (CGTMSE) guarantee.. Rs.. m oc In a loan a/c...com Facebook Groups ...ja The amount outstanding in excess of the guaranteed portion should be provided for as per the extant guidelines on provisioning for non-performing advances...... Minimum loss d. Scenario test c..... Rs... Security available = Rs.. Which test is not applied in Stress Testing ? kt es t.CAIIB DISCUSSION murugan0501@gmail... Simple sensitivity test b. The a/c has been doubtful since 01.. the balance outstanding is Rs...10.. 75000 ca Ans ..2011 and the value of security held is Rs... 5 lacs..org.. 09994452442 d..........com..c ... Visit ...in/scripts/BS_ViewMasCirculardetails..www.03. 275000 c. Funding risk om Ans ....jaiibcaiibmocktest... .......... admin@jaiibcaiibmocktest. Maximum loss Ans .b iib Friends. actually in case the advance covered by CGTMSE guarantee becomes non-performing.2015? iib a.. What will be the total provision to be made for this account as on 31.. Rs. 09994452442 ....c a..... 5 lacs and a cover of 75% is available from CGTMSE.JAIIB CAIIB STUDY MATERIALS . 2 lacs CGTMSE cover of 75% available on the remaining amount = (500000 – 200000) x 75/100 www..com... Please refer "http://rbi..com.

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.... ..jaiibcaiibmocktest..... None of the above w Ans – b .. Total CRAR = (Eligible total capital funds) .. 26.111 Crores d.www..JAIIB CAIIB STUDY MATERIALS .. 09994452442 om RWAs for Credit Risk .com Facebook Groups ...889 Crores b.444 Crores Total RWAs = 15000+6667+4444 = Rs 26. What would be the bank's total RWAs? Ans .. admin@jaiibcaiibmocktest.ja iib ABC Co.... It may be noted that tier I capital of the bank is less than required level. Assets Decreased b... ABC follows the accrual basis of accounting and its accounting year ends on December 31....09 = Rs 6.com.000 Crores Tier II Capital = Rs 1....... admin@jaiibcaiibmocktest.com..com murugan0501@gmail.(Total RWAs) = 1000/18889 = 5.667 Crores RWAs for Operational Risk = Rs 400/. .... Excess of Current Assets over Current Liabilities other than bank borrowings www.com. 09994452442 .Rs 600 Crores...200 Crores Total Capital = Rs 2. No Effect On Owner's Equity d...(Total RWAs) = 2000/18889 = 10..... Liabilities Increased c.. Excess of Current Assets over Current Liabilities b... Working Capital Gap means: a..29%. Tier-I CRAR = (Eligible Tier I capital funds) ...141 Crores ca iib Tier I Capital = Rs 1.com.CAIIB DISCUSSION murugan0501@gmail.... Capital charge for operational risk .09 = Rs 4. 21....jaiibcaiibmocktest..111 Crores kt es t...59%......000 Crores RWAs for Market Risk = Rs 600/.. incurs cleanup expense of 5000 on December 30. The supplier's invoice states that the 5000 is due by January 10 and ABC will pay the invoice on January 9....Rs 15....000 Crores...161 Crores c.....Rs 400 Crores... 18... 26.....c a.000 Crores Maximum tier II capital that can be taken into account for the purpose of CRAR is 100% of tier I capital.. Capital charge for market risk ..c m oc Solution : RWAs for Credit Risk = Rs 15.... What is the effect of the cleanup service on the December balance sheet of ABC? w w a.

60 lacs = 6000000 x 75/100 = 45 lacs So...... admin@jaiibcaiibmocktest. Company’s net working capital is Rs.. Excess of Current Assets over Current Liabilities including working Capital term loan d...... w Which of the following is not one of the 3 main pillars of Basel II ? a.. 09994452442 .....www... Minimum capital requirements www. The current assets would amount to ... And the ECGC had settled only 75 % of the claim amount... Rs.. 1 crore...... 15 lacs on this loan.... 3 crores d.com.......com Facebook Groups . 60 lacs has been settled by ECGC in favour of a bank against default of Rs. w Ans – c ... 20 lacs was realised through the security held..com murugan0501@gmail...... None of these Ans – b .... Market discipline d... Rs. 3.com...... Rs.5 crores iib Balance sheet of a company indicated that its Current Ratio is 1... 75% of Rs....... the bank had suffered loss Rs.. admin@jaiibcaiibmocktest. Rs. w .. 60 Lacs only from ECGC..c A claim of Rs.. total realised value = 4500000 + 2000000 = 6500000 (out of 80 lacs) So. What is the loss suffered by the bank on this loan? m oc Ans – c Explanation : ca iib ECGC had settled Rs.....5:1.. Capital for market risks b.... 20 c.. Rs.. the claim amount from ECGC should be.. lacs lacs lacs lacs kt es a... 15 d. . Supervisory review process c. Subsequently the bank realizes Rs. Rs...CAIIB DISCUSSION murugan0501@gmail..ja a...........jaiibcaiibmocktest.. 60 lacs on default of 80 Lacs (That is 75% of the default amount) But Subsequent to that settlement... 80 lacs... Rs.... 20 lacs with the collaterals available to the loan. So...... 2.JAIIB CAIIB STUDY MATERIALS .. 25 b. Rs......... the settlement amount will be.. Rs... 10 t... 2 crores b...jaiibcaiibmocktest.5 crores c.com...... 09994452442 om c... So........com..

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... settlement of Forex transactions c...... subject to receipt of documents conforming to the terms and condition of the LC...com murugan0501@gmail.com.... w ..... Ans .. iib a.. All of these ca Ans . Swaps.... it is called as ....... Negotiated Dealing System (NDS) b....jaiibcaiibmocktest.. If Fixed interest rates are swapped with floating interest rates.. A Deferred Payment Credit b..c ... b................jaiibcaiibmocktest....d . ICICI Ltd..... Interest om d.d ... at a future date..JAIIB CAIIB STUDY MATERIALS .. Under the Acceptance Credit www. a............... a money market product based on Gilts as collaterals d.ja iib a.com Facebook Groups .......b .. 09994452442 Ans ...........e. Indian Citizens working abroad on assignment with Foreign government.. Officials of Central and State Governments and Public Sector Undertaking deputed abroad on assignments with Foreign Govt Agencies/ organization or posted to their own offices including Indian Diplomatic Missions abroad. m oc Which of the following components not issued by CCIL? kt es t........... Currency d......... The bill of exchange or drafts are drawn with certain Usance period and are payable upon acceptance..... admin@jaiibcaiibmocktest...... government agencies or International MNC c.. 09994452442 ..com....com.. All of these w w Ans ..... d..............com..... Collateralized Borrowing and Lending Obligation (CBLO)......www.. is a person resident outside India who is a citizen of India i.......... Coupon c... admin@jaiibcaiibmocktest... Financial b.... Indian Citizen who proceed abroad for employment or for carrying on any business or vocation or for any other purpose in circumstances indicating indefinite period of stay outside India...CAIIB DISCUSSION murugan0501@gmail.... NRI....c a.....

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