Treasury Division

Question & Answer

1. Q: ALCO stands for

a) Asset liability committee
b) Asset liability co-operation
c) Asset liquidation company
d) None of the above
Ans: a)
2 ALCO monitors following risk
a) Interest Rate Risk
b) Foreign Exchange Risk
c) Liquidity Risk
d) All of the above
Ans: d)

3 Interest Rates of Asset & Liability products are fixed by

a) General Banking Division
b) Asset Liability Committee (ALCO)
c) Treasury Division
d) Board of Directors
Ans: b)

4 Q: Call Money transactions take place between

a) Customer to customer
b) Bank/NBFIs to customer
c) Bank/NBFI to Bank/NBFI
d) Both (a) & (b)
Ans: c)

5 Q: Tenor of Call Money transaction usually for

a) 1 day
b) 2 days
c) 7 days
d) All of the above
Ans: a)

6 CRR stands for

a) Cash Reserve Requirement
b) Cash reserve Ratio
 c) Cash remittance Ratio
d) None of the above
Ans: a)

7 SLR stands for

a) Statutory Liquidity Reserve
b) Standard Liquidity Ratio
c) Statutory Liquidity Ratio
d) None of the above
Ans: c)

8 CRR to be maintained by Banks

a) 6.5 %
b) 6.0 %
c) 5.5 %
d) 5.0 %
Ans: a)

9 SLR to be maintained by Banks

a) 12.50 %
b) 13.00 %
c) 13.50 %
d) 19.50 %
Ans: b)

10 HTM stands for

a) Held Till Maturity
b) Held To Maturity
c) Held Through Maturity
d) Held Towards Maturity
Ans: b)

11 HFT stands for

a) Held For Trading
b) Held For Transfer
c) Held For Transaction
d) Both a) & c)
Ans: a)

12 REPO stands for

a) Repurchase Agreement
b) Repurchase Arrangement
 c) Repurchase Assignment
d) Repurchase Operation
Ans: a)

13 Reverse Repo stands for

a) Repurchase Agreement
b) Reverse Repurchase Agreement
c) Reverse Repurchase Operation
d) Both a) & b)
Ans: b)

14 Convertibility of Currency means

a) The ease with which a country's currency can be converted into gold
b) The ease with which a country's currency can be converted into another currency
c) The ease with which a country's currency can be converted into only US Dollar
d) Both a) & b)
Ans: b)

15 PD Bank means
a) Preliminary Deposit Bank
b) Primary Dealer Bank
c) Personal Deposit Bank
d) Professional Dealer Bank
Ans: b)

16 Exchange Rate means

a) the value of one currency for the purpose of conversion to another
b) the rate for exchanging commodity
c) The rate for exchanging Gold
d) All of the above
Ans: d)

17 For Export Bill purchase we use the following Exchange rate

a) OD Sight
b) TT Clean
c) TT Doc
d) OD Transfer
Ans: a)

18 We use OD Transfer rate for

a) Over Draft
 b) To purchase D D,MT at spot
c) Advance against export bill collection
d) Both b) & c)

Ans: b)

19 For Import Bill settlement we use

a) Bills for Collection Rate
b) BC Selling Rate
c) TT & OD
d) Both a) & b)
Ans: d)

20 LIBOR stands for

a) London Interbank Overnight Rate
b) London Interbank Offer Rate
c) London Interbank Outright Rate
d) Both a) & b)
Ans: b)
21 EURIBOR
a) Emirates Interbank Offer rater
b) Euro interbank offer Rate
c) European Interbank offer rate
d) None of the above
Ans: b)

22. What is a Foreign Exchange derivative?

a) A foreign exchange derivative is a financial derivative whose payoff depends on
the foreign exchange rate(s) of two (or more) currencies.
b) FX derivatives are contracts to buy or sell foreign currencies at a future date.
c) A derivative is a security with a price that is dependent upon or derived from one or
more underlying assets.
d) Both a) & b)
Ans: d)
23. What are the FX derivatives
a) Interest rate SWAP, Call , Spot
b) Spot , Forward, Future
c) Forward, Future, option, SWAP
d) None of the above
Ans: c)
 24. Forward Transaction
a) Settlement of a deal that will take place on day after tomorrow
b) Settlement of a deal that will take place on Tomorrow
c) Settlement of a deal that will take place on 4th working day and/or beyond
d) Both a) & c)
Ans: c)
25 Option means
a) It is a financial contract
b) It is the right to exercise the contract not obligation for the buyer of the contract
c) The buyer pays a premium to the seller for this right
d) All of the above
Ans: d)
26 Hedging means
a) Profit Maximization
b) Risk Minimization
c) Making investment to offset price fluctuation
d) Both b) & C)
Ans: d)

27 Speculation means
a) Special Calculation of Foreign Exchange Rate
b) Taking view on future movement in price of Stocks only
c) Making investment in the hope of gain but with the risk of loss
d) Both b) & c)
Ans: c)

28 NOSTRO Account is
a) A bank’s account with a correspondent bank/branch abroad in the home currency of
that country.
b) A bank’s account with a correspondent bank/branch abroad in foreign currency.
c) A bank’s account with a correspondent bank/branch abroad in account holder
currency
d) A local currency account of a foreign bank/branch
Ans: a)

29 VOSTRO account is
a) A Bank’s account with correspondent bank/branch abroad in foreign currency
b) A local currency account of a bank/branch
c) A bank’s account with a correspondent bank/branch abroad in the home currency of
that country.
d) A bank’s account with a correspondent bank/branch abroad in foreign currency.
Ans: b)
 30 What is REER
a) Rare effective equivalent rate
b) Return on effective exchange rate
c) Real effective exchange rate
d) None of the above
Ans: c)
31 What is NEER
a) Nominal effective Exchange rate
b) Normal efficient exchange rate
c) Neutral effective earning rate
d) Nominal effective earning rate
Ans: a)

32 Which is the International Monetary System now

a) Classical gold standard
b) Bretton wood system
c) Flexible exchange rate
d) All the above
Ans: c)

33 SDR Means
a) Special Drawing rights
b) Savings Drawing rights
c) Secondary Drawings right
d) Security deposit rate
Ans: a)

34 Exchange rate quotation can be

a) Specific
b) Direct
c) Indirect
d) b & c
Ans: d)

35 Direct quotation of Foreign Currency means

a) Exchange rate express in variable unit of foreign currency against per fixed unit of
domestic currency.
b) Exchange rate express in variable unit of domestic currency for a fixed unit of foreign
currency.
c) Exchange rate express in variable unit of foreign currency against variable unit of
domestic currency.
 d) Exchange rate express in variable unit of domestic currency against variable unit of
domestic currency.
Ans: b)

36 Indirect Quotation of Foreign Currency means

a) Exchange rate express in variable unit of foreign currency against per fixed unit of
domestic currency.
b) Exchange rate express in variable unit of domestic currency for a fixed unit of foreign
currency.
c) Exchange rate express in variable unit of foreign currency against variable unit of
domestic currency.
d) Exchange rate express in variable unit of domestic currency against variable unit of
domestic currency.
Ans: a)

37 In BoP Current account includes

a. Export & import
b. Export , Import of Goods and Service, net income from abroad & Net current
transfer.
c. Export , Import & Service
d. None of the above
Ans: b)
38 Capital account in BoP shows
a. Merchandise Import & Foreign Direct investment
b. Merchandise export & Direct investment
c. capital account is the net result of public and private international investments
flowing in and out of a country
d. a & b
Ans: c)
39 Floating exchange rate means
a. Bangladesh Bank will fixed the rate
b. Forex Reserve & Treasury management division will determine the Exchange rate
c. Market demand supply will determine the exchange rate
d. Bank’s Treasury will determine the exchange rate
Ans: c)

40 Floating Exchange regime started in our country from

a. December 1, 2004
b. March 1, 2003
c. May 31, 2003
d. June 01, 2003
Ans: c)
 41 VaR stands for
a) Value against Return
b) Value against Risk
c) Value at Risk
d) All of the above
Ans: c)

42 FX SWAP means
a) Simultaneous purchase and sale of identical amounts of one currency for another
b) Selling one currency against another currency
c) Switching one currency with another currency
d) All of the above

Ans: a)

43 Arbitrage means
a) Foreign currency arbitration with counter party
b) Taking advantage of rate differences in on market with another
c) Making profit from Buy and sell of foreign currency
d) All of the above
Ans: b)

44 Factoring means
a) Financing based on facts
b) Financing against Account Receivables by a third party other than buyer and seller
c) Financing against Account Receivables by the bank
d) All of the above

Ans: b)

45 Treasury functions comprises of

a) Treasury Front Office
b) Treasury Mid Office
c) Treasury Back Office
d) All of the above
Ans: d)

46 Treasury Bills issued by

a) Bangladesh Bank
b) Sonali Bank
c) Bangladesh Government
 d) Foreign Bank
Ans: c)

47 Treasury Bonds issued by

a) Bangladesh Government
b) Bangladesh Bank
c) Finance Ministry
d) All of the above
Ans: a)

48 RSA stands for

a) Rate Sensitive Asset
b) Risk Sensitive Asset
c) Ratio of Sensitive Asset
d) None of the above
Ans: a)

49 Treasury Division manages following risks

a) Credit Risk
b) Interest Rate Risk
c) Liquidity Risk
d) Both b) & c)
Ans: d)

50 Money Market transaction products includes

a) Call Money
b) Repo & Reverse Repo
c) SWAP
d) All of the above
Ans: d)

51 Foreign Exchange transaction Product includes

a) Spot
b) Forward
c) Term Placement
d) All of the above
Ans: d)

52 LCR stands for

a) Leverage Coverage Ratio
b) Liquidity Coverage Ratio
c) Liability Coverage Ratio
 d) None of the above
Ans: b)

53 NSFR stands for

a) Non Stable funding Ratio
b) Net Stable Funding Requirement
c) Net Stable Funding Ratio
d) Net Standard Funding Requirement
Ans: c)

54 Which is/are integral part of the Financial System of a country?

a) Money Market
b) Capital Market
c) Bangladesh Bank
d) All of the above
Ans: d)

55 Monetary Policy Statement issued

a) Monthly
b) Quarterly
c) Half Yearly
d) Yearly
Ans: c)

56 Monetary Policy Statement issued by

a) Finance Minister
b) Bangladesh Bank Governor
c) Planning Commission
d) None of the above
Ans: b)

57 MPS stands for

a) Management Policy Statement
b) Management Planning System
c) Monetary Policy Statement
d) All of the above
Ans: c)

58 FTP stands for in product pricing

a) File Transfer Policy
b) Fund Transfer Protocol
c) Fund Transfer Policy
 d) None of the Above
Ans: c)

59 Currency of Italy
a) Lira
b) EUR
c) USD
d) GBP
Ans: b)

60 ALM stands for

a) Asset Liability Management
b) Assured Liquidity Management
c) Asset Liability Manager
d) Both a) & c)
Ans: a)

61 Components of SLR
a) Govt Securities
b) Cash in Vaults
c) Sonali Bank Balance
d) All of the above
Ans: d)

62 BOP stands for

a) Back-office Operation
b) Balance of Payment
c) Business Operation
d) Both b) & c)
Ans: b)

63 CDR stands for

a) Consumer Deposit Ratio
b) Credit Deposit Ratio
c) Corporate Deposit Ratio
d) All of the above
Ans: b)

64 which one is Core risk management identify by Bangladesh Bank

a) Liquidity Risk management
b) Credit risk management
 c) Asset liability Management
d) Both b) & c)
Ans: d)
65 Interest rate risk and foreign exchange risk is part of
a) Credit risk
b) Liquidity risk
c) Market risk
d) None of the above
Ans: c)

67. Quantitative easing

a) Monetary policy to stimulate the economy when standard monetary policy has become
ineffective.
b) Policy to achieved standard monetary policy
c) Policy to find out quantitative disequilibrium in the economy
d) Both b)& c)
Ans : a)

68. What is hot money?

a) Money that is moved by its owner quickly from one form of investment to another, as to take
advantage of changing international exchange rates or gain high .
b) Money that more rate sensitive
c) Money that are less rate sensitive
d) Both a) & b)
Ans: d)

69. What is board money?

a) Money supply that includes physical money, demand deposits with commercial bank & FIs
deposit with central bank.
b) Money supply that includes physical money, demand deposits with commercial bank , FIs
deposit with central bank and time deposits with deposit money banks
c) Money supply that includes physical money, demand deposits with commercial bank, FIs deposit
with central bank, time deposit with deposit money banks and overnight repo.
d) None of the above.
Ans: b)

70. What is narrow money?

a) Money supply that includes physical money, demand deposits with commercial bank & FIs
deposit with central bank.
b) Money supply that includes physical money, demand deposits with commercial bank , FIs
deposit with central bank and time deposits with deposit money banks
 c) Money supply that includes physical money, demand deposits with commercial bank, FIs deposit
with central bank, time deposit with deposit money banks and overnight repo.
d) None of the above.
Ans: a)

Essay type Question

a) Wage earner remittance and its impact on socio economy of

Bangladesh.