Notes

BFS L0 LATEST DUMPS
1. Which of the following is NOT a settlement Method for Bank Loans

a. Securities Repository
b. Sub-Participation
c. Assignment
d. Participation
e. Preclosure
2. Tax and insurance Premiums Collected as part of Loan repayment are handled through which
of the following type of account?
a. DMAT account
b. Mutual fund account
c. Escrow account
d. Fixed despoait
3. What is the difference between Banker’s acceptance and sight draft

a. Bank can raise funds by selling the acceptance
b. Sight drafts are negotiable instruments
c. Banker’s acceptance reduces bank’s leading capacity
d. None of the listed Options
e. Banker’s acceptance demands immediate payment
4. Red herring prospectus is issued during _______________

a. When a divided is declared
b. Poat-Acquisition
c. During Securitization
d. During a IPO
e. A merger
5. Which of the following is NOT a banking service?

a. Retail Banking
b. Private Banking
c. Stock market regulation
d. Corporate Banking
e. Consumer Lending
6. Who among the following offers private banking services?

a. Bank of New-York Melon
b. Bank One
c. All of the listed options
d. UBS
e. Credit Suisse
7. Ram deposits $100 in XYZ Bank. Puja takes a loan of $ 100 from XYZ Bank. Which of the
following is most likely to happen?
a. Bank is charging 3% interest to Puja and paying 5% interest to Ram
b. Bank giving 3% interest to Ram and Take 5% interest from Puja
c. ………………….
d. ……………………
e. ……………………
8. Which of the following represents the correct hierarchy of corporate rating (highest to
lowest)
9. Bank ABC interest rate on deposits is 7.30% and its interest rate on loans is 9.25%
dur………………. Find the spread for Bank ABC?
a. 0.
b. 0.
c. N
d. 0.
9.25 – 7.30 = 1.95 or 0.0195
10. If a bank gets a deposit of $5000, assuming reserve requirement(CRR) of 10%, and it
Circulate through 2 more banks, leading to which of the following money multiper effect?
a. None
b. It crea……………………..
c. It crea……………………..
d. It crea……………………..
e. It crea……………………...
Solution:
CRR (Cash Reserve Ratio).
Deposit 10% Reserve Loaned Out

1 5000 500 4500
2 4500 450 4050
3 4050 405 3645
An initial deposit of $5000 has created a reserve of $1355, and loan of $12195.
11. What does a CALL option give the buyer?

a. The right, but not the obligation, to sell
b. The Obligation to sell
c. The right and obligation to buy
d. The obligation to buy
e. The right, but not the obligation, to buy
Put Options - The right, but not the obligation, to sell

12. What is the purpose of rebalancing
a. To keep investments in line with original investment strategy
b. To Maximize the portfolio return by effectively timing the market
d. Reallocation of assets classes to gain competitive advantage
13. Which two risks of a financial institution may bring gains as well as losses?
a. Credit risk and interest rate risk
b. Credit risk and foreign exchange risk
c. Liquidity risk and credit risk
d. None of the listed options
e. Interest rate risk and foreign exchange risk
14. Institution specializing transactions of mortgage loans for US banks are

a. Gennie Mae and indymac
b. Gennie Mae & Fannie Mae
c. …………………………
d. …………………………
Fannie Mae and Ginnie Mae are examples of institutions specializing in securitisation
transactions of mortgage loans for US banks.
Freddie Mac, Ginnie Maes & Fannie Mae - Federal National Mortgage Association (FNMA
or Fannie Mae), Government National Mortgage Association (GNMA or Ginnie Mae) and Federal
Home Loan Mortgage Corporation (FHLMC or Freddie Mac) are all "secondary market lenders".
15. A proprietary system of ATM’s is a network that comes into being when
custom………..……. institutions have success to transaction services at ATMs owned or
operated b……………… State True or False
a. True
b. Flalse
16. Assuming a 4% annual inflation rate, in how many years will the purchasing power of $1,000
be cut in half?
a. 18 Years or option which is near to 18 like 17.65.
b. 16 Years
c. 20 Years
d. 12 Years
e. 24 Years
17. The term “Settlement cycle” refers to the which of the following options?
a. time period between the date on which the trade is executed and the date when
the trade is settled
b. time period between the date on which an investor first makes the decision to enter
a trade and the date when the trade is settled.
c. Time period between the date on which the trade is cleared and the date when the
trade is settled.
d. None of the listed option are correct
18. When is a bank failure is is more likely to occur?

a. Capital adequacy ratio is increased
b. Cash Reserve ration is increased
c. Bank increases its equity capital
d. Capital adequacy ratio is reduced
e. Bank holds more short-term riskless securities
19. GDR stand for which of the following option?

a. Gold Deposit Report
b. Global Depository Receivables
c. Global Deposit Report
d. Global Depositary Receipt
e. Global Derivatives Report
20. If the entry load is 2% and the NAV is Rs 10, then how much the investor will have to pay
for 100 units?
a. Rs. 1020
b. Rs 1500
c. Rs. 1200
d. Rs. 800
NAV – Net Asset Value

(10+(2/100*10))*100 =1020
21. After a buyer and a seller enter into a trade agreement, who initiates the issues of LC?
a. None of the listed Options
b. Buyer’s bank
c. Seller
d. Advising bank
e. Seller’s bank
22. If a financial instrument has a 50% chance of paying 20% and a 50% chance of paying 60%
percent. What would be the expected return?
a. 0.4
b. 0.2
c. 0.5
d. 0.8
= (50/100)*(20/100) + (50/100)*(60/100) = 0.4
23. Does a pure play investment bank accept deposits?

a. No
b. Only during IPO
c. Yes
d. Yes , if it is below
e. None of the listed Option
24. Which of the following is a corporate action?

a. Declaring Dividend
b. All of the listed options
c. Rights issue
d. M & A
e. Stock Split
25. In a typical credit card transaction processing cycle, which of the following is
I: The issuer and acquirer route authorization through the Association
II: Issuer transfers funds to the Acquirer
a. I only
b. Both I and II
c. II only
Answer: I & II
26. Choose the correct order of occurrence of the following activities

a. Trade execution, Trade matching, Trade clearance, Trade confirmation, Trade
Settlement
b. Trade execution, Trade matching, Trade confirmation, Trade clearance, Trade
Settlement
c. Trade matching, Trade execution, Trade confirmation, Trade clearance, Trade
Settlement
d. Trade execution, Trade confirmation, Trade matching, Trade clearance, Trade
Settlement
27. From the given options the service(s) that can be categorized under A………………..
I: Corporate Action processing
II: income Processing
a. …………………………………
b. …………………………………
c. …………………………………
d. …………………………………
28. There are 5 participants A, B, C, D, E in a 25M USD syndicated loan and A is the lead m has
agreed to pay 0.4% ($1,00,000) participant fee. How much each participant will share in
participant fee?
a. $1,00,000 will be received every time money is withdrawn
b. $1,00,000 will be received every month
c. $1,00,000 will be received affront
d. $1,00,000 will be charged towards undrawn portion
e. None of the listed Options
29. Which of the following are NOT the benefits of using credit derivatives?
a. Increasing the credit limit of a corporate
b. Credit derivatives can be used both to diversity their credit risk exposures and free
up capital from regulatory constraints
c. Credit derivatives can be used to create positions that can otherwise not established
in the case market
d. Credit derivatives can be used either to take on more risk or to avoid (hedge) it
30. The counterparty in a futures contracts trade is

a. The Exchange
b. Banks
c. The buyer and Seller
d. The brokers who………………………
e. Government
31. . ………………………
32. . ………………………
33. . ………………………
34. . ………………………
35. . ………………………
36. . ………………………
37. . ………………………
38. . ………………………
39. . ………………………
40. . ………………………
41. What is OTC?

a. Over The Counter
b. .………………………
c. ……………………….
d. ……………………….
e. ……………………….
42. All the following statement concerning U.S Governmernt securities are Correct EXCEPT
a. Treasury notes have maturity dates up to 10 years
b. Treasury bonds have maturity dates up to 30 years
c. Treasury bills have a greater interest rate risk than either Treasury bill
d. Treasury bills have their interest paid in lump sum at maturity.
43. Interest rate spread is equal to?

a. Capital Rate – Base Rate
b. Base Rate – Current Rate
c. Current Rate
d. Current Rate – Base Rate
e. None of Listed Options
44. Universal banks provide commercial banking as well as investment bank services under one
head . State True or False
a. True
b. False
45. Dividend declaration is an example of

a. Corporate Action
b. . ………………………
c. . ………………………
d. . ………………………
46. Identity the services offered by Retail Banks.

a. Sa……………………….
b. All………………………
c. Deb……………………..
d. Pe……………………….
47. VISA involved in which of the following?

I: Provide the interchange systems to transfer data and funds between members
II: Set credit limits
III: Issue credit cards
a. I Only
b. II only
c. I & II
d. I, II & III
48. Which are true in a “BASIC or No Frill Checking” Account?

I: Limit the number of check written
II: Interest paid
III: Limit the number of withdrawals made
a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
49. On a trading day at the NYSE, a broker undertakes the following trades:
Buy 120 DELL shares for $ 10.00 each
Sell 70 DELL shares for $ 10.50 each
Buy 200 CISCO shares for $ 20.00 each
Sell 50 CISCO shares for $ 20.50 each
Given that a net settlement system is being used. Find out the net position of the broker
a. Dell 70 Shares to give out, Cisco 90 shares to receive, $3,000 to pay out to the
exchange
b. Dell 20 Shares to pay out, Cisco 150 shares to receive , $3,780 to pay out to the
exchange
c. Dell 20 Shares to receive, Cisco 150 shares to receive , $3,130 to pay out to the
exchange
e. Dell 150 shares to receive, Cisco 20 shares to receive, $3130 to receive from the
exchange
Solution:
Sock Buy/Sell Quantity Price Amount

DELL Buy 120 $10.00 (1200)
DELL Sell 70 $10.50 735
CISCO Buy 200 $20.00 (4000)
DELL Sell 20 $11.00 220
CISCO Sell 50 $20.50 1025
DELL Sell 10 $9.00 90
Total (3130)
Net position for DELL: +120 – 70-20-10 = 20

Net position for CISCO: +200 – 50 = 150
So exchange will need to deliver 20 DELL & 150 CISCO shares to the broker.
This was what exchange owes to broker.
So the broker has to pay $3130 only and he gets 20 DELL & 70 CISCO shares from the
exchange.
50. Which of the following are involved in the regulation of capital markets in USA?
a. SEC
b. FSA
c. Senate
d. Federal Reserve
51. In syndicate loan, borrowers will be charged even if they don’t utilize the committed
fu………………………
a. True
b. False
52. Inflation represents which of the following option?

a. Ver………………………
b. Increase in price………………………
c. Eco………………………
d. Curr………………………
e. Dec………………………
53. Loan Servicing starts after underwriting state True or False

a. True
b. False
54. All of the following investments are examples of “debt” investments Except
a. Cash Value
b. Gold
c. Certificate of………………………
d. Company Bond
e. Fixed Annuity
55. Which of the following is the most risky asset?

a. Shares of a Bi…………………
b. Investment in N………………
c. Triple A rated b………………
d. Investment in R………………
e. Treasury bills
56. What is a credit union?
a. Operated for the purpose of promoting thrift
b. Providing other financial services to its members
c. Providing credit at reasonable rate
d. A cooperative financial institution that is owned and controlled b
e. All of the listed Options
57. Coming together of BNY and Mellon is an example of __________________

a. Brokerage
b. Takeover
c. Acquisition
d. Merger
e. All of the listed options
58. CIP in the context of anti money laundering

a. Requiring businesses, which were only to report cash transactions involving more
than $1,000,000 to the IRS to file
b. Stands for Suspicious activity reports
c. Stands for customer identification program
d. N
e. eeds to be filled by Securities brokers and dealers as well as commodity merchants
f. All of the listed Options
59. Which among the following is a key feature of letter of credit?

a. All of the listed options
b. Opportunity to receive payment in advance of the due date
c. Basis for devising proper currency hedging strategy and opportunity to receive
payment in advance of the due date
d. Distributes risk between buyer and seller
e. Basis for devising proper currency hedging strategy
60. Find out the one which does NOT come under the retail banking Service
a. Personal Loan
b. Transfer Fund
c. Credit Services
d. Electronic Transfer
61. How would you categorize account activity alerts in mobile banking?
a. Account information
b. Transactions
c. Investment
d. Support
62. Pooling and repackaging of cash-flow-producing financial assets into securities, which are
then sold to investors is called ____________
a. Leveraging
b. Securitization
c. Initial Public Offer
d. Short Selling
e. None of the listed options
63. An investor indulging in short selling on a share expects the share price to decrease. State
True or False
a. True
b. False
64. GE shares are currently selling for $15.00 each. You bought 200 shares one year ago at $12
and received dividend payments of $2 per share. What was your total capital gain this year?
a. 600
b. 400
c. 1000
e. 200
Solution:
(200*15) + (200*2) – (200*12) = 1000
65. Securities with an original maturity of lesser than 1-year are traded on money markets. State
True or False
a. True
b. False
66. Pick the odd one out

a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
67. _____________ is the legal and professional proceeding in which a lender, cbtains a court
orders …………..….a borrower’s equitable right of redemption.
a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
68. Bank a based in US provides safe keeping services for securities to its US clients. It also has
clients in France and Belgium and provides securities safe keeping services to these clients
through banks C & D respectively. Which best describes bank A?
a. Secondary custodian
b. Global Custodian
c. Sub Custodian
e. Main Custodian
69. In Trade Finance, Which of the following factors are considered while choosing made of
financing?
a. Time frame, cost of financing, Buyer trade associates
b. Government Guarantee Program, Seller Preference
c. None of the listed options
d. Exporter’s Fund, Risk Factors, Cost of financing, Time frame
70. Company ABC has a gross profit of $50000. The operating expenses amounts to $10000.
The interest on loans availed amounts to $5000 and the taxes to be paid amounts to $5000.
Calculate the EPS if there are total of 20000 shares.
a. 2.5
b. 2
c. 1.25
d. 1.5
Solution:
Operating Income = Gross Profit - Operating Expenses
EPS (Earnings Per Share) = (Operating Income – Interest on Loan – Taxes Paid) /
Number of shares
= (50000-10000-5000-5000) / 20000 = 1.5
71. The risk that a given security or asset cannot be traded quickly enough in the
……………..the required profit) is
a. .Liquidity risk ………………………
b. . ………………………
c. . ………………………
d. . ………………………
72. Identify the core risk that a securities lending firm faces
a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
e. . ………………………
73. Netting reduces the number of settlements needed by more than 95% state True or False
a. True
b. False
74. The Components to determine the rate of exchange in a Forward Contract are
a. Cross Currency Rate and forward rate……
b. Current Spot Rate and Forward rate a……
c. Current Spot Rate, amount of currency……
d. Forward rate adjustment and amount ……
75. High-Net worth individuals generally have ____________________.

a. Net worth greater than $500,000
b. Household income greater than $500,000
c. Market capitalization more than $200,000
d. Household income of maximum $50,000……
76. Product development in sales and marketing refers to which of the following option?
a. Developing and differentiating deposits, loans etc
b. Products that are bought using online payment such as e-commence
c. All of the listed Options
d. Identifying products such as SAP, Oracle for the bank
e. Collateral e.g. Cars in case of car loans, houses in case of mortg……
77. Which of the following methods of payment is most risky to the Buyer?
a. Open Account
b. Documentary Collection
c. Letter of Credit
d. Counter trade
e. Cash in advance
Methods of payment is most risky to the Seller – Open Account
78. on a trading day at the NYSE, a broker undertakes the following trades
Buy 100 IBM shares for $11.00 each
Sell 50 IBM shares for $10.50 each
Buy 100 MSFT shares for $20.00 each
Sell 10 MSFT shares for $20.50 each
How much did the broker pay out to the exchange in total in case of (a) gross settlement
(b) Net settlement system?
a. None of the Listed Option
b. (a) $1880 (b)$ 3100
c. (a) $1,780 (b) 0 for IBM, $1795 for MSFT
d. (a) 0 for IBM, $1795 for MSFT (b) $1880
e. (a) $3100 (b) $1880
Solution:

IBM Buy 100 $11.00 (1100)
IBM Sell 50 $10.50 525
MSFT Buy 100 $20.00 (2000)
IBM Sell 20 $11.00 220
MSFT Sell 10 $20.50 205
IBM Sell 30 $9.00 270
Total (1880)
Net position for IBM: +100 – 50-20-30 = 0

Net position for MSFT: +100 – 10 = 90
So broker would not receive any IBM shares from the exchange as he sold all the shares that he
bought during the day. But exchange will need to deliver 90 MSFT shares to the broker.
So the broker has to pay $1880 only and he gets 90 MSFT shares from the exchange
0 for IBM, $1,795 for MSFT,
It is worth understanding that, we have some markets where settlement happens on a gross
basis, meaning no netting is done and all the transactions need to be settled individually. This is
prevalent in Fixed Income markets in the US and the settlement mechanism is known as Real
Time Gross Settlement (RTGS). - (Page No 181 in BFS PDF)
79. How much will be the 1% legal fee on 30M USD

a. 0.03M
b. 30M
c. None of listed Option
d. 3M
e. 0.3M
80. In active approach, asset allocation is more influenced by which of the following option?
a. Marke…………
b. None…………..
c. Value…………..
d. Investo…………
81. The arrangement fee paid by the borrower will be paid to:
a. Facility manager / agent
b. Every participant expect lead manager
c. Will be retained by lead manager
d. Underwriting bank
e. Every participant
82. In a securities lending transaction, if the buyer of securities provides cash as collateral, then
the seller of securities has to provide the buyer with a interest amount for the cash. What is
this interest amount called?
a. Rebate rate
b. Collateral Interest
c. Interest Rate
e. Return Rate
83. Corporate Loans are.
a. Never unsecured
b. Never secured
c. Always secured
d. Always unsecured
e. Secured or unsecured
84. Who is a underwriting Bank?

a. Bank which underwrites a IPO(not sur shd b thz)
b. Bank which commits supply of funds in a syndicated loan
c. Bank which does not insures a loan
d. Bank which underwrites a insurance
e. Bank which insures a loan
85. The amount owed by a company to suppliers in the next one year will be categorized under
__________________
a. Annual liabilities
b. Deferred Liabilities
c. Accrued Liabilities
d. Current Liabilities
86. What is a mutual fund?

a. A pool of funds used to purchase securities on behalf of investors
b. A collective investment vehicle
d. A portfolio of stocks, bonds and other securities
87. The Advising bank is used as a trusted bridge between the ____________ and
_____________ when they do not have an active relationship
a. Reimbursing bank; beneficiary bank
b. Issuing bank; Confirming bank
c. Importer; Exporter
d. Applicant bank; Beneficiary bank (Issuing bank; Beneficiary bank)
e. Beneficiary bank; Reimbursing bank
88. Which of the following debt instrument involves lowest risk?

a. Munis
b. Junk Bonds
c. Corporate bonds
d. Treasury Bills
e. Yarkee Bonds
89. Following are the types of market risks except

a. Currency Risk
b. Commodity Risk
c. Interest Rate Risk
d. Credit Risk
e. Equity Risk
90. When the Central Bank of a country decides to change the interest rates, it is a manifestation
of which of the following?
a. Money Policy
b. Money Making
c. Money Market
d. …motenary policy…………….
e. ……………….
91. In terms of computation, which of the following is the fastest method for calculating VaR?
a. All would take equal time if done using a software
b. Variance-Covariance Matrix
c. Morte carlo Simulation
d. Historical Simulation
e. A combination of Morte Carlo and Historical Simulation
92. ABC co. wants to identity the best way for making salary credits to its huge employee base.
Can you select the best option?
a. Paper Checks
b. Automated Clearing House
c. Cash
d. Contactless Payments
93. In a economy where inflation is 4%, future value of 100 units of money after 2 year would be
which of the following option?
a. Exactly 108
b. None of the listed options
c. Exactly 100
d. Around Rs. 104
e. 108.16
Solution:
n 2
FV = PV*(1 + i) = 100(1+0.04) = 108.16
FV: Future Value at the end of n time periods,

PV: Beginning value OR Present Value
i: Interest rate per unit time period
n: Number of time periods
94. if R is the real rate of interest, N is the norminal rate of interest and I is the rate of inflation,
then:
a. R = N – I
b. R = N * I
c. R = N + I
d. R = N/I
95. FFELP or the Federal Family Education Loan Program can be of which type?
a. Federal Stafford
b. Consolidation loans
c. Federal PLUS
d. Graduate Plus (its not their in FFELP type)
96. What is the settlement standard followed in the US?

a. T+1
b. T+4
c. T+2
d. T+3
Normal T+3 settlement cycle. When confirmation /affirmation completed are -> T+2
97. P&L Statements represent transactions over a period of time while the balance sheet shows
information as on Specific date. State True or False.
a. True
b. False
98. Which of the following is not the example of options?……………………………

a. Put Option
b. Oil Futures
c. Swaption
d. Call Option
e. LEAPS (Long Term Options)
99. What are Yankee bonds also Know as?

a. Junk bonds
b. None of the listed Options
c. Shares
d. Call Options
e. T-Bills
100. The share price of a company may drop considerably from its current levels. In this
scenario, what type of risk are the investors facing?
a. Market Risk
b. Business Risk
c. Credit Risk
d. Company Risk
e. Liquidity Risk
101. From the following options, find what type of risks that a software export company may
face?
a. Operational Risk
b. It can face all the risks
c. Legal Risk
d. Currency Risk
e. Credit Risk
102. The Federal funds rate

a. Is the rate commercial banks use as a benchmark for evaluating their largest
borrowers
b. Is inversely related to the prime rate
c. None of the listed Options
d. Is a primary policy target of the Fed in conducting monetary policy
e. Is the rate the Fed charges on overnight loans to commercial banks
103. A bank has a portfolio of $50 million worth of loans out of which it wants to sell $20
million worth of loan to another financial institution. What is this process called?
a. Held for Sale Loans
b. Trading Loans
c. Accrual Loans
d. Undrawn Loan
e. Committed Loans
104. You purchased a stock for $40. One year later you received $2 as dividend and sold the
share for $48. How much is the return of holding period?
a. 50 percentage
b. 45 percentage
c. 10 percentage
d. 25 percentage
105. Money laundering refers to which of the following option?

b. Extending loans to corporate
c. Short term borrowing & placements
d. Converting the profits from criminal activities into legitimate funds
106. Banks are financial institutions that are licensed to accept deposits and issue loans. State
True or False
a. True
b. False
107. In FOP mode of Settlement, there is no simultaneous exchange of securities and payment
State True or False
a. True
b. False
108. The type of loan in which spread varities over the life of the loan is called ___________.
a. Positive spread loan
b. Fixed rate loan
c. Semi-fixed rate loan
d. Negative spread loan
e. Floating rate loan
109. Which of the following combination holds true?

a. wire transfer, more costly than other payment alternatives
b. commercial letter of credit, Improves applicant’s credit facilities
c. Foreign Checks Not useful for cross border trade
d. Documentary collection, Strict compliance rules apply
e. Standby letter of credit, less costly than documentary collection
110. Which of the following type of loan requires the amount of interest that would be earned
on the amount of interest paid upfront by the borrower?
a. Demand loan
b. True discounted Loan
c. Capitalized loan
d. Amortized loan
e. Discounted loan
111. Which of the following is not a derivative?

a. Bonds
b. Futures
c. Options
d. Swaps
e. Forwards
112. TARP stands for which of the following options?

a. Term Assets Reform Program
b. None of the Listed options
c. Term Assets Relief Program
d. Troubled Assets Relief Program
e. Troubled Assets Reform Program
113. If the Limit = $2000, Margin = 20% and Asset value = $2000, then Drawing Power for
an Open ended loan is equal to
a. 2200
b. 2000
c. 1600
d. 2400
Solution:
Limit (L) – max outstanding allowed

Margin (M) – percentage of limit that can be drawn
Asset value (AV) – value of underlying asset
Drawing Power (DP) - lower of L and (1-M)*AV
DP = (1-0.20)*2000 = 1600
114. …………………..………
a. 20000
b. 17000
c. 18000
d. 15000
115. Customer’s usually interact extensively with the bank’s mid and back offices. State True
or False
a. True
b. False
116. In Normal Distribution 99% confidence interval corresponds to __________

a. 2.33 Sd
b. 1.65 Sd
c. 1.96 sd
d. 3 Sd
e. 1 Sd
117. At the end of an active trading day, a broker sees that he has a net position in 6 securities,
and owes the system some money. How many settlement transactions will take place at the
end of the settlement cycle?
a. 6 any 5 as transfer of securities and 1 as securities-versus-cash
b. Neither the number of securities nor the number of cash tranactions can be
determined
c. 7, 6 as transfers of securities and 1 as transfer of cash
d. 6, all 6 as securities-verus-cash
e. 1 as transfer of cash, but the number of transactions for securities cannot be
determined.
118. A person purchases a share at $50. After 2 years, the price is at $75 and he decides to sell
the share at that price. What is the annualized return that the person has earned?
a. 0.6667
b. 0.3333
c. 0.5
d. 0.2247
119. Which of the following operations cannot be done on a LC (Letter of Credit)?

a. Purchase
b. Discount
c. Acceptance
d. None of the Listed options
120. Which of the following is a treasury management system?

a. TS2
b. Front Arena
c. ………………….
d. ………………….
e. …………………..
121. Which of the following are involved in the retail brokerage business in US?
a. Freddie Mae
b. E-Trade
c. Ginnie Mae
d. Sallie Mae
e. Federal Reserve
122. Which of the following methods eliminate county risk and commercial risk upon
confirmation?
a. Back to back Letter of Credit. Documentary collection
b. Documentary Collection, Letter of Credit
c. Letter of Credit, Back to back Letter of credit
d. Standby Letter of credit, Letter Credit
e. Documentary Collection, Stand by letter of Credit
123. All of the following are valid means for a custody client to communicate trade
instructions to its custodian, EXCEPT
a. SWIFT networks
b. FEDWIRE
c. By Fax
d. By Telephone
124. SPV means

a. Security Purpose vehicle
c. Securitized planning Vehicle
d. Special principal vehicle
e. Special purpose vehicle
125. NPV stands for

a. Net Present Value
b. New Present Value
c. No Present Value
d. Net Past Value
126. SMA offers investors a customized approach to investing. Rather than a generic product.
State True or False
a. True
b. False
127. If total Spread on underwriting is $ 500000 and Manager’s fee is $100000. What is the
amount which will be disturbed in the syndicate?
a. Cannot be determined
b. 600000
c. 400000
d. 100000
e. 500000
128. An investor has multiple investment options yielding various dollar returns at various
points of time, while he is comfortable with a return of X% p.a. Which method should he use
to compare the various investments?
a. External Rate of Return
b. Compound Interest
c. Simple Interest
d. Internal Rate of Return
e. Net present value
129. In case of Auto finance, monthly lease payments are usually lower than monthly loan
payments because of which reason?
a. Customer is paying only for depreciation
b. Customer is paying only for Fees
d. Customer is paying only for Taxes
e. Customer is paying only for Rent Charges
130. In Electronic Check Conversion (ECC). What happens once the check is processed?
a. The customer can present a check to a store cashier
b. The customer signs a receipt authorizing the store to present the check to the
bank electronically and deposit the funds into the bank account
c. Receive Cash immediately
d. All of the Listed options
Missing Question
1. Which of the following represents the correct hierarchy of corporate ratings (highest to
lowest)?
a. AAA, AA+, BBB, D

b. AAA, AA-, D, BBB
c. D,C,B,A
d. D, AA-, B, AAA
e. AAA, AA+, D, AA-
Mutual funds can not invest in
a. Bond
b. Equity
c. Share
d. None
2. There are five participant A, B, C, D, E and A is a manager. Profit is 500000 and operating
charges is 100000. Then how the profit will be distributed among all?
Ans: 20000
3. The initial sale of the security is in the ………market, while subsequent trading in the
security is in the …….. market
a. Spot, futures
b. Debt , Equity
c. Primary , Secondary
d. Money, Capital
4. Among which is Issuer as well as Acquirer

a. Amex
b. T-sys
c. Elavon
d. Front Data Company
KOL-1 7-Aug-I I [I I :00-I 3:30]

Attempt I Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 (Next)
1. Auto loans are given by which of the following entities? Marks: 1

Answer: a. All of the listed Options
b. Banks
C. Dealerships
d. Auto manufacturers’
e. Credit Unions
2. XYZ corporation is a large client of bank and on a average for a period it
maintains $20 million in its bank account However. the bank allows the authorized
representatives off XYZ to utilize funds up to 1 5% over the balance maintained
This is an example of which of the following option? Marks: 1
Answer: a. Committed Loans
b. Undrawn Loan
c. Held for Sale Loans
d Accrual Loan
e. Overdraft
3. Company ABC has a gross profit of $50000. The operating expenses amounts to
$10000. The interest on loans availed amounts to $5000 and the taxes to
be paid amounts to $5000. Calculate the EPS if there are total of 20000 shares.
Marks: 3
Answer: a. 2.5 b.1.25
c.2
d. 1.5
4. What is the difference between Banker’s acceptance and sight draft? Marks: 3
Answer: a. Bankers acceptance reduces bank’s lending capacity
b. Bank can raise funds by selling the acceptance
c. Sight drafts are negotiable instruments
e. Bankers acceptance demands immediate payment.
5. Which of the following is a corporate action? Marks: 3
Answer: a. All of the listed options
b. Rights Issue
c. M&A
d. Declaring Dividend
e. Stock split
6. Checking Account, Deposit Account and Savings account are the Assets of the
Bank State True or False
Marks: 1 Answer: True False
7. BAFT stands for: Marks: 1
Answer a. Bankers Association for Foreign Trade
b. Bankers Acceptance for Foreign transactions
c. Bankers association for Factoring Trade.
d. Bankers Acceptance for Factoring Transactions
e. Bankers Association for Forfaiting & Factoring transaction
8 Inflation represents which of the following option? Marks: 2
Answer: a. Currency crisis
b. Very high change in prices
c. Economic crisis
d. Increase in prices
e. Decrease in prices
9 In a economy where inflation is 4%, future value of 100 units of money after 2
year would be which of the following option? Marks: 2
Answer: a. Around Rs 104
c. Exactly 108
d.108.16 ‘
e. Exactly 100
10. The type of loan in which spread varies over the life of the loan is called Marks:
3
Answer: a. Fixed rate loan
b. Semi-fixed rate loan
c. Positive spread loan
KOL-1 7-Aug-I I [I I :00-I 3:30]

Attempt I Page: (Previous) 1 2 3 4 5 6 7 8 9 10 11 12 13
(Next)
11 Simple interest is calculated on which of the following basis? Marks: 1

Answer: a. Beginning principal only
b Accumulated interest in each period
c. beginning principal + accumulated interest in each period
12 Bank ABC interest rate on deposits is 7.20% and its interest rate on loans is
9.25% during 2009. What is the spread for Bank ABC? Marks: 3
Answer: a. ‘10195
b. 00225
d. 01655
14 Equity Research (Research on stocks and market) is performed by which of the
following option? Marks: 2
Answer: a. Back office of an investment firm
c. Middle office of an investment firm
d. Front office of an investment firm
15 If the Limit = $2000. margin = 20% and Asset Value = $2000. then Drawing Power
for an Open ended loan is equal to? Marks: 3
Answer: a. 2000
b. 2200
c. 1600
e. 2400
16. With continuous compounding at 10 percent for 3 years. the future value of an
initial investment of $2000 is closest to Marks: 3
____________
Answer: a. 2870
b. 2662
c. 3000
d. 2700
17. Which are true in a ‘Basic or No Frill Checking’ Account? Marks: 3
I: Limitthe number of checks written
II: Interest paid
b. II and III
c. I and III
d. I and II
18. When Checks are deposited they are converted into digital files and then images
are transferred to financial intermediaries. What is the process of clearing
and settlement called? Marks: 3
Answer: a. Check Imaging
b. Paper check processing
c. None ofthe listed options
d. Certified check
19. VISA is involved in which of the following? Marks: 2
Ill: Issue credit cards
Answer: a. I only
b. Both I and II
c. II only
d III only
20. Tax and Insurance premiums collected as part of Loan repayment are handled
through which of the following type of account? Marks: 2
Answer: a. Mutual fund account
b. Fixed deposit
c. DMAT account
d. Escrow account
KOL-1 7-Aug-I I [I I :00-I 3:30]

Attempt I Page: (Previous) 1 2 3 4 5 6 7 8 9 10 11 12 13 (Next)
21 Number of stages in loan syndication are _____ Marks: 2

Answer: a. 1
b. 4
c. 3
d. 5
e. 2
22. Choose the correct order of occurrence of following activities: Marks. 3
Answer: a. Trade execution. Trade confirmation, Trade matching. Trade clearance,
-
Trade settlement
b. Trade execution, Trade matching. Trade clearance. Trade confirmation, Trade
settlement
c. Trade execution. Trade matching, Trade confirmation. Trade clearance. Trade
settlement
d. Trade matching. Trade execution. Trade confirmation. Trade clearance, Trade
settlement
23. The counterparty in a futures contracts trade is: Marks: 3
Answer a. The brokers who struck the deal b. Banks c. The Exchange d.
Government e. The buyer and seller
24. P&L Statements represent transactions over a period of time while the
balance sheet show information as of a specific data State True or False
25. What is the difference between residential and commercial mortgage?
Marks: 3
Answer: a. Type of customers
b. Type of property being collateralized
c. Range of loan tenor
d. All of the listed options
26. Which of the following combinations holds true? Marks. 3
Answer: a. Documentary collection: strict compliance rules apply
b. Foreign Checks: Not useful for cross border trade
c. Standby letter of credit: less costly than documentary collection
d. Wire transfer: more costly than other payment alternatives
e. Commercial letter of credit: Improves applicant’s credit facilities
27. Direct investment in stock markets can be a better option over investing
through mutual funds if: Marks: 3
Answer: a. The investor wants to invest for the long term
b. The investor wants better returns than those offered by mutual funds
c. The investor has identified a bullish phase in the stock market
d. The investor has large capital. knowledge and resources for research
28. An investor indulging in short selling on a share expects the share price to
decrease State True or False Marks: 2
Answer True False
29. Hedge Funds are now regulated by: Marks: 3
Answer: a.SEC
b. Industry wide SROs
c. State regulatory agencies
30. What happens when the interest rates rise? Marks: 1
Answer: a. Bond prices decrease
b. Bond prices do not change
c. Interest rates never fall, they always go up
d. Bond prices increase
KOL-1 7-Aug-I I [I I :00-I 3:30]

Attempt I Page: (Previous) 1 2 3 4 5 6 7 8 9 10 11 12
13 (Next)
31. Bank A, based in the US, provides safekeeping services for securities to its US
clients. It also has clients in France and Belgium. and provides securities
safekeeping services to these clients through Banks C and D respectively. Which of
the following terms best describes Bank A? Marks: 2
Answer: a. Secondary Custodian
c. Sub Custodian
d. Global Custodian
e. Main Custodian
32 SMA oners investors a customized approach to investing. Rawer than a generic
product State True or False. Marks: 2
Answer: True False
33 What is the role of a Central Bank in Forex market of a country? Marks: 2 ,
Answer: a. Regulatory role depending on country’s economic policies b. Acts as a trader
for maximum profit making
c. Encouraging trading in all currencies and not be limited to USD only d. Seller of USD
34 What are Yankee bonds also known as? Marks: 3

Answer: a. Shares
b. T-Bills
d. Call Options
e. Junk bonds
35. Which of the following LCs is similar to a Bank Guarantee? Marks: 2
Answer: a. Stand by
b. Negotiable
c. Back to Back
d. Straight
e. Revolving
36. You purchased a stock for $40. One year later you received $2 as dividend and
sold the share for $48. How much is the return of holding period? Marks: 3
Answer: a. 10 percentage
b. 50 percentage
d. 45 percentage
e. 25 percentage
37. Banks operations are divided into which of the following option? Marks: 2
Answer: a. Back Office
c. Middle Office
d. Front office
38. If a bank gets a deposit of $5000. assuming a reserve requirement (CRR) of
10%. and that it circulates through 2 more banks, leading to which of the following
money multiplier effect? Marks: 3
Answer: a. It creates reserve of $1000
b. It creates a Loan of $8550
c. It creates a reserve of $500
e. It creates a Loan of $12195
39 Which of the following Mechanisms is used for financing for auto loans? Marks:
2
Answer: a. Dealer financing
b. Direct Lending
c. Leasing
d. All of the listed Options
40. The purpose of Community development banks (CDBs) is to serve residents and
spur economic development in low to moderate income (LMI) geographical areas
State True or False. Marks: 1
Answer: True False
KOL-1 7-Aug-I I [I I :00-I 3:30]

Attempt I
Page: (Previous) 1 2 3 4 5 6 7 8 9 10 11 12 13 (Next)
41. Which of the following methods eliminate country risk and commercial risk
upon confirmation? Marks: 1
Answer: a. Documentary Collection, Letter of Credit
b Letter of Credit, Back to back Letter of Credit
c. Stand by Letter of Credit, Letter of credit
d. Documentary collection. Stand by letter of credit
e. Back to back Letter of Credit. Documentary collection
42. Which of the following methods of payment is most risky to the Buyer? Marks:
2
Answer: a. Open Account
b. Letter of Credit
c. Documentary Collection
d. Cash in Advance
e. Counter trade
43. Which of the following is a benefit from a Mutual Fund? Marks: 2 ,

Answer: a. Investor is able to diversify risk
b. Investor can get professional management to manage his money
d. Investor can save costs
44. TARP stands for which of the following option? Marks: 1
Answer: a. Term Assets Relief Program
b. Troubled Assets Relief Program
c. Troubled Assets Reform Program
d. Term Assets Reform Program
45. Hedge Funds can use which of the following investment Strategies? Marks: 1
Answer a. Short Bias
c. Short Selling
d. Regulation D
e. Credit Arbitrage
Marks: 3
Answer: a. Interest rate risk and foreign exchange risk
d. Credit risk and foreign exchange risk
e. Credit risk and interest rate risk
47. Which of the following is NOT a core private banking function? Marks: 3
Answer: a. Investment Analysis and Advise
b. Client Management
c. Sales and Marketing
d. Deposit Mobilization
e. Research
48 When is a bank failure is more likely to occur? Marks: 2 ,
Answer: a. Capital adequacy ratio is increased
b. Cash Reserve ratio is increased
49 In account period settlement trades are aggregated for a period of time--- State
True or False Marks: 2
Answer: True False
50 There are 5 participants A, B, C, D, E in a 25M USD syndicated loan and A is the
lead manager. The borrower has agreed to pay 0.4% ($1 ,00,000)
participant fee How much each participants will share in participant fee? Marks: 3
Answer: a. $1 ,00.000 will be received every time money is withdrawn
b. $1 ,00.000 will be charged towards undrawn portion
d. $1 ,00.000 will be received every month
e. $1 ,00.000 will be received affront
KOL-1 7-Aug-I I [I I :00-I 3:30]

Attempt I
51 A Custodian processes Interest proceeds from the fixed income securities
held under its custody. Which division within the custodian company is
responsible for carrying out the process. Marks: 2
Answer: a. Transaction management
b. Income processing
c. Brokerage services
d. Cash Management
e. Fund administration
52 Check 21 Act facilitates Marks: 1
Answer: a. Netting and pooling of checks at day end
b. Check truncation and creation of substitute check
c. Netting and substitution of checks at day end
d. Clearing check by manually processing the check
e. Netting of checks at day end
53 Which of the following represents the correct hierarchy of corporate

ratings (highest to lowest)? Marks: 1
Answer a.D,-,B,A4A ...
b.AAA,AA-,D, BBB8
c. MA, AA+, BBB, D 6
d. D,C,B.A
e.AM,AA÷, D,AA
54 assumes the counter party risk of each member and guarantees

______________
financial settlement. Marks: 3

Answer: a. Depository
b. Custodian
c. clearing house
d. Stock Exchange
55 Which of the following is a Top 10 US Bank? Marks: 1
Answer: Q a. HDFC
b. INC Bank
c. Rabo bank
d. Morgan Stanley
e. Wells Fargo
56 SPV means: Marks: 2
Answer: a. Special Purpose Vehicle
b. Security Purpose Vehicle
c. Special Principal Vehicle
d. Securitized Planning Vehicle
57 The term OTC usually stands for which ofthe following in the context of
financial markets? Marks: 1
Answer: a. Over the cash
b. Overview of trading courses
c. Online trading in commodities
d. Out of the cash
e. Over the counter
58 Company A has higher credit rating than Company B. What does this
means? Marks: 1
Answer: a. Company B is more risky
c. Both are equally risky
d. There is no relation between credit rating and risk
e. Company A is more risky
59 Two major functions of Corporate Finance division of investment banks
are? Marks: 2
Answer: a. Short Selling
b. Technology and M&A’s
c. Risk Management and Underwriting
d. Mergers and acquisitions advisory and Underwriting
e. Security Trading and Underwriting
60 Annuities are: Marks: 3
Answer: a. True discounted Loan
b. A loan that is paid in periodic equated installments with capitalized interest
c. Amortized Loan
d. Discounted loan
e. Capitalized Loan
KOL-1 7-Aug-I I [I I :00-I 3:30]

Attempt I
61 The underwriting agreement states Marks: 3
Answer a Public Offering Price
d Underwriting Spread
e terms and conditions of the offering
62 Due to which of the following reason is Rebalancing performed? Marks: 3
Answer: a change in original asset allocation due to market performance
b All of the listed options
c occurrence of major life events in the investor’s life
d. change in risk profile of the investor
63 An investor has multiple investment options yielding various dollar returns at

various points of time. While he is comfortable with a return of X%. Which
method should he use to compare the various investments? Marks: 3
Answer: a. Net Present Value
b. Internal Rate of Return
c. Simple Interest
d. External Rate of Return
e. Compound Interest
64 The Federal funds rate: Marks: 2
Answer: a. Is the rate the Fed charges on overnight loans to commercial banks b. Is
inversely related to the prime rate
c Is the rate commercial banks use as a benchmark for evaluating their largest borrowers
e. Is a primary policy target of the Fed in conducting monetary policy
65 What is NOT true about Back to Back LC (letter of Credit)? Marks: 3
I: Buyer to open new LC against an already issued LC
II: Seller to use the LC received from his buyer in favor of another
Ill: Buyer to use the LC received from his seller to open his own LC
IV: Seller to receive one more LC against an already issues LC from his buyer
Answer: a. I only
b. I. III and IV
c. III only
d. IV only
e. II only
67. Which of the following is NOT a Settlement Method for Bank Loans? Marks: 3
Answer: a Securities Repository
b. Assignment
c Participation
d Sub-Participation
e Pre closure
68 Which ofthe following operations cannot be done on a LC (Letter of Credit)?
Marks: 2 ,
Answer: a Purchase
b None of the listed Options
c Discount
d. Acceptance
69 What is a collateral? Marks: 2
Answer: a. Obligations to be fulfilled by the borrower
b. A form of loan
d. A bad loan
e. Asset put up as security
70 In a typical credit card transaction processing cycle. which of the following is
applicable? Marks: 3
I: The Issuer and Acquirer route authorization through the Association
Answer: a None of the listed options
b. I only
c. II only
d. Both I and II
KOL-1 7-Aug-I I [I I :00-I 3:30]

Attempt I
71 In a Securities lending transaction, if the buyer of securities provides cash as a
collateral. Then the seller of securities has to provide the buyer with a interest
amount for the cash What is this interest amount called? Marks: 3
Answer: a Interest Rate
b Rebate Rate
c Collateral Interest
d. Return Rate
e None of the listed Options
72 The term ‘settlement cycle’ refers to which of the following option? Marks: 1
Answer: a time period between the date on which an investor first makes the decision to
enter a trade and the date when the trade is settled b None of the listed option are correct
c time period between the date on which the trade is cleared and the date when the trade
is settled
d time period between the date on which the trade is executed and the date when the trade
is settled
73 What is the common advantage of using leasing? Marks: 1
Answer: a. Lower cost for items purchased
b. Using the asset without need for purchase.
c. Less impulse buying
e. Lower chance of overspending
74 Jet Airways and Citibank have tied up to offer this type of credit card What type
of card is it? Marks: 2
Answer: a. Gift Card
b Co Branded card
c Smart Card
d Affinity Card
75 When a Sank goes to the Fed to borrow funds. The interest rate charged by the
Fed is known as: Marks: 2
Answer: a Prime rate
b. Discount rate
c Bond rate d Federal funds rate
76 Interest rate spread is equal to? Marks: 3
Answer a Current rate Base rate
-
b Base rate - Floor

c Cap - Current rate
d. None ofthe listed Options
e Current rate - Floor
77 The share price of a company may drop considerably from its current levels. In
this scenario, what type of risk are the investors facing? Marks: 3
Answer: a. Market Risk
b. Credit Risk
c. Company Risk
d. Business Risk
e Liquidity Risk
78 Which of the following are NOT the benefits of using credit derivatives? Marks 3
-Answer: a Credit derivatives can be used both to diversify their credit risk exposures and
free up capital from regulatory constraints b. Credit derivatives can be used either to
take on more risk or to avoid (hedge) it
c. Increasing the credit limit of a corporate
d Credit derivatives can be used to create positions that can otherwise not easily be
established in the cash market
79 Which of the following is NOT a banking service? Marks: 2
Answer: a. Corporate Banking
b Stock market regulation
c. Private Banking
d. Consumer Lending
e Retail Banking
80 Which of the following are involved in the retail brokerage business in US?
Marks: 2
Answer: a. E-Trade
b. Sallie Mae
c. Ginnie Mae
d. Federal Reserve
e. Freddie Mac
KOL-1 7-Aug-I I [I I :00-I 3:30]

Attempt I
81 represents the creditworthiness of the borrower Marks: 2
__________
Answer: a. LOAN score

b. score
c. FICO score
d. Interest score
82 In Trade Finance, which of the following factors are considered while
choosing mode of financing? Marks: 2
Answer: a. Exporter’s Fund, Risk Factors, Cost of financing. Time frame
b None of the listed options
c Government Guarantee Program. Seller preference
d Time frame, Cost of financing. Buyer’s trade associates
83 How would you categorize account activity alerts in mobile banking?
Marks: 2
Answer: a Transactions
b Support
c Investment
d Account Information
84 Banks are NOT allowed to: Marks: 1

Answer a. Print money
b. Make loans
c. Invest money
d. Take deposits
85 The BASEL 2 framework has 3 main pillars From the options given below.
find the one that is NOT a part of it: Marks: 1
Answer: Q a. Operational Effectiveness
b Minimum Capital Requirements
c. Market Discipline
d. Supervisory Review
86 In Normal Distribution 99% Confidence interval corresponds to Marks:
3
Answer: a. 3 Sd
b. 196 Sd
c. 2.33 Sd
d. 1.65 Sd
e. 1 Sd
87 What does Single Euro Payments Area (SEPA) do? Marks: 1
Answer: a. Applicable to direct debits, credit and debit cards
b. Creates a single payment market
c. Removes differences in intra and cross border payments d. All of the listed
options
88 Participation of less number of banks reduces the risk of lead bank? State
Answer True False
89 Mutual funds: Marks: 2
Answer: a. Are often riskier than investing in individual stocks
b. Give much greater returns than the stock index
c. Require investors to invest very large sums of money, which eliminates small
investors.
d. Carry no risk
e. Are less riskier than individual stocks as the fund managers invest in a
diversified portfolio
90 Which of the following are NOT examples of Payment Methods? Marks: 1
Answer: a. Letter of credit
c. Cash in advance
d. Documentary collection
KOL-1 7-Aug-I I [I I :00-I 3:30]
Attempt I
91 In any task undertaken by a company, the presence of risk implies that Marks
1
Answer: a. The shareholders of the company will lose money
b. The outcome of the tasks undertaken by the company is uncertain
c. The company will not fare better than its competitors
d. The company’s management has not done a good job
e. The standard deviation of the return is zero
92 Trading of a corporation’s stock or other securities (eg bonds or stock options)
by individuals with potential access to non-public information about the company is
called: Marks: 2
Answer: a. Insider Holdings
b. Lock in Period
c Insider Trading
d Hedging
e Initial Public Offer
93 If total spread on underwriting is $ 500000 and Manager’s fee is S 100000. What
is the amount which will be distributed in the syndicate? Marks:3
Answer a. Cannot be determines•....
b. 100000
c. 400000
d. 600000
e. 500000
94 If an investment company has securities and other assets worth $100 million and
has liabilities of $10 million. the investment company’s NAV will be? Marks: 2
Answer a. $110 million
b. $10 million
c. $100 million
d. $90 million
95 is the amount of net income related to each share. Marks: 1
Answer a. EBIT
b. PAT
c. PBT
d. LEPS
96 A process in which money is lent to corporate bodies refers to: Marks: 1
Answer a. Loans provided to individuals
b Loans provided to companies by Government
c. Loans provided by companies to individuals
d. Loans provided to high net worth individuals
e. Loans provided to companies
97 Which of the following is a treasury management system? Marks: 1
Answer a. Pinnacle
b Front Arena
c.TS2
d. Finnacle
e. Flex cube
98 What is Line of credit? Marks: 2
Answer: a. None of the listed Options
b. Irrevocable credit provided by financial institution
c. A formal, legal commitment to extend credit up to some maximum amount over a
stated period of time
d. Similar to credit card
e. Removing credit agreement
99 A person purchases a share at $50 After 2 years, the price is at $75 and he
decides to sell the share at that price. What is the annualized return that the person
has earned?
Marks: 3 Answer: Q a None of the listed options
b. 0.5
c. 06667
d. 03333
e. 02247
100 Dividend declaration is an example of: Marks: 3
Answer: a. Private Banking
b. Investment Banking
c. Merger and acquisition
d. Initial Public Offer
e. Corporate action
KOL-1 7-Aug-I I [I I :00-I 3:30]

Attempt I
101 Which is NOT a type of corporate bond? Marks: 1
Answer: a. Unsecured bonds
b. Sub-ordinated debentures
c. T-BiIIs
d. Secured Bonds
102 An investor is holding 1 00 Microsoft shares that are trading at $27 per
shara He instructs the broker to sell all the 1 00 shares when the share price
reaches 35 or above that. What is this type of order called? Marks: 1
Answer: a. Optional Order
b. Conditional Order
c. None ofthe listed Options
d. Limit Order
e. High price order
103 There are 5 participants A, B, C, D, E in a 25M USD syndicated loan and
A is the lead manager The borrower has agreed to pay 0.4% ($1,00,000)
arrangement fee. How much each participant will share in arrangement fee?
Marks: 3
Answer: a. 20000
b.15000
c. 18000
d. 17000
104 In a typical trade cycle, when does the clearing house take over the two
legs of the trade through notation? Marks: 3
Answer: a. After the confirmation from the broker of the Sell side
b. After the confirmation from the broker of the Buy side
c. After the trades have been confirmed with both the brokers
d. Before the trades are confirmed with both the brokers
105 At the end of the trade cycle. the trades are to determine the obligation of
the trading members to deliver securities/funds as per settlement
schedule. Marks: 2
Answer: a. Offset
b. Grossed
c. Netted
d. Aggregated
106 Based on your understanding of EBPP, which would you identify as a
potential cost-cutting opportunity for a bank? Marks: 1
Answer: a. Outsourcing the Billing Service Provider
b. Give preference to check-based bill payment
c. All ofthe listed options
d. Create bills offline but ensure online payments
107 From the given options identify the service(s) that can be categorized
under Asset Servicing line of business.
Marks: 1 II: Income Processing
Ill: Transfer Agency services
IV: All of the listed options
Answer: a. Ill only
b. I only
c. Both I and II
d .IV
0 e. II only
108 Identify the odd one out: Marks: 1
Answer: a. Treasury Notes
b. Stocks
c. Treasury Bills
d. Bill of Exchange
e. Commercial Papers
109 Which of the following is NOT an example of an option? Marks: 1
Answer: a. Oil Futures
b. Call Option
c. LEAPS (Long Term Options)
d. Swap option
e. Put Option
110 GE shares are currently selling for $15 each. You bought 200 shares one
year ago at $12 and received dividend payments of $2 per share. What was
your total dollar capital gain this year? Marks: 2
Answer: a. 600
b. 1000
d. 400
e. 200
KOL-1 7-Aug-I I [I I :00-I 3:30]

Attempt I
111 of a securities trade involves the transfer of the securities from the
_____________
seller to the buyer. Marks:2

Answer: a. Settlement
b. Netting
c. Trading
d. Clearing
112 In FOP mode of settlement there is no simultaneous exchange of securities
and payments State True or False
113 If R is the real rate of interest. N is the nominal rate of interest and I is the
rate of inflation, then: Marks:2
Answer a R= Nxl
b. R=N+l
c. R = N/I d. R=N-l
114 ABC corporation is a large client of Bank New. Bank New extends a loan
to XYZ Corporation which is a supplier 0fABC. This is an example of:
Marks: 2
Answer: Q & Working Capital Loan
b Asset Securitization Loan
c. Revolving Line of Credit
d. Bill Discounting
e. Dealer I supplier Loan
115 In Electronic Check Conversion (ECC), what happens once the check is
processed? Marks: 3
Answer: a. Receive Cash immediately
bank electronically and depositthe funds into the store’s
account
c. The customer can present a check to a store cashier
d. All ofthe listed options
116 A Central Bank in an economy is also known as: Marks: 1
Answer: a. The Retail Depositors’ Bank
b. The Bankers’ Bank
d. The Banking Boss
e. The Government Bank
117 Open ended loan allow the borrower to borrow additional amount subject
to the maximum amount less then a set value. State True or False Marks: 1
Answer: True False
118 Private Banking Clients have high _________ Marks: 1
_
Answer a Investible Assets

b. Net worth. Investible assets and Income
c. Income
d. Net worth
119 Which of the following risks for the investor is associated with corporate
bonds but NOT U.S. Treasury securities? Marks: 2
Answer: a. Credit Rating Risk
b. Interest Rate Risk
d. Default Risk
e. Reinvestment Risk
120 Which of the following are the list of risks that Cognizant faces at an
organization level? Marks: 1
Answer: a. Cognizant faces all of the above risks
b. Market Risk
c. Operational Risk
d. Credit Risk
e. Currency Risk
KOL-1 7-Aug-I I [I I :00-I 3:30]

Attempt I
Page: (Previous) 12345678910111213
121 On a trading day at an exchange. a broker undertakes the following trades:
Marks: 3
Buy 200 Microsoft shares for S10.00 each
Sell 100 Microsoft shares for S10.00 each
Buy 100 Google shares for $20.00 each
Sell 30 Microsoft shares for $11. 00 each
Sell 50 Google shares for $20.50 each
Sell 40 Microsoft shares for $9.00 each
system (b) net settlement system?
Answer: a. (a) $4000 (b) $1285
b. (a) $1235 (b) $2235
c. (a) $260 for Microsoft $975 for Google (b) $975 for Google & $260 for Microsoft
d. (a) $1235 (b) $4,000
e. None ofthe listed Options
122 On a trading day at the NYSE. a broker undertakes the following trades:
Marks: 2
Buy 120 Dell shares for $10.00 each
Sell 70 Dell shares for $10.50 each
Buy 200 Cisco shares for $20.00 each
Sell 20 Dell shares for $1 1.00 each
Sell 50 Cisco shares for $20.50 each
Sell 1 0 Dell shares for $9.00 each
Given that a net settlement system is being used, find out the net position of the broker at
the end of the day.
Answer: a. Dell: 70 shares to give out: Cisco: 90 shares to receive: $3,000 to pay out to
the exchange
b. Dell: 20 shares to receive: Cisco: 1 50 shares to receive: $31 30 to pay out to the
exchange
c. Dell: 150 shares to receive: Cisco: 20 shares to receive: $3130to receive from the
exchange
e. Dell: 20 shares to pay out: Cisco: 1 50 shares to receive: $3,780 to pay out to the
exchange
123 The process of netting: Marks. 1
.Answer: a. Increases the number of settlements
b. Neither reduces nor increases the number of settlements
c. Increases the transaction costs
d Reduces the number of settlements
Marks: 3
Buy 100 IBM sharesfor$11.00 each
Buy I 00 MSFT shares for $20.00 each
Sell 20 IBM shares for $1 1 .00 each
Sell 1 0 MSFT shares for $20.50 each
How much did the broker pay outto the exchange in total in case of (a) gross settlement
Answer: a. (a) $3100 (b) $1880
b.(a) $1880 (b) $3100
d. (a) 0 for IBM, $1 ,795 for MSFT (b) $1,780
e. (a) $1 .780 (b) 0 for IBM. $1 ,795 for MSFT
125 Which of the following is associated with the purpose of regulating financial
institutions? Marks: 3
Answer: a. To off set the moral hazard incentives provided by deposit insurance and
other guarantees.
b. To serve certain social objectives
c. To prevent failure of any financial institution
e. To provide stability of the money supply
126 If a financial instrument has a 50% chance of paying 20% and a 50% chance of
paying 60% percent, what would be the expected return? Marks: 2
Answer: a. 0.2
b. 0.8
c.0.4
d. 0.5
127 Warrants are the combination of which of these instruments? Marks: 3
Answer: a. Put Options and Swaps
b. Cash and Call Options
c. Equities and Call Options
d. Equities and Futures
e. Call and Put Options
128 is the legal and professional proceeding in which a lender, obtains a court
ordered termination of a borrower’s equitable right of redemption. Marks: 3
Answer: a. Credit-Freeze
b. Foreclosure
c. Securitization
d. Sub-Prime
129 The components to determine the rate of exchange in a Forward Contract are:
Marks: 2 ,
Answer a. Current Spot Rate and Forward rate adjustment
b. Forward rate adjustment and amount of currency bought 7 sold
c. Current Spot Rate, amount of currency bought / sold
d. Cross Currency Rate and forward rate adjustment
130 Money laundering refers to which of the following option? Marks. 1
Answer: a Extending loans to corporate
.
b. Converting the profits from criminal activities into legitimate funds

KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 (Next)
I Credit derivatives can be used to the regulatory capital requirements and
____________ ____________
credit risk.
Answer: Q a. increase, transfer
Marks: 2 , b avoid, manage
0 c. improve. eliminate
0 d reduce. diversify
0 e. estimate, assess
3 Jet Airways and Citibank have tied up to offer this type of credit card. What type of
card is it? 11 12
Answer: ® a. Co Branded card° 2
Marks:2 Q b. Gift Card t.
8
0 c. Smart Card 6
0 d. Affinity Card
4 Which of the following are NOT the benefits of using credit derivatives?
Answer 0 a. Credit derivatives can be used both to diversify their credit risk exposures
and free up capital from regulatory constraints Marks: 3 0 b Increasing the credit limit of
a corporate
0 c. Credit derivatives can be used to create positions that can otherwise not easily be
0 d. Credit derivatives can be used either to take on more risk or to avoid (hedge) it
5 A Custodian has different types of assets under its custody and those assets earn returns
to the original investor in various forms. What are the types of returns that can be taxed?
Marks: 3 I: Dividend
II: Interest
Ill: Capital Gain
Answer: & II only
0 b. I only
0 c. Both I and II
0 d. Ill only
Qe.IV
6 Which of the following are benefit(s) of EMV?
Marks: 1 I: Fraud Prevention
II: Exception transactions
Answer: Q & II only
0 b. None of the listed options
0 c. I only
0 d. Both I and II
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
12 Operational Risk is defined as:

Answer: Q & he possibility of loss as a result of default, such as when a customer defaults
-
on a loan
Marks. 1 , b the possibility of loss over a given period of time related to uncertain
movements in market factors
0 c. the possibility of loss when a contract cannot be enforced
0 d. the risk of loss resufting from errors in processes, people and systems
0 e the possibility that a firm will be unable to generate funds to meet contractual
obligations as they fall dueS
0:14:51
I 4 Which one of the following is NOT offered by Investment Banking division of a

bank?
Answer: a. Valuation of firms
Marks: 2 € b. Lending services
0 c. Underwriting and distribution of equity issues
0 d. None of the listed Options
0 e. Mergers and acquisitions
I 5 Which of the following is an example of Pre Srupment Loan?
Answer: 0 a. Working Capital for purchase of raw material
Marks: 1 b. None of the listed options
0 c. Bills receivable and payable
0 d. Bill discounting
16 In case of auto finance. monthly lease payments are usually lower than monthly loan
payments because of which reason? 12
Answer: , a. All of the listed Options 10 . 2
Marks: 3 0 b. Customer is Paying only for depreciation9 . . . 3
“.
0 c. Customer is Paying only for Rent Charges8. 4

0 d. Customer is Paying only for Taxes
0 e. Customer is Paying only for Fees
I 7 Generally, if Bond X had a lower rating than Bond Y, the yield on Bond X would be:
Answer C a. Lower than that of Bond Y
Marks: 1 b. same as that of Bond Y
C c. Volatile
0 d. Higher than that of Bond Y
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
23 Which of the following is NOT a player in a typical trade cycle?

Answer 0 a. Custodian bank 12
Marks: 3 0 b Clearing bank ?. . . • . . .
0 c Regulator 8 • 4
0 d Clearing member 7 6
0 e Trading member
24 Which of the following is NOT Bank’s primary use for deposits from depositors?
Answer: Q a Withdrawals
Marks: 1 b Loans
0 c Employee salaries
0 d Investments
0 e. None of the listed Options
25 All the following statements concerning US Government securities are correct
EXCEPT:
Answer 0 a. Treasury notes have maturity dates up to I 0 years.
Marks: 2 0 b. Treasury bills have a greater interest rate risk than either Treasury bonds or
Treasury notes.
c Treasury bonds have maturity dates up to 30 years
0 d. Treasury bills have their interest paid in a lump sum at maturifr
26 What is a mutual fund?
Answer: 0 a A pool of funds used to purchase securities on behalf of investors
Marks: 3 0 b All of the listed options
o c. A portfolio of stocks. bonds and other securities
o d A collective investment vehicle
27 Identify the core risk that a Securities lending firm faces:
Answer 0 a. Compliance risk
Marks: 1 0 b Credit risk
o c. Strategic risk
o t Transaction risk
o e. Reputation risk
28 Trading occurs between clearing and settlement State True or False
Marks 2 Answer QTrue 0 False
30 Private Banking includes which of the following options?

Answer ® & All of the listed options
Marks: 2 0 b money management
0 c. Investment services
0 ci personalized banking services
o e financial advice
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
31 Which of the following is NOT true about LC (Letter of Credit)?
I: Shifts credit risk from the Importer to the Importer’s Bank (Issuing Bank)
Marks: 3 II: Deals with products and not with documents
Ill: Are typically revocable unless specified otherwise
IV: Advising bank has the liability for the payment of the LC.
Answer: Q a. I only
QbHVonIy
0 c II. Ill and IV
0 d II only
0 a III only
32 A settlement can be considered as final only if:
Answer: rj & The settlement is irrevocable
Marks: 2 ® b The transfer offunds and securities take place simultaneously
0 c The settlement is unconditional
0 d The settlement is unconditional as well as irrevocable
0:14:24
11 12
10 2
9• 3
. . . .4..
36 Which of the following are not institutional investors?

Answer: cj & High Net worth Individuals
Marks: 1 b Mutual Funds
0 c. Banks
0 d Pension Funds
0 e Hedge Funds
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
43 Which of the following services are provided by a global custodian?

Answer: ® & All of the listed options
Marks: 3 0 b. Fund administration 01412
0 c. Tax reclaims processing 12
0 d. Settlement services 2
0 e Foreign exchange transactions a. . .••.

institutions?
Answer: , a. To serve certain social objectives
Marks: 3 0 b. To provide stability of the money supply
0 c. None of the listed options
0 d. To prevent failure of any financial institution
0 e. To offset the moral hazard incentives provided by deposit insurance and other
guarantees
49 The risk that a given security or asset cannot be traded quickly enough in the market
to prevent a loss (or make the required profit) is:
Answer: 0 a. Liquidity Risk
Marks: 3 0 b. Business Risk
0 c. Credit Risk
0 d. Financial Risk
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
54 Mutual Funds cannot

Answer: a. Invest in equity
Marks: 2 0 b. Short Sell
C c. Invest in Money Market Instruments
0 d. Can follow any of the investment practices
0 e. Invest in Bonds
55 A card holder swipes his card for USD 100. How much does the merchant
Marks: 3 I: deduct from the card holder?
II: receive from the Acquirer?
Assume Merchant Discount at 2 %
Answer: Q a. I: USD 100 ll:USD2
0 b. I: USD 98 II: USD 98
0 c. I: USD 100 II: USD 98
0 d. I: USD 100 II: USD 100
57 What happens when the Fed manipulates the federal funds interest rate?
Answer 0 a. None of the listed Options
Marks: 2 , b. Affects withdrawals
0 c. Affects lending
Qd Affects deposits
0 e. Affects credit card balances
58 In defined benefit plans, the benefit is expressed as an and in defined contribution
__________
plans. the benefit is expressed as an

____________
Answer: Q a. Annuity: annuity

Marks: 2 b. Account balance: annuity
0 c. Account balance: account balance
0 d. Annuity: account balance
59 Which of the following is usually NOT a participant in Stock Markets?
Answer: 0 a. FlIs
Marks: 2 , b. Mutual Funds
0 c. Individual investors
0 d. Central banks
60 The trade terms “1 0/3, net 1 5” indicate that:
Answer: a. 30% discount is offered if payment is made before 15 of the month
.
Marks. 3 0 b. 3% discount is offered if payment is made within 10 days

0 c. 10% discount is offered if payment is made between 3 and 15 days
0 d. 10% discount is offered if payment is made within 3 days. the payment should
however be made in 15 days
C e. 3% discount is offered if payment is made within 1 5 days
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
62 Client Management is a function of:

Answer: Q & Back Office
Marks: 1 ® b Front Office
0 c. Anyone who knows the client Qd.MidOffice
0:13:53
63 Which are the basic parties involved in any transaction using LC (Letter of Credit)?
Answer: Q a None of the listed otioq 1’ 12
Marks: 1 b Beneficiary’s Bank 2•• ::
0 c Seller, Buyer 8 4
•
0 d Issuing Bank 7 6
65 CIP in the context of anti money laundering:

Answer: 0 All of the listed options
Marks: 2 ® b. Stands for customer identification program
0 c Stands for Suspicious activity reports
0 d. Needs to be filed by Securities brokers and dealers as well as commodity merchants
0 e Requiring businesses. which were only to report cash transactions involving more
than $1 .000.000 to the IRS to file
66 When a firm needs short-term funds for a specific purpose. the bank loan will likely
be a
Answer: Q & Term Loan
Marks: 1 b Line of credit
0 c. Revolving credit agreement
0 d Compensating balance arrangement
0 a Transaction loan
67 Suppose that a portfolio manager has a daily VaR equal to $1 million at 99% What
does this imply?
Answer: Q a Portfolio looses 1% everyday
Marks: 1 c b Under normal circumstances. on 1 day out of 100 portfolio can loose S 1
million
0 c. On 1 day out of 100 portfolio can loose S 1 million
0 d Portfolio size is S 100 million
0 e Under abnormal circumstances, on 1 day out of 100 portfolio can
loose S 1 million
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
72 An investment that earns compound interest is the same as one that earns simple
interest at the effective yield State True or False

Buy 120 Dell sharesfor$1ODO each
Marks: 2 Sell 70 Dell shares for $1050 each
Buy 200 Cisco shares for S2OOO each
Sell 20 Dell shares for $1 1 .00 each
Sell 1 0 Dell shares for $900 each
Given that a net settlement system i s being used. find out the net position of the broker at
the end of the day
Answer: Q & Dell: 150 sharesto receive: Cisco: 20 sharesto receive: $3130to
receivefromthe exchange
0 b Dell: 20 shares to receive: Cisco: 1 50 shares to receive: $31 30 to pay out to the
exchange
0 c. Dell: 70 shares to give out: Cisco: 90 shares to receive: $3.000 to pay out to the
exchange
0 d None of the listed Options
0 a Dell: 20 shares to pay out: Cisco: I 50 shares to receive: $3,780 to pay out to the
exchange
75 Share price is determined by which of the following option?
Answer: a Market sentiment
Marks: 1 b. Performance of the company
0 c All of the listed options
0 d. Performance of the relevant industry
0 e State of the country’s economy
77 A person purchases a share at $12.5. After 4 years, the price is at $57.5 and he decides
to sell the share at that price. What is the absolute return that the person has earned?
Marks: 2 Answer: Q & 0.36
0 b None of the listed options
Øc.3.6
0 d 0.7826
0 e. 0.4645
78 The Advising bank is used as a trusted bridge between the and when they do not have
an active relationship.
Answer 0 a. Reimbursing bank: Beneficiary bank
Marks: 2 b. Beneficiary bank: Reimbursing bank 0•13•39
0 c. Applicant bank: Beneficiary bank
0 d. Importer: Exporter 1 12
0 e. Issuing bank: Confirming bank 10 2•
9 .. .:
8
79 Which one of the following is NOT a measurement technique for Credit Risk?
Answer: a. LGD
Marks: 1 b. EAD
0 c. Probability of Defauft
0 d. FIRB
0 e. Basic Indicator Approach
80 Company ABC has a gross profitof$50000. The operating expenses amounts to
$10000. The interest on loans availed amounts to $5000 and the taxes to be paid amounts
to $5000. Calculate the EPS if there are total of20000 shares.
Marks: 3 Answer: Q a. 1.25
0 b. 1.5
Qc.2
Qd.2.5
KOL-24-Aug-1 I [1 5:OOel 7:30]
Attempt I
82 Which one of the following portfolio is more risky?

Answer: Q & 60% Equity. 40% Debt
Marks: 2 ® b 80% Equity, 20% Debt
0 c 75% Equity. 25% Debt
0 d 400/b Equity, 60% Debt
83 Unit capital of a mutual fund scheme is Rs 20 million: The market value of its
investments is Rs. 55 million. The number of units is 1 million What is the 0:13:29
NAV?
Marks: 2 Answer: Q a. Rs. 75 11 12
ØbRs55 19••• 2
0 c. Not possible to sa8
QdRs2O
84 Find out the one which does NOT come under the retail banking service?
Answer: & Credit card services
Marks: 1 b Personal loans
0 Trade Finance
0 & Electronic banking
85 The clearing process is completed When delivery and payment have occurred State
True or False
Marks 2 Answer: GTrue 0 False
88 When in a front end, fee is charged?

Answer: 0 a Upfront at the inception
Marks: 2 0 b. Per annum
0 c Every month
Qd Everyday
0 a One off in case of prepayment
89 Which of the following is not an Index?
Answer Q&NYSE
Marks: 2 0 b. HangSeng
0 c FTSE
QcIDAX
0 a NASDAQ 100
90 What is a credit union?
Answer: 0 & Providing credit at reasonable rates
Marks: 2 0 b Providing otherfinancial services to its members
€3 c All of the listed Options
0 d. Operated forthe purpose of promoting thrift
0 a A cooperative financial institution that is owned and controlled by its members
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
91 What does a CALL option give the buyer?
Answer: Q a. The right, but notthe obligation. to buy
Marks: 3 0 b. The right. but not the obligation. to sell
0 C. The right and obligation to buy
0 d. The obligation to sell
0 e. The obligation to buy
93 Which of the following is NOT a derivatives instrument? ...•
Answer: cij a. Corporate Bonds

Marks: 2 , b. Put Options 6‘
0 c. Equity
Qd. Swaps
0 e. Call Options
Marks: 3 Buy 100 IBM sharesfor$11.OO each
Sell 20 IBM shares for $1 I .00 each
0 b. (a) $1880 (b) $3100
0 c. (a) $1 .780 (b) 0 for IBM, $1 .795 for MSFT
0 d. (a) 0 for IBM, $1 ,795 for MSFT (b) $1,780
0 e. (a) $3100 (b) $1880
96 Which of the following is an Un-secured loan?

Answer: Q a. Overdraft on checking.
Marks: 2 b. Credit cards
0 c. Study loan
0 d. Personal lines of credit.
C e. All of the listed options
98 Red herring prospectus is issued during _______________

Answer: a. When a dividend is declared
Marks: 3 0 b. During Securitization
0 c. A merger
0 d. During a IPO
0 e. Post-Acquisition
99 Premature withdrawal in a IRA account does NOT attract penalty and taxes need NOT
be paid for the period forgone. State True or False
Marks: 2 Answer OTrue 0 False
I 00 Which is NOT a Captive finance company?
Answer 0 a. Ford Motor Credit
Marks: 2 , b. None ofthe listed Options
0 c. Bank of America
0 d. General Motors Acceptance Corporation
0 e. Hyundai Motor Finance Company
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
I 01 In reality. people hold part of their loans as cash. This makes the multiplier
Answer: 0 a. Smaller
Marks: 2 b. Larger
0 c. Zero
0 d. The same as if people did not hold cash
I 02 Securities with an original maturity of lesser than 1 -year are traded on money
markets. State True or False
Marks: 1 Answer: ®True 0 False
103 When is a bank failure is more likely to occur?
Answer 0 Capital adequacy ratio is increased
Marks: 2 , b. Bank holds more short-term riskless securities
0 c. Bank increases its equity capital 013010
0 d. Cash Reserve ration is increased
... ii12i
0 e Capital adequacy ratio is reduced io 2
9 3 . ....
8: 4 ••
I 04 With continuous compounding at I 0 percent for 3 years, the future value of an initial
investment of $2,000 is closest to ___________
Answer: a. 2700
Marks: 3 0 b. 2870
0 c. 3000
0 d. 2662
I 05 What is financial leverage?
Answer ® a. a private company transforming itself into a public company
Marks: 2 , b. Investing in equity
0 c. Borrowing funds to increase return on equity
0 d. Investing in derivatives
0 e. Closing down a loss making company
I 06 A person purchases a share at $50. After 2 years, the price is at $75 and he decides
to sell the share at that price. What is the annualized return that the person has earned?
Qb.0.5
0 c. 0.2247
0 d. None of the listed options
0 e. 0.6667
I 09 Banker acceptances are credit investment created by ________ and used for financing
imports, exports and domestic shipping.
Answer: Q a. Short term: financial firms
Marks: 2 , b. Long term: non-financial firms
0 c. Medium terms: banks
0 d. Long term: financial firms
0 e. Short term: non-financial firms
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
I I I Identify the services offered by Retail Banks:
Answer: Q a Debit Cards
Marks: 1 b Personal Loans
0 C. All of the listed options
0 & Savings and Checking Accounts
I I 2 A Custodian holds a wide range of assets on behalf of its customers What are these
assets known as?
Answer: Q a. Shared Assets
Marks: 1 ® b. Assets Under Custody
0 c. None of the listed Options
0 d. Assets Under Management
0 e. Custodian Assets
0:12:59
I I 3 There are 5 participants A, B. C, D. E in a 25M USD syndicated loan and A is the
lead manager The borrower has agreed to pay 0.4% (Si 00,000)
participant fee How much each participants will share in participant fee? 11 12 1
Marks: 3 Answer: a. $i,00.000 will be received every time money is withdrawr?. 2 .
0 b $1 00,000 will be charged towards undrawn portion 8 4

0 d $i ,00.000 will be received affront
0 e. $1 ,00.000 will be received even’ month
I 14 Which ofthe following are market regulators?
Answer: cj a All ofthe listed options
Marks: 2 b Securities and Exchange Commission (SEC)
0 c. Securities and Exchange Board of India (SEBI)
0 t Financial Services Authority (FSA) of UK
115 Pick the odd one out:
Answer: & VA loans
Marks: 1 , b. Interest only loans
0 c. Agency loans
0 d. Fl-IA Loans
I 16 are profits of the business that have not been distributed to the owners as of the
________
balance sheet date

Answer 0 Share capital
Marks: i b Revenue
0 c. Gross profit
0 d Retained earnings
I I 7 A clearing system in which payment instructions between banks are processed and
settled individually and continuously throughout the day is called:
Answer: Q & Automated Clearing House
Marks: i b. Continuous Linked Settlement
0 c. Clearing Services
ØdRTGS
0 e. Collection Services
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
Page: (Previous) 12345678910111213
I 22 Which entity is NOT involved in Student loan?

Answer 0 Federal government
Marks: 1 b Servicers and Guarantors
0 c None ofthe listed Options
0 d Lenders and Borrowers
0 e Schools
0:12:50
123 A proprietary system 0f ATM’s is a network that comes into being when
customers of one or more financial institutions have access to transaction services
at ATMs owned or operated by other financial institutions State True or False 11. 12
1
Marks: 1 Answer GTrue QFals• ••
I 24 Bank ABC interest rate on deposits is T30% and its interest rate on loans is
925% during 2OO9 What is the spread for Bank ABC?
Answer: QaOi655
Marks: 3 0 b OO225
0 d 0.0195
I 26 Legal documents will be prepared in the post-closure stage State True or False
Marks 2 Answer: ®True 0 False
I 27 A Custodian processes Interest proceeds from the fixed income securities held
under its custody. Which division. within the custodian company. is responsible for
carrying out the process.
Marks: 2 Answer Q a Transaction management
0 b Cash Management
0 c. Brokerage services
0 d Fund administration
0 a Income processing
130 Identify the odd one out:

Answer: 0 a. Bill of Exchange
Marks: 1 0 b. Treasury Notes
0 c. Commercial Papers
0 t Stocks
0 e. Treasury Bills
Intermediate Save j [ Submit the Quiz
Page: (Previous) 12345678910111213
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 (Next)
I All broker/dealers involved in the underwriting of non-exempt securities must be
Answer: Q a NYSE Member
Marks: 3 0 b SEC Member
0 c. No such membership is required
0 & NASD Member
0 a NASDAQ Member
2 If a financial instrument has a 20% chance of paying 80% and a 80% chance of paying
50% percent, what would be the expected return?
Answer: Q & 028
Marks: 2 b 02
0 c 044 Qd0.56
0:39:60
4 You invest Rs20,000 at 10% pa compound interest compounded annually in a bank

After 2 years. what is the amount you have received from the bank?
Answer: Q a Rs. 24000
Marks: 3 0 b. Rs.15092
QcRs4000
0 d Rs24692
0 a Rs. 24200
7 The process of clearing transaction electronically in which information about debits and
credits are passed across the clearing system electronically instead of physical
instruments is called
Marks: 1 Answer: cj & Clearing thru Documents
0 b All ofthe listed options
0 c. Clearing thru ACH
0 d Clearing Services
0 e. Electronic data file services
Buy 120 Dell sharesfor$1OJJO each
Marks: 2 Sell 70 DelI shares for $1050 each
Buy 200 Cisco shares for S20D0 each
Sell 20 DelI shares for $1 1 00 each
Sell I 0 Dell shares for $9.00 each
the end of the dayS
Answer 0 Dell: 20 shares to pay out: Cisco: 1 50 shares to receive: $3,780 to pay out to
the exchange
0 b Dell: 70 shares to give out: Cisco: 90 shares to receive: $3,000 to pay out to the
exchange
0 c Dell: 150 shares to receive: Cisco: 20 shares to receive: $3130to receive from the
exchange
0 d Dell: 20 shares to receive: Cisco: 1 50 shares to receive: $31 30 to pay out to the
exchange
0 a None of the listed Options
I 0 Credit union members have what type of accounts (rather than checking)?
Answer: cj & None ofthe listed options
Marks: 3 0 b. Checking
0 c. Basic
Qd Share Draft
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KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
I 2 Which of the following are NOT the benefits of using credit derivatives?
-Answer 0 a. Credit derivatives can be used either to take on more risk or to avoid (hedge)
it 0:39:32
Marks. 3 0 b. Credit derivatives can be used both to diversify their credit risk exposures
and free up capital from regulatory constraints 12
0 c. Increasing the credit limit of a corporate ic : 2
0 d. Credit derivatives can be used to create positions that can otherwise not easily be
established in the cash market 9 : 3
.
8 :4
76
14 NASDAQ is based out of____________

Answer: ® a. Chicago
Marks: 3 0 b. None of the listed options
0 c. Singapore
0 d. London
0 e. Hong Kong
Marks: 1 Answer GTrue 0 False
I 6 The Advising bank is used as a trusted bridge between the and when they do not have
Answer: Q a. Applicant bank: Beneficiary bank
Marks: 2 b. Beneficiary bank: Reimbursing bank
0 c. Importer: Exporter
0 d. Reimbursing bank: Beneficiary bank
0 e. Issuing bank: Confirming bank
I 7 Credit derivatives can be used to the regulatory capital requirements and
____________ ____________
credit risk.
Answer: cj a estimate, assess
Marks: 2 , b. increase, transfer
0 c. reduce. diversify
0 d. improve. eliminate
0 e. avoid. manage
I 9 Which ofthe following are benefit(s) of EMV?

Answer: Q a. None of the listed options
0 b. Both I and II
0 c. II only
0 d. I only
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KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
23 If the nominal interest rate is 10% and rate of inflation is 2%, what is the real interest
rate?
Answer: Qa12
Marks: 2 b 20 0:39:22
Qc5 iil2i
..
0 d. None ofthe listed option0 2::
Qe8 9 E 3
8:
7j5
24 In case of downturn in prices of shares. the investor will be compensated by which of
the following option?
Answer: , & Stock Exchange
Marks: 2 b U.S. Department ofthe Treasury
0 c. None ofthe listed Options
0 d Securities and Exchange Commission
0 a Federal Deposit insurance Corporation
25 Which ofthe following represents the correct hierarchy of corporate ratings (highestto
lowest)?
Answer: ® a AAA. AA+, BBB. D
Marks:1 Qb.D,AA-.B,W
0 c. D,C,B,A Qd.W,AA+,D,AAQe W,AA-.DBBB
KOL-23-Aug-1 I [11:00-13:30]
Attempt I
31 At the end of the trade cycle. The trades are to determine the obligation of the
__________
trading members to deliver securities’ funds as per settlement schedule

Marks: 2 Answer: a Grossed
QbAggregated
0 c Offset
0 d. Netted
32 What are Secondary markets defined as?
Answer: a Either auction or dealers markets and being only OTC market
Marks: 2 b. None ofthe listed Options
0 C. Market where security is sold during IPO
G d Markets in which security are resold after they are originally issued
0:39:010
33 Which of the following services are provided by a global custodian’
Answer: a. Tax reclaims processing 11 12
Marks: 3 0 b Fund administration 10 2.
€ c All ofthe listed options 8 4

0 d. Settlement services 7 5
0 e Foreign exchange transactions
34 All of the following are benefits of netting EXCEPT:

Answer: a Reduction in systemic risk
Marks: 3 0 b Reduction in the number of deliveries and receipts
0 c Reduction in the cost of settlement
0 d Reduction in compliance risk
35 Unit capital of a mutual fund scheme is Rs. 20 million: The market value of its
investments is Rs. 55 million. The number of units is 1 million. What is the NAy?
Marks: 2 Answer: a Rs. 75
0 b. Not possible to say
0 C. Rs 20
0 d. Rs. 55
36 Fedwire is an electronic transfer system developed and maintained by the Federal
Reserve System. State True or False
Marks: 2 Answer: ØTrue 0 False
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
41 Find the future value of$1500 invested at 6.5% p.a payable annually. after 6
months?
Answer Qa 1616
Marks: 2 Q b 1628
0 C. 154875
Qd 1597
Q e None of the listed Options
42 Drafts are negotiable instruments that facilitate international payments through
respected intermediaries such as banks State True or False
Marks: 1 Answer GTrue QFalse
43 Retail loans are asset products offered by the bank State True or False
Answer: ®True QFalse
Marks 1 0:39:01
11 12
10 : 2
9 ::. a .•
44 When the Central Bank of a country decides to change the interest rates. it is a
manifestation of which of the following? 8 4 •
Answer: C) & Money Market 6

Marks: 2 Q b. Money making
Q c Money Policy
0 d. Money Multiplier Effect
Q e. Monetary Policy
45 Which of the following is a corporate action?
Answer 0 a All of the listed options
Marks: 3 Q b Declaring Dividend
Q c. Stock split
QdM&A
0 e Rights Issue
46 In passive approach. asset allocation is influenced by which of the following
option?
Answer: 0 a All of the listed options
Marks: 2 ob Tax status of the investor
oc Cash needs of the investor o d Investor’s risk preferences
49 A type of stock in which the stockholder is likely to get a percentage of

dividends each year based on the profits of the company is:
Marks: 1 0 b Preferred Stock
0 c Common Stock
0 d Convertible Stock
50 In an exchange on a particular day there is a buy trade for 150 shares of a
particular company and there are two sell trades for 70 and 60 shares of the same
company Can the buy trade and sell trades be matched?
Marks: 2 Answer: Q a No
o b. Yes, but only if the number of shares on the buy & sell side match
o c. Yes
€ dYes, but only if the prices on the buy & sell side match
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KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
51 Banks are financial intermediaries that:
Answer: Q a. Do not operate efficiently in the financial system
Marks: 1 b help connect public to the central banks
0 c Should not be allowed to open Savings Accounts
0 & Are not required
0 e. Link depositors to borrowers
52 Coming together of BNY and Mellon is an example of _____________
Answer: Q & Acquisition

Marks: 3 0 b Merger
0 c Brokerage
0 d. All of the listed options
0 e Takeover
0:38:52
EXCEPT: 12 2
Answer 0 a. Treasury bills have their interest paid in a lump sum at maturity 9 3
- .
Marks 2 b Treasury bonds have maturity dates up to 30 years 8 4

0 c Treasury notes have maturity dates up to 1 0 years 7 5
0 d. Treasury bills have a greater interest rate risk than either Treasury bonds or
Treasury notes.
54 Increasing the Cash Reserve Ratio for banks would have an impact on which
ofthe following:
Answer: Q & Increased Money Supply in the economy
Marks: 2 b Profitability of firms
0 c Reduced Money Supply in the economy
0 c[ Increased interest rates
55 Legal documents will be prepared in the post-closure stage State True or False
Marks 2 Answer: OTrue 0 False
57 Liquidity refers to the ease with which an asset can be converted into cash.
State True or False
58 Following are the types of market risks except:
Answer: 0 a. Equity Risk
Marks: 1 0 b. Credit Risk
o c Commodity Risk
o d. Interest Rate Risk
o a Currency Risk
60 Asset allocation activity is performed by which of the following option?
Answer: Q a. None of the listed Options
Marks: 1 0 b Back office of an investment firm
o c Front office of an investment firm 0 d. Middle office of an investment firm
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KOL-23-Aug-1 I [1 1 :OOel 3:30]
Attempt I
61 Which of the following is true for stock markets?
Answer: Q a. Stock markets are never fair
Marks: 2 ® b. Stock markets facilitate secondary buying and selling of shares
0 c. Individual small investors can never make money in stock markets
0 d. Stock markets are always self regulated
0 e. There can only be one stock market in a country
62 Secured bonds
Answer: Q & are secured by assets of the issuing company and also have higher priority
.
for repayment than unsecured debt

Marks. 1 b. are issued only by large and financially sound companies
0 c. have higher priority for repayment than unsecured debt
0 d are secured by assets of the issuing company.
0:38:42
63 Participation of more number of banks reduces the risk of lead bank? State True or
False
11 12
Marks 2 Answer: GTrue QFalse0 : 2
9•.•: 3
.
8’ :
7j5
65 ATM’s fall under which of the following?

I: Front office
Marks: 2 II: Middle Office
Ill: Back Office
Answer: () & Ill only
Ø b. i only
0 c. Both II and Ill
0 d. II only
0 e Both I and II
70 Most common reasons for a corporate seeking a loan from a Bank include all of the
following EXCEPT:
Answer: 0 & Capacity expansions
Marks: 1 b. Paying bonuses to top executives
0 c. New projects
0 & Daily cash flow requirements
0 a Plant modernization
KOL-23-Aug-1 I [1 1 :OOel 3:30]
Attempt I
72 The risk that a given security or asset cannot be traded quickly enough in the marketto
prevent a loss (or make the required profit) is:
Answer: Q a Credit Risk
Marks: 3 0 b Financial Risk
0 c Business Risk
0 d. Liquidity Risk
74 Assets of a company that are reasonably expected to be realized in cash, or sold, or

consumed in the next one year are __________
Answer: cj & Current Assets

Marks: 1 b. Annual assets
0 c. Intangible assets
0 d Fixed Assets
75 The money bank receives as deposits becomes a banks
Answer: a Loss
Marks: 1 b Liability
QcAsset
0 d. All ofthe listed Options
0 e Profit
76 An export oriented firm, apart from facing usual risks associated with any firm, which
other very important risk it faces?
Answer: Q a. Legal Risk
Marks: 1 b. Credit Risk
0 c. Currency Risk
0 d. Operational Risk
0 e. Liquidity Risk
79 In a syndicated loan of 1 OOM, each participant commits for 25% of loan. But due to
exigencies if one participant reduces his share to 22% and others to share equally, what
will be revised share of other participants?
Marks: 3 Answer: Q a Oil
0 b. 0.3
0 c. 0.24
0 d. 0.26
QeO29
80 Great mines takes a loan from Bank of America to dig a new coal mine. The loan
would be repaid using the proceeds from the sale of coal from this mine. This is an
example of:
Marks: 1 Answer: Q Asset Securitization Loan
0 b Working Capital Loan
0 c. RevoMng Line of Credit
0 d. Supplier Loan
0 e. Bill Discounting
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
81 Which of the following type of loan requires the amount of interest that would be
earned on the amount of interest paid upfront by the borrower?
Answer: Q a Capitalized Loan
Marks: 3 0 b Amortized Loan
0 c. Discounted Loan
0 d True discounted Loan
0 a Demand loan
82 In Rolling Settlement trades are aggregated for a period of time State True or False
83 Warrants are the combination of which of these instruments?
Answer: & Call and Put Options
Marks: 3 0 b Put Options and Swaps 0:38:2 1
0 c. Equities and Call Options
0 d Cash and Call Options 2 ::
0 e Equities and Futures 9 3

8:
84 Bank ABC interest rate on deposits is 7.30% and its interest rate on loans is 9.25%
during 2009. What is the spread for Bank ABC?
Marks: 3 0 b. 0i655
0 c 0.0195
0 d. 0.0225
86 Role of syndicate is to:

Answer: Q a. Issue Derivatives
Marks: 2 , b. Ensure proper Risk Management
0 c. Participate in swaps
0 & Monitor bank regulations
0 a Place securities in a public offering
90 Which of the following is NOT correct for a personal loan?
Answer: 0 a. Loan amount is not linked to borrowers repayment capacity
Marks: 2 0 b. None of the listed Options
0 c. They are short term loans
0 d. The financer is not interested in the intention of the loan
0 e. No security required
[
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KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
institutions?
Answer: Q a. To serve certain social objectives
Marks: 3 0 b. To prevent failure of any financial institution
0 c None of the listed options
0 d To provide stability of the money supply
guarantees

Answer: cj a All ofthe listed options 0:38:13
Marks: 3 0 b. A collective investment vehicle 12
0 c A pool of funds used to purchase securities on behalf ofinvestor011 : 2 .
0 d. A portfolio of stocks, bonds and other securities 9

8:
94 If a portfolio of stocks has a one day 5% VaR of S 1 Million. what does it mean?
Answer: 0 a There is a 5% chance that the value of the portfolio will fall by S 1 Million
or above over a one day period Marks: 1 , b None ofthe listed Options
0 c. There is a 5% chance that the value of the portfolio will increase by S 1 Million or
above over a one day period
0 d There is a 95% chance that the value of the portfolio will increase by S 1 Million or
0 a There is a 95% chance that the value of the portfolio will fall by S 1 Million or above
over a one day period
97 Borrower is suppose to lock the rate at which stage of loan life cycle?
Answer ® & Loan Processing
Marks: 3 0 b Loan origination
0 c Loan closing
0 t Loan underwriting
98 In a typical trade cycle on an exchange. the successive functions of order matching.
determining obligations of participants. and undertaking settlement. are respectively
carried out by:
Marks: 2 Answer: Q & Broker/dealer exchange: clearing house
0 b. Exchange: depository: clearing house
0 c. Exchange: clearing house: depository
0 d Clearing house: clearing house: depository
Answer: & 30% discount is offered if payment is made before 15 of the month
Marks: 3 0 b 10% discount is offered if payment is made within 3 days. the payment
should however be made in 15 days
0 d 3% discount is offered if payment is made within 1 5 days
0 a 3% discount is offered if payment is made within 10 days
I 00 US Export and EURImport agree to carry out the transaction, goods worth $1
.000.000 under a confirmed term Letter of Credit with a maturity date of 60
days from the time of shipment The Acceptance commission © 1 8% pa equals
Calculate the acceptance commission
Marks: 3 Answer: Q a. 300
0 b 250
0 c. 2500
0 d. 3000
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KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
101 IRR stands for which of the following option?
Answer: Q & International Rate of Return
Marks: 1 b Indexed Rate of Return
0 C. Indian Rate of Return
0 t Internal Rate of Return
0 a Internal Referenced Return
I 04 Which of the following is an Issuer & Acquirer?

Answer: Q a. First Data Corporation
Marks: 2 b. Elavon
® c. Tsys
Qd.Amex
I 06 Which of the following is not a derivative?

Answer 0 a. Options
Marks: 2 , b. Forwards
0 c. Futures
0 d. Bonds
0 e. Swaps
107 Company ABC has a gross profitofS50000 The operating expenses amounts to
S10000 The interest on loans availed amounts to 55000 and the taxes to be paid amounts
to 55000. Calculate the EPS if there aretotalof20000 shares
Marks: 3 Answer Q & 125
0 b. 2.5
0 c. 2
Ød. 1.5
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
I I 2 In Trade Finance the term LC stands for:

Answer: Q a Letter of Complaints
Marks: 1 b Letter of Credit
0 c Letter of Commerce
0 d Letter of Creditworthiness
0 e Letter of Commercials
0:37:51
I 14 What is the purpose of rebalancing?

-Answer: ( & To keep investments in line with original investment strategy
Marks. 3 0 b Reallocation of asset classes to gain competitive advantage
0 c To maximize the portfolio return by effectively timing the market
0 d All ofthe listed options
I 15 Which of the following are order types based on price?
Answer: o Limit Order
Marks: 2 , b. Stop Order
0 c. Market Order
0 t All ofthe listed options
0 e Stop Limit Order
I 18 Which of the following is NOT a player in a typical trade cycle?

Answer ® & Regulator
Marks: 3 0 b Clearing bank
0 c Custodian bank
0 d Trading member
0 e Clearing member
I I 9 Private Banking is so called because:
Answer: Q a. It is private to a group of individuals
Marks: 2 b. The banking services provided are confidential
0 It is done privately without anyone’s knowledge
0 t Personalized banking services are provided to the clients
0 a It deals with black money
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
Page: (Previous) 12345678910111213
121 Trade Finance primarily helps in:
Answer: Q a. Facilitating intra-company transactions
Marks: 1 b. Facilitating inter company transaction
0 c. Facilitating corporate lending
0 & Facilitating International transactions
0 a Facilitating setting up of new factories
I 22 A card holder swipes his card for USD 1 OO How much does the merchant
Answer: ® a. I: USD 100
II: USD 98 0 b I: USD 100
II: USD 2
0 c I: USD 98 O’3742 II: USD 98
0 d. L USD 100 12 II: USD 100 io : 2
9•.•: 3
8’ :
I 23 What term is used to describe an LC that remains valid for years thereby eliminating
the cost of separate LOs for each transaction with a regular client?
Answer: (j a Irrevocable LC
Marks: 2 b. Evergreen Clause
0 c Green clause
0 d Red Clause
0 a RevoMng LC
I 24 A person purchases a share at $50. After 2 years, the price is at $75 and he decides to
sell the share at that price What is the annualized return that the person has earned?
Marks: 3 Answer: Q a 05
0 b. 06667
0 c. None ofthe listed options
0 d 03333
0 a 0.2247
I 25 Stock Split is a type of Corporate Action
Answer: ® Optional
Marks: 1 b. Mandatory with Options
0 c. Mandatory
0 d. Voluntary
I 26 Which or the following are not institutional investors?
Answer: Q a Pension Funds
Marks: 1 b Banks
0 c. High Net worth Individuals
0 d Mutual Funds
0 e Hedge Funds
128 “Market timing” is used in: 2

Answer 0 a. Active approach of Asset allocation
Marks: 2 b. Passive approach of Asset allocation
0 d. It can be used in both the approaches
I 29 CRR stands for which of the following option?
Answer: a. Cash Reserve Risk
Marks: 1 b. Cash Return Ratio
0 c. Common Reserve Ratio
0 d. Cash Refund Ratio
0 e. Cash Reserve Ratio
I 30 If the Limit = $2000, margin = 20% and Asset Value = $2000. then Drawing Power for
an Open ended loan is equal to?
Answer: Q 2200
Marks: 3 0 b 1600
0 c None of the listed Options
Qd.2400
Qe2000
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Submtthe Quizj
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KOL-05-Sep-1 I [14:30-17:00]
Attempt I
Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 (Next)
I Which of the following statements pertaining to Pooling is true?
Marks: 1 I: All value balances of a set of ‘participating’ accounts are centralized at the
end of each day
II: Banks offer both domestic and cross border zero balancing
Ill: The participating accounts bear credit or debit interest.
Answer: Q a. Ill only
0 b. Both I and II
0 c. II only
0 d. I only
Øe.IV
2 The clearing process is completed When delivery and payment have occurred. State
True or False
Marks: 2 Answer ®True 0 False
0:28:55
4 From the given options identify the service(s) that can be categorized under Asset
Servicing line of business.
Answer: cj a. Both I and II
0 b. II only
0 c. Ill only
Qd.IV
0 e. I only
6 NASDAQ is based out of _____________

Marks: 3 0 b. London
0 c. Chicago
0 d. Singapore
0 e. Hong Kong
Answer: Q a. Seller, Buyer
Marks: 1 0 b. Beneficiary’s Bank
0 c. None of the listed option
0 d. Issuing Bank
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
I I The Advising bank is used as a trusted bridge between the and when they do
___________ __________
not have an active relationship.

Answer: Q a. Beneficiary bank: Reimbursing bank
Marks: 2 , b. Importer: Exporter
sell the share at that price. What is the annualized return that the person has earned?
Marks: 3 Answer: c a. 0.2247
0 c. 0.6667
0 d. 0.3333
Qe.0.5
0:28:18
I 6 Coming together of BNY and Mellon is an example of _____________
Answer 0 a. All of the listed options

Marks: 3 0 b. Acquisition
0 c. Takeover
0 d. Merger
0 e. Brokerage
I 7 If the Limit = $2000. margin = 20% and Asset Value = $2000. then Drawing Power for
Answer 0 a None of the listed Options
Marks: 3 0 b. 2200
0 c. 2400
0 d. 2000
Øe.1600
I 8 An investor has lost track of a particular company’s shares that he holds for the last 5
years. Now the investor wants the know the details like how many shares he owns, in
what form they exist etc. Whom should he contact?
Marks: 1 Answer: Q a The investor has to obtain the information only through an
authorized intermediary.
0 b. The investor has to contact the Custody service provider to get the details
0 c The investor can call the company directly and get the information
0 d. The investor has to contact to the Company’s transfer Agent to get the details
I 9 A card holder swipes his card for USD I 00 How much does the merchant
Answer: a. I: USD 100
II: USD 100 Qb.I:USD98
II: USD 98 0 c. I: USD 100
lI:USD2
0 d. I: USD 100 II: USD 98
20 NPV stands for
Answer: ® a. Net Present Value
Marks: 1 b. No Present Value
0 c. Net Past Value C d. New Present Value
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
22 Which of the following is NOT a function of Central Bank?

Answer 0 Stability of the financial system
Marks: 2 , b Conducting the nations monetary policy
0 c Monitoring foreign currency inflow and outflow
0 d Managing the branches of public banks
0 e Regulating the Banking institutions
Answer ® a O44 0.28.02
Marks: 2 ‘.
0 u no 12
Qc.051i0 2
QdO29 :“3
8
24 Choose the right option:
Answer 0 a Both close and open ended funds have a fixed maturity period
Marks: 2 b. Mutual funds don’t have a fixed maturity period
0 c. Close ended funds have a fixed maturity period
0 d. Open ended funds have a fixed maturity period
25 If the Point Of Purchase is S 52 and the amount given to the issuer is S 50 what is the
underwriter spread?
Answer: Q a 50
Marks:2 Qb52
0 c. 102
Øe2
26 Identity the three Cs of underwriting:
Answer: a. Collateral
Marks: 3 El b. Capacity
El c Credit
ci d. Cash
29 Ram deposits $1 00 in XYZ Bank. Puja takes a loan of $1 00 from XYZ Bank.
Which of the following is most likely to happen?
Answer: & Bank is paying 3% interest to Puja and charging 5% interest to Ram
.
Marks. 3 0 b. Bank is charging 3% interest to Puja and paying 5% interest to Ram

0 c. Bank is charging 5% interest to Puja and paying 3% interest to Ram
0 d. Bank is paying 5% interest to Ram and charging 5% interest to Puja
0 e None of the listed Options
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
Qe.M&A
32 A building society is a financial institution. owned by its members. that offers banking
and other financial services. especially mortgage lending and are
prevalent only in UK. State True or False
-

33 The BSE is a large primary financial market in which the initial issuer receives the
proceeds for the sale of securities State True or False
Marks: 2 Answer: GTrue 0 False
0:27:51
11 1:2 i
10 2
Answer: 0 a. II only
0 c. Both land II
Qd. l only
Answer: 0 a. True discounted Loan
Marks: 3 0 b. Discounted Loan
0 c Demand loan d. Amortized Loan
0 e. Capitalized Loan
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
42 Under Basic Indicator Approach for measurement of Operational risk. the banks have
to set aside an amount calculated as the percentage of___________
for operational risk management

Marks: 1 Answer: c a Net Income
Qb Net worth
0 c. Annual Gross Income
0 d Net Profit
0 a Quarterly Income
43 Which of the following are examples of emerging payments? 0:27:40
Answer: cj & All of the listed options
o 10 .2
0 c. Proximity Payments 9 1•
• .•
0 d. Digital Cash 8 4
44 Credit union members have what type of accounts (rather than checking)?
Answer: ® a. None of the listed options
0 c Basic
Qd Share Draft
47 If an investment pays interest at an annual rate of r % per year, compounded twice a

year. then what is the effective yield?
Answer ® & greater than r %
Marks: 2 o b All of the listed options
Qc. equal to r%
Q& less than r%
49 Identify the services offered by Retail Banks:

Answer: 0 a Savings and Checking Accounts
Marks: 1 0 b Personal Loans
0 c. All of the listed options
0 & Debit Cards
50 Increasing the Cash Reserve Ratio for banks would have an impact on which of the
following:
Answer: 0 & Reduced Money Supply in the economy
Marks: 2 0 b Profitability of firms
o c Increased Money Supply in the economy o d Increased interest rates
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
51 If the money multiplier is 1. the required reserve ratio must be:
Answer: Q a. 1
Marks: 2 ® b Greater than 100%
0 C. 0.5
0 d. Zero
52 In defined benefit plans. investment management of funds is done by and in
________
defined contribution plans. it can be done by Answer 0 a. Plan administrator plan

________
administrator
Marks: 2 , b Employer: employee
0 c. Trustee: trustee
0 d. Employee: employer
Answer: &j a. 80% Equity, 20% Debt
Marks: 2 b 60°/b Equity, 40% Debt 0:27:30
0 c. 40°/b Equity, 60% Debt 12
0 t 75% Equity, 25% Debt o 2
9
8
56 Which of the following market entities cannot provide securities lending service?
Answer: ® a. Sub-Custodians
Marks: 1 b. Custodians
0 c. Wholesale intermediaries
0 d. Securities market regulators
0 e. Niche intermediaries
57 In Normal Distribution 99°/b Confidence interval corresponds to __________
Answer: Q a. 3 Sd
Marks: 3 0 b. 1.65 Sd
Qc.1965d
Oct lSd
0 e. 2.33 Sd
58 How much will be the 1% legal fee on 30M USD?
Answer: Qa3M
Marks: 2 b 0.3M
0 c. 3000
Qe0.1 M
59 Which of the following is the most risky asset?
Answer: Q a Treasury bills
Marks: 1 b Investment in Real Estate
0 c. Triple A rated bond
0 d. Shares of a Blue chip company
0 e Investment in Mutual fund
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
62 Market Risk is defined as:

.Answer: G a. the possibility of loss over a given period of time related to uncertain
Marks. 1 b. the possibility of loss resulting from errors in instructing payments or settling
transactions
0 c. The possibility of loss as a result of default. such as when a customer default on a
loan 0:27:18
0 d. the possibility of loss when a contract cannot be enforced
C e. the possibility that a firm will be unable to generate funds to meet contractual
obligations as they fall ‘12I
7: e
65 Which of the following are characteristics of Savings Accounts?

Answer: 0 a. Funds deposited are generally for savings
Marks: 1 b. Provides Interest income to customers
0 c. Accountholder can make deposits & withdrawals but has limited check writing
capacity
0 d. Charge a small fee for maintaining the account especially if a minimum balance is
not maintained
0 e. All of the listed options
67 What term is used to describe an LC that remains valid for years thereby eliminating
the cost of separate LCs for each transaction with a regular client?
Answer: a. Red Clause
Marks: 2 b. Irrevocable LC
0 c. Revolving LC
0 d. Green clause
0 e. Evergreen Clause
68 Investing in shares will always result in a monetary gain. State True or False
Marks: 1 Answer: C True 0 False
70 Corporate Loans are:

Answer: Q a. Never unsecured
Marks: 1 b. Always unsecured
0 c Secured or unsecured
0 d. Never secured
0 e. Always secured
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
71 A Standard and Poor’s bond rating of D refers to:
Answer: Q a High quality investment grade bonds
Marks: 2 b Convertible bonds
0 C. Junk bonds
0 d Government bonds only
0 a Corporate bonds
72 Trading occurs between clearing and settlement State True or Ealse
75 Product development in sales and marketing refers to which of the following option?
Answer: a All of the listed Options
Marks: 3 0 b Collateral eg Cars in case of car loans. houses in case of mortgages
0 c. Identifying products such as SAP. Oracle for the bank
0 & Developing and differentiating deposits. loans etc
0 a Products that are bought using online payment such as e-commerce
76 A is a less risk-averse investor than S Hence what will be the consequences?
Answer: ® & For the same return. A takes higher risk than B.
Marks: 1 b For the same return, B tolerates lesser risk than &
0 c For the same risk, A requires a higher rate of return than R
0 d. For the same risk, A requires a lower rate of return than B.
77 Which of the following is true?
-Answer: Q a. Tax deduction can be claimed for the full value of the rental paid in case of
lease
Marks. 2 , b. Depreciation is claimed by the financier in Lease and not in case of Hire
Purchase
0 c. All of the listed Options
0 d. The financier owns the asset both in case of “Lease” and “Hire Purchase”
78 US Export and EURImport agree to carry out the transaction, goods worth $1
.000.000 under a confirmed term Letter of Credit with a maturity date of 60 days from the
time of shipment. The Acceptance commission © I .8% pa equals. Calculate the
acceptance commission.
Marks: 3 Answer: a. 300
0 b. 2500
0 c. 250
0 d. 3000
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
investments is Rs 55 million. The number of units is 1 million. What is the
NAV?
Marks: 2 Answer: a. Rs. 20
0 c. Rs. 75
® d. Rs. 55

Buy 120 Dell shares for $10.00 each 0:26:54
Marks: 2 Sell 70 Dell shares for $10.50 each
Buy 200 Cisco shares for $20.00 each if.12 i
Sell 20 Dell shares for $1 1 .00 each 10 2.
Sell 50 Cisco shares for S2050 each 9 : 3

.
Sell 1 0 Dell shares for $9.00 each 8 4

the end of the day. 7 e
Answer: a Dell: 70 shares to give out: Cisco: 90 shares to receive: $3,000 to pay out to
the exchange
0 b. Dell: 20 shares to receive: Cisco: 1 50 shares to receive: $31 30 to pay out to the
exchange
0 c. Dell: 20 shares to pay out: Cisco: I 50 shares to receive: $3,780 to pay out to the
exchange
0 e. Dell: 150 shares to receive: Cisco: 20 shares to receive: $3130to receive from the
exchange
84 Credit derivative is all BUT:
Answer: Q a. Financial Instrument
Marks: 3 0 b. Traded over the counter
0 c. Facilitate greater efficiency
0 d. Transfers ask
85 Does a pure play investment bank accept deposits?
Answer: Q & Yes. if it is below 1 0% of market cap
Marks: 1 b. Only during IPO
0 c. No
Qe.Yes
86 What is coupon in reference to bonds?
Answer: oj a. the interest rate that the issuer pays to the bond holders
Marks: 2 , b. Cheap is to buy bond
0 c. Percentage change in a bond’s phce function with respect to interest rate
0 d. Number of days to maturity of bond
0 e. Present value of Bond
87 Which of the following is a type of underwriting spread?
Answer: Q a. Concession
0 c. Manager’s fee
0 e. Underwhter’s Allowance
Answer: Q & 3% discount is offered if payment is made within 1 5 days
.r
Marks. 3 0 b. 1 0% discount is offered if payment is made within 3 days. the payment

should however be made in 1 5 days
0 c. 3% discount is offered if payment is made within 10 days
0 d. 1 0% discount is offered if payment is made between 3 and 1 5 days
0 e 30% discount is offered if payment is made before 15 of the month
89 In an exchange on a particular day there is a buy trade for 1 50 shares of a particular
company and there are two sell trades for 70 and 60 shares of the same company. Can the
buy trade and sell trades be matched?
Marks: 2 Answer: Q & No
Qb.Yes
0 c. Yes, but only if the prices on the buy & sell side match
0 t Yes, but only if the number of shares on the buy & sell side match
90 What is the purpose of rebalancing?
Answer: Q a. Reallocation of asset classes to gain competitive advantage
Marks: 3 0 b. All of the listed options
0 c. To maximize the portfolio return by effectively timing the market
0 d. To keep investments in line with original investment strategy
Answer: 0 & Internal Rate of Return

o b. Simple Interest
o c. Compound Interest
o c[ External Rate of Return
0 a Net Present Value

Marks: 3
Answer: 0 a. Foreign exchange transactions

o b. Settlement services
o c. Fund administration
o d. Tax reclaims processing
0 a All of the listed options
There are 10000 shares of company XYZ. XYZ’s net income for the year 2008 is
$40000. The current market price of the share is $48. Find the PIE ratio.
Answer Øa.12
Qb.64
o c. 48
Qd. 192
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
From an investor’s standpoint. a debenture issued by the Excellent Company will
appear “safer” than a share of preferred stock issued by the Excellent Company.
State True or False
Answer: OTrue 0 False
Answer: 0 a. 0.0225
.
Marks. 3 0 b. None of the listed options

o c. 0.1655
0 d. 0.0195
97
Marks: 3 ;1
Search Desktop;0]
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
I 01 The amount of money that banks can lend is directly affected by the reserve
requirement set by the Central Bank State True or False
I 02 Risk Management is a function of
Answer ® a. Mid Office
Marks:3 Qb Traders
0 c. Specialists
Qd. Front Office
0 a Back Office
Answer: c & All of the listed options
Marks: 1 b Performance of the relevant industry
0 c. Performance of the company 0:26:32
0 t Market sentiment
0 e State of the country’s economy i 12
10 2
9
8
I 04 Who is a Underwriting Bank?
Answer: Q a Bank which underwrites a IPO
Marks: 2 , b Bank which insures a loan
0 c. Bank which does not insures a loan
0 d Bank which commits supply of funds in a syndicated loan
0 a Bank which underwrites a insurance
107 What is the purpose of Mortgage loan?

Answer: 0 a. Buying Property
Marks: 1 0 b Buying shares
o c Buying Car o c[ Buying farm equipment
108 Treasury bills can be transacted and settled on the same date State True or False
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
I I I CRR stands for which of the following option?
Answer: Q a. Cash Refund Ratio
Marks: 1 b Cash Reserve Risk
0 c. Cash Return Ratio
0 d Common Reserve Ratio
0 a Cash Reserve Ratio
I 13 Which of the following financial institutions are covered under the Anti-money
laundering. US PatriotAct? 0:26:22
Answer: oj a Securities brokers and dealers 12
Marks: 2 b. Banks and Trust companies 1o 2
QcMutualFunds 9
0 d. All ofthe listed options 8 4
7s
I 14 If you invest S 500for 3 years at 8 % simple interest. how much will you have at the
end of the 3 years?
Answer: Q & 580
Marks: 3 0 b. 680
0 c. 620
0 e. 606
I I 6 Which are the types of IRA?
Answer: a. SEP IRA
Marks: 2 , b. Simple IRA
0 c. Traditional IRA
Qe.RothIRA
I I 7 It is possible to nil an order to buy 1 UU snares of GTSri with o sen oroers for uTSri,
of 20, 30 and aü shares each, leaving 1 buy order with 20 shares on the order book. State
True or False
I I 8 A type of stock in which the stockholder is likely to get a percentage of dividends
each year based on the profits of the company is:
Answer: rj a. None of the listed options
Marks: 1 b. Preferred Stock
0 c. Common Stock
0 d. Convertible Stock
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
Page: (Previous) 12345678910111213
123 What is financial leverage? 11 12

Answer 0 a. Investing in derivatives io 2
Marks: 2 ® b a private company transforming itself into a public company .• : •.
0 c. Investing in equity 8 4
0 d. Closing down a loss making company 6 ‘
0 e. Borrowing funds to increase return on equity
I 25 The term “settlement cycle” refers to the time period between the date on which an
investor first makes the decision to enter a trade to the date when the trade is settled. State
True or False
I 26 A Custodian has different types of assets under its custody and those assets earn
returns to the original investor in various forms. What are the types of returns that can be
taxed?
II: Interest
III: Capital Gain
Answer: cj a. IV
0 b. III only
0 c. Both I and II
0 d. I only
0 e. II only
I 27 What are Secondary markets defined as?
Answer Q a. Either auction or dealers markets and being only OTC market
Marks: 2 , b. Market where security is sold during IPO
0 d. Markets in which security are resold after they are originally issued.
L-0 QUESTION BANK

You purchased a share of stock for $20. One year later you received $1 as dividend and sold the share
for $29. What was your holding period return
45%
5%
50%
40%
None of the listed options
Bank of America charges a lower rate of interest to Lockheed Martin than to General Electric. This can be
attributed to lower ________ risk from Lockheed as compared to GE for Bank of America
Market Risk
Credit Risk
Liquidity Risk
Legal Risk
None of Above
If Bank of New York has found errors in settlement of transactions with some of its customers, as there is
some mistake in some of its systems. This would be classified as
Liquidity Risk
Market Risk
Credit Risk
Country Risk
Operational Risk
Risk is best measured when looked at

At a Macro level
At the lowest possible level
At a sub-macro level
At organizational level
At country level
What would be the most accurate VaR estimation method?

Monte Carlo Simulation
Historical Simulation
Variance-Covariance Matrix
Cannot Say
Analytical Methods
If a financial instrument has a 35 percent chance of paying 29 percent and a 65 percent chance of paying
- 13 percent, it expected return would be simple {0.35 * 0.29+0.65 * (-0.13)}
0.008
0.036
0.053
0.017
-0.029
The term "risk averse" means that

An individual refuses to take risks.
Most investors and businessmen seek risk.
An individual will seek to avoid risk or be compensated with a higher return.
Only investment proposals with no risk should be accepted.
Both An individual refuses to take risks and Only investment proposals with no risk should be accepted
CRR stands for which of the following

Cash Reserve Ratio
Common Reserve Ratio
Cash Refund Ratio
Cash Re-service Ratio
Cash Reserve Risk
Money Multiplier effect would imply

An increase in the total money lent out into the system
An increase in the total money in the bank reserves in the system
A decrease in the total money in the bank reserves in the system
Both An increase in the total money lent out into the system and An increase in the total money
in the bank reserves in the system
Both An increase in the total money lent out into the system and a decrease in the total money in the
bank reserves in the system
Which of the following is NOT a function of the bank?

Ensure super-normal returns to its small depositors
Channelize Savings
Provide credit facilities to borrower
Provide investment avenues to investors
Facilitate the trade and commerce dealings
Which of the following is associated with the purpose of regulating financial institutions?
To provide stability of the money supply
To serve certain social objectives
To prevent failure of any financial institution
To offset the moral hazard incentives provided by deposit insurance and other guarantees.
Both To serve certain social objectives and To offset the moral hazard incentives provided by deposit
insurance and other guarantees
The central bank in the US is called

Federal Reserve
Federal Reserve Board
Reserve Bank of United States
Central Bank of United States
Reserve Bank of America
If a bank gets a deposit of $100, assuming a reserve requirement (CRR) of 10%, and that it circulates
through 2 more banks, leading to the following money multiplier effect
create a reserve of $10
loan of $244
create reserve of $19
loan of $171
None of the listed Options
If the Limit = $1500, margin = 20% and Asset Value = $2000 then Drawing Power for an Open ended
loan is equal to
$1,500
$1,200
$1,600
$900
Which of the following is the most profitable for Credit Card Company?
Customers who always pay in time
Customers who never pay
Customers who default but finally pay
all of the listed options
Interest rate spread is equal to?

Current rate – Base rate
Current rate – Floor
Base rate – Floor
Cap – Current rate
Freddie Mac, Ginnie Maes & Fannie Mae are?

Marketing institutions selling home loans
Lenders to the banks for home loan bought by retail customers
Regulatory bodies governing home loan market in US
Primarily asset management companies
Which of the following is not involved in a credit card transaction?
Independent sales organization
Merchant
Payment gateway
Associations
Who checks for the credit limit of the card before approving the transaction?
Payment processor
Acquiring banks
Payment gateway
Issuing bank
Which is not a banking account?

Checking Accounts
Money Market Deposit Accounts
Demat Account
Time Deposits
One should have the Time Deposits if one is looking for?

Quick, convenient and, frequent-access to the money
A high rate of interest
Guaranteed rate of interest
Low fee
EFTA stands for

Electronic Funds Trading Act
Electronic Financial Transfer Act
Electronic Funds Transfer Act
Electronic Fee Transfer Act
Electronic Funds Telecommunication Act
The Federal Reserve offers financial services to banks and the U.S. government for all of the following
reasons except to
make a profit
promote competition
foster innovation
promote efficiency in the payments system
CHIPS stand for

Clearing House for International Payments Settlement
Clearing House for Interbank Payment System
Clearing Head of Interbank Payment Settlement
Clearing Head of international Payment Settlement
Clearing House for Interbank Payment Settlement
The process flow in a Private banking firm goes as
Servicing Specialist => Client Representative => Middle Office => Back Office
Client Representative => Servicing Specialist => Middle Office => Back Office
Client Representative => Servicing Specialist => Back Office => Middle Office
Middle Office => Back Office => Servicing Specialist => Client Representative
Client Representative => Middle Office => Servicing Specialist => Back Office
Which of the following roles and responsibilities are correctly stated?

Services Provider; Tax Services
Middle Office; Statements & Advices
Front Office; Client Reporting
Back Office: Risk Management
Middle Office; Custodial Services
The below stated responsibilities are carried out by which of the following players. Cash Services/Client
Reporting/Statements & Advices/Domestic & Global Settlements
Services Provider
Client Representative
Back office
Front Office
Middle Office
Private banking offers “structured lending” that provides

Customized asset-based credit solutions
Long-term liquidity to clients
Advice-led credit solutions
Credit solutions to High Net worth individuals
All of the listed options
Financial planning involves all EXCEPT

Cash flow management
Retirement planning
Risk management
Tax planning
Portfolio management
Loan can take many of the following basic forms EXCEPT

Overdrafts
Bills and promissory notes
Corporate bonds
Advances
Credit line
If a fund purchases a loan in the Primary, they also use another word for that. Which term is used to
indicate the initial group of lenders (Primary Lenders)?
Allocation
Syndicate
Secondary
Assignment
Which of the following is not a credit derivative?
Credit linked Notes.
Total return swaps.
Credit default swap.
Currency swap.
Which of the following is not a secured loan?

Equity Loans
Secured Loans with Savings
Equity Lines of Credit
Personal Loans
Car Loan
Which if the following is true in the case of sight draft?

Buyer can refuse to take the delivery
Quality of the Good is guaranteed
Buyer is expected to make the payment after specified credit days
Payments made based on only bill of lading
The basic four parties involved in any transaction using LC (Letter of Credit) are the following EXCEPT
Issuing Bank
Reimbursement Bank
Seller
Beneficiary’s Bank
Buyer
Which of the following is the safest type of letter of credit from seller point of view?
Confirmed Letter of Credit
Irrevocable Letter of Credit
Red Clause
Standby Letter of Credit
Revolving Letter of Credit
Which of the following methods of payment is most risky to the Seller?

Documentary Collection
Open Account
Letter of Credit
Counter trade
Cash in Advance
BOL stands for

Bill of Letter
Banker’s Overdraft Limit
Bank of London
Bill of Leasing
Bill of Lading
BAFT stands for

Bankers Acceptance for Factoring Transactions
Bankers Association for Foreign Trade
Bankers Acceptance for Foreign transactions
Bankers Association for Forfaiting & Factoring transaction
Bankers association for Factoring Trade
Bill of Lading is
a contract between Importer and Exporter for transportation of goods
a receipt issued by importer to exporter for goods received for transportation
a contract between a carrier and a shipper for the transportation of goods
A receipt issued by exporter to importer for goods delivered.
Which of the following methods eliminate country risk and commercial risk upon confirmation?
Back to back Letter of Credit
Letter of Credit
Both Standby Letter of Credit & Letter of Credit
The following are interest rate risk management instruments EXCEPT?

Interest rate swap
Forward rate agreement
Swaption
Interest rate guarantee
Cash management techniques include
Pooling
Netting
Swapping
Both Pooling and Netting
Pooling, Netting and Swapping
All of the following are payment modes except

EFT
Cheque
Debit to account through Debit card
Lockbox
Which of the following are principles used by an asset manager?

Diversification
Screens and Filters
Capital preservation
Only Diversification and Screens and Filters
Bid-Ask spread refers to

Difference in price between buying one asset and another similar one
Difference in opinion between the seller and buyer on the price of an asset
Difference between the buying and selling price of the same asset
Both Difference in price between buying one asset and another similar one and Difference in opinion
between the seller and buyer on the price of an asset
The process of ‘Hiring of the Lead Managers’ in the case of IPO is referred to as
Red Herring
Road-show
Investment Manager Contest
Advisor Contest
Beauty Contest
Syndicate in Investment banking refers to all except

Hub of the investment banking wheel
Determination of allocation of bonds
Merger and Acquisition advisory
Facilitating placing of securities in public offering
The difference between “Fill or Kill” and “All or None” order is

“Fill or Kill” allows multiple trades
“All or None” can be a Good Till Cancelled order
They are synonyms
“Fill or Kill” can be valid till end of day
“Fill or Kill” allows partial execution
The NYSE is an example of

Primary Market
Secondary Market
OTC Market
Fourth Market
What is the key regulatory authority over the American securities industry?
Federal Reserve
FDIC
DTCC
ASA
Securities Exchange Commission
What is the term for the difference between bid and ask?
Difference
Spread
Profit
Quote
What is the Third Market?

NASDAQ
OTC
NYSE
Instinet
The “Fourth Market” refers to

NASDAQ
OTC
NYSE
Instinet
Core Custody Services performs the following functions except

Price securities positions
Record Keeping
Fiduciary and compliance monitoring
Reporting services
Processes corporate actions
Services like the settlement, safekeeping, and reporting of customers’ marketable securities and cash are
provided by _________________
Custodian
Broker
Investment bank
Fund Administrator
Dealer
Money laundering refers to

Money facilitating criminal offences
Extending loans to corporate
Short term borrowing & placements
Federal authorities attack money laundering through

Regulations
Criminal sanctions
Forfeiture
Three pillars of the new capital accord, Basel II, are
Quantitative; Supervisory; General
Qualitative; Market Forces; Geographic
Quantitative; Operational; Supervisory
Quantitative; Qualitative; Market Forces
Qualitative; Mandatory; Quantitative
Capital adequacy ratio refers to

Amount of bank’s capital expressed as percentage of the risk weighted credit exposure
Amount of bank’s capital expressed as percentage of the risk weighted credit exposure & operational risk
Amount of bank’s capital expressed as percentage of the risk weighted credit exposure, & market risk
Amount of bank’s capital expressed as percentage of the risk weighted credit exposure,
operational risk & market risk
Doc 2
Some pattern questions:
1) The central bank in US is called______
Federal Reserve
2) Simple interest is calculated on which of the following

Beginning principal only
3) An investment manager handles all of the following except --------

Guaranteeing that the investor doesn’t suffer a loss in any investment
4) Pick the odd one out

a. Rakesh Jhunjunwala
b. Sachin Tendulekar
c. Warren Buffet
d. George Soros
e Peter Ujnah
5) In retail banking the term PDC stands for which of the following
post dated cheques
6) A company would pay the interest on what portion of the loan?

Disbursed amount

a. Notes
b. Stocks
c. Debentures
d. T-Bills
e. Minus
8) A formal, legal commitment to extend credit up to some maximum amount over a stated
period of time in a description of ________ Line of credit
9) As nominal interest rates increases in the economy the inflation should ideally
Increase
10) Which of the following is associated with the purpose of regulating financial institution
11) What is the maximum maturity for commercial paper? 270 days
12) The below stated responsibilities are carried out by which of the following players
Cash services/ client reporting/ statements & advice/ domestic & global settlements
Back office
13) In a financial instrument has a 20% chance of paying 20% & a 80% chance of paying 50%,
its expected return would be 44%
14) Which division provides services to high net worth individual

Private banking
15) Which of the following instruments will carry the lowest interest rate
T-note
16) Which of the following instruments will carry the highest interest rate?
Commercial Paper
CTS-L0
1. What does BAFT stand for

a. Bankers Association For Foreign trade
2. What is CP?
a. Commercial Paper
3. What is CPI ?
a. Consumer Product index
b. Consumer Price index
4. Which of the following are regulatory authorities?
a. SEC
b. SEBI
c. FSA (Financial Security Authority), UK
d. All OF the ABOVE
5. The Bid price is
a. more than offer price
b. less than offer price
c. equal to offer price
d. None of the above
6. ATM is
a. Banking enabled through a terminal used to make transactions without a
human teller.
7. Where is the initial prospectus filed?
a. SEC
b. BAFT
c .None of the above
8. Banker acceptances are ________________ credit investment created by

___________ and used for financing imports, exports and domestic shipping
a. Long term; financial firms
b. Long term; non-financial firms
c. Short term; non-financial firms
d. Short term; financial firms
e. Medium terms; banks
9. USA Patriot act was passed in

a. 2000.
b. 2001
c. 2002
d. 2003
10. As per an estimate, netting reduces the number of settlements needed by

a. 60 %
b. 75 %
c. 95 %
d. 50 %
11. SWIFT uses ___________ messaging system

a. 15022
b. 5022
c. 196
d.2000
12. Which is not an option
e. Call
f. Put
g. Swaption
h. Oil futures
i. Leaps
13. Who starts the process of issuing a LOC
a. Issuer Bank
b. Buyer
c. Seller
d. Beneficiary Bank
14. What is a choice quote?

a. Quote at which one wants to buy or sell
15. Bank is
a. Unregulated and unsafe
b. Regulated and unsafe
c. Unregulated and safe
d. Regulated and safe
16.Bank is a common place

a. For Borrower and depositor
17.Rohit deposits XYZ amount into bank A. Payal borrows XYZ amount from bank A. How
will the bank benefit?
a. Lending rate less than deposit rate.
b. Lending rate greater than deposit rate.
c. Lending rate equal to deposit rate.
d. All of the above
18.Which of the following is more risky

a. An asset with standard deviation 5
b. An asset with standard deviation 4
c. An asset with standard deviation 3
d. An asset with standard deviation 2
e. An asset with standard deviation 1
19. Find the odd man out about Hedge Fund

a. Higher Liquidity higher risk
b. Leverage
c. Speculation
d. Risk aversion
20. What is GDR?

a. Global Depository Receipt
21. ACH
a. are electronic clearing transactions in which information about debits and
credits are passed across the clearing system through electronic data files
22. Trade finance is used in
a. International trade
23. Intsinet is used in

a. Listed Market
b. Primary Market
c. Secondary Market
d. Third Market
e. Fourth Market
24. Stock price on Day 1 and 2 are 102 and 100. How much is the return earned
a. Very high
b. –1.96 %
c. 2%
d. –2%
25. X share is selling at $25. Y had bought 200 shares at $24 and earned a dividend of 1.5% per
share. How much returned he has earned?
a. $500
b. $400
c. $300
d. $200
e. $100
26. Find the odd man out

a. NASDAQ
b. NYSE
c. LSE
d. SEC
27. NASD is not an SRO for

a. Listed Market
b. Second market
c. Third Market
d. Fourth Market
28. Retail lending is for

a. Large investors
b. Small and medium investors
c. Financial Institutions
29. Who among the following is supposedly a private banking client?

a. Manager of a manufacturing plant
b. A cricketer who has not played a single international/Domestic match
c. Tiger Woods
30. Lending money to which of the following country is not risky?

a. US
b. India
c. Pakistan
d. Bangladesh
31. Sweep transfers

a. Excess money from one account into another
b. Money from one persons account into another.
CTS-L0
1. If an investment pays interest at an annual rate of 5% per year, compounded twice a

year than the effective yield larger than 5.5%
a. True b. False
2. In a 2 way quote for a share the bid is

a. 2% less than offer
b. Less than offer
c. More than offer
d. Dependent on dealer’s skill
e. Equal to offer
3. Which of the following is usually not participant in stock market

a. Small individual’s investors
b. Central banks
c. Companies
d. Financial institutions
4. In an account saving simple interest from the first year is reinvented at the beginning of
the second year?
a. True b. False
5. Which of the following is a not current asset?

a. Goods for sale inventory
b. Terms loans
c. Cash
d. Raw material inventory
e. Receivables
6. Which of the following in not a feature of private banking?

a. Specialist advice
b. Lot of research
c. Commercial lending
d. High investment in technology
e. Understanding the capital and investment needs.
7. Retail loans are asset product offered by the bank

a. True b. False
8. If the price of share pf cognizant changes from 65 to 60 this can be attributed to:
a. Market risk
b. Interest rate risk
c. Credit risk
d. Operational risk
e. Liquidity risk
9. Account maintained in the home currency by one bank is the name of another bank
based abroad is called as:
a. Current account
b. Nostro account
c. Vostro account
d. Forex account
e. Overseas account
10. Which of the following is not the settlement method for bank loans?
a. Pre-closure
b. Assignment
c. Participation
d. Sub participation
e. Securities repository
11. The process of transferring obligation from one party to another is called Credit
Swap/Credit Derivatives
12. The purchase of any stock for immediate delivery is a __ market transaction.
a. Futures
b. Spot
c. Forward
d. Stock
e. Option
13. In the historical simulation method of VaR calculation:

a. Return are assumed to be not normally distributed
b. No assumption is made about the distribution
c. Random returns are generated to calculate VaR
d. Return are assumed to be normally distributed
e. Returns are not required at all.
14. What happens when interest rate fall:

a. Bond prices increase
b. Bond prices decrease
c. Bond prices do not change
d. Economy goes into deflation
e. Interest rate never fall, they always go up.
15. If the price of a security on day 1&2 is $102 and $100 respectively. The return is
a. -2%
b. 2%
c. -1.96%
d. Very high
e. 1-2%
16. If you invest $1000 for 3 years at 7% compound interest, how much will you have at the
end of the 3 years?
a. $1225
b. None of listed option
c. $1000
d. $1070
e. $1270
17. The trade finance the term LC stands for;

a. Letter of commercials
b. Letter of credit worthiness
c. Letter of credit
d. Letter of commerce
e. Letter of complaints
18. What is need for banks in the society?

a. Small investor are protected, hence it is a low risk investment avenue.
b. Banks are in the best position to lend out money at competitive
c. Depositors are participant in primary and secondary markets.
d. All of listed options.
19. A is more risk averse investor than B .therefore.

a. For the same return, B tolerates lesser risk than B.
b. For the same return, A tolerates higher rate of return.
c. For the same return, A tolerates lower rate of return.
d. For the same return, A takes higher risk.
20. Liquidity issues of credit can be addressed by:-

a. Sweep facility
b. Structured lending to client
c. All
d. Short term credit facilities
e. Overdraft
21. Which is associated with purpose of regulating financial institution?
a. None
b. To provide stability of money supply.
c. To serve certain social objectives.
d. To prevent failure of any financial institution.
e. To offset moral hazard incentive provided by deposit insurance and other
guarantees.
22. Fastest method for calculating VaR.

a. Monte- Carlo simulation.
b. All equal time with software.
c. Variance-Covariance matrix.
d. Combination of Monte- Carlo and Historical Simulation.
23. Which is not banks primary use for deposits?

a. Payment to employers
b. None
c. Investment
d. Loan
e. Withdrawal
24. If the 5 bids available for stock are 64, 65, 63, 62.5 and 66 which one u will sell? -> 66
25. When a bank issue a loan its liabilities & reserves increases by the amount of the loan.
a. True b. False
26. If the corporate isn’t able to raise money from the market to pay off some loans the risk
can be refer.
a. Market risk
c. Commodity risk
d. Operational risk
e. Liquidity risk
27. On the trading day at the NYSE a broker undertakes the following trades
Buy 100 MFST share for $20.00 each
Sell 20 IBM shares $11 each
Sell 10 MFST share at 20.50 each
Sell 30 IBM shares for 9.00 each
How much did the broker pay out to the exchange in total in case of (i) Gross settlement
system (ii) Net Settlement System?
a. (i) $1780 (ii) $3000
b. (i) 0 for IBM, $1795 for MSFT (ii) $1780.
c. (i) $3000 (ii) $1780
d. None
e. (i) $1780 (ii) 0 for IBM, $1795 for MSFT
28. US export and Europe import agree to carry out the transaction of goods word $100000
under a confirmed term LC with a maturity date of 60 days from the time of shipment.
The acceptance commission @ 1.5 % PA equals
A) $2500
B) $3000
C) $300
D) none
E) $250
29. Operational risk is defined as?
30. The basic four parties involved in any transaction using LC are the following EXCEPT
A) Issuing Bank
B) Reimbursement Bank
C) Beneficiary Bank
D) Seller
E) Buyer
31. While providing security lending services to its clients which risk will a custodian have
to manage for its clients
A) Liquidity risk
B) Both Credit risk and interest rate risk
C) Interest rate risk
D) Credit risk
E) Both credit risk and liquidity risk.
32. If the price of securities on day 1 and 2 are $100 and $102 respectively .Returns is
A) A very high
B) 2
C) -1
D) -2
E) -1.96%
33. Following are the list of risk that Cognizant faces at organizational level
A) Currency risk
B) Attrition
C) Credit risk
D) All of the above
E) Protective legislation by US/UK
34. Which of the following is not a core private banking function?
A) Client management
B) Deposit Mobilization
C) Investment analysis and advice
D) Research
E) Sales and Marketing
35. A mutual fund with investment objective of achieving high capital growth approaches
investor services firm for advice. The firm advices the mutual fund to invest 80% of the
fund in govt debt and 20% in equity. The allocation towards debt advised by the firm
A) Cannot be determined
B) is too high
C) Is about right
D) is too low
36. Which of the following operations can be done on a LC?
A) All the listed option

B) Acceptance
C) Negotiate
D) Purchase
E) Discount
37. Who among the following is most likely to be a private banking client of a bank?
A) A fresh engineer in his first job at cognizant

B) Tiger Woods
C) Any of the above
D) A cricket player who has never played national / international cricket
E) A manager at a manufacturing plant.
38. Which of the following method eliminate country risk and commercial risk upon
confirmation?
A) Documentary collection
B) Back to back LC
C) LC
D) Standby LC
E) Both standby LC and LC
42. The act of the loan amount being handed over to the borrower by the bank is known as
disbursement. State TRUE or FALSE -> TRUE
39) On the trading day at the NYSE a broker undertakes the following trades
the end of the day
A) IBM no exchange of shares ; MFST 90 shares to receive ; $1780 to pay out to the
exchange
B) 6None of these
C) IBM no exchange of shares ; MFST 90 share to receive ; $3000 to pay out to exchange
D) IBM 70 shares to given out ; MFST 90 shares to receive ; $3000 to pat out to exchange
E) IBM no exchange of shares ; MFST 90 share to receive ; $1780 receive from the
exchange
40. ACH transaction involves the transmission of _________

A) All of the listed option
B) Documents
C) Physical instrument like check and draft
D) Electronic data files
E) Cash
41. What should one use while using comparing mortgages?

A) APR
B) None
C) IRR
D) NPV
E) Rate of interest applicable for the loan
43. Which one of the following is not offered by investment banking division of a bank?
A) learning services
B) ‘None
C) Merger and Acquisition
D) Valuation of firm
E) Underwriting and distribution of equity issues.
44. If total spread on underwriting is $500000 and manager fee is $100000. What is the
amount which will be distributed in the syndicate?
A) 500000
B) 100000
C) 400000
D) 600000
E) Can not be determined
45. HPPL shares are currently selling for $25 each. You bought 200 shares one year ago at
$24 each and received dividend payment as $1.50 per share what was total dollar capital
gain this year
A) 200
B) 500
C) None
D) 300
E) 400
46. The brokerage firm is regulated by

A) State regularity agency
B) SEC
C) Industry wide SRO
D) All of the listed option
47) Pick odd one out

a. Demat
b. Personal loan
c. None
d. Hire Purchase
e. Auto loans
48. I deposited 100 in a bank .Bank loan out 90 out of it to someone else, who then invest
the money in setting u a new factory. This process is called
A) Monetary policy
B) None
C) Money multiplier effect
D) Profit making tendency of a bank
E) Fiscal policy
49. Capital adequacy ratio refers to

A) Amount of bank capital expressed as % of the risk weighted credit exposure & market
risk.
B) Amount of bank capital expressed as % of the risk weighted credit exposure
C) Amount of bank capital expressed as % of the risk weighted credit exposure & operational
risk.
D) Amount of bank capital expressed as % of the risk weighted credit exposure
operational risk & market risk.
E) None
50. Which of the following is not a treasury management system?

A) Calypso
B) Summit
C) Wall street system
D) Front arena
E) Flex cube
51. Syndicate helps in all of the following activity but

A) Managing large bond issues
B) Raising huge money from the bank
C) Managing large capital raising act
D) Managing conflict between investment banks.
E) IPO distribution.
52. All of the following statements concerning US govt securities are correct EXCEPT
A) Treasury bills have their interest paid in a lump sum at maturity
B) None
C) Treasury bills have greater interest risk than either treasury bond or treasury note
D) Treasury note has maturity dates up to 10 yrs
E) Treasury bonds have maturity dates up to 30 yrs
53. In defined benefit plan the benefit is expressed as ________ and in defined contribution
plan the benefit is expressed as an ________
A) Account balance , Annuity

B) Annuity , Annuity
C) Account balance , Account balance
D) None
E) Annuity , Account balance
54. What is the term used to indicate the arrangement of LARGE borrowing for a
corporate by a group as lenders
A) none
B) Syndicate
C) Allocation
D) Assignment
E) Secondary
55. Card associate provide which of the following service

A) issue card
B) Set credit limits
C) Set interest rates
D) Set card fees
E) Security/ Risk management
56. in an international securities transaction, which of the following participant will not be
involved
A) Global custodian , domestic sub custodian , depository in foreign country and sometime
stock exchange in foreign country
B) Depository in foreign country
C) Global Custodian
D) stock exchange in foreign country
E) domestic sub custodian
57. An insurer undertakes an analysis of a portfolio of insurance policy by exploring

scenarios for the path followed by swap rates, policy surrender rates, mortgage
prepayment rates for the mortgage backed security in the portfolio, what is this process
called
A) Cash projection
B) Investment manages universe
C) Asset allocation
D) Fund administration
E) Asset / liabilities analysis
58 Trade finance helps in

A) Facilitating international transaction
B) Facilitating intra company transaction
C) Facilitating international transaction , corporate lending and settling up of new factories
D) Facilitating corporate lending
E) Facilitating setting up of new factories
59. A choice quote is

A) a price at which a firm is ready to buy or sell
B) When bid is equal to offer
C) When the firm has a choice of deciding the securities to take
D) a price at which a firm is ready to buy or sell it also means when bid is equal to
offer
60. Which of the following is likely to have the highest interest rate?
A) 6 month deposit of min balance of $1000
B) 3 month deposit of min balance of $4000
C) 12 month deposit of min balance of $1000
D) None
E) 6 month deposit of min balance of $2000
61. If 1 day VaR is $1 million, 9 day Var is

A) $3mn
B) $4.5 mn
C) $9mn
D) $4.4mn
E) $1mn
62. If a bank gets a deposit of $1000 assuming a CRR of 10% and that it circulates through
2 more banks, leading to the following money multiplier effect
A) Loan of $2439
B) Loan of $1710
C) None
D) Create a reserve of $100
E) Create a reserve of $190
63. Which among the following is an investment company that pools money from unit
holders and invest in a variety of security?
A) Mutual Fund
B) Mortgage Company
C) None
D) Stock Exchange
64. You purchased a stock for $40. 1 year later you received $2 as Dividend. You sold it at
$48. What is your return?
a. 45%
b. 10%
c. 25%
d. 50%
e. None
65. A formal Legal commitment to extend credit to some max amount over a state period of
time is description of
a. Trade Credit
b. Revolving Credit
c. Agreement Irrevocable Credit
d. Line of Credit
e. Letter of Credit
66. Odd 1 out

a. Warren Buffet
b. George Soros
c. Bill Gates
d. Ben Graham
e. Peter Lynch
67. Development of Investment Objective and Investment policy falls under the Purview of
a. Investment manager Universe
b. Asset Allocation
c. Asset Liability Analysis
d. Fund Admin
e. Compliance Reporting
68. Interest Rate Spread is equal to
a. Current rate – Base Rate
b. Cap – Current Rate
c. Current Rate – Floor
d. Base Rate – Floor
69. Which of the following factors affect the choice of Payment Method?
a. Exporters Fund
b. All
c. Government Guarantee Program
d. Time Frame
e. Cost of Financing
70. The NYSE is a large financial market in which the initial issue receives the proceeds for
the Sale of securities.
a. True b. False
71. Which of the following trading services reduces the trading cost for institutional
investors?
a. Stock Repurchase Program
b. Transition Management
c. Transition Management & Commission Recapture
d. Commission Recapture
e. None
72. A CALL option on futures gives the buyer

a. the obligation to buy a futures contract
b. the obligation to sell a futures contract
c. the right & obligation to buy a futures contract
d. the right but not the obligation to buy a futures contract
e. the right but not the obligation to sell a futures contract
73. Which is not an example of Option?

a. Call Option
b. Swaption
c. Leaps
d. Oil Futures
e. Put Options
74. Some banks pay interest on Checking A/c while many do not.
a. True
b. False
75. The advising bank is called as trusted bridge between the ___________ & __________
when they do not have active relationship. Options wrong
a. Beneficiary Bank & Reimbursing Bank
b. Importer Exporter
c. Reimbursing Bank & Beneficiary Bank
d. Issuing Bank & Confirming Bank
The advising bank is used as a trusted bridge between the applicant’s bank and the beneficiary’s
bank when they do not have an active relationship.
76. Which of the following according to you has resulted in defining contribution plans
gaining popularity over defined benefit plans
a. DC plans fix the monthly contribution from the employee making his financial planning
easier.
b. DC plans are seen by employees as investment which to accumulate retirement income.
c. All
d. Employer increasing wants employees to share responsibility for retirement
77. ________is typically largest part of spread and is paid to broker\dealer or that actually
took clients order
a. Salary
b. Manager fee
c. Wage
d. Concession
e. Underwriter

a. Listed market
b. Over the counter market
c. Third market
d. Fourth market
79. High net worth individuals generally have ____________.

a. Market capitalization more than $200000
b. All
c. Net worth greater than $500000
d. Household income of max $50000 year.
80. Which is true about retail banking?

a. The business focuses on small no. of high net worth individuals.
b. The business focuses on small and medium enterprises.
c. The business focuses on large no. of individuals.
d. The business focuses on large no. of corporation bodies.
81. Offer is price at which a firm

a. Trades in securities
b. Quotes to its bets customer
c. Intends to buy
d. Intends to sell
e. Quotes when it does not want to trade.
82. Securities with original maturity greater than 1 year are traded on money market.
a. True b. False
83. Which is not a banking service?
a. Stock market
b. Retail banking
c. Corporate banking
d. Customer lending
84. Which is true?
a. Financer owns the asset both in case of ‘Lease’ and ‘hire Purchase’.
b. Tax deduction cab be claimed fro the full value of the rental paid in case of lease
c. All
d. Depreciation in claimed by the financer in lease and not in case of hire purchase.
85. Bank a based in US provides safe keeping services for securities to its US clients. It also
has clients in France and Belgium and provides securities safe keeping services to these
clients through banks C & D respectively. Which best describes bank A?
a. Global custodian,
b. None
c. Main custodian
d. Sub custodian
e. Secondary custodian
86. All following statements relating to Bonds are correct except.

A) Bonds sell at a discount when Coupon Rate is less than Market Interest rate.
B) None
C) Bond is debt instrument giving issues.
87. Which of the following type of loan requires the amount of interest that would be
earned on the loan to be paid upfront by the borrower?
A) Capitalized loan
B) True Discounted loan
C) Amortized loan
D) Demand loan
E) Discounted loan
88. Who are involved in the preparation of prospectus of IPO?
A) Commercial bankers
B) Investment Bankers
C) None
D) Company Management
E) Company Management and Investment Bankers
89. Bankers Acceptance differs from Sight Draft in that

A) Bankers Acceptance reduces lending capacity
B) Sight Drafts are negotiable instruments
C) Bankers Acceptance demands immediate payment.
D) None
E) Banks can raise funds by selling acceptance.
90. Clients of a private banker are generally not segregated on the basis of
A) Investible assets
B) Location
C) Age
D) Net worth
E) Name
91. The initial sale of the security is in the ………market, while subsequent trading in
the security is in the …….. market
A) Spot, futures
B) Debt , Equity
C) Primary , Secondary
D) Money, Capital
E) Secondary, Primary
92. Under what category can services like asset/liability analysis, asset allocation, cash
projection, compliance reporting, fund administration, investment Management
universe etc. provided by an institution can be classified?
A) Investment Management
B) Asset Servicing
C) None
D) Trading
E) Investor Services.
93. CIP in the context of anti-money laundering is

A) All
B) Stands for Suspicious Activity Reports
C) Customer Identification Program
D) Requiring Businesses, which were only to report cash transactions involving more than
1.00,000?
94. On a trading day at a stock exchange a broker undertakes the foll trades:
Buy 100 IBM shares for 10$ each
Sell 50 IBM shares for 10.5 $each
Buy 100 MSFT shares for 20$ each
Sell 20 IBM shares for 11$ each
Sell 10 MSFT shares for 20.5 each
Sell 30 1bm shares for 9$ each
At the end of the day, the broker owes 1780 to the exchange while exchange owes him
90 shares of MSFT. Is it possible?
A) Yes under RTGS
B) No
C) Yes under net-settlement system
95. Dow Jones industrial average is made of

A) 30 stocks
B) 20 stocks
C) 40 stocks
D) 10 stocks
E) 50 stocks
96. Which is the key feature of Letter of Credit?

A) basis for devising proper currency hedging strategy
B) Distributes risk between buyer n sellers.
C) basis for devising proper currency hedging strategy and opportunity for receiving payment
in advance of the due date.
D) All
E) Opportunity for receiving payment in advance of the due date.
97. Which risks bring gain and losses?

A) Interest rate and foreign exchange
B) Liquidity and credit
C) Credit and Interest rate
D) Credit and Foreign exchange
E) All
98. Find the future value of $1200 invested at 5.25 % per annum payable annually
after 6 months? Marks: 2
1. 1345.1
2. 1243.1
3. 1231.1
4. None
5. 1235
99. Investor services like brokerage, cash management and short term investments,
commission re-capture, foreign exchange transactions, transaction management
etc. can be classified under ____ group of services. Marks: 1.
1. Trading
2. Investment Management
3. Investor service
4. None
5. Asset Servicing
101. The term CP is used in corporate lending for ____. Marks: 1

1. Collateral provision
2. Client Partner
3. Commercial Paper
4. Commodity Put options
5. Credit Provision
102 What are the risks associated with the Hedge funds? Marks: 3
1. All of the above
2. High exposures in derivatives
3. High Leveraging
4. High Speculation
103. The trade terms “15/2 net 30”indicates that _____. Marks: 3
a. 2% discount is offered if payment is made within 15 days.
b. 15% discount is offered if payment is made within 2 days; the payment should
however be made in 30 days.
c. 30% discount is offered if payment is made before 15 of the month.
d. 15% discount is offered if payment is made between 2 & 30 days;
e. 15% discount is offered if payment is made within 30 days.
104. A bank is required to hold reverses at least equal to a pre-scribed fraction of its total
deposit liabilities.
a. True b. False
105 What term is used to describe n LC that remains valid for years thereby eliminating
the cost of separate LC’s for each transaction with a regular client?(not sure bout the
answer)
a. Irrevocable LC
b. None
c. Red clause
d. Revolving LC
e. Evergreen clause
106 .Who appoints investment manager to manage a benefit plan?

a. Plan sponsor
b. Plan administrator
c. Fund trustee
d. None
e. Government
107 A company would pay the interest on what portion of loan?

a. Committed amount
b. Either disbursed or committed loan
c. Unused amount of loan
d. Disbursed amount
e. None
108 In the exchange on a particular trading there is a buy market order for 100 CTSH
shares and two sell market orders for 50 and 40 CTSH shares each, can the buy order be
matched against the two sell orders.
a. Yes
b. No
c. Yes, but if prices on the buy & sell side match.
109 If the limit = $2000, margin = 20% and asset value = $2000 then drawing power for an
open ended loan is equal to?
a. None
b. $1600
c. $2200
d. $2400
e. $2000
110 Risk cannot be migrated by
a. Setting risk limits
b. Hedging
c. Diversification
d. Arbitrage
e. Insurance
111 A fixed income analyst will analyze all but

a. Municipal bonds
b. Bonds of govt. sponsed enterprise
c. Corporate bonds
d. US treasuries
e. Shares
112 In benefit administration what are the relationships that exits between the plan
administrator and the investment manager, and between Trustee and the investment
manager.
a. None
b. Plan administrator & trustee both have outsourced plan administration as well as fund
management to investment manager
c. Any
d. Plan administrator gives investment instruction to investment manager while
trustee appoints the investment manager.
e. Trustee gives investment instruction to investment manager, while plan administrator
appoints the investment manager.
113 Which entity provides credit scores that are used by issuers to process card
application?
a. Issuer processor
b. Collection agency
c. Issuing bank
d. Authorization engine
e. Credit bureau.
114 CPI stands for which of the following?

a. Consolidated Price index
b. Consument popularity index
c. Consumer product index
d. Consumer price index
e. None
115 A bank decides to sanction only 10% of the loan sought by a company. The company
goes and pledges extra assets with the bank and the bank then agree to sanction 50% of the
loan sought. The company has indulged in the process of
a. Credit scoring
b. Credit increase
c. Credit incrementation
d. Credit revision
e. Credit enhancement.
116 FX spot deal assumes maturity of how many business days ahead ?
a) 4
b) 5
c) 3
d) 1
e) 2
117 Which of the following is best VaR estimation Model?

a) Monte- Carlo
b) Historical
c) Variance-Covariance
d) Variance-Covariance and Monte- Carlo
118 Which of them represent company is incorporated in USA?
a) Plc
b) Pte
c) Ltd
d) Inc
119 Which of the factors affect the choice of payment methods?

a) Govt. guarantee Program
b) Time frame
c) All
d) Cost of financing
e) Exporter fund.
120 Organization level risk appetite is determined by:

a) Risk management
b) Front office
c) Back office
d) Trade
e) Board of director
121 Risk management is function of:

a) Traders
b) Back office
c) Specialist
d) Front office
e) Mid office
122 Purely competitive financial market is not characterized by

a) Govt. regulation
b) Many traders
c) Full info
d) Cost effective trading
123 NOT player in typical trade cycle;

a) Custodian bank
b) Clearing bank
c) Clearing member
d) Trading member
e) Regulator
124 Once syndicate has sold all other trades participant, sub participant and assignment
are considered trade in what market?
a) Primary
b) Secondary
c) Participant
d) OTC
e) Index
125 Question relates to price weighted index?

1. DJIA –Price weighted
2. Hangseng market cap
3. EAFE index – market cap
4. NASDAQ composite index market cap
5. S&P 500 market cap
126 In defined contribution retirement plan .Tax sheltered annuities fall under section of
_________ERISA
403b
401k
401b
403k
None
126 In benefits administration, trustee and plan administrator submit compliance report
to______ which in turn qualifies the plan.
Participant
None (answer is TRUST)
Government
Investment manager
Sponsor
127 Full form of ADR

Answer: American Depository Receipts
128 Question related to BASEL II

Answer: Capital adequacy
129 What is interest rate charged on asset based loan?

Answer: The interest rate charged is lower than personal loans
130 Question related to credit derivatives as which of the following function is not done by credit
derivatives
Answer: Answer was something as Transfer to over the counter
131 Question related to credit derivatives it was fill up the blanks? Exactly don’t remember the
question/
Answer: option having “TRANSFER”
132 Question related to non-discretionary Investment Management

Answer: the bank offers investment recommendations based on the Client’s approval.
133 Question having few options like Income Processing, Tax Information Services, Cash Sweep
Answer: ASSET SERVICING
134 Question related to Underwriting?
Options:
1. Underwriting Spread
2. Public Offering Price (POP),
3. Lead or Managing Underwriter is the Underwriting Agreement.(not sure about it)
4. All
Answer is ALL the listed option
6. Risk Matrices was developed by:- JP Morgan, Bank of California, Credit Suisse, SBI
7. Research analyst may recommend to :- buy, hold and sell
8. Reducing CRR for banks would have impact on:-
a. Increased money supply
b. Reduced interest rates
c. Reduced money supply in the economy
d. Profitability of firms
e. None
9. Under corporate stock repurchase program
a. Corporate purchase their own shares from shareholders
10. Private banking providing risk management services strives to:-

a. Eliminate risk and maximize returns
b. Eliminate risk without worrying about returns
c. Reduce risk and optimize returns
d. Avoid risk and returns
e. All
f.
11. One would go for bank deposits because
a. Money easily available
b. Interest earned
c. Insurance cover available
d. All
12. Basic 4 parties involved in any transaction using letter of credit are following except
a. Issuing bank
b. Buyer
c. Reimbursement bank
d. Seller
e. Beneficiary bank
13. From seller’s point of view which method has least risk
a. LC
b. Direct debit
c. Documentary collection
d. Counter trade
e. Cash in advance
14. ABC rated as AA+ and XYZ rated D. Who gets loan from bank
a. Equally unlikely
b. Equally likely
c. ABC
d. XYZ
e. None
15. Which is not the settlement method for bank loans?

a. Pre-closure
b. Assignment
c. Participation
16. Which is correct hierarchy of corporate ratings (high to low)?

a. AAA,AA+,BBB,D
17. Inflation- 9%. Future value of 100 units of money after 2 years:
a. 118.8
b. Exactly 100
c. Exactly 200
d. Around 109
e. None
18. Brokerage firms are regulated by

a. SEC
c. State regulatory Agency
d. All
19. Odd man out:-

a. SEC
b. NYSE
c. NASDAQ
d. LSE
e. NSE
20. From investor stand point a debenture issued by excellent company will appear risky than
share of preferred stock issued by excellent company
a. True
b. False
21. Risk associated with hedge funds:-

a. High exposure in derivatives
b. All
c. High speculation
d. High leveraging
22. Not a feature of private banking:-

a. High investment in technology
b. Lot of research
d. Specialist advice
e. Understanding capital and investment needs
23. Which of the following affects the choice of payment method

a. All
b. Government guarantee method
c. Exporter’s fund
d. Time frame
e. Cost of financing
24. Which risk may bring gains and losses?

b. All
c. Liquidity risk and foreign exchange risk
25. Bankers acceptance differs from sight draft in that

a. Sight drafts are negotiable instruments
b. Bankers acceptance demand immediate payments
c. Bank can raise funds by selling acceptance
d. Bank acceptance reduces banks lending capacity
e. None
26. Formal legal commitment to extend credit up to some maximum amount over a period of
time is a description of
a. Line of credit
b. Irrevocable credit
c. Letter of credit
d. Revolving credit agreement
e. Trade credit
27. Security settlement is function of

a. Specialist
b. Traders
c. Back office
d. Front office
e. Mid office
28. Which of these instruments is not included as part of asset servicing services and the
category “Pricing/ Holdings” Valuation which includes accurate pricing, rating etc.
a. Equities
b. Certificate of participation
c. Government securities
d. Certificate of deposit
e. Services may be provided for all
29. Which of the following is involved in retails brokerage business in US

a. E-trade
b. Charles Schwab
c. Sallie Mae
d. Federal reserve
e. a and b both
30. Measures of performance of an investment portfolio are all of the following except:-
a. Risk adjusted return
b. Style maps score
c. Profit/loss on portfolio
d. Alpha
e. Up/down market analysis
31. Interest rate spread:-

a. Current rate – floor
b. Cap – current rate
c. Current rate-base rate
d. Base rate-floor rate
e. None
32. Who insures stocks in stock market

a. Security and exchange commission
b. Federal deposit insurance corporation
c. Us department of treasury
d. None

a. 4th market
b. 3rd market
c. Listed market
d. 2nd market
e. OTC market
34. Which of the following loan requires the amount of interest that would be earned on the
loan to be paid upfront by borrower:-
a. Discounted loans
b. True discount
c. Capitalized
d. Demand
e. Amortized
35. Limit = $2000 Margin=20% Asset value=2000

a. Drawing power = 1600
36. Over the counter market is also called

a. Unlisted market
b. 2nd , unlisted and OTC market
c. Unlisted
d. Super
e. 2nd market

a. Sweep facility
c. All
e. Overdraft
38. Standby letter is _____ secure than documentary collection and cheaper than ____
a. More, commercial LOC

a. Call
b. Put
c. Swaption
d. Oil futures
e. Leaps
40. question on top 10 US bank – REBO
41. ACH transaction involves

a. Cash
b. Electronic data
c. Docs
d. Checks and drafts
e. All
42. Interest rates falls
c. Do not change
d. Economy goes to deflation
43. Rate at which bank purchases US dollars against home currency is :-
a. Bid
b. Indirect
c. Direct
d. Cross currency
e. Ask rate
39 Offer price is the price at which the firm

f. Intends to buy
g. Intends to sell
h. Trades in securities
i. None
44. Bid price is the price at which the firm
The price at which market makers will buy or sell a particular security.
41 Presence of risk implies

a. Standard deviation of return is 0
b. Uncertainties of final outcome
c. Final wealth is lower
d. Investment gain
45. Company would pay interest on what portion of the loan?
a. Disbursed amount
b. Committed amount
c. Both
d. Either
e. None
46. Odd man out?
a. Equity
b. Stocks
c. Shares
d. Convertible bonds
e. Common stock
47. A bank cannot cover the money demanded by depositor, then it goes out to –
a. Federal reserve bank
48. Institutions involved in benefit administration process, discussing plans
a. Sponsor
b. Custodian
c. Plan administration
d. Record keeper
e. Participant
49. Which of the following eliminates both country risk and commercial risk?
a. Both standby LOC and LOC
50. When bank goes to the fed to borrow funds then the interest rate charged by fed is known
as
a. Prime rate
b. Bond rate
c. Discount rate
d. Federal rate
CTS-L0
e. None
4. ___ is the largest part of spread and is paid to broker/dealer that actually took the clients
order
a. Salary
b. Wage
c. Manager’s fee
d. Concession
e. Underwriter’s allowance
5. What is the term used to indicate the arrangement of large borrowing for a corporate by a
group of lenders?
a. Syndicate
b. Secondary
c. Assignment
d. None
e. Allocation
6. If a price of share changes from 65 to 60 this can be attributed to:
a. Market risk
c. Credit risk
d. Operational risk
e. Liquidity risk
e. All
9. Which will have highest interest rate
a. 3 months deposit with min balance of $4000
b. 12 months -> $1000
c. Cannot determine
d. 6 months -> $2000
e. 6 months -> $1000
b. Interest earned
d. All
a. Issuing bank
b. Buyer
d. Seller
e. Beneficiary bank
a. LC
b. Direct debit
d. Counter trade
e. Cash in advance
a. Equally unlikely
b. Equally likely
c. ABC
d. XYZ
e. None
14. Which of the following can be done on LC?
a. Negotiate
b. Purchase
c. Acceptance
d. Discount
e. All
a. Pre-closure
b. Assignment
c. Participation
a. AAA,AA+,BBB,D
17. Purchase as $40. A year later got dividend $2. Sold at $48. What is holding period return?
a. 10%
b. 25%
c. 45%
d. 50%
e. None
a. 118.8
b. Exactly 100
c. Exactly 200
d. Around 109
e. None
a. SEC
d. All
20. Odd man out:-
a. SEC
b. NYSE
c. NASDAQ
d. LSE
e. NSE
a. True
b. False
b. All
c. High speculation
d. High leveraging
b. Lot of research
a. All
d. Time frame
b. All
e. None
a. Line of credit
c. Letter of credit
e. Trade credit
28. Odd man out
a. None
b. Auto loans
c. Demat
d. Hire purchase
e. Personal loan
29. A choice quote is a price
a. At which a firm is ready to buy or sell
b. Where firm has a choice of deciding the security to take
c. A option and it also means when bid is equal to offer
d. When bid=offer
30. A bank gets a deposit of $1000 assuming CRR=10% and that is circulates through 2 more
banks, leading to following money multiplier effect:-
a. Create a reserve of $100
b. Create a reserve of $190
c. None
d. Loans of $1710
e. Loans of $2439
a. Specialist
b. Traders
c. Back office
d. Front office
e. Mid office
a. Equities
a. E-trade
b. Charles Schwab
c. Sallie Mae
d. Federal reserve
e. a and b both
b. Style maps score
d. Alpha
e. None
d. None
a. 4th market
b. 3rd market
c. Listed market
d. 2nd market
e. OTC market
38. Which of the following loan requires the amount of interest that would be earned on the loan
to be paid upfront by borrower:-
a. Discounted loans
b. True discount
c. Capitalized
d. Demand
e. Amortized
a. Unlisted market
c. Unlisted
d. Super
e. 2nd market
a. Sweep facility
c. All
e. Overdraft
43. Total spread of underwriting = 500000 and manager fee = 100000 and distributed in
syndicate=?
a. 600,000
b. 400,000
c. 100000
d. 500000
e. Cannot determine
44. Price of security on day 1&2 is $102 and $100 respectively. The return is
a. -2%
b. 2%
c. -1.96%
d. Very high
e. 1-2%
a. Call
b. Put
c. Swaption
d. Oil futures
e. Leaps
46. question on top 10 US bank – read page number 52
a. Cash
b. Electronic data
c. Docs
e. All
c. Do not change
a. Bid
b. Indirect
c. Direct
d. Cross currency
e. Ask rate
50. Offer price is the price at which the firm
a. Intends to buy
b. Intends to sell
c. Trades in securities
d. None
51. Presence of risk implies
d. Investment gain
a. Disbursed amount
b. Committed amount
c. Both
d. Either
e. None
53. Odd man out?
a. Equity
b. Stocks
c. Shares
e. Common stock
a. Sponsor
b. Custodian
d. Record keeper
e. Participant
57. When bank goes to the fed to borrow funds then the interest rate charged by fed is known as
a. Prime rate
b. Bond rate
c. Discount rate
d. Federal rate
58. CP full form in corporate lending …

a. commercial paper
59. when was US PATRICAT ACT passed

a. 2001
60. Risk averse
a. less risk/avoid risk
61. full form of EMI. Ans)
Equated Monthly Installment.
62. if day 1and day 2 share price is $100 and $102. return is
a. 2%
a. -1.96%
64. if share price of cognizant changes fronm $65 to $60 ,risk is
a .market risk
67. which of the following is online settlement method
a. RTGS
68. how much you will get at end of 3 years if you deposits $1000 at 7% compound interest
a. $1225
69. you bought 200 shares at $24. now share price is $ 25 and you got dividend of $1.50
your total return is
a. $500
70. if u buy share at price$ 40 and now share price is $ 48 and u got dividend of $2 per
share ur total return in % is
a. 25%
71. Which of the following is true for The Fed funds rate
a. It is cost of borrowing immediately available funds for one day.
72. corporate bonds are
a. always secured
73. fastest method in calculating VaR
A. covariance method
74. full form of VaR

a. value at risk
75.if one day var is $ 1M, calculate var for 9 days
a. $3M
76. Which of the following is not a repayment method?
Ans .collatral
78. in credit scores who is involved?
a. Credit Bureau
79. ATM stands for
1) Automatic Transaction Machine; Almost anytime banking
2) Automated Teller Machine; Remote location transactions
3) Automatic Transaction Machine; Fund transfer between accounts
4) Automated Teller Machine; Direct Deposit
5) Automatic Transaction Machine; Personal Banking
80. A Revocable LC (Letter of Credit)
 can be revoked without the consent of the Exporter
 can be revoked without the consent of the Exporter’s bank
 can be revoked without the consent of the Importer’s bank
 can’t be revoked with the consent of the Advising bank
 can’t be revoked without the consent of Exporter.
81. Which of the following are disadvantages of using LC (Letter of Credit)?(check box)
a. Time consuming
b. Costly
c. Specific and Binding
d. Deals with documents and not with products
e. Credit Line tied up.
a. Amount of bank’s capital expressed as percentage of the risk weighted credit exposure,
83. Banker acceptances are ________________ credit investment created by ___________
and used for financing imports, exports and domestic shipping
 Long term; financial firms
 Long term; non-financial firms
 Short term; non-financial firms
 Short term; financial firms
 Medium terms; banks
84. Mutual funds

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

a. security/risk management
93. funtions of private banking
95. not a Personal Investment Companies and private bank
96. risk associated with hedge funds

97. function of CORPORATE FINANCE
a. all
98. sales and brokers responds to which department when institution transfer their custody
service from one to another
a. Transition management
99. two questions from Netting and RTGS from pdf at page number 180-181
100. who is at risk in defind benefit
a. employer
101. difference between DB (defined benefit) and DC (defined contribution)
102. BAFT stands for
 Bankers Acceptance for Factoring Transactions
 Bankers Association for Foreign Trade
 Bankers Acceptance for Foreign transactions
 Bankers Association for Forfaiting & Factoring transaction
 Bankers association for Factoring Trade.
103. Corporate loans are .. Secured or unsecured , secured, unsecured
104. Pick odd one out ..
1) merril lynch
2) george soros
3) bell graham
4) bill gates
5) warren buffet
105. not investment bank
1) bear starter
2) lehmen brothers
3) icici securities
4) goldman sachs
106. newyork, delhi, Jakarta, thimpu … --- > least risk in investing
107. US, india, Pakistan, burma, Bhutan -- > beneficial for loan purpose
108. Which of the following is the most profitable for Credit Card Company?
1) Customers who always pay in time
2) Customers who never pay
3) Customers who default but finally pay
4) all of the listed options
5) None of the listed Options
6) Customer who pays minimum due
109. Which is not the charge type ??
Pledge, hypothecation, lien, collateral
110. Money Multiplier effect would imply………
1) An increase in the total money lent out into the system
2) An increase in the total money in the bank reserves in the system
3) A decrease in the total money in the bank reserves in the system
4) Both An increase in the total money lent out into the system and An increase in the
total money in the bank reserves in the system
5) Both An increase in the total money lent out into the system and a decrease in the total
money in the bank reserves in the system
111. Which of the following is associated with the purpose of regulating financial
institutions?
1) To provide stability of the money supply
2) To serve certain social objectives
3) To prevent failure of any financial institution
4) To offset the moral hazard incentives provided by deposit insurance and other guarantees.
5) Both To serve certain social objectives and To offset the moral hazard incentives
provided by deposit insurance and other guarantees.
112. Private banking is a fee driven business
113. Purely competitive financial market not characterized by,

1) govt. regulation
2) cost effective trading
3) full information
4) many traders
114. Open ended loan allow the borrower to borrow additional amount subject to the maximum
amount less then a set value.
1) True
2) False
115. investment bank assists in merger & aqisition..

1) Structure and deals
2) All
3) smooth transaction
4) structure and deals
116. card association do ??
1. Security/Risk management
2. Issue cards
3. Set credit limits
4. Set interest rates
117. which is not a pre shipment loan
1. bill discounting
2. row material
118. nominal rate – 8% , rate of inflation – 2%, real rate of inflation ???
1. 6%
2. 10%
119. two way quote for share the bid
120. funding cost goes up due to Hardening interest rate

… Risk ???
121. Federal funds rate: The rate domestic banks charge one another on overnight loans to meet
Federal Reserve requirements. This rate tracks very closely to the discount rate, but is usually
slightly higher.
122 . Warrant is combination of …..

1. equities & futures
2. call & put options
3. call options
123. KYC refers to …

1. checking old account
2. checking sponsors credentials
3. checking of credential of the customer
4. checking of bank credential by the federal bank
124. STP stands for ..
125. Price weighted index

Dow Jones Industrial Average
126. involved in IPO prospectus
1. invester banks
2. commercial banks
3. investor banks & corporate management
4. corporate management
5. none
127. 4.8% interest per annum- same as …

1. 0.4% per month & 1.6% per quarter
3. none
CTS-L0
Q1. Interest rate on deposit is 7.30; interest rate on loan is 9.25 %

Find spread?
Ans: 1.95
Q2. A card holder swap card for 100 usd. How much merchant deduct.
If 2 % is given discount.
Ans-100,100,
98,100,
100, 98,
98, 98,
100, 2
Q3. Foreclosure is the legal and professional proceeding in which a mortgagee, or other lien
holder, usually a lender, obtains a court ordered termination of a mortgagor's equitable right of
redemption
Q4. Financial operating plan (FOP)

Uses past performance income and expenses to forecast what to expect in the following
year
Q5 visa is involved in which of the following
1) Provide interchange system to transfer fund
2) Set credit limit
3) Issue credit cards
Q6.which is not true for barter trade and counter trade
Q7. Which one is benefit of netting?

1. compliance risk
2. systemic risk
Q8 VRU refers to??

Ans: All human to computer interaction
Q9. Question related to collateral …. (Interest for collateral)
Q10. Transaction reporting & compliance activity is performed by which of the following
1. front office
2. back office
Q11. Question on check 21 (ans –check imaging)
Q12. Share not issue publically …something like this (ans-insider trading)
Q13.if entry load is 2% and NAV is rs 10 then how much investor will have to pay to 100 units.
1.1200
2.1500
3. 500
4.1020
Q14. Amount owned by company to suppliers in the next one year is

1. Accrual liabilities
2. annual liabilities
3. deferred liabilities
4. current liabilities
Q15. FII,
Interest score
FFLP score
Loan Score
Q16. Process in which money is lend to corporate bodies
Q17. Normal T+3 settlement cycle. When are confirmation /affirmation completed?
1.
2. T+3
3. true
4. T+2
Q18. Question on forfeiting (read PDF Carefully)
Q19. Counterparty is a futures contracts (ans-stock exchange)
Q20. a borrower agrees to pay pre-payment fees of 1% in a syndicated loan of 30 M USD .

When the loan is disbursed, the prepayment loan will be paid to whom.
Q21.purpose of mortgage loan

1. Buying from equipment
2. buying shares
3. buying property(real estate)
4. buying car
Q21. Spread varies over life of loan is called?

Ans: Floating rate loan
Q22 Component to determine rate of exchange in a forward contact

ans: current spot rate n forward rate adjustment
Q23. Risk management is a function of ……

Ans: Mid office
Q24 Role of relationship manager?
Q25. Acceptance Commission (if 100000 then300 if 1000000 then 3000)
Q26 what is rebalancing?
Q28 odd -FHA Loans, interest rate loan, VA loans, Agency loans
Q29.one question from hedging (study PDF carefully)
Q30. Hire purchase (which one is wrong-financer is owner in hire and purchase)
Q31. TARP full form (TROUBLE ASSET RELIEF PROGRAM)
Q32 –financial operating plan

year
Q33. Airways & Citibank issue which card (answer -co branded card)
Q34.mesurement technique for credit risk

Ans: standardized approach, IRB (Internal Ratings Based)
Q35. How much will be the % legal fees on 30 M USD

1. 3m
2. 3000
3. 0.1m
4. 0.3m
5. no of the above
Q36. Valid means for a custody client …communicate trade instructions … (Ans-SWIFT)
Q37.Basic indicator approach for measurement of Operation risk (ans: Annual Gross income)
Q38 assuming a 4% inflation rate in how many years will purchasing power of 1000 be cut in half(ans-
17.65)
Q39. What is function of Single Euro Payment Area??
Q40. Bank does all except

Deposit money
Make a loan
Print Money
Invest Money
Q41. What is financial leveraging?
Q42. Question on short selling (True/False)

Ans: True
Q43. Question on NAV

Options: 55, 20, 75, cannot say
Q45. Question is something like not a way of transfer

Ans: By fax
Q46. Account used for tax and insurance premium

DEMAT
ESCORW
Q47. Which is not a derivative?

Future Contracts
Options
Swap
Bond
CTS-L0
LO
1.retail loans are asset products offered by the bank T or F
2.Treasurty management system :
3.NOE ? Full form Note of Execution
4. which institution is responsible for Monetary policy for the country?
central bank, finance ministry, planning comm., stock market, central govt.
5. In fundamental analysis, the top down approach involves performing analysis?
Economy Industry Country
6.categorise - asset servicing line of business? corporate action processing, income processing, transfer
agency service, all the above
7.odd man out in retail banking service cc service, trade finance, electronic banking, personal loans
8. next: current value of a future cash flow?
NPV, Nominal value, present value, FV
9. _assumes the counterparty risk of each member and guarantes financial settlement? custodian,
clearing house, depository stock exchange
10.order required:
trade execution, trade matching, trade confirmation, trrade clearance, trace settlement
Trade matching - Trade execution-Treade clearance-trade confirmation - TS
11. un secured loan?
cc, overdraft on checking, study loan, personal lines of credit All of the above
12. No of stages in loan syndication are--
2,3,1,5,4
13. which of the following is not an index?
HandSang, DAX, NASDAQ 100, FTSE, NYSE
14. banker acceptances are ------ credit investment created by ---- and used for financing imports,
exports and domestic shipping
short term; non-financial firms, st;ft, MT;banks, LT;NFT, LT, FT
15. A bank that is earning 10% on its earning assets and is paying 3% on its interest-earning liabilities ?
1. both have a neg. spread and will always have postive net earnings
2 have a pos. GAP position
3. Have a positive int. spread
4. have a neg. interest spread
5. will always have positive net earnings
16. attempting to profit by investing in a manner that differs from the conventional wisdom is an
example of
contrarian investing, momentum investing, technical analysis,passive
17. An MMDA account usually pays higher interest rates compared to a Savings or a checking acc.
True/False
18. tax and insurance premium collected as part of Loan repayment -- type of acc
escrow, MF account, FD, DMAT acc
19. Next : debt instrument involves lowest risk?

Treasury bills, Junk bonds, Corpor. bonds, Munis, Yankee bonds
20. corporate action?

M &A, Stock split, Rights issue, Declaring dividend, all
21. NASDAQ is based out of ----New York

22. Banknew is a retail bank All
23. Nominal interest rte 10%, rate of inflation 2%, RII value?
8%
24. role of syndicate? monitor bank regulations participate in swaps issue derivatives ensure proper
risk manage. place securities in a public offering
25. Trade finance - mode of financing
1. Time Frame, Cost of financiaing, Buyers trade associate
2. Govt, Guarantee Prg, Seller preference
3.None
4. 4. Exporter's fund, Risk Factors, Cost of financing, Time Frame
26. The amount of extra return investors demand for taking the extra risk of equity investment is called
---
1. abnormal return
2. equity risk premium
3 return of investmnet
4 return of equity
27. Next: BNY and Mellon is an example of is a leading asset management and securities services
company
28. coming together of BNY and Mellon is an example of merger
29. Corp. loans are: Always secured, always unsecured, never unsecured, never secured, secured or
unsecured
30. sweep is----- Cash sweep is a value added service provided by custodian banks to its customers. This
service ensures that the surplus cash in customers’ accounts are effectively invested in short-term
investment funds i.e. STIF (may be as short as an overnight fund) to generate additional returns. The
sweep can be done intra-day based on projected earnings of the particular account or end-of-day based
on actual surplus cash in the account. The STIFs invest money in money market or euro dollar Deposit.
31. open ended loan allow the borrower to borrow additional amount sub to the maximum amt less
than a set value. True or False
32. private banking is

?
1. combination of al
2. fee based business
3. trading business
4. net interest income based business
33. Risks for the investor is associated with corpoate bonds . but NOT U S Treasury securities?
1. Interest rate risk
2.default risk
3 credit rating risk
4 reinvestment risk
5. none
?
34. Unit Capital of MFS 20 Million; market value 55 mill. no of units is 1 mill. NAV please
55
36. Next: trade terms "10/3,net 15" indicate that?
37. Equity research is performed by following option

Mid off of investment firm, Front Off or Back Off

treasury management system - Pinnacle, Front Arena, TS2, Flex Cube or Finnacle
----------------------------------------------------------------------------------------------------
1. Which is a treasury management system?
Pinnacle, Front Arena, TS2, Flex Cube or Finnacle
2.What is the following process called? Checks are converted into digital files and then images are
transferred to fin. Intermediaries. Process of Clearing and settlement called?
Paper check processing, certified check, check imaging
3. Tax and Insurance premiums as part of loan repayment are handled in following type of account?
DMAT, FD, MF, Escrow
4. In TF, mode of financing?

a. Govt, Guarantee Prgm, Seller preference
b. Exporter's fund, Risk Factors, Cost of Financing, Time frame
c. Time frame, Cost of financing, Buyers trade associates
d. none
5. Trading of previously issued securities takes place?
a. All
b. Thro private placement
c. Secondary market
d. At company headquarters
e. Primary market
6. What is Farm Credit?

a. Credit to Reachers
b. Credit to Farmers
c. All
d. Credit to harvesters
e. credit to farm related business
7. Which does not come under the retail bank service?

TF, Per. loan, cc service, electronic banking
8. A purely competitive financial market is not charaterized by

Cost effecitive trading, many traders, Govt Regulation, Full information
9. which of the following debit instrument involves in lowest risk?

Corp. bonds, Treaasury bills, Munis, yankee bonds, junk bonds
10. P&L statement represent txns over a period of time while the Balance sheet show information as a
spec. date
TRUE
11. when a firm needs short term funds for a specific purpose, the bank loan will likely be a ----
Txn loan, revolving credit agreement, term loan, line of credit, compensating bal. agreement
?
12. Federal reserve, RBI, Bank of Japan, Bank of England, Bank of America
13. yankee bonds also known as

t-bills, call options, junk bonds, shares, none
14. Amt of money that banks can lend is directly affected by the reserve requirement set by central
bank.?
TRUE
15. When is bank failure is more likely to occur?

a.Bank increase its equity capital
b. Capital adequancy ratio is increase
c. bank holds more short term riskless securites
d. capital adequacy ratio is reduced
e. cash reserve ratin is increased
16.Valid repayment type

baloon, bullet payment, step up, all, step down
17. in reality, people hold part of their loans as cash. This makes the multiplier:
smaller, the same as if people did not hold cash, larger, zero
18. : --- is the legal and professional proceeding in which a lender, obtains a court ordered termination
of a borrower's equitable right of redemption?
credit freeze, sub-prime, foreclousre, securitization
19. At the end of the trade cycle, the trades are ----- to determint the obligation of the trading
members to deliver securities/ funds as per settlement schedule.
Ans: offset, Aggregated, netted, grossed
20. disadvantage of using lc?
a. Credit line tied up

b. Time consuming
c. All
21. CHIPS stands for?

Clearing House Interbank Payments System
22. a person purchase a share for $50, after 2 years,

price is $75
and he sold it
annual return ?
a. 0.5
b. 0.6667
c. 0.3333
d. 0.2247
23. High-net worh individuals generally have ----

net worth > $500,000, Household income of max. $50,000 per year, Household income > $500,000,
market capitalization more than $200,000
24. dividend declaration is an example of

Corporate Action
25. inflation represents
inc. in price, very high change in price, dec in prices, curr crisis, economic crisis
26. NOT a func of a bank?

a. Ensure super-normal returns to its small dep.
b. faciliate the trade and comm. dealings
27. community develop. banks(CDB's) is to serve residents and spur ecom. develop in low to moderate
income (LMI) geographical areas. T/F
TRUE
28 MF cannot
invest in bonds, short sell, invest in money market instruments, invest in equity, can follow any of the
investment practices
29. Univ. banks provide comm. banking as well as investment banking services under one roof . T/F
TRUE
30. suitable strategy for an investor following active appr.
a. pur. both types of stocks

b. sell both types of stocks
c. purchase undervalued stock and sel overvalued stock
d. sell undervalued stock and purchase overvalued stock
31. clearing system in which payments instructions between banks are processed and settled
individually and continuously throughout the day is called
ACH, RTGS, Continous Linked settlement, Clearing services, collection services
32. Next: order types based on volumes except

FOK, All, Day order, IOC, AON
33. Core banking is where the customer of one bank is able to transact on his account from any other
networked branck of the bank is known as
multi branch banking, None, Mobile banking, Online banking
34. open ended loan allow the borrower to borrow additional amt subject to the max amt < a set value
T/F TRUE
35. Warrant are the combination of which of these instruments?

a. put options and Swaps
b. call and put opt.
c. cash and call opt.
d. equities and futures
e. equities and call options
36. What happens when the interest rates rise?

Bond prices decrease, bond pricess do not change, bond prices increases, interest rates never fail,
they always go up
37. BSE is a large primary market in which the initial issuer receives the proceeds for the sale of
securities FALSE
38 categories the following

under asset servicing line of business: corp. Action processing;income processing;transfer agency
services;all
39 common advantage of using leasing

lower chance of overspending, less impulse buying, none, lower cost for items purchased,
using the asset without need for purchase
40. All brokers/dealers involved in the underwriting of non-exempt securities must be NASD member
41. diff. between banker's accep and sight draft?

a. BA demands imme. payment
b. bank can raise funds by selling the accep.
c. none
d. bankers accep. reduces bank's lending capacity
e. sight drafts are nego. instruments
?
42. A process in which money is lent to corp. bodies refers to:

a. loans provided to companies
b. loans provided to high net worth individuals
c. loans provided to individuals
d. loans provided by companies to individuals
e. loans provided to companies by govt.
43. VISA is involved which?

Provide interchange system to transfer fund
44. following represents that the company is incorporated in USA

PLC, INC, LTD, PTE
45. Next: If R- is real rate of interest, N - is nominal rate of interest and I - rate of inflation the
R=N-I
46. rate of exchange in forward contract are

a. Cross currency rate and forward rate adjustment
b. forward rate adjustment and amt of currency bought/sold
c. current spot rate and forward rate adjustment
47. interest rate spread is equal to?
48. ABC co wants to identify the best way for making salary credits to its huge employees
ach, paperchecks, cash , contactless payments
49. participation of less number of banks reduces the risk of lead bank. T/F TRUE
50. clearing house is the legal counterpart of the net settlement obligations of every membe. This
principle is called as
notation, novation, obligation gurantee, settlement fullfillment
51. ---- of a securities trade involves the transfer of the securities from the seller to the buyer
clearing, trading, netting, settlement
52. NOT a feature of online banking?

secure chat, Funds transfer, outbound calls, Bill payment
53. type of loan in which spreads varies over the life of the loan is called----
Floating rate loan, fixed rate loan, semi-fixed, positive spread loan, negative spread loan
54. In normal distribution 99%, confidence interval corresponds to ---

1 SD,1.65 SD, 1.96SD, 2.33 SD, 3 SD,
55. NOT an example of an option?

Call opt, Put opt, LEAPS, Swaption, Oil futures
56. In rolling settlement trades are aggregated for a period of time. T/F
TRUE
57. An investor in need of regular income should NOT select which of the following opt?
A bank deposit, PPF, An equity growth fund, A debt fund
58. USA patriot ACT passed in

2001
59. How much will be the 1% legal fee on 30M USD?

3000, None, 0.1M, 3M, 0.3M
60. Annuities are

true discounted loan, a loan that is paid in periodic equated installments with capatitalized interest,
capitalised loan, amortized loan, discounted loan Doubtful
61. The current value of a future cash flow or of a serious of future cash flows is called:
NPV
62. VaR can be measure at

95% Conf. level, Any conf. level, 97.5%, 99%, 90%
63. EBpp, identify the potential cost cutting
opp for a bank?
ALL
64.SPV –Special Purpose vehicle
1. A brokerage or analyst report will contain all of the following except?
a. Detailed description of the company, and its industry.
b. Opinion on why the analyst believes the company will succeed or fail.
-c. Recommendations to buy, sell, or hold the company.
d. Target price or performance prediction for the stock in a year.
e. Track record of the analyst writing the report.
2. 2 Marks
One should have the MMDA if one is looking for _______________________.
a. Quick, convenient and, frequent-access to the money
-b. A high rate of interest
c. Guaranteed rate of interest
d. Low fee
3. 2 Marks
______________ for securities lending, which bring lenders and borrowers together, may
eliminate _______________.
a. Wholesale intermediaries; Niche intermediaries
b. Internet auction systems; custodian and third party intermediaries
c. Custodian and third party intermediaries: Niche intermediaries
d. Niche intermediaries; custodian and third party intermediaries
-e. Internet auction systems; Niche intermediaries
4. 2 Marks
Money laundering can best be described as the process by which
____________________________________________.
-a. money gained from criminal activity is processed so it appears to be gained from legitimate
sources
b. criminals attempt to defraud the government
c. money gained from legitimate sources is hidden to avoid taxes
d. the police attempt to investigate organized crime
5. 3 MarksA U.S. importer who has agreed to pay 1 million Euros to a French exporter in 60
days decides to wait the full 60 days before paying. The importer is ______________________.
-a. a foreign exchange speculator
b. expecting the dollar to depreciate against the Euro
c. a hedger in the foreign exchange market
d. planning to pay a set amount of dollars for the items purchase
6. 1 Marks
The term POP stands for?
a. Private Offer Price
b. Private Option Price
-c. Public Offer Price
d. Public Option Price
e. Potential Offer Price
7. 1 Marks
Continuous Linked Settlement removes which of the following risks primarily
a. Exchange risk
-b. Temporal risk
c. Country risk
8. 2 Marks
Which of the following is correct with reference to Indian banks?
a. Indian banks are unregulated
b. Saraswat Bank is the largest Indian bank
-c. Reserve Bank of India regulates the Indian banks
d. Indian banks cannot open branches outside of India
e. India's banking system is one of the weakest in the world
9. 1 Marks
EFT stands for _______________.
a. Express Funds Transfer
b. Electrical Funds Transfer
c. Elevated Funds Transfer
d. Emergency Funds Transfer
-e. Electronic Funds Transfer
10. 1 Marks
Banks are financial intermediaries that ____________________.
-a. link lenders (depositors) to borrowers
b. have been in existence now for over 50000 years
c. are not required
d. cause problems as their sales reps keep calling people to buy new products
e. should not be allowed to open Savings Accounts
11Which of the following is not a type of Swap?

Answer:a. Currency Swap'
b. Forward Swap
c. Swaption
-d. Interest Rate
12 Forfeiture regulation under the US patriot act allows _____________________________

Answer: -a. permits confiscation of any property derived from or used to facilitate domestic or
international terrorism
b. Calls for the seizure of correspondent accounts held in foreign financial institutions for
domestic banks who are in turn holding forfeitable assets
c. Permits foreign enforcement of domestic forfeiture orders
13.Annual Percentage Rate for a loan takes into account the following?
Answer:
a. The interest rate charged
b. When and how often the interest must be paid
c. Other charges such as arrangement fee
d. When and how often these other charges must be paid
-e. All of the listed options
14. A young investor comes to an Investment Consultant and asks him for advice for his
investments. He declares that he doesn’t mind the risk but he would definitely like his money
to grow as fast as possible. He would like to invest in a Mutual Fund which would satisfy these
criteria. What would the consultants choice for his profile?
Answer:
a. Income Fund
b. Liquid Fund
-c. Growth Fund
d. Balanced Fund
e. Bank Deposit
15ABC corporation is a large client of BankNew and maintains $40 million in cash with the
bank. BankNew however allows authorized representatives off ABC to write checks up to 10%
over the balance maintained. This is an example of ____________________________________.
Answer:
-a. Overdraft
b. Accrual Loan
d. Undrawn Loan
e. Committed Loans
16.Which of the following is associated with the purpose of regulating financial institutions?
a. To ensure everyone makes money in the market
b. To ensure companies can cheat small investors in buying their securities
-c. To prevent failure of any financial institution
d. To ensure that various government departments can be created for regulation thus giving
employment to many people
17.Which of the following is true about Retail Banking business?

Answer:
a. The business focuses on small number of high net worth individuals
-b. The business focuses on large number of individuals each of whom may have a small
amount of money to deposit with the Bank
c. The business focuses on large corporate bodies
d. The business focuses on small and medium enterprises
e. The business focuses on giving financial advice to customers to generate maximum returns
on their investments
18. What is the best basis for the comparison of dividend paying stocks with other investments
such as bonds, certificates of deposits etc?
Answer:
a. Interest spread
b. Exchange rate
-c. Interest rate
d. Equity yield
e. Dividend yield
19. Corporate Loans are ___________________________________

Answer:
a. always secured
-b. secured or unsecured
c. never secured
d. always unsecured
20.Services like the settlement, safekeeping, and reporting of customers’ marketable securities
and cash are provided by _________________.
Answer:
-a. Custodian
b. Broker
c. Investment bank
d. Fund Administrator
e. Dealer
21. CRR stands for which of the following?

Answer:
-a. Cash Reserve Ratio
b. Common Reserve Ratio
c. Cash Refund Ratio
d. Cash Re-service Ratio
e. Cash Reserve Risk
22 1 Marks
The term CLS stands for
Answer:
-a. Cautious Linked Settlement
b. Continuous Linked Settlement
c. Competitive Linked Settlement
d. Comparitive Linked Settlement
e. Clearing Linked Settlement
23.1 Marks
Which of the following is not a risk management measure?
Answer:
a. Diversification
b. Hedging
c. Insurance
-d. Budgeting
e. All are risk management techniques
24 2 Marks
The quote for CTSH in NASDAQ was $ 43. The best buyer was at $ 42.5 and the best seller at $
43.5.</p><p> How much is the bid-ask spread?
Answer:
a. $0.50
b. ($0.50)
-c. $1.00
d. ($1.00)
e. $86
25 1 Marks
The easiest way to calculate IRR is
________________________________________________.
Answer:
a. writing a Java program with 100 FPs
-b. using MS-Excel
c. using a supercomputer
d. using a 2GHz processor
e. writing JCLs running on a powerful Mainframe
26 3 Marks
You invest Rs.5000 at 10% p.a. compound interest compounded annually in a bank. After 2
years, what is the amount you have received from the bank?
Answer:
a. Rs. 12346
b. Rs. 7000
c. Rs. 2346
-d. Rs. 6050
e. Rs. 7546
27 1 Marks
The central bank in the US is called ________________.

Answer:
-a. Federal Reserve
b. Federal Reserve Board
c. Reserve Bank of United States
d. Central Bank of United States
e. Reserve Bank of America
28 ABC corporation is a large client of BankNew. BankNew extends a loan to XYZ corporation
which is a supplier of ABC. This is an example of _______________________.
Answer:
a. Bill Discounting
-b. Supplier Loan
c. Asset Securitization Loan
d. Working Capital Loan
e. Revolving Line of Credit
29 2 Marks
The act of a loan amount being handed over to the borrower by the Bank is know as?
Answer:
-a. Disbursement
b. Distribution
c. Displacement
d. Dispersement
e. Diversification
30 1 Marks
Momentum investing” would refer to ___________________________.

Answer:
a. follow fundamental financial ratios to make decisions
b. invest in high dividend yield stocks
c. following charts and indicators to trade
d. create portfolio similar to index
-e. try best to market
31 3 Marks
Private clients trade in ____________ volumes and ___________ fees and commissions.
Answer:
-a. larger; larger
b. small; larger
c. small; small
d. larger; small
e. Either small; larger or larger; small
32 1 Marks
Bid-Ask spread refers to ________________________________.
Answer: a.difference in price between buying one asset and another similar one
b. difference in opinion between the seller and buyer on the price of an asset
-c. difference between the buying and selling price of the same asset
d. both difference in price between buying one asset and another similar one and difference in
opinion between the seller and buyer on the price of an asset
33 1 Marks
The process in which a privately held company offers its shares to public for the first time is
known as?
a. Public Offering
b. Corporate Action
c. Underwriting
-d. Initial Public Offering
34 3 Marks
Not all possible services that might be provided by the auditing firm are expressly prohibited by
Sarbanes-Oxley. If a non-audit service is not expressly prohibited, the auditing firm may
provide that service ___________________________
Answer:
a. If no one on the board objects.
-b. If the audit committee gives its prior approval.
c. Only in an emergency and only if the company being audited has not been able to find
another accounting firm to provide this service after making a good-faith effort.
d. Without any prohibitions or pre-conditions whatsoever.
e. None of the listed Options.
35 1 Marks
The performance of an internationally diversified portfolio may be affected by
________________________.
Answer:
a. currency selection
b. country selection
c. stock selection
-d. All of the listed options
36 1 Marks
Primary markets ____________________
Answer:
a. are markets in which primary goods and service, i.e. raw materials are traded.
b. are markets in which short-term debt is traded.
c. are markets in which claims that have already been issued are sold by one investor to
another.
-d. are markets in which newly issued claims are sold to initial buyers.
e. are markets in which shares are actively traded.
37 3 Marks
What does the ‘Federal Reserve Supervisory Letter’ define private banking as?
Answer:
-a. “personalized services such as money management, financial advice, and investment
services for high net worth clients”
b. “personalized services such as cheque collection and other retail banking services for high
net worth clients”
c. “service provided by private banks to all clients”
d. “personalized services provided by private and public banks to all clients”
38 1 Marks
The term PTA refers to ______________________.
Answer:
a. Permission to Act
b. Payable Through Automated Means
c. Payment To Automate
-d. Payable Through Account
39 1 Marks
The city of Basel is located in which country?
Answer:
a. USA
b. India
c. Japan
d. UK
-e. Switzerland
40 1 Marks
Inflation represents which of the following?
Answer:
-a. Increase in prices
b. Decrease in prices
c. Very high change in prices
d. Economic crisis
e. Currency crisis
41 1 Marks
Financial intermediaries exist because small investors cannot efficiently
________________________.
Answer:
a. gather information
b. advertise for needed investments
c. monitor their portfolios
d. diversify their portfolios
42 1 Marks
Answer:
a. Checking Accounts
b. Money Market Deposit Accounts
-c. Demat Account
d. Time Deposits
43 1 Marks
Pick the odd one out.
Answer:
a. Warren Buffet
b. Peter Lynch
c. George Soros
-d. Sachin Tendulkar
e. Rakesh Jhunjhunwala
44 1 Marks
In a economy where inflation is 5%, future value of 100 units of money after 1 year would be
which of the following?
a. More than 100
-b. Less than 100
c. Exactly 100
d. 105, as inflation is 5%
45 2 Marks
What term is used to describe an LC that remains valid for years thereby eliminating the cost
of separate LCs for each transaction with a regular client?
Answer:
-a. Evergreen Clause
b. Red Clause
c. Irrevocable LC
d. Transferable LC
46 2 Marks
When the Central Bank of a country decides to change the interest rates, it is a manifestation
Answer:
a. Money Policy
b. Money Market
c. Money Multiplier Effect
-d. Monetary Policy
e. Money making
47 3 Marks
Which of the following is not a rating agency?
Answer:
a. S&P
-b. Reserve Bank of India
c. Moody's
d. Fitch
e. Crisil
48 2 Marks
When you deposit $200 in currency into your bank _________________
Answer:
a. its assets decline by $200.
b. its reserves decline by $200.
-c. its liabilities increase by $200.
d. each of the above occur.
e. its assets decline by $200 and its reserves decline by $200.
49 1 Marks
Trade Finance helps in ________________________________.
Answer:
-a. Facilitating International transactions
b. Facilitating intra-compamy transactions
c. Facilitating corpoate lending
d. Facilitating setting up of new factories
e. Facilitating International transactions,Facilitating corpoate lending and Facilitating setting
up of new factories
50 2 Marks
Bank of America charges a lower rate of interest to Lockheed Martin than to General Electric.
This can be attributed to lower ________ risk from Lockheed as compared to GE for Bank of
America.
Answer:
a. Market Risk
-b. Credit Risk
c. Liquidity Risk
d. Legal Risk
51 1 Marks
"Don't put all your eggs in one basket" is a phrase used to describe which of the
following?
a. risk averse
-b. diversification
c. risk/return tradeoff
d. time value of money
e. budgeting
52 1 Marks
Answer:
a. Visa
b. Mastercard
c. Amex
d. Discover
-e. HSBC Bank
53 1 Marks
Which of the following is not likely to be an electronic banking function?
Answer:
a. Direct Debit
b. Standing Order
c. Standing Instruction
-d. Account opening
e. Wire transfer
54 1 Marks
Which division provides services to High Net Worth individuals?
Answer:
a. Corporate banking
b. Investment banking
c. Retail banking
-d. Private banking
55 1 Marks
Which term refers to securities that are sold by the issuer to investors?
Answer:
a. Secondary Offering
b. Outright Sale
-c. Primary Offering
d. Select Sale
56 2 Marks
A bank that is earning 7% on its earning assets and is paying 4% on its interest-earning
liabilities is said to __________________
Answer:
a. have a negative spread.
b. have a positive GAP position.
-c. have a positive spread.
d. will always have positive net earnings.
e. both have a negative spread and will always have positive net earnings.
57 1 Marks
Due Diligence is performed to ____________________________________.

Answer:
-a. assess the risk
b. performed by the buyer
c. performed on the seller
d. executed after contract is signed
58 1 Marks
______________ preauthorizes banks to pay recurring bills like insurance premium, utility bills
automatically.
a. Pay-by-Phone System
b. EFT
-c. Direct Debit
d. Direct Credit
e. Direct Deposit
59 1 Marks
BankNew has a portfolio of $30 million worth of loans, which it wants to hedge. This is an
example of what kind of drawn loans?
Answer:
a. Accrual Loans
b. Trading Loans
-c. Held for Sale Loans
d. Undrawn Loan
e. Committed Loans
60 3 Marks
Regulatory balance sheet restrictions are designed to _________________
Answer:
a. limit the size of depository institutions.
b. limit risk-taking and to encourage diversification.
c. limit excessive diversification.
d. to promote Universal Banking.
e. encourage high risk-taking by proper diversification.
61 3 Marks
Capital adequacy ratio refers to ___________________________.
Answer:
-a. Amount of bank’s capital expressed as percentage of the risk weighted credit exposure
b. Amount of bank’s capital expressed as percentage of the risk weighted credit exposure &
operational risk
c. Amount of bank’s capital expressed as percentage of the risk weighted credit exposure, &
market risk
d. Amount of bank’s capital expressed as percentage of the risk weighted credit exposure,
62 The term CP is used in Corporate Lending for ___________________________.

Answer:
a. Client Partner
b. Credit Provision
-c. Commercial Paper
d. Collateral Provision
e. Commodity Put Option
63 1 Marks
“Dealer” in broking parlance refers to which one of the following?
Answer:
a. Employee of stock exchange
b. Matches customer orders with other brokers
-c. Acts as a “Principal” and executes trades for his/her personal account
d. Only person authorized to buy or sell a particular stock
e. Charges commission for trades
64 1 Marks
Pick the odd one out with respect to Private Banking services.
Answer:
a. Switzerland
b. Luxembourg
c. Caymen Islands
-d. Mumbai
e. Mauritius
65 Why do we need banks?

Answer:
a. Banks are in the best position to lend out money at competitive rates to businesses and
individuals
b. Deposits are participants in primary and secondary markets
c. Banks are in the best position to lend out money at competitive rates to businesses and
individuals
d. Small investors are protected, hence it is a low risk investment avenue
66 The key feature of letter of credit is ________________________________________.

Answer:
a. basis for devising proper currency hedging strategy
-b. distributes risk between buyer and seller
c. opportunity to receive payment in advance of the due date
d. basis for devising proper currency hedging strategy and Opportunity to receive payment in
advance of the due date
67 Which of the following is not a function of a Custodian?

Answer:
a. Core Custody
b. Asset Servicing
-c. Corporate Lending
d. Securities Lending
e. Corporate Actions
68 1 Marks
The treasury services department performs all of the following functions EXCEPT
___________________________.
Answer:
a. Research market factors e.g., Interest rate monitoring
b. Managing corporate collections and payments
c. Managing liquidity and cash position
d. Risk Management services
-e. None of the listed Options
69 1 Marks
Which of the following is not covered under retail operations of a Bank?
Answer:
a. Loan for Consumer durables
b. Hire Purchase
-c. Bill Discounting
d. Lease
e. Auto Loans
70 IRR stands for which of the following?

Answer:
a. International Rate of Malaysian Ringit
b. International Rating of Rwanda
-c. Internal Rate of Return
d. Indian Rate of Return
e. International Rate of Return
71 3 Marks
Inter District Settlement Fund is a _____________.
Answer:
-a. Fund Transfer System
b. Electronic Bill Presentment System
c. Settlement Account
d. Booking System
e. Transaction System
72 Following are the list of risks that Cognizant faces at an organization level EXCEPT
______________________________________.
Answer:
a. Exchange rate fluctuation
b. Protective legislation by U.S/U.K
c. Attrition
d. Payment default
e. Cognizant faces all of the risks mentioned in the listed options
73 1 Marks
Which of the following is not a Retail Banking service?
Answer:
a. Current accounts
b. Savings accounts
c. Cheque book facility
-d. Investment advice
e. ATM facility

Answer:
-a. Equities and Call Options
b. Call and Put Options
c. Equities and Futures
d. Cash and Call Options
e. Put Options and Swaps
75 1 Marks
Core Custody Services performs the following functions except ________________________.
Answer:
a. Price securities positions
b. Record Keeping-c. NAV calculation
d. Reporting services
e. Processes corporate actions
76 What is the key regulatory authority over the American securities industry?
Answer:
a. Federal Reserve
b. FDIC
c. DTCC
d. ASA
-e. Securities Exchange Commission
77 After a buyer and a seller enter into a trade agreement, who initiates the issue of LC?
Answer:
a. Seller
b. Seller's bank
-c. Buyer's bank
d. Buyer
78 Which of the following is a foreign bank not operating in India as a retail bank?
Answer:
a. Citibank
b. HSBC
-c. JP Morgan Chase
d. Standard Chartered
e. ABN Amro
79 Legal risk is the __________________________________________.

Answer:
a. possibility that you will face legal action
b. loss you could incur when legal action is taken against you
-c. possibility of loss when a contract cannot be enforced
d. possibility of loss from errors in instructing payments or settling transactions
80 The term EMI stands for which of the following?

Answer:
a. Equal Monthly Income
b. Equalised Monetary Installments
c. Equated Money Inflow
d. European Monetary Inflows
-e. Equated Monthly Installments
81 Which of the following are involved in the mortgage business in US?

Answer:
a. Ginnie Mae
b. Fannie Mae
-c. Both Ginnie Mae and Fannie Mae
d. Sallie Mae
e. Federal Reserve
82 In Banking , the term LIBOR stands for?

Answer:
a. Limited Borrowing
b. Limited International Banking Operations
-c. London Interbank Offered Rate
d. Lending to International Borrowers
83 Loss of which of the following type of cards can cause the maximum financial impact for the
customer?
a. Debit Card
-b. ATM Card
c. Stored Card
d. Gift Voucher
e. Any of the listed options
84 Individual investors are most likely to trade securities in ________________________.

Answer:
a. Forex market
b. Money Market
-c. Stock Market
d. Mortgage Market
e. New York
85 A share represents __________________.

Answer:
a. ownership in a company
b. right to vote in important matters of the company
c. an instrument whose value might appreciate in secondary market
d. an instrument which can potentially earn dividends
86 Cash management techniques include ____________________________________.

Answer:
a. Pooling
b. Netting
c. Swapping
-d. Both Pooling and Netting
e. Pooling, Netting and Swapping
87 A very effective way to employ a passive strategy is to _____________________________.

Answer:
a. invest in an indexed portfolio
b. buy all Stocks on the index
c. invest money in a bank
-d. buy few securities which reflect the index
e. both invest money in a bank and buy few securities which reflect the index
88 In context of Treasury services, FRA stands for which of the following?

Answer:
a. Frivolous Rate Agreement
-b. Forward Rate Agreement
c. Free Rate Agreement
d. Factored Rate Agreement
e. Forfeited Rate Agreement
89 Which of the following is not associated with debt?
Answer:
a. Coroprate Bonds
b. Debentures
-c. Shares
d. Loans
e. Government Bonds
90 Electronic banking doesn’t covers the following services.

Answer:
a. Pay-by Phone system
b. ATM System
c. Point of Sale system
d. Internet payment
-e. Address check for verification of a loan application
91 Which kind of an investor should choose to invest in Money Market Securities?

Answer:
-a. Investor looking for capital gains
b. Investor looking for liquidity
c. Arbitrageur
d. Investor looking for regular income
92 SWIFT is a ______________________.
Answer:
a. Proprietary network interface
b. Open standard network interface
c. Message based network interface
d. Both open standard network interface AND message based network interface
-e. Both proprietary network interface & message based network interface
93 Two Financial Institutions A & B conducted the following transactions over CHIPS on
30th Jan 2004.A transferred $5m to B at 9:45 AM B transferred $10m to A at 11:30 AM A
transferred $12m to B at 2PM B transferred $15m to A at 3:30PM Which of the following holds
true?
Answer:
a. At the end of the day, $17m will be transferred to B
b. At the end of the day, $25m will be transferred to A
-c. At the end of the day, $8m will be transferred to A
d. All the transactions would settle individually real-time
e. Both, at the end of the day, $17m will be transferred to B AND at the end of the day, $25m
will be transferred to A
94 Research analysts do all of the following except ____________________.

Answer:
a. Follow stocks
b. Follow bonds
-c. Invest of behalf of the Investment Bank
d. Make buy / sell recommendations
e. Collect and analyse data on stocks and bonds
95 Which of the following is not a repayment method?

Answer:
a. Post dated checks
b. Salary deductions
c. Direct receipts
d. Direct debits
-e. All of the listed options are repayment methods
96 Coupon rate on a bond represents which of the following?

Answer:
a. Face value of the bond
b. Maturity duration of the bond
c. Credit rating of the bond
-d. Interest paid to the bondholders
e. Financial performance of the bond issuer
97 Which of the following is not a characteristic of money markets?

Answer
a. They trade in a central location.
b. They have an active secondary market.
c. They are wholesale markets.
d. They are beyond the reach of small investors.
e. They trade in short term instruments.
98 VaR is used for which of the following?

Answer:
-a. Risk Measurement
b. Risk Mitigation
c. Risk Taking
d. Risk Assumption
99 The Japanese Index is known as?

Answer:
a. Straits Times
-b. Nikkei
c. Footsie
d. DAX
e. CAC
100 Which of the following is the most profitable for Credit Card Company?
Answer:
a. Customers who always pay in time
b. Customers who never pay
-c. Customers who default but finally pay
BFS L0 LATEST DUMPS
c. Assignment
d. Participation
e. Preclosure
132. Tax and insurance Premiums Collected as part of Loan repayment are handled
through which of the following type of account?
a. DMAT account
c. Escrow account
d. Fixed despoait

b. Poat-Acquisition
d. During a IPO
e. A merger

a. Retail Banking
b. Private Banking
e. Consumer Lending

b. Bank One
d. UBS
e. Credit Suisse
137. Ram deposits $100 in XYZ Bank. Puja takes a loan of $ 100 from XYZ Bank.
c. ………………….
d. ……………………
e. ……………………
138. Which of the following represents the correct hierarchy of corporate rating
(highest to lowest)
139. Bank ABC interest rate on deposits is 7.30% and its interest rate on loans is
9.25% dur………………. Find the spread for Bank ABC?
a. 0.
b. 0.
c. N
d. 0.
9.25 – 7.30 = 1.95
140. If a bank gets a deposit of $5000, assuming reserve requirement(CRR) of 10%,

and it Circulate through 2 more banks, leading to which of the following money multiper
effect?
a. None
b. It crea……………………..
c. It crea……………………..
d. It crea……………………..
e. It crea……………………...
Solution:

1 5000 500 4500
2 4500 450 4050
3 4050 405 3645

***Put Options - The right, but not the obligation, to sell


c. …………………………
d. …………………………
a. True
b. Flalse
146. Assuming a 4% annual inflation rate, in how many years will the purchasing
power of $1,000 be cut in half?
a. 18 Years
b. 16 Years
c. 20 Years
d. 12 Years
e. 24 Years
trade is settled.


150. If the entry load is 2% and the NAV is Rs 10, then how much the investor will
have to pay for 100 units?
a. Rs. 1020
b. Rs 1500
c. Rs. 1200
d. Rs. 800

(10+(2/100*10))*100 =1020
151. After a buyer and a seller enter into a trade agreement, who initiates the issues of
LC?
b. Buyer’s bank
c. Seller
d. Advising bank
e. Seller’s bank
152. If a financial instrument has a 50% chance of paying 20% and a 50% chance of
paying 60% percent. What would be the expected return?
a. 0.4
b. 0.2
c. 0.5
d. 0.8
= (50/100)*(20/100) + (50/100)*(60/100) = 0.4

a. No
b. Only during IPO
c. Yes

c. Rights issue
d. M&A
e. Stock Split
e. I only
f. Both I and II
g. II only
h. None of the listed options
Answer: I & II
Settlement
Settlement
Settlement
Settlement
157. From the given options the service(s) that can be categorized under
A………………..
a. …………………………………
b. …………………………………
c. …………………………………
d. …………………………………
158. There are 5 participants A, B, C, D, E in a 25M USD syndicated loan and A is the
lead m has agreed to pay 0.4% ($1,00,000) participant fee. How much each participant
will share in participant fee?
in the case market

a. The Exchange
b. Banks
e. Government
161. . ………………………
162. . ………………………
163. . ………………………
164. . ………………………
165. . ………………………
166. . ………………………
167. . ………………………
168. . ………………………
169. . ………………………
170. . ………………………
171. What is OTC?

a. Over The Counter
b. .………………………
c. ……………………….
d. ……………………….
e. ……………………….
172. All the following statement concerning U.S Governmernt securities are Correct
EXCEPT

c. Current Rate
174. Universal banks provide commercial banking as well as investment bank services
under one head . State True or False
a. True
b. False

a. Corporate Action
b. . ………………………
c. . ………………………
d. . ………………………

a. Sa……………………….
b. All………………………
c. Deb……………………..
d. Pe……………………….

e. I Only
f. II only
g. I & II
h. I, II & III

II: Interest paid
a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
exchange
exchange
exchange
exchange
Solution:

DELL Buy 120 $10.00 (1200)
DELL Sell 70 $10.50 735
CISCO Buy 200 $20.00 (4000)
DELL Sell 20 $11.00 220
CISCO Sell 50 $20.50 1025
DELL Sell 10 $9.00 90
Total (3130)

exchange.
a. SEC
b. FSA
c. Senate
d. Federal Reserve
181. In syndicate loan, borrowers will be charged even if they don’t utilize the
committed fu………………………
a. True
b. False

a. Ver………………………
c. Eco………………………
d. Curr………………………
e. Dec………………………

a. True
b. False
a. Cash Value
b. Gold
d. Company Bond
e. Fixed Annuity

e. Treasury bills


a. Brokerage
b. Takeover
c. Acquisition
d. Merger

d. N

a. Personal Loan
b. Transfer Fund
c. Credit Services
b. Transactions
c. Investment
d. Support
192. Pooling and repackaging of cash-flow-producing financial assets into securities,

which are then sold to investors is called ____________
a. Leveraging
b. Securitization
d. Short Selling
decrease. State True or False
a. True
b. False
194. GE shares are currently selling for $15.00 each. You bought 200 shares one year
ago at $12 and received dividend payments of $2 per share. What was your total capital
gain this year?
a. 600
b. 400
c. 1000
e. 200
Solution:
(200*15) + (200*2) – (200*12) = 1000
195. Securities with an original maturity of lesser than 1-year are traded on money
a. True
b. False

a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
197. _____________ is the legal and professional proceeding in which a lender,

cbtains a court orders …………..….a borrower’s equitable right of redemption.
a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
198. Bank a based in US provides safe keeping services for securities to its US clients.
It also has clients in France and Belgium and provides securities safe keeping services to
these clients through banks C & D respectively. Which best describes bank A?
b. Global Custodian
c. Sub Custodian
e. Main Custodian
199. In Trade Finance, Which of the following factors are considered while choosing
made of financing?
to $5000. Calculate the EPS if there are total of 20000 shares.
a. 2.5
b. 2
c. 1.25
d. 1.5
Solution:
Number of shares
= (50000-10000-5000-5000) / 20000 = 1.5
a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
e. . ………………………
203. Netting reduces the number of settlements needed by more than 95% state True or
False
a. True
b. False

206. Product development in sales and marketing refers to which of the following
option?
a. Open Account
c. Letter of Credit
d. Counter trade
e. Cash in advance
f. None of the Listed Option
g. (a) $1880 (b)$ 3100
h. (a) $1,780 (b) 0 for IBM, $1795 for MSFT
i. (a) 0 for IBM, $1795 for MSFT (b) $1880
j. (a) $3100 (b) $1880
Solution:

IBM Buy 100 $11.00 (1100)
IBM Sell 50 $10.50 525
MSFT Buy 100 $20.00 (2000)
IBM Sell 20 $11.00 220
MSFT Sell 10 $20.50 205
IBM Sell 30 $9.00 270
Total (1880)


a. 0.03M
b. 30M
d. 3M
e. 0.3M
210. In active approach, asset allocation is more influenced by which of the following
option?
b. None…………..
212. In a securities lending transaction, if the buyer of securities provides cash as

collateral, then the seller of securities has to provide the buyer with a interest amount for
the cash. What is this interest amount called?
a. Rebate rate
c. Interest Rate
e. Return Rate

a. Never unsecured
b. Never secured
c. Always secured
d. Always unsecured

215. The amount owed by a company to suppliers in the next one year will be
categorized under __________________


a. Munis
b. Junk Bonds
c. Corporate bonds
d. Treasury Bills
e. Yarkee Bonds

a. Currency Risk
b. Commodity Risk
d. Credit Risk
e. Equity Risk
220. When the Central Bank of a country decides to change the interest rates, it is a
manifestation of which of the following?
a. Money Policy
b. Money Making
c. Money Market
d. ……………….
e. ……………….
221. In terms of computation, which of the following is the fastest method for
calculating VaR?
222. ABC co. wants to identity the best way for making salary credits to its huge
employee base. Can you select the best option?
a. Paper Checks
c. Cash
223. In a economy where inflation is 4%, future value of 100 units of money after 2
year would be which of the following option?
a. Exactly 108
c. Exactly 100
d. Around Rs. 104
e. 108.16
Solution:
n 2
FV = PV*(1 + i) = 100(1+0.04) = 108.16

224. if R is the real rate of interest, N is the norminal rate of interest and I is the rate of
inflation, then:
a. R = N – I
b. R = N * I
c. R = N + I
d. R = N/I
a. Federal Stafford
c. Federal PLUS
a. T+1
b. T+4
c. T+2
d. T+3
227. P&L Statements represent transactions over a period of time while the balance
sheet shows information as on Specific date. State True or False.
a. True
b. False

a. Put Option
b. Oil Futures
c. Swaption
d. Call Option

a. Junk bonds
c. Shares
d. Call Options
e. T-Bills
230. The share price of a company may drop considerably from its current levels. In
this scenario, what type of risk are the investors facing?
a. Market Risk
b. Business Risk
c. Credit Risk
d. Company Risk
e. Liquidity Risk
231. From the following options, find what type of risks that a software export
company may face?
a. Operational Risk
c. Legal Risk
d. Currency Risk
e. Credit Risk

borrowers
233. A bank has a portfolio of $50 million worth of loans out of which it wants to sell
$20 million worth of loan to another financial institution. What is this process called?
b. Trading Loans
c. Accrual Loans
d. Undrawn Loan
e. Committed Loans
sold the share for $48. How much is the return of holding period?
a. 50 percentage
b. 45 percentage
c. 10 percentage
d. 25 percentage

236. Banks are financial institutions that are licensed to accept deposits and issue
loans. State True or False
a. True
b. False
237. In FOP mode of Settlement, there is no simultaneous exchange of securities and

payment State True or False
a. True
b. False
238. The type of loan in which spread varities over the life of the loan is called
___________.
b. Fixed rate loan

240. Which of the following type of loan requires the amount of interest that would be
a. Demand loan
c. Capitalized loan
d. Amortized loan
e. Discounted loan

a. Bonds
b. Futures
c. Options
d. Swaps
e. Forwards

243. If the Limit = $2000, Margin = 20% and Asset value = $2000, then Drawing
Power for an Open ended loan is equal to
a. 2200
b. 2000
c. 1600
d. 2400
Solution:

DP = (1-0.20)*2000 = 1600
244. …………………..………
a. 20000
b. 17000
c. 18000
d. 15000
245. Customer’s usually interact extensively with the bank’s mid and back offices.
State True or False
a. True
b. False

a. 2.33 Sd
b. 1.65 Sd
c. 1.96 sd
d. 3 Sd
e. 1 Sd
247. At the end of an active trading day, a broker sees that he has a net position in 6
securities, and owes the system some money. How many settlement transactions will take
place at the end of the settlement cycle?
determined
determined.
248. A person purchases a share at $50. After 2 years, the price is at $75 and he
decides to sell the share at that price. What is the annualized return that the person has
earned?
a. 0.6667
b. 0.3333
c. 0.5
d. 0.2247

a. Purchase
b. Discount
c. Acceptance

a. TS2
b. Front Arena
c. ………………….
d. ………………….
e. …………………..
a. Freddie Mae
b. E-Trade
c. Ginnie Mae
d. Sallie Mae
e. Federal Reserve
confirmation?
a. SWIFT networks
b. FEDWIRE
c. By Fax
d. By Telephone
254. SPV means

255. NPV stands for

c. No Present Value
d. Net Past Value
256. SMA offers investors a customized approach to investing. Rather than a generic
product. State True or False
a. True
b. False
257. If total Spread on underwriting is $ 500000 and Manager’s fee is $100000. What
is the amount which will be disturbed in the syndicate?
b. 600000
c. 400000
d. 100000
e. 500000
258. An investor has multiple investment options yielding various dollar returns at
various points of time, while he is comfortable with a return of X% p.a. Which method
should he use to compare the various investments?
c. Simple Interest
259. In case of Auto finance, monthly lease payments are usually lower than monthly
loan payments because of which reason?
260. In Electronic Check Conversion (ECC). What happens once the check is
processed?
Missing Question
lowest)?
a. AAA, AA+, BBB, D

b. AAA, AA-, D, BBB
c. D,C,B,A
d. D, AA-, B, AAA
e. AAA, AA+, D, AA-
a. Bond
b. Equity
c. Share
d. None
Ans: 20000
e. Spot, futures
f. Debt , Equity
g. Primary , Secondary
h. Money, Capital

a. Amex
b. T-sys
c. Elavon
http://www.creditmanagementworld.com/glossary/letterofcreditglossary.html
http://books.google.com/books?id=EqoN-
3wnMVgC&pg=PA38&lpg=PA38&dq=methods+of+payment+is+most+risky+to+the+Buyer&s
ource=bl&ots=vzMehoM1LA&sig=npc-
HsSsOitQrx5pVM5oueaKys8&hl=en&ei=DzOWTN2dNZGuvgOpmdnnCw&sa=X&oi=book_r
esult&ct=result&resnum=9&ved=0CDgQ6AEwCA#v=onepage&q&f=false
a. True b. False

b. Less than offer
c. More than offer
e. Equal to offer

b. Central banks
c. Companies
the second year?
a. True b. False

b. Terms loans
c. Cash
e. Receivables

b. Lot of research

a. True b. False
a. Market risk
c. Credit risk
d. Operational risk
e. Liquidity risk
a. Current account
b. Nostro account
c. Vostro account
d. Forex account
e. Overseas account
a. Pre-closure
b. Assignment
c. Participation
25. The process of transferring obligation from one party to another is called
a. Futures
b. Spot
c. Forward
d. Stock
e. Option


f. Bond prices increase
g. Bond prices decrease
h. Bond prices do not change
i. Economy goes into deflation
j. Interest rate never fall, they always go up.
f. -2%
g. 2%
h. -1.96%
i. Very high
j. 1-2%
end of the 3 years?
f. $1225
g. None of listed option
h. $1000
i. $1070
j. $1270

f. Letter of commercials
g. Letter of credit worthiness
h. Letter of credit
i. Letter of commerce
j. Letter of complaints

e. Small investor are protected, hence it is a low risk investment avenue.
f. Banks are in the best position to lend out money at competitive
g. Depositors are participant in primary and secondary markets.
h. All of listed options.

e. For the same return, B tolerates lesser risk than B.
f. For the same return, A tolerates higher rate of return.
g. For the same return, A tolerates lower rate of return.
h. For the same return, A takes higher risk.

f. Sweep facility
g. Structured lending to client
h. All
i. Short term credit facilities
j. Overdraft

f. None
g. To provide stability of money supply.
h. To serve certain social objectives.
i. To prevent failure of any financial institution.
j. To offset moral hazard incentive provided by deposit insurance and other
guarantees.

e. Monte- Carlo simulation.
f. All equal time with software.
g. Variance-Covariance matrix.
h. Combination of Monte- Carlo and Historical Simulation.

f. Payment to employers
g. None
h. Investment
i. Loan
j. Withdrawal
b. True b. False
can be refer.
f. Market risk
g. Interest rate risk
h. Commodity risk
i. Operational risk
j. Liquidity risk
a. (i) $1780 (ii) $3000

c. (i) $3000 (ii) $1780
d. None
F) $2500
G) $3000
H) $300
I) none
J) $250
A) Issuing Bank
C) Beneficiary Bank
D) Seller
E) Buyer
A) Liquidity risk
D) Credit risk
A) A very high
B) 2
C) -1
D) -2
E) 1
A) Currency risk
B) Attrition
C) Credit risk
D) All of the above
D) Research
B) is too high
C) Is about right
D) is too low

B) Acceptance
C) Negotiate
D) Purchase
E) Discount

B) Tiger Woods
C) Any of the above
confirmation?
B) Back to back LC
C) LC
D) Standby LC
the end of the day
F) IBM no exchange of shares ; MFST 90 shares to receive ; $1780 to pay out to the
exchange
G) None of these
H) IBM no exchange of shares ; MFST 90 share to receive ; $3000 to pay out to exchange
I) IBM 70 shares to given out ; MFST 90 shares to receive ; $3000 to pat out to exchange
J) IBM no exchange of shares ; MFST 90 share to receive ; $1780 receive from the
exchange
F) All of the listed option
G) Documents
H) Physical instrument like check and draft
I) Electronic data files
J) Cash

F) APR
G) None
H) IRR
I) NPV
J) Rate of interest applicable for the loan
F) learning services
G) ‘None
H) Merger and Acquisition
I) Valuation of firm
J) Underwriting and distribution of equity issues.
F) 500000
G) 100000
H) 400000
I) 600000
J) Can not be determined
gain this year
F) 200
G) 500
H) None
I) 300
J) 400

E) State regularity agency
F) SEC
G) Industry wide SRO
H) All of the listed option

a. Demat
b. Personal loan
c. None
d. Hire Purchase
e. Auto loans
F) Monetary policy
G) None
H) Money multiplier effect
I) Profit making tendency of a bank
J) Fiscal policy

F) Amount of bank capital expressed as % of the risk weighted credit exposure & market
risk.
G) Amount of bank capital expressed as % of the risk weighted credit exposure
H) Amount of bank capital expressed as % of the risk weighted credit exposure & operational
risk.
I) Amount of bank capital expressed as % of the risk weighted credit exposure
J) None

F) Calypso
G) Summit
H) Wall street system
I) Front arena
J) Flex cube

F) Managing large bond issues
G) Raising huge money from the bank
H) Managing large capital raising act
I) Managing conflict between investment banks.
J) IPO distribution.
F) Treasury bills have their interest paid in a lump sum at maturity
G) None
H) Treasury bills have greater interest risk than either treasury bond or treasury note
I) Treasury note has maturity dates up to 10 yrs
J) Treasury bonds have maturity dates up to 30 yrs
F) Account balance , Annuity

G) Annuity , Annuity
H) Account balance , Account balance
I) None
J) Annuity , Account balance
F) none
G) Syndicate
H) Allocation
I) Assignment
J) Secondary

F) issue card
G) Set credit limits
H) Set interest rates
I) Set card fees
J) Security/ Risk management
involved
F) Global custodian , domestic sub custodian , depository in foreign country and sometime
G) Depository in foreign country
H) Global Custodian
I) stock exchange in foreign country
J) domestic sub custodian

called
F) Cash projection
G) Investment manages universe
H) Asset allocation
I) Fund administration
J) Asset / liabilities analysis

F) Facilitating international transaction
G) Facilitating intra company transaction
H) Facilitating international transaction , corporate lending and settling up of new factories
I) Facilitating corporate lending
J) Facilitating setting up of new factories

E) a price at which a firm is ready to buy or sell
F) When bid is equal to offer
G) When the firm has a choice of deciding the securities to take
H) a price at which a firm is ready to buy or sell it also means when bid is equal to
offer
F) 6 month deposit of min balance of $1000
G) 3 month deposit of min balance of $4000
H) 12 month deposit of min balance of $1000
I) None
J) 6 month deposit of min balance of $2000

F) $3mn
G) $4.5 mn
H) $9mn
I) $4.4mn
J) $1mn
F) Loan of $2439
G) Loan of $1710
H) None
I) Create a reserve of $100
J) Create a reserve of $190
E) Mutual Fund
F) Mortgage Company
G) None
H) Stock Exchange
f. 45%
g. 10%
h. 25%
i. 50%
j. None
f. Trade Credit
g. Revolving Credit agreement
h. Agreement Irrevocable Credit
i. Line of Credit
j. Letter of Credit
66. Odd 1 out

f. Warren Buffet
g. George Soros
h. Bill Gates
i. Ben Graham
j. Peter Lynch
f. Investment manager Universe
g. Asset Allocation
h. Asset Liability Analysis
i. Fund Admin
j. Compliance Reporting
e. Current rate – Base Rate
f. Cap – Current Rate
g. Current Rate – Floor
h. Base Rate – Floor
f. Exporters Fund
g. All
h. Government Guarantee Program
i. Time Frame
j. Cost of Financing
b. True b. False
investors?
f. Stock Repurchase Program
g. Transition Management
h. Transition Management & Commission Recapture
i. Commission Recapture
j. None

f. the obligation to buy a futures contract
g. the obligation to sell a futures contract
h. the right & obligation to buy a futures contract
i. the right but not the obligation to buy a futures contract
j. the right but not the obligation to sell a futures contract

f. Call Option
g. Swaption
h. Leaps
i. Oil Futures
j. Put Options
c. True
d. False
e. Beneficiary Bank & Reimbursing Bank
f. Importer Exporter
g. Reimbursing Bank & Beneficiary Bank
h. Issuing Bank & Confirming Bank
e. DC plans fix the monthly contribution from the employee making his financial planning
easier.
f. DC plans are seen by employees as investment which to accumulate retirement income.
g. All
h. Employer increasing wants employees to share responsibility for retirement
took clients order
f. Salary
g. Manager fee
h. Wage
i. Concession
j. Underwriter

e. Listed market
f. Over the counter market
g. Third market
h. Fourth market

e. Market capitalization more than $200000
f. All
g. Net worth greater than $500000
h. Household income of max $50000 year.

e. The business focuses on small no. of high net worth individuals.
f. The business focuses on small and medium enterprises.
g. The business focuses on large no. of individuals.
h. The business focuses on large no. of corporation bodies.

f. Trades in securities
g. Quotes to its bets customer
h. Intends to buy
i. Intends to sell
j. Quotes when it does not want to trade.
b. True b. False
e. Stock market
f. Retail banking
g. Corporate banking
h. Customer lending
84. Which is true?
e. Financer owns the asset both in case of ‘Lease’ and ‘hire Purchase’.
f. Tax deduction cab be claimed fro the full value of the rental paid in case of lease
g. All
h. Depreciation in claimed by the financer in lease and not in case of hire purchase.
f. Global custodian,
g. None
h. Main custodian
i. Sub custodian
j. Secondary custodian

D) Bonds sell at a discount when Coupon Rate is less than Market Interest rate.
E) None
F) Bond is debt instrument giving issues.
101. Which of the following type of loan requires the amount of interest that
would be earned on the loan to be paid upfront by the borrower?
F) Capitalized loan
G) True Discounted loan
H) Amortized loan
I) Demand loan
J) Discounted loan

F) Commercial bankers
G) Investment Bankers
H) None
I) Company Management
J) Company Management and Investment Bankers

F) Bankers Acceptance reduces lending capacity
G) Sight Drafts are negotiable instruments
H) Bankers Acceptance demands immediate payment.
I) None
J) Banks can raise funds by selling acceptance.
F) Investible assets
G) Location
H) Age
I) Net worth
J) Name
105. The initial sale of the security is in the ………market, while subsequent
trading in the security is in the …….. market
F) Spot, futures
G) Debt , Equity
H) Primary , Secondary
I) Money, Capital
J) Secondary, Primary
106. Under what category can services like asset/liability analysis, asset allocation,
cash projection, compliance reporting, fund administration, investment
Management universe etc. provided by an institution can be classified?
F) Investment Management
G) Asset Servicing
H) None
I) Trading
J) Investor Services.

E) All
F) Stands for Suspicious Activity Reports
G) Customer Identification Program
H) Requiring Businesses, which were only to report cash transactions involving more than
1.00,000?
D) Yes under RTGS
E) No
F) Yes under net-settlement system

F) 30 stocks
G) 20 stocks
H) 40 stocks
I) 10 stocks
J) 50 stocks

D) All

F) Interest rate and foreign exchange
G) Liquidity and credit
H) Credit and Interest rate
I) Credit and Foreign exchange
J) All
112. Find the future value of $1200 invested at 5.25 % per annum payable
annually after 6 months? Marks: 2
1. 1345.1
2. 1243.1
3. 1231.1
4. None
5. 1235
113. Investor services like brokerage, cash management and short term
investments, commission re-capture, foreign exchange transactions, transaction
management etc. can be classified under ____ group of services. Marks: 1.
1. Trading
3. Investor service
4. None
5. Asset Servicing

2. Client Partner
3. Commercial Paper
5. Credit Provision
1. All of the above
3. High Leveraging
4. High Speculation
f. 2% discount is offered if payment is made within 15 days.
g. 15% discount is offered if payment is made within 2 days; the payment should
h. 30% discount is offered if payment is made before 15 of the month.
i. 15% discount is offered if payment is made between 2 & 30 days;
j. 15% discount is offered if payment is made within 30 days.
b. True b. False
answer)
f. Irrevocable LC
g. None
h. Red clause
i. Revolving LC
j. Evergreen clause
106 Who appoints investment manager to manage a benefit plan?

f. Plan sponsor
g. Plan administrator
h. Fund trustee
i. None
j. Government

f. Committed amount
g. Either disbursed or committed loan
h. Unused amount of loan
i. Disbursed amount
j. None
d. Yes
e. No
f. Yes, but if prices on the buy & sell side match.
f. None
g. $1600
h. $2200
i. $2400
j. $2000
f. Setting risk limits
g. Hedging
h. Diversification
i. Arbitrage
j. Insurance

f. Municipal bonds
g. Bonds of govt. sponsed enterprise
h. Corporate bonds
i. US treasuries
j. Shares
manager.
f. None
g. Plan administrator & trustee both have outsourced plan administration as well as fund
h. Any
i. Plan administrator gives investment instruction to investment manager while
j. Trustee gives investment instruction to investment manager, while plan administrator
application?
f. Issuer processor
g. Collection agency
h. Issuing bank
i. Authorization engine
j. Credit bureau.

f. Consolidated Price index
g. Consument popularity index
h. Consumer product index
i. Consumer price index
j. None
f. Credit scoring
g. Credit increase
h. Credit incrementation
i. Credit revision
j. Credit enhancement.
f) 4
g) 5
h) 3
i) 1
j) 2

e) Monte- Carlo
f) Historical
g) Variance-Covariance
h) Variance-Covariance and Monte- Carlo

e) Plc
f) Pte
g) Ltd
h) Inc

f) Govt. guarantee Program
g) Time frame
h) All
i) Cost of financing
j) Exporter fund.

f) Risk management
g) Front office
h) Back office
i) Trade
j) Board of director

f) Traders
g) Back office
h) Specialist
i) Front office
j) Mid office

e) Govt. regulation
f) Many traders
g) Full info
h) Cost effective trading

f) Custodian bank
g) Clearing bank
h) Clearing member
i) Trading member
j) Regulator
f) Primary
g) Secondary
h) Participant
i) OTC
j) Index

6. DJIA
7. Hangseng
8. EAFE index
9. NASDAQ composite index
10. S&P 500
_________ERISA
403b
401k
401b
403k
None
Participant
Government
Investment manager
Sponsor



derivatives
question/


Options:
8. All
e. None

e. All
f.
b. Interest earned
d. All
a. Issuing bank
b. Buyer
d. Seller
e. Beneficiary bank
a. LC
b. Direct debit
d. Counter trade
e. Cash in advance
a. Equally unlikely
b. Equally likely
c. ABC
d. XYZ
e. None

a. Pre-closure
b. Assignment
c. Participation

a. AAA,AA+,BBB,D
a. 118.8
b. Exactly 100
c. Exactly 200
d. Around 109
e. None

a. SEC
d. All
64. Odd man out:-

a. SEC
b. NYSE
c. NASDAQ
d. LSE
e. NSE
a. True
b. False

b. All
c. High speculation
d. High leveraging

b. Lot of research

a. All
d. Time frame

b. All
e. None
a. Line of credit
c. Letter of credit
e. Trade credit

a. Specialist
b. Traders
c. Back office
d. Front office
e. Mid office
a. Equities

a. E-trade
b. Charles Schwab
c. Sallie Mae
d. Federal reserve
e. a and b both
b. Style maps score
d. Alpha

e. None

d. None

a. 4th market
b. 3rd market
c. Listed market
d. 2nd market
e. OTC market
a. Discounted loans
b. True discount – check not sure
c. Capitalized
d. Demand
e. Amortized


a. Unlisted market
c. Unlisted
d. Super
e. 2nd market

a. Sweep facility
c. All
e. Overdraft
a. Call
b. Put
c. Swaption
d. Oil futures
e. Leaps

a. Cash
b. Electronic data
c. Docs
e. All
c. Do not change
a. Bid
b. Indirect
c. Direct
d. Cross currency
e. Ask rate

f. Intends to buy
g. Intends to sell
i. None

d. Investment gain
a. Disbursed amount
b. Committed amount
c. Both
d. Either
e. None
91. Odd man out?
a. Equity
b. Stocks
c. Shares
e. Common stock
a. Sponsor
b. Custodian
d. Record keeper
e. Participant
as
a. Prime rate
b. Bond rate
c. Discount rate
d. Federal rate
Question Bank for
CCP in Fundamentals of Banking
1. Which of the following types does SWIFT belong?

a. Proprietary Network
b. Private Network
c. Proprietary and Messaging Service
2. A Share Holder has
a. Got ownership
b. Voting Rights
c. All the above
3. If Reliance Industries Limited wants to sell shares in USA, what should they do?
a. Use American Depository Receipt
4. Which of the following is not a Banking Activity?
a. Private Banking
b. Public Banking
c. Investment Banking
d. Retail Banking
5. Expand CLS.
a. Continuous Linked Settlements
6. Which of the following risks are avoided by Continuous Linked Settlements?
a. Temporal Risk
b. Spatial Risk
c. Market Risk
7. Which of the following locations is not specialized for Private Banking?
a. Switzerland
b. Mauritius
c. India
d. Cayman Islands
8. Don’t put all your eggs in the same basket. – This is a famous saying insisting what?
a. Hedging
b. Active aapproach
c. Diversification
9. Calulate the amount you will receive by the end of two years if you have invested
Rs.5000 at 10% rate of interest compounded annually:
a. 6050
b. 6000
c. 7200
d. 5050
10. Simple Interest is calculated based on
a. Principal Only
b. Principal and Accumulated Interest
11. Compound Interest is calculated based on
a. Principal Only
12. What is an Operational Risk?
a. Possibility of loss resulting from errors in instructing payments or settling
transactions.
b. Possibility that a firm will be unable to generate funds to meet contractual
obligations as they fall due.
c. Possibility of loss as a result of default, such as when a customer defaults on a
loan, or more generally, any type of financial contract.
d. Possibility of loss over a given period of time related to uncertain movements in
market factors, such as interest rates, currencies, equities, and commodities.
13. Which of the following is not a possible risk while doing a project in Cognizant?
No idea of the options and the answer
14. ICICI bank in India comes under the category of
a. Private Bank
b. Public Bank
c. Co operative Bank
d. Corporation Bank
15. What are FreddieMac and GinnieMae?
a. Regulatory bodies of Insurance
b. Institutions in Mortgage Markets
c. Investment Banks
d. Brokerage Firms
16. Which of the following is not a Rating Agency?
a. RBI
17. What are the 3 pillars of Basel 2?
a. Quantitative, Qualitative and Market Forces
18. Losing which of the following cards will have more impact?
a. Credit Card
b. Debit Card
c. Stored Card
d. Gift Voucher
19. If you have 100 units of money and inflation being 5% what is the future value after 1
year?
a. 105
b. 95
c. 90
d. 110
20. If banks increase their cash reserve ratio what will be the impact?(not the same one but
similar)
a. Money flow will be more
b. Money flow will be less
c. Reserve amount will be less
21. Expand IRR.
a. Internal Rate of Return
22. Servicing High Net worth Clients is called
a. Asset Management
b. Private Banking
c. Retail Banking
23. PTA stands for
a. Payable Through Account
24. Details about 3 tiers of Federal communications privacy law.
25. US Government passed the USA PATRIOT Act in response to
a. November 30, 1982
b. September 11, 2001
c. June 09, 1984
d. August 10, 1984
26. Benefits of Check 21.
27. SuperDot is used in which Stock Exchange?
a. NYSE
b. BSE
c. FSE
d. LSE
28. FTSE index is used in which stock exchange?
a. New York
b. Bombay
c. London
d. Singapore
29. If the current market price of a share is $90 and you have placed a sell stop order for $85
and Limit order for $87. Which of the following statements is correct?
a. Will be sold immediately but at a price >$87
b. Will be sold immediately but at a price >$85
c. Will be sold but at a price between $85 and $87
30. What are warrants?
31. Pick the odd man out.
a. Stocks
b. Shares
c. Equity
d. Convertible Bonds
e. Common Stocks
32. Define risk in financial terms.
a. Probability of loss
Find spread?
Ans: 1.95
Ans-100,100,
98,100,
100, 98,
98, 98,
100, 2
redemption

year

3. compliance risk
4. systemic risk
Q8 VRU refers to??

3. front office
4. back office
1.1200
2.1500
3. 500
4.1020

Q15. FII,
Interest score
FFLP score
Loan Score
5. T+1
6. T+3
7. true
8. T+2


6. buying shares
7. buying property
8. buying car



Ans: Mid office


year


6. 3m
7. 3000
8. 0.1m
9. 0.3m
10. no of the above
17.65)

Deposit money
Make a loan
Print Money
Invest Money

Ans: True


Ans: By fax

DEMAT
ESCORW
Future Contracts
Options
Swap
Bond
1. Wat is inflation ?
a. Rise in cost of goods and service over period of time and decrease in value of money
2. A problem using nominal interest rate ?
a. Nominal interest rate – real rate of interest
3. Problem on future value
a. FV = PV * (i+i)^n
4. What is NPV ?
a. Net present value
5. Mortages
a. Secured by the real estate\
6. Wat is CP
a. Commerical paper
7. What is SEC ?
8. Prefferred stock includes ?
a. Straight,cummulative,convertible,callable,participating,variable
9. What is GDR ?
a. Global depository receipts
10. What is a warrant?
a. Is a call option(equity) + security and sold as unit [check for option .. ans took from pdf]
11. What is options ?
a. Gives the buyer the right but not the obligation to buy or sell shares
12. Which is not a Bank ?
a. Bank of America
13. If market rate of interest increases ?
a. Bond decreases
14. Central bank is also called as
a. Bankers bank
15. Questions based on spread
a. Base rate – current rate
16. Line of credit is
a. Revoliving in nature
17. Credit drivatives
a. Itz a financial contract ; transfer risk ; efficiency in pricing n distributing
18. Swap is measured by
a. NOTIONAL
19. Current account maintained by home currancy by one bank in the name of another bank
(abroad)
a. VOSTRO
20. Current market rate
a. Spot
21. 3 questions on gross .. problems
22. Truncation of original cheque and vil delliver electronic by sendin sub check
a. Check21
23. Letter of credit
a. IRREVVOKABLE
24. Standby LC valid for years ; eliminate cost
a. Evergreen LC
25. BAFT
a. Bankers association for foreign trade
26. Ther was a question .. like arrange type .. not sure answer
a. Economy -> society -> .. (not sure options)
27. Hub of investment banking
a. Syndicate
28. Largest par of spread
a. CONCESSION
29. Flow of cash intend to fecilate commission of criminal offense
a. Money laundering
30. Basel 2 capital
a. 55 CENTRAL banks; safety n soundness
31. Question on risk
a. Market risk
32. VaR
a. No assumptions are made
33. Trade cycle
a. Decision to trade-> place an order -> trade matchin -> trade execution -> clearing ->
settlememnt -> security

a. Central bank
a. Securities repositories
a. Spot
a. Reimbursement bank
a. Flex cube
39. The advising bank is called as trusted bridge between the ___________ & __________ when
they do not have active relationship.

a. Banks can raise funds by selling acceptance
a. AAA,AA+,BBB,D
42.
a. Customers who default but finally pay
44. Which of the following is not involved in a credit card transaction?
a. Associations
45. One should have the Time Deposits if one is looking for?
a. Guaranteed rate of interest
46. The process flow in a Private banking firm goes as
a. Client Representative => Servicing Specialist => Middle Office => Back Office
47. Which of the following roles and responsibilities are correctly stated?
a. Services Provider; Tax Services
48. Financial planning involves all EXCEPT
a. Portfolio management
49. If a fund purchases a loan in the Primary, they also use another word for that. Which term is used
to indicate the initial group of lenders (Primary Lenders)?
a. Syndicate
50. Which of the following is not a credit derivative?
a. Currency swap.
51. Which if the following is true in the case of sight draft?
a. Buyer can refuse to take the delivery
52. Which of the following is the safest type of letter of credit from seller point of view?
a. Standby Letter of Credit
53. Which of the following methods of payment is most risky to the Seller?
a. Open account
54. Which of the following methods eliminate country risk and commercial risk upon confirmation?
a. Both Standby Letter of Credit & Letter of Credit
55. The following are interest rate risk management instruments EXCEPT?
a. Interest rate guarantee
56. Core Custody Services performs the following functions except
a. Fiduciary and compliance monitoring
57. The Bid price is

a. Less than offer price
a. 95 %
a. Buyer
a. Small and medium investors
61. Corporate actions refer to
a. Dividend / stock split
62. Besides providing core custody services the global custodian provides which of the following
services
a. BOTH foreign exchange transaction and tax reclaim processing
63. Credit derivatives are both diversify their credit risk and free up capital from regulatory
constraints
64. When a firms needs short term funds for specific purpose the bank loan vil likely transcation
loan
65. hedge fund investment stratergy - credit arbitrage
hedge funds are run by private banks ... variety of techniques

leverage ... short selling .. and use of derivative .. arbitrage
66. the contract between issuer and lead is the underwriting agreement , it states tern n condition
of the offering such as underwritin spread pop and amt of procedds from the offering that wil
go to issuer
67. visa is involved in which of the following

a. Provide interchange system to transfer fund
68. What is market timing
a. Market timing is the strategy of making buy or sell decisions of financial assets
(often stocks) by attempting to predict future market price movements. The
prediction may be based on an outlook of market or economic conditions resulting
from technical or fundamental analysis. This is an investment strategy based on
the outlook for an aggregate market, rather than for a particular financial asset.
69. What is financial leveraging

a. Financial leverage (FL) takes the form of a loan or other borrowings (debt), the
proceeds of which are (re)invested with the intent to earn a greater rate of return
than the cost of interest
70. _____________ provides Private banking in the Trust or Investment management
division whereas _______________ provides Private Client Services (PCS)
Mellon and Bank One; Salomon Smith Barney

71. Warrants are combination of (Equity & Call)
72. when price of share of one company falls then which risk (ans : market risk)
73. Interest rate increases then bond price decreases.
74. Wire transfer is more costly than other payment alternatives
75. In how many types we can take auto loan

Direct
Dealer
Lease
Ans: All of the above
76. Two Banks get together Ans: Merger
77. which risk we can face in case of municipal bond but not in case of US-treasury bonds?
Ans: Interest rate risk
78. A is more risk adverse than B then what happens (ans: A get less return than B)
79. Question based on repayment method (options: step up,step down,ballon,bullet)
Ans: All
80. Which of the following factors affect choice of payment. (all)
81. Security with maturity less than one year are traded on money market. (ans : True)
82. A bank is required to hold reserves at lease equal to a prescribed fraction of its total
deposit liabilities. (True/False)
83. which of the following is a Treasury management System ?
ans: Front Arena
84. Trade finance helps in (ans : facilitating international transactions)
1. Compound interest and simple interest are same or not?
Ans : No
2. Simple interest calculation.

3. interest spread rate = current rate – base rate.
4. Future value calculation
5. P/E Ratio Calculation ( refer P&L Account from PDF)
6. True & False Question based on P&L And balance Sheet. ( for which period it is created
?)
7. Credit rating Hierarchy ( ans: AAA,AA+,BBB,D)
8. when a person goes to a bank for a loan say 300$ but bank doesn’t have that much of
money to lend then what the bank will do ? (ans : take money from other source and
then give it to customer)
9. full form of ADR ? ans: American Depository Receipt

10. full form of CRR ? ans: Cash Reserve Ratio
11. question based on EBPP (not full form)
12. full form of SPV ans: Special Purpose Vechile
13. what is settlement cycle ?
14. sequence for trade cycle
ans: trade matching, trade execution, trade clearing, trade settlement
15. Gross settlement and Net settlement question ( 4 questions based on that)
16. processing cycle for LC (letter of credit) (ans : 3,4,2,5,1)
17. question based on “Basic or No Frill Banking Accounts:”
three stat given. Ans is all of the above
18. difference betwn Defined benefit and defined contribution
19. Question on Money laundering
20. US Patriot act was introduced in which year? (ans : 2001)
21. question on Basel II three pillars
22. Hedge funds are now handled by which bank?
23. Question based on syndicate loan.
24. Which is not an option? (ans: oil feature)
25. You invest Rs.5000 at 10% p.a. compound interest compounded annually in a
bank After 2 years, what is the amount you have received from the bank?
26. Question on supplier/dealer loan.
27. question on Bid rate
28. there are five participant A,B,C,D,E and A is a manager. Profit is 500000 and operating
charges is 100000. then how the profit will be distributed among all?
29. In a economy where inflation is 4%, future value of 100 units of money after 1
year would be which of the following?
Ans: None of the above
30. Process of money multiplier effect was given as question and told that what does this
process called ? (ans : money multiplier effect)
31. question on calculating CRR. i.e bank deposit is 100$ and CRR is 10% and it circulate
through 2 banks then how much money bank can lend.
Ans: 2439
32. which risk we can face in case of municipal bond but not in case of US-treasury bonds?
Ans: Interest rate risk
33. what VISA does ?

34. which is not a function of private banking ? (options : secured call , personal chat)
35. question based on Auto Loans?
36. Central bank is also called (The Banker’s Bank)
37. Warrants are combination of (Equity & Call)
38. The standby LC can remain valid for years. it eliminates the cost of separate LCs for each
transaction with a regular client (Ans : Evergreen Clause)
39. Yankee bonds are also called?
Ans: junk bonds
40. corporates with very low credit ratings and carry very high rates of interest. (ans : Junk
Bond)
41. which method eliminates both country risk and commercial risk ? (ans : Stand by LC
and LC)
42. fastest method for calculating VaR (ans : variance-covariance method)
43. which risk may bring both gain as well as loss ?
(ans: Interest rate risk and foreign exchange risk)
44. when price of share of one company falls then which risk (ans : market risk)
45. Question on true discounted loan (from dumps)
46. interest rate decreases then bond price increases.
47. Question on Global Custodian
48. Question on STP (straight through processing) (what is does?)
49. Trade finance helps in (ans : facilitating international transactions)
50. Question on NPV.
51. which of the following is a Treasury management System ?
ans: Front Arena
52. which of the following options is not done by LC ?

ans: None of the listed
53. which of the following is not an Order Type ?

54. ATM operates at which Office? (options : front,middle,back)
55. A bank is required to hold reserves at lease equal to a prescribed fraction of its total
deposit liabilities. (True/False)
56. which combination holds true ? (ans : Wire transfer is more costly than other
payment alternatives)
57. you purchase a stock at 40$, one year later u received 2$ dividend and sold the share @
48$. What was your holding period return ? (Ans : 25%)
58. HPPL shares are currently selling at 25$. U bought 200 shares 1 year ago at 24$.
Received dividend 1.5$ per share.what is total dollar capital gain this year? (Question
data was Changed)
59. Full form of BAFT (ans : bankers association for foreign trade)
60. Ram deposit money in bank, Puja took loan the same money from bank then how much
bank will charge interest to both ram & puja ? (ans : charge higher interest to puja
than ram)
61. Security with maturity less than one year are traded on money market. (ans : True)
62. Question based on asset servicing.
63. Currency is also called (ans : store of value)
64. interest rate on a bond depends on (ans: all of the listed option)
65. Question based on Core banking Lenders.
66. Question based on ALM (asset Liability management)
67. Question based on repayment method (options: step up,step down,ballon,bullet)
Ans: All
68. Question on MMDA?

69. Disadvantages of LC
70. if total spread on underwriting is 500000$ and manager’s fee is 100000$ then what will
be the amount that will be distributed in the syndicate?(ans : 400000$)
71. Banker’s acceptance differ from sight draft (ans: bank can raise funds by selling
acceptance)
72. Question based on Sweep (transferring access money from one account to another)
73. 2 question based on credit derivatives
74. A is more risk adverse than B then what happens (ans: A get less return than B)
75. Which of the following factors affect choice of payment.
76. FRA is determined by ?
BFS L0 LATEST DUMPS
c. Assignment
d. Participation
e. Preclosure
262. Tax and insurance Premiums Collected as part of Loan repayment are handled through
which of the following type of account?
a. DMAT account
c. Escrow account
d. Fixed despoait

b. Poat-Acquisition
d. During a IPO
e. A merger

a. Retail Banking
b. Private Banking
e. Consumer Lending

b. Bank One
d. UBS
e. Credit Suisse
267. Ram deposits $100 in XYZ Bank. Puja takes a loan of $ 100 from XYZ Bank. Which of
the following is most likely to happen?
c. ………………….
d. ……………………
e. ……………………
lowest)
a. 0.
b. 0.
c. N
d. 0.
9.25 – 7.30 = 1.95
a. None
b. It crea……………………..
c. It crea……………………..
d. It crea……………………..
e. It crea……………………...
Solution:

1 5000 500 4500
2 4500 450 4050
3 4050 405 3645



c. …………………………
d. …………………………
a. True
b. Flalse
276. Assuming a 4% annual inflation rate, in how many years will the purchasing power of
$1,000 be cut in half?
a. 18 Years
b. 16 Years
c. 20 Years
d. 12 Years
e. 24 Years
trade is settled.


280. If the entry load is 2% and the NAV is Rs 10, then how much the investor will have to
pay for 100 units?
a. Rs. 1020
b. Rs 1500
c. Rs. 1200
d. Rs. 800

(10+(2/100*10))*100 =1020
b. Buyer’s bank
c. Seller
d. Advising bank
e. Seller’s bank
282. If a financial instrument has a 50% chance of paying 20% and a 50% chance of paying
60% percent. What would be the expected return?
a. 0.4
b. 0.2
c. 0.5
d. 0.8
= (50/100)*(20/100) + (50/100)*(60/100) = 0.4

a. No
b. Only during IPO
c. Yes

c. Rights issue
d. M & A
e. Stock Split
i. I only
j. Both I and II
k. II only
l. None of the listed options
Answer: I & II

Settlement
Settlement
Settlement
Settlement
a. …………………………………
b. …………………………………
c. …………………………………
d. …………………………………
288. There are 5 participants A, B, C, D, E in a 25M USD syndicated loan and A is the lead m
has agreed to pay 0.4% ($1,00,000) participant fee. How much each participant will share in
participant fee?
in the case market

a. The Exchange
b. Banks
e. Government
291. . ………………………
292. . ………………………
293. . ………………………
294. . ………………………
295. . ………………………
296. . ………………………
297. . ………………………
298. . ………………………
299. . ………………………
300. . ………………………
301. What is OTC?

a. Over The Counter
b. .………………………
c. ……………………….
d. ……………………….
e. ……………………….

c. Current Rate
304. Universal banks provide commercial banking as well as investment bank services under
one head . State True or False
a. True
b. False

a. Corporate Action
b. . ………………………
c. . ………………………
d. . ………………………

a. Sa……………………….
b. All………………………
c. Deb……………………..
d. Pe……………………….

i. I Only
j. II only
k. I & II
l. I, II & III

II: Interest paid
a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
exchange
exchange
exchange
exchange
Solution:

DELL Buy 120 $10.00 (1200)
DELL Sell 70 $10.50 735
CISCO Buy 200 $20.00 (4000)
DELL Sell 20 $11.00 220
CISCO Sell 50 $20.50 1025
DELL Sell 10 $9.00 90
Total (3130)

exchange.
a. SEC
b. FSA
c. Senate
d. Federal Reserve
fu………………………
a. True
b. False

a. Ver………………………
c. Eco………………………
d. Curr………………………
e. Dec………………………

a. True
b. False
a. Cash Value
b. Gold
d. Company Bond
e. Fixed Annuity

e. Treasury bills


a. Brokerage
b. Takeover
c. Acquisition
d. Merger
d. N

a. Personal Loan
b. Transfer Fund
c. Credit Services
b. Transactions
c. Investment
d. Support
322. Pooling and repackaging of cash-flow-producing financial assets into securities, which
are then sold to investors is called ____________
a. Leveraging
b. Securitization
d. Short Selling
True or False
a. True
b. False
324. GE shares are currently selling for $15.00 each. You bought 200 shares one year ago at
$12 and received dividend payments of $2 per share. What was your total capital gain this
year?
a. 600
b. 400
c. 1000
e. 200
Solution:
(200*15) + (200*2) – (200*12) = 1000
325. Securities with an original maturity of lesser than 1-year are traded on money markets.
State True or False
a. True
b. False

a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
327. _____________ is the legal and professional proceeding in which a lender, cbtains a
court orders …………..….a borrower’s equitable right of redemption.
a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
b. Global Custodian
c. Sub Custodian
e. Main Custodian
financing?
a. 2.5
b. 2
c. 1.25
d. 1.5
Solution:
Number of shares
= (50000-10000-5000-5000) / 20000 = 1.5
a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
e. . ………………………
a. True
b. False

a. Open Account
c. Letter of Credit
d. Counter trade
e. Cash in advance
k. None of the Listed Option
l. (a) $1880 (b)$ 3100
m. (a) $1,780 (b) 0 for IBM, $1795 for MSFT
n. (a) 0 for IBM, $1795 for MSFT (b) $1880
o. (a) $3100 (b) $1880
Solution:

IBM Buy 100 $11.00 (1100)
IBM Sell 50 $10.50 525
MSFT Buy 100 $20.00 (2000)
IBM Sell 20 $11.00 220
MSFT Sell 10 $20.50 205
IBM Sell 30 $9.00 270
Total (1880)


a. 0.03M
b. 30M
d. 3M
e. 0.3M
b. None…………..
342. In a securities lending transaction, if the buyer of securities provides cash as collateral,
then the seller of securities has to provide the buyer with a interest amount for the cash. What
is this interest amount called?
a. Rebate rate
c. Interest Rate
e. Return Rate

a. Never unsecured
b. Never secured
c. Always secured
d. Always unsecured

345. The amount owed by a company to suppliers in the next one year will be categorized
under __________________


a. Munis
b. Junk Bonds
c. Corporate bonds
d. Treasury Bills
e. Yarkee Bonds

a. Currency Risk
b. Commodity Risk
d. Credit Risk
e. Equity Risk
a. Money Policy
b. Money Making
c. Money Market
d. ……………….
e. ……………….
351. In terms of computation, which of the following is the fastest method for calculating
VaR?
352. ABC co. wants to identity the best way for making salary credits to its huge employee
base. Can you select the best option?
a. Paper Checks
c. Cash
353. In a economy where inflation is 4%, future value of 100 units of money after 2 year
would be which of the following option?
a. Exactly 108
c. Exactly 100
d. Around Rs. 104
e. 108.16
Solution:
n 2
FV = PV*(1 + i) = 100(1+0.04) = 108.16

inflation, then:
a. R = N – I
b. R = N * I
c. R = N + I
d. R = N/I
a. Federal Stafford
c. Federal PLUS
a. T+1
b. T+4
c. T+2
d. T+3
357. P&L Statements represent transactions over a period of time while the balance sheet
shows information as on Specific date. State True or False.
a. True
b. False

a. Put Option
b. Oil Futures
c. Swaption
d. Call Option

a. Junk bonds
c. Shares
d. Call Options
e. T-Bills
a. Market Risk
b. Business Risk
c. Credit Risk
d. Company Risk
e. Liquidity Risk
face?
a. Operational Risk
c. Legal Risk
d. Currency Risk
e. Credit Risk

borrowers
b. Trading Loans
c. Accrual Loans
d. Undrawn Loan
e. Committed Loans
a. 50 percentage
b. 45 percentage
c. 10 percentage
d. 25 percentage

True or False
a. True
b. False
State True or False
a. True
b. False
b. Fixed rate loan

a. Demand loan
c. Capitalized loan
d. Amortized loan
e. Discounted loan

a. Bonds
b. Futures
c. Options
d. Swaps
e. Forwards

a. 2200
b. 2000
c. 1600
d. 2400
Solution:

DP = (1-0.20)*2000 = 1600
374. …………………..………
a. 20000
b. 17000
c. 18000
d. 15000
or False
a. True
b. False

a. 2.33 Sd
b. 1.65 Sd
c. 1.96 sd
d. 3 Sd
e. 1 Sd
determined
determined.
a. 0.6667
b. 0.3333
c. 0.5
d. 0.2247

a. Purchase
b. Discount
c. Acceptance

a. TS2
b. Front Arena
c. ………………….
d. ………………….
e. …………………..
a. Freddie Mae
b. E-Trade
c. Ginnie Mae
d. Sallie Mae
e. Federal Reserve
confirmation?
a. SWIFT networks
b. FEDWIRE
c. By Fax
d. By Telephone
384. SPV means

385. NPV stands for

c. No Present Value
d. Net Past Value
State True or False
a. True
b. False
b. 600000
c. 400000
d. 100000
e. 500000
c. Simple Interest
Missing Question
lowest)?
a. AAA, AA+, BBB, D

b. AAA, AA-, D, BBB
c. D,C,B,A
d. D, AA-, B, AAA
e. AAA, AA+, D, AA-
a. Bond
b. Equity
c. Share
d. None
Ans: 20000
i. Spot, futures
j. Debt , Equity
k. Primary , Secondary
l. Money, Capital

a. Amex
b. T-sys
c. Elavon
d. Front Data Company\
1.An underwriter ______________.

a. guarantees & makes good of any shortfall in subscription to the extent of his underwriting
b. decides the insurance premium
c. is typically an investment bank
d. guarantees that the capital issue will be subscribed at premium
2. Which of the options best describes the sequence of following events?

1. Issuing bank arranges for advising bank to make payment
2. Freight forwarder sends documents to the advising bank
3. Issuing bank issues the letter of credit (LC)
4. Advising bank advises seller that an LC has been opened
5. Advising bank sends documents to the issuing bank
a. 4,1,3,2,5 b. 4,5,2,3,1 c. 1,2,3,4,5 d. 3,4,2,5,1 e. 2,5,1,3,4
3. Corporate Lending refers to:

a. Loans provided by companies to individuals
b. Loans provided to high net worth individuals
c. Loans provided to individuals
d. Loans provided to companies by Government
4. A choice quote is _______________.

a. price at which a firm is ready to buy or sell. It also means when bid is equal to offer
b. when bid is equal to offer
c. where the firm has a choice of deciding the security to take
d. price at which a firm is ready to buy or sell
5. In an international securities transaction, which of the following participants will NOT be involved?
a. Domestic Sub-custodian
b. b. Stock exchange in foreign country
c. c. Global Custodian, Domestic Sub Custodian, Depository in Foreign Country and
Sometimes Stock exchange in foreign Country
d. d. Depository in foreign country e. Global Custodian
6. Stock A is more volatile than Stock B. Which stock is more risky?
a. Data on SD is required for this b. A c. B
d. Depends e. Both are equally risky
7. Which of the following would be most attractive private banking destination

a. Delhi b. Jakarta c. Thimpu d. NewYork e. Lahore
8. A good risk management system

a. sends alerts automatically when the risk crosses a defined tolerance limit.
b. allows the risk managers to drill down the risk to lowest components
c. All of the given options
d. carries out sensitivity, what-if analyses,
e. generates customizable reports

How much did the broker pay out to the exchange in total in case of (a) gross settlement system (b)
net settlement system?
a. (a) $1,780 (b) 0 for IBM, $1,795 for MSFT

b. (a) $1,780 (b) $3,000 c. (a) 0 for IBM, $1,795 for MSFT (b) $1,780
d. None of the listed Options e. (a) $3,000 (b) $1,780
10. Which of the following is likely to have the highest interest rate
a. 12 month deposit with minimum balance of 1000$
b. Cannot be determined
c. 6 month deposit with minimum balance of 1000$
d. 3 month deposit with minimum balance of 4000$
e. 6 month deposit with minimum balance of 2000$
11. A Central Bank in an economy is also known as:

a. The Retail Depositors' Bank b. The Banking Boss
c. None of the listed Options d. The Big Boss e. The Bankers' Bank
12. Retail loans are asset products offered by the bank. State True or False .
True False
a. Counter trade b. Open Account c. Cash in Advance d. Letter
of Credit e. Documentary Collection
14. If the price of a security on day 1 & 2 are $ 100 and $ 102 respectively the return is
a. 1% b. 2% c. Very high d. -1% e. -2%
15. Cash management solutions help corporations to ___________

a. manage surpluses and deficits b. reduce float on collections
c. outsource collections d. All of the listed options e. automate collections
16. What is the role of a Central Bank in Forex market of a country?
a. Acts as a trader for maximum profit making
b. Encouraging trading in all currencies and not be limited to USD only
c. Seller of USD
d. Regulatory role depending on country's economic policies
e. No role
17. If a bank gets a deposit of $1000, assuming a reserve requirement (CRR) of 10%, and that it
circulates through 2 more banks, leading to the following money multiplier effect
a. Loan of $1710 b. Create reserve of $190 c. None of the listed Options

d. Create a reserve of $100 e. Loan of $2439
18. High-Net worth individuals generally have _______.

a. Networth greater than $500,000 b. All of the listed options
d. Household income of maximum $50,000 per year
19. Which of these instruments is not included as part of Asset servicing services under the
category "Pricing/Holdings Valuation", which includes accurate pricing, ratings, etc. ?
a. Equities
b. The service may be provided for all of these instruments
d. Certificates of participation
e. Certificates of deposit
20. In the Historical Simulation method of VaR calculation

a. no assumption is made about the distribution of returns
b. random returns are generated to calculate VaR
c. returns are assumed to be not normally distributed
d. returns are assumed to be normally distributed
e. returns are not required at all
21.Which is the most risky of the following:

a. An asset with a standard deviation of 3
b. An asset with a standard deviation of 1
c. An asset with a standard deviation of 2
d. An asset with a standard deviation of 5
e. An asset with a standard deviation of 4
22. A mutual fund with investment objective of achieving high capital growth approaches an investor
services firm for advice. The firm advises the mutual fund to invest 80% of the fund in govt. debt,
and 20% in equity. The allocation towards debt advised by the firm:
a. Cannot be determined, depends on market conditions prevailing at the time

b. Is too high c. Is about right d. Is too low
23. In which of the following cases can the Securities Lending service of a custodian be used to
borrow securities?
a. A broker has made a sale of securities, but some of the securities were delivered defective
c. A hedge fund manager wants to trade with borrowed shares as part of his arbitrage strategy
d. A broker has made a short sale of a security, and wants to cover it
24. The process of transferring obligation from one party to anoth er is called _________
a. Settlement b. Novation c. Netting d. None of the listed Options e. Counterparty risk
a. Standby Letter of Credit b. Both Standby Letter of Credit & Letter of Credit
c. Letter of Credit d. Back to back Letter of Credit e. Documentary Collection
26. ADR stands for which of the following?

a. American Demand of Russian bond b. American Demand of Rented homes
c. American Demand Receivables d. American Dollar Receivables
e. American Depository Receipts
27. Which of the following are examples of Payment Methods?

a. Letter of credit b. Open account or credit c. Cash in advance
d. All of the listed options e. Documentary collection
28. All broker/dealers involved in the underwriting of non-exempt securities must be

a. NASDAQ Member b. No such membership is required c. NYSE Member
d. SEC Member e. NASD Member
29. Credit derivative have all of the following characteristics EXCEPT:

a. Traded over the counter b. Financial Instrument c. None of the listed Options
d. Transfers risk e. Facilitate greater efficiency
30. Risk Management is a function of

a. Back Office b. Mid Office c. Traders d. Front Office e. Specialists

a. Demat b. Personal Loans c. None of the listed Options
d. Hire Purchase e. Auto Loans
32. The term CP is used in Corporate Lending for:

a. Client Partner b. Credit Provision c. Commercial Paper
d. Commodity Put Options e. Collateral Provision
33. In defined contribution retirement plans, Tax-sheltered Annuities fall under Section ______ of
ERISA
a. 401(b) b. None of the listed Options c. 401(k) d. 403(b) e. 403(k)
34._____________ is typically the largest part of the spread and is paid to the broker/dealer that
actually took the client’s order.
a. Underwriter's Allowance b. Wage c. Manager's fee d. Concession e. Salary
35. Which of the following type of loan requires the amount of interest that would be earned on the
loan to be paid upfront by the borrower?
a. True discounted Loan b. Discounted Loan c. Capitalized Loan
d. Demand loan e. Amortized Loan
36. Auto loans are loans financed for vehicles for business use. State True or False.
True False
37. The real rate of interest is 9.50% while the nominal rate of interest is 11.70%. The applicable
inflation rate is:
a. 2.2 b. 2.1 c. None of the listed Options d. 0 e. -2.2
a. 2% b. -2% c. -1.96% d. 1 to 2% e. Very high
39. Which of the following is NOT a category of health & welfare plan?
a. Property insurance b. Survivor benefits c. All of these are valid categories
d. Disability income e. Health care plan
40. If total spread on underwriting is $ 500000 and Manager's fe e is $ 100000, what is the amount
which will be distributed in the syndicate?
a. $400,000 b. $500,000 c. $600,000 d. Cannot be determined e. $100,000
41. What are the risks associated with Hedge Funds?

a. High Leveraging b. High Speculation
c. High Exposure in Derivatives d. All of the listed options
42. Which is the best VaR estimation model

a. Variance-Covariance Matrix b. Cannot Say - depends on case to case
c. Historical Simulation d. A combination of Monte Carlo and Historical Simulation
e. Monte Carlo Simulation
43. A bank decides to sacntion only 10% of the loan sought by a company. The company goes and
pledges extra assets with the bank and the bank then agrees to sanction 50% of the loan sought.
The company has indulged in the process of:
a. Credit Revision b. Credit Increase c. Credit scoring

d. Credit Enhancement e. Credit Incrementation
44. A purely competitive financial market is not characterized by:

a. Many Traders b. Government Regulation c. Cost
effective Trading d. Full Information
Given that a net settlement system is being used, find out the net position of the broker at the end of
the day.
a. IBM: 70 shares to give out; MSFT: 90 shares to receive; $3,000 to pay out to the exchange
b. IBM: no exchange of shares; MSFT: 90 shares to receive; $3,000 to pay out to the exchange
c. IBM: no exchange of shares; MSFT: 90 shares to receive; $1,780 to pay out to the
exchange
e. IBM: no exchange of shares; MSFT: 90 shares to receive; $1,780 to receive from the exchange
46. Card associations provide which of the following services ?

a. Set interest rates b. Set card fees c. Issue cards
d. Set credit limits e. Security/Risk management
47. FX Spot Deal in US assumes a maturity of how many business days ahead?
a. Five days b. Three days c. Four days d. Two days e. One days
48. A fixed income analyst will analyze all but

a. Municipal Bonds b. Shares c. US Treasuries
d. Corporate Bonds e. Bonds of Government Sponsored Enterprises
49. Which of the following is not correct for a personal loan?
a. Loan amount is not linked to borrowers’ repayment capacity

b. No security required
c. The financer is not interested in the intention of the loan
d. They are short term loans e. None of the listed Options
50. In Check 21, IRD stands for:

a. Investor Replacement Document b. Institutional Replacement Document
c. Internal Rating Document d. Image Replacement Document
51. In an account earning simple interest, the interest from the first year is reinvested at the
beginning of the second year. State True or False.
True False
52.Which of the following is not a Charge Type

a. Hypothecation b. Pledge c. Collateral d. Lien
53.Jo inherited an antique tie pin. It was valued at $1350. Each year its value appreciated by 5%.
Approximately how much was the tie pin expected to be worth 5 years later
a. $1,723 b. $1,450 c. None of the listed options d. $1,688 e. $1,045
54. Which of the following represents the correct hierarchy of corporate ratings (highest to lowest)?
a. AAA, AA+, BBB, D b. AAA, AA-, D, BBB c. D,C,B,A
d. D, AA-, B, AAA e. AAA, AA+, D, AA-
55. The rate at which the bank will purchase US dollars against home currency is called as
___________.
a. Direct Rate b. Ask Rate c. Bid Rate d. Indirect Rate e. Cross Currency Rate
56. Which among the following is an investment company that pools money from unitholders and
invests in a variety of securities?
a. Mutual Fund b. None of the listed options c. Stock
Exchange d. Mortgage Company
57. Pick the odd one out.

a. George Soros b. Bill Gates c. Warren Buffet d. Ben Graham e. Peter Lynch
58. USExport and EURImport agree to carry out the transaction, goods worth $1,000,000 under a
confirmed term Letter of Credit with a maturity date of 60 days from the time of shipment. The
Acceptance commission @ 1.5% pa equals ___________.
a. 2500 b. None of the listed Options c. 300 d. 250 e. 3000
59. Which of the following, according to you, has resulted in defined contribution plans gaining
popularity over defined benefit plans?
b. Employers increasingly want employees to share responsibility for their retirement
c. DC plans fix the monthly contribution from the employee, making h is financial planning easier
d. DC plans are seen by employees as an investment vehicle to accumulate retirement income
60. Which of the following financial institutions are covered under the Anti -money laundering, US
Patriot Act
a. Mutual Funds b. Securities brokers and dealers
c. All of the listed options d. Banks and Trust companies
61. All the following statements concerning U.S. Government securities are correct EXCEPT:
a. Treasury bills have a greater interest rate risk than either Treasury bonds or Treasury
notes.
c. Treasury notes have maturity dates up to 10 years.
d. Treasury bonds have maturity dates up to 30 years
e. Treasury bills have their interest paid in a lump sum at maturity.
62. Legitimate ways to cancel the credit card transactions within a limited time frame are
_________________
a. Chargeback and Chargeback reversals b. Chargeback reversals
c. Chargeback d. Presentment
63. Syndicate helps in all the following activities but

a. raising huge money from the banks b. managing large capital raising activity
c. IPO Distribution d. managing conflicts between investment banks
e. managing large bond issues
64. Bank New has a portfolio of $30 million worth of loans, which it wants to hedge. This is an
example of what kind of loan?
a. Held for Sale Loans b. Trading Loans c. Committed Loans

d. Accrual Loans e. Undrawn Loan
65. Operational Risk is defined as
a. the risk of loss resulting from errors in processes, people and systems
b. he possibility of loss as a result of default, such as when a customer defaults on a loan
c. the possibility of loss over a given period of time related to uncertain movements in market
factors
d. the possibility that a firm will be unable to generate funds to meet contractual obligations as they
fall due.
e. the possibility of loss when a contract cannot be enforced
66. Open ended loan allow the borrower to borrow additional amou nt subject to the maximum
amount less then a set value. State True or False.
True False
67. Which risks may bring gains as well as losses?

b. Liquidity risk and credit risk
c. All these risks may lead to profits as well as losses
68. Banks are financial institutions that are licensed to accept deposits and issue loans
True False
69. Bank A, based in the US, provides safekeeping services for securities to its US clients. It also
has clients in France and Belgium, and provides securities safekeeping services to these clients
through Banks C and D respectively. Which of the following terms best describes Bank A?
a. Sub Custodian b. Secondary Custodian c. None of the listed Options
d. Main Custodian e. Global Custodian
70. Credit derivatives can be used to ___________ the risk and ___________ the regulatory capital
requirements.
a. Diversify; reduce b. Manage; avoid c. Transfer; increase
d. Assess; estimate e. Eliminate; improve
71. Liquidity refers to the ease with which an asset can be converted into cash. State True or False.
True False
72. Trade Finance helps in:

a. Facilitating corpoate lending b. Facilitating intra-company transactions
c. Facilitating International transactions, corporate lending and setting up of new factories
d. Facilitating International transactions e. Facilitating setting up of new factories

a. Investment Analysis and Advise b. Sales and Marketing
c. Deposit Mobilization d. Client Management e. Research
74. An insurer undertakes an analysis of a portfolio of insurance policies by exploring scenarios for
the paths followed by swap rates, policy surrender rates, mortgage prepayment rates for the
mortgage-backed securities in the portfolio, etc. What is this process called?
a. Cash projections b. Fund Administration c. Asset/Liability analysis
d. Investment Manager Universe e. Asset allocation
75. The Brokerage firms are regulated by:

a. State regulatory agencies b. Industry wide SROs c. SEC d. All of the listed options
76. Which of the following factors affect the choice of payment methods?
a. Government Guarantee Program b. All of the listed options
c. Cost of financing d. Time frame e. Exporter’s Fund
77. Which of the following is associated with the purpose of regulating financial institutions?
a. To offset the moral hazard incentives provided by deposit insurance and other guarantees.
b. To provide stability of the money supply c. None of the listed options
d. To prevent failure of any financial institution
e. To serve certain social objectives
78. Retail banking is banking services provided for corporates. State True or False.
True False
79. If the funding cost of a Company goes up due to hardening of interest rates, this can be
attributed to
a. Commodity Risk b. Liquidity Risk c. Operational Risk
d. Legal Risk e. Interest Rate Risk
80. I deposit $100 in a bank. Bank loans out $90 out of it to someone else who then invests the
money in setting up a new factory. This process is called?
a. Profit making tendancies of the Bank b. None of the listed options
c. Monetery Policy d. Money Multiplier Effect e. Fiscal Policy
81. Which of the following is NOT an example of an Asset Based Loan?

a. Auto Loan b. Home Loan c. Personal Loan d. All of the listed Options
82. The purchase of any stock for immediate delivery is a ______ market transaction.
a. Option b. Forward c. Spot d. Futures e. Stock
roof. State True or False.
True False
84. If 1 day VaR is $ 1 million, 9 Day VaR is

a. $ 9 Mn b. $ 3 Mn c. $ 4.5 Mn d. $ 4.4 Mn e. $ 1 Mn
85. Which of the following is NOT a potential benefit of Straight Through Processing ?
a. Increased diversity in IT systems of various players supporting the trade cycle
b. Increased liquidity
c. Reduction in trade processing time
d. Drastic reduction in operational risk through reduction of human element
e. Elimination of delays in settlement
86. The "Compliance reporting" service, offered as part of Investor services in the US, provides
automated, __________, information highlighting potential violations of pre -agreed investment
guidelines, external regulations & internal risk exposure limits
a. Risk-based b. Exception-based c. Rule-based d. Client instruction-based
87. The Advising bank is used as a trusted bridge between the __________ and _______________
when they do not have an active relationship
a. Issuing bank; Confirming bank b. Beneficiary bank; Reimbursing bank
c. Issuing bank; Beneficiary bank d. Importer; Exporter
e. Reimbursing bank; Beneficiary bank

a. Merill Lynch b. Federal Reserve c. CSFB d. UBS
e. Saloman Smith Barney
89. Which of the following are disadvantages of using LC (Letter of Credit)?

a. Credit Line tied up. b. Costly c. Specific and Binding
e. Time consuming
90. CPI stands for which of the following?

a. Consumer Popularity Index b. Consumer Product Index
c. Consumer Price Index d. None of the listed options
e. Consolidated Price Index
91. Which of the following holds true for an LC (Letter of Credit)

a. Are typically revocable unless specified otherwise.
b. Advising bank has the liability for the payment of the LC.
c. Shifts credit risk from the Importer to the Importer's Bank (Issuing Bank).
d. Deals with products and not with documents
e. One of the relatively cheaper forms of payment guarantee.
92. Which of the following is not a derivatives instrument?

a. Futures b. Corporate Bonds c. Put Options d. Call Options e. Swaps

a. more than offer b. equal to offer c. less than offer
d. 2% less than offer e. dependent on dealer's skill
94. HPPL shares are currently selling for $25.00 each. You bought 200 shares one year ago at $24
and received dividend payments of $1.50 per share. What was your total dollar capital gain this
year?
a. $300 b. $200 c. $400 d. $500 e. None of the listed options
95. A bank providing custody services is in a good position to offer securities lending services to its
clients as well. State True or False.
True False
96. Which of the following operations can be done on a LC (Letter of Credit)?
a. Purchase b. Negotiate c. Acceptance d. All of the listed Options e. Discount
97. Under what category can services like asset/liability analysis, asset allocation, cash projection,
compliance reporting, fund administration, investment manager universe, etc. provided b y an
institution be classified?
a. Asset servicing b. Investment management c. Investor services
d. Trading e. None of the listed Options
98. Which of the following best describes bank systems?

a. Unregulated and safe b. Unregulated and unsafe
c. Regulated and unsafe d. None of the listed Options
e. Regulated and safe
a. Around Rs 109 b. None of the listed options c. 118.8
d. Exactly 120 e. Exactly 100
100. An investor wants to undertake a cross-border transaction in a security. Which of the following
does NOT correctly represent a way in which such a trade may be settled?
a. Directly through a local agent who is a member of the local depository
b. All of these are valid ways for settling the cross-border trade
c. Through a Global Custodian, operating through a local agent, who is a member of the local
depository
d. Through an International Central Securities Depository, which has dire ct links with the local
depository
e. Through direct communication link between investor's depository and local depository
101. You purchased a stock for $40. One year later you received $2 as dividend and sold the share
for $48. What was your holding period return?
a. 10% b. 50% c. 45% d. None of the listed options e. 25%
102. NASD is an not an SRO for ____________.

a. Over the counter market b. Second Market c. Fourth Market
d. Listed Market e. Third Market
103. A successful wealth manager needs to know about ___________.

a. All of the listed options b. 401 k rollovers c. tax and estate planning
d. fixed income investments e. equity investments
104. Offer is the price at which a firm

a. intends to buy b. trades in securities c. quotes when it does not want to trade
d. quotes to its best customers e. Intends to sell
105. Which of the following best describes how banks m ake loans?
a. None of the listed Options b. Reasonably, not depending upon risk
c. Without limitation d. Blindly with equal offers to all customers
e. Reasonably, depending upon risk
106. Which of the following is not an example of an option?

a. Oil Futures b. Call Option c. Put Option d. Swaption e. LEAPS (Long Term Options)
107. If the price of shares of Cognizant change from $ 65 to $ 60, this can be attributed to
a. Credit Risk b. Interest Rate Risk c. Operational Risk d. Liquidity Risk e. Market Risk
108. A company would pay the interest on what portion of the loan?
a. Disbursed amount b. Unused amount of the loan c. None of the listed Options
d. Either disbursed or committed amount e. Committed amount
109. A bank is required to hold reserves at least equal to a prescribed fraction of its total deposit
liabilities. State True or False
True False
110. Securities with an original maturity of greater than 1-year are traded on money markets. State
True or False.
True False
111. Interest rates are ____________.

a. the prices paid for the use of a real asset b. the prices paid for the use of a real liability
c. the prices paid for the use of a financial liability
d. the prices paid for the use of a financial asset
e. the prices paid for the use of a financial liability and the prices paid for the use of a financial asset
112. Basel capital accord was instituted to coordinate global regulatory efforts to institute
_______________ capital requirements to eliminate the threat posed by _____________
a. Minimum; undercapitalized banks
b. Maximum; undercapitalized financial institutions c. Minimum; overcapitalized banks d.
Maximum; overcapitalized financial institutions e. None of the listed Options
113. Which of the following trading services reduces the trading costs for institutional investors?
a. Transition management b. None of the listed Options
c. Transition management and commission recapture
d. Commission recapture e. Stock repurchase program
114. Money Market accounts never require a minimum balance to operate. State True or False.
True False
114. which of the following is not a feature of private banking?

a. Specialist Advice b. Commercial Lending c. Lot of research
d. High Investment in technology e. Understanding the capital and investment needs
115. What happens when the interest rates fall?

a. Interest rates never fall, they always go up b. Economy goes into a deflation
c. Bond prices decrease d. Bond prices do not change e. Bond prices increase
116. What are the two types of portfolio management services?

a. Penny wise and Pound wise b. X and Y c. Directed and Straight
d. Discretionary and Non Discretionary e. Universal and Local
117. Who backs the dollar?

a. None of the listed Options b. The treasury
c. Private companies d. The government e. The Fed
118. Warrants are the combination of which of these instruments?

a. Cash and Call Options b. Equities and Futures c. Call and Put Options
d. Equities and Call Options e. Put Options and Swaps
119. Which of the following is computationally the fastest method for calculating VaR
a. Monte Carlo Simulation b. Historical Simulation
c. All would take equal time if done using a software
d. Variance-Covariance Matrix
e. A combination of Monte Carlo and Historical Simulation
120.Factoring is______________
a. Purchase of account receivables at a discount
b. works mostly with capital goods c. sharing risk with third party
d. works with medium and long term receivables
e. a discounting method without recourse
121.A life insurance company has guaranteed a payment of $ 8 Million to a pension fund, 4
years from now. If the Insurance company has received a total premium of $ 6.5 million, and can
invest this entire amount for 3 years at 6.75 %, will it have sufficient funds to meet the $ 8
million obligation?
a) No
b) Yes
c) Insufficient data to draw any conclusions
122. You have invested $5000, for 5 years and 3 months @ an annual interest rate of 6%. What
is the future value of this amount?
a) $ 6890.42
b) $ 6789.31
c) $ 6780.24
d) $ 7346.51
123. An investor is considering the purchase of a financial instrument, that promises to make the
following payments:
Year 1 $ 100
Year 2 $ 100
Year 3 $ 100
Year 4 $ 1,200
What is the price she should pay for this instrument, assuming she wants a 7% annual interest
rate?*
* PV Values of $ 1: PV(1,0.7) (i.e. discounted over 1 period by 7%) = 0.9346
PV(2,0.7)=0.8734; PV(3,0.7) = 0.8163; PV(4,0.7)= 0.7629600
a. $1500
b. $ 1231.31
c. $ 1177.91
d. $ 1096.28
Data for questions 4-7: The following data is gathered from Cognizant’s annual report 2002 (it
is not an exact copy).Use this to answer the next 3 questions. (all $ values in millions)
Total Revenue : $ 229.08
Direct Cost $ 122.7
Tax 23.35%
Interest Income $ 1.8
Depreciation & Amortization $ 7.84
# shares outstanding 59.2 Mn
Selling, General & $ 53.34
Administrative Expense
Other expenses $ 1.9
124.What is the Gross Profit?

a. $ 106.38 Mn
b. $ 227.18 Mn
c. $ 104.48 Mn
d. $ 51.14 Mn
125. What is the EBIT?

a. $ 106.38 Mn
b. $ 53.04 Mn
c. $ 52.94 Mn
d. $ 45.10 Mn
126. What is the PAT?

a) $ 45.1 Mn
b) $ 35.5 Mn
c) $ 34.56 Mn
d) $ 52.94 Mn
127. What is the EPS?

a. 0.76
b. 0.599
c. 0.58
d. 0.63
128. .A firm’s undistributed profit falls under which category in the balance sheet?
a) Working Capital
b) Asset
c) Owner’s Equity
d) Borrowings
Leary Corporation's snapshot as of December 31, 2002 is presented below in random order.
Accounts receivable $60,000
Shareholders' equity $377,000
Short term debt $130,000
Accounts payable $37,000
Inventory $165,000
Equipment $500,000
Long-term debt payable $ 350,000
Land $194,000
Cash $25,000
Prepare the balance sheet for December 31, 2003, and answer questions 9-13.
Assume depreciation @ 10%, using straight-line method
129. With the above data, what is the total of the assets /or liabilities+shareholders’ equity ?
a) $ 944,000
b) $ 894,000
c) $ 900,000
d) $ 874,600
130. What is the total of the Current Assets?

a. $ 250,000
b. $ 85,000
c. $ 225,000
d. $ 190,000
131. What is the total of the Current Liabilities?

a) $ 165,000
b) $ 377,000
c) $ 350,000
d) $ 167,000
132.What is the amount of depreciation?

a. $ 0
b. $ 19,400
c. $ 50,000
d. $ 69,400
133. What is the total of short term liabilities?

a) $ 727,000
b) $ 377,000
c) $ 350,000
d) $ 167,000
134. ABC Corporation Ltd.’s capital structure is given below. How much minimum cash will the
company need to meet its necessary payment obligations to investors this year?
Pref. equity $ 1,000,000 dividend rate 9%
Debentures $ 500,000 8% interest rate
Secured Loans $1,200,000 5% interest rate
Common shares $1,000,000 -
Assume that principal need not be repaid this year on any debt, and that ABC Corp is making no
profits this year.
a. $0
b. $190,000
c. $100,000
d. $60,000
135. The following are the cash flows for a trader over the next 7 days. He has Rs. 10,000 in his
current account with the bank. The bank also offers an overdraft facility. Does the trader need to
use overdraft on his account? If yes, how much should be the minimum overdraft allowed by the
bank? Assume that all payments are made using checks on the account and similarly all
incoming payments are deposited directly in the same account. Assume that he gets a 1-day float
on the payments made using checks, and checks he receives get credited immediately. Also
assume that debits and credits for a day take place at the same time.
Day 1: Pay supplier Rs. 5,400
Day 2: Pay telephone bill Rs. 4,000
Receive payment Rs. 1,800
Day 3: Pay instalment on Loan Rs. 5,200
Day 4: Receive payments Rs. 3,900
Day 5: Pay salaries Rs. 2,500
Receive payments Rs. 1,700
Pay to Supplier Rs. 5,500
Day 6: Reimburse expenses Rs. 1,400
Day 7: Receive payment Rs. 1,950
a. No, he doesn’t need an overdraft

b. Yes, and the min. limit should be Rs. 4,650
c. Yes, and the min. limit should be Rs. 6,600
d. Yes, and the min. limit should be Rs. 5,200
136. Using the data of the question above: The following are the cash flows for a trader over the
next 7 days. He has Rs. 10,000 in his current account with the bank. The bank also offers an
overdraft facility. Does the trader need to use overdraft on his account? If yes, how much should
be the minimum overdraft allowed by the bank? Assume that all payments are made using
checks on the account and similarly all incoming payments are deposited directly in the same
account. Assume that he does not get a 1-day float on the payments he makes using checks.
Checks he receives get credited immediately. Also assume that debits and credits for a day take
place at the same time.
a. No, he doesn’t need an overdraft

b. Yes, and the min. limit should be Rs. 4,650
c. Yes, and the min. limit should be Rs. 6,600
d. Yes, and the min. limit should be Rs. 5,200
1. You invest Rs.5000 at 8% p.a. compound interest in a bank. After 5 years, what is the amount
you have received from the bank?
Rs.12346 Rs. 7000 Rs. 2346 Rs. 7346 Rs. 7546
2. Your friend invests Rs.8000 in the some bank at 10% p.a. His interest is getting compounded each
year. At the end of 5 years, how much interest will he have earned on his investment?
Rs. 4845.6 Rs. 4000 Rs. 12000 Rs. 4884.08 None of the listed Options
3. Your brother calls you, saying that he has found a great plot of land, which requires a payment of
Rs.50, 000 immediately, which he has made. He asks you to pay the Rs.2, 50,000 which is due after one
year. You have Rs.2, 25,000 right now, and want to invest it right away, to yield the desired amount after
one year. However, it is also your hard-earned money, and rather than simple go for the highest return,
you want to find the right risk-return balance. Here the options open to you, which one would you chose?
a. Investment Option: Bank Fixed Deposit 1, Rate of return offered: 11% p.a.
b. Investment Option: Bank Fixed Deposit 2, Rate of return offered: 11 % semi annually –
compounded every 6 mths
c. Investment Option: Co-operative Bank FD, Rate of return offered: 14% p.a
d. Investment Option: Friend’s business, Rate of return offered: 18% p.a.
e. Investment Option: Share market
4. Present Value of Rs.600 received one year from now (using 15% time value rate) is
510 521.7 690 517.2 None of the listed Options
5. An investor is considering the purchase of a financial instrument that promises to make the following
payments:
Yrs from now Promised Payments
1 Rs. 2000
2 Rs. 2000
3 Rs. 22500
Investor wants exactly 6% return on the investment. At what price should the investor buy the instrument?
22512 22558 23021 21000 21500
6. A person borrows $12,000 from a private money lender at a rate of 9.50% for a period of 1 year, when
the average inflation rate for the period is 4%. The real rate of interest is ____ while the nominal rate of
interest is _____.
9.50%, 13.50% 9.50%, 5.50% 9.50%, 9.50%
9.50%, information not sufficient for finding real rate of interest
7. The real rate of interest is 7.60% while the nominal rate of interest is 9.70%. The applicable inflation
rate is:
2.10% -2.10% 13.10% 0% None of the listed Options
8. As nominal interest rates increase in the economy, the inflation should ideally:
Decrease Remain same Increase
Depends on rate of increase in real interest rates
9. A person wants to borrow money from the banking system for the purpose of an overseas holiday.
Bank A offers him an interest rate of 5.15% p.a. payable monthly, bank B offers him 5.20% p.a. payable
semi-annually while Bank C offers him 5.25% p.a. payable annually. Which is the cheapest option for the
borrower?
Bank A Bank B Bank C All of them are the same Both Bank B & Bank C
10. Find the future value of $1200 invested at 5.25% p.a. payable quarterly, after 5 years?
1465.2 1280.95 1557.55 1987.4 None of the listed Options
11. Find the future value of $1200 invested at 5.25% p.a. payable annually, after 6 months?
1231.1 1243.1 1235 1345.1 None of the listed Options
12. Find the present value of $1200 payable after 2 years, assuming the applicable interest rate is
5.10%?
1131.1 1078 1065 1086.36 None of the listed Options
13. Person A wins a lottery and the lottery organizers give the man the following options: Receive
$120,000 no or receive $135,000 after 18 months? Assuming bank rates are at 8% p.a. payable
quarterly, which is the better option?
Receive $120,000 now Receive $135,000 after 18 months
Both options are equally good Depends on bank rates at the end of 18 months
14. An investment of 12,000 at the beginning of Year 1 yields $1000 at the end of Year 1, $1200 at the
end of Year 2 and $1300 at the end of Year 3, apart from recovery of principal. What is the NPV of the
investment assuming re-investment and a cut-off yield of 9.00%?
$201.20 $3,500.00 $1,012.20 $181.20 None of the listed Options
end of Year 2. What should be the return at the end of Year 3, apart from principal recovery, to justify the
investment with a cut-off yield of 15.00%?
$14,000.00 $13,423.67 $11,896.75 $12,345.90 None of the listed Options
16. A consumer goods company has a market share of 23% in the Flat screen television industry. The
company is weighing the option of investing an additional $1.2 million in modernization and expansion,
which is expected to yield additional revenues of $0.4 million over the first 3 years while it would yield
$0.3 million and $0.1 million each in years 4 and 5. Assuming that the time window for the investment is 5
years and the hurdle rate for investments is 15%, should the company go for the investment from a purely
financial perspective?
No Yes Maybe Insufficient information None of the listed Options
17. An investor has multiple investment options yielding various dollar returns at various points of time,
while he is comfortable with a return of X% p.a. Which method should he use to compare the various
investments?
IRR NPV Either of these Insufficient information None of the listed Options
18. An investor estimates an investment of $15,000 to yield returns of $1200 each at the end of the first 3
years apart from return of principal at the end of 3 years. Assuming that the inflation rate is 5%, should
the investor opt for the investment?
19. What is the IRR for an investment of $ 10,000 that yields a return of $1000 at the end of each of the
first 3 years, $600 at the end of the 4th and 5th years and principal recovery at the end of 5 years?
5.55% 7.65% 8.47% Insufficient information None of the listed Options
20. The following concepts are derived from the basic concept of time value of money except:
Present value Future value IRR Net Present Value None of the listed Options
21. A young student looking for monthly income should invest most of his savings in
Bank deposits & Fixed Interest instruments Regular dividend paying companies
Blue-chip shares Zero coupon bonds Real estate
22. Savings bonds are:

Issued by department of Treasury Unregistered
Transferable without registration
Issued by department of Treasury and Transferable without registration
Unregistered and Transferable without registration
23. The interest rate on a bond doesn’t depends on

Years to Maturity Credit Rating of the Issuer Currency of Issue
Bond Face Value All of the listed options
24. What is the Yield to Maturity for a 6% - 5 years bond with face value $ 1000 trading at $ 800 after one
year?
7.50% 6% 11% 7% 10%
25. Unsecured bonds are:

Issued only by large and financially sound companies
Secured by assets of the issuing company.
Have lower priority for repayment than secured debt
Issued only by large and financially sound companies and Secured by assets of the issuing company.
Secured by assets of the issuing company and Have lower priority for repayment than secured debt
26. In what form are bond’s typically issued in US?

Physical, Registered
Electronic, Registered
Physical, Registered and Electronic, Registered
Physical, Unregistered
Electronic, Unregistered
27. What is the backing for a Mortgaged Bond?

No backing Bank Guarantee The credit worthiness of the issuing company
Real estate owned by the Issuer None of the listed Options
28. What secured debt securities are generally backed by a portfolio of non-issuer securities, usually U.S.
Government Securities?
Debentures Bearer Bonds Collateral Trust Bonds Junk bonds Equipment Trust
Debenture
29. What bondholders would have a general creditor status?

Debentures Bearer bonds Unsecured bonds Junk bonds Equipment Trust debenture
30. What is the S & P ratings below which bonds are considered to be speculative?
Less than AAA Less than BBB Less than CCC D Junk grade
31. What securities experience Reinvestment Risk?

Cumulative Interest Bonds Callable bonds Zero coupon bonds Junk bonds None of
the listed Options
32. What are the current maturities for T-Bills?

1, 2 and 3 months 3, 6 and 12 months 1, 2 and 3 years 1 month only None of the listed
Options
33. What is the maximum maturity for Commercial Paper?

90 days 180 days 270 days 360 days None of the listed Options
34. Who sets the Fed Funds Rate?

Federal Reserve Banks SEC Stock Exchanges Investors 1
35. Negotiable securities are:

Sale price can be negotiated Freely transferable
Can only be sold to the issuer Can’t be sold except on maturity
Have a lock in period
36. Mutual funds

Are often riskier than investing in individual stocks.
Require investors to invest very large sums of money, which eliminates small investors.
Are less riskier than individual stocks as the fund managers invest in a diversified portfolio
Give much greater returns than the stock index Carry no risk
37. Hybrid securities are

Combination of Preference and Common stock
Combination of put and call Combination of debt and equity
Combination of growth and income None of the listed Options
38. Why would an investor choose to invest in Money Market Securities?

Investor looking for capital gains Investor looking for liquidity
Arbitrageur Investor looking for regular income None of the listed Options
39. Which of the following bonds involves highest risk?

Subordinated debenture bonds. Debenture bonds.
Collateral bonds. Mortgage bonds None of the listed Options
40.Which of the following statements is true about futures?

Future prices are paid for current transactions
Risk is often increased when dealing in futures because buyers and sellers may be required to accept a
price other than the one to which they agreed.
Financial futures are traded primarily at the New York Stock Exchange.
Investors may hedge their risk by entering into futures
Futures are same as Options
41.The responsibility of enforcing futures contracts is taken on by

A clearing house. The brokers who struck the deal.
Banks The buyer and seller. Arbitrageurs
42.What provides the incentive for someone to sell an option when that individual has no rights, just
obligations?
The seller stands to gain from changes in interest rates.
The seller stands to gain from changes in prices.
Selling options is relatively risk free
The seller earns commission
The buyer must pay an option premium to the seller.
43. Which of the following is used primarily by financial intermediaries to hedge interest rate risk for long
periods of time (up to 15 years)?
Swaps. Put options. Futures Call options LEAPS
44. Which of the following is not an example of a derivative?

Financial futures Options Preferred stock of a company Swaps
Swaptions
45. Company ABC Inc. Declares bankruptcy. Now, $180 million has been accumulated through
liquidation of its assets. The main stake holders in the firm are debt holders (Bank of New York - $140
million, Union Bank of California - $30 Million) and equity holders (Templeton Investments - $100 million).
What is the amount that the three stake holders end up with (in $ million)? (In the order, BNY, UBC and
TI)
30, 140 and 10 60, 60 and 60 93, 20 and 67 140, 30 and 10
140, 30 and 0
46. If General Electric would borrow $300 million from Bank of America, how would its balance sheet be
affected in terms on leverage ratio?
Leverage ratio would remain the same Leverage ratio would increase
Leverage ratio would decrease Leverage ratio has no relation with borrowing
47. People who buy stock in a corporation such as Coca Cola become
Part owners of Coca Cola, so the benefits of holding the stock depend on Coca Cola’s profits
Part owners of Coca Cola, but the benefits of holding the stock do not depend on Coca Cola’s
profits
Receive interest
Creditors of Coca Cola, so the benefits of holding the stock depend on Coca Cola’s profits
Creditors of Coca Cola, but the benefits of holding the stock do not depend on Coca Cola’s profits
48. Assuming that IBM has paid handsome dividends to its shareholders this year, what would be a right
assumption to make?
No relationship between interest and dividend payouts
IBM has only paid dividends and no interest on its issued bonds
IBM has paid the dividends after paying interest to its bondholders
IBM will pay interest if it has enough cash after its dividend payout
IBM will pay interest only if it is still in profit zone after the dividend payout
49. Municipal bonds

Are exempt from federal taxes.
Usually have yields that are higher than U.S. government securities with similar maturities.
Are guaranteed by the federal government.
Usually support real estate spending and student loans.
Are junk grade bonds
50.Bonds with relatively low risk of default are called

Zero coupon bonds Junk bonds Investment grade bonds Price-premium bonds
High Yield bonds
51. A young investor comes to an Investment Consultant and asks him for advice for his investments. He
declares that he doesn’t mind the risk but he would definitely like his money to grow as fast as possible.
He would like to invest in a Mutual Fund which would satisfy these criteria. What would the consultants
choice for his profile?
Income Fund Liquid Fund Growth Fund Balanced Fund Bank Deposit
52. Reliance Industries Limited, India would like to raise money in NYSE for expanding its operations in
the domestic market (India).The securities issued would be
American Depository Receipt Indian Share Public offering in India
Global Depository Receipt None of the listed options
53. If I expect the price CTS share price to rise by $5 from its current levels within 1 month, then which
would be the best option?
Buy a put option on CTS stock Sell a put option on CTS stock
Buy a call option on CTS stock Sell a put option on CTS stock
Buy a put as well as a call at different strike prices
54. Casablanca Inc. Issues $100 million worth of securities which will continue to pay a fixed coupon of
2% annually for next five years.The investors also have an option of converting the security into equity
after the first year. Such a security would be termed as
Convertible Bond Preferred Stock Stock Option Forward Contract Futures
55. State and local government or municipal bonds have one unique feature that makes them attractive to
wealthy investors.Which of the following is that unique feature of "muni" bonds?
They are exempt from state taxation for all investors

They are exempt from federal and state (resident investors) income taxation
State and municipal bonds usually have coupon rates
State and local municipal bonds are all revenue bonds
They have high credit rating
56. If IBM finds it much cheaper to raise money in US and Vodafone in UK. However, both IBM would like
to raise money in UK and Vodafone in US, both of which are costlier propositions for the firms. What
would be best possible solution to this problem?
Future contract LEAPS Vanilla Call Option Forward Contract Currency Swap
57.Forward contracts are promises to buy or sell foreign exchange:

On a futures exchange at some time in the future.
On a specific future date at a price established on that specific future date.
At a specific forex rate at some time during the contract period.
At a specific price on a specified future date.
58. If the forward rate (Forex/U.S. dollar) is selling at a premium over the spot rate, which of the following
statements best reflects the expectations of the foreign exchange market?
No forecast can be made with forward contracts
The U.S. dollar is expected to appreciate
The foreign currency is expected to appreciate
The spot rate is expected to remain constant
59. A U.S. importer who owes 1 million Canadian $ in 90 days and wishes to hedge his/her foreign
exchange risk would:
Take no action
Wait and buy Canadian in the spot market in 90 days
Sell Canadian dollars forward for delivery in 90 days
Buy Canadian dollars forward for delivery in 60 days
60. A U.S. importer of Canadian nickel ore with an invoice to pay $1 million U.S. dollars in thirty days
would
Pay the invoice in thirty days.
Buy a forward contract in U.S. dollars for delivery in thirty days.
Sell Canadian dollars in the futures market.
Sell US dollars in futures market
Purchase Canadian dollars for delivery in thirty days.
61. A U.S. importer who has agreed to pay 1 million Euros to a French exporter in 60 days decides to wait
the full 60 days before paying. The importer is
A foreign exchange speculator
Expecting the dollar to depreciate against the Euro
A hedger in the foreign exchange market
Planning to pay a set amount of dollars for the items purchase
62. A hedger in the financial futures market

Usually buys financial futures to hedge
Usually sells financial futures to hedge
Either buys or sells financial futures contracts so that the underlying asset spot gains/losses are directly
related to futures contract gains/losses
Either buys or sells financial futures contracts so that the underlying asset spot gains/losses are
inversely related to financial futures contract gains/losses
63. Who will lose money if the price of any underlying instrument falls?
The seller of a futures contract The buyer of a put.
The writer of a call. The buyer of a futures contact.
64. The value of options

Varies inversely with the price variance of the underlying asset.
Varies directly with the length of time to expiration.
Varies inversely with the level of interest rates
Increases with the decreased volatility of the underlying asset.
65. A Standard and Poor's bond rating of AAA refers to

High quality investment grade bonds.
Bonds of high quality, but with an elevated risk of long-term default.
Non-investment grade bonds, with uncertain long-term prospects.
Government bonds only
66. The first time a company issues stock to the public the issue is called
An initial public offering (IPO).
A secondary offering.
A stock option.
Internal financing.
An initial public offering (IPO) and Internal financing
67. Common stockholders usually trade ________ to preferred stockholders in return for __________.
Interest income; voting rights

A prior claim on dividends; higher dividend income
A prior claim on dividends; voting rights
Their residual claim on assets in liquidation; preferred claim on dividends
Both 2 and 3
68. Leverage financing refers to

Using Promoter’s credibility to raise money
Leveraging brand value to issue equity
Using debt finance
Selling assets to raise money
Use of retained profits for expansion
69. Preferred stock dividends are paid

Each year on a contractual basis, but before common dividends.
After common dividends are paid.
Before interest is paid on debt.
If declared by the board of directors.
After both interest and common dividends are paid
70. The purchase of U.S. Treasury bonds for immediate delivery is a ______ market transaction
Stock Option Spot Futures Forward
71. Suppose Ruthie has the option of receiving a $10,800 payment today or a $15,868.7 payment in six
years. Which of the following statements is true if the interest rate is 8 percent?
She should take the $10,800 today because the present value of the $15,868 paid in six years is only
$9,752.54.
The present value of the $10,800 is $15,868.74.
She should take the $15,000 in six years because $15,000 is more than $10,000.
She should take the $15,000 in six years because the future value of $10,800 is only $15,000.
Both are equal
72. The buying or selling of securities with the hope of profiting from privileged information is known as
Speculation. The spot market. Arbitraging The futures market. The term to maturity.
73. If the issue price of a 5 year zero-coupon bond is $940 and its redemption price is $1000, market
price $955,then the difference amount of $45 stands for
The interest for the 5-year period
The return on the investment of $960
Both The interest for the 5-year period and The return on the investment of $960
Only 1
Premium on the bond
74. The effective interest rate on a bond, (when the price of the bond is greater than its par value)
Is lower than the coupon rate.
Is always equal to the coupon rate.
Increases as the bond price decreases.
Is greater than the coupon rate.
75. John holds 2007 maturity government security which pays a semi-annual coupon of 8%. What should
John do with this security?
Sell it, if interest rate is increasing
Sell it, if interest rate is decreasing
Sell it with the next coupon date, irrespective of interest rates movement
Sell it now or hold it till maturity
Can never sell
76. If bond portfolio managers expect interest rates to increase

They will anticipate a decrease in bond prices.
They will probably buy bonds now to avoid capital losses.
They will wait for the rates to actually change before taking any action.
They will probably sell more bonds now before the bond prices decreases.
They will buy short-term bonds.
77. Which of the following is not a characteristic of money markets?

They trade in a central location.
They have an active secondary market.
They are wholesale markets.
They are beyond the reach of small investors.
They trade in short term instruments
78. Investors use the money market
To reduce the liquidity of their funds.
To reduce the opportunity cost of idle funds.
To gain from expected declines in future interest rates.
To earn high returns on their investments.
To manage long-term cash requirements
It can be raised if the Govt. buys securities from the public.
It can be raised if the Treasury will sell more bills.
It can be raised if the Govt. announces an increase in the rate at its regular meeting.
It is cost of borrowing immediately available funds for one day.
The Fed can’t do anything because it is market determined.
80. If John, a foreign exchange trader sees that EUR/USD, EUR/JPY and USD/JPY show that he could
make money by buying two of them and selling the other, then what is he trying to do?
Arbitrage trading Hedging Taking high risks to get high returns
Both arbitrage trading and hedging Can’t say
81.One potential problem that could be caused by the tremendous growth of the international financial
system in recent years is
Lower standards of living around the world.
That a disturbance in one financial market can spread more quickly to other countries.
That the additional transactions will make the international financial markets less efficient.
That economic growth will be likely to slow down in many countries
Higher Income inequality
82. Primary markets

Are markets in which primary goods and service, i.e. raw materials are traded.
Are markets in which short-term debt is traded.
Are markets in which claims that have already been issued are sold by one investor to another.
Are markets in which newly issued claims are sold to initial buyers.
Are markets in which shares are actively traded.
83. The current market interest rate is 10%. A coupon bond with a coupon payment of $70, a face value
of $1000, and with still ten years to maturity, will trade at what discount?
$1000. $0. $300. $200. $70
84. "Liquidity" is a term that is used to refer to

The ease with which assets can be converted into goods and services.
Financial assets in general.
The practice of converting financial assets into money.
Money.
The devaluation of assets in general.
85. Discount bonds are

Bonds that are currently trading below their face value.
Bonds that are currently trading above their face value.
Bonds that are sold below their face value, which yield interest payments in one lump sum at the
day of maturity.
Bonds that are sold at face value, but which yield interest payments in one lump sum at the day of
maturity.
Bonds that can be redeemed anytime at a discount 3
86. The money market trades debt

of a short-term maturity.
of a medium-term maturity.
of a medium-to-long-term maturity.
of a long-term maturity.
of all types of maturities.
87. Say you buy a bond with a face value of $1000 at a discount for $750. The bond still has 10 years to
maturity, and the coupon rate on the bond is 10%. The yield to maturity of this bond is approximately
70%. 14%. 10% 7% 12.5%
88. Which of the following classifies financial markets by term to maturity?

Debt vs. equity market
Money vs. capital market
Spot vs. futures market
Primary vs. secondary market
89. The initial sale of a security is in the ______ market, while subsequent trading in the security is in the
________ market
Primary; secondary
Secondary; primary
Money; capital
Spot; futures
Debt; equity
90. Which of the following functions of financial markets best describes the primary functions of the
financial futures market where trading is done for delivery some time in the future?
Speculation; raise funds
Payments system; risk management
Risk management; speculation
Funds intermediation; risk management
Raise funds; payment system
91. The financial system

Provides risk sharing, liquidity and information services.
Provides liquidity services only.
Provides information services only.
Refers to the banking system only.
Where only financial assets are bought & sold
92. While the primary market provides ________ for spenders, the secondary market provides
________ for investors
Funds; liquidity
A place for investing; liquidity
Funds; low risk
Securities; funds
Low risk; high returns
93. Which of the following is associated with increased liquidity of a security?

Increased transactions costs
Increased time it takes to sell a security
Increase in taxes for every transaction
Increased number of dealers trading the security
94. Which of the following is not associated with money market securities?
Short-term Marketable High quality Equity securities Repo
95. The second largest amount of capital market securities outstanding, after common stock, is
Corporate and foreign bonds Mortgages U.S. Treasury securities
U.S. Agency securities Municipal Bonds
96. Regulations limiting risk taking of financial institutions are imposed for which of the following
reasons?
The social costs to shareholders of a general bank failure are more than the private cost of the bank
failure.
The costs of regulation exceed the benefits.
The private costs of a bank failure exceed the social costs of general bank panic.
The social costs of a general bank failure exceed the private costs to the shareholders of the
bank that failed.
Private costs to the shareholders of the bank exceeds the soci al costs of the a general bank failure.
98. Regulatory balance sheet restrictions are designed to

Limit the size of depository institutions.
Limit risk-taking and to encourage diversification.
Limit excessive diversification.
Encourage high risk-taking by proper diversification.
Limit diversification and encourage risk taking
99. Regulators' attempting to limit competition by restricted entry, exclusive services, etc. was an
attempt to serve which of the following purposes of regulation?
To promote competition in the financial services markets.
To promote limited quantities of financial services at maximum prices.
To promote safety and soundness of depository institutions.
To protect the soundness of the deposit insurance fund.
100. Which of the following are involved in the regulation of Capital Markets in the US?
Ginnie Mae Fed SEC The US government None of the listed Options
101. Who among the following would not be a participant in the money-markets
Banks Central Bank Small Investor Companies Financial Institutions
102. Repo’s are considered the safest financial instruments as

They are backed by the government
They are of very short-term maturity
They come in very small denominations
They are backed by all big banks and companies
They offer lowest interest rates.
103. Individual investors are most likely to trade securities in

The primary market a brokered market an auction market
a block transaction a direct search market
104. Financial intermediaries differ from other businesses in that bo th their assets and their
liabilities are mostly
illiquid. owned by government real. financial regulated. 3
105. Insurance or a guarantee to cover losses of a financial institution may create a moral hazard
Which is an increase in the chance that a random negative economic event will occur.
Which is an incentive to decrease risk-taking by the insured.
Which is an incentive to increase risk-taking by the insurance authority.
Which is an incentive to increase risk-taking by the insured.
Which is an incentive to decrease risk-taking by the insured
106. In what roles do investment bankers perform?

design securities with desirable properties
market new stock and bond issues for firms
provide advice to the firms as to market conditions, price, etc.
107. Financial intermediaries exist because small investors cannot efficiently

gather information
advertise for needed investments
monitor their portfolios
diversify their portfolios
108. Exchange rate risk

results from changes in the exchange rates in the currencies of the investor and the country in
which the investment is made.
can be hedged by using a forward or futures contract in foreign exchange.
cannot be eliminated.
Both results from changes in the exchange rates in the currencies of the investor and the
country in which the investment is made and can be hedged by using a forward or futures
contract in foreign exchange.
which the investment is made, can be hedged by using a forward or futures contract in f oreign
exchange and cannot be eliminated.
109. A coupon bond is a bond that

does not pay interest on a regular basis but pays a lump sum at maturity
pays interest on a regular basis (typically every six months)
can always be converted into a specific number of shares of common stock in the issuing company
always sells at par
110. Under the present international monetary system,

Exchange rates fluctuate freely without government intervention.
Central banks determine the exchange rates in all countries
Supply and demand are the only factors for price determination. Central banks don’t intervene
Supply and demand are the primary forces that determine exchange rates, but central banks
may intervene if they believe currency values are over- or undervalued.
It is illegal for central banks of major countries to coordinate their intervention activities.
111. The presence of risk means that

Few outcomes possible Investors will lose money
Investors will gain money
The standard deviation of the return is large
Final wealth will be lower than the initial wealth
112. Which asset class would provide highest returns for the lowest risk?
Property Shares Bonds Cash Can’t be answered
113. Which asset class would provide lowest returns for the highest risk?
Property Gold Bank deposits Cash Can’t be answered
114. If REAL rate of return was 10% last year and inflation was 3%, what was your investment
returned?
3.30% 7% 13% 30% 10%
115. Which of the following statements regarding risk -averse investors is true?
They will only accept lower returns and low risk
They accept investments that provide high returns.
They only care about rate of return.
They will only accept higher returns and low risk
116. Alex is a more risk-averse investor than Olivia. Therefore

For the same risk, Alex requires a higher rate of return than Olivia.
For the same return, Alex tolerates higher risk than Olivia.
For the same risk, Alex requires a lower rate of return than Olivia.
For the same return, Olivia tolerates lesser risk than Alex.
Both 2 and 3
117. If a T-bill pays 5 percent, which of the following investments would not be chosen by a risk-
averse investor?
An asset that pays 10 percent with a probability of 0.60 or 2 percent with a probability of 0.40.
An asset that pays 10 percent with a probability of 0.30 or 3.75 percent with a probability of 0.70.
An asset that pays 10 percent with a probability of 0.20 or 3.75 percent with a probability of
0.80
An asset that pays 10 percent with a probability of 0.50 or 2.75 percent with a probabili ty of 0.50
118. You purchased a share of stock for $20. One year later you received $1 as dividend and sold
the share for $29. What was your holding period return
45% 5% 50% 40% None of the listed options
119. Bank of America charges a lower rate of interest to Lockheed Martin than to General Electric.
America
Market Risk Credit Risk Liquidity Risk Legal Risk None of Above
120. If Bank of New York has found errors in settlement of transactions with some of its customers,
as there is some mistake in some of its systems. This would be classified as
Liquidity Risk Market Risk Credit Risk Country Risk Operational Risk
121. VaR is used for which of the following

Risk Measurement Risk Mitigation Risk Taking
Risk Assumption None of the listed options
122. A trader lost more than $50 million as the market moved against his positions. However, when
measured the previous day by hisrisk manager, his VaR for a single day was defined at $20 million.
Is this possible that the VaR is right
Yes because VaR does not cover 100% of the outcomes
No, it is impossible
Yes but only if the trader must have broken the VaR limit purposely
Both a and c
123. Risk is best measured when looked at

At a Macro level
At country level
124. Which percentage of confidence for VaR is the most conservative?

99% 95% 96% 90% 68%
125. Which of the following is not a risk management measure?

Diversification Hedging Insurance Budgeting All are risk management techniques

At a Macro level At the lowest possible level At a sub-macro level
At a super-macro or organizational level
At a macro level and at the lowest possible level
127. Value-at-Risk can be estimated using

Monte Carlo Simulation Historical Simulation
Variance-Covariance Matrix Parametric methods
128. Is time horizon of importance when calculating VaR?

Only for certain instruments Yes, for all financial instruments
No. It is not a factor used for calculations.
Yes but only time horizons lesser than a week
Yes but only high value financial instruments 2
129. What would be the most accurate VaR estimation method?

Variance-Covariance Matrix Cannot Say Analytical Methods
130. VaR helps in describing which of the following?

How big the loss would be on a bad day.
How to minimize the loss on bad days
Approximately predict movements of asset to help minimize losses
Explains the loss on a bad day as compared to other days
None of the listed options 1
131. A 2.33 sigma limit for calculating risk would refer to what level of confidence?
95% 99% 99.99% 50% 100%
132. Risk-based capital requirements, under the Basel Accord, focused on what area of commercial
bank risk?
Default risk Interest rate risk Liquidity risk
Political risk None of the listed options
133. An investor's strategy of holding many risky assets in an attempt to reduce overall risk is called
------------
Spread management Specialization Coincidentialization Securitization.
Diversification
134. If a financial instrument has a 35 percent chance of paying 29 percent and a 65 percent
chance of paying - 13 percent,it expected return would be
0.008 0.036 0.053 0.017 -0.029 4
135. Risk is usually measured as the

Potential loss. Variability of outcomes around some expected value.
Probability of expected values. Potential expected loss.
136. The term "risk averse" means that

Both An individual refuses to take risks and Only investment proposals with no risk should be
accepted
137. If one project has a higher standard deviation than another

It has a greater risk. It has a higher expected value.
It has more possible outcomes.
It may be riskier, but this can only be determined by the coefficient of variation.
Both It has a greater risk and It has a higher expected value 1
138. Which of the following is a false statement?

Risky investments may produce large losses.
Risky investments may produce large gains.
The standard deviation of returns is a risk measure.
Risk-averse investors cannot be induced to invest in risky assets.
Both Risky investments may produce large losses and Risky investments may produce large gains
4
139. Risk, as used in financial markets, means

The probability of a loss. The probability of a gain.
The probability of a gain and the probability of a loss.
The overall rate of return. The present value of a financial instrument. 3
140. Legal risk is the

Possibility that you will face legal action
Loss you could incur when legal action is taken against you
Possibility of loss when a contract cannot be enforced
Possibility of loss from errors in instructing payments or settling transactions
141. The monetary value at risk is expressed as

A number between 0 and 1 Possible impact in Dollars
(1) * (2) can’t be assigned None of the listed options
142. A Portfolio Manager is examining the stock performance of Company Dee. She sees t hat, in
the past, the maximum the stock has ever fallen is 5%. She buys 1 million worth of Company Dee
stock. Which of the following statements is true?
Her VaR is $50,000 with a confidence level of 100%
Her VaR is $ 5,000 with a confidence level of 100%
Her VaR is $1 Million with a confidence level of 100%
Her VaR is $ 1 Million with a confidence level of 0%
143. State which of the following statement(s) is (are) true

There is no risk without reward
There is no reward without risk
Increasing business in Europe also reduces a certain risk to Cognizant’s business
Both There is no reward without risk and Increasing business in Europe also reduces a
certain risk to Cognizant’s business
Risk doesn’t change with time

Microsoft stock is the safest investment
It is better not to spend time and effort to identify and measure a risk if in the end we may not
undertake any risk mitigation measure
Risk management initiatives should reduce the risk to zero to obtain maximum benefit
All of above
145. It is estimated that the probability of a particular risk in a project is 0.3 and the impact, should
the risk materialize, is $ 5,000, while the project is worth $ 3 million. The Project Manager should
Compare the cost of risk management with the value at risk and decide on optimum strategy
Take immediate action to reduce the probability to as low as possible
Ignore the risk – the monetary value is negligible
Cannot say
Shouldn’t take up the project
146. In 2002, interest earned on bank deposits was higher than profit from stock market
investments, even though deposits were supposed to have less risk associated w ith them. It means
Bank deposits are actually riskier form of investment than share prices, since reward has to be
proportional to risk
The scenario described above is impossible; there must be an error in measurement
The risk-reward principle holds true over a long period, while in the short term it is less
certain
Cannot say
The risk-reward principle holds true over a short period, while in the long term it is less certain
147. Following are the list of risks that Cognizant faces at an organization level EXCEPT
exchange rate fluctuation protective legislation by U.S/U.K
attrition payment default None of the listed Options
148. Following are the list of risks that your project or a typical project in Cognizant is exposed to
EXCEPT
attrition cost & time over-run incorrect requirements
requirement evolution None of the listed Options
149. The extent of diversification affects the following EXCEPT

risk return liquidity total investment None of the listed Options
150. Indian software firms lost a lot of money due to the Dollar appreciating against the Indian
Rupee. This risk could be term
Liquidity Risk Market Risk Credit Risk Legal Risk Price Risk
151. Fill in the blanks: The liability of a bank include ____________, while the assets of a bank
include _____________
Deposits, loans.
Savings accounts and large time deposits, checking accounts.
Long term deposits and short term loans Loans, deposits.
such as bonds, certificates of deposits etc
interest spread exchange rate interest rate equity yield dividend yield
153. Banks are financial intermediaries that

a) Link lenders (depositors) to borrowers
b) Evaluate the likelihood of borrower repayment, reducing risk by developing a diversified
portfolio rather than lending to a single borrower.
c) Create monopolies, monetary & fiscal policies.
d) Both Link lenders (depositors) to borrowers and Create monopolies, monetary & fiscal
policies.
e) Both Link lenders (depositors) to borrowers and Evaluate the likelihood of borrower
repayment, reducing risk by developing a diversified portfolio rather than lending to a
single borrower
154. A bank failure is more likely to occur when

bank increases its equity capital bank holds more short-term riskless securities
bank large loans outflows bank increases its holdings of excess reserves
capital adequacy ratio is reduced
155. When you deposit $200 in currency into your bank

its assets decline by $200 its reserves decline by $200
its liabilities increase by $200 each of the above occur
its assets decline by $200 and its reserves decline by $200
156. Which of the following is NOT under the purview of the Central Bank
Monitoring foreign currency inflow and outflow
Stability of the financial system
Conducting the nations fiscal policy
Regulating the Banking institutions
Conducting the nations monetary policy
157. Which of the following represent tools available to the Fed to control the money supply?
a) The capacity to make direct commercial loans to the public.
b) The ability to inject or remove money held by the public by buying or selling U.S.
Treasury Bonds.
c) The ability to write legislation to generate increased government spending on public works
projects such as building trails, parks, and bridges.
d) The ability, through its Internal Revenue Service division, to change federal income tax
rates, and thus vary cash holdings by the public.
e) all of the listed options.
158. CRR stands for which of the following

Cash Reserve Ratio Common Reserve Ratio Cash Refund Ratio
Cash Re-service Ratio Cash Reserve Risk
159. Increasing the Cash Reserve Ratio for banks would have an impact on which of the following
Increased Money Supply in the economy Reduced interest rates
Reduced Money Supply in the economy Profitability of firms
Both Increased Money Supply in the economy and Reduced interest rates 3
Credit risk and interest rate risk
Interest rate risk and foreign exchange risk
Credit risk and foreign exchange risk
Liquidity risk and credit risk
161. How does the central bank increase money supply in the economy?
By reducing the Cash Reserve Ratio (CRR)
By buying foreign currency
By increasing the wages of the salaried class
By selling Government Securities in the open market
By maintaining a high interest rate
162. When the interest rate rises, people are

Less likely to borrow, that is, sell a financial asset.
More likely to borrow, that is, sell a financial asset.
Less likely to borrow, that is, purchase a financial asset.
More likely to borrow, that is, purchase a financial asset.
Would be neutral to borrowing
163.Banks must keep a percentage of their deposits on hand as

Required reserves. Excess reserves. Savings accounts.
Home loans Safe deposit reserves. 1
164. When a large majority of a bank's depositors lose faith in it and attempt to withdraw their
deposits, the bank
a) Will not experience difficulties because its required reserves will be adequate t o meet
withdrawals
b) Will not experience difficulties because it will hold sufficient excess reserves to meet
withdrawals
c) Will experience difficulties but will not fail
d) Will fail unless it can obtain additional reserves or government assistance
e) Both Will not experience difficulties because its required reserves will be adequate to meet
withdrawals and Will not experience difficulties because it will hold sufficient excess
reserves to meet withdrawals
165. A financial asset is liquid

a) If it can be carried easily from one place to another.
b) If it can be readily exchanged for another asset or good.
c) Only if it takes the form of cash.
d) If it is held by the public and earning interest.
e) Both If it can be carried easily from one place to another and If it can be readily exchanged
for another asset or good.
166. In Harvey, N.D. three local banks have issued no-interest loans in the form of Harvey Bucks.
They can be spent in local stores. Retailers get 95 U.S. cents for each Harvey Buck. From this
information you can conclude that Harvey Bucks
a) Although less liquid than Fed Notes, are money because they are accepted as money.
b) Although less liquid than Fed Notes, are money because they are assets of everyone who
holds them.
c) Are not money because they are liabilities for consumers who have been issued
Harvey Bucks.
d) Are not money because they are not backed by the Federal government.
e) None of the listed options
167. If Bank of Japan was buying Dollars fervently, it would most likely be for which of the following
reasons
a) To protect Japanese exporters from loss due to movement in Yen
b) To protect Japanese importers from loss due to movement in Yen
c) For speculative purposes
d) Both To protect Japanese exporters from loss due to movement in Yen and For speculative
purposes
168. ACommercial bank would be able to make money in which of the following ways
a) Make the lending rate below the deposit rate
b) Make the lending rate equal to the deposit rate
c) Keep the lending rate above the deposit rate but play the volume game
d) Either Make the lending rate below the deposit rate or Make the lending rate equal to the
deposit rate
e) Either Make the lending rate equal to the deposit rate or Keep the lending rate above the
deposit rate but play the volume game
169. Retail Banking division in a bank would not include which if the following departments
Personal Loans Home Mortgages Derivatives Trading Consumer Loans
Vehicle Loans
170. Glass-Steagall act (1933) was created to ensure which of the following
a) Create a Chinese wall between Commercial Banking and Securities Business
b) Create a Chinese wall between Corporate Banking and Retail Banking Business
c) To make the banks more efficient
d) To promote the concept of Universal Banking
e) Both To make the banks more efficient and To promote the concept of Universal Banking
171. Money Multiplier effect would imply

a) An increase in the total money lent out into the system
b) An increase in the total money in the bank reserves in the system
c) A decrease in the total money in the bank reserves in the system
d) Both An increase in the total money lent out into the system and An increase in the
e) Both An increase in the total money lent out into the system and a decrease in the total
172. Cash Reserve Ratio is maintained for which of the following reasons?
a) To ensure that the Bank doesn’t face a cash crunch due to heavy withdrawals
b) To ensure that the Central Bank can take this cash in case of its need
c) To contribute towards government needs in times of crisis
d) Both To ensure that the Central Bank can take this cash in case of its need and To
contribute towards government needs in times of crisis
e) None of the listed Options
173. The Fed has been reducing the interest rates with aim of achieving which of the following
a) Increasing the growth rate of the economy
b) Decreasing the growth rate of the economy
c) Help interest-rate traders book profit
d) Both Increasing the growth rate of the economy and Help interest -rate traders book profit
e) To help the government raise funds
174. Which of the following is NOT a function of the bank?

Channelize Savings
Facilitate the trade and commerce dealings 1
reasons?
a) The social costs to shareholders of a general bank failure are more than the private cost of
the bank failure.
b) The costs of regulation exceed the benefits.
c) The private costs of a bank failure exceed the social costs of general bank panic.
d) The social costs of a general bank failure exceed the private costs to the shareholders
of the bank that failed.
Both To serve certain social objectives and To offset the moral hazard incentives provided by
deposit insurance and other guarantees.
a) To promote competition in the financial services markets.
b) To promote limited quantities of financial services at maximum prices.
c) To promote safety and soundness of depository institutions.
d) To protect the soundness of the deposit insurance fund.
e) Both To promote limited quantities of financial services at maximum prices and To promote
safety and soundness of depository institutions

limit excessive diversification
to promote Universal Banking
encourage high risk-taking by proper diversification 2
179. A bank that is earning 7% on its earning assets and is paying 4% on its interest -earning
liabilities is said to
Have a negative spread.
Have a positive GAP position.
Have a positive spread.
Will always have positive net earnings.
Both Have a negative spread and Will always have positive net earnings
180. Which of the following is not a commonly used term in the context of Banking?
Corporate banking Investment banking Public banking
Retail banking Private banking
181. The term ‘Spread’ refers to
a) The amount of profit a bank makes after clearing all its costs including payment of interest to
deposit holders.
b) The difference in the purchase and sale prices of any financial instrument quoted by any
financial “intermediary” such as a bank, a broker, etc.
c) The difference between the lending rates and deposit rates of a bank.
d) Both The difference in the purchase and sale prices of any financial instrument
quoted by any financial “intermediary” such as a bank, a broker, etc. and The
difference between the lending rates and deposit rates of a bank.
182. Why do we need banks?

a) Banks are in the best position to lend out money at competitive rates to businesses and
individuals
b) Deposits are participants in primary and secondary markets
c) Banks are in the best position to lend out money at competitive rates to businesses and
individuals and Deposits are participants in primary and secondary markets
d) All of above of small investors are protected, hence it is a low risk inv estment avenue
e) Banks
183. CRR stands for

Cash Requirement Ratio Cash Reserve Requirement Cash Reserve Ratio
Cash Requirement Reserve Capital Reserve Requirement
184. The central bank in the US is called

Federal Reserve Federal Reserve Board Reserve Bank of United States
Central Bank of United States Reserve Bank of America
185. Investment Banking division of a bank offers all of the following except
Underwriting and distribution of equity issues Leasing services
Mergers and acquisitions Valuation of firms None of the listed Options
186. Which division provides services to High Net Worth individuals?

Corporate banking Investment banking Retail banking
Private banking None of the listed Options
187. Which of the following statements is true

a) Banks may loan out all the money they receive through deposits
b) When the central bank reduces CRR, amount of money in circulation in the economy
goes up
c) When the central bank issues securities in the market, amount of liquidity in the econo my
goes up
d) All of the listed options
188. Which of the following US banks is the biggest based on the asset size as on July 2003
Bank of America J.P. Morgan Chase & Co Citigroup, Inc
ABN AMRO Bank One Corporation
create a reserve of $10 loan of $244 create reserve of $19
loan of $171 None of the listed Options
190. Today, the most important monetary policy tool is

bank examination and supervise capital requirements
discount rate policy open market policy required reserves policy
191. Which of the following is not covered under retail operations of a Bank?
Loan for Consumer durables Hire Purchase Bill Discounting
Lease Auto Loans

The financer is not interested in the intention of the loan
Loan amount is linked to borrowers’ repayment capacity
They are short term loans
No security required
193. "Thumb rules for calculation of Maximum loan amount in case of auto loan are?
a) Not greater than 3 times the yearly income of the borrower
b) Not greater than 2 times the yearly income of the borrower
c) The EMI should be less than 70 pct of the gross monthly income
d) The EMI should be less than 60 pct of the gross monthly income"
(b) and (c) (a) and (d) (a) and (c) (b) and (d) None of the listed Options
194. Interest rate charged on asset based loans is

Greater than the personal loans Always equal to the personal loans
Lesser than the personal loans all of the listed options
196. Which is true for a closed ended loan?

There is no end to such loans Overdraft is not allowed in such loans
Interest is calculated on daily outstanding balance
The borrower gets a credit card along with the loan
197. If the Limit = $1500, margin = 20% and Asset Value = $2000 then Drawing Power for an Open
ended loan is equal to
$1,500 $1,200 $1,600 $900 None of the listed Options
ended loan is equal to?
$1,500 $1,200 $960 $900 None of the listed Options
199. Which of the following is true?

a) The financier owns the asset in case of “Lease” but not in case of “Hire Purchase”
b) Depreciation is claimed by the financier both in Lease and Hire Purchase
c) Callable bonds
d) Tax deduction can be claimed for the full value of the payment in lease but only to the extent
of interest paid in Hire Purchase
Post dated checks Salary deductions Direct receipts
Direct debits None of the listed Options
202. Which of the following is not a kind of repayment?

Slice payment Step up Step down Bullet payment None of the listed Options

Current rate – Base rate Current rate – Floor Base rate – Floor
Cap – Current rate None of the listed Options
204. Collateral is?

A form of loan Asset put up as security
Obligations to be fulfilled by the borrower
A bad loan None of the listed Options
205. While comparing mortgages, one should use?

Internal rate of return Annual Percentage Return
Net present Value Rate of Interest applicable for the loan
206. While taking a Mortgage, one needs a large sum to furnish the home, then which interest rate
deal should be chosen?
Discounted interest rate Capped rate Standard variable rate
Standard variable rate with cash back None of the listed Options
207. In
case of discounted interest rate deal for a mortgage the following is true?
a) One receives a substantial cash sum when one takes the loan.
b) Interest rate is guaranteed to be set amount below the base rate
c) The payments are set at less than that lender’s going rate for a fixed period of time.
d) The payments go up and down as the mortgage rate changes but are guaranteed not to go
above a set level
208. Capped rate of interest in case of Mortgage implies

a) The rate of interest can’t move above a set level
b) The rate of interest can’t move below a set level
c) The collar of the interest rate can’t move above a set level
d) The spread of the interest rate can’t move above a set level
209. Which is not true in case of Repayment Mortgage?

a) Monthly payments goes partly towards the interest and partly towards the principal
b) If all the monthly payments are made, the loan will be repaid by the end of the term
c) Monthly payments would increase if interest rates rise
d) Monthly payments would decrease in interest rates fall
210. Endowment mortgage refers to the following?

a) An interest only mortgage, along with a endowment policy to mature at the same time
as the term of the loan
b) An interest only mortgage that comes with life insurance policy
c) Another name of interest only mortgage
d) An interest only mortgage combined with tax saving investment policies
211. Annual Percentage Rate for a loan takes into account the following?
a) The interest rate charged
b) When and how often the interest must be paid
c) Other charges such as arrangement fee
d) When and how often these other charges must be paid
e) All of the listed options
212. Freddie Mac, Ginnie Maes & Fannie Mae are?

a) Marketing institutions selling home loans
b) Lenders to the banks for home loan bought by retail customers
c) Regulatory bodies governing home loan market in US
d) Primarily asset management companies
213. Which is not true for an Acquiring bank

a) They approve a merchant for accepting credit cards
b) They collect the merchant's online payments
c) They are members of Visa and Master Card Associations
d) They are members of Dinner’s club
214. Which of the following is not true Independent sales organization?
a) They provide merchant accounts
b) They process the funds of merchants
c) They keep reports of all the activity of merchant accounts
d) They work on behalf of Acquiring banks

Independent sales organization Merchant Payment gateway
Associations None of the listed Options
216. After a credit card transaction is initiated by a customer in a s hop, the transaction’s information
is sent to?
Payment Processor Merchant’s payment gateway
Issuing bank’s payment gateway Acquiring bank’s payment gateway
217. Who checks for the credit limit of the card before approving the transaction?
Payment processor Acquiring banks Payment gateway
Issuing bank None of the listed Options
218. When the merchant clicks the Bill Orders button in the store to "capture" the funds, the store
sends the capture information to?
219. Which information is not provided by a Credit Bureau?

Credit History Report inquiries Personal Identifying Information
Public Records None of the listed Options
220. Which of the following data appear on a credit report?

Bank account balances Race & Religion Health
Income & Driving records None of the listed Options
221. Which of the following is not true for the credit score?
a) Its based on one’s consolidated financial information from the Credit Report
b) Its a number calculated based on one’s credit history
c) Its used by lenders for a simpler "lend/don't lend" answer
d) Its a three digit number varying between 300 – 900
222. Which one of the following contributes to one’s credit report?

Bank account balance Personal Assets One’s qualification
Types of existing credit None of the listed Options
223. Which of the following does not contributes to the cost of using credit card?
Expenses incurred through credit cards Annual Percentage rate
Utility Bills paid through credit card Late payment charges
224. Which is not a banking account?

Checking Accounts Money Market Deposit Accounts
Demat Account Time Deposits None of the listed Options
225. One should have the checking account if one is looking for?
A high rate of interest Guaranteed rate of interest
Low fee None of the listed Options
226. One should have the MMDA if one is looking for?

228. One should have the Basic Account if one is looking for?
Low fee None of the listed Options 4
229. One should have the Savings account if one is looking for?
230. Which one is true for a capitalized loan?

a) Monthly payments go towards the interest, while a lump sum pa yment at the end of the term
goes towards the principal
b) Monthly payments goes partly towards the interest and partly towards the principal
c) The interest due and not paid is added to the principal balance of the loan. interest
becomes part of the principle of the loans
d) Such loans come at a very low processing fee
231. The term “Capture” in context of credit cards refers to?

a) Capture of credit card number by the issuing bank during a transaction for authentication
b) Capture of the person using a card not owned by him
c) Conversion of the authorization amount into a billable transaction record.
d) Recording of a person’s credit details in the credit report.
232. Considering the amount of competition in the retail market, which of the following are the
upcoming challenge/s for the banks
a) Single customer interface across multiple departments
b) Increasing their cross-sell opportunities to customers
c) Improving internal processing efficiency and quality
d) all of the listed options
233. "A bank has provided the following options to the borrower for $50,000 of lending for duration
of 5 years.
a. Pay $80,525.5 at the end of 5 years
b. Pay $25,500 now and $50,000 at the end of 5 years
c. Pay $16,105.1 end of every year for 5 years
d. Pay $16,105.1 beginning of every year for 5 years
Considering 10% as IRR for the borrower"
Option (a) is the cheapest for the borrower
Option (b) is the cheapest for the borrower
Option (c) and (d) are equally costly to the borrower
234. Electronic banking doesn’t covers the following service/s

Pay-by Phone system ATM System Point of Sale system
all of the listed options None of the listed Options
235. EFT act covers

Prepaid Telephone cards ‘Gift’ cards Mass transit passes
Both Prepaid Telephone cards & ‘Gift’ cards None of the listed Options
236. What is Checking Account?

a) An account at a bank where funds have been deposited against which checks may be
written
b) An account, folder, or file where checks are stored
c) A type of bank account that allows withdrawals by phone or Internet
d) A form of documentation for transactions between you and the bank
237. Net Settlement stands for

Settlement of funds over the Internet Posting net debit or net credit
Real time settlement all of the listed options None of the listed Options
238. Direct debits

Authorizes specific deposits to your account on regular basis
Authorizes all deposits directly to your account Pre-Authorized direct withdrawal
Pre-authorization to withdraw from others account None of the listed Options
239. EFTA stands for

Electronic Funds Trading Act Electronic Financial Transfer Act
Electronic Funds Transfer Act Electronic Fee Transfer Act
240. ______________ preauthorizes banks to pay recurring bills like insurance premium, utility bills
automatically
Pay-by-Phone System EFT Direct Debit Direct Credit Direct Deposit
241. ATM stands for

a) Automatic Transaction Machine; Almost anytime banking
b) Automated Teller Machine; Remote location transactions
c) Automatic Transaction Machine; Fund transfer between accounts
d) Automated Teller Machine; Direct Deposit
e) Automatic Transaction Machine; Personal Banking
242. Debit Card

is a ‘stored value’ card provide credit line transfer money at Point of Sale
Only provide credit line and transfer money at Point of Sale
None of the listed Options 5
243. EFT systems are a major form of electronic payment systems in banking and retailing
industries. EFT is an acronym for
Electronic Financial Transactions Encrypt Fund Transfer
Electronic Fund Transactions Electronic Fund Transfer
External Fund Transfer
244. EFT services require institution to tell the following to the customers
a) Summary of Customer’s assets for unauthorized transfers
b) Summary of institution's liability if it fails stop certain transactions.
c) List of institute holidays
d) Circumstances under which institute will not disclose information to third party.
245. A transaction error has occurred in customer’s account. Which of the following holds as per
EFT act?
a) Customer has 30 days to notify the error from the date a statement is received
b) Financial Institution has 15 days to investigate the errors
c) Financial Institution has to communicate within 7 working days the result after
completion of the investigation
d) Financial Institution has to correct the error within one working day after detecting
the same.
e) Both Financial Institution has to communicate within 7 working days the result after
completion of the investigation and Financial Institution has to correct the error within
one working day after detecting the same.
246. Customer can lose much more on ________________ loss than on _____________ loss
Credit Card; Debit Card Credit Card; ATM Card Credit Card; Stored Card Debit
Card; ATM Card Debit Card; Credit Card 5
247. In the case of Debit or ATM card

a) Customer liability is limited if the loss is reported before it is used without his/her
permission.
b) Customer liability varies depending on the delay in the reporting of the loss, if
unauthorized use occur before reporting
c) Customer liability is limited if the unauthorized use occurs before reporting the loss.
d) Notification period can’t be extended even in the case of extenuating circumstances.
e) There can’t be unlimited liability
248. Stop-Payment privilege provides

a) right to customer to stop payment on any EFT transaction
b) customer can stop payment if the purchase is defective or not delivered
c) customer can stop payment only for preauthorized regular payments
d) customers don’t have privileges for any transaction
249. Terminal Receipts

a) issued for regularly occurring electronic payments that are pre-authorized
b) entitled to customer only when the electronic transaction is terminated
c) provides statement of all the transactions terminated for a given period
d) must show the amount and date of the transfer, and its type, such as "from savings to
checking”
250. The Federal Reserve offers financial services to banks and the U.S. government for all of
the following reasons except to
make a profit promote competition foster innovation
251. Which of the following statements about the Fed's involvement in electronic banking is
true?
a) each year the Fed conducts billions of transactions valued in the trillions of dollars
b) funds transfers are originated and received through a sophisticated telecommunications
network called FedWire
c) financial institutions can move their balances at the Fed or send funds to another
institution through electronic banking
252. The Federal Reserve System processes about ___ of all checks written in the country 1/5
2/3 1/3 4/5 All
253. Just after you write a check at a store to make a purchase

a) your checking account at a financial institution is instantly reduced by the value of the
check
b) the store manager sends the check to a Federal Reserve Bank to be processed
c) the store manager deposits the check in the store’s account at a local financial
institution
d) your checking account at a financial institution is increased by the value of the check
after it has been processed by a Federal Reserve Bank or a correspondent bank
254. A one-time written order that instructs a financial institution to transfer funds from your
account to the account of an individual or business is called
check Automatic Clearinghouse (ACH) transaction. currency debit credit 1
255. CHIPS stand for

256. FEDWIRE involves the following intermediaries for the fund transfer EXCEPT Inter
District Settlement Fund
Federal Reserve bank Treasury & Government agencies
Depository institutions None of the listed Options
257. CHIPS uses ______________ to & from special settlement account on the booking of the
_____________
ACH; Federal Reserve Bank EFT; Federal Reserve Bank
FEDWIRE; New York Fed
Inter District Settlement Fund; Federal Reserve Bank
FEDWIRE; Federal Reserve bank
258. Following are all Private-sector payment systems EXCEPT

Check Clearing System Inter District Settlement Fund
Automated Clearing Houses CHIPS FEDWIRE
259. "Two Financial Institutions conducted the following transactions over CHIPS on 30th Jan
2004.
A transferred $5m to B at 9:45 AM
B transferred $10m to A at 11:30 AM
A transferred $12m to B at 2PM
B transferred % 15m to A at 3:30PM
Which of the following holds true?"
a) At the of the day, $17m will be transferred to B
b) At the end of the day, $25m will be transferred to A
c) At the end of the day, $8m will be transferred to A
d) All the transactions would settle individually real-time
e) Both At the of the day, $17m will be transferred to B and At the end of the day, $25m
260. EFT offers the following services EXCEPT
Electronic check Conversion Pay by Phone Direct Debit
Direct Deposit All Stored value cards
261. What is the electronic payment delivery system most often used to process low-dollar
repetitive retail payments?
Check Funds transfer Treasury payments
Automated Clearinghouse (ACH) FEDWIRE
262. Which of the following results in a direct, immediate, electronic payment from the
cardholder's checking account to a merchant?
Credit Card Money Order Checks Debit card ATM card
263. If you use your debit card to make a purchase, the amount will be transferred out of your
account
Typically within one day In whole-dollar amounts
The next business day
The amount is not transferred, but added to your credit card bill
Depends on the billing cycle
264. The Federal Reserve System is responsible for

regulating banks and financial institutions
creating a stable economic environment
managing regional and national check clearing
monetary policy All of the listed options 5
265. Which of the following is probably the most familiar form of electronic banking? ATM
Debit card Credit card POS system ACH
266. Which of the following transactions would cost the most?

ATM deposit Deposit at Teller window
Direct deposit Electronic fund transfer None of the listed Options
267. FEDWIRE transfer

involves relatively large no. of book keeping entries
are free of cost
handle high volume of small transactions
are settled on net settlement basis
handle high value transactions
268. Which of the following transactions costs the least?

Payment by personal check Payment via ACH
Debit card for point of sale purchase ATM withdrawal
Withdrawal at teller window
269. FEDWIRE differs from CHIPS in that
a) FEDWIRE is gross settlement system
b) FEDWIRE is a private sector fund transfer system
c) CHIPS provide international fund settlement
d) FEDWIRE offers free services
e) FEDWIRE provides domestic fund settlement
270. Which of the following transfers are covered by the Electronic Funds Transfer Act?
a) Bob’s purchase of an electronic toilet seat with a wire transfer
b) Joe’s transfer, made in person, from his checking to his savings account, to post bail from
prison
c) Larry’s check written at the Three Strikes and Your Out Bowling Alley
d) Tim’s point of sale purchase from his business account to buy that new hardware store he
has always wanted
271. Inter District Settlement Fund is a

a) Fund Transfer System
b) Electronic Bill Presentment System
c) Settlement Account
d) Booking System
e) Transaction System
272. John loses his ATM card, which has his PIN written on the back of the card. He doesn’t discover this
until two weeks later and immediately notifies the bank. During the two weeks that his card was lost,
$9,000 worth of withdrawals have been made from his account. Tim is liable for which of the following
a) $500
b) 40 hours of community service teaching classes on why to not write your PIN on the back of
your card
c) Half of the $9,000
d) $50
273. ‘Stored value’ cards

a) are like prepaid mobile cards, mass transit passes etc.,
b) are all covered by EFT act
c) stores encrypted code for accessibility
d) are used for accessing personal bank account
e) are like debit cards, credit cards etc.,
274. What does the ‘Federal Reserve Supervisory Letter’ define private banking as?
a) “personalized services such as money management, financial advice, and investment
b) “personalized services such as cheque collection and other retail banking services for high net
worth clients”
c) “service provided by private banks to all clients”
d) “personalized services provided by private and public banks to all clients”
275. Structured Lending
a) Investment Management and Advice
b) Issuer Capital Formation
c) Trade Finance Management and Advice
d) Access to investment banking and institutional services
e) Structured Lending
276. Private Banking clients can be based on

a) Volume of business
b) Traditional banking business
c) Net Worth
d) Retail Banking business
277. Which of the following is true for the Personal Investment Companies (PICs) setup
a) Tax benefit
b) Huge startup fee
c) Annual Administration Fee
d) Foreign Check Writing Services
278. Typical Fee charged for private banking services
a) Less than 1%
b) Between 1 to 4%
c) Between 6 to 10%
d) More than 10%
279. Client relationship manager doesn’t have to understand which of the following need/s for investment
management and advice
a) Liquidity requirement
b) Capital Base
c) Tax planning
d) Arbitrage trading
280. High-Net worth individuals generally have

a) Household income atleast $50,000
b) Networth greater than $500,000
c) Market capitalization more than $200,000

a) Servicing Specialist => Client Representative => Middle Office => Back Office
b) Client Representative => Servicing Specialist => Middle Office => Back Office
c) Client Representative => Servicing Specialist => Back Office => Middle Office
d) Middle Office => Back Office => Servicing Specialist => Client Representative
e) Client Representative => Middle Office => Servicing Specialist => Back Office
282. In the case of ‘self directed investment management’ in Private banking

a) Bank’s portfolio managers make investment decisions only after customer approval
b) Bank’s portfolio managers make ‘self-directed’ investment decisions
c) Bank’s portfolio managers make investment decisions on behalf of the customer
d) Bank’s portfolio managers make investment decisions behalf of all the customer
a) Services Provider; Tax Services
b) Middle Office; Statements & Advices
c) Front Office; Client Reporting
d) Back Office: Risk Management
e) Middle Office; Custodial Services
284. “High net worth” individuals are normally defined based on the
a) Household income
b) Net Worth
c) Value of shares held by the household + household income
d) Both Net Worth and Value of shares held by the household + household income
e) Both Household income and Net Worth
285. Which of the following is/are not a responsibility of the Middle office?
a) Account Aggregation
b) Domestic Global Settlement
c) Cash Processing
d) Sales & Brokerage
e) Both Account Aggregation and Sales & Brokerage
286. Private Banking doesn’t deal with the following services EXCEPT
a) Tax & estate planning
b) Insurance
c) Foreign exchange
d) Automated credit entitlement
e) all of the listed options
287. A Private Banking division would entail the need for which of the following
a) Efficient Portfolio Analysis
b) Asset Allocation techniques
c) High Technology Investment
e) Only Efficient Portfolio Analysis and Asset Allocation techniques
288. Private clients trade in ____________ volumes and ___________ fees and commissions
a) larger; larger
b) small; larger
c) small; small
d) larger; small
e) Either small; larger or larger; small
289. “Sweep” facility provides

a) automatic transfer of funds from one account to another account, whose balances have fallen
below the pre-determined limit
b) automatic transfer of funds from one account to another account, whose balances have
exceeded pre-determined limit
c) automatic transfer of funds from one account, whose balances have exceeded pre-determined
limit, to another account
d) Both automatic transfer of funds from one account to another account, whose balances
have fallen below the pre-determined limit and automatic transfer of funds from one account,
whose balances have exceeded pre-determined limit, to another account
e) Both automatic transfer of funds from one account to another account, whose balances have
fallen below the pre-determined limit and automatic transfer of funds from one account to another
account, whose balances have exceeded pre-determined limit
290. Managing client’s liquidity assumes paramount importance in private banking, it involves
a) Short term credit facilities
b) Flexible cash management
c) Optimizing returns on short term cash
291. The two most distinguishing features of Private banking are _____________ and _____________.
a) Liquidity management; risk management
b) Specialist advice; risk management
c) Wealth management; financial advice
d) Extensive research; specialist advice
e) Liquidity management; structured lending
292. Private Banking providing Risk management services thereby strives to

a) Eliminate risk and maximize returns
b) Reduce risk and optimize returns
c) Avoids risk and optimize returns
d) Transfers risk and maximize returns
293. Private Banking provides plethora of specialized services to it clients. Which of the following
statements holds true?
a) It is less dependent on accepting deposits than retail banking.
b) Client portfolios are reflected on the liability side of the bank’s balance sheet
c) Client portfolios are reflected on the asset side of the bank’s balance sheet
d) Both It is less dependent on accepting deposits than retail banking and Client portfolios are
reflected on the asset side of the bank’s balance sheet
e) Both Client portfolios are reflected on the liability side of the bank’s balance sheet and Client
portfolios are reflected on the asset side of the bank’s balance sheet
294. Which of the following companies offer Private banking services?

a) Credit Suisse
b) Fidelity
c) Merrill Lynch
295. _____________ provides Private banking in the Trust or Investment management division whereas
_______________ provides Private Client Services (PCS)
a) Credit Suisse; Salomon Smith Barney
b) Fidelity; UBS
c) Mellon and Bank One; Salomon Smith Barney
d) All of above
296. The below stated responsibilities are carried out by which of the following players. Cash
Services/Client Reporting/Statements & Advices/Domestic & Global Settlements
a) Services Provider
b) Client Representative
c) Back office
d) Front Office
e) Middle Office
297. Private banking offers “structured lending” that provides

a) Customized asset-based credit solutions
b) Long-term liquidity to clients
c) Advice-led credit solutions
d) Credit solutions to High Net worth individuals
298. Private Banking customers can be categorized based on the following parameters
a) Risk taking capability
b) Investible assets
c) Networth
d) Both Investible assets and Networth
299. In the case of ‘discretionary investment management’ in Private banking

300. Jim Morrison, 52 years old, founder, chairman and largest shareholder of a small Australian listed
company, seeking to borrow A$8 million secured against his 45 percent shareholding (valued at A$30
million) to diversify his asset base and invest in a separate business venture. He has existing relationship
with the bank. Given the fact that loan represented quasi-equity as it would be almost impossible to
offload the shares into the market, what kind of solution can be provided by the bank to the client?
a) Issuer Capital formation
b) Investment Management Services
c) Structured Lending
d) Hedge Funds
e) Payable Through Account
301. Increasing numbers of hedge funds are locating to ‘Cayman Islands’ because al EXCEPT
a) Tax haven
b) Flexible legislation
c) Highly sophisticated venue
d) Numerous capable professionals
302. Hedge funds have attracted investors' attention due to some spectacular & successes & failures, but
in fact they aim to provide a low risk investment solution. Which of the following does hold true for hedge
funds?
a) Highly speculative
b) Private investment partnership
c) Highly leveraged
d) Consistent performance
e) Investor needs to be fully accredited
a) Cash flow management
b) Retirement planning
c) Risk management
d) Tax planning
e) Portfolio management
304. Which of the following is not a secured loan?

a) Overdraft on checking.
b) Personal lines of credit.
c) Study loan
d) Credit cards
305. Which of the following statements is true?
a) Requires "collateral" or something, which the lender can easily sell and use to pay off
the loan if the borrower defaults.
b) Rates are generally lesser for unsecured loans.
c) If a person with a less than perfect credit history gets a loan it will be at a lower interest rate.
d) Having a good credit record of lender is a critical factor because higher interest rate can be
charged to that individual.
e) Rates are generally greater for secured loans
306. Which of the following statements is false about loan?

a) The amount of the loan that is disbursed is an asset for the bank
b) The interest rate on a loan depends on the disbursed amount and Schedule.
c) Loans can be disbursed in multiple currencies with different schedules.
d) Loan is considered as a liability for the customer.
e) Loan can be prepaid with or without penalty
307. Which of the following statement is faulty about ‘credit enhancement’?

a) Enhancing the duration of the credit given to the corporate
b) Evaluating the feasibility of extending the credit facility to the borrower.
c) Mechanism to improve the original rating of the credit for the borrower.
d) Increasing the credit limit for the corporate
308. Which of the following is true about Working Capital?

a) Working capital requirements depends on the current assets and current liabilities of the
corporate.
b) 25% of the Working capital gap has to be fulfilled by long term funding and 75% by short term
loans and overdrafts.
c) Overdraft limit is extended to corporate to manage their day to day cash flow needs
d) Part of the current liabilities need to be funded through the current assets.
309. Supplier or Dealer loans provide

a) Assurance from the Corporate in case of default by suppliers and dealers
b) Immediate loans to the suppliers and dealers of the corporate at higher rate of interest.
c) Long term loans to the suppliers and dealers by the banks
310. Which of the following is NOT a Settlement Method for Bank Loans?
a) Assignment
b) Participation.
c) Securities Repository.
d) Sub-Participation
e) Preclosure
311. Once the Syndicate has closed, all other trades, Participations, Sub-participations and Assignments
are considered trades in what market?
a) Primary market
b) Index market
c) Secondary market
d) Participation market
e) Over the counter market
312. Consider a loan of USD 10,000 which is agreed to be lent for a period of six months on Jan 1, 2004
at an interest rate of LIBOR + 2%. Here, the base rate is LIBOR and the spread is 2%. Further, consider
that the LIBOR was 7% p.a. on Jan 1, 4% p.a. on May 1. What would be the interest paid at the end of six
months?
a) 600 USD
b) 400 USD
c) 1400 USD
d) 1350 USD
e) 350 USD
313. Consider a one-year loan of USD 10,000 given by bank to a borrower on Jan 1, 2004. The loan
carries an interest rate of 10% p.a. As per the terms and conditions of the loan, the borrower has to pay
the interest amount together with principal amount on Dec 31, 2004. The Bank follows straight-line
accrual with monthly frequency. What would be bank’s income as on June 31, 2004?
a) 11,000 USD
b) 600 USD
c) 1,000 USD
d) 5,500 USD
e) 10,000 USD
amount of interest paid upfront by the borrower?
a) Demand loan
b) True discounted Loan
c) Discounted Loan
d) Capitalized Loan
e) Amortized Loan
315. Interest rates are

a) The prices paid for the use of a real liability.
b) The prices paid for the use of a real asset.
c) The prices paid for the use of a financial liability.
d) The prices paid for the use of a financial asset.
e) The price paid for the use of a contingent asset
316. A loan that can be paid in periodic equated installments with capitalized interest is called
a) Amortized Loan
b) Capitalized Loan
c) Annuities
d) Discounted loan
e) True discounted Loan
317. Loan can take many of the following basic forms EXCEPT
a) Overdrafts
b) Bills and promissory notes
c) Corporate bonds
d) Advances
e) Credit line
318. If a fund purchases a loan in the Primary, they also use another word for that. Which term is used to
a) Allocation
b) Syndicate
c) Secondary
d) Assignment
319. In the case of floating rate loan, which of the following is false?
a) Base rate can be reset at mutually agreed time period or it can be periodic.
b) Spread is applied over and above the base rate.
c) The spread varies over the life of the loan.
d) Spread can be negative.
320. What does ‘loan provisioning’ stand for?

a) To create the provisions for doing business in different lines of businesses.
b) Loan provisioning is done to classify and grade the loans.
c) All of above
d) To create buffer against the loss of the non-performing loans.
321. Credit risk in the swap market is

a) Extensive.
b) Equal to the total value of the payments that the floating rate payer was obligated to make
c) Limited to the difference between the values of the fixed rate and floating rate
obligations.
d) Both Extensive and Limited to the difference between the values of the fixed rate and floating
rate obligations.
322. When a firm needs short-term funds for a specific purpose, the bank loan will likely be a
a) Compensating balance arrangement
b) Revolving credit agreement
c) Transaction loan.
d) Line of credit
e) Term Loan
323. Which of the following are the benefits of using credit derivatives?
a) Credit derivatives can be used either to take on more risk or to avoid (hedge) it.
b) Credit derivatives can be used to create positions that can otherwise not easily be established
in the cash market.
c) Credit derivatives can be used both to diversify their credit risk exposures and free up capital
from regulatory constraints.
d) All of above
324. A formal, legal commitment to extend credit up to some maximum amount over a stated period of
time
a) Letter of credit
c) Line of credit
d) Trade credit
e) Irrevocable Credit
325. Utility companies and medical service organizations commonly offer (fill in the blank) credit
a) Revolving
b) Single payment
c) Installment
d) Retail
e) Corporate
326. A common advantage of using credit is

a) less impulse buying
b) lower cost for items purchased
c) ability to obtain needed items now
d) lower chance of overspending
327. A Company has negotiated a $500,000 revolving credit agreement with a National Bank. The
agreement calls for an interest rate of 10% on fund used and a commitment fee of 1% on the unused
amount of the credit line. The effective annual interest cost if the firm borrows $200,000 for one year is
closest to
a) 11.50%
b) 15%
c) 26.50%
d) 13.25%
e) 11.50%

a) Credit linked Notes.
b) Total return swaps.
c) Credit default swap.
d) Currency swap.
329. Secondary loan trading refers to ______________ of _____________ on the secondary market.
a) Approving; new debts
b) Buying/Selling; only bad debts
c) Selling; new debts
d) Buying/Selling; existing debts
e) Reassignment; debts
330. Asset securitization refers to

a) financing vehicle consisting of pooling of existing debts as collateralized asset for the issuance
of the debt
b) financing vehicle consisting of pooling of government securities as collateralized asset for the
issuance of debt
c) financing vehicle consisting of the pooling financial assets, and the issuance of debt
collateralized by these assets
d) financing vehicle consisting of pooling of corporate bonds and equities as collateralized asset
for the issuance of debt
requirements
a) Transfer; increase
b) Diversify; reduce
c) Eliminate; improve
d) Manage; avoid
e) Assess; estimate
332. Credit derivative is all BUT

a) Financial Instrument
b) Transfers risk
c) Traded over the counter
d) Facilitate greater efficiency
a) Equity Loans
b) Secured Loans with Savings
c) Equity Lines of Credit
d) Personal Loans
e) Car Loan
334. In the inflationary economy, which of the following is the best option for the bank while lending,
$10,000 to a corporate borrow (Assume IRR at 10%)
A. Discounted loan @ 10% interest rate
B. Bullet payment loan @10% interest rate
C. True discounted loan @10% rate of interest
D. Equated installed loan @10% interest rate
a) Option A
b) Option B
c) Option C
d) Option D
335. The key feature of letter of credit

a) Basis for devising proper currency hedging strategy
b) Distributes risk between buyer and seller
c) Opportunity to receive payment in advance of the due date
d) Basis for devising proper currency hedging strategy and Opportunity to receive payment in
confirmed term Letter of Credit with a maturity date of 60 days from the time of shipment. The Acceptance
commission @ 1.5% pa equals
a) 3000
b) 250
c) 2500
d) 300
337. A company called FixImport Co. awards USExport a contract that requires not only making a large
quantity of widgets, but also installing and integrating them into an existing manufacturing process at
FixImport's plant. So, USExport asks for 25% down payment to finance the pre-shipment production.
FixImport agrees provided that an Advance Payment Guarantee is issued on its behalf. To what risk has
CanExport exposed itself as a result of issuing the Advance Payment Guarantee?
a) Wrongful demand against the Advance Payment Guarantee.
b) Country risk
c) The remainder of the payment might not be made on time
d) Risk of default.
e) Interest Risk

a) Buyer can refuse to take the delivery
b) Quality of the Good is guaranteed
c) Buyer is expected to make the payment after specified credit days
d) Payments made based on only bill of lading
339. UKImport, a financially sound G-7 company, convinces to buy widgets from USExport on open
account basis, with 60 days credit. The goods were dispatched by USExport on 15th Oct, value being
10,000$. Therefore, the payment was due on 14th of Dec. However the payment was made by UKImport
on 21st Feb. The delay in payment cost USExporter$…………. because of overdrawn account (consider
9% pa interest rate)
a) 1700
b) 1900
c) 190
d) 170
e) 2100
340. USExport and CanImport agree to carry out transaction under a confirmed letter of credit with
maturity date of 180 days from the time of shipment. But after shipping the goods, USExport realizes that
it doesn’t have the cash flow to wait 180 days to receive the payment? Which of the following options can
USExport use to collect the payment before the maturity date?
a) Requesting a Sight Letter of Credit
b) Applying for Bank Loan
c) Discounting the term letter of credit
d) Taking Advance from the Issuing Bank
e) Not Possible before date of maturity
341. The trade terms "15/2, net 30" indicate that

a) 2% discount is offered if payment is made within 15 days
b) 15% discount is offered if payment is made within 2 days
c) 2% discount is offered if payment is made within 30 days
d) 15% discount is offered if payment is made between 2 and 30 days
e) 30% discount is offered if payment is made before 15 of the month
342. The basic four parties involved in any transaction using LC (Letter of Credit) are the following
EXCEPT
a) Issuing Bank
b) Reimbursement Bank
c) Seller
d) Beneficiary’s Bank
e) Buyer
a) Issuing bank; Confirming bank

b) Beneficiary bank; Reimbursing bank
c) Importer; Exporter
d) Issuing bank; Beneficiary bank
e) Reimbursing bank; Beneficiary bank
a) Confirmed Letter of Credit
b) Irrevocable Letter of Credit
c) Red Clause
d) Standby Letter of Credit
e) Revolving Letter of Credit.
345. Credit cards

a) Create financial liabilities for those who use them.
b) Create financial liabilities for the issuer once they are used by the holder
c) Create money for those who use them
d) Create money for those who issue them
e) Create financial asset for those who use them
346. Which of the following operations can’t be done on a LC (Letter of Credit)?

a) Discount
b) Purchase
c) Acceptance
d) Collection

a) can be revoked without the consent of the Exporter
b) can be revoked without the consent of the Exporter’s bank
c) can be revoked without the consent of the Importer’s bank
d) can’t be revoked with the consent of the Advising bank
e) can’t be revoked without the consent of Exporter.
348. Standby LC (letter of Credit)

a) Is used as primary payment method.
b) Promises payment only if the buyer fails to make an arranged payment
c) Promises payment only if the seller fails to meet pre-determined terms and conditions
d) Can remain valid for short duration only.
e) Involves complex process and complicated documentation
349. Back to Back LC (letter of Credit) allows

a) buyer to open new LC against an already issued LC
b) seller to use the LC received from his buyer to open his own LC
c) buyer to use the LC received from his seller to open his own LC
d) seller to receive one more LC against an already issues LC from his buyer
e) Buyer to open one more LC based on an already issued LC
350. ________________ evidences delivery of goods and services whereas _______________ relates to
the apparent performance / non-performance of an obligation of the applicant
a) Transferable LC; Confirmed LC
b) Confirmed LC; Red Clause
c) Green Clause; Back to Back LC
d) Confirmed LC; Standby LC
351. What term is used to describe an LC that remains valid for years thereby eliminating the cost of
separate LCs for each transaction with a regular client?
a) Evergreen Clause
b) Red Clause
c) Irrevocable LC
d) Revolving LC

a) Shifts credit risk from the Importer to the Importer's Bank (Issuing Bank).
b) Deals with products and not with documents
c) Are typically revocable unless specified otherwise.
d) One of the relatively cheaper forms of payment guarantee.
e) Advising bank has the liability for the payment of the LC.
353. Draft can

a) be called bill of exchange
b) be a written order by one party directing a second party to pay a third party
c) be a negotiable instruments that facilitate international payments through respected
intermediaries
d) offer more flexibility than LCs
e) not be transferred from one party to another party
354. Banker’s acceptance defers from sight draft in that

a) Sight drafts are negotiable instruments
b) Banker’s acceptance demands immediate payment.
c) Banker’s acceptance reduces bank’s lending capacity
d) Bank can raise funds by selling the acceptance
355. Counter-trade or barter is most likely used when buyer

a) has access to convertible currency
b) finds that rates are favorable
c) will compensate the seller in a manner other than transfer or money or products
d) can’t exchange for products or services desirable to the seller
356. Factoring is
a) a discounting method with recourse
b) works with short term receivables
c) works mostly with capital goods
d) works with medium and long term receivables
e) sharing risk with third party
357. Fundamental difference between factoring and forfeiting lies in

a) transferring the credit risk to the third party (Factor)
b) removal of contingent liabilities from balance sheet
c) term of the contract viz., short, medium or long term
d) difference in the risk profiles of the receivables
e) the structuring of the contract with the third party
358. An Asian Importer wants to purchase machinery that he is unwilling or unable to pay for in cash until
that machinery begins to generate income. At the same time, the exporter wants immediate payment in
full in order to meet his on-going business commitments. Which of the following solutions best suit the
situation?
a) Bill Discounting
b) Factoring
c) Forfaiting
d) Letter of Credit
e) Consignment
a) Documentary Collection
b) Open Account
c) Letter of Credit
d) Counter trade
e) Cash in Advance

a) Time consuming
b) Costly
c) Specific and Binding
d) Deals with documents and not with products
e) Credit Line tied up.
361. BOL stands for

a) Bill of Letter
b) Banker’s Overdraft Limit
c) Bank of London
d) Bill of Leasing
e) Bill of Lading

a) Bankers Acceptance for Factoring Transactions
b) Bankers Association for Foreign Trade
c) Bankers Acceptance for Foreign transactions
d) Bankers Association for Forfaiting & Factoring transaction
e) Bankers association for Factoring Trade.
363. Bill of Lading is

a) a contract between Importer and Exporter for transportation of goods
b) a receipt issued by importer to exporter for goods received for transportation
c) a contract between a carrier and a shipper for the transportation of goods
d) A receipt issued by exporter to importer for goods delivered.
364. Foreign Credit Insurance Underwriters and Brokers is

a) A collection of banking institutions, dedicated to promoting American exports, international
trade, and finance and investment between U.S. firms and their trading partners
b) A forum for analysis, discussion and action among international financial professionals on a
wide range of topics affecting international trade and finance, including legislative/regulatory issues.
c) A forum to insure repayment of export credit against nonpayment due to political and/or
commercial causes
d) A forum to set up a trade finance database with a grant from the U.S. Department of
Commerce
365. An Asian Buyer entered into deal with Swedish Exporting company on open account terms. The
Asian Buyer obtained 60 days credit, calculated from the date of the invoice. The value of the order was
USD 100, 000 and the goods were dispatched and invoiced by the Swedish Exporter on the 15th July
2003. The payment from Asia was due on the 15th Sept 2003. The payment eventually arrived on the
15th Nov 2003, over two months late leading to interest loss for two months @ 9%. However if confirmed
Letter of credit had been required, what would have been the exporter benefit? Given that the
Confirmation Fee & Acceptance Commission is 1.5% each, Negotiation Fee of $150, and other
administration expenses of about $60.
a) $1,200
b) $1,700
c) $710
d) $990
e) $250
366. Which of the following combinations holds true?

a) Wire transfer; more costly than other payment alternatives
b) Foreign Checks; Useful when information/documentation must accompany payment
c) Commercial letter of credit; Improves applicant’s credit facilities
d) Standby letter of credit; less costly than documentary collection
e) Documentary collection; strict compliance rules apply
367. Standby letter of credit is __________ secure than documentary collection and cheaper than
__________________
a) Less; open account
b) More; documentary collection
c) More; commercial letter of credit
d) Less; commercial letter of credit
368. Banker acceptances are ________________ credit investment created by ___________ and used
for financing imports, exports and domestic shipping
a) Long term; financial firms
b) Long term; non-financial firms
c) Short term; non-financial firms
d) Short term; financial firms
e) Medium terms; banks
369. Discounting method for long term account receivables on non-recourse basis is termed as
a) Factoring
b) Leasing
c) Forfaiting
d) Bill discounting
370. Due Diligence is performed to

a) Assess the risk
b) Performed by the buyer
c) Performed on the seller
d) Executed after contract is signed
a) Back to back Letter of Credit
b) Standby Letter of Credit
c) Documentary Collection
d) Letter of Credit
e) Both Standby Letter of Credit & Letter of Credit
372. Documentary Letter of credit provides all BUT

a) Cheaper than letter of credit
b) More rigid than letter of credit
c) No strict compliance rules
d) No credit facilities required
e) No guarantee of payment by bank
a) Time frame
b) Exporter’s Fund
c) Government Guarantee Program
374. The treasury services department performs all of the following functions except
a) Research market factors e.g., Interest rate monitoring
b) Managing corporate collections and payments
c) Managing liquidity and cash position
d) Risk Management services
375. A bank treasury manages investment of surplus cash in which of the following instruments EXCEPT
a) Money market instruments
b) Treasury securities
c) Debt
d) Deposits with other banks
376. Assume that Bank A treasury borrows $2.0 million for 2-years from another bank at US Treasury Bill
rate and lends it to a corporate borrower in US for 2 years at LIBOR + 1.5%. Which of the following risks
is the bank exposed to?
a) Forex risk
b) Repricing risk
c) Optionality
d) Basis risk
a) Interest rate swap
b) Forward rate agreement
c) Swaption
d) Interest rate guarantee
378. The following forex risk management instruments used for foreign exchange risk EXCEPT?
a) Cross currency swap
b) Spot Forex contract
c) Options
d) Forward Forex contract
e) Both Cross currency swap and Options
379. On October 15, ABC Limited enters in to a 3-month forward contract with Bank A for delivering USD
20.0 million at INR 46.50 /USD, while the spot rate is INR 46.20/USD. Subsequently, USD depreciates to
INR 47.05/USD by the end of 3 months. Assuming this as a stand-alone deal, which of the following is
true
a) Bank A loses money in the deal
b) ABC Limited loses money in the deal
c) There is insufficient information to answer the question
d) Loss/Gain depends on forward rate at the end of 3 months
e) Neither party loses money in the deal
380. Bank A has significant investments in 10-year treasury bonds at a coupon rate of 4.9% and Bank B
has significant investments in 10-year treasury bonds at a coupon rate of 5.2%. When market yield for 10-
year treasury bonds start moving upwards from the current level of 5.0%,
a) Both banks see an increase in portfolio value
b) Bank A portfolio value increases while Bank B’s decrease
c) Bank B portfolio value decreases while Bank A’s increase
d) Both banks see a decrease in portfolio value
e) Insufficient information for answering the question
381. A corporate has on books a 5-year floating rate loan at LIBOR+2%. Suppose interest rates are
anticipated to rise in the near term. The corporate should ideally
a) Retain the floating rate loan
b) Convert to fixed rate loan immediately
c) Wait for the interest rates to rise and then go for a fresh fixed rate loan to repay the old loan
d) Wait for the interest rates to rise and then go for a fresh floating rate loan to repay the old loan
382. Assume hypothetically that Bank A has hedged a long position in 5 year government bonds with a
short position in 3 year government notes. When the yield curve steepens
a) Bank A stands to lose money
b) Bank A stands to gain money
c) Depends on interest rates of the instruments
d) Insufficient information
383. A financial entity XYZ Ltd borrows 5-year money from Bank A at LIBOR+2.25% and lends the
money to a corporate borrower ABC Ltd at 5-year T-bill rate + 2.00%. XYZ Ltd is exposed to the following
risk
a) Repricing risk
b) Basis risk
c) Yield curve risk
d) Political risk
384. ABC Ltd in US has to make an import payment of Euro 2.3 million after 3 months. Market feels that
Euro will appreciate against the US dollar in the near term however the final rate would depend on the
results of the US presidential elections which would be happening after 1 month. Prima facie, ABC Ltd
should go for
a) 3-month forward purchase of Euro
b) Purchase of a 3-month Euro future
c) Purchase a 3-month Call option on the Euro
d) Sell a 3-month put option on the Euro
e) 3-month forward sale of Euro
385. Assume that Euro/USD is quoting at 1.2476/0.2481 and GBP/USD is at 1.8195/0.8200. What would
be the cross currency rate for Euro/GBP?
a) 1.2476/0.8200
b) 0.6793/0.6802
c) 0.6854/0.6860..
d) 1.2481/0.8195
386. Assume that INR/USD is quoting at 45.35/0.36 and Euro/USD is at 1.2476/0.2481. What would be
the cross currency rate for Euro/INR?
a) 55.2344/0.4565
b) 36.3300/0.4016
c) 56.3849/0.5231
d) 56.5787/0.6138..
387. Which of the following is a valid forex risk management strategy?

a) Purchase a put option on a currency which is anticipated to appreciate
b) Purchase a call option on a currency which is anticipated to appreciate
c) Sell a call option on a currency which is anticipated to appreciate
d) Both Purchase a put option on a currency which is anticipated to appreciate and Purchase a
call option on a currency which is anticipated to appreciate
e) Both Purchase a put option on a currency which is anticipated to appreciate and Sell a call
option on a currency which is anticipated to appreciate
388. The USD/INR spot rate is 45.35/0.36 and the 3-month forward premium quote is 0.02/0.04. What is
the forward rate applicable?
a) 45.37/45.32
b) 45.37/45/46
c) 45.37/45.40
d) 45.39/45.38
389. Which of the following is true theoretically?

a) As interest rates in India rise, forward premium for USD/INR rise
b) As interest rates in India rise, forward premium for USD/INR fall
c) As interest rates in India fall, forward premium for USD/INR fall
d) Both As interest rates in India rise, forward premium for USD/INR rise and As interest
rates in India fall, forward premium for USD/INR fall
390. Which of the following is correct?

a) Swaps are not derivative instruments
b) Swaption is a combination of a swap and an option
c) Swaps can be used for covering interest rate risk and forex risk
d) Both Swaption is a combination of a swap and an option and Swaps can be used for
covering interest rate risk and forex risk
391. ICICI Bank has an account with Chase Manhattan for settling forex transactions. Such an account is
called
a) Nostro account of ICICI Bank
b) Vostro account of ICICI Bank
c) Correspondent Vostro account
d) Both Vostro account of ICICI Bank and Correspondent Vostro account
392. Cash management techniques include

a) Pooling
b) Netting
c) Swapping
d) Both Pooling and Netting
e) Pooling, Netting and Swapping
393. Cheque Lock box refers to

a) The main method of collections management
b) The main method of payments management
c) Electronic Finds transfer
d) Both The main method of collections management and Electronic Finds transfer
394. The following happens in zero-balance structure
a) Cash balances are pooled to a central account
b) Cash balances of surplus accounts are use to top up deficit accounts
c) Cash balances are made zero in surplus accounts
395. All of the following are payment modes except

a) EFT
b) Cheque
c) Debit to account through Debit card
d) Lockbox
396. A traditional cash management system takes care of the following except
a) Pooling collections to one central account
b) Electronic bill presentment and payment
c) Cash funding for purchase of capital equipment
d) Netting receipts and payments globally
e) Providing customized MIS for cash flow monitoring
397. ACH payments are usually used for

a) Large value, single transfers
b) Small value, periodic transfers
c) Transfers to distant parties
398. The following parties can act as clearing members

a) National Banks
b) Regional banks
c) Corporates
d) National Banks and Regional Banks
e) National Banks, Regional Banks and Corporates
399. In RTGS, the following is true

a) All members need to maintain a central account with the nodal agency
b) Settlements are done at a transaction level
c) Settlements are done on a batch mode
d) Both All members need to maintain a central account with the nodal agency and
Settlements are done at a transaction level
e) All members need to maintain a central account with the nodal agency, Settlements are done
at a transaction level and Settlements are done on a batch mode
400. A traditional end-of-day settlement process results in the following risks except
a) Credit risk
b) Interest rate risk
c) Operational risk
d) Systemic risk
401. Continuous Linked Settlement is applicable to

a) Domestic cash payment
b) Domestic collections
c) Electronic Funds Transfer
d) International forex transfers
402. Continuous Linked Settlement removes which of the following risks primarily
a) Exchange risk
b) Temporal risk
c) Country risk
d) All of these
403. Treasury & cash Management takes care of all of the following except
a) Liquidity risk
c) Forex risk
d) Credit risk of corporate borrowers
404. Asset Managers uses which of the following principles/approaches

a) Screens and Filters
b) Capital Preservations
c) Alternatives investments
405. The difference between private banking and asset management lies in
a) Investment management techniques
b) Type of returns promised
c) Type of investors
d) Extensive Research techniques
e) Both Investment management techniques and Extensive Research techniques
406. The following major players provide asset management services

a) UBS
b) Aberdeen Asset Management
c) JP Morgan Chase
407. Active Approach to Asset Management refers to

a) Diversification to minimize risk and maximize return
b) Successful market timing
c) Invest in a single line of assets
d) Both Diversification to minimize risk and maximize return and Successful market timing
e) Both Diversification to minimize risk and maximize return and Invest in a single line of assets
408. The philosophy that ‘if prices go up, they tend to keep going up, is known as
a) Contrarians Investing
b) Market Timing
c) Momentum Investing
d) Passive Value Investing
409. The philosophy that ‘markets systematically undervalue certain companies’, is known as
b) Market Timing
d) Passive value Investing
410. For portfolio objectives of growth of income and capital appreciation, which of the following
securities will most likely have to be in the portfolio?
a) Common stocks
b) Corporate bonds
c) Preferred stock
d) U.S. Treasury bonds
e) Municipal Bonds
411. Which of the following is best associated with asset allocation in portfolio management?
a) The choice of assets to use for consumption for the year.
b) The selection of asset classes within which to invest portfolio funds.
c) The selection of the proportion of funds for each asset class.
d) The selection of asset classes for investment and the proportion of each asset class for
portfolio funds.
e) The selection of assets in a particular asset class.
412. A portfolio strategy associated with little trading or change once established is called
a) resistance management.
b) active management.
c) passive management.
d) resilient management.
e) Top-down management
413. Which of the following are principles used by an asset manager?

a) Diversification
b) Screens and Filters
c) Capital preservation
e) Only Diversification and Screens and Filters
414. A buy-and-hold strategy is representative of a(n) ___ portfolio management style

a) active.
b) passive.
c) indecisive.
d) rebalanced.
e) resilient
415. The components involved in the cost of portfolio execution are

a) Bid-ask Spread
b) Illiquidity
c) Tax impact
e) Only Bid-ask Spread and Tax impact
416. The dimensions to portfolio execution could be

a) Cost of execution
b) Trading speed
c) Portfolio Risk Management
e) Both Cost of execution and trading speed
417. “Momentum investing” would refer to

a) Follow fundamental financial ratios to make decisions
b) Invest in high dividend yield stocks
c) Following charts and indicators to trade
d) Create portfolio similar to index
e) Try best to market
418. The performance of an internationally diversified portfolio may be affected by

a) currency selection
b) country selection
c) stock selection
419. In the long run, diversifying into international markets is most likely to benefit U.S. investors
a) Under all U. S. market conditions.
b) When U.S. markets are performing well.
c) When U.S. markets are performing poorly.
d) Under no circumstances.
e) Only when currency risk is hedged.
420. When an investor adds international stocks to her portfolio

a) it will raise her risk relative to the risk she would face just holding U.S. stocks.
b) she needs to seek professional management because she doesn't have access to
international stocks on her own.
c) she will increase her expected return, but must also take on more risk.
d) it will have no significant impact on either the risk or the return of her portfolio.
e) she can reduce its risk relative to the risk she would face just holding U.S. stocks.
421. “Contrarian Investing” refers to investing on the basis of

a) Market correction due to accelerated movement
b) Single direction market movement – Bull or Bear run
c) Market timing for greater gains
d) Momentum Investing
422. "Don't put all your eggs in one basket" is a phrase used to describe which of the following?
a) risk averse
b) diversification
c) risk/return tradeoff
d) time value of money
e) budgeting
423. By alternative investments (other than debt and equity), what are the investment avenues for a
asset manager?
a) Hedge funds
b) Futures
c) Savings bank accounts
e) Both Hedge funds and Futures
424. Bid-Ask spread refers to

a) Difference in price between buying one asset and another similar one
b) Difference in opinion between the seller and buyer on the price of an asset
c) Difference between the buying and selling price of the same asset
d) Both Difference in price between buying one asset and another similar one and Difference in
425. Which of the following statements concerning correlation coefficients is (are) correct?
I. A correlation coefficient of -1 for the returns of two securities would indicate that both of them should be
carefully considered for inclusion in a portfolio since maximum risk reduction could be achieved by
including both.
II. The returns of security B would increase 8% if the returns of security A increased 8% if the correlation
coefficient for the returns of the two securities was +1.
a) I only
b) II only
c) Both I and II
d) Neither I or II
426. Beverly Drake has two stocks with a correlation coefficient of zero. Which of the following is true?
a) These stocks are well diversified because as one stock appreciates in value, the other
decreases.
b) These stocks are well diversified because they will move in unison.
c) These stocks are not well diversified because they move in unison.
d) These stocks will move independently of each other.
e) None of the listed options.
427. Which of the following are major categories of investments?

a) Cash (or cash equivalents such as money market funds)
b) Stocks
c) Bonds
d) Real Estate (including Real Estate Investment Trusts)
428. A very effective way to employ a passive strategy is to

a) Invest in an indexed portfolio
b) Buy all Stocks on the index
c) Invest money in a bank
d) Buy few securities which reflect the index
e) Both Invest money in a bank and Buy few securities which reflect the index
429. Risk reduction (Diversification) in a stock portfolio can be achieved by

a) Investing in a few less risky stocks
b) Investing is as many stocks on the index as possible
c) Buying an option to hedge risk on all stocks in portfolio
d) Investing in an index option
430. A buy-and-hold strategy would be with the aim of

a) Reducing Transaction costs
b) Reduce costs involved in constant researching of stocks
c) Wait till the investors objective is met
e) Both Reduce costs involved in constant researching of stocks and Wait till the investors
objective is met
431. The derivatives market provide the asset manager a tool to

a) Increase trading speed
b) Reduce cost of execution
c) Hedge portfolio risks
d) Both Increase trading speed and Reduce cost of execution
e) Both Reduce cost of execution and Hedge portfolio risks
432. Which of the following statements concerning diversification is (are) correct?

I. Studies suggest a portfolio of 100 or more different common stocks is needed to substantially reduce
unsystematic risk.
II. The key to effective risk reduction through diversification is combining assets whose returns show
negative, low, or no correlation over time.
III. Security analysis will permit investors to consistently earn returns superior to the market.
a) I only
b) I and II only
c) I and III only
d) II and III only
e) I, II, and II
433. Bottom-Up approach would involve

a) Building country-by-country forecasting models
b) Validating the forecasting models and investing in portfolio of high yield countries
c) Selecting few scripts, forecasting their performance and investing based on the
forecasts
d) Both Building country-by-country forecasting models and Validating the forecasting models
and investing in portfolio of high yield countries
e) Both Validating the forecasting models and investing in portfolio of high yield countries and
Selecting few scripts, forecasting their performance and investing based on the forecasts
434. Underwriting in Investment banking stands for

a) Process of understanding the risks and return profile for investment portfolio
b) Guarantees the capital issue and making good for any shortfall
c) Processed of getting the shortfall insured from an insurance company
435. The process of ‘Hiring of the Lead Managers’ in the case of IPO is referred to as
a) Red Herring
b) Road-show
c) Investment Manager Contest
d) Advisor Contest
e) Beauty Contest
436. The top tier investment banks are EXCEPT

a) Salomon Smith Barney
b) Sallie Mae
c) Credit Suisse First Boston
d) UBS
437. The “Chinese Wall” in an investment bank refers to

a) The separation of Legal and Marketing
b) The separation of Sales and Trading
c) The separation of Corporate Finance and Research
d) The separation of Senior Management and Brokers
e) The separation of Underwriting and Sales
438. Syndicate in Investment banking refers to all Except
a) Hub of the investment banking wheel
b) Determination of allocation of bonds
c) Merger and Acquisition advisory
d) Facilitating placing of securities in public offering
439. Sales function in Investment banking takes the form of

a) Retail Broker
b) Institutional Sales Person
c) Private client service representative
440. The ECNs (like Instinet) offer after the market trading facilities. They
a) Involve Stock Exchange Brokers
b) Don’t Involve Stock Exchange Brokers
c) Also called as “Fourth Market”
d) Both Involve Stock Exchange Brokers and Also called as “Fourth Market”
e) Both Don’t Involve Stock Exchange Brokers and Also called as “Fourth Market”
441. “Specialist” in broking parlance refers to one

a) Specializes in one or few stocks and offer buy as well as sell quotes
b) Employee of stock exchange
c) Specializes in all equities
d) Only person authorized to buy or sell a particular stock
e) Charges commission for trades
442. “Dealer” in broking parlance refers to one

a) Employee of stock exchange
b) Matches customer orders with other brokers
c) Acts as a “Principal” and executes trades for his/her personal account
443. The latest quote for IBM is $ 90. A “Stop Order” to sell IBM at $ 85 means
a) The order will get released only when the Market Price hits $ 85
b) The stock will get sold immediately at Current Market Price – but not less than $ 85
c) The stock will get sold immediately at Current Market Price – but not less than $ 90
d) The order will get released immediately and the stock will get sold between $ 85 - $ 90
e) The order will get released at $ 85 as a limit order at $ 90
444. The latest quote for IBM is $ 90. A “Stop Limit Order” to sell IBM at $ 85 stop & $ 87 limit means
a) The stock will get sold immediately at Current Market Price – but not less than $ 85
c) The order will get released immediately and the stock will get sold between $ 85 - $ 87
d) The order will get released only when the Market Price hits $ 85 as a Market Order
445. The difference between “Fill or Kill” and “All or None” order is
a) “Fill or Kill” allows multiple trades
b) “All or None” can be a Good Till Cancelled order
c) They are synonyms
d) “Fill or Kill” can be valid till end of day
e) “Fill or Kill” allows partial execution
446. The quote for CTSH in NASDAQ was $ 43. The best buyer was at $ 42.5 and the best seller at $
43.5. How much is the bid-ask spread
a) $0.50
b) ($0.50)
c) $1.00
d) ($1.00)
e) $86
447. “Figuration” in brokerage industry means

a) Monetary value of a transaction
b) Number of shares bought/sold
c) Settlement details
d) Payment instrument details
e) Dividend payable/receivable
448. Movement of securities and funds within a brokerage firm is done by

a) Margin Department
b) Cashiering department
c) Corporate Actions team
d) Purchase and Sales
e) Accounting Department
449. CTSH has announced a stock split of 3 shares for 1 share. The record date for the same is Dec 19,
2003. The holder will be eligible for the bonus only if he holds the shares as of close of business on
a) Jan 01, 2003
b) Dec 19, 2003
c) Dec 18, 2003
d) Dec 20, 2003
e) Dec 31, 2003
a) Detailed description of the company, and its industry.
b) Opinion on why the analyst believes the company will succeed or fail.
c) Recommendations to buy, sell, or hold the company.
d) Target price or performance prediction for the stock in a year.
e) Track record of the analyst writing the report.
451. Dow Jones Industrial Average (DJIA) and Bombay Stock Exchange Index (Sensex) are
a) Both are Price Weighted
b) Both are Value Weighted
c) DJIA is Value Weighted & Sensex is Price Weighted
d) DJIA is Price Weighted & Sensex is Value Weighted
452. A “Value Weighted Index” has stocks in

a) Equal proportion
b) Each stock in proportion to its intrinsic value
c) Each stock in proportion to its free float
d) Each stock in proportion to its equity capital
e) Each stock in proportion to its market value
453. Consider an index with only 3 stocks
Stock A – 2 million shares – Market Price $ 50
Stock B – 4 million shares – Market Price $ 40
Stock C – 8 million shares – Market Price $ 30
The Weightage for Stock A in Value Weighted Index is
a) 14.14%
b) 20%
c) 33.33%
d) 50%
e) 41.66%
454. The FTSE (Footsie) Index reflects share prices in

a) London
b) Europe
c) Asia
d) Americas
e) Australia
455. Which equity securities provide for the domestic trading of foreign stock?
a) Eurodollars
b) American Depository Receipts
c) Foreign stocks
d) Sterling shares
e) International equities
456. In general, how frequently do companies declare Cash Dividends?

a) Annual
b) Half Yearly
c) Quarterly
d) Monthly
e) Irregular
457. What would happen to Convertible Preferred Stock if the underlying common stock experienced a 2
for 1 stock split?
a) Conversion price would be reduced, and the number of convertible shares would increase.
b) Conversion price would be reduced, and the number of convertible shares remain the same
c) Conversion price remains the same, and the number of convertible shares would
increase
d) No impact
e) Conversion price would be increased, and the number of convertible shares would increase
458. What date represents the announcement by the board of directors that a dividend will be paid?
a) Book Closure date
b) Record Date
c) Declaration Date
d) Dividend date
e) Payment Date
459. If the payable date is Friday, December 6, and the record date is Monday Jan 12, when is the Ex-
Dividend Date?
a) December 4
b) December 6
c) January 12
d) January 10
e) January 8
460. Which term refers to securities that are sold by the issuer to investors?
a) Secondary Offering
b) Outright Sale
c) Primary Offering
d) Select Sale
461. When are shareholders of record determined for dividend purposes?

a) Primary Offering
b) Secondary Offering
c) Outright Sale
d) Select Sale
462. If a stock trades on Wednesday, May 2, when will Regular Settlement occur in US markets?
a) May 3
b) May 4
c) May 5
d) May 7
e) May 8

The Weightage for Stock A in Price Weighted Index is
a) 14.14%
b) 20%
c) 33.33%
d) 50%
e) 41.66%
464. All of these are different types of brokerage accounts except?

a) Margin Account
b) Nostro Account
c) Cash Account
d) IRA Account
e) Power of Attorney Account
465. The NYSE is an example of

a) Primary Market
b) Secondary Market
c) OTC Market
d) Fourth Market
466. What is the key regulatory authority over the American securities industry?
a) Federal Reserve
b) FDIC
c) DTCC
d) ASA
e) Securities Exchange Commission
467. If a company announces a 2 for 1 Stock Dividend, what will happen to the price and number of
shares outstanding on the ex-date?
a) Price will go down by 50% while shares outstanding would double
b) Price will go down by 50% while shares outstanding would remain the same
c) Price will remain the same while shares outstanding would double
d) Price and shares outstanding would double
e) Price and shares outstanding would remain the same
468. What is the term for previously issued stock that has been repurchased by the issuer in the
secondary market?
a) Treasury Stock
b) Preference Stock
c) Promoter Stock
d) Trade able Stock
e) Non voting Stock
469. If a corporate bond which pays its coupon on April 1 and October 1 is traded on Wed, June 10, how
many days of accrued interest does the buyer owe the seller?
a) 0
b) 70 days
c) 71 days
d) 74 days
e) 75 days
470. What is the Effective Yield for a bond trading at a discount?

a) Less than interest indicated in the bond
b) Same as interest indicated in the bond
c) More than interest indicated in the bond
d) No relationship between the interest and effective yield
471. What securities do not require proof of ownership to receive interest or principal payments?
a) Bearer bonds
b) Registered Securities
c) Unregistered Securities
d) Warrants
e) Debentures
472. Who is at risk during a best efforts underwriting?

a) Investor
b) Underwriter
c) Issuer
d) Stock Exchanges
473. When must GTC orders be reconfirmed?

a) End of every day
b) End of every week
c) End of every month
d) End of every quarter
e) End of April and October
474. What is the term for the difference between bid and ask?
a) Difference
b) Spread
c) Profit
d) Quote
475. What is the Third Market?

a) NASDAQ
b) OTC
c) NYSE
d) Instinet
476. What is the term for a broker/dealer that maintains an inventory of stock and disseminates quotes
on that stock to other broker/dealers?
a) Issuer
b) Investor
c) Underwriter
d) Stock Exchanges
e) Market Maker
477. “Corporate Action” refers to

a) All company announcements
b) All stock exchange announcements
c) Dividends/Stock Splits
d) New investments
478. Dow Jones Industrial Average (DJIA) has

a) All companies listed at NYSE
b) 30 large companies listed at NYSE
c) Top 10% of NYSE
d) Top 10% of NASDAQ
e) 30 large companies listed at NASDAQ
479. “Insiders” of the company cannot sell any shares for a specified period of time, this is known as
a) Holding Period
b) Blackout Period
c) Buy & Hold Period
d) Book Closure Period
480. In a “Rights” offering of shares, which of the following is used?
a) Firm commitment
b) Stand by underwriting
c) Best Efforts underwriting
d) Outright Sales
481. The “Fourth Market” refers to

a) NASDAQ
b) OTC
c) NYSE
d) Instinet
482. The coming together of Daimler AG of Germany and Chrysler of US to form Daimler Chrysler can be
termed as
a) Chrysler acquiring Daimler
b) Merger of Daimler & Chrysler to form a new company
c) An informal arrangement between the two companies to manufacture and sell each other’s
products
d) Daimler acquiring Chrysler
e) A technical collaboration
483. What is a meant by a buy limit at 46?
a) Buy at exactly 46 + brokerage
b) Buy Price + Brokerage exactly equal to 46
c) Buy at 46 or lower + brokerage
d) Buy Price + Brokerage equal to or lower than 46
484. Which of the following risks need to be managed while lending securities
a) Foreign exchange risk
b) Liquidity risk
c) Credit risk
d) Equity risk
485. Development of investment objectives and investment policy falls under the purview
a) Fund Administration
b) Asset Allocation
c) Compliance reporting
d) Investment Manager Universe
e) Asset Liability Analysis
486. Schroeder’s PLC presently has State Street as its custodian. They would like to move the assets to
JP Morgan Chase as the new custodian because of better pricing and services. Which of the following
teams in JPMC will handle this change?
a) Account Management
b) Transition Management
c) Brokerage Services
d) Administration
e) Treasury

a) Price securities positions
b) Record Keeping
c) Fiduciary and compliance monitoring
d) Reporting services
e) Processes corporate actions
488. “Transition Management” under the purview of trading services help

a) Multi-currency collateral management and reporting
b) Brokerage to minimize costs and maximize efficiency
c) Institutional investors reduce their trading costs
d) Setting brokerage rates
489. Which of the following trading services provide institutional investors reduce their trading costs
a) Stock repurchase program
b) Transition management
c) Commission recapture
d) Both 2 and 3
490. “Alternate Investments” refer to

a) Diversification from equity into debt
b) Investment into non-regular asset categories
c) Forex trading
d) Arbitraging
491. Corporate Actions are communicated to the clients by custodians using

a) MT 15022
b) MT 5022
c) MT 2001
d) MT 199
492. Which one of the following is NOT an “Alternate Asset”

a) Distressed debt
b) Private Equity
c) Venture Funds
d) IBM stock
e) LBOs
493. “Income Processing” team of a custodian takes care of:

a) Stock splits
b) Trade Processing
c) Global income and payments on due dates
d) Settlements
e) Clearing
494. Asset-Liability analysis results in

a) Determining excess of assets over liabilities
b) Estimating Future economic wealth
c) Effect of return volatility
d) Both 2 and 3
e) Term mismatch of assets and liabilities
495. Which of the following services doesn’t fall under the purview of Trading?
a) Foreign exchange
d) Local fund servicing
e) Cash & short term investment
a) Performance management
b) Investor management universe
c) Cash projection
d) Cash & short term management
e) Fund administration
497. Fund administration covers the administrative and legal services to meet the needs of the fund.
Which of the following items are not covered?
a) Fund Development
b) Portfolio evaluation
c) Transfer agency
d) Corporate Stock Repurchase
e) Fiduciary and compliance monitoring
498. Transition management is a systematic, controlled process that utilizes all available sources of
liquidity to simultaneously _____________ and _____________
a) Minimize risk; maximize profits
b) Maximize liquidity; minimize risk
c) Minimize cost ; maximize efficiency
d) Minimize liquidity; maximize efficiency
499. Securities lending experts specializes in market information and negotiation skills to provide
profitability to the lender while managing
a) Credit risk
b) Liquidity risk
c) Interest rate risk
d) Both Credit risk and Liquidity Risk
e) Both Credit risk and Interest Rate Risk
500. In the case of securities lending services, the “Third party intermediaries”
a) Conduct transactions directly with the lender and borrower
b) specialize in particular types of securities loaned
c) target clients that are dissatisfied with the performance of their custody banks
d) become a principal to the transaction
e) Both Conduct transactions directly with the lender and borrower and
501. In the case of securities lending services, the “Wholesale intermediaries”

a) conduct transactions directly with the lender and borrower
d) becoming a principal to the transaction
e) Both conduct transactions directly with the lender and borrower & becoming a principal
to the transaction
502. ______________ for securities lending, which bring lenders and borrowers together, may eliminate
_______________
a) Wholesale intermediaries; Niche intermediaries
b) Internet auction systems; custodian and third party intermediaries
c) Custodian and third party intermediaries: Niche intermediaries
d) Niche intermediaries; custodian and third party intermediaries
e) Internet auction systems; Niche intermediaries
503. “Offshore” securities lending markets required

a) the settlement of securities lending transactions on the books of Global custodians
b) the settlement of securities lending transactions on the books of domestic custodians
c) the settlement of securities lending transactions on the books of foreign sub
custodians
d) the settlement of securities lending transactions on the books of foreign sub domestic
custodians
504. The reason for the development of “offshore” securities lending is

a) Unfavorable tax treatment
b) Assorted securities restrictions
c) Legalities of transaction
505. “Distressed debt” refer to

a) distressed state of market for debts/loans
b) loan/debt that has become watchlist or impaired
c) corporate bonds of companies that have filed for bankruptcy
506. Besides providing core custody services, the global custodian typically provides which of the
following services?
a) Foreign exchange transactions
b) Futures & Options Clearing and Execution
c) Tax reclaims processing
d) Both Foreign exchange transactions and Futures & Options Clearing and Execution
e) Both Foreign exchange transactions & Tax reclaims processing
507. When an entity is able to control a majority of shares by using borrowed money, it is called
a) Corporate stock repurchase
b) Leveraged buyout
c) Corporate lending
d) Busted takeover
e) Management buyout
508. Managers' returns are analyzed using a market factor-based performance analysis model that
allows us to create accurate manager peer groups based on market exposures, what is it called as
a) Financial reporting
b) Income processing
c) Investment manager universe
d) Investment manager portfolio
509. What is one of the best investment strategies to protect an investor from volatility?
a) Hedging
b) Market timing
c) Insurance
d) Diversification
510. Standard & Poor's and Moody's are companies that would be examples of
a) Stockbrokers
b) securities exchanges
c) stock regulations
d) investor's services
e) stock underwriter
511. The most readily available source of information for an investor

a) the daily newspaper
b) government publications
c) corporate reports
d) investor newsletters
e) business periodicals
512. In the case of Single Premium Deferred Annuities (SPDA),

a) Premium is an asset for the bank
b) Premium is a liability for the customer
c) Deferred annuities are an asset for the bank
d) Deferred annuities are liability for the customer
513. Asset allocation process generate

a) Lowest possible risk
b) Highest possible returns
c) Meet planned objectives
d) All of above
e) None of above
514. SWIFT is a
a) Proprietary network interface
b) Open standard network interface
c) Message based network interface
d) Both Open standard network interface & Message based network interface
e) Both Proprietary network interface & Message based network interface
515. Compliance reporting

a) Provides exception-based information
b) Provides standard template based information
c) Highlights potential violations for internal regulations
516. Compliance reporting covers all of the following services EXCEPT

a) Hedging and gearing reports
b) Weighted average analytics
c) Prohibited investments
d) Suspicious activity reports
e) Sharing holding restrictions
517. Custody clients' trade instructions are typically communicated using

a) SWIFT network
b) FEDWIRE
c) CHIPS
d) Clearing
518. Tax processing investor services include

a) make reclamations for client accounts
b) pursue tax relief at the source
c) manage clients' investment-related tax issues
519. _____________, the largest discount brokerage house, uses the Internet to deliver both high-tech
and high-touch services to its clients
a) Charles Schwab
b) Brown & company, J P Morgan Chase
c) Ameritrade
520. Private Equity

a) Requires very large investment
b) Quoted on the stock market
c) Listed on stock exchange
521. Asset Allocation involves

a) “Immunization” techniques
b) Use of options
c) Use of emerging market equities
d) Use of venture funds
522. Does Asset Allocation help reduce the investment risk?

a) No - It only maximizes return
b) It increases risk
c) Yes
d) It increases choice – No impact on risk
523. Services like the settlement, safekeeping, and reporting of customers’ marketable securities and
cash are provided by _________________
a) Custodian
b) Broker
c) Investment bank
d) Fund Administrator
e) Dealer
524. Asset Allocation in an investment policy is designed to meet the required rate of return. If the
investment objective is “Generate as much income as possible”. Which of the following asset allocation
strategy would be suitable for the above objective?
a) Invest in high quality bonds
b) Invest in shares of rapidly growing companies
c) Investment in both shares and bonds
d) Invest in lower quality bonds
525. Custody as an industry is going through a period of massive change. What do you think are the
major driver/s changing the way the business is done?
a) Increasing regulation and transparency
b) Infrastructure rapidly changing towards tight cost base and automated trade workflows
c) Disintegration of the Global custody market
d) Increasing regulation and transparency and Infrastructure rapidly changing towards
tight cost base and automated trade workflows
526. Sarbanes-Oxley Act comprises of

a) Section 401 seek to improve objectivity of research by recommending rules
b) Section 201 specifies enhanced financial disclosures
c) Section 501 prohibits non audit services
527. Federal communication privacy law features

a) Three tiered system
b) prohibits electronic eavesdropping on telephone conversations, face-to-face conversations, or
computer and other forms of electronic communications
c) privacy protection covers telephone records, e-mail held in third party storage
528. Which of the following financial institutions are covered under the Anti-money laundering, US Patriot
Act
a) Securities brokers and dealers
b) Mutual Funds
c) Banks and Trust companies
529. The US Patriot act deals with the following money laundering crime
a) Proceeds from foreign crimes of violence and political corruption
b) Proceeds from cyber crime
c) Counterfeiting
530. Check21 provides

a) Fully automated Day 1 processing
b) Decreased collection float due to faster clearing process
c) Compressed processing windows to enable later branch cutoff times
d) Only privately-held companies that are headquartered in the U.S.
531. The US Patriot Act doesn’t allows for

a) US enforcement of foreign forfeiture orders
b) Seizure of correspondent accounts held in U.S. financial institutions for foreign banks
c) Confiscation of property located in US for crimes committed in violation of foreign laws
532. Under the new rules, an accounting firm that does an audit is prohibited from providing many other
accounting services. Which of the following is specifically permitted under Sarbanes-Oxley?
a) Broker or dealer, investment adviser, or investment banking services
b) Financial Information Systems Design and Implementation
c) Appraisal or Valuation Services
d) Tax services
533. Not all possible services that might be provided by the auditing firm are expressly prohibited by
Sarbanes-Oxley. If a non-audit service is not expressly prohibited, the auditing firm may provide that
service
a) If no one on the board objects
b) If the audit committee gives its prior approval If the audit committee gives its prior
approval
c) Only in an emergency and only if the company being audited has not been able to find another
accounting firm to provide this service after making a good-faith effort
d) Without any prohibitions or pre-conditions whatsoever
534. Sarbanes-Oxley Act, section 501, specifies

a) Book Keeping and Actuarial Services
b) Balance sheet transactions
c) Commission rules on pro forma figures
d) Rules for greater public confidence in securities research
535. The stated objectives of the stringent rules under Sarbanes-Oxley Act are
a) To protect the interest of investors
b) To improve the accuracy and reliability of corporate disclosures
c) To deter and punish corporate and accounting frauds
d) To ensure justice for wrongdoers
536. USA PATRIOT Act enforces which of the following

a) Criminal Investigations
b) Foreign Intelligence Investigations
c) Money Laundering
537. Money laundering refers to

a) Money facilitating criminal offences
b) Extending loans to corporate
c) Short term borrowing & placements
538. Money laundering can best be described as the process by which

a) money gained from criminal activity is processed so it appears to be gained from
legitimate sources
b) criminals attempt to defraud the government
c) money gained from legitimate sources is hidden to avoid taxes
d) the police attempt to investigate organized crime
539. Which of the following is not an example of money laundering during the placement stage?
a) Exchanging many small denomination bills (i.e. tens, twenties and fifties) for larger bills and
bank drafts
b) Repeated deposits of cash into a financial institution just below mandatory reporting threshold
c) Setting up an offshore "shell" corporation to "lend" yourself money for a new house
540. Federal authorities attack money laundering through

a) Regulations
b) Criminal sanctions
c) Forfeiture
541. The US Patriot Act expands the authority of the ________________ to regulate the activities of U.S.
financial institutions, particularly their relations with ______________and entities
a) Secretary of the Treasury; domestic individuals
b) Secretary of the Treasury; foreign individuals
c) Securities Exchange Corporation; domestic individuals
d) Securities Exchange Corporation; foreign individuals
542. SARs in the context of anti money laundering

a) stands for Suspicious activity reports
b) Needs to be filed by Securities brokers and dealers as well as commodity merchants
c) Requiring businesses, which were only to report cash transactions involving more than
$1,000,000 to the IRS to file
d) Both stands for suspicious activity reports & Needs to be filed by Securities brokers
and dealers as well as commodity merchants
543. Which of the following regulations are not covered under the US Patriot act?
a) Encouraging financial institutions and law enforcement agencies to keep confidential
information concerning suspected money laundering and terrorist activities
b) Prohibiting U.S. financial institutions from maintaining correspondent accounts for foreign shell
banks
c) Establishing minimum new customer identification standards and record-keeping
d) Requiring financial institutions to maintain anti-money laundering programs which must include
at least a compliance officer
544. Forfeiture regulation under the US patriot act allows

a) permits confiscation of any property derived from or used to facilitate domestic or
b) Calls for the seizure of correspondent accounts held in foreign financial institutions for
c) Permits foreign enforcement of domestic forfeiture orders
545. US Patriot act incorporates the following new crimes

a) terrorist attacks on mass transportation facilities
b) for biological weapons offences
c) for fraudulent charitable solicitation
546. Federal communications privacy law features a three tiered system under US Patriot act
First level: prohibits electronic eavesdropping on telephone conversations, face-to-face conversations, or
Second level: telephone records, e-mail held in third party storage, and the like
Third level: in the case of serious criminal cases, law enforcement officers may seek a court order
authorizing them to secretly capture conversations
Which of the above levels are correctly described?

a) All the levels
b) First & Second
c) Only Second level
d) Second & third
547. Which of the following institutions are not covered under the AMR guidelines?
a) Credit unions
b) Securities brokers and dealers
c) Mutual funds
d) Futures commission
548. The Customer Identification program includes all of the following EXCEPT
a) Collecting information
b) Verifying identity
c) Checking terrorist list
d) Reliance on other financial institution
549. For the customer identification program, the AMR guidelines
a) dictates which forms of identification documents financial institutions can accept
b) financial institutions responsible for assessing and minimizing the risk associated with the
documents
c) risk based approach to determine the form of identification
d) Both financial institutions responsible for assessing and minimizing the risk associated
with the documents and risk based approach to determine the form of identification
550. Which of the following risk categories are covered under Basel II
A. Interest risk
B. Market risk
C. Foreign exchange risk
D. Liquidity risk
E. Credit risk
F. Operational risk
G. Qualitative risk
a) A, C, F
b) E,B,F
c) A, B, G
d) B,D,G
e) E,C,A
551. The deadline for the implementation of BASEL II for all the foreign and financial institutions is
a) December 2005
b) December 2007
c) December 2006
d) December 2004
552. The aim of Basel II is

a) To promote safety and soundness in the financial system by allocating capital in
organizations to reflect risk more accurately
b) To promote efficiency in the financial system by allocating capital in organizations efficiently to
minimize risk and maximize returns
c) To promote standardization in the financial system by allocating capital in organizations to
obtain optimal risk return profile
d) To establishing a more sophisticated framework for banks to measure risk and ensure
sufficient capital to cover losses from market and credit risk
553. How many countries so far have signed the new capital accord Basel II
a) 10
b) 92
c) 110
d) 176
e) 21
554. Basel capital accord was established in

a) 1998
b) 1978
c) 1988
d) 1992
556. Three pillars of the new capital accord, Basel II, are
a) Quantitative; Supervisory; General
b) Qualitative; Market Forces; Geographic
c) Quantitative; Operational; Supervisory
d) Quantitative; Qualitative; Market Forces
e) Qualitative; Mandatory; Quantitative
a) Maximum; overcapitalized financial institutions
b) Minimum; overcapitalized banks
c) Maximum; undercapitalized financial institutions
d) Minimum; undercapitalized banks
558. The “Qualitative” pillar of the Basel II encompasses

a) Capital management processes
b) Trading book changes
c) Disclosure requirements
d) Operational risk
e) Capital structure
559. Which of the following risks has been incorporated in the new framework for the first time?
a) Operational risk
b) Market risk
c) Interest risk
d) Exchange risk
e) Credit risk
560. Which of the following method can be utilized for the evaluation of operational risk?
a) Basic indicator approach
b) Internal ratings based approach
c) Advanced internal rating based approach
561. Under the “standardized approach” for credit risk assessment, bank
a) Allocates risk weights to each of the assets and off-balance sheet positions
b) Calculates sum of risk-weighted asset values
c) Risk weights depend on the broad category of borrower
d) Risk weights can be refined by reference to external ratings

a) Amount of bank’s capital expressed as percentage of the risk weighted credit exposure
b) Amount of bank’s capital expressed as percentage of the risk weighted credit exposure &
operational risk
c) Amount of bank’s capital expressed as percentage of the risk weighted credit exposure, &
market risk
d) Amount of bank’s capital expressed as percentage of the risk weighted credit exposure,
563. Operational risk results from inadequate

a) Internal processes
b) People
c) System or from External events
d) All of above
564. Under “standardized approach” for operational risk

a) Capital charge is calculated by multiplying a bank’s broad financial indicator by a ‘beta’
factor
b) Capital charge is calculated by multiplying a bank’s broad financial indicator by a ‘alpha’ factor
c) Capital charge is calculated by multiplying a bank’s broad financial indicator by a ‘gamma’
factor
d) Factor can applied for any bank regardless of its complexity or sophistication
565. The “internal rating based approach” differs from “standardized approach” for credit risk
assessment, in that
a) IRB results in lesser risk sensitivity
b) IRB uses diverse range of risk weights
c) IRB is simpler approach
d) IRB leads to lower capital charges
567. USA PATRIOT Act has been enacted in response to

a) Very high profile corporate scandals such as Enron
b) The terrorists’ attacks of September 11, 2001
c) Growing complexity, volatility, and interdependence among international financial markets
d) High tax payers defaults
568. In order to implement new capital adequacy framework by 2006, banks are planning to go for
different approaches for credit and operational risks, as specified in the framework, based on its
readiness in terms of systems and processes. What could be the challenges that would be faced by these
financial institutions?
a) Availability of historic data
b) System Integration
c) Re-engineer business process
d) Only Availability of historic data and System Integration
569. Which of the following benefits can accrue to the banks implementing the new capital adequacy
norms besides reduced capital adequacy requirements?
a) Better risk based pricing
b) Improved capital allocation
c) Increased corporate and emerging markets lending
d) Only Better risk based pricing and improved capital allocation
570. The migration to Check21 environment requires substantial investment in imaging, storage and
image exchange technology. Some of these investments can be avoided by outsourcing some of these
processes to third party ASP Solutions. Which of the following factors are likely to influence the decisions
of the banks to outsource or not?
a) Capacity planning
b) Security Analysis
c) ‘AS IS’ process analysis
571. Which of the following activities can invite the application of Anti Money Laundering guidelines?
a) Purchase or sale of same good
b) Multiple transfer of money
c) Depositing cash in big amounts
d) Only Purchase or sale of same good and Multiple transfer of money
e) Only Multiple transfers of money and Depositing cash in big amounts
572. Which of the following methods, parameters used, for measuring credit risk is more reliable while
processing credit application, assume that the calculation engine allocate equal weightage to different
factors:
a) Method A
b) Method B
c) Method C
d) Method D
e) Both Method A and Method D
573. Assume that you have a holding in IBM Stock worth $10 million. You have calculated the
standard deviation (SD) of change over one day in IBM is $ 0.20.
Therefore for the entire position, SD of change over 1 day = $200,000
The SD of change over 10 days = $200,000 * √(10) = $632,456
The 99% VaR over 10 days = 2.33 * 632,456 = $1,473,621
1. vaR is a measure of _________ (164)

2. Expand vaR Value at Risk
3. Best method for vaR _______________variance co-variance model
4. Rate of Inflation R=N-I
5. Check21
6. Liquidity
7. DC and DB differences
8. hedge,syndicate
9. Back to Back LC
10. Electronic
Some important questions:

There will be 1,2,3 marks questions
There will be 121 questions
1) Page 5
State T/F
Simple interest is calculated only on the beginning principal.
2) Page 6
INFLATION
There will be three questions based on this formula:-
The relationship between the R (real rate of interest), N (nominal rate of interest)
and I (rate of inflation) is as:
R= N-I.
3) Page 8
One question on future value
The formula for Future Value is:
FV = PV*(1 + i)n
4) Page 8
One question on Intra-year compounding
Question was like this if rate of interest is 4% and compounded quaterley for 4 years
then what is the value of r and t
5) Page 10
NPV of a project:
Increases with increase in future cash inflows for a given initial outlay
Decreases with increase in initial outlay for a given set of future cash inflows
Decreases with increase in required rate of return
6) Page 14
Read all the type of securities and their sub parts
7) Page 15
Types of secured bonds.
Mortgage Bonds are secured by real estate owned by the issuer
Equipment Trust Certificates are secured by equipment owned and used in the issuers business
Collateral Trust Bonds are secured by a portfolio of non-issuer securities. (usually U.S. Government
securities)
8) Page 16
Treasury Securities
Treasury bills issued for one year or less.
Treasury notes have a term of more than one year, but not more than 10 years
Treasury bonds greater than ten years
9) Page 16
What are zero coupon bonds?
Zeros generate no periodic interest payments but they are issued at a discount from face value.
10) Page 17
Commercial paper
An unsecured, short-term loan issued by a corporation, typically for financing accounts receivable
and inventories.
11) Page 19
What is meant by Preferred stock ?
Preference shares carry a stated dividend and they do not usually have voting rights
12) Page 20
American Depository Receipts (ADR)
The purpose of an ADR is to facilitate the domestic trading of a foreign stock.
13) Page 20
Warrants
Warrants are call options – variants of equity.
14) Page 20
What are derivatives?
A derivative is a product whose value is derived from the value of an underlying asset, index or
reference rate.
15) Page 21
Forward contract
A forward contract is an agreement to buy or sell an asset (of a specified quantity) at a certain
future time for a certain price. No cash is exchanged when the contract is entered into.
Futures contract
A futures contract is an agreement between two parties to buy or sell an asset at a certain time in
the future at a certain price. Index futures are all futures contracts where the underlying is the
stock index and helps a trader to take a view on the market as a whole.
16) page21
Two questions will come:
Hedging involves protecting an existing asset position from future adverse price movements. In
order to hedge a position, a market player needs to take an equal and opposite position in the
futures market to the one held in the cash market.
Arbitrage: An arbitrageur is basically risk averse. He enters into those contracts were he can
earn risk less profits. When markets are imperfect, buying in one market and simultaneously
selling in other market gives risk less profit. Arbitrageurs are always in the look out for such
imperfections.
17) Page 22
Which is not a option?
Call Options
Put Options
LEAPS
Swaps
Oil futures( Answer)
18) Page 21
What is call and put option?
19) Page 22
Currency Swap involves the exchange of principal and interest in one currency for the same in
another currency.
20) Page25
What are primary and secondary markets?
21) Page 26
Which is not a stock market?
The important stock exchanges are as follows:
New York Stock Exchange (NYSE)
National Association of Securities Dealers Automated Quotations (NASDAQ)
London Stock Exchange (LSE)
Bombay Stock Exchange (BSE),
National Stock Exchange of India (NSE)
One will be different…
22) Page 27
What is the name of central bank in America?
Federal Reserve
23) Page 27
What will haven if market rates go up?
Bond price will fall…
Ie Bond price is inversely proportional to market interest rates
24)Page 29
What is Money Market?
Money market is for short term financial instruments, usually a day to less than a year.
25) Page 29
What is a repo?
A repo is a contract in which the seller of securities, such as Treasury Bills, agrees to buy them back at a
specified time and price.
26) Page 30
regulator(s) and supervisor(s) forthe financial markets.
Thus India has Securities and Exchange Board of India (SEBI)
and the US has Securities and Exchange Commission (SEC).
27) Page 30
What do u mean by portfolio management system?
These systems allow the investment managers to choose the instruments to invest in, based on
the requirements or inputs such as amount to be invested, expected returns, duration (or tenure)
of investment, risk tolerance etc. and analysis of price and other data on the instruments and
issuers
Just read Chapter Financial Statements only 1 question can come…………
28) Page 49
What is not a function of central bank?
Read all the functions of central bank…
Answer- To appoint some governor
29) Page 50
There will two or three questions from CRR..
What do u mean by CRR (Cash Reserve Ratio).
There will be two numericals also…..
Same from book example?
30) Page 52
Read the services offering by banks
31) Page 54
What is Glass-Steagall Act ?
Glass-Steagall Act of 1933, created a Chinese wall between commercial banking and securities
businesses in US. That act was intended to address the perceived causes of bank failures during
the Great Depression of 1929.
32)Page 57
Read this page carefully .. three questions will come…
Checking Accounts
Quick, convenient and, frequent-access to the money.
Some banks pay interest while many do not.

Pays a higher rate of interest than a checking or savings account
MMDAs often require a higher minimum balance to start earning interest
Savings Account
Allows making withdrawals, but checks writing facility is not there.
Number of withdrawals or transfers one can make on the account each month is limited.
Time Deposits (Certificates of Deposit)

Guaranteed rate of interest for a term or length of time specified by the account holder.
The rate of interest is often higher than savings or any other account
Basic or No Frill Banking Accounts

Checking accounts, but with a limit on the number of checks one can write and the number of
deposits and withdrawals one can make
Interest is generally not paid.
33) Page 60
What are the ways of Money Transfer?
Cheques/Checks
o Bearer Checks
o Account Payee Checks
o Travelers’ Checks
o Bankers Checks
Debit Cards
Demand Drafts
Automated Clearing House (ACH)
Standing Instructions
Electronic Transfer
34)Page 61
What is EFT?
Electronic banking, also known as electronic fund transfer (EFT), uses computer and electronic
technology as a substitute for checks and other paper transactions. EFTs are initiated through
devices like ATM cards or codes that let one to access your account. Many financial institutions
use ATM or debit cards and Personal Identification Numbers (PINs) for this purpose.
35) Page 63
Read section Lost or Stolen ATM or Debit Cards

If unauthorized use occurs before reporting, the liability of the customer varies depending on the
delay in reporting the loss to the card issuer.
Within two business days – Liability limited to $50 for unauthorized use.
Between 2 - 60 days – Liability limited to $500 because of an unauthorized transfer.
If the loss is not reported within 60 days, the liability has no limits.
36) page 64
What is EBPP and its advantages?

ELECTRONIC BILLING PRESENTATION AND PAYMENT
37) page 65-66
Read thoroughly.. Some of the questions were

What is Fedwire?
Fedwire is an electronic transfer system developed and maintained by the Federal Reserve
System. The system connects Federal Reserve Banks and Branches, the Treasury and other
government agencies
Full form of CHIPS?

What is SWIFT?
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) runs a worldwide
network by which messages concerning financial transactions are exchanged among banks and
other financial institutions
What is latest version of SWIFT?

SWIFT 15022
38) Page 69
Read thoroughly..
Which is non secure loan?
Answer: Personal loan
Auto loans have Interest rate is lower as compared to Personal loans…
39) Page 70 VVimp
One question ie numerical atleast on :…

c. Limit (L) – max outstanding allowed
d. Margin (M) – percentage of limit that can be drawn
e. Asset value (AV) – value of underlying asset
f. Drawing Power (DP) - lower of L and (1-M)*AV
There will be atleast 2 questions on difference between Lease and Hire..

Lease
Two main types – operating, financial
The Financier owns the asset.
Depreciation is claimed by the financier.
Tax deduction can be claimed for the full value of the rental paid.
Financier takes care of maintenance, insurance etc.
Hire Purchase
The asset is owned by the financier.
Depreciation can be claimed by the borrower.
Tax deduction can be claimed only to the extent of the interest repayment.
40) Page 71
One question which is not a repayment kind?
Kinds of repayments
o EMI – same installment amount
o Fixed Principal – constant principal, decreasing interest amt
o Step-up – principal amount increases in steps
o Step-down – principal amount decreases in steps
o Balloon – notional amount initially, large last payment
o Bullet – interest payment initially, entire principal at one shot
o Random – schedule & amount of installments undecided
o Special products – combination of above
one will be extra given…
41)Page 72
What is Floating Rate of Interest?
The rate of interest is linked to one of the rates prevailing in the market, for example it can be
linked to PLR (Prime Lending Rate) or LIBOR (London Interbank Offered Rate).
42) Page 73
What is Collar and Spread?
Spread= current rate – base rate
Collar = cap-floor
43) Page 73
Charge Types
Pledge – gold, bank has possession
Hypothecation – vehicle, borrower has possession
Lien – against bank deposits
Assignment – insurance policies, rights get transferred to bank
Shares - periodic drawing power calculation
Mortgage – immovable property
44) Page 76
What are Freddie Mac, Ginnie Maes & Fannie Mae?
Federal National Mortgage Association (FNMA or Fannie Mae), Government National Mortgage
Association (GNMA or Ginnie Mae) and Federal Home Loan Mortgage Corporation (FHLMC or
Freddie Mac) are all "secondary market lenders".
45)Page 76-77
Read auto loans and student loans ? only one two question will come?
46) Page 82
What is the meaning of corporate lending?
Corporate Lending refers to various forms of loans extended by banks to corporate bodies like
proprietorship, partnership, private limited companies or public limited companies.
Why they are given by banks?

Corporate loans areprovided by banks for various purposes like new projects, capacity expansion or plant
modernization, daily cash flow requirements (working capital) etc.
Interest is usually paid on the disbursed amount of the loan.
47) page 83
Credit ratings
Rating levels might vary from AAA(highest), AA+, AA- to default ratings like D.
48) Page 84
What do u mean by Lines of Credit?
These are short term loans sanctioned for a fixed validity period, allowing the corporate to draw
the loan as and when required within the validity period and repay the loan after a certain period
(repayment period). Interest is either repayable in certain intervals or in one bullet installment at
the end of the repayment period
49) Page 85
What do u mean by Commercial Paper?

Commercial Paper (CPs as commonly known) is an instrument by which a corporate borrows
money from banks for short periods of time. A CP binds the corporate to make a payment equal
to the face value of the CP to the issuing bank on a specified due date. In this sense, a CP is like
a short term unsecured loan.
Read page 84-85 topics little bit….
50) page 86
What is the classification of loans:
Loans are classified and accounted for as follows:
Accrual—Loans
Held-for-sale.
Trading
51) page 87
Atleast two questions will come from credit derivatives
Credit derivatives are financial contracts that transfer credit risk from one party to another,
facilitating greater efficiency in the pricing and distribution of credit risk among market players.
In market parlance, the corporate bond investor in this example is the buyer of protection, the dealers
the protection seller, and the issuer of the corporate bond is called the reference entity
Uses of Credit Derivatives
52) Page 89
Definition of treasury services and its functions?
53) Page 90
What do u mean by:
Forward Rate Agreement (FRA) - A contract that determines the rate of interest,
or currency exchange rate, to be paid, or received, on an obligation beginning at a some
future start date. It is also referred to as Future Rate Agreement.
Interest Rate Swap (IRS) - A deal between banks or companies where borrowers switch
floating-rate loans for fixed rate loans in another country. These can be either the same
or different currencies. The motive may be the competitive advantage of one company to
have access to lower fixed rates than another company. The other company may be
competitively placed to have access to lower floating rates. A swap would be beneficial
to both. The swap is measured by its notional principal.
54) page 91
What do u mean by CMS?
Cash Management Services - CMS is a service provided by banks to its corporate clients for
a fee to reduce the float on collections and to ease the bulk payment transactions of the
client. The three elements of CMS are:
Receivables Management
Payables Management
Liquidity Managemet
55) Page 92
What are the causes of interest rate risk?
Repricing risk
Yield curve risk.
Basis risk
Optionality
56) Page 94
One numerical on:
INR/USD quote: 45.26/.36 (here, 0.01 is the smallest count, referred to as one ‘pip’)
EUR/USD quote: 1.2458/.2461 (here, 0.0001 is the smallest count, referred to as one ‘pip’)
While the derived cross currency rate would be:
INR/Euro quote: (45.26*1.2461)/ (45.36*1.2458) = 56.40/.51
Definitions of:
Nostro (Our/my account with you): Current account maintained by one bank with another
bank abroad in the latter’s home currency
Vostro (Their account with me/us): Current account maintained in the home currency by one
bank in the name of another bank based abroad
How many business days are required for spot deal?

Answer – two days
Read topic Spot and Forward Foreign Exchange Contracts
57) Page 95
Which are the interbanks:
Front Arena
Summit
Calapso
Wall Street Systems
58) Page 97
Read CMS functions..
59) Page 99
What do u mean by lock box service?
60) Page 99-100

What is pooling and netting ?
61) page 100

What is New Act - Check 21?
62)page 102
What is RGTS?
63)page 103
Read what is ACH?
64)page 104
What are risk factors choosing the mode of financing?
Costs
Time frame
Risk factors
Govt gurantee programs
Exporters funds
65)page 105
What is BOL?
Full form of BOL?
66) page 105

PAYMENT METHODS
Cash in advance
Letter of credit
Documentary collection
Open account or credit
Counter-trade or Barter
67) page 106

Advantages or disadvantages of LC (commercial letter of credit) in check box question
68)page 107
four parties are involved in any transaction using an LC:
1. Buyer or Applicant
2. Issuing bank
3. Beneficiary’s bank
4. Beneficiary or Seller
69)page 108
Read the steps..
70) page 110( positively come)

The standby LC is like a bank guarantee. It is not used as the primary payment method but as a
fail safe method or guarantee for long-term projects.
Back to Back LC allows a seller to use the LC received from his buyer as collateral with the bank
to open his own LC to buy inputs necessary to fill his buyer’s order.
71) page 110

DOCUMENTARY COLLECTION
Documentary collection carries the risk that the buyer will not or cannot pay for the goods upon
receipt of the draft and documents.
Drafts
A draft (sometimes called a bill of exchange)
Read sight draft and Time Drafts thoroughly..
72) page 111

OPEN ACCOUNT
This can be a very risky method for the seller, unless he has a long and favorable relationship with the
buyer or the buyer has an excellent credit rating.
73) page 113

Full form of BAFT?
74) page 114

two questions will at least come from the table:
INTERNATIONAL PAYMENT INSTRUMENTS COMPARISON CHART
75)Page 117
What are chip cards?
76) page 119

What are the key activities in credit card market? Pls learn which comes under which category..
77)page 120
What are issuing anf acquiring services?
78) page 121

A card Association
Do Not Provide These Functions
Security/Risk management( this function is provided, it is odd one out)
Issue cards
Set credit limits
Set card fees
Set interest rates
Solicit merchants
Set discount rates
79) page 122

Only read the functions little bit…
80) page 127

Private Banking covers banking services, including lending and investment management(true)
Investment Management and Advice

A client relationship Manager understands the client’s liquidity, capital and investment needs. He
strives to develop an integrated approach to manage client investments and capital markets
trading. Access to specialist advice and extensive research is a key feature of private banking.
Self-directed or non-discretionary: This is largely investment advisory in which the bank offers
investment recommendations based on the Client’s approval. The client may choose to ignore
this.
Discretionary: In this case, the bank’s portfolio managers make investment decisions on behalf
of the customer.
81) page 128-129

COMMON PRIVATE BANKING PRODUCTS
Personal Investment Companies (PICs)
Payable Through Account (PTA)
Hedge Funds
82) page 131-132

See the diagram and learn all the front office and back office functions? Two questions will atleast
come…
83)page 133
In achieving the above goals, an Investment Manager uses the following approaches/principles:
Asset Mix
International Diversification
Screens/Filters.
Capital preservation
Alternative Investments
84) page 135-136

Active vs passive approach
Top Down Approach vs Bottom Up Approach
85) page 137

There are three dimensions to portfolio execution:
Cost of execution
Trading speed
Portfolio Risk Management
86) page 139

Read mutual funds ..two questions will atleast come..
87) page 141

What do u mean by NAV?
Some of the leading companies that offer mutual funds are:

Fidelity Investments
Vangaurd
ING Direct
Mellon
88) page 142

Difference between SMA and Mutual Funds?
Advantages and disadvantages of SMA?
89) page 143
What is the name of pension funds?

401k,IRA
90) page 148

2 questions
SYNDICATE
The hub of the investment banking wheel, syndicate provides a vital link between salespeople
and corporate finance. Syndicate exists to facilitate the placing of securities in a public offering, a
knock-down drag-out affair between and among buyers of offerings and the investment banks
managing the process. In a corporate or municipal debt deal, syndicate also determines the
allocation of bonds.
91) page 148-149
Full form of IPO? What it is?
An initial public offering (IPO) is the process by which a private company transforms itself into a
public company.(this will come)
The IPO process consists of these three major phases:

Hiring the Managers
Due Diligence and Drafting
Marketing
92) page 149

What do u mean by THE CHINESE WALL?
93) page 150

UNDERWRITING
Underwriters earn 3 types of Underwriting Spread:
Manager's fee - The lead underwriter receives this fee on all securities sold.
Underwriter's Allowance is the total spread minus the Manager's fee. This fee is shared by
syndicate members based on the type of syndicate account.
Concession - It is typically the largest part of the spread and is paid to the broker/dealer that
Question: which is the largest part of spread?

Answer : concession
94) page 151

SECONDARY MARKET TRADING
there will three questions atleast come, read it carefully:
Examples: Stock Exchanges: NYSE, AMEX
NASDAQ is a good example of OTC market.
Another name for fourth market: Instinet
What is OTC?
95) page 153

Bid or ask rate:
An individual firm could act as a broker on one trade and a dealer on another. When acting as a
broker, the firm is taking customer orders and acting as their agent to buy or sell the security. For
this service, the broker charges a commission. A firm acting as a dealer is the actual buyer or
seller, taking the other side of a trade. The price at which market makers will buy or sell a
particular security is known as the Bid or Ask Price.
96) page 154

Order Types (Based on Volume)
Fill or Kill (FOK) – The order must be immediately filled in one trade or canceled completely.
All or None (AON) - The entire order must be filled or canceled completely, but unlike FOK, AON
can remain good till cancelled.
Immediate or Cancel (IOC) must immediately be filled for as much of the order as possible in
one trade, with the remainder being cancelled.
Market Not Held order – The floor broker has the discretion concerning time and price. A key
point is that Market Not Held orders are never on the Specialist's Book.
Question: diff between FOK and AON?
97)page 160
The important markets and the indices used are presented below:
US Diversified market Dow Jones Industrial Average (Dow)
US Technology NASDAQ 100
UK (London) Financial Times Stock Exchange Index (FTSE)
Germany (Frankfurt) DAX
France (Paris) CAC
Switzerland (Zurich) SMI
Japan (Tokyo) Nikkei
Hong Kong Hang Seng
Singapore Strait Times Index (STI)
98) page 164

See XL sheet sure three questione will come from risk
Credit risk is the possibility of loss as a result of default, such as when a customer defaults on a
Liquidity risk is the possibility that a firm will be unable to generate funds to meet contractual
Operational risk is the possibility of loss resulting from errors in instructing payments or settling
transactions.
Legal risk is the possibility of loss when a contract cannot be enforced -- for example, because
the customer had no authority to enter into the contract or the contract turns out to be
unenforceable in a bankruptcy.
Market risk is the possibility of loss over a given period of time related to uncertain movements in
99) page 164

MEASURING RISKS
The probability
monetary impact
100) page 164

What is var?
101) page 165

Numerical..
Example VaR Calculation
Assume that you have a holding in IBM Stock worth $10 million. You have calculated the
The 99% VaR over 10 days = 2.33 * 632,456 = $1,473,621
102) page 165
What is monto-carlo?
Ans: A simulation technique
103) page 166
Variance-Covariance method
it is the computationally fastest method known today.
Which is the best VAR method? Ans- Cant say
104) page 166

MANAGING RISKS
There are multiple strategies to manage risks. Some of the commonly followed ones are:
1. Diversification
2. Hedging or Insurance
3. Setting Risk Limits
4. Ignore the risk!
105) page 170

Read this page..
U should know what do u mean by core and global custodian?
What are custodian services?
106) page 172

Read in depth Asset/Liability Analysis
107) page 177

What is exchange?
An exchange is a regulated market place, where buyers and sellers come together to exchange
what they want.

Ques: What is NYSE?
Over the Counter Market

Over The Counter (OTC) market is different from the exchanges in the sense that there is no
single physical location
108) page 180-181

Two –three numerical will come same as it is as given in IBM shares
What is clearing? What is netting?
109) page 184-185

The primary employee benefits are
Defined Benefits
Defined Contribution
Health and Welfare
Defined contribution plans have gained popularity as employers have begun to ask their
employees to share responsibility for their retirement. The main purpose of a defined
contributionplan is to provide an investment vehicle for employees to accumulate retirement
income.( state true or false) true
diff between Defined Benefit Plan vs Defined Contribution Plan ?

110) page 186
The following plans are designated as defined contribution plans:
Profit Sharing Plans
Cash Or Deferred Arrangements Or 401(k) Plans
Stock Bonus Plans And Employee Stock Ownership Plans
Simplified employee pensions (SEP)
Tax Sheltered Annuities Or 403(b) Arrangements
111) page 187

What is there is peraby tax check?
SPO
SAR
Discrimination test
415 LIMIT
5500 REPORTING
1059 Reporting
Reporting and compliance
See the diagram..
112) page 188

What are the categories in Health and welfare?
Categories of health and welfare plans
Health Care
o Medical
o Prescription drug
o Behavioral health
o Dental
o Vision
o Long-term care
Disability Income
o Sick leave
o Short-term disability
o Long term disability
Survivor Benefits
o Term life
113) page 190 -191

Read USA PATRIOT ACT‡‡‡
Two questions will come from money laundering..
114) page 194

SARBANES OXLEY ACT
115) page 196

Pillar 1
“Quantitative” Minimum Capital Requirements
Pillar 2
“Qualitative” Supervisory Review
Pillar 3
“Market Forces” Market Discipline
115) page 198

Check 21
Some common questions:
1)Which is the best market ? New York
2) which is not a function of private bank?

Ans: to print notes
3) Reliance Industries Limited, India would like to raise money in NYSE for expanding its operations in
the domestic market (India). The securities issued would be
American Depository Receipt
Some numerical questions I will send later

All the best
a. True b. False
b. Less than offer
c. More than offer
e. Equal to offer

b. Central banks
c. Companies
the second year?
a. True b. False

b. Terms loans
c. Cash
e. Receivables

b. Lot of research

a. True b. False
a. Market risk
c. Credit risk
d. Operational risk
e. Liquidity risk
a. Current account
b. Nostro account
c. Vostro account
d. Forex account
e. Overseas account
a. Pre-closure
b. Assignment
c. Participation
a. Futures
b. Spot
c. Forward
d. Stock
e. Option


k. Bond prices increase
l. Bond prices decrease
m. Bond prices do not change
n. Economy goes into deflation
o. Interest rate never fall, they always go up.
k. -2%
l. 2%
m. -1.96%
n. Very high
o. 1-2%
end of the 3 years?
k. $1225
l. None of listed option
m. $1000
n. $1070
o. $1270

k. Letter of commercials
l. Letter of credit worthiness
m. Letter of credit
n. Letter of commerce
o. Letter of complaints

i. Small investor are protected, hence it is a low risk investment avenue.
j. Banks are in the best position to lend out money at competitive
k. Depositors are participant in primary and secondary markets.
l. All of listed options.

i. For the same return, B tolerates lesser risk than B.
j. For the same return, A tolerates higher rate of return.
k. For the same return, A tolerates lower rate of return.
l. For the same return, A takes higher risk.

k. Sweep facility
l. Structured lending to client
m. All
n. Short term credit facilities
o. Overdraft

k. None
l. To provide stability of money supply.
m. To serve certain social objectives.
n. To prevent failure of any financial institution.
o. To offset moral hazard incentive provided by deposit insurance and other
guarantees.

i. Monte- Carlo simulation.
j. All equal time with software.
k. Variance-Covariance matrix.
l. Combination of Monte- Carlo and Historical Simulation.

k. Payment to employers
l. None
m. Investment
n. Loan
o. Withdrawal
c. True b. False
can be refer.
k. Market risk
l. Interest rate risk
m. Commodity risk
n. Operational risk
o. Liquidity risk
a. (i) $1780 (ii) $3000

c. (i) $3000 (ii) $1780
d. None
K) $2500
L) $3000
M) $300
N) none
O) $250
A) Issuing Bank
C) Beneficiary Bank
D) Seller
E) Buyer
A) Liquidity risk
D) Credit risk
A) A very high
B) 2
C) -1
D) -2
E) 1
A) Currency risk
B) Attrition
C) Credit risk
D) All of the above

D) Research
B) is too high
C) Is about right
D) is too low

B) Acceptance
C) Negotiate
D) Purchase
E) Discount

B) Tiger Woods
C) Any of the above
confirmation?
B) Back to back LC
C) LC
D) Standby LC
the end of the day
K) IBM no exchange of shares ; MFST 90 shares to receive ; $1780 to pay out to the
exchange
L) None of these
M) IBM no exchange of shares ; MFST 90 share to receive ; $3000 to pay out to exchange
N) IBM 70 shares to given out ; MFST 90 shares to receive ; $3000 to pat out to exchange
O) IBM no exchange of shares ; MFST 90 share to receive ; $1780 receive from the
exchange

K) All of the listed option
L) Documents
M) Physical instrument like check and draft
N) Electronic data files
O) Cash

K) APR
L) None
M) IRR
N) NPV
O) Rate of interest applicable for the loan
K) learning services
L) ‘None
M) Merger and Acquisition
N) Valuation of firm
O) Underwriting and distribution of equity issues.
K) 500000
L) 100000
M) 400000
N) 600000
O) Can not be determined
gain this year
K) 200
L) 500
M) None
N) 300
O) 400

I) State regularity agency
J) SEC
K) Industry wide SRO
L) All of the listed option

a. Demat
b. Personal loan
c. None
d. Hire Purchase
e. Auto loans
K) Monetary policy
L) None
M) Money multiplier effect
N) Profit making tendency of a bank
O) Fiscal policy

K) Amount of bank capital expressed as % of the risk weighted credit exposure & market
risk.
L) Amount of bank capital expressed as % of the risk weighted credit exposure
M) Amount of bank capital expressed as % of the risk weighted credit exposure & operational
risk.
N) Amount of bank capital expressed as % of the risk weighted credit exposure
O) None

K) Calypso
L) Summit
M) Wall street system
N) Front arena
O) Flex cube

K) Managing large bond issues
L) Raising huge money from the bank
M) Managing large capital raising act
N) Managing conflict between investment banks.
O) IPO distribution.
K) Treasury bills have their interest paid in a lump sum at maturity
L) None
M) Treasury bills have greater interest risk than either treasury bond or treasury note
N) Treasury note has maturity dates up to 10 yrs
O) Treasury bonds have maturity dates up to 30 yrs
K) Account balance , Annuity

L) Annuity , Annuity
M) Account balance , Account balance
N) None
O) Annuity , Account balance
K) none
L) Syndicate
M) Allocation
N) Assignment
O) Secondary

K) issue card
L) Set credit limits
M) Set interest rates
N) Set card fees
O) Security/ Risk management
involved
K) Global custodian , domestic sub custodian , depository in foreign country and sometime
L) Depository in foreign country
M) Global Custodian
N) stock exchange in foreign country
O) domestic sub custodian

called
K) Cash projection
L) Investment manages universe
M) Asset allocation
N) Fund administration
O) Asset / liabilities analysis

K) Facilitating international transaction
L) Facilitating intra company transaction
M) Facilitating international transaction , corporate lending and settling up of new factories
N) Facilitating corporate lending
O) Facilitating setting up of new factories

I) a price at which a firm is ready to buy or sell
J) When bid is equal to offer
K) When the firm has a choice of deciding the securities to take
L) a price at which a firm is ready to buy or sell it also means when bid is equal to
offer
K) 6 month deposit of min balance of $1000
L) 3 month deposit of min balance of $4000
M) 12 month deposit of min balance of $1000
N) None
O) 6 month deposit of min balance of $2000

K) $3mn
L) $4.5 mn
M) $9mn
N) $4.4mn
O) $1mn
K) Loan of $2439
L) Loan of $1710
M) None
N) Create a reserve of $100
O) Create a reserve of $190
I) Mutual Fund
J) Mortgage Company
K) None
L) Stock Exchange
k. 45%
l. 10%
m. 25%
n. 50%
o. None
k. Trade Credit
l. Revolving Credit agreement
m. Agreement Irrevocable Credit
n. Line of Credit
o. Letter of Credit
66. Odd 1 out

k. Warren Buffet
l. George Soros
m. Bill Gates
n. Ben Graham
o. Peter Lynch
k. Investment manager Universe
l. Asset Allocation
m. Asset Liability Analysis
n. Fund Admin
o. Compliance Reporting
i. Current rate – Base Rate
j. Cap – Current Rate
k. Current Rate – Floor
l. Base Rate – Floor
k. Exporters Fund
l. All
m. Government Guarantee Program
n. Time Frame
o. Cost of Financing
c. True b. False
investors?
k. Stock Repurchase Program
l. Transition Management
m. Transition Management & Commission Recapture
n. Commission Recapture
o. None

k. the obligation to buy a futures contract
l. the obligation to sell a futures contract
m. the right & obligation to buy a futures contract
n. the right but not the obligation to buy a futures contract
o. the right but not the obligation to sell a futures contract

k. Call Option
l. Swaption
m. Leaps
n. Oil Futures
o. Put Options
e. True
f. False
i. Beneficiary Bank & Reimbursing Bank
j. Importer Exporter
k. Reimbursing Bank & Beneficiary Bank
l. Issuing Bank & Confirming Bank
i. DC plans fix the monthly contribution from the employee making his financial planning
easier.
j. DC plans are seen by employees as investment which to accumulate retirement income.
k. All
l. Employer increasing wants employees to share responsibility for retirement
took clients order
k. Salary
l. Manager fee
m. Wage
n. Concession
o. Underwriter

i. Listed market
j. Over the counter market
k. Third market
l. Fourth market

i. Market capitalization more than $200000
j. All
k. Net worth greater than $500000
l. Household income of max $50000 year.

i. The business focuses on small no. of high net worth individuals.
j. The business focuses on small and medium enterprises.
k. The business focuses on large no. of individuals.
l. The business focuses on large no. of corporation bodies.

k. Trades in securities
l. Quotes to its bets customer
m. Intends to buy
n. Intends to sell
o. Quotes when it does not want to trade.
c. True b. False
i. Stock market
j. Retail banking
k. Corporate banking
l. Customer lending
84. Which is true?
i. Financer owns the asset both in case of ‘Lease’ and ‘hire Purchase’.
j. Tax deduction cab be claimed fro the full value of the rental paid in case of lease
k. All
l. Depreciation in claimed by the financer in lease and not in case of hire purchase.
k. Global custodian,
l. None
m. Main custodian
n. Sub custodian
o. Secondary custodian

G) Bonds sell at a discount when Coupon Rate is less than Market Interest rate.
H) None
I) Bond is debt instrument giving issues.
K) Capitalized loan
L) True Discounted loan
M) Amortized loan
N) Demand loan
O) Discounted loan

K) Commercial bankers
L) Investment Bankers
M) None
N) Company Management
O) Company Management and Investment Bankers
K) Bankers Acceptance reduces lending capacity
L) Sight Drafts are negotiable instruments
M) Bankers Acceptance demands immediate payment.
N) None
O) Banks can raise funds by selling acceptance.
K) Investible assets
L) Location
M) Age
N) Net worth
O) Name
K) Spot, futures
L) Debt , Equity
M) Primary , Secondary
N) Money, Capital
O) Secondary, Primary
K) Investment Management
L) Asset Servicing
M) None
N) Trading
O) Investor Services.

I) All
J) Stands for Suspicious Activity Reports
K) Customer Identification Program
L) Requiring Businesses, which were only to report cash transactions involving more than
1.00,000?
G) Yes under RTGS
H) No
I) Yes under net-settlement system

K) 30 stocks
L) 20 stocks
M) 40 stocks
N) 10 stocks
O) 50 stocks

D) All

K) Interest rate and foreign exchange
L) Liquidity and credit
M) Credit and Interest rate
N) Credit and Foreign exchange
O) All
1. 1345.1
2. 1243.1
3. 1231.1
4. None
5. 1235
1. Trading
3. Investor service
4. None
5. Asset Servicing
2. Client Partner
3. Commercial Paper
5. Credit Provision
1. All of the above
3. High Leveraging
4. High Speculation
k. 2% discount is offered if payment is made within 15 days.
l. 15% discount is offered if payment is made within 2 days; the payment should
m. 30% discount is offered if payment is made before 15 of the month.
n. 15% discount is offered if payment is made between 2 & 30 days;
o. 15% discount is offered if payment is made within 30 days.
c. True b. False
answer)
k. Irrevocable LC
l. None
m. Red clause
n. Revolving LC
o. Evergreen clause

k. Plan sponsor
l. Plan administrator
m. Fund trustee
n. None
o. Government
k. Committed amount
l. Either disbursed or committed loan
m. Unused amount of loan
n. Disbursed amount
o. None
g. Yes
h. No
i. Yes, but if prices on the buy & sell side match.
k. None
l. $1600
m. $2200
n. $2400
o. $2000
k. Setting risk limits
l. Hedging
m. Diversification
n. Arbitrage
o. Insurance

k. Municipal bonds
l. Bonds of govt. sponsed enterprise
m. Corporate bonds
n. US treasuries
o. Shares
manager.
k. None
l. Plan administrator & trustee both have outsourced plan administration as well as fund
m. Any
n. Plan administrator gives investment instruction to investment manager while
o. Trustee gives investment instruction to investment manager, while plan administrator
application?
k. Issuer processor
l. Collection agency
m. Issuing bank
n. Authorization engine
o. Credit bureau.

k. Consolidated Price index
l. Consument popularity index
m. Consumer product index
n. Consumer price index
o. None
k. Credit scoring
l. Credit increase
m. Credit incrementation
n. Credit revision
o. Credit enhancement.
k) 4
l) 5
m) 3
n) 1
o) 2

i) Monte- Carlo
j) Historical
k) Variance-Covariance
l) Variance-Covariance and Monte- Carlo

i) Plc
j) Pte
k) Ltd
l) Inc

k) Govt. guarantee Program
l) Time frame
m) All
n) Cost of financing
o) Exporter fund.

k) Risk management
l) Front office
m) Back office
n) Trade
o) Board of director

k) Traders
l) Back office
m) Specialist
n) Front office
o) Mid office

i) Govt. regulation
j) Many traders
k) Full info
l) Cost effective trading

k) Custodian bank
l) Clearing bank
m) Clearing member
n) Trading member
o) Regulator
k) Primary
l) Secondary
m) Participant
n) OTC
o) Index

11. DJIA
12. Hangseng
13. EAFE index
15. S&P 500
_________ERISA
403b
401k
401b
403k
None
Participant
Government
Investment manager
Sponsor



derivatives
question/


Options:
12. All
e. None

e. All
f.
b. Interest earned
d. All
a. Issuing bank
b. Buyer
d. Seller
e. Beneficiary bank
a. LC
b. Direct debit
d. Counter trade
e. Cash in advance
a. Equally unlikely
b. Equally likely
c. ABC
d. XYZ
e. None
a. Pre-closure
b. Assignment
c. Participation

a. AAA,AA+,BBB,D
a. 118.8
b. Exactly 100
c. Exactly 200
d. Around 109
e. None

a. SEC
d. All
109. Odd man out:-

a. SEC
b. NYSE
c. NASDAQ
d. LSE
e. NSE
a. True
b. False

b. All
c. High speculation
d. High leveraging

b. Lot of research

a. All
d. Time frame

b. All

e. None
a. Line of credit
c. Letter of credit
e. Trade credit

a. Specialist
b. Traders
c. Back office
d. Front office
e. Mid office
a. Equities
a. E-trade
b. Charles Schwab
c. Sallie Mae
d. Federal reserve
e. a and b both
b. Style maps score
d. Alpha

e. None

d. None

a. 4th market
b. 3rd market
c. Listed market
d. 2nd market
e. OTC market
a. Discounted loans
c. Capitalized
d. Demand
e. Amortized


a. Unlisted market
c. Unlisted
d. Super
e. 2nd market

a. Sweep facility
c. All
e. Overdraft

a. Call
b. Put
c. Swaption
d. Oil futures
e. Leaps

a. Cash
b. Electronic data
c. Docs
e. All
c. Do not change
a. Bid
b. Indirect
c. Direct
d. Cross currency
e. Ask rate

f. Intends to buy
g. Intends to sell
i. None

d. Investment gain
a. Disbursed amount
b. Committed amount
c. Both
d. Either
e. None
136. Odd man out?
a. Equity
b. Stocks
c. Shares
e. Common stock
a. Sponsor
b. Custodian
d. Record keeper
e. Participant
as
a. Prime rate
b. Bond rate
c. Discount rate
d. Federal rate
BFS L0 LATEST DUMPS

c. Assignment
d. Participation
e. Preclosure
2. Tax and insurance Premiums Collected as part of Loan repayment are handled through which of
the following type of account?
a. DMAT account
c. Escrow account
d. Fixed despoait


b. Poat-Acquisition
d. During a IPO
e. A merger

a. Retail Banking
b. Private Banking
e. Consumer Lending

b. Bank One
d. UBS
e. Credit Suisse
7. Ram deposits $100 in XYZ Bank. Puja takes a loan of $ 100 from XYZ Bank. Which of the
c. ………………….
d. ……………………
e. ……………………
8. Which of the following represents the correct hierarchy of corporate rating (highest to lowest)
a. 0.
b. 0.
c. N
d. 0.
9.25 – 7.30 = 1.95

10. If a bank gets a deposit of $5000, assuming reserve requirement(CRR) of 10%, and it Circulate
through 2 more banks, leading to which of the following money multiper effect?
a. None
b. It crea……………………..
c. It crea……………………..
d. It crea……………………..
e. It crea……………………...
Solution:
CRR (Cash 10% Reserve Loaned Out
Reserve Ratio).
Deposit
1 5000 500 4500
2 4500 450 4050
3 4050 405 3645
1. If an investment pays interest at an annual rate of 5% per year, compounded twice a year
than the effective yield larger than 5.5%
a. True b. False

b. Less than offer
c. More than offer
e. Equal to offer
b. Central banks
c. Companies
4. In an account saving simple interest from the first year is reinvented at the beginning of the
second year?
a. True b. False

b. Terms loans
c. Cash
e. Receivables

b. Lot of research

a. True b. False
a. Market risk
c. Credit risk
d. Operational risk
e. Liquidity risk
9. Account maintained in the home currency by one bank is the name of another bank based
abroad is called as:
a. Current account
b. Nostro account
c. Vostro account
d. Forex account
e. Overseas account
a. Pre-closure
b. Assignment
c. Participation
a. Futures
b. Spot
c. Forward
d. Stock
e. Option

a. -2%
b. 2%
c. -1.96%
d. Very high
e. 1-2%
16. If you invest $1000 for 3 years at 7% compound interest, how much will you have at the end
of the 3 years?
a. $1225
c. $1000
d. $1070
e. $1270

c. Letter of credit



a. Sweep facility
c. All
e. Overdraft

a. None
e. To offset moral hazard incentive provided by deposit insurance and other guarantees.

b. None
c. Investment
d. Loan
e. Withdrawal
a. True b. False
26. If the corporate isn’t able to raise money from the market to pay off some loans the risk can
be refer.
a. Market risk
c. Commodity risk
d. Operational risk
e. Liquidity risk
How much did the broker pay out to the exchange in total in case of (i) Gross settlement system
(ii) Net Settlement System?
a. (i) $1780 (ii) $3000
c. (i) $3000 (ii) $1780
d. None
under a confirmed term LC with a maturity date of 60 days from the time of shipment. The
acceptance commission @ 1.5 % PA equals
A) $2500
B) $3000
C) $300
D) none
E) $250
A) Issuing Bank
C) Beneficiary Bank
D) Seller
E) Buyer
31. While providing security lending services to its clients which risk will a custodian have to
manage for its clients
A) Liquidity risk
D) Credit risk
A) A very high
B) 2
C) -1
D) -2
E) 1
A) Currency risk
B) Attrition
C) Credit risk
D) All of the above
D) Research
investor services firm for advice. The firm advices the mutual fund to invest 80% of the fund in
govt debt and 20% in equity. The allocation towards debt advised by the firm
B) is too high
C) Is about right
D) is too low
B) Acceptance
C) Negotiate
D) Purchase
E) Discount
B) Tiger Woods
C) Any of the above
confirmation?
B) Back to back LC
C) LC
D) Standby LC
Given that a net settlement system is being used, find out the net position of the broker at the
end of the day
A) IBM no exchange of shares ; MFST 90 shares to receive ; $1780 to pay out to the exchange
B) None of these
C) IBM no exchange of shares ; MFST 90 share to receive ; $3000 to pay out to exchange
D) IBM 70 shares to given out ; MFST 90 shares to receive ; $3000 to pat out to exchange
E) IBM no exchange of shares ; MFST 90 share to receive ; $1780 receive from the exchange

B) Documents
E) Cash

A) APR
B) None
C) IRR
D) NPV
B) ‘None

44. If total spread on underwriting is $500000 and manager fee is $100000. What is the amount
A) 500000
B) 100000
C) 400000
D) 600000
45. HPPL shares are currently selling for $25 each. You bought 200 shares one year ago at $24
each and received dividend payment as $1.50 per share what was total dollar capital gain this
year
A) 200
B) 500
C) None
D) 300
E) 400

B) SEC

a. Demat
b. Personal loan
c. None
d. Hire Purchase
e. Auto loans
48. I deposited 100 in a bank .Bank loan out 90 out of it to someone else, who then invest the
money in setting u a new factory. This process is called
A) Monetary policy
B) None
E) Fiscal policy

A) Amount of bank capital expressed as % of the risk weighted credit exposure & market risk.
C) Amount of bank capital expressed as % of the risk weighted credit exposure & operational risk.
D) Amount of bank capital expressed as % of the risk weighted credit exposure operational
risk & market risk.
E) None

A) Calypso
B) Summit
D) Front arena
E) Flex cube

B) None
C) Treasury bills have greater interest risk than either treasury bond or treasury note
D) None
54. What is the term used to indicate the arrangement of LARGE borrowing for a corporate by
a group as lenders
A) none
B) Syndicate
C) Allocation
D) Assignment
E) Secondary

A) issue card
D) Set card fees
involved
A) Global custodian , domestic sub custodian , depository in foreign country and sometime stock
exchange in foreign country
C) Global Custodian
57. An insurer undertakes an analysis of a portfolio of insurance policy by exploring scenarios

for the path followed by swap rates, policy surrender rates, mortgage prepayment rates for the
mortgage backed security in the portfolio, what is this process called
A) Cash projection
C) Asset allocation

C) Facilitating international transaction , corporate lending and settling up of new factories

D) a price at which a firm is ready to buy or sell it also means when bid is equal to offer
D) None

A) $3mn
B) $4.5 mn
C) $9mn
D) $4.4mn
E) $1mn
62. If a bank gets a deposit of $1000 assuming a CRR of 10% and that it circulates through 2
more banks, leading to the following money multiplier effect
A) Loan of $2439
B) Loan of $1710
C) None
63. Which among the following is an investment company that pools money from unit holders
and invest in a variety of security?
A) Mutual Fund
B) Mortgage Company
C) None
D) Stock Exchange
64. You purchased a stock for $40. 1 year later you received $2 as Dividend. You sold it at $48.
What is your return?
a. 45%
b. 10%
c. 25%
d. 50%
e. None
a. Trade Credit
b. Revolving Credit agreement
d. Line of Credit
e. Letter of Credit
66. Odd 1 out

a. Warren Buffet
b. George Soros
c. Bill Gates
d. Ben Graham
e. Peter Lynch
b. Asset Allocation
d. Fund Admin

a. Exporters Fund
b. All
d. Time Frame
70. The NYSE is a large financial market in which the initial issue receives the proceeds for the
Sale of securities.
a. True b. False
71. Which of the following trading services reduces the trading cost for institutional investors?
e. None


a. Call Option
b. Swaption
c. Leaps
d. Oil Futures
e. Put Options
a. True
b. False
they do not have active relationship. Options wrong
76. Which of the following according to you has resulted in defining contribution plans gaining
popularity over defined benefit plans
a. DC plans fix the monthly contribution from the employee making his financial planning easier.
b. DC plans are seen by employees as investment which to accumulate retirement income.
c. All
77. ________is typically largest part of spread and is paid to broker\dealer or that actually took
clients order
a. Salary
b. Manager fee
c. Wage
d. Concession
e. Underwriter

a. Listed market
c. Third market
d. Fourth market

b. All


c. Intends to buy
d. Intends to sell
a. True b. False

a. Stock market
b. Retail banking
d. Customer lending
84. Which is true?

b. Tax deduction cab be claimed fro the full value of the rental paid in case of lease
c. All
d. Depreciation in claimed by the financer in lease and not in case of hire purchase.
clients in France and Belgium and provides securities safe keeping services to these clients
through banks C & D respectively. Which best describes bank A?
b. None
c. Main custodian
d. Sub custodian
B) None
87. Which of the following type of loan requires the amount of interest that would be earned on
the loan to be paid upfront by the borrower?
A) Capitalized loan
C) Amortized loan
D) Demand loan
E) Discounted loan

C) None

D) None
B) Location
C) Age
D) Net worth
E) Name
A) Spot, futures
B) Debt , Equity
D) Money, Capital
92. Under what category can services like asset/liability analysis, asset allocation, cash
projection, compliance reporting, fund administration, investment Management universe etc.
provided by an institution can be classified?
B) Asset Servicing
C) None
D) Trading
A) All
D) Requiring Businesses, which were only to report cash transactions involving more than 1.00,000?

At the end of the day, the broker owes 1780 to the exchange while exchange owes him 90 shares
of MSFT. Is it possible?
A) Yes under RTGS
B) No

A) 30 stocks
B) 20 stocks
C) 40 stocks
D) 10 stocks
E) 50 stocks

C) basis for devising proper currency hedging strategy and opportunity for receiving payment in
advance of the due date.
D) All
E) All
98. Find the future value of $1200 invested at 5.25 % per annum payable annually after 6
months? Marks: 2
1. 1345.1
2. 1243.1
3. 1231.1
4. None
5. 1235
99. Investor services like brokerage, cash management and short term investments, commission
re-capture, foreign exchange transactions, transaction management etc. can be classified under
____ group of services. Marks: 1.
1. Trading
3. Investor service
4. None
5. Asset Servicing
2. Client Partner
3. Commercial Paper
5. Credit Provision
1. All of the above
3. High Leveraging
4. High Speculation
b. 15% discount is offered if payment is made within 2 days; the payment should however be
made in 30 days.
a. True b. False
105 What term is used to describe n LC that remains valid for years thereby eliminating the
cost of separate LC’s for each transaction with a regular client?(not sure bout the answer)
a. Irrevocable LC
b. None
c. Red clause
d. Revolving LC
e. Evergreen clause
a. Plan sponsor
c. Fund trustee
d. None
e. Government

a. Committed amount
d. Disbursed amount
e. None
108 In the exchange on a particular trading there is a buy market order for 100 CTSH shares
and two sell market orders for 50 and 40 CTSH shares each, can the buy order be matched
against the two sell orders.
a. Yes
b. No
a. None
b. $1600
c. $2200
d. $2400
e. $2000

b. Hedging
c. Diversification
d. Arbitrage
e. Insurance

a. Municipal bonds
c. Corporate bonds
d. US treasuries
e. Shares
administrator and the investment manager, and between Trustee and the investment manager.
a. None
b. Plan administrator & trustee both have outsourced plan administration as well as fund management
to investment manager
c. Any
d. Plan administrator gives investment instruction to investment manager while trustee
e. Trustee gives investment instruction to investment manager, while plan administrator appoints the
investment manager.
113 Which entity provides credit scores that are used by issuers to process card application?
a. Issuer processor
c. Issuing bank
e. Credit bureau.

e. None
115 A bank decides to sanction only 10% of the loan sought by a company. The company goes
and pledges extra assets with the bank and the bank then agree to sanction 50% of the loan
sought. The company has indulged in the process of
a. Credit scoring
b. Credit increase
d. Credit revision
a) 4
b) 5
c) 3
d) 1
e) 2

a) Monte- Carlo
b) Historical

a) Plc
b) Pte
c) Ltd
d) Inc
b) Time frame
c) All
e) Exporter fund.

a) Risk management
b) Front office
c) Back office
d) Trade

a) Traders
b) Back office
c) Specialist
d) Front office
e) Mid office

a) Govt. regulation
b) Many traders
c) Full info

a) Custodian bank
b) Clearing bank
c) Clearing member
d) Trading member
e) Regulator
124 Once syndicate has sold all other trades participant, sub participant and assignment are
considered trade in what market?
a) Primary
b) Secondary
c) Participant
d) OTC
e) Index

1. DJIA
2. Hangseng
3. EAFE index
5. S&P 500
_________ERISA
403b
401k
401b
403k
None
Participant
Government
Investment manager
Sponsor
derivatives
question/
Options:
4. All

e. None

e. All
f.
b. Interest earned
d. All
a. Issuing bank
b. Buyer
d. Seller
e. Beneficiary bank

a. LC
b. Direct debit
d. Counter trade
e. Cash in advance
a. Equally unlikely
b. Equally likely
c. ABC
d. XYZ
e. None

a. Pre-closure
b. Assignment
c. Participation
a. AAA,AA+,BBB,D
a. 118.8
b. Exactly 100
c. Exactly 200
d. Around 109
e. None

a. SEC
d. All
14. Odd man out:-

a. SEC
b. NYSE
c. NASDAQ
d. LSE
e. NSE
15. From investor stand point a debenture issued by excellent company will appear risky than share
of preferred stock issued by excellent company
a. True
b. False

b. All
c. High speculation
d. High leveraging

b. Lot of research

a. All
d. Time frame

b. All

e. None
21. Formal legal commitment to extend credit up to some maximum amount over a period of time is
a description of
a. Line of credit
c. Letter of credit
e. Trade credit

a. Specialist
b. Traders
c. Back office
d. Front office
e. Mid office
23. Which of these instruments is not included as part of asset servicing services and the category
“Pricing/ Holdings” Valuation which includes accurate pricing, rating etc.
a. Equities

a. E-trade
b. Charles Schwab
c. Sallie Mae
d. Federal reserve
e. a and b both
b. Style maps score
d. Alpha
e. None

d. None

a. 4th market
b. 3rd market
c. Listed market
d. 2nd market
e. OTC market
29. Which of the following loan requires the amount of interest that would be earned on the loan to
be paid upfront by borrower:-
a. Discounted loans
c. Capitalized
d. Demand
e. Amortized


a. Unlisted market
c. Unlisted
d. Super
e. 2nd market

a. Sweep facility
c. All
e. Overdraft

a. Call
b. Put
c. Swaption
d. Oil futures
e. Leaps

a. Cash
b. Electronic data
c. Docs
e. All
c. Do not change
a. Bid
b. Indirect
c. Direct
d. Cross currency
e. Ask rate

f. Intends to buy
g. Intends to sell
i. None
d. Investment gain
a. Disbursed amount
b. Committed amount
c. Both
d. Either
e. None
41. Odd man out?
a. Equity
b. Stocks
c. Shares
e. Common stock
a. Sponsor
b. Custodian
d. Record keeper
e. Participant
45. When bank goes to the fed to borrow funds then the interest rate charged by fed is known as
a. Prime rate
b. Bond rate
c. Discount rate
d. Federal rate
L-0 MODEL BANK
45%
5%
50%
40%
Market Risk
Credit Risk
Liquidity Risk
Legal Risk
None of Above
Liquidity Risk
Market Risk
Credit Risk
Country Risk
Operational Risk

At a Macro level
At country level
Cannot Say
Analytical Methods
0.008
0.036
0.053
0.017
-0.029


Cash Reserve Ratio
Cash Refund Ratio
Cash Reserve Risk


Channelize Savings

Federal Reserve
loan of $244
loan of $171
loan is equal to
$1,500
$1,200
$1,600
$900

Base rate – Floor


Merchant
Payment gateway
Associations
Payment processor
Acquiring banks
Payment gateway
Issuing bank

Checking Accounts
Demat Account
Time Deposits

Low fee
EFTA stands for

reasons except to
make a profit
promote competition
foster innovation
CHIPS stand for



Services Provider
Back office
Front Office
Middle Office


Retirement planning
Risk management
Tax planning

Overdrafts
Corporate bonds
Advances
Credit line
Allocation
Syndicate
Secondary
Assignment

Total return swaps.
Currency swap.

Equity Loans
Personal Loans
Car Loan

Issuing Bank
Reimbursement Bank
Seller
Buyer
Red Clause

Open Account
Letter of Credit
Counter trade
Cash in Advance
BOL stands for

Bill of Letter
Bank of London
Bill of Leasing
Bill of Lading
BAFT stands for

Bill of Lading is
Letter of Credit

Interest rate swap
Swaption
Pooling
Netting
Swapping

EFT
Cheque
Lockbox

Diversification
Screens and Filters

Road-show
Advisor Contest
Beauty Contest
Syndicate in Investment banking refers to all except


They are synonyms

Primary Market
Secondary Market
OTC Market
Fourth Market
Federal Reserve
FDIC
DTCC
ASA
Difference
Spread
Profit
Quote

NASDAQ
OTC
NYSE
Instinet

NASDAQ
OTC
NYSE
Instinet

Record Keeping
Reporting services
provided by _________________
Custodian
Broker
Investment bank
Fund Administrator
Dealer


Regulations
Criminal sanctions
Forfeiture

Doc 2
1) The central bank in US is called______
Federal Reserve

Beginning principal only


e. Rakesh Jhunjunwala
f. Sachin Tendulekar
g. Warren Buffet
h. George Soros
e Peter Ujnah
post dated cheques

Disbursed amount

f. Notes
g. Stocks
h. Debentures
i. T-Bills
j. Minus
Increase
Back office

Private banking
T-note
Commercial Paper
CTS-L0

142. What is CP?
a. Commercial Paper
143. What is CPI ?

a. Consumer Product index
b. Consumer Price index
a. SEC
b. SEBI
d. All OF the ABOVE
145. The Bid price is
a. more than offer price
b. less than offer price
c. equal to offer price
6. ATM is
human teller.
a. SEC
b. BAFT
8. Banker acceptances are ________________ credit investment created by

___________ and used for financing imports, exports and domestic shipping
d. Long term; financial firms
e. Long term; non-financial firms
f. Short term; non-financial firms
d. Short term; financial firms
e. Medium terms; banks
9. USA Patriot act was passed in

a. 2000.
b. 2001
c. 2002
d. 2003

a. 60 %
b. 75 %
c. 95 %
d. 50 %

a. 15022
b. 5022
c. 196
d.2000
e. Call
f. Put
g. Swaption
h. Oil futures
i. Leaps
e. Issuer Bank
f. Buyer
g. Seller
h. Beneficiary Bank

b. Quote at which one wants to buy or sell
15. Bank is
e. Unregulated and unsafe
f. Regulated and unsafe
g. Unregulated and safe
h. Regulated and safe

b. For Borrower and depositor
e. Lending rate less than deposit rate.
f. Lending rate greater than deposit rate.
g. Lending rate equal to deposit rate.
h. All of the above

f. An asset with standard deviation 5
g. An asset with standard deviation 4
h. An asset with standard deviation 3
i. An asset with standard deviation 2
j. An asset with standard deviation 1

e. Higher Liquidity higher risk
f. Leverage
g. Speculation
h. Risk aversion
20. What is GDR?

21. ACH
f. Listed Market
g. Primary Market
h. Secondary Market
i. Third Market
j. Fourth Market
24. Stock price on Day 1 and 2 are 102 and 100. How much is the return earned
e. Very high
f. –1.96 %
g. 2%
h. –2%
25. X share is selling at $25. Y had bought 200 shares at $24 and earned a dividend of 1.5% per
share. How much returned he has earned?
f. $500
g. $400
h. $300
i. $200
j. $100

e. NASDAQ
f. NYSE
g. LSE
h. SEC

a. Listed Market
b. Second market
c. Third Market
d. Fourth Market

d. Large investors
e. Small and medium investors
f. Financial Institutions
29. Who among the following is supposedly a private banking client?

d. Manager of a manufacturing plant
e. A cricketer who has not played a single international/Domestic match
f. Tiger Woods

a. US
b. India
c. Pakistan
d. Bangladesh
31. Sweep transfers

c. Excess money from one account into another
d. Money from one persons account into another.
CTS-L0
a. True b. False

b. Less than offer
c. More than offer
e. Equal to offer

b. Central banks
c. Companies
the second year?
a. True b. False

b. Terms loans
c. Cash
e. Receivables

b. Lot of research

a. True b. False
a. Market risk
c. Credit risk
d. Operational risk
e. Liquidity risk
a. Current account
b. Nostro account
c. Vostro account
d. Forex account
e. Overseas account
a. Pre-closure
b. Assignment
c. Participation
51. The process of transferring obligation from one party to another is called Credit
Swap/Credit Derivatives
a. Futures
b. Spot
c. Forward
d. Stock
e. Option


p. Bond prices increase
q. Bond prices decrease
r. Bond prices do not change
s. Economy goes into deflation
t. Interest rate never fall, they always go up.
p. -2%
q. 2%
r. -1.96%
s. Very high
t. 1-2%
end of the 3 years?
p. $1225
q. None of listed option
r. $1000
s. $1070
t. $1270

p. Letter of commercials
q. Letter of credit worthiness
r. Letter of credit-
s. Letter of commerce
t. Letter of complaints

m. Small investor are protected, hence it is a low risk investment avenue.
n. Banks are in the best position to lend out money at competitive
o. Depositors are participant in primary and secondary markets.
p. All of listed options.

m. For the same return, B tolerates lesser risk than B.
n. For the same return, A tolerates higher rate of return.
o. For the same return, A tolerates lower rate of return.
p. For the same return, A takes higher risk.

p. Sweep facility
q. Structured lending to client
r. All
s. Short term credit facilities
t. Overdraft

p. None
q. To provide stability of money supply.
r. To serve certain social objectives.
s. To prevent failure of any financial institution.
t. To offset moral hazard incentive provided by deposit insurance and other
guarantees.

m. Monte- Carlo simulation.
n. All equal time with software.
o. Variance-Covariance matrix.
p. Combination of Monte- Carlo and Historical Simulation.

p. Payment to employers
q. None
r. Investment
s. Loan
t. Withdrawal
d. True b. False
can be refer.
p. Market risk
q. Interest rate risk
r. Commodity risk
s. Operational risk
t. Liquidity risk
a. (i) $1780 (ii) $3000

c. (i) $3000 (ii) $1780
d. None
P) $2500
Q) $3000
R) $300
S) none
T) $250
A) Issuing Bank
C) Beneficiary Bank
D) Seller
E) Buyer
A) Liquidity risk
D) Credit risk
A) A very high
B) 2
C) -1
D) -2
E) -1.96%
A) Currency risk
B) Attrition
C) Credit risk
D) All of the above
D) Research
B) is too high
C) Is about right
D) is too low

B) Acceptance
C) Negotiate
D) Purchase
E) Discount

B) Tiger Woods
C) Any of the above
confirmation?
B) Back to back LC
C) LC
D) Standby LC
the end of the day
P) IBM no exchange of shares ; MFST 90 shares to receive ; $1780 to pay out to the
exchange
Q) 6None of these
R) IBM no exchange of shares ; MFST 90 share to receive ; $3000 to pay out to exchange
S) IBM 70 shares to given out ; MFST 90 shares to receive ; $3000 to pat out to exchange
T) IBM no exchange of shares ; MFST 90 share to receive ; $1780 receive from the
exchange

P) All of the listed option
Q) Documents
R) Physical instrument like check and draft
S) Electronic data files
T) Cash

P) APR
Q) None
R) IRR
S) NPV
T) Rate of interest applicable for the loan
P) learning services
Q) ‘None
R) Merger and Acquisition
S) Valuation of firm
T) Underwriting and distribution of equity issues.
P) 500000
Q) 100000
R) 400000
S) 600000
T) Can not be determined
gain this year
P) 200
Q) 500
R) None
S) 300
T) 400

M) State regularity agency
N) SEC
O) Industry wide SRO
P) All of the listed option

a. Demat
b. Personal loan
c. None
d. Hire Purchase
e. Auto loans
P) Monetary policy
Q) None
R) Money multiplier effect
S) Profit making tendency of a bank
T) Fiscal policy

P) Amount of bank capital expressed as % of the risk weighted credit exposure & market
risk.
Q) Amount of bank capital expressed as % of the risk weighted credit exposure
R) Amount of bank capital expressed as % of the risk weighted credit exposure & operational
risk.
S) Amount of bank capital expressed as % of the risk weighted credit exposure
T) None

P) Calypso
Q) Summit
R) Wall street system
S) Front arena
T) Flex cube

P) Managing large bond issues
Q) Raising huge money from the bank
R) Managing large capital raising act
S) Managing conflict between investment banks.
T) IPO distribution.
P) Treasury bills have their interest paid in a lump sum at maturity
Q) None
R) Treasury bills have greater interest risk than either treasury bond or treasury
note
S) Treasury note has maturity dates up to 10 yrs
T) Treasury bonds have maturity dates up to 30 yrs
P) Account balance , Annuity

Q) Annuity , Annuity
R) Account balance , Account balance
S) None
T) Annuity , Account balance
P) none
Q) Syndicate
R) Allocation
S) Assignment
T) Secondary

P) issue card
Q) Set credit limits
R) Set interest rates
S) Set card fees
T) Security/ Risk management
involved
P) Global custodian , domestic sub custodian , depository in foreign country and sometime
Q) Depository in foreign country
R) Global Custodian
S) stock exchange in foreign country
T) domestic sub custodian

called
P) Cash projection
Q) Investment manages universe
R) Asset allocation
S) Fund administration
T) Asset / liabilities analysis

P) Facilitating international transaction
Q) Facilitating intra company transaction
R) Facilitating international transaction , corporate lending and settling up of new factories
S) Facilitating corporate lending
T) Facilitating setting up of new factories

M) a price at which a firm is ready to buy or sell
N) When bid is equal to offer
O) When the firm has a choice of deciding the securities to take
P) a price at which a firm is ready to buy or sell it also means when bid is equal to
offer
P) 6 month deposit of min balance of $1000
Q) 3 month deposit of min balance of $4000
R) 12 month deposit of min balance of $1000
S) None
T) 6 month deposit of min balance of $2000
P) $3mn
Q) $4.5 mn
R) $9mn
S) $4.4mn
T) $1mn
P) Loan of $2439
Q) Loan of $1710
R) None
S) Create a reserve of $100
T) Create a reserve of $190
M) Mutual Fund
N) Mortgage Company
O) None
P) Stock Exchange
p. 45%
q. 10%
r. 25%
s. 50%
t. None
p. Trade Credit
q. Revolving Credit
r. Agreement Irrevocable Credit
s. Line of Credit
t. Letter of Credit
66. Odd 1 out

p. Warren Buffet
q. George Soros
r. Bill Gates
s. Ben Graham
t. Peter Lynch
p. Investment manager Universe
q. Asset Allocation
r. Asset Liability Analysis
s. Fund Admin
t. Compliance Reporting
m. Current rate – Base Rate
n. Cap – Current Rate
o. Current Rate – Floor
p. Base Rate – Floor
p. Exporters Fund
q. All
r. Government Guarantee Program
s. Time Frame
t. Cost of Financing
d. True b. False
investors?
p. Stock Repurchase Program
q. Transition Management
r. Transition Management & Commission Recapture
s. Commission Recapture
t. None

p. the obligation to buy a futures contract
q. the obligation to sell a futures contract
r. the right & obligation to buy a futures contract
s. the right but not the obligation to buy a futures contract
t. the right but not the obligation to sell a futures contract

p. Call Option
q. Swaption
r. Leaps
s. Oil Futures
t. Put Options
g. True
h. False
m. Beneficiary Bank & Reimbursing Bank
n. Importer Exporter
o. Reimbursing Bank & Beneficiary Bank
p. Issuing Bank & Confirming Bank
m. DC plans fix the monthly contribution from the employee making his financial planning
easier.
n. DC plans are seen by employees as investment which to accumulate retirement income.
o. All
p. Employer increasing wants employees to share responsibility for retirement
took clients order
p. Salary
q. Manager fee
r. Wage
s. Concession
t. Underwriter

m. Listed market
n. Over the counter market
o. Third market
p. Fourth market

m. Market capitalization more than $200000
n. All
o. Net worth greater than $500000
p. Household income of max $50000 year.

m. The business focuses on small no. of high net worth individuals.
n. The business focuses on small and medium enterprises.
o. The business focuses on large no. of individuals.
p. The business focuses on large no. of corporation bodies.
p. Trades in securities
q. Quotes to its bets customer
r. Intends to buy
s. Intends to sell
t. Quotes when it does not want to trade.
d. True b. False
m. Stock market
n. Retail banking
o. Corporate banking
p. Customer lending
84. Which is true?
m. Financer owns the asset both in case of ‘Lease’ and ‘hire Purchase’.
n. Tax deduction cab be claimed fro the full value of the rental paid in case of lease
o. All
p. Depreciation in claimed by the financer in lease and not in case of hire purchase.
p. Global custodian,
q. None
r. Main custodian
s. Sub custodian
t. Secondary custodian

J) Bonds sell at a discount when Coupon Rate is less than Market Interest rate.
K) None
L) Bond is debt instrument giving issues.
P) Capitalized loan
Q) True Discounted loan
R) Amortized loan
S) Demand loan
T) Discounted loan

P) Commercial bankers
Q) Investment Bankers
R) None
S) Company Management
T) Company Management and Investment Bankers

P) Bankers Acceptance reduces lending capacity
Q) Sight Drafts are negotiable instruments
R) Bankers Acceptance demands immediate payment.
S) None
T) Banks can raise funds by selling acceptance.
P) Investible assets
Q) Location
R) Age
S) Net worth
T) Name
P) Spot, futures
Q) Debt , Equity
R) Primary , Secondary
S) Money, Capital
T) Secondary, Primary
P) Investment Management
Q) Asset Servicing
R) None
S) Trading
T) Investor Services.

M) All
N) Stands for Suspicious Activity Reports
O) Customer Identification Program
P) Requiring Businesses, which were only to report cash transactions involving more than
1.00,000?
J) Yes under RTGS
K) No
L) Yes under net-settlement system

P) 30 stocks
Q) 20 stocks
R) 40 stocks
S) 10 stocks
T) 50 stocks

D) All

P) Interest rate and foreign exchange
Q) Liquidity and credit
R) Credit and Interest rate
S) Credit and Foreign exchange
T) All
1. 1345.1
2. 1243.1
3. 1231.1
4. None
5. 1235
1. Trading
3. Investor service
4. None
5. Asset Servicing

2. Client Partner
3. Commercial Paper
5. Credit Provision
1. All of the above
3. High Leveraging
4. High Speculation
p. 2% discount is offered if payment is made within 15 days.
q. 15% discount is offered if payment is made within 2 days; the payment should
r. 30% discount is offered if payment is made before 15 of the month.
s. 15% discount is offered if payment is made between 2 & 30 days;
t. 15% discount is offered if payment is made within 30 days.
d. True b. False
answer)
p. Irrevocable LC
q. None
r. Red clause
s. Revolving LC
t. Evergreen clause
106 .Who appoints investment manager to manage a benefit plan?

p. Plan sponsor
q. Plan administrator
r. Fund trustee
s. None
t. Government

p. Committed amount
q. Either disbursed or committed loan
r. Unused amount of loan
s. Disbursed amount
t. None
j. Yes
k. No
l. Yes, but if prices on the buy & sell side match.
p. None
q. $1600
r. $2200
s. $2400
t. $2000
p. Setting risk limits
q. Hedging
r. Diversification
s. Arbitrage
t. Insurance

p. Municipal bonds
q. Bonds of govt. sponsed enterprise
r. Corporate bonds
s. US treasuries
t. Shares
manager.
p. None
q. Plan administrator & trustee both have outsourced plan administration as well as fund
r. Any
s. Plan administrator gives investment instruction to investment manager while
t. Trustee gives investment instruction to investment manager, while plan administrator
application?
p. Issuer processor
q. Collection agency
r. Issuing bank
s. Authorization engine
t. Credit bureau.

p. Consolidated Price index
q. Consument popularity index
r. Consumer product index
s. Consumer price index
t. None
p. Credit scoring
q. Credit increase
r. Credit incrementation
s. Credit revision
t. Credit enhancement.
p) 4
q) 5
r) 3
s) 1
t) 2

m) Monte- Carlo
n) Historical
o) Variance-Covariance
p) Variance-Covariance and Monte- Carlo

m) Plc
n) Pte
o) Ltd
p) Inc
p) Govt. guarantee Program
q) Time frame
r) All
s) Cost of financing
t) Exporter fund.

p) Risk management
q) Front office
r) Back office
s) Trade
t) Board of director

p) Traders
q) Back office
r) Specialist
s) Front office
t) Mid office

m) Govt. regulation
n) Many traders
o) Full info
p) Cost effective trading

p) Custodian bank
q) Clearing bank
r) Clearing member
s) Trading member
t) Regulator
p) Primary
q) Secondary
r) Participant
s) OTC
t) Index

16. DJIA –Price weighted
17. Hangseng market cap
18. EAFE index – market cap
19. NASDAQ composite index market cap
20. S&P 500 market cap
_________ERISA
403b
401k
401b
403k
None
Participant
Government
Investment manager
Sponsor



derivatives
question/


Options:
16. All
e. None

e. All
f.
b. Interest earned
d. All
a. Issuing bank
b. Buyer
d. Seller
e. Beneficiary bank
a. LC
b. Direct debit
d. Counter trade
e. Cash in advance
a. Equally unlikely
b. Equally likely
c. ABC
d. XYZ
e. None

a. Pre-closure
b. Assignment
c. Participation

a. AAA,AA+,BBB,D
a. 118.8
b. Exactly 100
c. Exactly 200
d. Around 109
e. None

a. SEC
d. All
159. Odd man out:-

a. SEC
b. NYSE
c. NASDAQ
d. LSE
e. NSE
a. True
b. False

b. All
c. High speculation
d. High leveraging

b. Lot of research

a. All
d. Time frame

b. All

e. None
a. Line of credit
c. Letter of credit
e. Trade credit

a. Specialist
b. Traders
c. Back office
d. Front office
e. Mid office
a. Equities
a. E-trade
b. Charles Schwab
c. Sallie Mae
d. Federal reserve
e. a and b both
b. Style maps score
d. Alpha

e. None

d. None

a. 4th market
b. 3rd market
c. Listed market
d. 2nd market
e. OTC market
a. Discounted loans
b. True discount
c. Capitalized
d. Demand
e. Amortized

a. Unlisted market
c. Unlisted
d. Super
e. 2nd market

a. Sweep facility
c. All
e. Overdraft

a. Call
b. Put
c. Swaption
d. Oil futures
e. Leaps

a. Cash
b. Electronic data
c. Docs
e. All
c. Do not change
a. Bid
b. Indirect
c. Direct
d. Cross currency
e. Ask rate

f. Intends to buy
g. Intends to sell
i. None

d. Investment gain
a. Disbursed amount
b. Committed amount
c. Both
d. Either
e. None
186. Odd man out?
a. Equity
b. Stocks
c. Shares
e. Common stock
a. Sponsor
b. Custodian
d. Record keeper
e. Participant
as
a. Prime rate
b. Bond rate
c. Discount rate
d. Federal rate
CTS-L0
e. None
68. ___ is the largest part of spread and is paid to broker/dealer that actually took the clients
order
a. Salary
b. Wage
c. Manager’s fee
d. Concession
e. Underwriter’s allowance
69. What is the term used to indicate the arrangement of large borrowing for a corporate by a
group of lenders?
a. Syndicate
b. Secondary
c. Assignment
d. None
e. Allocation
70. If a price of share changes from 65 to 60 this can be attributed to:
a. Market risk
c. Credit risk
d. Operational risk
e. Liquidity risk
e. All
b. 12 months -> $1000
c. Cannot determine
d. 6 months -> $2000
e. 6 months -> $1000
b. Interest earned
d. All
a. Issuing bank
b. Buyer
d. Seller
e. Beneficiary bank
a. LC
b. Direct debit
d. Counter trade
e. Cash in advance
a. Equally unlikely
b. Equally likely
c. ABC
d. XYZ
e. None
78. Which of the following can be done on LC?
a. Negotiate
b. Purchase
c. Acceptance
d. Discount
e. All
a. Pre-closure
b. Assignment
c. Participation
a. AAA,AA+,BBB,D
81. Purchase as $40. A year later got dividend $2. Sold at $48. What is holding period return?
a. 10%
b. 25%
c. 45%
d. 50%
e. None
a. 118.8
b. Exactly 100
c. Exactly 200
d. Around 109
e. None
a. SEC
d. All
84. Odd man out:-
a. SEC
b. NYSE
c. NASDAQ
d. LSE
e. NSE
a. True
b. False
b. All
c. High speculation
d. High leveraging
b. Lot of research
a. All
d. Time frame
b. All
e. None
a. Line of credit
c. Letter of credit
e. Trade credit
92. Odd man out
a. None
b. Auto loans
c. Demat
d. Hire purchase
e. Personal loan
93. A choice quote is a price
a. At which a firm is ready to buy or sell
b. Where firm has a choice of deciding the security to take
c. A option and it also means when bid is equal to offer
d. When bid=offer
94. A bank gets a deposit of $1000 assuming CRR=10% and that is circulates through 2 more
banks, leading to following money multiplier effect:-
a. Create a reserve of $100
b. Create a reserve of $190
c. None
d. Loans of $1710
e. Loans of $2439
a. Specialist
b. Traders
c. Back office
d. Front office
e. Mid office
a. Equities
a. E-trade
b. Charles Schwab
c. Sallie Mae
d. Federal reserve
e. a and b both
b. Style maps score
d. Alpha
e. None
d. None
a. 4th market
b. 3rd market
c. Listed market
d. 2nd market
e. OTC market
a. Discounted loans
b. True discount
c. Capitalized
d. Demand
e. Amortized
a. Unlisted market
c. Unlisted
d. Super
e. 2nd market
a. Sweep facility
c. All
e. Overdraft
107. Total spread of underwriting = 500000 and manager fee = 100000 and distributed in
syndicate=?
a. 600,000
b. 400,000
c. 100000
d. 500000
e. Cannot determine
108. Price of security on day 1&2 is $102 and $100 respectively. The return is
a. -2%
b. 2%
c. -1.96%
d. Very high
e. 1-2%
a. Call
b. Put
c. Swaption
d. Oil futures
e. Leaps
110. question on top 10 US bank – read page number 52
a. Cash
b. Electronic data
c. Docs
e. All
c. Do not change
a. Bid
b. Indirect
c. Direct
d. Cross currency
e. Ask rate
114. Offer price is the price at which the firm
a. Intends to buy
b. Intends to sell
c. Trades in securities
d. None
d. Investment gain
a. Disbursed amount
b. Committed amount
c. Both
d. Either
e. None
117. Odd man out?
a. Equity
b. Stocks
c. Shares
e. Common stock
a. Sponsor
b. Custodian
d. Record keeper
e. Participant
as
a. Prime rate
b. Bond rate
c. Discount rate
d. Federal rate
122. CP full form in corporate lending …

a. commercial paper

a. 2001
124. Risk averse
125. full form of EMI. Ans)
Equated Monthly Installment.
a. 2%
a. -1.96%
128. if share price of cognizant changes fronm $65 to $60 ,risk is
a .market risk
a. RTGS
68. how much you will get at end of 3 years if you deposits $1000 at 7% compound interest
a. $1225
69. you bought 200 shares at $24. now share price is $ 25 and you got dividend of $1.50
your total return is
a. $500
70. if u buy share at price$ 40 and now share price is $ 48 and u got dividend of $2 per
share ur total return in % is
a. 25%
a. always secured
73. fastest method in calculating VaR
A. covariance method
74. full form of VaR

a. value at risk
a. $3M
Ans .collatral
78. in credit scores who is involved?
a. Credit Bureau
79. ATM stands for
a. Time consuming
b. Costly
a. Amount of bank’s capital expressed as percentage of the risk weighted credit exposure,
84. Mutual funds

a. Are less riskier than individual stocks as the fund managers invest in a
85. Warrants
sweetener
a. credit scores
a. all
a. APR
89. securitizing cash flows fromfuture monthly sale of oil explored from its specified
offshore


a. all
a. employer
 Bankers Acceptance for Factoring Transactions
 Bankers Association for Foreign Trade
 Bankers Acceptance for Foreign transactions
 Bankers Association for Forfaiting & Factoring transaction
 Bankers association for Factoring Trade.
6) merril lynch
7) george soros
8) bell graham
9) bill gates
10) warren buffet
5) bear starter
6) lehmen brothers
7) icici securities
8) goldman sachs
7) Customers who always pay in time
8) Customers who never pay
9) Customers who default but finally pay
10) all of the listed options
11) None of the listed Options
12) Customer who pays minimum due
110. Money Multiplier effect would imply………
6) An increase in the total money lent out into the system
7) An increase in the total money in the bank reserves in the system
8) A decrease in the total money in the bank reserves in the system
9) Both An increase in the total money lent out into the system and An increase in the
10) Both An increase in the total money lent out into the system and a decrease in the total
111. Which of the following is associated with the purpose of regulating financial
institutions?
6) To provide stability of the money supply
7) To serve certain social objectives
8) To prevent failure of any financial institution
9) To offset the moral hazard incentives provided by deposit insurance and other guarantees.
10) Both To serve certain social objectives and To offset the moral hazard incentives
provided by deposit insurance and other guarantees.

1) govt. regulation
3) full information
4) many traders
1) True
2) False

2) All
6. Issue cards
3. bill discounting
4. row material
3. 6%
4. 10%

… Risk ???
slightly higher.

6. call options

124. STP stands for ..

6. invester banks
7. commercial banks
10. none

6. none
CTS-L0

Find spread?
Ans: 1.95
Ans-100,100,
98,100,
100, 98,
98, 98,
100, 2
redemption

year

2) Set credit limit

5. compliance risk
6. systemic risk
Q8 VRU refers to??

5. front office
6. back office
1.1200
2.1500
3. 500
4.1020

Q15. FII,
Interest score
FFLP score
Loan Score
9.
10. T+3
11. true
12. T+2


10. buying shares
11. buying property(real estate)
12. buying car



Ans: Mid office

year


11. 3m
12. 3000
13. 0.1m
14. 0.3m
15. no of the above
17.65)

Deposit money
Make a loan
Print Money
Invest Money

Ans: True


Ans: By fax

DEMAT
ESCORW

Future Contracts
Options
Swap
Bond
CTS-L0
LO
1.retail loans are asset products offered by the bank T or F
2.Treasurty management system :
3.NOE ? Full form Note of Execution
4. which institution is responsible for Monetary policy for the country?
central bank, finance ministry, planning comm., stock market, central govt.
5. In fundamental analysis, the top down approach involves performing analysis?
Economy Industry Country
6.categorise - asset servicing line of business? corporate action processing, income processing, transfer
agency service, all the above
7.odd man out in retail banking service cc service, trade finance, electronic banking, personal loans
8. next: current value of a future cash flow?
NPV, Nominal value, present value, FV
9. _assumes the counterparty risk of each member and guarantes financial settlement? custodian,
clearing house, depository stock exchange
10.order required:
trade execution, trade matching, trade confirmation, trrade clearance, trace settlement
Trade matching - Trade execution-Treade clearance-trade confirmation - TS
11. un secured loan?
cc, overdraft on checking, study loan, personal lines of credit All of the above
12. No of stages in loan syndication are--
2,3,1,5,4
13. which of the following is not an index?
HandSang, DAX, NASDAQ 100, FTSE, NYSE
54. banker acceptances are ------ credit investment created by ---- and used for financing imports,
exports and domestic shipping
short term; non-financial firms, st;ft, MT;banks, LT;NFT, LT, FT
15. A bank that is earning 10% on its earning assets and is paying 3% on its interest-earning liabilities ?
1. both have a neg. spread and will always have postive net earnings
2 have a pos. GAP position
3. Have a positive int. spread
4. have a neg. interest spread
5. will always have positive net earnings
16. attempting to profit by investing in a manner that differs from the conventional wisdom is an
example of
contrarian investing, momentum investing, technical analysis,passive
17. An MMDA account usually pays higher interest rates compared to a Savings or a checking acc.
True/False
18. tax and insurance premium collected as part of Loan repayment -- type of acc
escrow, MF account, FD, DMAT acc
19. Next : debt instrument involves lowest risk?

Treasury bills, Junk bonds, Corpor. bonds, Munis, Yankee bonds
20. corporate action?

M &A, Stock split, Rights issue, Declaring dividend, all
21. NASDAQ is based out of ----New York
22. Banknew is a retail bank All
23. Nominal interest rte 10%, rate of inflation 2%, RII value?
8%
24. role of syndicate? monitor bank regulations participate in swaps issue derivatives ensure proper
risk manage. place securities in a public offering
25. Trade finance - mode of financing
1. Time Frame, Cost of financiaing, Buyers trade associate
2. Govt, Guarantee Prg, Seller preference
3.None
4. 4. Exporter's fund, Risk Factors, Cost of financing, Time Frame
26. The amount of extra return investors demand for taking the extra risk of equity investment is called
---
1. abnormal return
2. equity risk premium
3 return of investmnet
4 return of equity
27. Next: BNY and Mellon is an example of is a leading asset management and securities services
company
28. coming together of BNY and Mellon is an example of merger
29. Corp. loans are: Always secured, always unsecured, never unsecured, never secured, secured or
unsecured
30. sweep is----- Cash sweep is a value added service provided by custodian banks to its customers. This
service ensures that the surplus cash in customers’ accounts are effectively invested in short-term
investment funds i.e. STIF (may be as short as an overnight fund) to generate additional returns. The
sweep can be done intra-day based on projected earnings of the particular account or end-of-day based
on actual surplus cash in the account. The STIFs invest money in money market or euro dollar Deposit.
31. open ended loan allow the borrower to borrow additional amount sub to the maximum amt less
than a set value. True or False
32. private banking is

?
1. combination of al
2. fee based business
3. trading business
4. net interest income based business
33. Risks for the investor is associated with corpoate bonds . but NOT U S Treasury securities?
1. Interest rate risk
2.default risk
3 credit rating risk
4 reinvestment risk
5. none
?
34. Unit Capital of MFS 20 Million; market value 55 mill. no of units is 1 mill. NAV please
55
36. Next: trade terms "10/3,net 15" indicate that?


treasury management system - Pinnacle, Front Arena, TS2, Flex Cube or Finnacle
----------------------------------------------------------------------------------------------------
1. Which is a treasury management system?
Pinnacle, Front Arena, TS2, Flex Cube or Finnacle
2.What is the following process called? Checks are converted into digital files and then images are
transferred to fin. Intermediaries. Process of Clearing and settlement called?
Paper check processing, certified check, check imaging
3. Tax and Insurance premiums as part of loan repayment are handled in following type of account?
DMAT, FD, MF, Escrow
4. In TF, mode of financing?

a. Govt, Guarantee Prgm, Seller preference
b. Exporter's fund, Risk Factors, Cost of Financing, Time frame
c. Time frame, Cost of financing, Buyers trade associates
d. none
5. Trading of previously issued securities takes place?
a. All
b. Thro private placement
c. Secondary market
d. At company headquarters
e. Primary market
6. What is Farm Credit?

a. Credit to Reachers
b. Credit to Farmers
c. All
d. Credit to harvesters
e. credit to farm related business
7. Which does not come under the retail bank service?

TF, Per. loan, cc service, electronic banking
8. A purely competitive financial market is not charaterized by

Cost effecitive trading, many traders, Govt Regulation, Full information
9. which of the following debit instrument involves in lowest risk?

Corp. bonds, Treaasury bills, Munis, yankee bonds, junk bonds
10. P&L statement represent txns over a period of time while the Balance sheet show information as a
spec. date
TRUE
11. when a firm needs short term funds for a specific purpose, the bank loan will likely be a ----
Txn loan, revolving credit agreement, term loan, line of credit, compensating bal. agreement
?
12. Federal reserve, RBI, Bank of Japan, Bank of England, Bank of America
13. yankee bonds also known as

t-bills, call options, junk bonds, shares, none
14. Amt of money that banks can lend is directly affected by the reserve requirement set by central
bank.?
TRUE
15. When is bank failure is more likely to occur?

a.Bank increase its equity capital
b. Capital adequancy ratio is increase
c. bank holds more short term riskless securites
d. capital adequacy ratio is reduced
e. cash reserve ratin is increased
16.Valid repayment type

baloon, bullet payment, step up, all, step down
17. in reality, people hold part of their loans as cash. This makes the multiplier:
smaller, the same as if people did not hold cash, larger, zero
18. : --- is the legal and professional proceeding in which a lender, obtains a court ordered termination
of a borrower's equitable right of redemption?
credit freeze, sub-prime, foreclousre, securitization
19. At the end of the trade cycle, the trades are ----- to determint the obligation of the trading
members to deliver securities/ funds as per settlement schedule.
Ans: offset, Aggregated, netted, grossed
20. disadvantage of using lc?
a. Credit line tied up

b. Time consuming
c. All
21. CHIPS stands for?

22. a person purchase a share for $50, after 2 years,

price is $75
and he sold it
annual return ?
a. 0.5
b. 0.6667
c. 0.3333
d. 0.2247
23. High-net worh individuals generally have ----

net worth > $500,000, Household income of max. $50,000 per year, Household income > $500,000,
market capitalization more than $200,000
24. dividend declaration is an example of

Corporate Action
25. inflation represents
inc. in price, very high change in price, dec in prices, curr crisis, economic crisis
26. NOT a func of a bank?

a. Ensure super-normal returns to its small dep.
b. faciliate the trade and comm. dealings
27. community develop. banks(CDB's) is to serve residents and spur ecom. develop in low to moderate
income (LMI) geographical areas. T/F
TRUE
28 MF cannot
invest in bonds, short sell, invest in money market instruments, invest in equity, can follow any of the
investment practices
29. Univ. banks provide comm. banking as well as investment banking services under one roof . T/F
TRUE
30. suitable strategy for an investor following active appr.
a. pur. both types of stocks

b. sell both types of stocks
c. purchase undervalued stock and sel overvalued stock
d. sell undervalued stock and purchase overvalued stock
31. clearing system in which payments instructions between banks are processed and settled
individually and continuously throughout the day is called
ACH, RTGS, Continous Linked settlement, Clearing services, collection services
32. Next: order types based on volumes except

FOK, All, Day order, IOC, AON
33. Core banking is where the customer of one bank is able to transact on his account from any other
networked branck of the bank is known as
multi branch banking, None, Mobile banking, Online banking
34. open ended loan allow the borrower to borrow additional amt subject to the max amt < a set value
T/F TRUE
35. Warrant are the combination of which of these instruments?

a. put options and Swaps
b. call and put opt.
c. cash and call opt.
d. equities and futures
e. equities and call options
36. What happens when the interest rates rise?

Bond prices decrease, bond pricess do not change, bond prices increases, interest rates never fail,
they always go up
37. BSE is a large primary market in which the initial issuer receives the proceeds for the sale of
securities FALSE
38 categories the following

under asset servicing line of business: corp. Action processing;income processing;transfer agency
services;all
39 common advantage of using leasing

lower chance of overspending, less impulse buying, none, lower cost for items purchased,
using the asset without need for purchase
40. All brokers/dealers involved in the underwriting of non-exempt securities must be NASD member
41. diff. between banker's accep and sight draft?

a. BA demands imme. payment
b. bank can raise funds by selling the accep.
c. none
d. bankers accep. reduces bank's lending capacity
e. sight drafts are nego. instruments
?
42. A process in which money is lent to corp. bodies refers to:

a. loans provided to companies
b. loans provided to high net worth individuals
c. loans provided to individuals
d. loans provided by companies to individuals
e. loans provided to companies by govt.
43. VISA is involved which?

Provide interchange system to transfer fund
44. following represents that the company is incorporated in USA

PLC, INC, LTD, PTE
45. Next: If R- is real rate of interest, N - is nominal rate of interest and I - rate of inflation the
R=N-I
46. rate of exchange in forward contract are

b. forward rate adjustment and amt of currency bought/sold
c. current spot rate and forward rate adjustment
47. interest rate spread is equal to?

48. ABC co wants to identify the best way for making salary credits to its huge employees
ach, paperchecks, cash , contactless payments
49. participation of less number of banks reduces the risk of lead bank. T/F TRUE
50. clearing house is the legal counterpart of the net settlement obligations of every membe. This
principle is called as
notation, novation, obligation gurantee, settlement fullfillment
51. ---- of a securities trade involves the transfer of the securities from the seller to the buyer
clearing, trading, netting, settlement
52. NOT a feature of online banking?

secure chat, Funds transfer, outbound calls, Bill payment
53. type of loan in which spreads varies over the life of the loan is called----
Floating rate loan, fixed rate loan, semi-fixed, positive spread loan, negative spread loan
54. In normal distribution 99%, confidence interval corresponds to ---

1 SD,1.65 SD, 1.96SD, 2.33 SD, 3 SD,
55. NOT an example of an option?

Call opt, Put opt, LEAPS, Swaption, Oil futures
56. In rolling settlement trades are aggregated for a period of time. T/F
TRUE
57. An investor in need of regular income should NOT select which of the following opt?
A bank deposit, PPF, An equity growth fund, A debt fund
58. USA patriot ACT passed in

2001
59. How much will be the 1% legal fee on 30M USD?

3000, None, 0.1M, 3M, 0.3M
60. Annuities are

true discounted loan, a loan that is paid in periodic equated installments with capatitalized interest,
capitalised loan, amortized loan, discounted loan Doubtful
61. The current value of a future cash flow or of a serious of future cash flows is called:
NPV
62. VaR can be measure at

95% Conf. level, Any conf. level, 97.5%, 99%, 90%
63. EBpp, identify the potential cost cutting

opp for a bank?
ALL
64.SPV –Special Purpose vehicle
2. 2 Marks
d. Low fee
3. 2 Marks
eliminate _______________.
4. 2 Marks
____________________________________________.
-a. money gained from criminal activity is processed so it appears to be gained from legitimate
sources
6. 1 Marks
7. 1 Marks
a. Exchange risk
-b. Temporal risk
c. Country risk
8. 2 Marks
9. 1 Marks
EFT stands for _______________.
10. 1 Marks
c. are not required

b. Forward Swap
c. Swaption
-d. Interest Rate

Answer:
criteria. What would the consultants choice for his profile?
Answer:
a. Income Fund
b. Liquid Fund
-c. Growth Fund
d. Balanced Fund
e. Bank Deposit
15ABC corporation is a large client of BankNew and maintains $40 million in cash with the
Answer:
-a. Overdraft
b. Accrual Loan
d. Undrawn Loan
e. Committed Loans

Answer:
Answer:
a. Interest spread
b. Exchange rate
-c. Interest rate
d. Equity yield
e. Dividend yield

Answer:
a. always secured
c. never secured
d. always unsecured
Answer:
-a. Custodian
b. Broker
c. Investment bank
e. Dealer

Answer:
22 1 Marks
Answer:
23.1 Marks
Answer:
a. Diversification
b. Hedging
c. Insurance
-d. Budgeting
24 2 Marks
Answer:
a. $0.50
b. ($0.50)
-c. $1.00
d. ($1.00)
e. $86
25 1 Marks
________________________________________________.
Answer:
-b. using MS-Excel
26 3 Marks
Answer:
a. Rs. 12346
b. Rs. 7000
c. Rs. 2346
-d. Rs. 6050
e. Rs. 7546
27 1 Marks

Answer:
-a. Federal Reserve
Answer:
a. Bill Discounting
-b. Supplier Loan
29 2 Marks
Answer:
-a. Disbursement
b. Distribution
c. Displacement
d. Dispersement
e. Diversification
30 1 Marks

Answer:
31 3 Marks
Answer:
-a. larger; larger
b. small; larger
c. small; small
d. larger; small
32 1 Marks
33 1 Marks
known as?
a. Public Offering
b. Corporate Action
c. Underwriting
34 3 Marks
Answer:
35 1 Marks
________________________.
Answer:
c. stock selection
36 1 Marks
Primary markets ____________________
Answer:
another.
37 3 Marks
Answer:
38 1 Marks
Answer:
39 1 Marks
Answer:
a. USA
b. India
c. Japan
d. UK
-e. Switzerland
40 1 Marks
Answer:
d. Economic crisis
e. Currency crisis
41 1 Marks
________________________.
Answer:
42 1 Marks
Answer:
-c. Demat Account
d. Time Deposits
43 1 Marks
Answer:
a. Warren Buffet
b. Peter Lynch
c. George Soros
44 1 Marks
a. More than 100
-b. Less than 100
c. Exactly 100
45 2 Marks
Answer:
b. Red Clause
c. Irrevocable LC
d. Transferable LC
46 2 Marks
Answer:
a. Money Policy
b. Money Market
-d. Monetary Policy
e. Money making
47 3 Marks
Answer:
a. S&P
c. Moody's
d. Fitch
e. Crisil
48 2 Marks
Answer:
49 1 Marks
Trade Finance helps in ________________________________.
Answer:
-a. Facilitating International transactions
b. Facilitating intra-compamy transactions
c. Facilitating corpoate lending
d. Facilitating setting up of new factories
e. Facilitating International transactions,Facilitating corpoate lending and Facilitating setting
up of new factories
50 2 Marks
America.
Answer:
a. Market Risk
-b. Credit Risk
c. Liquidity Risk
d. Legal Risk
51 1 Marks
following?
a. risk averse
-b. diversification
e. budgeting
52 1 Marks
Answer:
a. Visa
b. Mastercard
c. Amex
d. Discover
-e. HSBC Bank
53 1 Marks
Answer:
a. Direct Debit
b. Standing Order
-d. Account opening
e. Wire transfer
54 1 Marks
Answer:
c. Retail banking
-d. Private banking
55 1 Marks
Answer:
b. Outright Sale
d. Select Sale
56 2 Marks
Answer:
57 1 Marks

Answer:
-a. assess the risk
58 1 Marks
automatically.
b. EFT
-c. Direct Debit
d. Direct Credit
e. Direct Deposit
59 1 Marks
Answer:
a. Accrual Loans
b. Trading Loans
d. Undrawn Loan
e. Committed Loans
60 3 Marks
Answer:
61 3 Marks
Answer:
-a. Amount of bank’s capital expressed as percentage of the risk weighted credit exposure
operational risk
market risk
d. Amount of bank’s capital expressed as percentage of the risk weighted credit exposure,

Answer:
a. Client Partner
b. Credit Provision
63 1 Marks
Answer:
64 1 Marks
Answer:
a. Switzerland
b. Luxembourg
c. Caymen Islands
-d. Mumbai
e. Mauritius

Answer:
individuals
individuals

Answer:

Answer:
a. Core Custody
b. Asset Servicing
68 1 Marks
___________________________.
Answer:
69 1 Marks
Answer:
b. Hire Purchase
d. Lease
e. Auto Loans

Answer:
71 3 Marks
Answer:
d. Booking System
______________________________________.
Answer:
c. Attrition
d. Payment default
73 1 Marks
Answer:
a. Current accounts
b. Savings accounts
e. ATM facility

Answer:
75 1 Marks
Answer:
b. Record Keeping-c. NAV calculation
Answer:
a. Federal Reserve
b. FDIC
c. DTCC
d. ASA
Answer:
a. Seller
b. Seller's bank
-c. Buyer's bank
d. Buyer
Answer:
a. Citibank
b. HSBC
-c. JP Morgan Chase
e. ABN Amro
79 Legal risk is the __________________________________________.

Answer:

Answer:

Answer:
a. Ginnie Mae
b. Fannie Mae
d. Sallie Mae
e. Federal Reserve

Answer:
customer?
a. Debit Card
-b. ATM Card
c. Stored Card
d. Gift Voucher

Answer:
a. Forex market
b. Money Market
-c. Stock Market
d. Mortgage Market
e. New York

Answer:

Answer:
a. Pooling
b. Netting
c. Swapping

Answer:

Answer:
Answer:
a. Coroprate Bonds
b. Debentures
-c. Shares
d. Loans
e. Government Bonds
90 Electronic banking doesn’t covers the following services.

Answer:
b. ATM System
d. Internet payment

Answer:
c. Arbitrageur
92 SWIFT is a ______________________.
Answer:
true?
Answer:

Answer:
a. Follow stocks
b. Follow bonds
-c. Invest of behalf of the Investment Bank

Answer:
c. Direct receipts
d. Direct debits

Answer:

Answer

Answer:
b. Risk Mitigation
c. Risk Taking
d. Risk Assumption

Answer:
a. Straits Times
-b. Nikkei
c. Footsie
d. DAX
e. CAC
Answer:
55. If an investment pays interest at an annual rate of 5% per year, compounded twice a year than the
effective yield larger than 5.5%
a. True b. False

b. Less than offer
c. More than offer
e. Equal to offer

b. Central banks
c. Companies
58. In an account saving simple interest from the first year is reinvented at the beginning of the second
year?
a. True b. False

b. Terms loans
c. Cash
e. Receivables

b. Lot of research

a. True b. False
a. Market risk
c. Credit risk
d. Operational risk
e. Liquidity risk
63. Account maintained in the home currency by one bank is the name of another bank based abroad is
called as:
a. Current account
b. Nostro account
c. Vostro account
d. Forex account
e. Overseas account
a. Pre-closure
b. Assignment
c. Participation
65. The process of transferring obligation from one party to another is called Novation
a. Futures
b. Spot
c. Forward
d. Stock
e. Option


u. Bond prices increase
v. Bond prices decrease
w. Bond prices do not change
x. Economy goes into deflation
y. Interest rate never fall, they always go up.
u. -2%
v. 2%
w. -1.96%
x. Very high
y. 1-2%
70. If you invest $1000 for 3 years at 7% compound interest, how much will you have at the end of the 3
years?
u. $1225
v. None of listed option
w. $1000
x. $1070
y. $1270

u. Letter of commercials
v. Letter of credit worthiness
w. Letter of credit
x. Letter of commerce
y. Letter of complaints

q. Small investor are protected, hence it is a low risk investment avenue.
r. Banks are in the best position to lend out money at competitive
s. Depositors are participant in primary and secondary markets.
t. All of listed options.

q. For the same return, B tolerates lesser risk than B.
r. For the same return, A tolerates higher rate of return.
s. For the same return, A tolerates lower rate of return.
t. For the same return, A takes higher risk.

u. Sweep facility
v. Structured lending to client
w. All
x. Short term credit facilities
y. Overdraft

u. None
v. To provide stability of money supply.
w. To serve certain social objectives.
x. To prevent failure of any financial institution.
y. To offset moral hazard incentive provided by deposit insurance and other guarantees.

q. Monte- Carlo simulation.
r. All equal time with software.
s. Variance-Covariance matrix.
t. Combination of Monte- Carlo and Historical Simulation.

u. Payment to employers
v. None
w. Investment
x. Loan
y. Withdrawal
e. True b. False
80. If the corporate isn’t able to raise money from the market to pay off some loans the risk can be refer.
u. Market risk
v. Interest rate risk
w. Commodity risk
x. Operational risk
y. Liquidity risk
How much did the broker pay out to the exchange in total in case of (i) Gross settlement system (ii)
Net Settlement System?
a. (i) $1780 (ii) $3000

c. (i) $3000 (ii) $1780
d. None
82. US export and Europe import agree to carry out the transaction of goods word $100000 under a
confirmed term LC with a maturity date of 60 days from the time of shipment. The acceptance
commission @ 1.5 % PA equals
U) $2500
V) $3000
W) $300
X) none
Y) $250
A) Issuing Bank
C) Beneficiary Bank
D) Seller
E) Buyer
85. While providing security lending services to its clients, which risk will a custodian have to manage for
its clients?
A) Liquidity risk
D) Credit risk
A) A very high
B) 2
C) -1
D) -2
E) 1
A) Currency risk
B) Attrition
C) Credit risk
D) All of the above

D) Research
89. A mutual fund with investment objective of achieving high capital growth approaches investor
services firm for advice. The firm advices the mutual fund to invest 80% of the fund in govt debt and
20% in equity. The allocation towards debt advised by the firm
B) is too high
C) Is about right
D) is too low

B) Acceptance
C) Negotiate
D) Purchase
E) Discount
B) Tiger Woods
C) Any of the above
92. Which of the following method eliminate country risk and commercial risk upon confirmation?
B) Back to back LC
C) LC
D) Standby LC
93. The act of the loan amount being handed over to the borrower by the bank is known as disbursement.
State TRUE or FALSE
a. True b. False
the day
U) IBM no exchange of shares ; MFST 90 shares to receive ; $1780 to pay out to the exchange
V) None of these
W) IBM no exchange of shares ; MFST 90 share to receive ; $3000 to pay out to exchange
X) IBM 70 shares to given out ; MFST 90 shares to receive ; $3000 to pat out to exchange
Y) IBM no exchange of shares ; MFST 90 share to receive ; $1780 receive from the exchange

U) All of the listed option
V) Documents
W) Physical instrument like check and draft
X) Electronic data files
Y) Cash

U) APR
V) None
W) IRR
X) NPV
Y) Rate of interest applicable for the loan
U) learning services
V) ‘None
W) Merger and Acquisition
X) Valuation of firm
Y) Underwriting and distribution of equity issues.
98. If total spread on underwriting is $500000 and manager fee is $100000. What is the amount which
will be distributed in the syndicate?
U) 500000
V) 100000
W) 400000
X) 600000
Y) Can not be determined
99. HPPL shares are currently selling for $25 each. You bought 200 shares one year ago at $24 each
and received dividend payment as $1.50 per share what was total dollar capital gain this year
U) 200
V) 500
W) None
X) 300
Y) 400
Q) State regularity agency
R) SEC
S) Industry wide SRO
T) All of the listed option
101. Pick odd one out

a. Demat
b. Personal loan
c. None
d. Hire Purchase
e. Auto loans
102. I deposited 100 in a bank .Bank loan out 90 out of it to someone else, who then invest the money
in setting u a new factory. This process is called
U) Monetary policy
V) None
W) Money multiplier effect
X) Profit making tendency of a bank
Y) Fiscal policy

U) Amount of bank capital expressed as % of the risk weighted credit exposure & market risk.
V) Amount of bank capital expressed as % of the risk weighted credit exposure
W) Amount of bank capital expressed as % of the risk weighted credit exposure & operational risk.
X) Amount of bank capital expressed as % of the risk weighted credit exposure operational
risk & market risk.
Y) None

U) Calypso
V) Summit
W) Wall street system
X) Front arena
Y) Flex cube

U) Managing large bond issues
V) Raising huge money from the bank
W) Managing large capital raising act
X) Managing conflict between investment banks.
Y) IPO distribution.
U) Treasury bills have their interest paid in a lump sum at maturity
V) None
W) Treasury bills have greater interest risk than either treasury bond or treasury note
X) Treasury note has maturity dates up to 10 yrs
Y) Treasury bonds have maturity dates up to 30 yrs
107. In defined benefit plan the benefit is expressed as ________ and in defined contribution plan the
benefit is expressed as an ________
U) Account balance , Annuity

V) Annuity , Annuity
W) Account balance , Account balance
X) None
Y) Annuity , Account balance
108. What is the term used to indicate the arrangement of LARGE borrowing for a corporate by a
group as lenders
U) none
V) Syndicate
W) Allocation
X) Assignment
Y) Secondary

U) issue card
V) Set credit limits
W) Set interest rates
X) Set card fees
Y) Security/ Risk management
110. In an international securities transaction, which of the following participant will not be involved?
U) Global custodian , domestic sub custodian , depository in foreign country and sometime stock
V) Depository in foreign country
W) Global Custodian
X) stock exchange in foreign country
Y) domestic sub custodian
111. An insurer undertakes an analysis of a portfolio of insurance policy by exploring scenarios for the
path followed by swap rates, policy surrender rates, mortgage prepayment rates for the mortgage
backed security in the portfolio, what is this process called?
U) Cash projection
V) Investment manages universe
W) Asset allocation
X) Fund administration
Y) Asset / liabilities analysis
112. Trade finance helps in

U) Facilitating international transaction
V) Facilitating intra company transaction
W) Facilitating international transaction , corporate lending and settling up of new factories
X) Facilitating corporate lending
Y) Facilitating setting up of new factories

Q) a price at which a firm is ready to buy or sell
R) When bid is equal to offer
S) When the firm has a choice of deciding the securities to take
T) a price at which a firm is ready to buy or sell it also means when bid is equal to offer
U) 6 month deposit of min balance of $1000
V) 3 month deposit of min balance of $4000
W) 12 month deposit of min balance of $1000
X) None
Y) 6 month deposit of min balance of $2000
61. If 1 day VaR is $1 million, 9 day VaR is

U) $3mn
V) $4.5mn
W) $9mn
X) $4.4mn
Y) $1mn
115. If a bank gets a deposit of $1000 assuming a CRR of 10% and that it circulates through 2 more
banks, leading to the following money multiplier effect
U) Loan of $2439
V) Loan of $1710
W) None
X) Create a reserve of $100
Y) Create a reserve of $190
116. Which among the following is an investment company that pools money from unit holders and
invest in a variety of security?
Q) Mutual Fund
R) Mortgage Company
S) None
T) Stock Exchange
117. You purchased a stock for $40. 1 year later you received $2 as Dividend. You sold it at $48. What
is your return?
u. 45%
v. 10%
w. 25%
x. 50%
y. None
118. A formal Legal commitment to extend credit to some max amount over a stated period of time is
description of
u. Trade Credit
v. Revolving Credit
w. Agreement Irrevocable Credit
x. Line of Credit
y. Letter of Credit
119. Odd 1 out

u. Warren Buffet
v. George Soros
w. Bill Gates
x. Ben Graham
y. Peter Lynch
u. Investment manager Universe
v. Asset Allocation
w. Asset Liability Analysis
x. Fund Admin
y. Compliance Reporting
q. Current rate – Base Rate
r. Cap – Current Rate
s. Current Rate – Floor
t. Base Rate – Floor
u. Exporters Fund
v. All
w. Government Guarantee Program
x. Time Frame
y. Cost of Financing
123. The NYSE is a large financial market in which the initial issue receives the proceeds for the Sale
of securities.
e. True b. False
u. Stock Repurchase Program
v. Transition Management
w. Transition Management & Commission Recapture
x. Commission Recapture
y. None

u. the obligation to buy a futures contract
v. the obligation to sell a futures contract
w. the right & obligation to buy a futures contract
x. the right but not the obligation to buy a futures contract
y. the right but not the obligation to sell a futures contract

u. Call Option
v. Swaption
w. Leaps
x. Oil Futures
y. Put Options
i. True
j. False
q. Beneficiary Bank & Reimbursing Bank
r. Importer Exporter
s. Reimbursing Bank & Beneficiary Bank
t. Applicant’s bank & Beneficiary’s bank
q. DC plans fix the monthly contribution from the employee making his financial planning easier.
r. DC plans are seen by employees as investment which to accumulate retirement income.
s. All
t. Employer increasing wants employees to share responsibility for retirement
130. ________is typically largest part of spread and is paid to broker\dealer or that actually took clients
order
u. Salary
v. Manager fee
w. Wage
x. Concession
y. Underwriter

q. Listed market
r. Over the counter market
s. Third market
t. Fourth market

q. Market capitalization more than $200000
r. All
s. Net worth greater than $500000
t. Household income of max $50000 year.

q. The business focuses on small no. of high net worth individuals.
r. The business focuses on small and medium enterprises.
s. The business focuses on large no. of individuals.
t. The business focuses on large no. of corporation bodies.

u. Trades in securities
v. Quotes to its bets customer
w. Intends to buy
x. Intends to sell
y. Quotes when it does not want to trade.
e. True b. False

q. Stock market
r. Retail banking
s. Corporate banking
t. Customer lending
137. Which is true?

q. Financer owns the asset both in case of ‘Lease’ and ‘hire Purchase’.
r. Tax deduction cab be claimed from the full value of the rental paid in case of lease
s. All
t. Depreciation is claimed by the financer in lease and not in case of hire purchase.
clients in France and Belgium and provides securities safe keeping services to these clients through
banks C & D respectively. Which best describes bank A?
u. Global custodian,
v. None
w. Main custodian
x. Sub custodian
y. Secondary custodian

M) Bonds sell at a discount when Coupon Rate is less than Market Interest rate.
N) None
O) Bond is debt instrument giving issues.
U) Capitalized loan
V) True Discounted loan
W) Amortized loan
X) Demand loan
Y) Discounted loan

U) Commercial bankers
V) Investment Bankers
W) None
X) Company Management
Y) Company Management and Investment Bankers

U) Bankers Acceptance reduces lending capacity
V) Sight Drafts are negotiable instruments
W) Bankers Acceptance demands immediate payment.
X) None
Y) Banks can raise funds by selling acceptance.
U) Investible assets
V) Location
W) Age
X) Net worth
Y) Name
144. The initial sale of the security is in the ………market, while subsequent trading in the security is in
the …….. market
U) Spot, futures
V) Debt , Equity
W) Primary , Secondary
X) Money, Capital
Y) Secondary, Primary
compliance reporting, fund administration, investment Management universe etc. provided by an
institution can be classified?
U) Investment Management
V) Asset Servicing
W) None
X) Trading
Y) Investor Services.

Q) All
R) Stands for Suspicious Activity Reports
S) Customer Identification Program
T) Requiring Businesses, which were only to report cash transactions involving more than 1.00,000?
At the end of the day, the broker owes 1780 to the exchange while exchange owes him 90 shares of
MSFT. Is it possible?
M) Yes under RTGS
N) No
O) Yes under net-settlement system

U) 30 stocks
V) 20 stocks
W) 40 stocks
X) 10 stocks
Y) 50 stocks

D) All

U) Interest rate and foreign exchange
V) Liquidity and credit
W) Credit and Interest rate
X) Credit and Foreign exchange
Y) All
151. Find the future value of $1200 invested at 5.25 % per annum payable annually after 6 months?
Marks: 2
1. 1345.1
2. 1243.1
3. 1231.1
4. None
5. 1235
152. Investor services like brokerage, cash management and short term investments, commission re-
capture, foreign exchange transactions, transaction management etc. can be classified under ____
group of services. Marks: 1.
1. Trading
3. Investor service
4. None
5. Asset Servicing
2. Client Partner
3. Commercial Paper
5. Credit Provision
154. What are the risks associated with the Hedge funds? Marks: 3
1. All of the above
3. High Leveraging
4. High Speculation
u. 2% discount is offered if payment is made within 15 days.
v. 15% discount is offered if payment is made within 2 days; the payment should however
be made in 30 days.
w. 30% discount is offered if payment is made before 15 of the month.
x. 15% discount is offered if payment is made between 2 & 30 days;
y. 15% discount is offered if payment is made within 30 days.
156. A bank is required to hold reverses at least equal to a pre-scribed fraction of its total deposit
liabilities.
e. True b. False
separate LC’s for each transaction with a regular client?
u. Irrevocable LC
v. None
w. Red clause
x. Revolving LC
y. Evergreen clause
158. Who appoints investment manager to manage a benefit plan?

u. Plan sponsor
v. Plan administrator
w. Fund trustee
x. None
y. Government
159. A company would pay the interest on what portion of loan?

u. Committed amount
v. Either disbursed or committed loan
w. Unused amount of loan
x. Disbursed amount
y. None
160. In the exchange on a particular trading there is a buy market order for 100 CTSH shares and two
sell market orders for 50 and 40 CTSH shares each, can the buy order be matched against the two
sell orders.
m. Yes
n. No
o.Yes, but if prices on the buy & sell side match.
161. If the limit = $2000, margin = 20% and asset value = $2000 then drawing power for an open ended
loan is equal to?
u. None
v. Drawing power = $1600
w. $2200
x. $2400
y. $2000
162. Risk cannot be mitigated by

u. Setting risk limits
v. Hedging
w. Diversification
x. Arbitrage
y. Insurance

u. Municipal bonds
v. Bonds of govt. sponsed enterprise
w. Corporate bonds
x. US treasuries
y. Shares
164. In benefit administration what are the relationships that exits between the plan administrator and
the investment manager, and between Trustee and the investment manager.
u. None
v. Plan administrator & trustee both have outsourced plan administration as well as fund
w. Any
x. Plan administrator gives investment instruction to investment manager while trustee
y. Trustee gives investment instruction to investment manager, while plan administrator appoints
the investment manager.
165. Which entity provides credit scores that are used by issuers to process card application?
u. Issuer processor
v. Collection agency
w. Issuing bank
x. Authorization engine
y. Credit bureau.

u. Consolidated Price index
v. Consumer popularity index
w. Consumer product index
x. Consumer price index
y. None
167. A bank decides to sanction only 10% of the loan sought by a company. The company goes and
pledges extra assets with the bank and the bank then agree to sanction 50% of the loan sought.
The company has indulged in the process of
u. Credit scoring
v. Credit increase
w. Credit incrementation
x. Credit revision
y. Credit enhancement.
168. FX spot deal assumes maturity of how many business days ahead?
u)4
v) 5
w) 3
x) 1
y)2
169. Which of the following is best VaR estimation Model?

q)Monte- Carlo
r) Historical
s)Variance-Covariance
t) Variance-Covariance and Monte- Carlo
170. Which of them represent company is incorporated in USA?

q)Plc
r) Pte
s) Ltd
t) Inc
171. Which of the factors affect the choice of payment methods?

u)Govt. guarantee Program
v) Time frame
w) All
x) Cost of financing
y) Exporter fund.
172. Organization level risk appetite is determined by:

u)Risk management
v) Front office
w) Back office
x) Trade
y)Board of director
173. Risk management is function of:

u)Traders
v) Back office
w) Specialist
x) Front office
y)Mid office
174. Purely competitive financial markets are not characterized by

q) Govt. regulation
r) Many traders
s) Full info
t) Cost effective trading
175. NOT player in typical trade cycle;

u)Custodian bank
v) Clearing bank
w) Clearing member
x) Trading member
y)Regulator
176. Once syndicate has sold all other trades participant, sub participant and assignment are considered
trade in what market?
u)Primary
v)Secondary
w) Participant
x) OTC
y) Index
177. Question related to price weighted index?

21. DJIA
22. Hangseng
23. EAFE index
25. S&P 500
178. In defined contribution retirement plan .Tax sheltered annuities fall under section of
_________ERISA
403b
401k
401b
403k
None
179. In benefits administration, trustee and plan administrator submit compliance report to______ which
in turn qualifies the plan.
Participant
Government
Investment manager
Sponsor
180. Full form of ADR

181. Question related to BASEL II

182. What is interest rate charged on asset based loan?

183. Question related to credit derivatives as which of the following function is not done by credit
derivatives
184. Question related to credit derivatives it was fill up the blanks? Exactly don’t remember the question/
185. Question related to non-discretionary Investment Management

186. Question having few options like Income Processing, Tax Information Services, Cash Sweep
187. Question related to Underwriting?

Options:
20. All
191. Risk Matrices was developed by:-

a. JP Morgan
b. Bank of California
c. Credit Suisse
d. SBI

e. None


e. All

b. Interest earned
d. All
a. LC
b. Direct debit
d. Counter trade
e. Cash in advance
a. Equally unlikely
b. Equally likely
c. ABC
d. XYZ
e. None

a. AAA,AA+,BBB,D
a. 118.8
b. Exactly 100
c. Exactly 200
d. Around 109
e. None
201. Odd man out:-

a. SEC
b. NYSE
c. NASDAQ
d. LSE
e. NSE
a. True
b. False

a. Specialist
b. Traders
c. Back office
d. Front office
e. Mid office
a. Equities

a. E-trade
b. Charles Schwab
c. Sallie Mae
d. Federal reserve
e. a and b both
b. Style maps score
d. Alpha

d. None

a. Unlisted market
nd
b. 2 , unlisted and OTC market
c. Unlisted
d. Super
nd
e. 2 market
210. Question on top 10 US bank
REBO

a. Bid
b. Indirect
c. Direct
d. Cross currency
e. Ask rate
212. Bid price is the price at which the firm:

The price at which market makers will buy or sell a particular security

d. Investment gain
214. Odd man out?

a. Equity
b. Stocks
c. Shares
e. Common stock

a. Sponsor
b. Custodian
d. Record keeper
e. Participant
217. When bank goes to the federal to borrow funds then the interest rate charged by fed is known as
a. Prime rate
b. Bond rate
c. Discount rate
d. Federal rate

a. 2001
219. Risk averse

220. Full form of EMI.

Equated Monthly Installment
221. BAFT full form
Banker’s Association for foreign trade
222. Which of the following is online settlement method
a. RTGS
224. Corporate bonds are

a. always secured
225. Full form of VaR

a. value at risk

Collateral
227. ATM stands for

a. Automated teller machine

a. Can be revoked without the consent of the Exporter
a. short term: non-financial
230. Mutual funds

a. Are less riskier than individual stocks as the fund managers invest in a diversified portfolio
231. Warrants
a. Warrants are call options – variants of equity. They are usually offered as bonus or sweetener
232. Difference between lease & hire purchase

a. all
233. Securitizing cash flows from future monthly sale of oil explored from its specified offshore
a. Asset securitization
234. Not a Treasury Management Systems –

Inter-bank
235. Pre shipment loans

a. Banks provide Pre-shipment finance - working capital for purchase of raw materials, processing
and packaging of the export commodities.
236. Function of CORPORATE FINANCE

a. all
237. Sales and brokers responds to which department when institution transfer their custody service
from one to another
238. Who is at risk in defined benefit

a. Employer
a) Depreciation is claimed by financier in Lease & not in case of hire purchase
b) Tax deduction can be claimed for the full value of the rental paid in case of lease
c) All
d) The financier owns the asset both in case of “lease” and “Hire Purchase”
Lease is a long-term rental agreement for the asset, while Hire Purchase is allows the user to
own the asset after all the payments have been made to the lender.
Lease
Two main types – operating, financial
The Financier owns the asset.
Depreciation is claimed by the financier.
Tax deduction can be claimed for the full value of the rental paid.
Financier takes care of maintenance, insurance etc.
Hire Purchase
The asset is owned by the financier.
Depreciation can be claimed by the borrower.
Tax deduction can be claimed only to the extent of the interest repayment.
2. Annuities are:
a) Discounted loan
b) Capitalized loan
c) Amortized loan
d) True discounted loan
e) A loan that is paid in periodic installments with capitalized interest
3. The counterparty in futures contracts trade is

a) Government
b) Banks
c) The brokers who stuck in deal
d) The exchange
e) The buyer and seller
A futures contract is an agreement between two parties to buy or sell an asset at

a certain time in the future at a certain price. Index futures are all futures
contracts where the underlying is the stock index and helps a trader to take a
view on the market as a whole.
4. A person purchases a share at 50$. After 2 years the price is at 75$ and he decides to sell the share
at that price. What is the annualized return that person has earned?
FV = 75
PV=50
Fv=pv(1+i)n i : Interest rate per unit time period n : Number of time periods
I = 0.2247
5. Bank operations are divided into?
a) Middle office
b) Front office
c) Back office
d) All
Private Banking Front Office covers functions like Sales & Client prospecting,
Contact
Management, Account Aggregation and Financial Advisory services.

Private Banking Middle/Back Office covers functions like Asset Allocation,
Research, Portfolio Analysis, Risk Management, Trade Processing, Compliance
and documentation
6. Primary source of income for banks?
a) Interest income
b) Fees for services
c) None
d) Deposits from public
e) Grants from Central banks
A bank makes a profit by investing or lending money that is earning a higher rate
of interest than it pays to its depositors.
They borrow money from individual or businesses “who have money”, and lend it
to those “who need money”, by adding a mark up, to pay for expenses and profit.
The difference between the rates, which banks offer to depositors and lenders, is
generally referred to as “Spread”.
7. If a bank charges 8% for 1 year from customer A and 10% from customer B for similar loan, this can
be attributed to
a) Interest rate risk
b) Credit risk
c) Liquidity risk
d) Operational risk
e) Market risk
Market risk is the risk that the value of a portfolio, either an investment portfolio
or a trading portfolio, will decrease due to the change in value of the market risk
factors. The four standard market risk factors are stock prices, interest rates,
foreign exchange rates, and commodity prices. The associated market risks are:
 Equity risk, the risk that stock prices and/or the implied volatility will
change.
 Interest rate risk is the risk (variability in value) borne by an interest-
bearing asset, such as a loan or a bond, due to variability of interest rates.
 Currency risk, the risk that foreign exchange rates and/or the implied
volatility will change.
 Commodity risk, the risk that commodity prices (e.g. corn, copper, crude
oil) and/or implied volatility will change.
Credit risk is an investor's risk of loss arising from a borrower who does not make
payments as promised.
Liquidity risk is the risk that a given security or asset cannot be traded quickly
enough in the market to prevent a loss (or make the required profit).
An operational risk is, as the name suggests, a risk arising from execution of a
company's business functions.
8. Expand NOE –
a) Note of execution
b) Notice of error
c) Note of enrichment
d) Net outstanding error
9. Check 21 act facilitates:
a) Netting of checks at day end
b) Netting and substitution of checks at day end
c) Netting and pooling of checks at day end
d) Clearing check by manually processing the check
e) Check truncation and creation of substitute check
The law allows the recipient of the original paper check to create a digital version
of the original check—called a "substitute check," thereby eliminating the need
for further handling of the physical document.
10. Tax and insurance premiums collected as part of loan repayment are handled through which of the
following type of account?
a) Escrow
b) DMAT
c) MFA
Escrow account - A trust account held in the borrower's name to pay obligations such as
property taxes and insurance premiums.
11. Pick the odd one
a) Agency loans
b) FHA loans
c) VA loans
d) Interest only loans
Agency loan - A conventional loan is a mortgage that is not guaranteed or insured by
any government agency, including the Federal Housing Administration (FHA), the
Farmers Home Administration (FmHA) and the Department of Veterans Affairs (VA). It is
typically fixed in its terms and rate.
FHA loans - A mortgage issued by federally qualified lenders and insured by the Federal
Housing Administration (FHA). FHA loans are designed for low to moderate income
borrowers who are unable to make a large down payment. FHA loans allow the borrower
to borrow up to 97% of the value of the home. The 3% down payment requirement can
come from a gift or a grant, which makes FHA loans popular with first-time buyers.
VA loans - A mortgage loan program established by the United States

Department of Veterans Affairs to help veterans and their families obtain home
financing
Interest only loans - Mortgage in which the borrower pays only interest for a set
term. At the end of this term, typically five to ten years in the United States, the
loan converts to a fully amortizing loan in which both interest and principal are
paid. An interest-only loan reduces loan payments in the early years of a loan, so
borrowers who expect their income will grow over the loan term can take out a
larger Mortgage for purchase of a home.
12. Bank A, bases in US, provides safekeeping services for securities to its US clients. IT also has clients
in France & Belgium and provides securities safekeeping services to these clients through Banks C
and D respectively. Which of the following terms best describes Bank A?
a) Secondary custodian
b) Global custodian
c) None
d) Main custodian
e) Sub custodian
A global custodian provides custody services for cross-border securities transactions. In

addition to providing core custody services in a number of foreign markets, a global
custodian typically provides services such as executing foreign exchange transactions
and processing tax reclaims.
A global custodian typically has a sub-custodian, or agent bank, in each local market to
help provide custody services in the foreign country.
13. In Normal distribution 99% confidence interval corresponds to __

a) 1.65sd
b) 1sd
c) 3sd
d) 2.33sd
e) 1.96sd
Value at Risk is an estimate of the worst expected loss on a portfolio under

normal market conditions over a specific time interval at a given confidence level.
VaR Calculation: 99% = 2.33 * standard deviation
14. All of following are benefits of netting EXCEPT:

a) Reduction in cost of settlement
b) Reduction in the no. of deliveries and receipts
c) Reduction in compliance risk
d) Reduction in systemic risk
Clearing is the process of determination of obligations, i.e. who owes what, to
whom and how much. Settlement on “net” basis reduces the number of
transactions to be settled drastically reducing the overall transaction cost for
everyone. As per an estimate, netting reduces the number of settlements needed
by more than 95%.
Settlement for clearing cheques presented to the clearing houses takes place on
a netting basis at a particular time either same day or on the next day. This
system gives rise to risks such as credit risk, liquidity risk, legal risk, operational
risk and systemic risk.
Compliance risk are Associated with Custody Services.

15. All the following statements concerning US government securities are correct EXCEPT:
a) Treasury bills have their interest paid in a lump sum at maturity
b) Treasury bonds have maturity dates up to 30 years
c) Treasury notes have maturity dates up to 10 years
d) Treasury bills have a greater interest rate risk than either Treasury bonds or Treasury notes.
Treasury bills are short-term obligations issued for one year or less. They are
sold at a discount from face value and don't pay interest before maturity. The
interest is the difference between the purchase price of the bill and the amount
that is paid to the investor at maturity (face value) or at the time of sale prior to
maturity.
Treasury notes and bonds bear a stated interest rate, and the owner receives
semi-annual interest payments. Treasury notes have a term of more than one
year, but not more than 10years.
16. SPV = Special purpose vehicle
17. Which of the options best describes the sequence of the following events?
1. Issuing bank arranges for advising bank payment
2. Freight forwarder sends documents to advising bank
3. Issuing bank issues the letter of credit(LC)
18. VISA is involved in which of the following
i. Provide the interchange systems to transfer data and funds between members
ii. Set credit limits
iii. Issue credit cards
a) I b) II c) III d) I and II
Visa does not issue cards, extend credit or set rates and fees for consumers;
rather, Visa provides financial institutions with Visa-branded payment products
that they then use to offer credit, debit, prepaid and cash-access programs to
their customers
19. In reality people hold part of their loans as cash. This makes the multiplier:
a) Same as if people did not hold cash
b) Larger
c) Zero
d) smaller
20. The share price of a company may drop considerably from its current levels. In scenario, what type
of risk are the investors facing?
a) Liquidity risk
b) Company risk
c) Market risk
d) Business risk
e) Credit risks
21. Securities functionality is a function of _____
a) Back office
b) Specialists
c) Front office
d) Mid office
e) Traders
Security is a financial instrument that signifies ownership in a company (a stock), a

creditor relationship with a corporation or government agency (a bond), or rights to
ownership (an option).
Contact Management, Account Aggregation and Financial Advisory services.
and documentation.
Traders facilitate the buying and selling of stock, bonds, or other securities such
as currencies, either by carrying an inventory of securities for sale or by
executing a given trade for a client. Traders deal with transactions large and
small and provide liquidity (the ability to buy and sell securities) for the market.
(This is often called making a market.) Traders make money by purchasing
securities and selling them at a slightly higher price. This price differential is
called the "bid ask spread."
22. Generally if bond X had a lower rating than bond Y, the yield on bond X would be
a) Same as that of Bond y
b) Lower than that of bond Y
c) Higher than that of Bond Y
d) Volatile
Annual rate of return (also called Coupon, Fixed, Stated or Nominal Yield)
Higher the credit rating, the lower the Yield
23. Trade Finance primarily helps in

a) Facilitating corporate lending
b) Facilitating setting up of new factories
c) Facilitating intercompany transaction
d) Facilitating international transactions
e) Facilitating intra=company transactions
The main objective of trade finance is to facilitate transactions. There are many
financing options available to facilitate international trade such as pre-shipment
finance to produce or purchase a product, and post-shipment finance of the
receivables.
24. Which of the following is a type of underwriting spread?

a) Underwriter’s allowance
b) All
c) None
d) Concession
e) Manager’s Fee
An Underwriter is a broker/dealer or an investment bank. He guarantees that the

capital issue will be subscribed to the extent of his underwritten amount. He will
make good of any shortfall. The contract between the issuer and the Lead or
Managing Underwriter is the Underwriting Agreement. The agreement states the
terms and conditions of the offering, such as, the Underwriting Spread (the
amount the underwriters make on sales), the Public Offering Price (POP), and
the amount of proceeds from the offering that will go to the issuer.

· Manager's fee - The lead underwriter receives this fee on all securities sold.
· Underwriter's Allowance is the total spread minus the Manager's fee. This fee is
shared by syndicate members based on the type of syndicate account.
· Concession - It is typically the largest part of the spread and is paid to the
broker/dealer that actually took the client’s order.
25. Coming together of BNY and Mellon together is an example of ____
a) All
b) Takeover
c) Acquisition
d) Merger
e) Brokerage
26. ABC co wants to identify the best way for making salary credits to its huge employee base. Can you
select the best option?
a) Paper checks
b) Contactless payments
c) Cash
d) Automated clearing house
27. In private banking PTA is Payable thorough account

28. Loc is Letter of credit
29. On trading day at an exchange, a broker undertakes the following trades.
Buy/Sell Company No of shares Share price
Buy MS 200 $10
Sell MS 100 $10.5
Buy Google 100 $20
Sell MS 30 $ 11
Sell Google 50 20.5
Sell MS 40 $9
How much did the broker payout to exchange on total in-case of a) gross settlement system b)
a) (a) $4000 (b) $1235
b) (a) $1235 (b) $2235
c) (a) $260 for Microsoft $ 975 for Google & $260 for MS
d) None
e) (a) $ 1235 (b) $ 4000
Gross
Buy 200 $10 -$2,000

Buy 100 $20 -$2,000
$ 4000 needs to be paid to exchange to get 200 MS share and 100 google shares.
Netting
Net position for MS: +200-100-30-40 = 30

Net position for Google: +100-50 = 50
So broker would receive 30 MS shares and 50 Google shares from the exchange. The broker has to
pay $1235 only to get 30 MS shares and 50 Google shares from the exchange.
Buy 200 $10 -$2,000

Sell 100 $10.50 $1,050
Buy 100 $20 -$2,000
Sell 30 $11 $330
Sell 50 20.5 $1,025
Sell 40 $9 $360
Total -$1,235
30. There are 5 participants A, B, C, D, E in a 25M USD syndicated loan and A is the lead manager. The
borrower has agreed to pay 0.4% ($ 1,00,000) participant fee. How much each participant will
share in participant fee?
a) ($ 1,00,000) will be received every time money is withdrawn
b) None
c) (%$1,00,000) will be charged towards undrawn portion
d) ($ 1,00,000) will be received affront
e) ($1,00,000) will be received every month
31. Find out the one which does NOT come under retail banking service?
a) Personal loans
b) Credit card services
c) Trade finance
d) Electronic banking
Retail Banking
o Electronic Banking
o Credit Card services
o Retail Lending – Personal Loans, Home Mortgages, Consumer Loans, Vehicle Loans
o Private Banking
o Asset Management
32. Which of the following is NOT a feature of online trading
a) Fund transfer
b) Bill payment
c) Secure chat
d) Outbound calls
33. Which of the following is NOT an example of an option?
a) LEAPS (Long term options)
b) Call option
c) swaption
d) put option
e) oil futures
An option is a contract, which gives the buyer the right, but not the obligation to buy or sell shares
of the underlying security at a specific price on or before a specific date. There are two kinds of
options: Call Options and Put Options.
· Call Options are options to buy a stock at a specific price on or before a certain date.
· Put Options are options to sell a stock at a specific price on or before a certain date.
· Long-Term Options are options with holding period of one or more years, and they are
called LEAPS (Long-Term Equity Anticipation Securities).
· Swaps are the exchange of cash flows or one security for another to change the maturity
34. What could be the type of mortgage interest?
a) All
b) Fixed
c) Floating
d) Hybrid
A mortgage loan is a loan secured by real property through the use of a mortgage note which
evidences the existence of the loan and the encumbrance of that realty through the granting
of a mortgage which secures the loan.
The two basic types of amortized loans are the fixed rate mortgages (FRM) and adjustable
rate mortgages (ARM) (also known as a floating rate or variable rate mortgage).
Combinations of fixed and floating rate are also common, whereby a mortgage loan will have
a fixed rate for some period, and vary after the end of that period.
a) Help connect public to the central banks
b) Do not operate efficiently in the financial system
c) Should not be allowed to open savings accounts
d) Are not required
e) Link depositors to borrowers
36. In electronic check conversion (ECC), what happens once the check is processed?
a) Receive cash immediately
b) The customer signs a receipt authorizing the store to present the check to bank
electronically and deposit the funds into the store’s account
c) All
d) The customer can present a check to store cashier
37. Which is NOT a Captive finance company?
a) Bank of America
b) Ford Motor credit
c) Hyundai Motor Finance Company
d) General Motors Acceptance Corporation
e) None
Captive finance company is a subsidiary whose purpose is to provide financing to customers
buying the parent company's product.
The captive finance company is usually wholly owned by the parent company. Although there
are numerous examples of these, the best ones occur in the automotive industry.
General Motors has General Motors Acceptance Corporation (GMAC),
Daimler Chrysler has Chrysler Financial, and
Ford Motor Company has Ford Motor Credit Company (FMCC)
Similarly Hyundai Motor Finance Company serves Hyundai dealers

38. What is OTC?
a) Operating the company
b) Over the counter
c) Options on the counter
d) None
39. XYZ Corporation is a large client of bank and on average for a period it maintains $20 million in its bank
account. However the bank allows the authorized representatives off XYZ to utilize funds up to 15% over the
balance maintained. This is an example of which of the following option?
a) Accrual loan
b) Committed loans
c) Held for sale loans
d) Overdraft
e) Undrawn loan
Overdraft limits are extended to help the corporate manage the day-to-day cash flow needs
of the business. The bank makes available a certain sum of money for a period of time (say,
USD 20.0 million for a period of 1 year). There would be a separate account called the
overdraft account created to monitor withdrawals under this loan. Whenever the corporate
has a deficit in its main business account, it can draw money from the overdraft account (up
to the limit of USD 20.0 million). It can also put back money in the overdraft account as and
when they have surpluses in the business account.
40. You purchase a stock for $40. One year later you receive $2 as dividend and sold the share for $48.
How much is the return of holding period?
a) 45%
b) None
c) 25%
d) 10%
e) 50%
41. Which of the following is NOT a core private banking function?
a) Investment analysis and advise
b) sales and marketing
c) deposit mobilization
d) client management
e) research
42. Treasury bills can be transacted and settled on the same date? (TRUE)
43. Identity the odd one out
a) Equities
b) Shares
c) Stocks
d) Common stock
e) Conversible bond
Corporates raise money by issuing Securities in the form of Debt and Equity.
Debt is money owed by one person or firm to another. Examples are Bonds, loans, and commercial
paper.
Bonds: An investor loans money to an entity (company or government) that needs funds for a specified
period of time at a specified interest rate.
Bonds are issued in three basic physical forms:
 Bearer Bonds - bearer of the bond is presumed to be the owner. (owner’s name does not appear
on the bond)
 Registered As to Principal Only - Bonds that are registered as to principal only have the owner’s
name on the bond certificate, but since the interest is not registered these bonds still have
coupons attached.
 Fully Registered Bonds - Bonds that are registered to both interest and principal
 Corporate bond A bond issued by a corporation. Corporations generally issue three types of bonds:
Secured Bonds (Mortgage, Equipment Trust Certificates, Collateral Trust Bonds), Unsecured Bonds
(Debentures), and Subordinated Debentures.
 Municipal bond (Munis) A bond issued by a municipality. These are generally tax free, but the
interest rate is usually lower than a taxable bond.
 Treasury Securities Treasury bills, notes, and bonds are marketable securities the U.S. government
sells in order to pay off maturing debt and raise the cash needed to run the federal government
 Zero coupon bonds Zeros generate no periodic interest payments but they are issued at a discount
from face value.The return is realized at maturity
 Commercial paper An unsecured, short-term loan issued by a corporation, typically for financing
accounts receivable and inventories. It is usually issued at a discount to face value, reflecting
prevailing market interest rates.
EQUITY: Equity (Stock) is a security, representing an ownership interest.
 Common stock Common stock represents an ownership interest in a company. Owners of stock
also have Limited Liability (i.e.) the maximum a shareholder can lose is their original investment. Most
of the stock traded in the markets today is common. An individual with a majority shareholding or
controlling interest controls a company's decisions and can appoint anyone he/she wishes to the
board of directors or to the management team. Corporations seeking capital sell it to investors
through a Primary Offering or an Initial Public Offering (IPO). Before shares can be offered, or sold to
the general public, they must first be registered with the Securities and Exchange Commission (SEC).
Once the shares have been sold to investors, the shareholders are usually free to sell or trade their
stock shares in the Secondary Markets (such as the New York Stock Exchange – NYSE). From time
to time, the Issuer may choose to repurchase the stock they previously issued. Such repurchased
stock shares are referred to as Treasury Stock, and the shares that remain trading in the secondary
market are referred to as Shares Outstanding. Treasury Stock does not have voting rights and is not
entitled to any declared dividends. Corporations may use Treasury Stock to pay a stock dividend, to
offer to employees.
 Preferred Stock Preference shares carry a stated dividend and they do not usually have voting
rights. Preferred shareholders have priority over common stockholders on earnings and assets in the
event of liquidation.
 American Depository Receipts (ADR) The purpose of an ADR is to facilitate the domestic trading of
a foreign stock. An ADR is a receipt for a specified number of foreign shares owned by an American
bank. ADRs trade like shares, either on a U.S. Exchange or Over the Counter. The owner of an ADR
has voting rights and also has the right to receive any declared dividends. An example would be
Infosys ADRs that are traded in NASDAQ.
44. The amount owed by a company to suppliers in the next one year will be categorized under ____
a) Current liabilities
b) Deferred liabilities
c) Annual liabilities
d) Accrued liabilities
45. Company ABC has a gross profit of $50000. The operating expenses amounts to $10000. The interest on
loans availed amounts to $5000 and taxes to be paid amounts to $5000. Calculate the EPS if there are total of
20000 shares.
a) 1.5
b) 1.25
c) 2.5
d) 2
Gross profit = 50000
Operating expenses = 10000
Operating Income = Gross profit - Operating expenses = 40000
EBIT (Earnings Before Interest and Taxes) = Operating Income + other income – other expenses = 40000
Profit Before Tax (PBT) = EBIT - Interest Expenses = 40000 – 5000 = 35000
Net Income or PAT (Profit after Tax) = Profit Before Tax (PBT) – income taxes = 30000
EPS (Earnings Per Share) = Profit after Tax / No. of Shares = 30000/20000 = 1.5
46. If you invest $500 for 3 years at 8% simple interest, how much you have at the end of 3 years?
PTR/100 = 500*3*0.08 = 120

P+SI = 500+120 = 620
47. In an account earning simple interest from the first year is reinvested at the beginning of the
second year. FALSE
48. An investor has multiple investment options yielding various dollar returns at various points of
time, while he is comfortable with a return of X% pa. Which method should he use to compare the
various investments?
a) External rate of return
b) Net present value
c) Simple interest
d) Compound interest
Net Present Value (NPV) is a concept often used to evaluate projects/investments using the
Discounted Cash Flow (DCF) method. The DCF method simply uses the time value concept and
discounts future cash flows by the applicable interest rate factor to arrive at the present value of
the cash flows.
49. P & L statements represent transactions over a period of time while the balance sheet information
as of a specific date. TRUE
one that distinguishes P & L statement from a balance sheet, is that the
amounts shown on this statement represent transactions over a period of time while the items
represented on the balance sheet show information as of a specific date (or point in time).
50. Which of the following LCs is similar to a bank guarantee?
a) Straight
b) Negotiable
c) Back to back
d) Standby
e) Revolving
The letter of credit (LC) allows the buyer and Seller to contract a trusted intermediary (a bank)
that will guarantee full payment to the seller provided that he has shipped the goods and
complied with the terms of the agreement.
four parties are involved in any transaction using an LC
 Buyer or Applicant
The buyer applies to his bank for the issuance of an LC. If the buyer does not have a
credit arrangement with this issuing bank then he must pay in cash or other negotiable
securities.
 Issuing bank
The issuing or applicant’s bank issues the LC in favor of the beneficiary (Seller) and
routes the document to the beneficiary’s bank. The applicant’s bank later verifies that all
the terms, conditions, and documents comply with the LC, and pays the seller through his
bank.
 Beneficiary’s bank
The seller’s or beneficiary’s bank verifies that the LC is authentic and notifies the
beneficiary.
 Beneficiary or Seller
The beneficiary must ensure that the order is prepared according to specifications and
shipped on time. He must also gather and present the full set of accurate documents,
required by the LC, to the bank.

Letters of credit can be flexible. Some LC variations include: Revolving, Negotiable, Straight, Red
Clause, Transferable, and Restricted. But perhaps the safest type of letter of credit from the
seller’s point of view, is the Standby letter of credit.
fail safe method or guarantee for long-term projects. This LC promises payment only if the buyer
fails to make an arranged payment or fail to meet pre-determined terms and conditions. Should
the buyer default, the seller must then apply to the bank for payment - a relatively simple process
without complicated documentation. Since the standby LC can remain valid for years (Evergreen
Clause) it eliminates the cost of separate LCs for each transaction with a regular client.
51. The BASEL 2 frameworks has 3 main pillars. From the options given below, find the one that is NOT
a part of it.
a) Operational effectiveness
b) Market discipline
c) Minimum capital requirements
d) Supervisory review
52. Premature withdrawal of principal attracts penalty in a CD account. TRUE
53. _____ is the legal and professional proceeding in which a lender. Obtains a court ordered
termination of a borrower’s equation right of redemption
a) Securitization
b) Foreclosure
c) Sub-prime
d) Credit freeze
54. The BSE is large primary financial market in which the initial issuer receives the proceeds for the
sale of securities. TRUE
55. FICO score represents the credit worthiness of the borrower.
The FICO score is a key tool used by many lenders to assess the creditworthiness of a borrower;
it conducts a probability analysis on a borrower’s credit report assessing the ability of an
individual to repay his/her debts.
56. If total spread of underwriting is $100000. What is the amount which will be distributed in the syndicate?
a) 100000
b) 400000
c) 500000
d) Cannot be determined
e) 600000
Syndicate - To share the risk, and more efficiently distribute the offering to the public,
broker/dealers will join together in a Joint Trading Account. The syndicate profits by selling the
securities and earning a Spread (i.e., the POP less the amount paid to the issuer). Syndicate
members share the risk and are responsible for any unsold securities.
57. Purchase of account receivables at a discount is called FACTORING
Factoring is a financial transaction whereby a business sells its accounts receivable (i.e.,
invoices) to a third party (called a factor) at a discount in exchange for immediate money with
which to finance continued business.
58. Choose the right option
a) None of the mutual funds are listed on stock exchanges
b) Only close ended mutual funds are listed on stock exchanges
c) Only open ended mutual funds are listed on stock exchanges
d) Both close and open ended funds are listed on stock exchanges
You can buy mutual funds when mutual fund companies make initial public offerings. Filling out
an application form with a payment of some initial deposit is all it takes.
Buying mutual funds called closed end funds is from stock exchanges. Closed end funds are
initially sold by fund companies in limited numbers and they are listed in a stock exchange to
facilitate trading by investors. These will be usually at premium prices or as dictated by demands
in the market (higher demands for various reasons attract higher premiums).
You can also buy mutual funds (open end funds - funds purchasable perpetually from the
company). Here the price at which you buy will be a figure called as NAV in the industry circles.

a) Put options and swaps
b) Cash and call options
c) Call and put options
d) Equities and futures
e) Equities and call options

60. On trading at NYSE, a broker undertakes the following trades
Buy IBM 100 $11

Sell IBM 50 $10.50
Buy MS 100 $20
Sell IBM 20 $11
Sell MS 10 20.5
Sell IBM 30 $9
How much did the broker pay to exchange? A) gross B)net

Answer : 3100 (gross) 1880 (Net)
Buy IBM 100 $11 -$1,100 100

Sell IBM 50 $10.50 $525 -50
Buy MS 100 $20 -$2,000 100
Sell IBM 20 $11 $220 -20
Sell MS 10 20.5 $205 -10
Sell IBM 30 $9 $270 -30
Netting -$1,880 30 IBM 90 MS

Gross -$3,100 to by 100 IBM & 100 MS
61. Which institution is responsible for monetary policy for the country? CENTRAL BANK
Monetary policy is the process by which the government, central bank controls (i) the supply of
money (ii) availability of money (iii) cost of money or rate of interest to attain a set of objectives
oriented towards the growth and stability of the economy.
62. Which of the following is NOT true about LC?
I. Shifts credit risk from the importer to the importer’s bank (issuing bank)
II. Deals with products and not with documents
III. Are typically revocable unless specified otherwise
IV. Advising bank has the liability for the payment of the LC
a) AAA, AA, D, BBB
b) D,AA,B,AAA
c) AAA,AA+,D,AA
d) D,CB,A
Bond Rating Grade Risk

Moody's Standard & Poor's
Aaa AAA Investment Lowest Risk
Aa AA Investment Low Risk
A A Investment Low Risk
Baa BBB Investment Medium Risk
Ba, B BB, B Junk High Risk
Caa/Ca/C CCC/CC/C Junk Highest Risk
C D Junk In Default
64. Which of the following is treasury management system?
a) Pinnacle
b) Flex cube
c) TS2
d) Finnacle
e) Front Arena
Treasury Management Systems are

 Sungard / Front Arena
 Summit
 Calypso
 Wall Street Systems
65. Corporate loans are:

a) Never secured
b) Never unsecured
c) Secured or unsecured
d) Always unsecured
e) Always secured
proprietorship, partnership, private limited companies or public limited companies. Banks lend to
such entities on the strength of their balance sheet and business cash flows.
Corporate loans are provided by banks for various purposes like new projects, capacity
expansion or plant modernization, daily cash flow requirements (working capital) etc. Depending
on the nature of the requirement, loans may be long-term or short-term in nature.
Loans can be either secured or unsecured in nature. In case of secured loans, if the corporate
defaults on payment of principal or interest on the loan, the bank can take possession of the
security and sell off the same to meet principal or interest payment on the loan. Security is usually
in the form of land, buildings, plant and machinery, physical stock of the raw material, goods for
sale etc.
66. Two major functions of corporate finance division of investment banks are?
a) Technology and m&a ‘s
b) Risk management and underwriting
c) Security trading and underwriting
d) Mergers and acquisitions advisory and underwriting
e) Short selling
CORPORATE FINANCE
The bread and butter of a traditional investment bank, corporate finance generally performs two
different functions:
· Mergers and acquisitions advisory - Banks assist in negotiating and structuring a merger
between two companies. If, for example, a company wants to buy another firm, then an
investment bank will help finalize the purchase price, structure the deal, and generally ensure
a smooth transaction.
· Underwriting - The process by which investment bankers raise investment capital from
investors on behalf of corporations and governments that are issuing securities (both equity
and debt).An Underwriter guarantees that the capital issue will be subscribed to the extent of his
underwritten amount. He will make good of any shortfall.
a) Credit derivatives can be used either to take more risk or to avoid (hedge) it
b) Credit derivatives can be used to credit positions that can otherwise not easily be
established in cash market.
c) Increasing the credit limit of a corporate
d) Credit derivatives can be used both to diversify their credit risk exposures and free up
capital from regulatory constraints.

 Like any other derivative instrument, credit derivatives can be used either to take on more
risk or to avoid (hedge) it.
 credit derivatives can be used to create positions that can otherwise not easily be
established in the cash market.
 Banks use credit derivatives both to diversify their credit risk exposures and to free up
capital from regulatory constraints
68. Which of the following represents that the company is incorporated in USA?
a) LTD
b) PTE
c) PLC
d) INC
Ltd. or Ltd, is a business incorporated under the laws of England, Wales, Scotland, certain
Commonwealth countries, the Republic of Ireland, Cyprus and Israel.
A public liability company (legally abbreviated to plc with or without full stops) is a limited
liability company that sell shares to the public in United Kingdom company law, in the
Republic of Ireland and other Commonwealth jurisdictions
69. GE shares are selling for $15 each. You bought 200 shares one year ago at $12 are received
dividend payments of $2 per share. What was your total dollar capital gain this year?
a) 200
b) 600
c) None
d) 1000
e) 400
A capital gain is a profit that results from investments into a capital asset, such as stocks,
bonds or real estate, which exceeds the purchase price. It is the difference between a higher
selling price and a lower purchase price, resulting in a financial gain for the investor.
70. If the nominal interest rate is 10% and rate of inflation in 2%, what is the real interest rate?
a) 12
b) 8
c) 20
d) 5
e) None
71. The current value of future cash flow or series of cash flows is called?
a) NPV
b) Future value
c) Nominal value
d) Present value
Present Value is the current value of a future cash flow or of a series of future cash flows.
Future Value is the value that a sum of money invested at compound interest will have after a
specified period. The formula for Future Value is:
FV = PV*(1 + i)n
72. A card holder swipes his card for USD 100. How much does the merchant
i. Deduct from the card holder?
ii. Receive from the acquirer?
Assume merchant discount at 2%

a) USD 100, USD 100
b) USD 100, USD 98
c) USD 100, USD 2
d) USD 98, USD 98
Following are the

Income and Expense sources in an Acquirer business
Income:
 Merchant discount (1–4% of transaction value)
 Processing fees ($ 0.20 – $ 0.40 per transaction)
 Monthly minimum fees
 Customer service fees
 POS Equipment sales/service
Expense:
 Interchange fees paid to Issuer
 ISO/MSP fees
 Data processing & Communications expenses
 Risk Management
 Losses on Merchant Charge backs & Fraud
73. Which of the following operations cannot be done on LC?
a) Purchase
b) Discount
c) None
d) Acceptance
74. When would a company pay nominal interest on committed position?
i) Always
ii) In some cases
iii) If it wishes to pay
a) All
b) III only
c) I only
d) II only
Interest is usually paid on the disbursed amount of the loan. In some cases, a nominal interest if
also payable on the committed amount of the loan. Also, in most cases, the corporate would have
to pay a certain amount as processing fees for the loan. This would cover the bank’s overhead
costs in the loan process.
75. Securities with an original maturity of lesser than 1-year are traded on money markets?
TRUE
Money market is for short term financial instruments, usually a day to less than a year. The most
common instrument is a “repo”, short for repurchase agreement. A repo is a contract in which the
seller of securities, such as Treasury Bills, agrees to buy them back at a specified time and price.
Treasury bills of very short tenure, commercial paper, certificates of deposits etc. are also
considered as money market instruments.
a) Collateral e.g. cars in case of car loans, houses in case of mortgages
b) Products that are bought using online payment such as e-commerce
c) Developing and differentiating deposits, loans etc
d) All
e) Identifying products such as SAP, Oracle for the bank
77. ___ of securities trade involves the transfer of the securities from the seller to the buyer.
a) Clearing
b) Settlement
c) Netting
d) Trading
Settlement of securities is a business process whereby securities or interests in securities
are delivered, usually against (in simultaneous exchange for) payment of money, to fulfill
contractual obligations, such as those arising under securities trades
A number of risks arise for the parties during the settlement interval, which are managed by
the process of clearing, which follows trading and precedes settlement. Clearing involves
modifying those contractual obligations so as to facilitate settlement, often by netting and
novation. clearing denotes all activities from the time a commitment is made for a transaction
until it is settled.
78. The type of loan in which spread varies over the life of the loan is called ____
a) Positive spread loan
b) Floating rate loan
c) Semi-fixed rate loan
d) Negative spread loan
e) Fixed rate loan
A fixed rate mortgage (FRM) is a mortgage loan first developed by the Federal Housing
Administration (FHA) where the interest rate on the note remains the same through the
term of the loan, as opposed to loans where the interest rate may adjust or "float."
79. Which two risks of a financial institution may gain as well as losses?
a) Interest rate risk and foreign exchange risk
b) None
c) Credit risk and foreign exchange risk
d) Liquidity risk and credit risk
e) Credit risk and interest rate risk
a) T+2
b) T+3
c) T+4
d) T+1
In the U.S., the settlement date for marketable stocks is usually 3 (three)
business days after the trade is executed, and for listed options and government
securities it is usually 1 (one) day after the execution.
a) Type of property being collateralized
b) Range of loan tenure
c) All
d) Type of customer
82. What are Yankee bonds also known as? junk bonds
Yankee bond, a US dollar-denominated bond issued by a non-US entity in the US market. Yankee
bonds, ... are rated below investment-grade, commonly known as high-yield securities or junk bonds
83. Var can be measure at: 99%
84. Who is participating bank?
a) A bank which participates in every process of syndication
b) Bank which underwrites a loan
c) Bank which participates in arranging a loan
d) Bank which participates in disbursing a loan
e) Bank that participates in the syndication by lending a portion of the total amount required
a) Private banking
b) Initial public offer
c) Merger & acquisition
d) Investment banking
e) Corporate action
Corporate Action refers to dividend declarations, stock splits etc. The Corporate Action
department makes sure that the rightful owners (as on the Record Date) receive the dividends,
Splits etc.
86. From the given options identify the services that can be categorized under asset servicing line of
business
i. Corporate action processing iii. Transfer agency services
ii. Income processing iv. All
a) I only
b) Iii only
c) II only
d) Both I and II
e) IV
Asset servicing is a”core“ongoing service provided by custodians. This service includes

collecting dividends and interest payments, processing corporate actions and applying for tax
relief from foreign governments on behalf of customers.
list of services under the asset servicing
 Corporate Actions
24-hour customer service center provides responses to all client inquiries on active corporate
events using the latest SWIFT 15022 corporate action messaging standards.
 Income Processing
Receiving global income payments on due dates in the client-specified currency. Daily on-line
reports keep clients informed of conditional dividend projection as well as the status of
provisional, confirmed and credited income payments.
 Transfer Agency and Distribution Solutions Services
These services offer a single source for comprehensive mutual fund servicing, integrating global
transfer agency and distribution solutions with fund accounting, fund administration, cash
management and custody, depending on client needs.
 Custody
Custody service handles trade processing and settlement, asset servicing and electronic
information delivery in multiple time zones and languages on a fully integrated platform.
 Financial Reporting
Fund companies meet their financial reporting requirements to shareholders and regulators using
real-time financial accounting systems.
 Pricing/Holdings Valuation, Tax Information Services, Tax Processing, Trade Instruction
and Settlement, Cash Sweep
a) Account information
b) Support
c) Investment
d) Transactions
88. Which of the following is involved in the retail brokerage business in US?
a) Freddie Mac
b) Sallie Mae
c) Ginnie Mae
d) Federal Reserve
e) E-Trade
A brokerage that primarily serves retail investors rather than institutional investors is referred to
as a retail brokerage. Registered representatives who work for these retail brokerage firms are
expected to market their services directly to individual investors and offer investment advice.
a) Extending loans to corporate
b) All
d) Converting the profits from criminal activities into legitimate funds
Money laundering is generally regarded as the practice of engaging in financial transactions
to conceal the identity, source, and/or destination of illegally gained money by which the
proceeds of crime are converted into assets which appear to have a legitimate origin.
Money laundering occurs over a period of three steps, which include the physical distribution
of the cash (“placement”), the second step involves carrying out complex financial
transactions in order to camouflage the illegal source (“layering”), and the final step which
entails acquiring wealth generated from the transactions of the illicit funds (“integration”).
90. All of the following are valid means for custody client to communicate trade instructions to its
custodian EXCEP
a) FEDWIRE
b) By Fax
c) By telephone
d) SWIFT network
91. The term “settlement cycle” referes to the which of the following option?
Answer: Time period between the date on which the trade is executed and the date when
the trade is settled.
This settlement cycle is known as "T+3,"
92. On a trading day at the NYSE, a broker undertakes the following trades
end of the day.
Buy Dell 120 10
Sell Dell 70 10.5
Buy Cisco 200 20
Sell Dell 20 11
Sell Cisco 50 20.5
Sell Dell 10 9
Answer: To get 20 dell and 150 cisco shares the broker needs to pay 3130
93. Which of the following is an issuer and acquirer?

a) Elavon
b) Amex
c) Tsys
d) First Data Corporation
First Data Corp (Processor)

TSYS (Processor)
American Express (Acquirer, Card Organization & Issuer)
94. If a financial instrument has a 20% chance of paying 80% and an 80% chance of paying 50% what
would be the expected return?
a) 0.2
b) 0.44
c) 0.28
d) 0.56
E(R)= Sum( probability (in scenario i) * the return (in scenario i))
ER = ( 0.2 * 0.8 ) + (0.8 * 0.5) = 0.16 + 0.4 = 0.56
95. Who is known as “the drawer” in check processing?
a) Person who receives the check
b) Person receiving the payment
c) Maker’s bank
d) The clearing house
"Drawer" of a check means a person whose name appears thereon as the primary obligor,
whether the actual signature be that of (himself/herself) or of a person purportedly authorized
to draw the check in (his/her) behalf.
96. An open end funds with 10,000 units outstanding had the total assets of Rs 120,000 and the
liabilities of Rs 25,000. Calculate the fund’s NAV per unit.
Answer: NAV = Assets – liabilities / no. of outstanding shares = (95,000/10,000) = 9.5
Net asset value," or "NAV," of an investment company or a mutual fund is the company/fund’s
total assets minus its total liabilities. For example, if an investment company has securities and
other assets worth $100 million and has liabilities of $10 million, the investment company’s NAV
will be $90 million. Because an investment company’s assets and liabilities change daily, NAV will
also change daily. NAV might be $90 million one day, $100 million the next, and $80 million the
day after.
The investment company/fund calculates the NAV of a single share (or the "per share NAV") by
dividing its NAV by the number of shares that are outstanding.
97. Which of the following is not an index?
a) FTSE
b) DAX
c) HangSeng
d) NASDAQ 100
e) NYSE ------------ (is a Stock Exchange)
A statistical measure of change in an economy or a securities market. In the case of financial

markets, an index is an imaginary portfolio of securities representing a particular market or a
portion of it. Each index has its own calculation methodology and is usually expressed in terms of
a change from a base value. Thus, the percentage change is more important than the actual
numeric value.
98. The components to determine the rate of exchange in a Forward contract are:
a) Cross currency Rate and forward rate adjustment
b) Current spot rate and forward rate adjustment
c) Forward rate adjustment and amount of currency bought/sold
d) Current spot rate, amount of currency bought/sold
The most basics tools of forex risk management are 'spot' and 'forward' contracts. These are
contracts between end users and financial institutions that specify the terms of an exchange of
two currencies. In a spot transaction the currency that is bought will be receivable in two days
whilst the currency that is sold will be payable in two days.
Most market participants want to exchange the currencies at a time other than two days in
advance but would like to know the rate of exchange now. This is done through a forward
contract to exchange the currencies at a specified exchange rate at a specified date. In
determining the rate of exchange in six months time there are two components:
· the current spot rate (is simply the current market rate as determined by supply and demand)
· the forward rate adjustment (Forward rate (Local currency/USD) = Spot rate *(1+ interest rate in
US) / (1+ local interest rate))
99. In trade finance, which of the following factors are considered while choosing mode of
financing?
a) Exporter’s fund, risk factors, cost of financing, time frame
b) None
c) Time frame, cost of financing, buyers trade associates
d) Government guarantee program, seller preference
FACTORS IN CHOOSING THE MODE OF FINANCING Costs, Time frame, risk factors,
government guarantee program and exporter’s funds.
100. A custodian processes interest proceeds from the fixed income securities held under its
custody. Which division, within the custodian company, is responsible for carrying out the
position
a) Transaction management
b) Income management
c) Cash management
d) Brokerage services
101. A bank has a portfolio of %50 million worth of loans of which it wants to hedge $20 million
worth of loan. What is the processes called?
a) Held for sale loans
b) Committed loans
c) Undrawn loans
d) Trading loans
e) Accrual loans
CLASSIFICATION OF LOANS BY THE BANK

1. Classification of Drawn Loans
Accrual—Loans that management has the intent and the ability to hold for the foreseeable future
or until maturity/loan payoff. Accrual loans are reported on the balance sheet at the principal
amount outstanding, net of charge-offs, allowance for loan losses, unearned income, and any net
deferred loan fees.
Held-for-sale—Loan or loan portfolios that management intends to sell or securitize.
Trading—Loans where management has the ability and intent to trade or make markets (i.e.,
sell/hedge the credit risk.) Loans held for trading purposes are included in Trading Assets and are
carried at fair value, with the gains and losses included in Trading Revenue provided that the
criteria outlined in this policy are met.
2. Classification of Undrawn Loan Commitments
Loan commitments are generally classified as accrual and recorded off-balance sheet.
Differences between loan and commitment are as follows; -
Loans are reflected in the asset side of the bank’s balance sheet. Commitments are
‘off-balance sheet’ items and are reflected in the contingent asset side of the balance
sheet.
· The amount of the loan that is disbursed is credited to the account of the borrower. In
case of a commitment, there is no disbursement or credit to a borrower’s account.
· The fee charged on a loan is a function of the disbursed amount. The fee charged on
commitment is a function of the amount of commitment that is not utilized.
102. What term is used to describe an LC that remains valid for years there by eliminating the cost
a) Revolving LC
b) Evergreen clause
c) Green clause
d) Irrevocable LC
e) Fixed clause
The standby LC can remain valid for years (Evergreen Clause) it eliminates the cost of separate
LCs for each transaction with a regular client.

a) Cap-current rate
b) Current rate –floor
c) Current rate – base rate
d) None
e) Base rate – floor
104. A settlement can be considered as final only if :

a) The settlement is unconditional
b) The settlement is irrevocable
c) The transfer of funds and securities take place simultaneously
d) The settlement is unconditional as well as irrevocable
105. Credit derivatives can be used to reduce the regulatory capital requirement and a diversify
credit risk.
106. The details of trade obligation are created by
a) Broker
b) Depository
c) Exchange
d) Clearing house
a) Documentation collection, strict compliance rules apply
b) Standby letter of credit, less costly than documentary collection
c) Wire transfer, more costly than other payment alternatives
d) Foreign checks, not useful for cross border trade
e) Commercial letter of credit, improves applicant’s credit facilities
108. Increasing the cash reserve ratio for banks would have an impact on which of the following
a) Increased interest rates
b) Increased money supply in the economy
c) Profitability of firms
d) Reduced money supply the economy
109. In defined benefit plans, the benefits is expressed as an ___ and in defined contribution plans,
the benefit is expressed as an_____
a) Account balance, account balance
b) Account balance, annuity
c) Annuity, annuity
d) Annuity, account balance
110. Identify the services offered by retail banks:
a) Savings and checking accounts
b) Personal loans
c) Debit cards
d) All
111. Trading of previously issued securities takes place where?
a) At company headquarters
b) Secondary market
c) All
d) Primary market
e) Through private placement
The primary market is where securities are created (by means of an IPO) while, in the secondary
market, investors trade previously-issued securities without the involvement of the issuing-companies.
The secondary market is what people are referring to when they talk about the stock market. It is
important to understand that the trading of a company's stock does not directly involve that company.
112. Which of the following is NOT a settlement method for bank loans?
a) Preclosure
b) Participation
c) Securities repository
d) Sub-participation
e) Assignment
113. NASDAQ is based out of __________
a) London
b) Chicago
c) None
d) Singapore
e) Hong kong
NASDAQ, is an American stock exchange (located in New York). "NASDAQ" originally stood
for "National Association of Securities Dealers Automated Quotations”.
114. In a securities lending transaction, if the buyer of securities provides cash as collateral, then the
seller of securities has to provide the buyer with a interest amount for the cash. What is this
interest amount called?
a) Collateral interest
b) None
c) Interest rate
d) Rebate rate
e) Return rate
Securities lending or stock lending refers to the lending of securities by one party to another.
The terms of the loan will be governed by a "Securities Lending Agreement", which requires that
the borrower provides the lender with collateral, in the form of cash, government securities, or a
Letter of Credit of value equal to or greater than the loaned securities. The agreement is a
contract enforceable under relevant state law, which is often specified in the agreement.
As payment for the loan, the parties negotiate a fee, quoted as an annualized percentage of the
value of the loaned securities. If the agreed form of collateral is cash, then the fee may be quoted
as a "rebate", meaning that the lender will earn all of the interest which accrues on the cash
collateral, and will "rebate" an agreed rate of interest to the borrower
115. Which of the following is NOT a commonly used term in the contest of banking?
a) Social banking
b) Investment banking
c) Corporate
d) Personal banking
e) Retail banking
a) Increase in prices
b) Very high change in prices
c) Currency crisis
d) Decrease in prices
e) Economic crises
a) Variance-covariance matrix
b) A combination of Monte Carlo and historical simulation
c) Historical simulation
d) All would take equal time if done using a software
e) Monte Carlo simulation
118. TARP stands for: Troubled Asset Relief Program
119. In a syndicated loan of 100M, each participant commits for 25% of loan. But due to exigencies
if one participant reduces his share to 22% and others to share equally. What will be revised
share of other participants?
a) 0.3
b) 0.24
c) 0.31
d) 0.26
e) 0.29
120. Which of the following debt instrument involves lowest risk? Mutual Funds or municipal bonds
121. Ram deposits $100 in xyz bank. Puja takes a loan of $100 from XYZ bank. Which of the
a) None
b) Bank is charging 3% interest to Puja and paying 5% interest to Ram
c) Bank is charging 5% interest to Ram and paying 5% interest to Puja
d) Bank is charging 5% interest to Puja and paying 3% interest to Ram
e) Bank is charging 3% interest to Puja and paying 5% interest to Ram
122. Due to which of the following reason is rebalancing performed?
a) Change in original asset allocation due to market performance
b) Change in risk profile of the investor
c) All
d) Occurrence of major life events in the investor’s life
123. If a bank gets a deposit of $5000, assuming a reserve requirement (CRR) of 10% and that it
circulates through 2 more banks, leading to which of the following money multiplier effect?
a) It creates a loan of $1210
b) It creates a reserve of $500
c) It creates a loan of $8550
d) None
e) It creates a reserve of $ 4000
When a bank gets a deposit of $100, assuming a reserve requirement of 10%, the bank can then
lend out $90. That $90 goes back into the economy, purchasing goods or services, and usually
ends up deposited in another bank. That bank can then lend out $81 of that $90 deposit, and that
$81 goes into the economy to purchase goods or services and ultimately is deposited into
another bank that proceeds to lend out a percentage of it. In this way, money grows and flows
throughout the community in a much greater amount than physically exists. This is also called
multiplier effect. An initial deposit of $100 has created a reserve of $27, and loan of $244.
5000
Bank 1 (10% = 500) ------------------ 4500
Bank 2 (10% = 450) ------------------ 4050
Reserve = $950 and loan is $8550
124. If the limit = $2000, margin = 20% and asset value = $ 2000, then drawing power for an open
a) 2000
b) 1600
c) 2200
d) 2400
e) None

L=2000 => max value for DP is not greater than 2000

(1-M)AV = (1-0.2)2000 = 1600
125. Direct investment in stock markets can be a better option investing through mutual funds if:
a) The investor has large capital, knowledge and resources for research
b) The investor has identified a bullish phase in the stock market
c) The investor wants to invest for the long term
d) The investor wants better returns than those offered by mutual funds
126. The process of creating buffer against the potential loss of non-performed loans is called:
a) Loan classifying
b) Loan provisioning
c) Loan buffering
d) Loan monitoring
127. Retail loans are asset products offered by the bank. TRUE
a) All
b) Declaring dividend
c) Stock split
d) Rights issue
e) M&A
129. An investor indulging in short selling on a share expects the share price to decrease. TRUE
130. With reference to settlement, FOP stands for: FREE OF PAYMENT

Find spread?
Ans: 1.95
Ans-100,100,
98,100,
100, 98,
98, 98,
100, 2
redemption

year

2) Set credit limit

7. compliance risk
8. systemic risk
Q8 VRU refers to??

7. front office
8. back office
1.1200
2.1500
3. 500
4.1020

Q15. FII,
Interest score
FFLP score
Loan Score
13. T+1
14. T+3
15. true
16. T+2


14. buying shares
15. buying property
16. buying car



Ans: Mid office

year


16. 3m
17. 3000
18. 0.1m
19. 0.3m
20. no of the above
17.65)

Deposit money
Make a loan
Print Money
Invest Money

Ans: True


Ans: By fax

DEMAT
ESCORW

Future Contracts
Options
Swap
Bond
188. If an investment pays interest at an annual rate of 5% per year, compounded twice
a year than the effective yield larger than 5.5%
a. True b. False

b. Less than offer
c. More than offer
e. Equal to offer

b. Central banks
c. Companies
191. In an account saving simple interest from the first year is reinvented at the
beginning of the second year?
a. True b. False

b. Terms loans
c. Cash
e. Receivables

b. Lot of research

a. True b. False
a. Market risk
c. Credit risk
d. Operational risk
e. Liquidity risk
a. Current account
b. Nostro account
c. Vostro account
d. Forex account
e. Overseas account
a. Pre-closure
b. Assignment
c. Participation
a. Futures
b. Spot
c. Forward
d. Stock
e. Option


z. Bond prices increase
aa. Bond prices decrease
bb. Bond prices do not change
cc. Economy goes into deflation
dd. Interest rate never fall, they always go up.
z. -2%
aa. 2%
bb. -1.96%
cc. Very high
dd. 1-2%
end of the 3 years?
z. $1225
aa. None of listed option
bb. $1000
cc. $1070
dd. $1270

z. Letter of commercials
aa. Letter of credit worthiness
bb. Letter of credit
cc. Letter of commerce
dd. Letter of complaints

u. Small investor are protected, hence it is a low risk investment avenue.
v. Banks are in the best position to lend out money at competitive
w. Depositors are participant in primary and secondary markets.
x. All of listed options.

u. For the same return, B tolerates lesser risk than B.
v. For the same return, A tolerates higher rate of return.
w. For the same return, A tolerates lower rate of return.
x. For the same return, A takes higher risk.

z. Sweep facility
aa. Structured lending to client
bb. All
cc. Short term credit facilities
dd. Overdraft

z. None
aa. To provide stability of money supply.
bb. To serve certain social objectives.
cc. To prevent failure of any financial institution.
dd. To offset moral hazard incentive provided by deposit insurance and other
guarantees.

u. Monte- Carlo simulation.
v. All equal time with software.
w. Variance-Covariance matrix.
x. Combination of Monte- Carlo and Historical Simulation.
z. Payment to employers
aa. None
bb. Investment
cc. Loan
dd. Withdrawal
f. True b. False
can be refer.
z. Market risk
aa. Interest rate risk
bb. Commodity risk
cc. Operational risk
dd. Liquidity risk
a. (i) $1780 (ii) $3000

c. (i) $3000 (ii) $1780
d. None
Z) $2500
AA) $3000
BB) $300
CC) none
DD) $250
A) Issuing Bank
C) Beneficiary Bank
D) Seller
E) Buyer
A) Liquidity risk
D) Credit risk
A) A very high
B) 2
C) -1
D) -2
E) 1
A) Currency risk
B) Attrition
C) Credit risk
D) All of the above
D) Research
B) is too high
C) Is about right
D) is too low

B) Acceptance
C) Negotiate
D) Purchase
E) Discount

B) Tiger Woods
C) Any of the above
confirmation?
B) Back to back LC
C) LC
D) Standby LC
the end of the day
Z) IBM no exchange of shares ; MFST 90 shares to receive ; $1780 to pay out to the
exchange
AA) None of these
BB) IBM no exchange of shares ; MFST 90 share to receive ; $3000 to pay out to
exchange
CC) IBM 70 shares to given out ; MFST 90 shares to receive ; $3000 to pat out to
exchange
DD) IBM no exchange of shares ; MFST 90 share to receive ; $1780 receive from the
exchange

Z) All of the listed option
AA) Documents
BB) Physical instrument like check and draft
CC) Electronic data files
DD) Cash

Z) APR
AA) None
BB) IRR
CC) NPV
DD) Rate of interest applicable for the loan
Z) learning services
AA) ‘None
BB) Merger and Acquisition
CC) Valuation of firm
DD) Underwriting and distribution of equity issues.
Z) 500000
AA) 100000
BB) 400000
CC) 600000
DD) Can not be determined
gain this year
Z) 200
AA) 500
BB) None
CC) 300
DD) 400

U) State regularity agency
V) SEC
W) Industry wide SRO
X) All of the listed option

a. Demat
b. Personal loan
c. None
d. Hire Purchase
e. Auto loans
Z) Monetary policy
AA) None
BB) Money multiplier effect
CC) Profit making tendency of a bank
DD) Fiscal policy

Z) Amount of bank capital expressed as % of the risk weighted credit exposure & market
risk.
AA) Amount of bank capital expressed as % of the risk weighted credit exposure
BB) Amount of bank capital expressed as % of the risk weighted credit exposure &
operational risk.
CC) Amount of bank capital expressed as % of the risk weighted credit exposure
DD) None

Z) Calypso
AA) Summit
BB) Wall street system
CC) Front arena
DD) Flex cube

Z) Managing large bond issues
AA) Raising huge money from the bank
BB) Managing large capital raising act
CC) Managing conflict between investment banks.
DD) IPO distribution.
Z) Treasury bills have their interest paid in a lump sum at maturity
AA) None
BB) Treasury bills have greater interest risk than either treasury bond or treasury note
CC) Treasury note has maturity dates up to 10 yrs
DD) Treasury bonds have maturity dates up to 30 yrs
Z) Account balance , Annuity

AA) Annuity , Annuity
BB) Account balance , Account balance
CC) None
DD) Annuity , Account balance
Z) none
AA) Syndicate
BB) Allocation
CC) Assignment
DD) Secondary

Z) issue card
AA) Set credit limits
BB) Set interest rates
CC) Set card fees
DD) Security/ Risk management
involved
Z) Global custodian , domestic sub custodian , depository in foreign country and sometime
AA) Depository in foreign country
BB) Global Custodian
CC) stock exchange in foreign country
DD) domestic sub custodian

called
Z) Cash projection
AA) Investment manages universe
BB) Asset allocation
CC) Fund administration
DD) Asset / liabilities analysis

Z) Facilitating international transaction
AA) Facilitating intra company transaction
BB) Facilitating international transaction , corporate lending and settling up of new
factories
CC) Facilitating corporate lending
DD) Facilitating setting up of new factories

U) a price at which a firm is ready to buy or sell
V) When bid is equal to offer
W) When the firm has a choice of deciding the securities to take
X) a price at which a firm is ready to buy or sell it also means when bid is equal to
offer
Z) 6 month deposit of min balance of $1000
AA) 3 month deposit of min balance of $4000
BB) 12 month deposit of min balance of $1000
CC) None
DD) 6 month deposit of min balance of $2000

Z) $3mn
AA) $4.5 mn
BB) $9mn
CC) $4.4mn
DD) $1mn
Z) Loan of $2439
AA) Loan of $1710
BB) None
CC) Create a reserve of $100
DD) Create a reserve of $190
U) Mutual Fund
V) Mortgage Company
W) None
X) Stock Exchange
z. 45%
aa. 10%
bb. 25%
cc. 50%
dd. None
z. Trade Credit
aa. Revolving Credit agreement
bb. Agreement Irrevocable Credit
cc. Line of Credit
dd. Letter of Credit
66. Odd 1 out

z. Warren Buffet
aa. George Soros
bb. Bill Gates
cc. Ben Graham
dd. Peter Lynch
z. Investment manager Universe
aa. Asset Allocation
bb. Asset Liability Analysis
cc. Fund Admin
dd. Compliance Reporting
u. Current rate – Base Rate
v. Cap – Current Rate
w. Current Rate – Floor
x. Base Rate – Floor
z. Exporters Fund
aa. All
bb. Government Guarantee Program
cc. Time Frame
dd. Cost of Financing
f. True b. False
investors?
z. Stock Repurchase Program
aa. Transition Management
bb. Transition Management & Commission Recapture
cc. Commission Recapture
dd. None

z. the obligation to buy a futures contract
aa. the obligation to sell a futures contract
bb. the right & obligation to buy a futures contract
cc. the right but not the obligation to buy a futures contract
dd. the right but not the obligation to sell a futures contract

z. Call Option
aa. Swaption
bb. Leaps
cc. Oil Futures
dd. Put Options
k. True
l. False
u. Beneficiary Bank & Reimbursing Bank
v. Importer Exporter
w. Reimbursing Bank & Beneficiary Bank
x. Issuing Bank & Confirming Bank
u. DC plans fix the monthly contribution from the employee making his financial planning
easier.
v. DC plans are seen by employees as investment which to accumulate retirement income.
w. All
x. Employer increasing wants employees to share responsibility for retirement
took clients order
z. Salary
aa. Manager fee
bb. Wage
cc. Concession
dd. Underwriter

u. Listed market
v. Over the counter market
w. Third market
x. Fourth market

u. Market capitalization more than $200000
v. All
w. Net worth greater than $500000
x. Household income of max $50000 year.

u. The business focuses on small no. of high net worth individuals.
v. The business focuses on small and medium enterprises.
w. The business focuses on large no. of individuals.
x. The business focuses on large no. of corporation bodies.

z. Trades in securities
aa. Quotes to its bets customer
bb. Intends to buy
cc. Intends to sell
dd. Quotes when it does not want to trade.
f. True b. False
u. Stock market
v. Retail banking
w. Corporate banking
x. Customer lending
84. Which is true?
u. Financer owns the asset both in case of ‘Lease’ and ‘hire Purchase’.
v. Tax deduction cab be claimed fro the full value of the rental paid in case of lease
w. All
x. Depreciation in claimed by the financer in lease and not in case of hire purchase.
z. Global custodian,
aa. None
bb. Main custodian
cc. Sub custodian
dd. Secondary custodian

P) Bonds sell at a discount when Coupon Rate is less than Market Interest rate.
Q) None
R) Bond is debt instrument giving issues.
Z) Capitalized loan
AA) True Discounted loan
BB) Amortized loan
CC) Demand loan
DD) Discounted loan

Z) Commercial bankers
AA) Investment Bankers
BB) None
CC) Company Management
DD) Company Management and Investment Bankers

Z) Bankers Acceptance reduces lending capacity
AA) Sight Drafts are negotiable instruments
BB) Bankers Acceptance demands immediate payment.
CC) None
DD) Banks can raise funds by selling acceptance.
Z) Investible assets
AA) Location
BB) Age
CC) Net worth
DD) Name
Z) Spot, futures
AA) Debt , Equity
BB) Primary , Secondary
CC) Money, Capital
DD) Secondary, Primary
Z) Investment Management
AA) Asset Servicing
BB) None
CC) Trading
DD) Investor Services.

U) All
V) Stands for Suspicious Activity Reports
W) Customer Identification Program
X) Requiring Businesses, which were only to report cash transactions involving more than
1.00,000?
P) Yes under RTGS
Q) No
R) Yes under net-settlement system
Z) 30 stocks
AA) 20 stocks
BB) 40 stocks
CC) 10 stocks
DD) 50 stocks

D) All

Z) Interest rate and foreign exchange
AA) Liquidity and credit
BB) Credit and Interest rate
CC) Credit and Foreign exchange
DD) All
1. 1345.1
2. 1243.1
3. 1231.1
4. None
5. 1235
1. Trading
3. Investor service
4. None
5. Asset Servicing

2. Client Partner
3. Commercial Paper
5. Credit Provision
1. All of the above
3. High Leveraging
4. High Speculation
z. 2% discount is offered if payment is made within 15 days.
aa. 15% discount is offered if payment is made within 2 days; the payment should
bb. 30% discount is offered if payment is made before 15 of the month.
cc. 15% discount is offered if payment is made between 2 & 30 days;
dd. 15% discount is offered if payment is made within 30 days.
f. True b. False
answer)
z. Irrevocable LC
aa. None
bb. Red clause
cc. Revolving LC
dd. Evergreen clause

z. Plan sponsor
aa. Plan administrator
bb. Fund trustee
cc. None
dd. Government

z. Committed amount
aa. Either disbursed or committed loan
bb. Unused amount of loan
cc. Disbursed amount
dd. None
p. Yes
q. No
r. Yes, but if prices on the buy & sell side match.
z. None
aa. $1600
bb. $2200
cc. $2400
dd. $2000
z. Setting risk limits
aa. Hedging
bb. Diversification
cc. Arbitrage
dd. Insurance

z. Municipal bonds
aa. Bonds of govt. sponsed enterprise
bb. Corporate bonds
cc. US treasuries
dd. Shares
manager.
z. None
aa. Plan administrator & trustee both have outsourced plan administration as well as fund
bb. Any
cc. Plan administrator gives investment instruction to investment manager while
dd. Trustee gives investment instruction to investment manager, while plan administrator
application?
z. Issuer processor
aa. Collection agency
bb. Issuing bank
cc. Authorization engine
dd. Credit bureau.

z. Consolidated Price index
aa. Consument popularity index
bb. Consumer product index
cc. Consumer price index
dd. None
z. Credit scoring
aa. Credit increase
bb. Credit incrementation
cc. Credit revision
dd. Credit enhancement.
z) 4
aa) 5
bb) 3
cc) 1
dd) 2

u) Monte- Carlo
v) Historical
w) Variance-Covariance
x) Variance-Covariance and Monte- Carlo

u) Plc
v) Pte
w) Ltd
x) Inc

z) Govt. guarantee Program
aa) Time frame
bb) All
cc) Cost of financing
dd) Exporter fund.
z) Risk management
aa) Front office
bb) Back office
cc) Trade
dd) Board of director

z) Traders
aa) Back office
bb) Specialist
cc) Front office
dd) Mid office

u) Govt. regulation
v) Many traders
w) Full info
x) Cost effective trading

z) Custodian bank
aa) Clearing bank
bb) Clearing member
cc) Trading member
dd) Regulator
z) Primary
aa) Secondary
bb) Participant
cc) OTC
dd) Index

26. DJIA
27. Hangseng
28. EAFE index
30. S&P 500
_________ERISA
403b
401k
401b
403k
None
Participant
Government
Investment manager
Sponsor



derivatives
question/


Options:
24. All
e. None

e. All
f.
b. Interest earned
d. All
a. Issuing bank
b. Buyer
d. Seller
e. Beneficiary bank
a. LC
b. Direct debit
d. Counter trade
e. Cash in advance
a. Equally unlikely
b. Equally likely
c. ABC
d. XYZ
e. None

a. Pre-closure
b. Assignment
c. Participation

a. AAA,AA+,BBB,D
a. 118.8
b. Exactly 100
c. Exactly 200
d. Around 109
e. None

a. SEC
d. All
252. Odd man out:-

a. SEC
b. NYSE
c. NASDAQ
d. LSE
e. NSE
a. True
b. False

b. All
c. High speculation
d. High leveraging

b. Lot of research

a. All
d. Time frame

b. All

e. None
a. Line of credit
c. Letter of credit
e. Trade credit

a. Specialist
b. Traders
c. Back office
d. Front office
e. Mid office
a. Equities

a. E-trade
b. Charles Schwab
c. Sallie Mae
d. Federal reserve
e. a and b both
b. Style maps score
d. Alpha

e. None

d. None

a. 4th market
b. 3rd market
c. Listed market
d. 2nd market
e. OTC market
a. Discounted loans
c. Capitalized
d. Demand
e. Amortized


a. Unlisted market
c. Unlisted
d. Super
e. 2nd market
a. Sweep facility
c. All
e. Overdraft

a. Call
b. Put
c. Swaption
d. Oil futures
e. Leaps

a. Cash
b. Electronic data
c. Docs
e. All
c. Do not change
a. Bid
b. Indirect
c. Direct
d. Cross currency
e. Ask rate

f. Intends to buy
g. Intends to sell
i. None
d. Investment gain
a. Disbursed amount
b. Committed amount
c. Both
d. Either
e. None
279. Odd man out?
a. Equity
b. Stocks
c. Shares
e. Common stock
a. Sponsor
b. Custodian
d. Record keeper
e. Participant
as
a. Prime rate
b. Bond rate
c. Discount rate
d. Federal rate


a. 4,1,3,2,5 b. 4,5,2,3,1 c. 1,2,3,4,5 d. 3,4,2,5,1 e. 2,5,1,3,4

4. A choice quote is _______________.

e. Domestic Sub-custodian
f. b. Stock exchange in foreign country
g. c. Global Custodian, Domestic Sub Custodian, Depository in Foreign Country and
h. d. Depository in foreign country e. Global Custodian

b. Data on SD is required for this b. A c. B




12. Retail loans are asset products offered by the bank. State True or False.
True False
a. 1% b. 2% c. Very high d. -1% e. -2%


c. Seller of USD
e. No role

a. Equities


22. A mutual fund with investment objective of achieving high capital growth approaches an investor

borrow securities?
24. The process of transferring obligation from one party to another is called _________






ERISA
True False
inflation rate is:
40. If total spread on underwriting is $ 500000 and Manager's fee is $ 100000, what is the amount

c. Historical Simulation d. A combination of Monte Carlo and Historical Simulation


the day.
exchange



True False

___________.

confirmed term Letter of Credit with a maturity date of 60 days from the time of shipment. The

c. DC plans fix the monthly contribution from the employee, making his financial planning easier
Patriot Act
notes.
62. Legitimate ways to cancel the credit card transactions with in a limited time frame are
_________________

64. Bank New has a portfolio of $30 million worth of loans, which it wants to hedge. This is an

a. the risk of loss resulting from errors in processes, people and systems
factors
fall due.
True False

True False
b. Sub Custodian b. Secondary Custodian c. None of the listed Options
requirements.
True False


the paths followed by swap rates, policy surrender rates, mortgage prepayment rates for the

True False
79. If the funding cost of a Company goes up due to harden ing of interest rates, this can be
attributed to

82. The purchase of any stock for immediate delivery is a ______ market trans action.
True False



e. Time consuming




year?
True False
97. Under what category can services like asset/liabilit y analysis, asset allocation, cash projection,
compliance reporting, fund administration, investment manager universe, etc. provided by an

depository
d. Through an International Central Securities Depository, which has direct links with the local
depository



105. Which of the following best describes how banks make loans?

True False
True or False.
True False

True False




120.Factoring is______________
million obligation?
d) No
e) Yes
f) Insufficient data to draw any conclusions
a) $ 6890.42
b) $ 6789.31
c) $ 6780.24
d) $ 7346.51
following payments:
Year 1 $ 100
Year 2 $ 100
Year 3 $ 100
Year 4 $ 1,200
rate?*
PV(2,0.7)=0.8734; PV(3,0.7) = 0.8163; PV(4,0.7)= 0.7629600
e. $1500
f. $ 1231.31
g. $ 1177.91
h. $ 1096.28
Direct Cost $ 122.7
Tax 23.35%

e. $ 106.38 Mn
f. $ 227.18 Mn
g. $ 104.48 Mn
h. $ 51.14 Mn

e. $ 106.38 Mn
f. $ 53.04 Mn
g. $ 52.94 Mn
h. $ 45.10 Mn

a) $ 45.1 Mn
b) $ 35.5 Mn
c) $ 34.56 Mn
d) $ 52.94 Mn

e. 0.76
f. 0.599
g. 0.58
h. 0.63
a) Working Capital
b) Asset
c) Owner’s Equity
d) Borrowings
Inventory $165,000
Equipment $500,000
Land $194,000
Cash $25,000
e) $ 944,000
f) $ 894,000
g) $ 900,000
h) $ 874,600

e. $ 250,000
f. $ 85,000
g. $ 225,000
h. $ 190,000

a) $ 165,000
b) $ 377,000
c) $ 350,000
d) $ 167,000

e. $0
f. $ 19,400
g. $ 50,000
h. $ 69,400

a) $ 727,000
b) $ 377,000
c) $ 350,000
d) $ 167,000
profits this year.
e. $0
f. $190,000
g. $100,000
h. $60,000
e. No, he doesn’t need an overdraft

f. Yes, and the min. limit should be Rs. 4,650
g. Yes, and the min. limit should be Rs. 6,600
h. Yes, and the min. limit should be Rs. 5,200
e. No, he doesn’t need an overdraft

f. Yes, and the min. limit should be Rs. 4,650
g. Yes, and the min. limit should be Rs. 6,600
h. Yes, and the min. limit should be Rs. 5,200
1. You invest Rs.5000 at 8% p.a. compound interest in a bank. After 5 years, wha t is the amount
Rs.12346 Rs. 7000 Rs. 2346 Rs. 7346 Rs. 7546
payments:
1 Rs. 2000
2 Rs. 2000
3 Rs. 22500
22512 22558 23021 21000 21500
interest is _____.
9.50%, 13.50% 9.50%, 5.50% 9.50%, 9.50%
rate is:
borrower?
5.10%?
investments?


year?
7.50% 6% 11% 7% 10%


Debenture


the listed Options

Options



36. Mutual funds





obligations?

Swaptions
TI)
30, 140 and 10 60, 60 and 60 93, 20 and 67 140, 30 and 10
140, 30 and 0
profits
Receive interest
assumption to make?
49. Municipal bonds


High Yield bonds

Take no action
would



A stock option.
Internal financing.

Both 2 and 3

Using debt finance

$9,752.54.
Both are equal
Only 1
Premium on the bond
Can never sell



82. Primary markets

$1000. $0. $300. $200. $70

Money.

day of maturity.
maturity.

70%. 14%. 10% 7% 12.5%

________ market
Primary; secondary
Secondary; primary
Money; capital
Spot; futures
Debt; equity

Funds; liquidity
Funds; low risk
Securities; funds

reasons?
failure.
bank that failed.
Private costs to the shareholders of the bank exceeds the social costs of the a general bank failure.



104. Financial intermediaries differ from other businesses in that both their assets and their

gather information

which the investment is made, can be hedged by using a forward or futures contra ct in foreign

always sells at par

Supply and demand are the primary forces that determine exchange rates, but centra l banks

returned?
3.30% 7% 13% 30% 10%

Both 2 and 3
117. If a T-bill pays 5 percent, which of the following investments would not be chosen by a risk -
averse investor?
0.80
An asset that pays 10 percent with a probability of 0.50 or 2.75 percent with a probability of 0.50
America

Both a and c

At a Macro level
At country level

99% 95% 96% 90% 68%





Approximately predict movements of asset to help m inimize losses
95% 99% 99.99% 50% 100%
bank risk?
133. An investor's strategy of holding many risky assets in an attempt to redu ce overall risk is called
------------
Diversification
0.008 0.036 0.053 0.017 -0.029 4


accepted


4



142. A Portfolio Manager is examining the stock performance of Company Dee. She sees that, in


All of above
Cannot say
investments, even though deposits were supposed to have less risk associated with them. It means
The scenario described above is impossible; there must be an error in measurement
certain
Cannot say
EXCEPT

include _____________
Deposits, loans.

f) Link lenders (depositors) to borrowers
g) Evaluate the likelihood of borrower repayment, reducing risk by developing a diversified
h) Create monopolies, monetary & fiscal policies.
i) Both Link lenders (depositors) to borrowers and Create monopolies, monetary & fiscal
policies.
j) Both Link lenders (depositors) to borrowers and Evaluate the likelihood of borrower
single borrower


f) The capacity to make direct commercial loans to the public.
g) The ability to inject or remove money held by the public by buying or selling U.S.
Treasury Bonds.
h) The ability to write legislation to generate increased government spending on public works
i) The ability, through its Internal Revenue Service division, to change federal income tax
j) all of the listed options.


deposits, the bank
f) Will not experience difficulties because its required reserves will be adequate to meet
withdrawals
g) Will not experience difficulties because it will hold sufficient excess reserves to meet
withdrawals
h) Will experience difficulties but will not fail
i) Will fail unless it can obtain additional reserves or government assistance
j) Both Will not experience difficulties because its required reserves will be adequate to meet

f) If it can be carried easily from one place to another.
g) If it can be readily exchanged for another asset or good.
h) Only if it takes the form of cash.
i) If it is held by the public and earning interest.
j) Both If it can be carried easily from one place to another and If it can be readily exchanged
f) Although less liquid than Fed Notes, are money because they are accepted as money.
g) Although less liquid than Fed Notes, are money because they are assets of everyone who
holds them.
h) Are not money because they are liabilities for consumers who have been issued
Harvey Bucks.
i) Are not money because they are not backed by the Federal government.
j) None of the listed options
167. If Bank of Japan was buying Dollars fervently, it would most likely be for which of the follow ing
reasons
f) To protect Japanese exporters from loss due to movement in Yen
g) To protect Japanese importers from loss due to movement in Yen
h) For speculative purposes
i) Both To protect Japanese exporters from loss due to movement in Yen and For speculative
purposes
168. A Commercial bank would be able to make money in which of the following ways
f) Make the lending rate below the deposit rate
g) Make the lending rate equal to the deposit rate
h) Keep the lending rate above the deposit rate but play the volume game
i) Either Make the lending rate below the deposit rate or Make the lending rate equal to the
deposit rate
j) Either Make the lending rate equal to the deposit rate or Keep the lending rate above the
Vehicle Loans
f) Create a Chinese wall between Commercial Banking and Securities Business
g) Create a Chinese wall between Corporate Banking and Retail Banking Business
h) To make the banks more efficient
i) To promote the concept of Universal Banking
j) Both To make the banks more efficient and To promote the concept of Universal Banking

f) An increase in the total money lent out into the system
g) An increase in the total money in the bank reserves in the system
h) A decrease in the total money in the bank reserves in the system
i) Both An increase in the total money lent out into the system and An increase in the
j) Both An increase in the total money lent out into the system and a de crease in the total
f) To ensure that the Bank doesn’t face a cash crunch due to heavy withdrawals
g) To ensure that the Central Bank can take this cash in case of its need
h) To contribute towards government needs in times of crisis
i) Both To ensure that the Central Bank can take this cash in case of its need and To
j) None of the listed Options
f) Increasing the growth rate of the economy
g) Decreasing the growth rate of the economy
h) Help interest-rate traders book profit
i) Both Increasing the growth rate of the economy and Help interest-rate traders book profit
j) To help the government raise funds

Channelize Savings
reasons?
f) The social costs to shareholders of a general bank failure are more than the private cost of
the bank failure.
g) The costs of regulation exceed the benefits.
h) The private costs of a bank failure exceed the social costs of general bank panic.
i) The social costs of a general bank failure exceed the private costs to the shareholders
Both To serve certain social objectives and To offset the moral hazard incentive s provided by
f) To promote competition in the financial services markets.
g) To promote limited quantities of financial services at maximum prices.
h) To promote safety and soundness of depository institutions.
i) To protect the soundness of the deposit insurance fund.
j) Both To promote limited quantities of financial services at maximum prices and To promote


f) The amount of profit a bank makes after clearing all its costs including payment of interest to
deposit holders.
g) The difference in the purchase and sale prices of any financial instrument quoted by any
h) The difference between the lending rates and deposit rates of a bank.
i) Both The difference in the purchase and sale prices of any financial instrument

f) Banks are in the best position to lend out money at competitive rates to businesses and
individuals
g) Deposits are participants in primary and secondary markets
h) Banks are in the best position to lend out money at competitive rates to businesses and
i) All of above of small investors are protected, hence it is a low risk investment avenue
j) Banks
183. CRR stands for



f) Banks may loan out all the money they receive through deposits
g) When the central bank reduces CRR, amount of money in circulation in the economy
goes up
h) When the central bank issues securities in the market, amount of liquidity in the economy
goes up
i) All of the listed options

Lease Auto Loans



f) The financier owns the asset in case of “Lease” but not in case of “Hire Purchase”
g) Depreciation is claimed by the financier both in Lease and Hire Purchase
h) Callable bonds
i) Tax deduction can be claimed for the full value of the payment in lease but only to th e extent



204. Collateral is?


207. In case of discounted interest rate deal for a mortgage the following is true?
f) One receives a substantial cash sum when one takes the loan.
g) Interest rate is guaranteed to be set amount below the base rate
h) The payments are set at less than that lender’s going rate for a fixed period of time.
i) The payments go up and down as the mortgage rate changes but are guaranteed not to go
above a set level

f) The rate of interest can’t move above a set level
g) The rate of interest can’t move below a set level
h) The collar of the interest rate can’t move above a set level
i) The spread of the interest rate can’t move above a set level

f) Monthly payments goes partly towards the interest and partly towards the principal
g) If all the monthly payments are made, the loan will be repaid by the end of the term
h) Monthly payments would increase if interest rates rise
i) Monthly payments would decrease in interest rates fall

f) An interest only mortgage, along with a endowment policy to mature at the same time
g) An interest only mortgage that comes with life insurance policy
h) Another name of interest only mortgage
i) An interest only mortgage combined with tax saving investment policies
f) The interest rate charged
g) When and how often the interest must be paid
h) Other charges such as arrangement fee
i) When and how often these other charges must be paid
j) All of the listed options

f) Marketing institutions selling home loans
g) Lenders to the banks for home loan bought by retail customers
h) Regulatory bodies governing home loan market in US
i) Primarily asset management companies

f) They approve a merchant for accepting credit cards
g) They collect the merchant's online payments
h) They are members of Visa and Master Card Associations
i) They are members of Dinner’s club
f) They provide merchant accounts
g) They process the funds of merchants
h) They keep reports of all the activity of merchant accounts
i) They work on behalf of Acquiring banks

216. After a credit card transaction is initiated by a customer in a shop, the transaction’s information
is sent to?


f) Its based on one’s consolidated financial information from the Credit Report
g) Its a number calculated based on one’s credit history
h) Its used by lenders for a simpler "lend/don't lend" answer
i) Its a three digit number varying between 300 – 900




f) Monthly payments go towards the interest, while a lump sum payment at the end of the term
g) Monthly payments goes partly towards the interest and partly towards the principal
h) The interest due and not paid is added to the principal balance of the loan. interest
i) Such loans come at a very low processing fee

f) Capture of credit card number by the issuing bank during a transaction for authentication
g) Capture of the person using a card not owned by him
h) Conversion of the authorization amount into a billable transaction record.
i) Recording of a person’s credit details in the credit report.
f) Single customer interface across multiple departments
g) Increasing their cross-sell opportunities to customers
h) Improving internal processing efficiency and quality
i) all of the listed options
of 5 years.

235. EFT act covers


f) An account at a bank where funds have been deposited against which checks may be
written
g) An account, folder, or file where checks are stored
h) A type of bank account that allows withdrawals by phone or Internet
i) A form of documentation for transactions between you and the bank

238. Direct debits


240. ______________ preauthorizes banks to pay recurring bills like insurance p remium, utility bills
automatically
241. ATM stands for

f) Automatic Transaction Machine; Almost anytime banking
g) Automated Teller Machine; Remote location transactions
h) Automatic Transaction Machine; Fund transfer between accounts
i) Automated Teller Machine; Direct Deposit
j) Automatic Transaction Machine; Personal Banking
242. Debit Card

f) Summary of Customer’s assets for unauthorized transfers
g) Summary of institution's liability if it fails stop certain transactions.
h) List of institute holidays
i) Circumstances under which institute will not disclose information to third party.
EFT act?
f) Customer has 30 days to notify the error from the date a statement is received
g) Financial Institution has 15 days to investigate the errors
h) Financial Institution has to communicate within 7 working days the result after
i) Financial Institution has to correct the error within one working day after detecting
the same.
j) Both Financial Institution has to communicate within 7 working days the result after

f) Customer liability is limited if the loss is reported before it is used without his/her
permission.
g) Customer liability varies depending on the delay in the reporting of the loss, if
h) Customer liability is limited if the unauthorized use occurs before reporting the loss.
i) Notification period can’t be extended even in the case of extenuating circumstances.
j) There can’t be unlimited liability

f) right to customer to stop payment on any EFT transaction
g) customer can stop payment if the purchase is defective or not delivered
h) customer can stop payment only for preauthorized regular payments
i) customers don’t have privileges for any transaction

f) issued for regularly occurring electronic payments that are pre-authorized
g) entitled to customer only when the electronic transaction is terminated
h) provides statement of all the transactions terminated for a given period
i) must show the amount and date of the transfer, and its type, such as "from savings to
checking”
true?
f) each year the Fed conducts billions of transactions valued in the trillions of dollars
g) funds transfers are originated and received through a sophisticated telecommunications
h) financial institutions can move their balances at the Fed or send funds to another
i) all of the listed options
2/3 1/3 4/5 All

f) your checking account at a financial institution is instantly reduced by the value of the
check
g) the store manager sends the check to a Federal Reserve Bank to be processed
h) the store manager deposits the check in the store’s account at a local financial
institution
i) your checking account at a financial institution is increased by the value of the check
j) All of the listed options

_____________

2004.
f) At the of the day, $17m will be transferred to B
g) At the end of the day, $25m will be transferred to A
h) At the end of the day, $8m will be transferred to A
i) All the transactions would settle individually real-time
j) Both At the of the day, $17m will be transferred to B and At the end of the day, $25m

account



are free of cost


f) FEDWIRE is gross settlement system
g) FEDWIRE is a private sector fund transfer system
h) CHIPS provide international fund settlement
i) FEDWIRE offers free services
j) FEDWIRE provides domestic fund settlement
f) Bob’s purchase of an electronic toilet seat with a wire transfer
g) Joe’s transfer, made in person, from his checking to his savings account, to post bail from
prison
h) Larry’s check written at the Three Strikes and Your Out Bowling Alley
i) Tim’s point of sale purchase from his business account to buy that new hardware store he
has always wanted

d) Booking System
a) $500
your card
d) $50

worth clients”


c) Net Worth
a) Tax benefit
b) Huge startup fee
a) Less than 1%
b) Between 1 to 4%
c) Between 6 to 10%
d) More than 10%
b) Capital Base
c) Tax planning



a) Household income
b) Net Worth
c) Cash Processing
b) Insurance
c) Foreign exchange
a) larger; larger
b) small; larger
c) small; small
d) larger; small



a) Credit Suisse
b) Fidelity
c) Merrill Lynch
b) Fidelity; UBS
d) All of above
c) Back office
d) Front Office
e) Middle Office

c) Networth

d) Hedge Funds
a) Tax haven
funds?
c) Highly leveraged

c) Risk management
d) Tax planning

c) Study loan
d) Credit cards



corporate.

a) Assignment
b) Participation.
e) Preclosure
a) Primary market
b) Index market
c) Secondary market
months?
a) 600 USD
b) 400 USD
c) 1400 USD
d) 1350 USD
e) 350 USD
a) 11,000 USD
b) 600 USD
c) 1,000 USD
d) 5,500 USD
e) 10,000 USD
a) Demand loan
c) Discounted Loan
d) Capitalized Loan
e) Amortized Loan

a) Amortized Loan
b) Capitalized Loan
c) Annuities
d) Discounted loan
a) Overdrafts
c) Corporate bonds
d) Advances
e) Credit line
a) Allocation
b) Syndicate
c) Secondary
d) Assignment

c) All of above

a) Extensive.
obligations.
rate obligations.
d) Line of credit
e) Term Loan
in the cash market.
d) All of above
time
a) Letter of credit
c) Line of credit
d) Trade credit
a) Revolving
b) Single payment
c) Installment
d) Retail
e) Corporate

closest to
a) 11.50%
b) 15%
c) 26.50%
d) 13.25%
e) 11.50%

d) Currency swap.

of the debt
issuance of debt
requirements
d) Manage; avoid
e) Assess; estimate

b) Transfers risk
a) Equity Loans
d) Personal Loans
e) Car Loan
a) Option A
b) Option B
c) Option C
d) Option D

a) 3000
b) 250
c) 2500
d) 300
b) Country risk
d) Risk of default.
e) Interest Risk

a) 1700
b) 1900
c) 190
d) 170
e) 2100

EXCEPT
a) Issuing Bank
c) Seller
e) Buyer

c) Red Clause
345. Credit cards


a) Discount
b) Purchase
c) Acceptance
d) Collection



a) Evergreen Clause
b) Red Clause
c) Irrevocable LC
d) Revolving LC

353. Draft can

intermediaries


356. Factoring is

situation?
a) Bill Discounting
b) Factoring
c) Forfaiting
d) Letter of Credit
e) Consignment
b) Open Account
c) Letter of Credit
d) Counter trade
e) Cash in Advance

a) Time consuming
b) Costly
361. BOL stands for

a) Bill of Letter
c) Bank of London
d) Bill of Leasing
e) Bill of Lading



commercial causes
Commerce
a) $1,200
b) $1,700
c) $710
d) $990
e) $250

__________________
a) Factoring
b) Leasing
c) Forfaiting
d) Bill discounting

a) Assess the risk
d) Letter of Credit

a) Time frame
c) Debt
a) Forex risk
b) Repricing risk
c) Optionality
d) Basis risk
c) Swaption
c) Options
true
risk
a) Repricing risk
b) Basis risk
c) Yield curve risk
d) Political risk
should go for
a) 1.2476/0.8200
b) 0.6793/0.6802
c) 0.6854/0.6860..
d) 1.2481/0.8195
a) 55.2344/0.4565
b) 36.3300/0.4016
c) 56.3849/0.5231
d) 56.5787/0.6138..

a) 45.37/45.32
b) 45.37/45/46
c) 45.37/45.40
d) 45.39/45.38


called

a) Pooling
b) Netting
c) Swapping


a) EFT
b) Cheque
d) Lockbox

a) National Banks
b) Regional banks
c) Corporates

a) Credit risk
c) Operational risk
d) Systemic risk

a) Exchange risk
b) Temporal risk
c) Country risk
d) All of these
a) Liquidity risk
c) Forex risk


a) UBS
c) JP Morgan Chase

b) Market Timing
b) Market Timing
a) Common stocks
b) Corporate bonds
c) Preferred stock
e) Municipal Bonds
portfolio funds.

a) Diversification

a) active.
b) passive.
c) indecisive.
d) rebalanced.
e) resilient

a) Bid-ask Spread
b) Illiquidity
c) Tax impact

b) Trading speed


c) stock selection


a) risk averse
b) diversification
e) budgeting
asset manager?
a) Hedge funds
b) Futures

including both.
a) I only
b) II only
c) Both I and II
d) Neither I or II
decreases.

b) Stocks
c) Bonds



objective is met


unsystematic risk.
a) I only
b) I and II only
c) I and III only
d) II and III only
e) I, II, and II

forecasts

a) Red Herring
b) Road-show
d) Advisor Contest
e) Beauty Contest

b) Sallie Mae
d) UBS



a) Retail Broker


a) $0.50
b) ($0.50)
c) $1.00
d) ($1.00)
e) $86


a) Jan 01, 2003
b) Dec 19, 2003
c) Dec 18, 2003
d) Dec 20, 2003
e) Dec 31, 2003

a) Equal proportion
a) 14.14%
b) 20%
c) 33.33%
d) 50%
e) 41.66%

a) London
b) Europe
c) Asia
d) Americas
e) Australia
a) Eurodollars
c) Foreign stocks
d) Sterling shares

a) Annual
b) Half Yearly
c) Quarterly
d) Monthly
e) Irregular
for 1 stock split?
increase
d) No impact
b) Record Date
c) Declaration Date
d) Dividend date
e) Payment Date
Dividend Date?
a) December 4
b) December 6
c) January 12
d) January 10
e) January 8
b) Outright Sale
c) Primary Offering
d) Select Sale

a) Primary Offering
c) Outright Sale
d) Select Sale
a) May 3
b) May 4
c) May 5
d) May 7
e) May 8

a) 14.14%
b) 20%
c) 33.33%
d) 50%
e) 41.66%

a) Margin Account
b) Nostro Account
c) Cash Account
d) IRA Account

a) Primary Market
b) Secondary Market
c) OTC Market
d) Fourth Market
a) Federal Reserve
b) FDIC
c) DTCC
d) ASA
secondary market?
a) Treasury Stock
b) Preference Stock
c) Promoter Stock
d) Trade able Stock
e) Non voting Stock
a) 0
b) 70 days
c) 71 days
d) 74 days
e) 75 days

a) Bearer bonds
d) Warrants
e) Debentures

a) Investor
b) Underwriter
c) Issuer
d) Stock Exchanges

a) End of every day
a) Difference
b) Spread
c) Profit
d) Quote

a) NASDAQ
b) OTC
c) NYSE
d) Instinet
a) Issuer
b) Investor
c) Underwriter
d) Stock Exchanges
e) Market Maker

d) New investments

c) Top 10% of NYSE
a) Holding Period
b) Blackout Period
a) Firm commitment
d) Outright Sales

a) NASDAQ
b) OTC
c) NYSE
d) Instinet
termed as
products

b) Liquidity risk
c) Credit risk
d) Equity risk
b) Asset Allocation
d) Administration
e) Treasury

b) Record Keeping

d) Both 2 and 3

c) Forex trading
d) Arbitraging

a) MT 15022
b) MT 5022
c) MT 2001
d) MT 199
a) Distressed debt
b) Private Equity
c) Venture Funds
d) IBM stock
e) LBOs

a) Stock splits
b) Trade Processing
d) Settlements
e) Clearing

d) Both 2 and 3
a) Foreign exchange
c) Cash projection
a) Fund Development
c) Transfer agency
a) Credit risk
b) Liquidity risk

to the transaction
_______________

custodians
custodians


following services?
b) Leveraged buyout
d) Busted takeover
a) Hedging
b) Market timing
c) Insurance
d) Diversification
a) Stockbrokers


d) All of above
e) None of above
514. SWIFT is a



a) SWIFT network
b) FEDWIRE
c) CHIPS
d) Clearing
a) Charles Schwab
c) Ameritrade
520. Private Equity


b) Use of options

c) Yes
a) Custodian
b) Broker
c) Investment bank
e) Dealer


Act
b) Mutual Funds
c) Counterfeiting


d) Tax services
service
approval


c) Money Laundering


legitimate sources
bank drafts

a) Regulations
c) Forfeiture

banks



a) All the levels
b) First & Second
d) Second & third
a) Credit unions
c) Mutual funds
documents
A. Interest risk
B. Market risk
D. Liquidity risk
E. Credit risk
F. Operational risk
G. Qualitative risk
a) A, C, F
b) E,B,F
c) A, B, G
d) B,D,G
e) E,C,A
a) December 2005
b) December 2007
c) December 2006
d) December 2004

a) 10
b) 92
c) 110
d) 176
e) 21

a) 1998
b) 1978
c) 1988
d) 1992

d) Operational risk
a) Operational risk
b) Market risk
c) Interest risk
d) Exchange risk
e) Credit risk

operational risk
market risk

b) People
d) All of above

factor
factor
assessment, in that

factors:
a) Method A
b) Method B
c) Method C
d) Method D
The 99% VaR over 10 days = 2.33 * 632,456 = $1,473,621

5. Check21
6. Liquidity
8. hedge,syndicate
9. Back to Back LC
10. Electronic

e) Depreciation is claimed by financier in Lease & not in case of hire purchase
f) Tax deduction can be claimed for the full value of the rental paid in case of lease
g) All
h) The financier owns the asset both in case of “lease” and “Hire Purchase”
Lease is a long-term rental agreement for the asset, while Hire Purchase is allows the user to
own the asset after all the payments have been made to the lender.
Lease
Two main types – operating, financial
The Financier owns the asset.
Depreciation is claimed by the financier.
Tax deduction can be claimed for the full value of the rental paid.
Financier takes care of maintenance, insurance etc.
Hire Purchase
The asset is owned by the financier.
Depreciation can be claimed by the borrower.
Tax deduction can be claimed only to the extent of the interest repayment.
72. Annuities are:
f) Discounted loan
g) Capitalized loan
h) Amortized loan
i) True discounted loan
j) A loan that is paid in periodic installments with capitalized interest
73. The counterparty in futures contracts trade is
f) Government
g) Banks
h) The brokers who stuck in deal
i) The exchange
j) The buyer and seller
A futures contract is an agreement between two parties to buy or sell an asset at

a certain time in the future at a certain price. Index futures are all futures
contracts where the underlying is the stock index and helps a trader to take a
view on the market as a whole.
74. A person purchases a share at 50$. After 2 years the price is at 75$ and he decides to sell the
share at that price. What is the annualized return that person has earned?
FV = 75
PV=50
Fv=pv(1+i)n i : Interest rate per unit time period n : Number of time periods
I = 0.2247
75. Bank operations are divided into?
e) Middle office
f) Front office
g) Back office
h) All
Contact
Management, Account Aggregation and Financial Advisory services.

and documentation
76. Primary source of income for banks?
f) Interest income
g) Fees for services
h) None
i) Deposits from public
j) Grants from Central banks
A bank makes a profit by investing or lending money that is earning a higher rate
of interest than it pays to its depositors.
They borrow money from individual or businesses “who have money”, and lend it
to those “who need money”, by adding a mark up, to pay for expenses and profit.
The difference between the rates, which banks offer to depositors and lenders, is
generally referred to as “Spread”.
77. If a bank charges 8% for 1 year from customer A and 10% from customer B for similar loan, this
can be attributed to
f) Interest rate risk
g) Credit risk
h) Liquidity risk
i) Operational risk
j) Market risk
Market risk is the risk that the value of a portfolio, either an investment portfolio
or a trading portfolio, will decrease due to the change in value of the market risk
factors. The four standard market risk factors are stock prices, interest rates,
foreign exchange rates, and commodity prices. The associated market risks are:
 Equity risk, the risk that stock prices and/or the implied volatility will
change.
 Interest rate risk is the risk (variability in value) borne by an interest-
bearing asset, such as a loan or a bond, due to variability of interest rates.
 Currency risk, the risk that foreign exchange rates and/or the implied
volatility will change.
 Commodity risk, the risk that commodity prices (e.g. corn, copper, crude
oil) and/or implied volatility will change.
Credit risk is an investor's risk of loss arising from a borrower who does not make
payments as promised.
Liquidity risk is the risk that a given security or asset cannot be traded quickly
enough in the market to prevent a loss (or make the required profit).
An operational risk is, as the name suggests, a risk arising from execution of a
company's business functions.
78. Expand NOE –
e) Note of execution
f) Notice of error
g) Note of enrichment
h) Net outstanding error
79. Check 21 act facilitates:
f) Netting of checks at day end
g) Netting and substitution of checks at day end
h) Netting and pooling of checks at day end
i) Clearing check by manually processing the check
j) Check truncation and creation of substitute check
The law allows the recipient of the original paper check to create a digital version
of the original check—called a "substitute check," thereby eliminating the need
for further handling of the physical document.
80. Tax and insurance premiums collected as part of loan repayment are handled through which of
the following type of account?
d) Escrow
e) DMAT
f) MFA
Escrow account - A trust account held in the borrower's name to pay obligations such as
property taxes and insurance premiums.
81. Pick the odd one
e) Agency loans
f) FHA loans
g) VA loans
h) Interest only loans
Agency loan - A conventional loan is a mortgage that is not guaranteed or insured by
any government agency, including the Federal Housing Administration (FHA), the
Farmers Home Administration (FmHA) and the Department of Veterans Affairs (VA). It is
typically fixed in its terms and rate.
FHA loans - A mortgage issued by federally qualified lenders and insured by the Federal
Housing Administration (FHA). FHA loans are designed for low to moderate income
borrowers who are unable to make a large down payment. FHA loans allow the borrower
to borrow up to 97% of the value of the home. The 3% down payment requirement can
come from a gift or a grant, which makes FHA loans popular with first-time buyers.
VA loans - A mortgage loan program established by the United States

Department of Veterans Affairs to help veterans and their families obtain home
financing
Interest only loans - Mortgage in which the borrower pays only interest for a set
term. At the end of this term, typically five to ten years in the United States, the
loan converts to a fully amortizing loan in which both interest and principal are
paid. An interest-only loan reduces loan payments in the early years of a loan, so
borrowers who expect their income will grow over the loan term can take out a
larger Mortgage for purchase of a home.
82. Bank A, bases in US, provides safekeeping services for securities to its US clients. IT also has
clients in France & Belgium and provides securities safekeeping services to these clients through
Banks C and D respectively. Which of the following terms best describes Bank A?
f) Secondary custodian
g) Global custodian
h) None
i) Main custodian
j) Sub custodian
A global custodian provides custody services for cross-border securities transactions. In

addition to providing core custody services in a number of foreign markets, a global
custodian typically provides services such as executing foreign exchange transactions
and processing tax reclaims.
A global custodian typically has a sub-custodian, or agent bank, in each local market to
help provide custody services in the foreign country.
83. In Normal distribution 99% confidence interval corresponds to __

f) 1.65sd
g) 1sd
h) 3sd
i) 2.33sd
j) 1.96sd
Value at Risk is an estimate of the worst expected loss on a portfolio under

normal market conditions over a specific time interval at a given confidence level.
84. All of following are benefits of netting EXCEPT:

e) Reduction in cost of settlement
f) Reduction in the no. of deliveries and receipts
g) Reduction in compliance risk
h) Reduction in systemic risk
Clearing is the process of determination of obligations, i.e. who owes what, to

whom and how much. Settlement on “net” basis reduces the number of
transactions to be settled drastically reducing the overall transaction cost for
everyone. As per an estimate, netting reduces the number of settlements needed
by more than 95%.
Settlement for clearing cheques presented to the clearing houses takes place on
a netting basis at a particular time either same day or on the next day. This
system gives rise to risks such as credit risk, liquidity risk, legal risk, operational
risk and systemic risk.
Compliance risk are Associated with Custody Services.

85. All the following statements concerning US government securities are correct EXCEPT:
e) Treasury bills have their interest paid in a lump sum at maturity
f) Treasury bonds have maturity dates up to 30 years
g) Treasury notes have maturity dates up to 10 years
h) Treasury bills have a greater interest rate risk than either Treasury bonds or Treasury notes.
Treasury bills are short-term obligations issued for one year or less. They are
sold at a discount from face value and don't pay interest before maturity. The
interest is the difference between the purchase price of the bill and the amount
that is paid to the investor at maturity (face value) or at the time of sale prior to
maturity.
Treasury notes and bonds bear a stated interest rate, and the owner receives
semi-annual interest payments. Treasury notes have a term of more than one
year, but not more than 10years.
86. SPV = Special purpose vehicle
87. Which of the options best describes the sequence of the following events?
1. Issuing bank arranges for advising bank payment
2. Freight forwarder sends documents to advising bank
3. Issuing bank issues the letter of credit(LC)
88. VISA is involved in which of the following
iv. Provide the interchange systems to transfer data and funds between members
v. Set credit limits
vi. Issue credit cards
b) I b) II c) III d) I and II
Visa does not issue cards, extend credit or set rates and fees for consumers;
rather, Visa provides financial institutions with Visa-branded payment products
that they then use to offer credit, debit, prepaid and cash-access programs to
their customers
89. In reality people hold part of their loans as cash. This makes the multiplier:
e) Same as if people did not hold cash
f) Larger
g) Zero
h) smaller
90. The share price of a company may drop considerably from its current levels. In scenario, what
type of risk are the investors facing?
f) Liquidity risk
g) Company risk
h) Market risk
i) Business risk
j) Credit risks
91. Securities functionality is a function of _____
f) Back office
g) Specialists
h) Front office
i) Mid office
j) Traders
Security is a financial instrument that signifies ownership in a company (a stock), a

creditor relationship with a corporation or government agency (a bond), or rights to
ownership (an option).
Contact Management, Account Aggregation and Financial Advisory services.
and documentation.
Traders facilitate the buying and selling of stock, bonds, or other securities such
as currencies, either by carrying an inventory of securities for sale or by
executing a given trade for a client. Traders deal with transactions large and
small and provide liquidity (the ability to buy and sell securities) for the market.
(This is often called making a market.) Traders make money by purchasing
securities and selling them at a slightly higher price. This price differential is
called the "bid ask spread."
92. Generally if bond X had a lower rating than bond Y, the yield on bond X would be
e) Same as that of Bond y
f) Lower than that of bond Y
g) Higher than that of Bond Y
h) Volatile
Annual rate of return (also called Coupon, Fixed, Stated or Nominal Yield)
Higher the credit rating, the lower the Yield
93. Trade Finance primarily helps in

f) Facilitating corporate lending
g) Facilitating setting up of new factories
h) Facilitating intercompany transaction
i) Facilitating international transactions
j) Facilitating intra=company transactions
The main objective of trade finance is to facilitate transactions. There are many
financing options available to facilitate international trade such as pre-shipment
finance to produce or purchase a product, and post-shipment finance of the
receivables.
94. Which of the following is a type of underwriting spread?

f) Underwriter’s allowance
g) All
h) None
i) Concession
j) Manager’s Fee
An Underwriter is a broker/dealer or an investment bank. He guarantees that the

capital issue will be subscribed to the extent of his underwritten amount. He will
make good of any shortfall. The contract between the issuer and the Lead or
Managing Underwriter is the Underwriting Agreement. The agreement states the
terms and conditions of the offering, such as, the Underwriting Spread (the
amount the underwriters make on sales), the Public Offering Price (POP), and
the amount of proceeds from the offering that will go to the issuer.

· Manager's fee - The lead underwriter receives this fee on all securities sold.
· Underwriter's Allowance is the total spread minus the Manager's fee. This fee is
shared by syndicate members based on the type of syndicate account.
· Concession - It is typically the largest part of the spread and is paid to the
broker/dealer that actually took the client’s order.
95. Coming together of BNY and Mellon together is an example of ____
f) All
g) Takeover
h) Acquisition
i) Merger
j) Brokerage
96. ABC co wants to identify the best way for making salary credits to its huge employee base. Can
you select the best option?
e) Paper checks
f) Contactless payments
g) Cash
h) Automated clearing house
97. In private banking PTA is Payable thorough account

98. Loc is Letter of credit
99. On trading day at an exchange, a broker undertakes the following trades.
Buy/Sell Company No of shares Share price
Buy MS 200 $10
Sell MS 100 $10.5
Buy Google 100 $20
Sell MS 30 $ 11
Sell Google 50 20.5
Sell MS 40 $9
How much did the broker payout to exchange on total in-case of a) gross settlement system b)
f) (a) $4000 (b) $1235
g) (a) $1235 (b) $2235
h) (a) $260 for Microsoft $ 975 for Google & $260 for MS
i) None
j) (a) $ 1235 (b) $ 4000
Gross
Buy 200 $10 -$2,000

Buy 100 $20 -$2,000
$ 4000 needs to be paid to exchange to get 200 MS share and 100 google shares.
Netting
Net position for MS: +200-100-30-40 = 30

Net position for Google: +100-50 = 50
So broker would receive 30 MS shares and 50 Google shares from the exchange. The broker has to
pay $1235 only to get 30 MS shares and 50 Google shares from the exchange.
Buy 200 $10 -$2,000

Sell 100 $10.50 $1,050
Buy 100 $20 -$2,000
Sell 30 $11 $330
Sell 50 20.5 $1,025
Sell 40 $9 $360
Total -$1,235
100. There are 5 participants A, B, C, D, E in a 25M USD syndicated loan and A is the lead
manager. The borrower has agreed to pay 0.4% ($ 1,00,000) participant fee. How much each
participant will share in participant fee?
f) ($ 1,00,000) will be received every time money is withdrawn
g) None
h) (%$1,00,000) will be charged towards undrawn portion
i) ($ 1,00,000) will be received affront
j) ($1,00,000) will be received every month
101. Find out the one which does NOT come under retail banking service?
e) Personal loans
f) Credit card services
g) Trade finance
h) Electronic banking
Retail Banking
o Electronic Banking
o Credit Card services
o Retail Lending – Personal Loans, Home Mortgages, Consumer Loans, Vehicle Loans
o Private Banking
o Asset Management
102. Which of the following is NOT a feature of online trading
e) Fund transfer
f) Bill payment
g) Secure chat
h) Outbound calls
103. Which of the following is NOT an example of an option?
f) LEAPS (Long term options)
g) Call option
h) swaption
i) put option
j) oil futures
An option is a contract, which gives the buyer the right, but not the obligation to buy or sell shares
of the underlying security at a specific price on or before a specific date. There are two kinds of
options: Call Options and Put Options.
· Call Options are options to buy a stock at a specific price on or before a certain date.
· Put Options are options to sell a stock at a specific price on or before a certain date.
· Long-Term Options are options with holding period of one or more years, and they are
called LEAPS (Long-Term Equity Anticipation Securities).
· Swaps are the exchange of cash flows or one security for another to change the maturity
104. What could be the type of mortgage interest?
e) All
f) Fixed
g) Floating
h) Hybrid
A mortgage loan is a loan secured by real property through the use of a mortgage note which
evidences the existence of the loan and the encumbrance of that realty through the granting
of a mortgage which secures the loan.
The two basic types of amortized loans are the fixed rate mortgages (FRM) and adjustable
rate mortgages (ARM) (also known as a floating rate or variable rate mortgage).
Combinations of fixed and floating rate are also common, whereby a mortgage loan will have
a fixed rate for some period, and vary after the end of that period.
f) Help connect public to the central banks
g) Do not operate efficiently in the financial system
h) Should not be allowed to open savings accounts
i) Are not required
j) Link depositors to borrowers
106. In electronic check conversion (ECC), what happens once the check is processed?
e) Receive cash immediately
f) The customer signs a receipt authorizing the store to present the check to bank
electronically and deposit the funds into the store’s account
g) All
h) The customer can present a check to store cashier
107. Which is NOT a Captive finance company?
f) Bank of America
g) Ford Motor credit
h) Hyundai Motor Finance Company
i) General Motors Acceptance Corporation
j) None
Captive finance company is a subsidiary whose purpose is to provide financing to customers
buying the parent company's product.
The captive finance company is usually wholly owned by the parent company. Although there
are numerous examples of these, the best ones occur in the automotive industry.
General Motors has General Motors Acceptance Corporation (GMAC),
Daimler Chrysler has Chrysler Financial, and
Ford Motor Company has Ford Motor Credit Company (FMCC)
Similarly Hyundai Motor Finance Company serves Hyundai dealers

108. What is OTC?
e) Operating the company
f) Over the counter
g) Options on the counter
h) None
109. XYZ Corporation is a large client of bank and on average for a period it maintains $20 million in its bank
account. However the bank allows the authorized representatives off XYZ to utilize funds up to 15% over
the balance maintained. This is an example of which of the following option?
f) Accrual loan
g) Committed loans
h) Held for sale loans
i) Overdraft
j) Undrawn loan
Overdraft limits are extended to help the corporate manage the day-to-day cash flow needs
of the business. The bank makes available a certain sum of money for a period of time (say,
USD 20.0 million for a period of 1 year). There would be a separate account called the
overdraft account created to monitor withdrawals under this loan. Whenever the corporate
has a deficit in its main business account, it can draw money from the overdraft account (up
to the limit of USD 20.0 million). It can also put back money in the overdraft account as and
when they have surpluses in the business account.
110. You purchase a stock for $40. One year later you receive $2 as dividend and sold the
f) 45%
g) None
h) 25%
i) 10%
j) 50%
111. Which of the following is NOT a core private banking function?
f) Investment analysis and advise
g) sales and marketing
h) deposit mobilization
i) client management
j) research
112. Treasury bills can be transacted and settled on the same date? (TRUE)
113. Identity the odd one out
f) Equities
g) Shares
h) Stocks
i) Common stock
j) Conversible bond
Corporates raise money by issuing Securities in the form of Debt and Equity.
Debt is money owed by one person or firm to another. Examples are Bonds, loans, and commercial
paper.
Bonds: An investor loans money to an entity (company or government) that needs funds for a specified
period of time at a specified interest rate.
Bonds are issued in three basic physical forms:
 Bearer Bonds - bearer of the bond is presumed to be the owner. (owner’s name does not appear
on the bond)
 Registered As to Principal Only - Bonds that are registered as to principal only have the owner’s
name on the bond certificate, but since the interest is not registered these bonds still have
coupons attached.
 Fully Registered Bonds - Bonds that are registered to both interest and principal
 Corporate bond A bond issued by a corporation. Corporations generally issue three types of bonds:
Secured Bonds (Mortgage, Equipment Trust Certificates, Collateral Trust Bonds), Unsecured Bonds
(Debentures), and Subordinated Debentures.
 Municipal bond (Munis) A bond issued by a municipality. These are generally tax free, but the
interest rate is usually lower than a taxable bond.
 Treasury Securities Treasury bills, notes, and bonds are marketable securities the U.S. government
sells in order to pay off maturing debt and raise the cash needed to run the federal government
 Zero coupon bonds Zeros generate no periodic interest payments but they are issued at a discount
from face value.The return is realized at maturity
 Commercial paper An unsecured, short-term loan issued by a corporation, typically for financing
accounts receivable and inventories. It is usually issued at a discount to face value, reflecting
prevailing market interest rates.
EQUITY: Equity (Stock) is a security, representing an ownership interest.

 Common stock Common stock represents an ownership interest in a company. Owners of stock
also have Limited Liability (i.e.) the maximum a shareholder can lose is their original investment. Most
of the stock traded in the markets today is common. An individual with a majority shareholding or
controlling interest controls a company's decisions and can appoint anyone he/she wishes to the
board of directors or to the management team. Corporations seeking capital sell it to investors
through a Primary Offering or an Initial Public Offering (IPO). Before shares can be offered, or sold to
the general public, they must first be registered with the Securities and Exchange Commission (SEC).
Once the shares have been sold to investors, the shareholders are usually free to sell or trade their
stock shares in the Secondary Markets (such as the New York Stock Exchange – NYSE). From time
to time, the Issuer may choose to repurchase the stock they previously issued. Such repurchased
stock shares are referred to as Treasury Stock, and the shares that remain trading in the secondary
market are referred to as Shares Outstanding. Treasury Stock does not have voting rights and is not
entitled to any declared dividends. Corporations may use Treasury Stock to pay a stock dividend, to
offer to employees.
 Preferred Stock Preference shares carry a stated dividend and they do not usually have voting
rights. Preferred shareholders have priority over common stockholders on earnings and assets in the
event of liquidation.
 American Depository Receipts (ADR) The purpose of an ADR is to facilitate the domestic trading of
a foreign stock. An ADR is a receipt for a specified number of foreign shares owned by an American
bank. ADRs trade like shares, either on a U.S. Exchange or Over the Counter. The owner of an ADR
has voting rights and also has the right to receive any declared dividends. An example would be
Infosys ADRs that are traded in NASDAQ.
114. The amount owed by a company to suppliers in the next one year will be categorized under ____
e) Current liabilities
f) Deferred liabilities
g) Annual liabilities
h) Accrued liabilities
115. Company ABC has a gross profit of $50000. The operating expenses amounts to $10000. The interest on
loans availed amounts to $5000 and taxes to be paid amounts to $5000. Calculate the EPS if there are
total of 20000 shares.
e) 1.5
f) 1.25
g) 2.5
h) 2
Gross profit = 50000
Operating expenses = 10000
Operating Income = Gross profit - Operating expenses = 40000
EBIT (Earnings Before Interest and Taxes) = Operating Income + other income – other expenses = 40000
Profit Before Tax (PBT) = EBIT - Interest Expenses = 40000 – 5000 = 35000
Net Income or PAT (Profit after Tax) = Profit Before Tax (PBT) – income taxes = 30000
EPS (Earnings Per Share) = Profit after Tax / No. of Shares = 30000/20000 = 1.5
116. If you invest $500 for 3 years at 8% simple interest, how much you have at the end of 3
years?
PTR/100 = 500*3*0.08 = 120

P+SI = 500+120 = 620
117. In an account earning simple interest from the first year is reinvested at the beginning of
the second year. FALSE
points of time, while he is comfortable with a return of X% pa. Which method should he use to
compare the various investments?
e) External rate of return
f) Net present value
g) Simple interest
h) Compound interest
Net Present Value (NPV) is a concept often used to evaluate projects/investments using the
Discounted Cash Flow (DCF) method. The DCF method simply uses the time value concept and
discounts future cash flows by the applicable interest rate factor to arrive at the present value of
the cash flows.
119. P & L statements represent transactions over a period of time while the balance sheet
information as of a specific date. TRUE
one that distinguishes P & L statement from a balance sheet, is that the
amounts shown on this statement represent transactions over a period of time while the items
represented on the balance sheet show information as of a specific date (or point in time).
120. Which of the following LCs is similar to a bank guarantee?
f) Straight
g) Negotiable
h) Back to back
i) Standby
j) Revolving
The letter of credit (LC) allows the buyer and Seller to contract a trusted intermediary (a bank)
that will guarantee full payment to the seller provided that he has shipped the goods and
complied with the terms of the agreement.
four parties are involved in any transaction using an LC
 Buyer or Applicant
The buyer applies to his bank for the issuance of an LC. If the buyer does not have a
credit arrangement with this issuing bank then he must pay in cash or other negotiable
securities.
 Issuing bank
The issuing or applicant’s bank issues the LC in favor of the beneficiary (Seller) and
routes the document to the beneficiary’s bank. The applicant’s bank later verifies that all
the terms, conditions, and documents comply with the LC, and pays the seller through his
bank.
 Beneficiary’s bank
The seller’s or beneficiary’s bank verifies that the LC is authentic and notifies the
beneficiary.
 Beneficiary or Seller
The beneficiary must ensure that the order is prepared according to specifications and
shipped on time. He must also gather and present the full set of accurate documents,
required by the LC, to the bank.

Letters of credit can be flexible. Some LC variations include: Revolving, Negotiable, Straight, Red
Clause, Transferable, and Restricted. But perhaps the safest type of letter of credit from the
seller’s point of view, is the Standby letter of credit.
fail safe method or guarantee for long-term projects. This LC promises payment only if the buyer
fails to make an arranged payment or fail to meet pre-determined terms and conditions. Should
the buyer default, the seller must then apply to the bank for payment - a relatively simple process
without complicated documentation. Since the standby LC can remain valid for years (Evergreen
Clause) it eliminates the cost of separate LCs for each transaction with a regular client.
121. The BASEL 2 frameworks has 3 main pillars. From the options given below, find the one
that is NOT a part of it.
e) Operational effectiveness
f) Market discipline
g) Minimum capital requirements
h) Supervisory review
122. Premature withdrawal of principal attracts penalty in a CD account. TRUE
123. _____ is the legal and professional proceeding in which a lender. Obtains a court
ordered termination of a borrower’s equation right of redemption
e) Securitization
f) Foreclosure
g) Sub-prime
h) Credit freeze
124. The BSE is large primary financial market in which the initial issuer receives the proceeds
for the sale of securities. TRUE
125. FICO score represents the credit worthiness of the borrower.
The FICO score is a key tool used by many lenders to assess the creditworthiness of a borrower;
it conducts a probability analysis on a borrower’s credit report assessing the ability of an
individual to repay his/her debts.
126. If total spread of underwriting is $100000. What is the amount which will be distributed in the syndicate?
f) 100000
g) 400000
h) 500000
i) Cannot be determined
j) 600000
Syndicate - To share the risk, and more efficiently distribute the offering to the public,
broker/dealers will join together in a Joint Trading Account. The syndicate profits by selling the
securities and earning a Spread (i.e., the POP less the amount paid to the issuer). Syndicate
members share the risk and are responsible for any unsold securities.
127. Purchase of account receivables at a discount is called FACTORING
Factoring is a financial transaction whereby a business sells its accounts receivable (i.e.,
invoices) to a third party (called a factor) at a discount in exchange for immediate money with
which to finance continued business.
128. Choose the right option
e) None of the mutual funds are listed on stock exchanges
f) Only close ended mutual funds are listed on stock exchanges
g) Only open ended mutual funds are listed on stock exchanges
h) Both close and open ended funds are listed on stock exchanges
You can buy mutual funds when mutual fund companies make initial public offerings. Filling out
an application form with a payment of some initial deposit is all it takes.
Buying mutual funds called closed end funds is from stock exchanges. Closed end funds are
initially sold by fund companies in limited numbers and they are listed in a stock exchange to
facilitate trading by investors. These will be usually at premium prices or as dictated by demands
in the market (higher demands for various reasons attract higher premiums).
You can also buy mutual funds (open end funds - funds purchasable perpetually from the
company). Here the price at which you buy will be a figure called as NAV in the industry circles.

f) Put options and swaps
g) Cash and call options
h) Call and put options
i) Equities and futures
j) Equities and call options

130. On trading at NYSE, a broker undertakes the following trades
Buy IBM 100 $11

Sell IBM 50 $10.50
Buy MS 100 $20
Sell IBM 20 $11
Sell MS 10 20.5
Sell IBM 30 $9
How much did the broker pay to exchange? A) gross B)net

Answer : 3100 (gross) 1880 (Net)
Buy IBM 100 $11 -$1,100 100

Sell IBM 50 $10.50 $525 -50
Buy MS 100 $20 -$2,000 100
Sell IBM 20 $11 $220 -20
Sell MS 10 20.5 $205 -10
Sell IBM 30 $9 $270 -30
Netting -$1,880 30 IBM 90 MS

Gross -$3,100 to by 100 IBM & 100 MS
131. Which institution is responsible for monetary policy for the country? CENTRAL BANK
Monetary policy is the process by which the government, central bank controls (i) the supply of
money (ii) availability of money (iii) cost of money or rate of interest to attain a set of objectives
oriented towards the growth and stability of the economy.
132. Which of the following is NOT true about LC?
V. Shifts credit risk from the importer to the importer’s bank (issuing bank)
VI. Deals with products and not with documents
VII. Are typically revocable unless specified otherwise
VIII. Advising bank has the liability for the payment of the LC
lowest)?
e) AAA, AA, D, BBB
f) D,AA,B,AAA
g) AAA,AA+,D,AA
h) D,CB,A
Bond Rating Grade Risk

Moody's Standard & Poor's
Aaa AAA Investment Lowest Risk
Aa AA Investment Low Risk
A A Investment Low Risk
Baa BBB Investment Medium Risk
Ba, B BB, B Junk High Risk
Caa/Ca/C CCC/CC/C Junk Highest Risk
C D Junk In Default
134. Which of the following is treasury management system?
f) Pinnacle
g) Flex cube
h) TS2
i) Finnacle
j) Front Arena
Treasury Management Systems are

 Sungard / Front Arena
 Summit
 Calypso
 Wall Street Systems
135. Corporate loans are:

f) Never secured
g) Never unsecured
h) Secured or unsecured
i) Always unsecured
j) Always secured
proprietorship, partnership, private limited companies or public limited companies. Banks lend to
such entities on the strength of their balance sheet and business cash flows.
Corporate loans are provided by banks for various purposes like new projects, capacity
expansion or plant modernization, daily cash flow requirements (working capital) etc. Depending
on the nature of the requirement, loans may be long-term or short-term in nature.
Loans can be either secured or unsecured in nature. In case of secured loans, if the corporate
defaults on payment of principal or interest on the loan, the bank can take possession of the
security and sell off the same to meet principal or interest payment on the loan. Security is usually
in the form of land, buildings, plant and machinery, physical stock of the raw material, goods for
sale etc.
136. Two major functions of corporate finance division of investment banks are?
f) Technology and m&a ‘s
g) Risk management and underwriting
h) Security trading and underwriting
i) Mergers and acquisitions advisory and underwriting
j) Short selling
CORPORATE FINANCE
The bread and butter of a traditional investment bank, corporate finance generally performs two
different functions:
· Mergers and acquisitions advisory - Banks assist in negotiating and structuring a merger
between two companies. If, for example, a company wants to buy another firm, then an
investment bank will help finalize the purchase price, structure the deal, and generally ensure
a smooth transaction.
· Underwriting - The process by which investment bankers raise investment capital from
investors on behalf of corporations and governments that are issuing securities (both equity
and debt).An Underwriter guarantees that the capital issue will be subscribed to the extent of his
underwritten amount. He will make good of any shortfall.
e) Credit derivatives can be used either to take more risk or to avoid (hedge) it
f) Credit derivatives can be used to credit positions that can otherwise not easily be
established in cash market.
g) Increasing the credit limit of a corporate
h) Credit derivatives can be used both to diversify their credit risk exposures and free up
capital from regulatory constraints.

 Like any other derivative instrument, credit derivatives can be used either to take on more
risk or to avoid (hedge) it.
 credit derivatives can be used to create positions that can otherwise not easily be
established in the cash market.
 Banks use credit derivatives both to diversify their credit risk exposures and to free up
capital from regulatory constraints
138. Which of the following represents that the company is incorporated in USA?
e) LTD
f) PTE
g) PLC
h) INC
Ltd. or Ltd, is a business incorporated under the laws of England, Wales, Scotland, certain
Commonwealth countries, the Republic of Ireland, Cyprus and Israel.
A public liability company (legally abbreviated to plc with or without full stops) is a limited
liability company that sell shares to the public in United Kingdom company law, in the
Republic of Ireland and other Commonwealth jurisdictions
139. GE shares are selling for $15 each. You bought 200 shares one year ago at $12 are
received dividend payments of $2 per share. What was your total dollar capital gain this year?
f) 200
g) 600
h) None
i) 1000
j) 400
A capital gain is a profit that results from investments into a capital asset, such as stocks,
bonds or real estate, which exceeds the purchase price. It is the difference between a higher
selling price and a lower purchase price, resulting in a financial gain for the investor.
140. If the nominal interest rate is 10% and rate of inflation in 2%, what is the real interest
rate?
f) 12
g) 8
h) 20
i) 5
j) None
131. The current value of future cash flow or series of cash flows is called?
e) NPV
f) Future value
g) Nominal value
h) Present value
Present Value is the current value of a future cash flow or of a series of future cash flows.
Future Value is the value that a sum of money invested at compound interest will have after a
specified period. The formula for Future Value is:
FV = PV*(1 + i)n
132. A card holder swipes his card for USD 100. How much does the merchant
iii. Deduct from the card holder?
iv. Receive from the acquirer?

e) USD 100, USD 100
f) USD 100, USD 98
g) USD 100, USD 2
h) USD 98, USD 98
Following are the

Income and Expense sources in an Acquirer business
Income:
 Merchant discount (1–4% of transaction value)
 Processing fees ($ 0.20 – $ 0.40 per transaction)
 Monthly minimum fees
 Customer service fees
 POS Equipment sales/service
Expense:
 Interchange fees paid to Issuer
 ISO/MSP fees
 Data processing & Communications expenses
 Risk Management
 Losses on Merchant Charge backs & Fraud
133. Which of the following operations cannot be done on LC?
e) Purchase
f) Discount
g) None
h) Acceptance
134. When would a company pay nominal interest on committed position?
iv) Always
v) In some cases
vi) If it wishes to pay
e) All
f) III only
g) I only
h) II only
Interest is usually paid on the disbursed amount of the loan. In some cases, a nominal interest if
also payable on the committed amount of the loan. Also, in most cases, the corporate would have
to pay a certain amount as processing fees for the loan. This would cover the bank’s overhead
costs in the loan process.
135. Securities with an original maturity of lesser than 1-year are traded on money markets?
TRUE
Money market is for short term financial instruments, usually a day to less than a year. The most
common instrument is a “repo”, short for repurchase agreement. A repo is a contract in which the
seller of securities, such as Treasury Bills, agrees to buy them back at a specified time and price.
Treasury bills of very short tenure, commercial paper, certificates of deposits etc. are also
considered as money market instruments.
f) Collateral e.g. cars in case of car loans, houses in case of mortgages
g) Products that are bought using online payment such as e-commerce
h) Developing and differentiating deposits, loans etc
i) All
j) Identifying products such as SAP, Oracle for the bank
137. ___ of securities trade involves the transfer of the securities from the seller to the
buyer.
e) Clearing
f) Settlement
g) Netting
h) Trading
Settlement of securities is a business process whereby securities or interests in securities
are delivered, usually against (in simultaneous exchange for) payment of money, to fulfill
contractual obligations, such as those arising under securities trades
A number of risks arise for the parties during the settlement interval, which are managed by
the process of clearing, which follows trading and precedes settlement. Clearing involves
modifying those contractual obligations so as to facilitate settlement, often by netting and
novation. clearing denotes all activities from the time a commitment is made for a transaction
until it is settled.
138. The type of loan in which spread varies over the life of the loan is called ____
f) Positive spread loan
g) Floating rate loan
h) Semi-fixed rate loan
i) Negative spread loan
j) Fixed rate loan
A fixed rate mortgage (FRM) is a mortgage loan first developed by the Federal Housing
Administration (FHA) where the interest rate on the note remains the same through the
term of the loan, as opposed to loans where the interest rate may adjust or "float."
139. Which two risks of a financial institution may gain as well as losses?
f) Interest rate risk and foreign exchange risk
g) None
h) Credit risk and foreign exchange risk
i) Liquidity risk and credit risk
j) Credit risk and interest rate risk
e) T+2
f) T+3
g) T+4
h) T+1
In the U.S., the settlement date for marketable stocks is usually 3 (three)
business days after the trade is executed, and for listed options and government
securities it is usually 1 (one) day after the execution.
e) Type of property being collateralized
f) Range of loan tenure
g) All
h) Type of customer
142. What are Yankee bonds also known as? junk bonds
Yankee bond, a US dollar-denominated bond issued by a non-US entity in the US market. Yankee
bonds, ... are rated below investment-grade, commonly known as high-yield securities or junk bonds
143. Var can be measure at: 99%
144. Who is participating bank?
f) A bank which participates in every process of syndication
g) Bank which underwrites a loan
h) Bank which participates in arranging a loan
i) Bank which participates in disbursing a loan
j) Bank that participates in the syndication by lending a portion of the total amount required
f) Private banking
g) Initial public offer
h) Merger & acquisition
i) Investment banking
j) Corporate action
Corporate Action refers to dividend declarations, stock splits etc. The Corporate Action
department makes sure that the rightful owners (as on the Record Date) receive the dividends,
Splits etc.
146. From the given options identify the services that can be categorized under asset
servicing line of business
iii. Corporate action processing iii. Transfer agency services
iv. Income processing iv. All
f) I only
g) Iii only
h) II only
i) Both I and II
j) IV
Asset servicing is a”core“ongoing service provided by custodians. This service includes

collecting dividends and interest payments, processing corporate actions and applying for tax
relief from foreign governments on behalf of customers.
list of services under the asset servicing
 Corporate Actions
24-hour customer service center provides responses to all client inquiries on active corporate
events using the latest SWIFT 15022 corporate action messaging standards.
 Income Processing
Receiving global income payments on due dates in the client-specified currency. Daily on-line
reports keep clients informed of conditional dividend projection as well as the status of
provisional, confirmed and credited income payments.
 Transfer Agency and Distribution Solutions Services
These services offer a single source for comprehensive mutual fund servicing, integrating global
transfer agency and distribution solutions with fund accounting, fund administration, cash
management and custody, depending on client needs.
 Custody
Custody service handles trade processing and settlement, asset servicing and electronic
information delivery in multiple time zones and languages on a fully integrated platform.
 Financial Reporting
Fund companies meet their financial reporting requirements to shareholders and regulators using
real-time financial accounting systems.
 Pricing/Holdings Valuation, Tax Information Services, Tax Processing, Trade Instruction

and Settlement, Cash Sweep
e) Account information
f) Support
g) Investment
h) Transactions
148. Which of the following is involved in the retail brokerage business in US?
f) Freddie Mac
g) Sallie Mae
h) Ginnie Mae
i) Federal Reserve
j) E-Trade
A brokerage that primarily serves retail investors rather than institutional investors is referred to
as a retail brokerage. Registered representatives who work for these retail brokerage firms are
expected to market their services directly to individual investors and offer investment advice.
e) Extending loans to corporate
f) All
g) Short term borrowing & placements
h) Converting the profits from criminal activities into legitimate funds
Money laundering is generally regarded as the practice of engaging in financial transactions
to conceal the identity, source, and/or destination of illegally gained money by which the
proceeds of crime are converted into assets which appear to have a legitimate origin.
Money laundering occurs over a period of three steps, which include the physical distribution
of the cash (“placement”), the second step involves carrying out complex financial
transactions in order to camouflage the illegal source (“layering”), and the final step which
entails acquiring wealth generated from the transactions of the illicit funds (“integration”).
150. All of the following are valid means for custody client to communicate trade instructions
to its custodian EXCEP
e) FEDWIRE
f) By Fax
g) By telephone
h) SWIFT network
151. The term “settlement cycle” referes to the which of the following option?
Answer: Time period between the date on which the trade is executed and the date when
the trade is settled.
This settlement cycle is known as "T+3,"
152. On a trading day at the NYSE, a broker undertakes the following trades
end of the day.
Buy Dell 120 10
Sell Dell 70 10.5
Buy Cisco 200 20
Sell Dell 20 11
Sell Cisco 50 20.5
Sell Dell 10 9
Answer: To get 20 dell and 150 cisco shares the broker needs to pay 3130
153. Which of the following is an issuer and acquirer?

e) Elavon
f) Amex
g) Tsys
h) First Data Corporation
First Data Corp (Processor)

TSYS (Processor)
American Express (Acquirer, Card Organization & Issuer)
154. If a financial instrument has a 20% chance of paying 80% and an 80% chance of paying
50% what would be the expected return?
e) 0.2
f) 0.44
g) 0.28
h) 0.56
E(R)= Sum( probability (in scenario i) * the return (in scenario i))
ER = ( 0.2 * 0.8 ) + (0.8 * 0.5) = 0.16 + 0.4 = 0.56
155. Who is known as “the drawer” in check processing?
e) Person who receives the check
f) Person receiving the payment
g) Maker’s bank
h) The clearing house
"Drawer" of a check means a person whose name appears thereon as the primary obligor,
whether the actual signature be that of (himself/herself) or of a person purportedly authorized
to draw the check in (his/her) behalf.
156. An open end funds with 10,000 units outstanding had the total assets of Rs 120,000 and
the liabilities of Rs 25,000. Calculate the fund’s NAV per unit.
Answer: NAV = Assets – liabilities / no. of outstanding shares = (95,000/10,000) = 9.5
Net asset value," or "NAV," of an investment company or a mutual fund is the company/fund’s
total assets minus its total liabilities. For example, if an investment company has securities and
other assets worth $100 million and has liabilities of $10 million, the investment company’s NAV
will be $90 million. Because an investment company’s assets and liabilities change daily, NAV will
also change daily. NAV might be $90 million one day, $100 million the next, and $80 million the
day after.
The investment company/fund calculates the NAV of a single share (or the "per share NAV") by
dividing its NAV by the number of shares that are outstanding.
157. Which of the following is not an index?
f) FTSE
g) DAX
h) HangSeng
i) NASDAQ 100
j) NYSE ------------ (is a Stock Exchange)
A statistical measure of change in an economy or a securities market. In the case of financial

markets, an index is an imaginary portfolio of securities representing a particular market or a
portion of it. Each index has its own calculation methodology and is usually expressed in terms of
a change from a base value. Thus, the percentage change is more important than the actual
numeric value.
158. The components to determine the rate of exchange in a Forward contract are:
e) Cross currency Rate and forward rate adjustment
f) Current spot rate and forward rate adjustment
g) Forward rate adjustment and amount of currency bought/sold
h) Current spot rate, amount of currency bought/sold
The most basics tools of forex risk management are 'spot' and 'forward' contracts. These are
contracts between end users and financial institutions that specify the terms of an exchange of
two currencies. In a spot transaction the currency that is bought will be receivable in two days
whilst the currency that is sold will be payable in two days.
Most market participants want to exchange the currencies at a time other than two days in
advance but would like to know the rate of exchange now. This is done through a forward
contract to exchange the currencies at a specified exchange rate at a specified date. In
determining the rate of exchange in six months time there are two components:
· the current spot rate (is simply the current market rate as determined by supply and demand)
· the forward rate adjustment (Forward rate (Local currency/USD) = Spot rate *(1+ interest rate in
US) / (1+ local interest rate))
159. In trade finance, which of the following factors are considered while choosing mode of
financing?
e) Exporter’s fund, risk factors, cost of financing, time frame
f) None
g) Time frame, cost of financing, buyers trade associates
h) Government guarantee program, seller preference
FACTORS IN CHOOSING THE MODE OF FINANCING Costs, Time frame, risk factors,
government guarantee program and exporter’s funds.
160. A custodian processes interest proceeds from the fixed income securities held under its
custody. Which division, within the custodian company, is responsible for carrying out the
position
f) Transaction management
g) Income management
h) Cash management
i) Brokerage services
j) Fund administration
161. A bank has a portfolio of %50 million worth of loans of which it wants to hedge $20 million
worth of loan. What is the processes called?
f) Held for sale loans
g) Committed loans
h) Undrawn loans
i) Trading loans
j) Accrual loans
CLASSIFICATION OF LOANS BY THE BANK

1. Classification of Drawn Loans
Accrual—Loans that management has the intent and the ability to hold for the foreseeable future
or until maturity/loan payoff. Accrual loans are reported on the balance sheet at the principal
amount outstanding, net of charge-offs, allowance for loan losses, unearned income, and any net
deferred loan fees.
Held-for-sale—Loan or loan portfolios that management intends to sell or securitize.
Trading—Loans where management has the ability and intent to trade or make markets (i.e.,
sell/hedge the credit risk.) Loans held for trading purposes are included in Trading Assets and are
carried at fair value, with the gains and losses included in Trading Revenue provided that the
criteria outlined in this policy are met.
2. Classification of Undrawn Loan Commitments
Loan commitments are generally classified as accrual and recorded off-balance sheet.
Differences between loan and commitment are as follows; -
Loans are reflected in the asset side of the bank’s balance sheet. Commitments are
‘off-balance sheet’ items and are reflected in the contingent asset side of the balance
sheet.
· The amount of the loan that is disbursed is credited to the account of the borrower. In
case of a commitment, there is no disbursement or credit to a borrower’s account.
· The fee charged on a loan is a function of the disbursed amount. The fee charged on
commitment is a function of the amount of commitment that is not utilized.
162. What term is used to describe an LC that remains valid for years there by eliminating the cost
f) Revolving LC
g) Evergreen clause
h) Green clause
i) Irrevocable LC
j) Fixed clause
The standby LC can remain valid for years (Evergreen Clause) it eliminates the cost of separate
LCs for each transaction with a regular client.

f) Cap-current rate
g) Current rate –floor
h) Current rate – base rate
i) None
j) Base rate – floor
164. A settlement can be considered as final only if :

e) The settlement is unconditional
f) The settlement is irrevocable
g) The transfer of funds and securities take place simultaneously
h) The settlement is unconditional as well as irrevocable
165. Credit derivatives can be used to reduce the regulatory capital requirement and a diversify
credit risk.
166. The details of trade obligation are created by
e) Broker
f) Depository
g) Exchange
h) Clearing house
f) Documentation collection, strict compliance rules apply
g) Standby letter of credit, less costly than documentary collection
h) Wire transfer, more costly than other payment alternatives
i) Foreign checks, not useful for cross border trade
j) Commercial letter of credit, improves applicant’s credit facilities
168. Increasing the cash reserve ratio for banks would have an impact on which of the following
e) Increased interest rates
f) Increased money supply in the economy
g) Profitability of firms
h) Reduced money supply the economy
169. In defined benefit plans, the benefits is expressed as an ___ and in defined contribution plans,
the benefit is expressed as an_____
e) Account balance, account balance
f) Account balance, annuity
g) Annuity, annuity
h) Annuity, account balance
170. Identify the services offered by retail banks:
e) Savings and checking accounts
f) Personal loans
g) Debit cards
h) All
171. Trading of previously issued securities takes place where?
f) At company headquarters
g) Secondary market
h) All
i) Primary market
j) Through private placement
The primary market is where securities are created (by means of an IPO) while, in the secondary
market, investors trade previously-issued securities without the involvement of the issuing-companies.
The secondary market is what people are referring to when they talk about the stock market. It is
important to understand that the trading of a company's stock does not directly involve that company.
172. Which of the following is NOT a settlement method for bank loans?
f) Preclosure
g) Participation
h) Securities repository
i) Sub-participation
j) Assignment
173. NASDAQ is based out of __________
f) London
g) Chicago
h) None
i) Singapore
j) Hong kong
NASDAQ, is an American stock exchange (located in New York). "NASDAQ" originally stood
for "National Association of Securities Dealers Automated Quotations”.
174. In a securities lending transaction, if the buyer of securities provides cash as collateral, then the
seller of securities has to provide the buyer with a interest amount for the cash. What is this
interest amount called?
f) Collateral interest
g) None
h) Interest rate
i) Rebate rate
j) Return rate
Securities lending or stock lending refers to the lending of securities by one party to another.
The terms of the loan will be governed by a "Securities Lending Agreement", which requires that
the borrower provides the lender with collateral, in the form of cash, government securities, or a
Letter of Credit of value equal to or greater than the loaned securities. The agreement is a
contract enforceable under relevant state law, which is often specified in the agreement.
As payment for the loan, the parties negotiate a fee, quoted as an annualized percentage of the
value of the loaned securities. If the agreed form of collateral is cash, then the fee may be quoted
as a "rebate", meaning that the lender will earn all of the interest which accrues on the cash
collateral, and will "rebate" an agreed rate of interest to the borrower
175. Which of the following is NOT a commonly used term in the contest of banking?
f) Social banking
g) Investment banking
h) Corporate
i) Personal banking
j) Retail banking
f) Increase in prices
g) Very high change in prices
h) Currency crisis
i) Decrease in prices
j) Economic crises
f) Variance-covariance matrix
g) A combination of Monte Carlo and historical simulation
h) Historical simulation
i) All would take equal time if done using a software
j) Monte Carlo simulation
178. TARP stands for: Troubled Asset Relief Program
179. In a syndicated loan of 100M, each participant commits for 25% of loan. But due to exigencies
if one participant reduces his share to 22% and others to share equally. What will be revised
share of other participants?
f) 0.3
g) 0.24
h) 0.31
i) 0.26
j) 0.29
180. Which of the following debt instrument involves lowest risk? Mutual Funds or municipal bonds
181. Ram deposits $100 in xyz bank. Puja takes a loan of $100 from XYZ bank. Which of the
f) None
g) Bank is charging 3% interest to Puja and paying 5% interest to Ram
h) Bank is charging 5% interest to Ram and paying 5% interest to Puja
i) Bank is charging 5% interest to Puja and paying 3% interest to Ram
j) Bank is charging 3% interest to Puja and paying 5% interest to Ram
182. Due to which of the following reason is rebalancing performed?
e) Change in original asset allocation due to market performance
f) Change in risk profile of the investor
g) All
h) Occurrence of major life events in the investor’s life
183. If a bank gets a deposit of $5000, assuming a reserve requirement (CRR) of 10% and that it
circulates through 2 more banks, leading to which of the following money multiplier effect?
f) It creates a loan of $1210
g) It creates a reserve of $500
h) It creates a loan of $8550
i) None
j) It creates a reserve of $ 4000
When a bank gets a deposit of $100, assuming a reserve requirement of 10%, the bank can then
lend out $90. That $90 goes back into the economy, purchasing goods or services, and usually
ends up deposited in another bank. That bank can then lend out $81 of that $90 deposit, and that
$81 goes into the economy to purchase goods or services and ultimately is deposited into
another bank that proceeds to lend out a percentage of it. In this way, money grows and flows
throughout the community in a much greater amount than physically exists. This is also called
multiplier effect. An initial deposit of $100 has created a reserve of $27, and loan of $244.
5000
Bank 1 (10% = 500) ------------------ 4500
Bank 2 (10% = 450) ------------------ 4050
Reserve = $950 and loan is $8550
184. If the limit = $2000, margin = 20% and asset value = $ 2000, then drawing power for an open
f) 2000
g) 1600
h) 2200
i) 2400
j) None

L=2000 => max value for DP is not greater than 2000

(1-M)AV = (1-0.2)2000 = 1600
185. Direct investment in stock markets can be a better option investing through mutual funds if:
e) The investor has large capital, knowledge and resources for research
f) The investor has identified a bullish phase in the stock market
g) The investor wants to invest for the long term
h) The investor wants better returns than those offered by mutual funds
186. The process of creating buffer against the potential loss of non-performed loans is called:
e) Loan classifying
f) Loan provisioning
g) Loan buffering
h) Loan monitoring
187. Retail loans are asset products offered by the bank. TRUE
f) All
g) Declaring dividend
h) Stock split
i) Rights issue
j) M&A
189. An investor indulging in short selling on a share expects the share price to decrease. TRUE
190. With reference to settlement, FOP stands for: FREE OF PAYMENT
You purchased a share of stock for $20. One year later you received $1 as dividend and sold the
share for $29. What was your holding period return
45%
5%
50%
40%
Bank of America charges a lower rate of interest to Lockheed Martin than to General Electric. This
can be attributed to lower ________ risk from Lockheed as compared to GE for Bank of America
Market Risk
Credit Risk
Liquidity Risk
Legal Risk
None of Above
If Bank of New York has found errors in settlement of transactions with some of its customers, as
there is some mistake in some of its systems. This would be classified as
Liquidity Risk
Market Risk
Credit Risk
Country Risk
Operational Risk

At a Macro level
At country level

Cannot Say
Analytical Methods
If a financial instrument has a 35 percent chance of paying 29 percent and a 65 percent chance of
paying - 13 percent, it expected return would be
0.008
0.036
0.053
0.017
-0.029


Cash Reserve Ratio
Cash Refund Ratio
Cash Reserve Risk


Channelize Savings

Federal Reserve
If a bank gets a deposit of $100, assuming a reserve requirement (CRR) of 10%, and that it
loan of $244
loan of $171
If the Limit = $1500, margin = 20% and Asset Value = $2000 then Drawing Power for an Open
$1,500
$1,200
$1,600
$900

Base rate – Floor


Merchant
Payment gateway
Associations
Payment processor
Acquiring banks
Payment gateway
Issuing bank

Checking Accounts
Demat Account
Time Deposits

Low fee
EFTA stands for

The Federal Reserve offers financial services to banks and the U.S. government for all of the
following reasons except to
make a profit
promote competition
foster innovation
CHIPS stand for



The below stated responsibilities are carried out by which of the following players. Cash
Services Provider
Back office
Front Office
Middle Office


Retirement planning
Risk management
Tax planning

Overdrafts
Corporate bonds
Advances
Credit line
If a fund purchases a loan in the Primary, they also use another word for that. Which term is used
to indicate the initial group of lenders (Primary Lenders)?
Allocation
Syndicate
Secondary
Assignment

Total return swaps.
Currency swap.

Equity Loans
Personal Loans
Car Loan

The basic four parties involved in any transaction using LC (Letter of Credit) are the following
EXCEPT
Issuing Bank
Reimbursement Bank
Seller
Buyer
Red Clause

Open Account
Letter of Credit
Counter trade
Cash in Advance
BOL stands for

Bill of Letter
Bank of London
Bill of Leasing
Bill of Lading
BAFT stands for

Bill of Lading is
Letter of Credit

Interest rate swap
Swaption

Pooling
Netting
Swapping

EFT
Cheque
Lockbox

Diversification
Screens and Filters

Red Herring
Road-show
Advisor Contest
Beauty Contest
Syndicate in Investment banking refers to all Except


They are synonyms

Primary Market
Secondary Market
OTC Market
Fourth Market
Federal Reserve
FDIC
DTCC
ASA
Difference
Spread
Profit
Quote

NASDAQ
OTC
NYSE
Instinet

NASDAQ
OTC
NYSE
Instinet

Record Keeping
Reporting services
Services like the settlement, safekeeping, and reporting of customers’ marketable securities and
Custodian
Broker
Investment bank
Fund Administrator
Dealer


Regulations
Criminal sanctions
Forfeiture



1)The central bank in US is called______
Federal reserve

beginning principal only


i. Rakesh Jhunjunwala
j. Sachin Tendulekar
k. Warren Buffet
l. George Soros
e Peter Ujnah
post dated cheques

Disbursed amount

k. Notes
l. Stocks
m. Debentures
n. T-Bills
o. Minus
Increase
Back office
13) In a financial instrument has a 20% chance of paying 20% & a 80% chance of paying
50%, its expected return would be 44%

Private banking
T-note
Commercial Paper
1. Auto loans are given by which of the following entities? Marks: 1

b. Banks
C. Dealerships
d. Auto manufacturers’
e. Credit Unions
2. XYZ corporation is a large client of bank and on a average for a period it

maintains $20 million in its bank account However. the bank allows the authorized
representatives off XYZ to utilize funds up to 1 5% over the balance maintained
This is an example of which of the following option? Marks: 1
Answer: a. Committed Loans
b. Undrawn Loan
d Accrual Loan
e. Overdraft
$10000. The interest on loans availed amounts to $5000 and the taxes to
be paid amounts to $5000. Calculate the EPS if there are total of 20000 shares.
Marks: 3
Answer: a. 2.5 b.1.25
c.2
d. 1.5
4. What is the difference between Banker’s acceptance and sight draft? Marks: 3
Answer: a. Bankers acceptance reduces bank’s lending capacity
b. Bank can raise funds by selling the acceptance
c. Sight drafts are negotiable instruments
e. Bankers acceptance demands immediate payment.
5. Which of the following is a corporate action? Marks: 3

Answer: a. All of the listed options
b. Rights Issue
c. M&A
d. Declaring Dividend
e. Stock split
6. Checking Account, Deposit Account and Savings account are the Assets of the
Bank State True or False
7. BAFT stands for: Marks: 1
Answer a. Bankers Association for Foreign Trade
b. Bankers Acceptance for Foreign transactions
c. Bankers association for Factoring Trade.
d. Bankers Acceptance for Factoring Transactions
e. Bankers Association for Forfaiting & Factoring transaction
8 Inflation represents which of the following option? Marks: 2

Answer: a. Currency crisis
b. Very high change in prices
c. Economic crisis
d. Increase in prices
e. Decrease in prices
9 In a economy where inflation is 4%, future value of 100 units of money after 2
year would be which of the following option? Marks: 2
Answer: a. Around Rs 104
c. Exactly 108
d.108.16 ‘
e. Exactly 100
10. The type of loan in which spread varies over the life of the loan is called Marks:
3
Answer: a. Fixed rate loan
b. Semi-fixed rate loan
c. Positive spread loan
11 Simple interest is calculated on which of the following basis? Marks: 1

Answer: a. Beginning principal only
b Accumulated interest in each period
c. beginning principal + accumulated interest in each period
12 Bank ABC interest rate on deposits is 7.20% and its interest rate on loans is
9.25% during 2009. What is the spread for Bank ABC? Marks: 3
Answer: a. ‘10195
b. 00225
d. 01655
14 Equity Research (Research on stocks and market) is performed by which of the

following option? Marks: 2
Answer: a. Back office of an investment firm
c. Middle office of an investment firm
d. Front office of an investment firm
15 If the Limit = $2000. margin = 20% and Asset Value = $2000. then Drawing Power
for an Open ended loan is equal to? Marks: 3
Answer: a. 2000
b. 2200
c. 1600
e. 2400
16. With continuous compounding at 10 percent for 3 years. the future value of an
initial investment of $2000 is closest to Marks: 3
____________
Answer: a. 2870
b. 2662
c. 3000
d. 2700
17. Which are true in a ‘Basic or No Frill Checking’ Account? Marks: 3

I: Limitthe number of checks written
II: Interest paid
b. II and III
c. I and III
d. I and II
18. When Checks are deposited they are converted into digital files and then images
are transferred to financial intermediaries. What is the process of clearing
and settlement called? Marks: 3
Answer: a. Check Imaging
b. Paper check processing
c. None ofthe listed options
d. Certified check
19. VISA is involved in which of the following? Marks: 2

Ill: Issue credit cards
Answer: a. I only
b. Both I and II
c. II only
d III only
20. Tax and Insurance premiums collected as part of Loan repayment are handled
through which of the following type of account? Marks: 2
Answer: a. Mutual fund account
b. Fixed deposit
c. DMAT account
d. Escrow account
21 Number of stages in loan syndication are _____ Marks: 2

Answer: a. 1
b. 4
c. 3
d. 5
e. 2
22. Choose the correct order of occurrence of following activities: Marks. 3

Answer: a. Trade execution. Trade confirmation, Trade matching. Trade clearance,
-
Trade settlement
b. Trade execution, Trade matching. Trade clearance. Trade confirmation, Trade
settlement
c. Trade execution. Trade matching, Trade confirmation. Trade clearance. Trade
settlement
d. Trade matching. Trade execution. Trade confirmation. Trade clearance, Trade
settlement
23. The counterparty in a futures contracts trade is: Marks: 3

Answer a. The brokers who struck the deal b. Banks c. The Exchange d.
Government e. The buyer and seller
24. P&L Statements represent transactions over a period of time while the
balance sheet show information as of a specific data State True or False

Marks: 3
Answer: a. Type of customers
b. Type of property being collateralized
c. Range of loan tenor
26. Which of the following combinations holds true? Marks. 3

Answer: a. Documentary collection: strict compliance rules apply
b. Foreign Checks: Not useful for cross border trade
c. Standby letter of credit: less costly than documentary collection
d. Wire transfer: more costly than other payment alternatives
e. Commercial letter of credit: Improves applicant’s credit facilities
27. Direct investment in stock markets can be a better option over investing
through mutual funds if: Marks: 3
Answer: a. The investor wants to invest for the long term
b. The investor wants better returns than those offered by mutual funds
c. The investor has identified a bullish phase in the stock market
d. The investor has large capital. knowledge and resources for research
decrease State True or False Marks: 2
Answer True False
29. Hedge Funds are now regulated by: Marks: 3

Answer: a.SEC
c. State regulatory agencies
30. What happens when the interest rates rise? Marks: 1

Answer: a. Bond prices decrease
b. Bond prices do not change
c. Interest rates never fall, they always go up
d. Bond prices increase
31. Bank A, based in the US, provides safekeeping services for securities to its US
clients. It also has clients in France and Belgium. and provides securities
safekeeping services to these clients through Banks C and D respectively. Which of
the following terms best describes Bank A? Marks: 2
Answer: a. Secondary Custodian
c. Sub Custodian
d. Global Custodian
e. Main Custodian
32 SMA oners investors a customized approach to investing. Rawer than a generic
product State True or False. Marks: 2
Answer: True False
33 What is the role of a Central Bank in Forex market of a country? Marks: 2 ,

Answer: a. Regulatory role depending on country’s economic policies b. Acts as a trader
for maximum profit making
c. Encouraging trading in all currencies and not be limited to USD only d. Seller of USD
34 What are Yankee bonds also known as? Marks: 3

Answer: a. Shares
b. T-Bills
d. Call Options
e. Junk bonds
35. Which of the following LCs is similar to a Bank Guarantee? Marks: 2

Answer: a. Stand by
b. Negotiable
c. Back to Back
d. Straight
e. Revolving
sold the share for $48. How much is the return of holding period? Marks: 3
Answer: a. 10 percentage
b. 50 percentage
d. 45 percentage
e. 25 percentage
37. Banks operations are divided into which of the following option? Marks: 2
Answer: a. Back Office
c. Middle Office
d. Front office
38. If a bank gets a deposit of $5000. assuming a reserve requirement (CRR) of

10%. and that it circulates through 2 more banks, leading to which of the following
money multiplier effect? Marks: 3
Answer: a. It creates reserve of $1000
b. It creates a Loan of $8550
c. It creates a reserve of $500
e. It creates a Loan of $12195
39 Which of the following Mechanisms is used for financing for auto loans? Marks:
2
Answer: a. Dealer financing
b. Direct Lending
c. Leasing
d. All of the listed Options
40. The purpose of Community development banks (CDBs) is to serve residents and
spur economic development in low to moderate income (LMI) geographical areas
State True or False. Marks: 1
Answer: True False
41. Which of the following methods eliminate country risk and commercial risk
upon confirmation? Marks: 1
Answer: a. Documentary Collection, Letter of Credit
b Letter of Credit, Back to back Letter of Credit
c. Stand by Letter of Credit, Letter of credit
d. Documentary collection. Stand by letter of credit
e. Back to back Letter of Credit. Documentary collection
42. Which of the following methods of payment is most risky to the Buyer? Marks:
2
Answer: a. Open Account
b. Letter of Credit
c. Documentary Collection
d. Cash in Advance
e. Counter trade
43. Which of the following is a benefit from a Mutual Fund? Marks: 2 ,

Answer: a. Investor is able to diversify risk
b. Investor can get professional management to manage his money
d. Investor can save costs
44. TARP stands for which of the following option? Marks: 1

Answer: a. Term Assets Relief Program
b. Troubled Assets Relief Program
c. Troubled Assets Reform Program
d. Term Assets Reform Program
45. Hedge Funds can use which of the following investment Strategies? Marks: 1
Answer a. Short Bias
c. Short Selling
d. Regulation D
e. Credit Arbitrage
Marks: 3
Answer: a. Interest rate risk and foreign exchange risk
e. Credit risk and interest rate risk
47. Which of the following is NOT a core private banking function? Marks: 3
Answer: a. Investment Analysis and Advise
b. Client Management
c. Sales and Marketing
d. Deposit Mobilization
e. Research
48 When is a bank failure is more likely to occur? Marks: 2 ,

Answer: a. Capital adequacy ratio is increased
b. Cash Reserve ratio is increased
49 In account period settlement trades are aggregated for a period of time--- State
Answer: True False
50 There are 5 participants A, B, C, D, E in a 25M USD syndicated loan and A is the

lead manager. The borrower has agreed to pay 0.4% ($1 ,00,000)
participant fee How much each participants will share in participant fee? Marks: 3
Answer: a. $1 ,00.000 will be received every time money is withdrawn
b. $1 ,00.000 will be charged towards undrawn portion
d. $1 ,00.000 will be received every month
e. $1 ,00.000 will be received affront
51 A Custodian processes Interest proceeds from the fixed income securities

held under its custody. Which division within the custodian company is
responsible for carrying out the process. Marks: 2
Answer: a. Transaction management
b. Income processing
c. Brokerage services
d. Cash Management
e. Fund administration
52 Check 21 Act facilitates Marks: 1

Answer: a. Netting and pooling of checks at day end
b. Check truncation and creation of substitute check
c. Netting and substitution of checks at day end
d. Clearing check by manually processing the check
e. Netting of checks at day end
53 Which of the following represents the correct hierarchy of corporate

ratings (highest to lowest)? Marks: 1
Answer a.D,-,B,A4A ...
b.AAA,AA-,D, BBB8
c. MA, AA+, BBB, D 6
d. D,C,B.A
e.AM,AA÷, D,AA
54 assumes the counter party risk of each member and guarantees

______________
financial settlement. Marks: 3

Answer: a. Depository
b. Custodian
c. clearing house
d. Stock Exchange
55 Which of the following is a Top 10 US Bank? Marks: 1

Answer: Q a. HDFC
b. INC Bank
c. Rabo bank
d. Morgan Stanley
e. Wells Fargo
56 SPV means: Marks: 2

Answer: a. Special Purpose Vehicle
b. Security Purpose Vehicle
c. Special Principal Vehicle
d. Securitized Planning Vehicle
57 The term OTC usually stands for which ofthe following in the context of
financial markets? Marks: 1
Answer: a. Over the cash
b. Overview of trading courses
c. Online trading in commodities
d. Out of the cash
e. Over the counter
58 Company A has higher credit rating than Company B. What does this
means? Marks: 1
Answer: a. Company B is more risky
c. Both are equally risky
d. There is no relation between credit rating and risk
e. Company A is more risky
59 Two major functions of Corporate Finance division of investment banks

are? Marks: 2
Answer: a. Short Selling
b. Technology and M&A’s
c. Risk Management and Underwriting
d. Mergers and acquisitions advisory and Underwriting
e. Security Trading and Underwriting
60 Annuities are: Marks: 3
Answer: a. True discounted Loan
b. A loan that is paid in periodic equated installments with capitalized interest
c. Amortized Loan
d. Discounted loan
e. Capitalized Loan
61 The underwriting agreement states Marks: 3

Answer a Public Offering Price
d Underwriting Spread
e terms and conditions of the offering
62 Due to which of the following reason is Rebalancing performed? Marks: 3

Answer: a change in original asset allocation due to market performance
b All of the listed options
c occurrence of major life events in the investor’s life
d. change in risk profile of the investor
63 An investor has multiple investment options yielding various dollar returns at

various points of time. While he is comfortable with a return of X%. Which
method should he use to compare the various investments? Marks: 3
Answer: a. Net Present Value
b. Internal Rate of Return
c. Simple Interest
d. External Rate of Return
e. Compound Interest
64 The Federal funds rate: Marks: 2

Answer: a. Is the rate the Fed charges on overnight loans to commercial banks b. Is
inversely related to the prime rate
c Is the rate commercial banks use as a benchmark for evaluating their largest borrowers
e. Is a primary policy target of the Fed in conducting monetary policy
65 What is NOT true about Back to Back LC (letter of Credit)? Marks: 3
I: Buyer to open new LC against an already issued LC
II: Seller to use the LC received from his buyer in favor of another
Ill: Buyer to use the LC received from his seller to open his own LC
IV: Seller to receive one more LC against an already issues LC from his buyer
Answer: a. I only
b. I. III and IV
c. III only
d. IV only
e. II only
67. Which of the following is NOT a Settlement Method for Bank Loans? Marks: 3
Answer: a Securities Repository
b. Assignment
c Participation
d Sub-Participation
e Pre closure
68 Which of the following operations cannot be done on a LC (Letter of Credit)?

Marks: 2 ,
Answer: a Purchase
b None of the listed Options
c Discount
d. Acceptance
69 What is a collateral? Marks: 2

Answer: a. Obligations to be fulfilled by the borrower
b. A form of loan
d. A bad loan
e. Asset put up as security
70 In a typical credit card transaction processing cycle. which of the following is

applicable? Marks: 3
I: The Issuer and Acquirer route authorization through the Association
b. I only
c. II only
d. Both I and II
71 In a Securities lending transaction, if the buyer of securities provides cash as

collateral. Then the seller of securities has to provide the buyer with a interest
amount for the cash What is this interest amount called? Marks: 3
Answer: a Interest Rate
b Rebate Rate
c Collateral Interest
d. Return Rate
e None of the listed Options
72 The term ‘settlement cycle’ refers to which of the following option? Marks: 1
Answer: a time period between the date on which an investor first makes the decision to
enter a trade and the date when the trade is settled b None of the listed option are correct
c time period between the date on which the trade is cleared and the date when the trade
is settled
d time period between the date on which the trade is executed and the date when the trade
is settled
73 What is the common advantage of using leasing? Marks: 1

Answer: a. Lower cost for items purchased
b. Using the asset without need for purchase.
c. Less impulse buying
e. Lower chance of overspending
74 Jet Airways and Citibank have tied up to offer this type of credit card what type
of card is it? Marks: 2
Answer: a. Gift Card
b Co Branded card
c Smart Card
d Affinity Card
75 When a Sank goes to the Fed to borrow funds. The interest rate charged by the
Fed is known as: Marks: 2
Answer: a Prime rate
b. Discount rate
c Bond rate d Federal funds rate
76 Interest rate spread is equal to? Marks: 3

Answer a Current rate Base rate
-
b Base rate - Floor

c Cap - Current rate
d. None ofthe listed Options
e Current rate - Floor
77 The share price of a company may drop considerably from its current levels. In
this scenario, what type of risk are the investors facing? Marks: 3
Answer: a. Market Risk
b. Credit Risk
c. Company Risk
d. Business Risk
e Liquidity Risk
78 Which of the following are NOT the benefits of using credit derivatives? Marks 3
-Answer: a Credit derivatives can be used both to diversify their credit risk exposures and
free up capital from regulatory constraints b. Credit derivatives can be used either to
take on more risk or to avoid (hedge) it
c. Increasing the credit limit of a corporate
d Credit derivatives can be used to create positions that can otherwise not easily be
79 Which of the following is NOT a banking service? Marks: 2

Answer: a. Corporate Banking
b Stock market regulation
c. Private Banking
d. Consumer Lending
e Retail Banking
80 Which of the following are involved in the retail brokerage business in US?
Marks: 2
Answer: a. E-Trade
b. Sallie Mae
c. Ginnie Mae
d. Federal Reserve
e. Freddie Mac
81 represents the credit worthiness of the borrower

__________ Marks: 2
Answer: a. LOAN score
b. score
c. FICO score
d. Interest score
82 In Trade Finance, which of the following factors are considered while

choosing mode of financing? Marks: 2
Answer: a. Exporter’s Fund, Risk Factors, Cost of financing. Time frame
b none of the listed options
c Government Guarantee Program. Seller preference
d Time frame, Cost of financing. Buyer’s trade associates
83 How would you categorize account activity alerts in mobile banking?

Marks: 2
Answer: a Transactions
b Support
c Investment
d Account Information
84 Banks are NOT allowed to: Marks: 1

Answer a. Print money
b. Make loans
c. Invest money
d. Take deposits
85 The BASEL 2 framework has 3 main pillars From the options given below.
find the one that is NOT a part of it: Marks: 1
Answer: Q a. Operational Effectiveness
b Minimum Capital Requirements
c. Market Discipline
d. Supervisory Review
86 In Normal Distribution 99% Confidence interval corresponds to Marks:
3
Answer: a. 3 Sd
b. 196 Sd
c. 2.33 Sd
d. 1.65 Sd
e. 1 Sd
87 What does Single Euro Payments Area (SEPA) do? Marks: 1

Answer: a. Applicable to direct debits, credit and debit cards
b. Creates a single payment market
c. Removes differences in intra and cross border payments d. All of the listed
options
88 Participation of less number of banks reduces the risk of lead bank? State
Answer True False
89 Mutual funds: Marks: 2

Answer: a. Are often riskier than investing in individual stocks
b. Give much greater returns than the stock index
c. Require investors to invest very large sums of money, which eliminates small
investors.
d. Carry no risk
e. Are less riskier than individual stocks as the fund managers invest in a
90 Which of the following are NOT examples of Payment Methods? Marks: 1

Answer: a. Letter of credit
c. Cash in advance
d. Documentary collection
91 In any task undertaken by a company, the presence of risk implies that Marks
1
Answer: a. The shareholders of the company will lose money
b. The outcome of the tasks undertaken by the company is uncertain
c. The company will not fare better than its competitors
d. The company’s management has not done a good job
e. The standard deviation of the return is zero
92 Trading of a corporation’s stock or other securities (eg bonds or stock options)

by individuals with potential access to non-public information about the company is
called: Marks: 2
Answer: a. Insider Holdings
b. Lock in Period
c Insider Trading
d Hedging
e Initial Public Offer
93 If total spread on underwriting is $ 500000 and Manager’s fee is S 100000. What

is the amount which will be distributed in the syndicate? Marks:3
Answer a. Cannot be determines •....
b. 100000
c. 400000
d. 600000
e. 500000
94 If an investment company has securities and other assets worth $100 million and
has liabilities of $10 million. the investment company’s NAV will be? Marks: 2
Answer a. $110 million
b. $10 million
c. $100 million
d. $90 million
95 is the amount of net income related to each share. Marks: 1

Answer a. EBIT
b. PAT
c. PBT
d. LEPS
96 A process in which money is lent to corporate bodies refers to: Marks: 1

Answer a. Loans provided to individuals
b Loans provided to companies by Government
c. Loans provided by companies to individuals
d. Loans provided to high net worth individuals
97 Which of the following is a treasury management system? Marks: 1

Answer a. Pinnacle
b Front Arena
c.TS2
d. Finnacle
e. Flex cube
98 What is Line of credit? Marks: 2

b. Irrevocable credit provided by financial institution
c. A formal, legal commitment to extend credit up to some maximum amount over a
stated period of time
d. Similar to credit card
e. Removing credit agreement
99 A person purchases a share at $50 After 2 years, the price is at $75 and he
decides to sell the share at that price. What is the annualized return that the person
has earned?
Marks: 3 Answer: Q a None of the listed options
b. 0.5
c. 06667
d. 03333
e. 02247
100 Dividend declaration is an example of: Marks: 3

Answer: a. Private Banking
b. Investment Banking
d. Initial Public Offer
e. Corporate action
101 Which is NOT a type of corporate bond? Marks: 1
Answer: a. Unsecured bonds
b. Sub-ordinated debentures
c. T-BiIIs
d. Secured Bonds
102 An investor is holding 1 00 Microsoft shares that are trading at $27 per
shara He instructs the broker to sell all the 1 00 shares when the share price
reaches 35 or above that. What is this type of order called? Marks: 1
Answer: a. Optional Order
b. Conditional Order
c. None ofthe listed Options
d. Limit Order
e. High price order
103 There are 5 participants A, B, C, D, E in a 25M USD syndicated loan and

A is the lead manager The borrower has agreed to pay 0.4% ($1,00,000)
arrangement fee. How much each participant will share in arrangement fee?
Marks: 3
Answer: a. 20000
b.15000
c. 18000
d. 17000
104 In a typical trade cycle, when does the clearing house take over the two
legs of the trade through notation? Marks: 3
Answer: a. After the confirmation from the broker of the Sell side
b. After the confirmation from the broker of the Buy side
c. After the trades have been confirmed with both the brokers
d. Before the trades are confirmed with both the brokers
105 At the end of the trade cycle. the trades are to determine the obligation of
the trading members to deliver securities/funds as per settlement
schedule. Marks: 2
Answer: a. Offset
b. Grossed
c. Netted
d. Aggregated
106 Based on your understanding of EBPP, which would you identify as a

potential cost-cutting opportunity for a bank? Marks: 1
Answer: a. Outsourcing the Billing Service Provider
b. Give preference to check-based bill payment
d. Create bills offline but ensure online payments
107 From the given options identify the service(s) that can be categorized
under Asset Servicing line of business.
Answer: a. Ill only
b. I only
c. Both I and II
d .IV
0 e. II only
108 Identify the odd one out: Marks: 1

Answer: a. Treasury Notes
b. Stocks
c. Treasury Bills
d. Bill of Exchange
e. Commercial Papers
109 Which of the following is NOT an example of an option? Marks: 1

Answer: a. Oil Futures
b. Call Option
c. LEAPS (Long Term Options)
d. Swap option
e. Put Option
110 GE shares are currently selling for $15 each. You bought 200 shares one
year ago at $12 and received dividend payments of $2 per share. What was
your total dollar capital gain this year? Marks: 2
Answer: a. 600
b. 1000
d. 400
e. 200
111 of a securities trade involves the transfer of the securities from the
_____________
seller to the buyer. Marks:2

Answer: a. Settlement
b. Netting
c. Trading
d. Clearing
112 In FOP mode of settlement there is no simultaneous exchange of securities

and payments State True or False
113 If R is the real rate of interest. N is the nominal rate of interest and I is the
rate of inflation, then: Marks:2
Answer a R= Nxl
b. R=N+l
c. R = N/I d. R=N-l
114 ABC corporation is a large client of Bank New. Bank New extends a loan
to XYZ Corporation which is a supplier 0fABC. This is an example of:
Marks: 2
Answer: Q & Working Capital Loan
b Asset Securitization Loan
c. Revolving Line of Credit
d. Bill Discounting
e. Dealer I supplier Loan
115 In Electronic Check Conversion (ECC), what happens once the check is
processed? Marks: 3
Answer: a. Receive Cash immediately
bank electronically and depositthe funds into the store’s
account
c. The customer can present a check to a store cashier
d. All ofthe listed options
116 A Central Bank in an economy is also known as: Marks: 1

Answer: a. The Retail Depositors’ Bank
b. The Bankers’ Bank
d. The Banking Boss
e. The Government Bank
117 Open ended loan allow the borrower to borrow additional amount subject
to the maximum amount less then a set value. State True or False Marks: 1
Answer: True False
118 Private Banking Clients have high _________ Marks: 1 _
Answer a Investible Assets

b. Net worth. Investible assets and Income
c. Income
d. Net worth
119 Which of the following risks for the investor is associated with corporate
bonds but NOT U.S. Treasury securities? Marks: 2
Answer: a. Credit Rating Risk
b. Interest Rate Risk
d. Default Risk
e. Reinvestment Risk
120 Which of the following are the list of risks that Cognizant faces at an
organization level? Marks: 1
Answer: a. Cognizant faces all of the above risks
b. Market Risk
c. Operational Risk
d. Credit Risk
e. Currency Risk
121 On a trading day at an exchange. a broker undertakes the following trades:

Marks: 3
Buy 200 Microsoft shares for S10.00 each
Sell 100 Microsoft shares for S10.00 each
Buy 100 Google shares for $20.00 each
Sell 30 Microsoft shares for $11. 00 each
Answer: a. (a) $4000 (b) $1285
b. (a) $1235 (b) $2235
c. (a) $260 for Microsoft $975 for Google (b) $975 for Google & $260 for Microsoft
d. (a) $1235 (b) $4,000
e. None ofthe listed Options
Marks: 2
Buy 200 Cisco shares for $20.00 each
Sell 20 Dell shares for $1 1.00 each
Sell 1 0 Dell shares for $9.00 each
the end of the day.
Answer: a. Dell: 70 shares to give out: Cisco: 90 shares to receive: $3,000 to pay out to
the exchange
b. Dell: 20 shares to receive: Cisco: 1 50 shares to receive: $31 30 to pay out to the
exchange
c. Dell: 150 shares to receive: Cisco: 20 shares to receive: $3130to receive from the
exchange
e. Dell: 20 shares to pay out: Cisco: 1 50 shares to receive: $3,780 to pay out to the
exchange
123 The process of netting: Marks. 1

Answer: a. Increases the number of settlements
.
b. Neither reduces nor increases the number of settlements

c. Increases the transaction costs
d Reduces the number of settlements
Marks: 3
Buy 100 IBM sharesfor$11.00 each
Sell 20 IBM shares for $1 1 .00 each
How much did the broker pay outto the exchange in total in case of (a) gross settlement
Answer: a. (a) $3100 (b) $1880
b.(a) $1880 (b) $3100
d. (a) 0 for IBM, $1 ,795 for MSFT (b) $1,780
e. (a) $1 .780 (b) 0 for IBM. $1 ,795 for MSFT
institutions? Marks: 3
Answer: a. To off set the moral hazard incentives provided by deposit insurance and
other guarantees.
b. To serve certain social objectives
c. To prevent failure of any financial institution
e. To provide stability of the money supply
126 If a financial instrument has a 50% chance of paying 20% and a 50% chance of
paying 60% percent, what would be the expected return? Marks: 2
Answer: a. 0.2
b. 0.8
c.0.4
d. 0.5
127 Warrants are the combination of which of these instruments? Marks: 3

Answer: a. Put Options and Swaps
b. Cash and Call Options
c. Equities and Call Options
d. Equities and Futures
e. Call and Put Options
128 is the legal and professional proceeding in which a lender, obtains a court
ordered termination of a borrower’s equitable right of redemption. Marks: 3
Answer: a. Credit-Freeze
b. Foreclosure
c. Securitization
d. Sub-Prime
129 The components to determine the rate of exchange in a Forward Contract are:
Marks: 2 ,
Answer a. Current Spot Rate and Forward rate adjustment
b. Forward rate adjustment and amount of currency bought 7 sold
c. Current Spot Rate, amount of currency bought / sold
d. Cross Currency Rate and forward rate adjustment
130 Money laundering refers to which of the following option? Marks. 1

Answer: a Extending loans to corporate
.
b. Converting the profits from criminal activities into legitimate funds

I Credit derivatives can be used to ____________ the regulatory capital requirements and ____________
credit risk.
Answer: Q a. increase, transfer
Marks: 2 , b avoid, manage
0 c. improve. eliminate
0 d reduce. diversify
0 e. estimate, assess
3 Jet Airways and Citibank have tied up to offer this type of credit card. What type
of card is it? 11 12
Answer: ® a. Co Branded card° 2
Marks:2 Q b. Gift Card t.
8
0 c. Smart Card 6
0 d. Affinity Card
4 Which of the following are NOT the benefits of using credit derivatives?
Answer 0 a. Credit derivatives can be used both to diversify their credit risk exposures
and free up capital from regulatory constraints Marks: 3 0 b Increasing the credit limit of
a corporate
0 c. Credit derivatives can be used to create positions that can otherwise not easily be
0 d. Credit derivatives can be used either to take on more risk or to avoid (hedge) it
5 A Custodian has different types of assets under its custody and those assets earn returns
to the original investor in various forms. What are the types of returns that can be taxed?
II: Interest
Ill: Capital Gain
Answer: & II only
0 b. I only
0 c. Both I and II
0 d. Ill only
Qe.IV
Answer: Q & II only
0 c. I only
0 d. Both I and II
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
12 Operational Risk is defined as:

Answer: Q & he possibility of loss as a result of default, such as when a customer defaults
-
on a loan
Marks. 1 , b the possibility of loss over a given period of time related to uncertain
0 c. the possibility of loss when a contract cannot be enforced
0 d. the risk of loss resufting from errors in processes, people and systems
0 e the possibility that a firm will be unable to generate funds to meet contractual
obligations as they fall dueS
0:14:51
I 4 Which one of the following is NOT offered by Investment Banking division of a

bank?
Answer: a. Valuation of firms
Marks: 2 € b. Lending services
0 c. Underwriting and distribution of equity issues
0 e. Mergers and acquisitions
I 5 Which of the following is an example of Pre Srupment Loan?
Answer: 0 a. Working Capital for purchase of raw material
Marks: 1 b. None of the listed options
0 c. Bills receivable and payable
0 d. Bill discounting
16 In case of auto finance. monthly lease payments are usually lower than monthly loan
payments because of which reason? 12
Answer: , a. All of the listed Options 10 . 2
Marks: 3 0 b. Customer is Paying only for depreciation9 . . . 3
“.
0 c. Customer is Paying only for Rent Charges8. 4

0 d. Customer is Paying only for Taxes
0 e. Customer is Paying only for Fees
I 7 Generally, if Bond X had a lower rating than Bond Y, the yield on Bond X would be:
Answer C a. Lower than that of Bond Y
Marks: 1 b. same as that of Bond Y
C c. Volatile
0 d. Higher than that of Bond Y
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
23 Which of the following is NOT a player in a typical trade cycle?

Answer 0 a. Custodian bank 12
Marks: 3 0 b Clearing bank ?. . . • . . .
0 c Regulator 8 • 4
0 d Clearing member 7 6
0 e Trading member
24 Which of the following is NOT Bank’s primary use for deposits from depositors?
Answer: Q a Withdrawals
Marks: 1 b Loans
0 c Employee salaries
0 d Investments
0 e. None of the listed Options
EXCEPT:
Answer 0 a. Treasury notes have maturity dates up to I 0 years.
Marks: 2 0 b. Treasury bills have a greater interest rate risk than either Treasury bonds or
Treasury notes.
c Treasury bonds have maturity dates up to 30 years
0 d. Treasury bills have their interest paid in a lump sum at maturifr
Answer: 0 a A pool of funds used to purchase securities on behalf of investors
Marks: 3 0 b All of the listed options
o c. A portfolio of stocks. bonds and other securities
o d A collective investment vehicle
27 Identify the core risk that a Securities lending firm faces:
Answer 0 a. Compliance risk
Marks: 1 0 b Credit risk
o c. Strategic risk
o t Transaction risk
o e. Reputation risk
28 Trading occurs between clearing and settlement State True or False
30 Private Banking includes which of the following options?

Answer ® & All of the listed options
Marks: 2 0 b money management
0 c. Investment services
0 ci personalized banking services
o e financial advice
KOL-24-Aug-1 I [1 5:OOel 7:30]
Attempt I
31 Which of the following is NOT true about LC (Letter of Credit)?
I: Shifts credit risk from the Importer to the Importer’s Bank (Issuing Bank)
Marks: 3 II: Deals with products and not with documents
Ill: Are typically revocable unless specified otherwise
IV: Advising bank has the liability for the payment of the LC.
Answer: Q a. I only
QbHVonIy
0 c II. Ill and IV
0 d II only
0 a III only
32 A settlement can be considered as final only if:
Answer: rj & The settlement is irrevocable
Marks: 2 ® b The transfer offunds and securities take place simultaneously
0 c The settlement is unconditional
0 d The settlement is unconditional as well as irrevocable
0:14:24
11 12
10 2
9• 3
. . . .4..
36 Which of the following are not institutional investors?

Answer: cj & High Net worth Individuals
Marks: 1 b Mutual Funds
0 c. Banks
0 d Pension Funds
0 e Hedge Funds
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I

Answer: ® & All of the listed options
Marks: 3 0 b. Fund administration 01412
0 c. Tax reclaims processing 12
0 d. Settlement services 2
0 e Foreign exchange transactions . . .••. a

institutions?
Answer: , a. To serve certain social objectives
Marks: 3 0 b. To provide stability of the money supply
0 d. To prevent failure of any financial institution
guarantees
49 The risk that a given security or asset cannot be traded quickly enough in the market
to prevent a loss (or make the required profit) is:
Answer: 0 a. Liquidity Risk
Marks: 3 0 b. Business Risk
0 c. Credit Risk
0 d. Financial Risk
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
54 Mutual Funds cannot

Answer: a. Invest in equity
Marks: 2 0 b. Short Sell
C c. Invest in Money Market Instruments
0 d. Can follow any of the investment practices
0 e. Invest in Bonds
55 A card holder swipes his card for USD 100. How much does the merchant
Answer: Q a. I: USD 100 ll:USD2
0 b. I: USD 98 II: USD 98
0 c. I: USD 100 II: USD 98
0 d. I: USD 100 II: USD 100
57 What happens when the Fed manipulates the federal funds interest rate?
Answer 0 a. None of the listed Options
Marks: 2 , b. Affects withdrawals
0 c. Affects lending
Qd Affects deposits
0 e. Affects credit card balances
58 In defined benefit plans, the benefit is expressed as an and in defined contribution
__________
plans. the benefit is expressed as an ____________
Answer: Q a. Annuity: annuity

Marks: 2 b. Account balance: annuity
0 c. Account balance: account balance
0 d. Annuity: account balance
59 Which of the following is usually NOT a participant in Stock Markets?
Answer: 0 a. FlIs
Marks: 2 , b. Mutual Funds
0 c. Individual investors
0 d. Central banks
Answer: a. 30% discount is offered if payment is made before 15 of the month
.
Marks. 3 0 b. 3% discount is offered if payment is made within 10 days

0 d. 10% discount is offered if payment is made within 3 days. the payment should
however be made in 15 days
C e. 3% discount is offered if payment is made within 1 5 days
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
62 Client Management is a function of:

Answer: Q & Back Office
Marks: 1 ® b Front Office
0 c. Anyone who knows the client Qd.MidOffice
0:13:53
Answer: Q a None of the listed otioq 1’ 12
Marks: 1 b Beneficiary’s Bank 2•• ::
0 c Seller, Buyer 8 4
•
0 d Issuing Bank 7 6
65 CIP in the context of anti money laundering:

Answer: 0 All of the listed options
Marks: 2 ® b. Stands for customer identification program
0 c Stands for Suspicious activity reports
0 d. Needs to be filed by Securities brokers and dealers as well as commodity merchants
0 e Requiring businesses. which were only to report cash transactions involving more
than $1 .000.000 to the IRS to file
66 When a firm needs short-term funds for a specific purpose. the bank loan will likely
be a
Answer: Q & Term Loan
Marks: 1 b Line of credit
0 c. Revolving credit agreement
0 d Compensating balance arrangement
0 a Transaction loan
67 Suppose that a portfolio manager has a daily VaR equal to $1 million at 99% What
does this imply?
Answer: Q a Portfolio looses 1% everyday
Marks: 1 c b Under normal circumstances. on 1 day out of 100 portfolio can loose S 1
million
0 c. On 1 day out of 100 portfolio can loose S 1 million
0 d Portfolio size is S 100 million
0 e Under abnormal circumstances, on 1 day out of 100 portfolio can
loose S 1 million
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
72 An investment that earns compound interest is the same as one that earns simple
interest at the effective yield State True or False

Buy 120 Dell sharesfor$1ODO each
Marks: 2 Sell 70 Dell shares for $1050 each
Buy 200 Cisco shares for S2OOO each
Sell 20 Dell shares for $1 1 .00 each
Sell 1 0 Dell shares for $900 each
Given that a net settlement system i s being used. find out the net position of the broker at
the end of the day
Answer: Q & Dell: 150 sharesto receive: Cisco: 20 sharesto receive: $3130to
receivefromthe exchange
0 b Dell: 20 shares to receive: Cisco: 1 50 shares to receive: $31 30 to pay out to the
exchange
0 c. Dell: 70 shares to give out: Cisco: 90 shares to receive: $3.000 to pay out to the
exchange
0 d None of the listed Options
0 a Dell: 20 shares to pay out: Cisco: I 50 shares to receive: $3,780 to pay out to the
exchange

Answer: a Market sentiment
Marks: 1 b. Performance of the company
0 c All of the listed options
0 d. Performance of the relevant industry
0 e State of the country’s economy
77 A person purchases a share at $12.5. After 4 years, the price is at $57.5 and he decides
to sell the share at that price. What is the absolute return that the person has earned?
Marks: 2 Answer: Q & 0.36
0 b None of the listed options
Øc.3.6
0 d 0.7826
0 e. 0.4645
78 The Advising bank is used as a trusted bridge between the and when they do not have
Answer 0 a. Reimbursing bank: Beneficiary bank
Marks: 2 b. Beneficiary bank: Reimbursing bank 0•13•39
0 d. Importer: Exporter 1 12
0 e. Issuing bank: Confirming bank 10 2 •
9 .. .:
8
79 Which one of the following is NOT a measurement technique for Credit Risk?
Answer: a. LGD
Marks: 1 b. EAD
0 c. Probability of Defauft
0 d. FIRB
0 e. Basic Indicator Approach
80 Company ABC has a gross profitof$50000. The operating expenses amounts to
to $5000. Calculate the EPS if there are total of20000 shares.
0 b. 1.5
Qc.2
Qd.2.5
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I

Answer: Q & 60% Equity. 40% Debt
Marks: 2 ® b 80% Equity, 20% Debt
0 c 75% Equity. 25% Debt
0 d 400/b Equity, 60% Debt
83 Unit capital of a mutual fund scheme is Rs 20 million: The market value of its
investments is Rs. 55 million. The number of units is 1 million What is the 0:13:29
NAV?
Marks: 2 Answer: Q a. Rs. 75 11 12
ØbRs55 19••• 2
0 c. Not possible to sa8
QdRs2O
84 Find out the one which does NOT come under the retail banking service?
Answer: & Credit card services
Marks: 1 b Personal loans
0 Trade Finance
0 & Electronic banking
85 The clearing process is completed When delivery and payment have occurred State
True or False
Marks 2 Answer: GTrue 0 False
88 When in a front end, fee is charged?

Answer: 0 a Upfront at the inception
Marks: 2 0 b. Per annum
0 c Every month
Qd Everyday
0 a One off in case of prepayment
89 Which of the following is not an Index?
Answer Q&NYSE
Marks: 2 0 b. HangSeng
0 c FTSE
QcIDAX
0 a NASDAQ 100
90 What is a credit union?
Answer: 0 & Providing credit at reasonable rates
Marks: 2 0 b Providing other financial services to its members
€3 c All of the listed Options
0 d. Operated for the purpose of promoting thrift
0 a A cooperative financial institution that is owned and controlled by its members
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
91 What does a CALL option give the buyer?
Answer: Q a. The right, but notthe obligation. to buy
Marks: 3 0 b. The right. but not the obligation. to sell
0 C. The right and obligation to buy
0 d. The obligation to sell
0 e. The obligation to buy
93 Which of the following is NOT a derivatives instrument? ...•
Answer: cij a. Corporate Bonds

Marks: 2 , b. Put Options 6‘
0 c. Equity
Qd. Swaps
0 e. Call Options
Marks: 3 Buy 100 IBM sharesfor$11.OO each
Sell 20 IBM shares for $1 I .00 each
0 b. (a) $1880 (b) $3100
0 c. (a) $1 .780 (b) 0 for IBM, $1 .795 for MSFT
0 d. (a) 0 for IBM, $1 ,795 for MSFT (b) $1,780
0 e. (a) $3100 (b) $1880
96 Which of the following is an Un-secured loan?

Answer: Q a. Overdraft on checking.
Marks: 2 b. Credit cards
0 c. Study loan
0 d. Personal lines of credit.
C e. All of the listed options
98 Red herring prospectus is issued during _______________
Answer: a. When a dividend is declared

Marks: 3 0 b. During Securitization
0 c. A merger
0 d. During a IPO
0 e. Post-Acquisition
99 Premature withdrawal in a IRA account does NOT attract penalty and taxes need NOT
be paid for the period forgone. State True or False
I 00 Which is NOT a Captive finance company?
Answer 0 a. Ford Motor Credit
Marks: 2 , b. None ofthe listed Options
0 c. Bank of America
0 d. General Motors Acceptance Corporation
0 e. Hyundai Motor Finance Company
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
I 01 In reality. people hold part of their loans as cash. This makes the multiplier
Answer: 0 a. Smaller
Marks: 2 b. Larger
0 c. Zero
0 d. The same as if people did not hold cash
Marks: 1 Answer: ®True 0 False
103 When is a bank failure is more likely to occur?
Answer 0 Capital adequacy ratio is increased
Marks: 2 , b. Bank holds more short-term riskless securities
0 c. Bank increases its equity capital 013010
0 d. Cash Reserve ration is increased
... ii12i
0 e Capital adequacy ratio is reduced io 2
9 3 . ....
8: 4 ••
I 04 With continuous compounding at I 0 percent for 3 years, the future value of an initial
investment of $2,000 is closest to ___________
Answer: a. 2700
Marks: 3 0 b. 2870
0 c. 3000
0 d. 2662
I 05 What is financial leverage?
Answer ® a. a private company transforming itself into a public company
Marks: 2 , b. Investing in equity
0 c. Borrowing funds to increase return on equity
0 d. Investing in derivatives
0 e. Closing down a loss making company
I 06 A person purchases a share at $50. After 2 years, the price is at $75 and he decides
to sell the share at that price. What is the annualized return that the person has earned?
Qb.0.5
0 c. 0.2247
0 e. 0.6667
I 09 Banker acceptances are credit investment created by ________ and used for financing
imports, exports and domestic shipping.
Answer: Q a. Short term: financial firms
Marks: 2 , b. Long term: non-financial firms
0 c. Medium terms: banks
0 d. Long term: financial firms
0 e. Short term: non-financial firms
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
I I I Identify the services offered by Retail Banks:
Answer: Q a Debit Cards
Marks: 1 b Personal Loans
0 C. All of the listed options
0 & Savings and Checking Accounts
I I 2 A Custodian holds a wide range of assets on behalf of its customers What are these
assets known as?
Answer: Q a. Shared Assets
Marks: 1 ® b. Assets Under Custody
0 d. Assets Under Management
0 e. Custodian Assets
0:12:59
I I 3 There are 5 participants A, B. C, D. E in a 25M USD syndicated loan and A is the
lead manager The borrower has agreed to pay 0.4% (Si 00,000)
participant fee How much each participants will share in participant fee? 11 12 1
Marks: 3 Answer: a. $i,00.000 will be received every time money is withdrawr?. 2 .
0 b $1 00,000 will be charged towards undrawn portion 8 4

0 d $i ,00.000 will be received affront
0 e. $1 ,00.000 will be received even’ month
I 14 Which ofthe following are market regulators?
Answer: cj a All ofthe listed options
Marks: 2 b Securities and Exchange Commission (SEC)
0 c. Securities and Exchange Board of India (SEBI)
0 t Financial Services Authority (FSA) of UK
115 Pick the odd one out:
Answer: & VA loans
Marks: 1 , b. Interest only loans
0 c. Agency loans
0 d. Fl-IA Loans
I 16 are profits of the business that have not been distributed to the owners as of the
________
balance sheet date

Answer 0 Share capital
Marks: i b Revenue
0 c. Gross profit
0 d Retained earnings
I I 7 A clearing system in which payment instructions between banks are processed and
settled individually and continuously throughout the day is called:
Answer: Q & Automated Clearing House
Marks: i b. Continuous Linked Settlement
0 c. Clearing Services
ØdRTGS
0 e. Collection Services
KOL-24-Aug-1 I [1 5:OOel 7:30]

Attempt I
Page: (Previous) 12345678910111213
I 22 Which entity is NOT involved in Student loan?

Answer 0 Federal government
Marks: 1 b Servicers and Guarantors
0 c None ofthe listed Options
0 d Lenders and Borrowers
0 e Schools
0:12:50
123 A proprietary system 0f ATM’s is a network that comes into being when
customers of one or more financial institutions have access to transaction services
at ATMs owned or operated by other financial institutions State True or False 11. 12
1
Marks: 1 Answer GTrue QFals• ••
I 24 Bank ABC interest rate on deposits is T30% and its interest rate on loans is
925% during 2OO9 What is the spread for Bank ABC?
Answer: QaOi655
Marks: 3 0 b OO225
0 d 0.0195
I 26 Legal documents will be prepared in the post-closure stage State True or False
I 27 A Custodian processes Interest proceeds from the fixed income securities held
under its custody. Which division. within the custodian company. is responsible for
carrying out the process.
Marks: 2 Answer Q a Transaction management
0 b Cash Management
0 c. Brokerage services
0 d Fund administration
0 a Income processing
130 Identify the odd one out:

Answer: 0 a. Bill of Exchange
Marks: 1 0 b. Treasury Notes
0 c. Commercial Papers
0 t Stocks
0 e. Treasury Bills
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KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 (Next)
I All broker/dealers involved in the underwriting of non-exempt securities must be
Answer: Q a NYSE Member
Marks: 3 0 b SEC Member
0 c. No such membership is required
0 & NASD Member
0 a NASDAQ Member
Answer: Q & 028
Marks: 2 b 02
0 c 044 Qd0.56
0:39:60
4 You invest Rs20,000 at 10% pa compound interest compounded annually in a bank

After 2 years. what is the amount you have received from the bank?
Answer: Q a Rs. 24000
Marks: 3 0 b. Rs.15092
QcRs4000
0 d Rs24692
0 a Rs. 24200
7 The process of clearing transaction electronically in which information about debits and
credits are passed across the clearing system electronically instead of physical
instruments is called
Marks: 1 Answer: cj & Clearing thru Documents
0 b All ofthe listed options
0 c. Clearing thru ACH
0 d Clearing Services
0 e. Electronic data file services
Buy 120 Dell sharesfor$1OJJO each
Marks: 2 Sell 70 DelI shares for $1050 each
Buy 200 Cisco shares for S20D0 each
Sell 20 DelI shares for $1 1 00 each
Sell I 0 Dell shares for $9.00 each
the end of the dayS
Answer 0 Dell: 20 shares to pay out: Cisco: 1 50 shares to receive: $3,780 to pay out to
the exchange
0 b Dell: 70 shares to give out: Cisco: 90 shares to receive: $3,000 to pay out to the
exchange
0 c Dell: 150 shares to receive: Cisco: 20 shares to receive: $3130to receive from the
exchange
0 d Dell: 20 shares to receive: Cisco: 1 50 shares to receive: $31 30 to pay out to the
exchange
I 0 Credit union members have what type of accounts (rather than checking)?
Answer: cj & None ofthe listed options
0 c. Basic
Qd Share Draft
Page: 1234567891011 1213 (Next)
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
I 2 Which of the following are NOT the benefits of using credit derivatives?
-Answer 0 a. Credit derivatives can be used either to take on more risk or to avoid (hedge)
it 0:39:32
Marks. 3 0 b. Credit derivatives can be used both to diversify their credit risk exposures
and free up capital from regulatory constraints 12
0 c. Increasing the credit limit of a corporate ic : 2
0 d. Credit derivatives can be used to create positions that can otherwise not easily be
established in the cash market 9 : 3
.
8 :4
76
14 NASDAQ is based out of____________

Answer: ® a. Chicago
0 c. Singapore
0 d. London
0 e. Hong Kong
I 6 The Advising bank is used as a trusted bridge between the and when they do not have
Answer: Q a. Applicant bank: Beneficiary bank
Marks: 2 b. Beneficiary bank: Reimbursing bank
0 c. Importer: Exporter
I 7 Credit derivatives can be used to the regulatory capital requirements and
____________ ____________
credit risk.
Answer: cj a estimate, assess
Marks: 2 , b. increase, transfer
0 c. reduce. diversify
0 d. improve. eliminate
0 e. avoid. manage
I 9 Which ofthe following are benefit(s) of EMV?

0 b. Both I and II
0 c. II only
0 d. I only
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
23 If the nominal interest rate is 10% and rate of inflation is 2%, what is the real interest
rate?
Answer: Qa12
Marks: 2 b 20 0:39:22
Qc5 iil2i
..
0 d. None ofthe listed option0 2

::
Qe8 9 E 3
8:
7j5
24 In case of downturn in prices of shares. the investor will be compensated by which of
the following option?
Answer: , & Stock Exchange
Marks: 2 b U.S. Department ofthe Treasury
0 c. None ofthe listed Options
0 d Securities and Exchange Commission
0 a Federal Deposit insurance Corporation
25 Which ofthe following represents the correct hierarchy of corporate ratings (highestto
lowest)?
Answer: ® a AAA. AA+, BBB. D
Marks:1 Qb.D,AA-.B,W
0 c. D,C,B,A Qd.W,AA+,D,AAQe W,AA-.DBBB
KOL-23-Aug-1 I [11:00-13:30]
Attempt I
31 At the end of the trade cycle. The trades are to determine the obligation of the
__________
trading members to deliver securities’ funds as per settlement schedule

Marks: 2 Answer: a Grossed
QbAggregated
0 c Offset
0 d. Netted
32 What are Secondary markets defined as?
Answer: a Either auction or dealers markets and being only OTC market
Marks: 2 b. None ofthe listed Options
0 C. Market where security is sold during IPO
G d Markets in which security are resold after they are originally issued
0:39:010
33 Which of the following services are provided by a global custodian’
Answer: a. Tax reclaims processing 11 12
Marks: 3 0 b Fund administration 10 2.
€ c All ofthe listed options 8 4

0 d. Settlement services 7 5
0 e Foreign exchange transactions
34 All of the following are benefits of netting EXCEPT:
Answer: a Reduction in systemic risk
Marks: 3 0 b Reduction in the number of deliveries and receipts
0 c Reduction in the cost of settlement
0 d Reduction in compliance risk
investments is Rs. 55 million. The number of units is 1 million. What is the NAy?
Marks: 2 Answer: a Rs. 75
0 C. Rs 20
0 d. Rs. 55
36 Fedwire is an electronic transfer system developed and maintained by the Federal
Reserve System. State True or False
Marks: 2 Answer: ØTrue 0 False
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
41 Find the future value of$1500 invested at 6.5% p.a payable annually. after 6
months?
Answer Qa 1616
Marks: 2 Q b 1628
0 C. 154875
Qd 1597
Q e None of the listed Options
42 Drafts are negotiable instruments that facilitate international payments through
respected intermediaries such as banks State True or False
Marks: 1 Answer GTrue QFalse
43 Retail loans are asset products offered by the bank State True or False
Answer: ®True QFalse
Marks 1 0:39:01
11 12
10 : 2
9 ::. a .•
44 When the Central Bank of a country decides to change the interest rates. it is a
manifestation of which of the following? 8 4 •
Answer: C) & Money Market 6

Marks: 2 Q b. Money making
Q c Money Policy
0 d. Money Multiplier Effect
Q e. Monetary Policy
45 Which of the following is a corporate action?
Answer 0 a All of the listed options
Marks: 3 Q b Declaring Dividend
Q c. Stock split
QdM&A
0 e Rights Issue
46 In passive approach. asset allocation is influenced by which of the following
option?
Answer: 0 a All of the listed options
Marks: 2 ob Tax status of the investor
oc Cash needs of the investor o d Investor’s risk preferences
49 A type of stock in which the stockholder is likely to get a percentage of

dividends each year based on the profits of the company is:
Marks: 1 0 b Preferred Stock
0 c Common Stock
0 d Convertible Stock
50 In an exchange on a particular day there is a buy trade for 150 shares of a
particular company and there are two sell trades for 70 and 60 shares of the same
company Can the buy trade and sell trades be matched?
Marks: 2 Answer: Q a No
o b. Yes, but only if the number of shares on the buy & sell side match
o c. Yes
€ dYes, but only if the prices on the buy & sell side match
[ Intermediate Save j [ Submit the Quiz j
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
51 Banks are financial intermediaries that:
Answer: Q a. Do not operate efficiently in the financial system
Marks: 1 b help connect public to the central banks
0 c Should not be allowed to open Savings Accounts
0 & Are not required
0 e. Link depositors to borrowers
52 Coming together of BNY and Mellon is an example of _____________
Answer: Q & Acquisition

Marks: 3 0 b Merger
0 c Brokerage
0 e Takeover
0:38:52
EXCEPT: 12 2
Answer 0 a. Treasury bills have their interest paid in a lump sum at maturity 9 3
- .
Marks 2 b Treasury bonds have maturity dates up to 30 years 8 4

0 c Treasury notes have maturity dates up to 1 0 years 7 5
0 d. Treasury bills have a greater interest rate risk than either Treasury bonds or
Treasury notes.
54 Increasing the Cash Reserve Ratio for banks would have an impact on which
ofthe following:
Answer: Q & Increased Money Supply in the economy
Marks: 2 b Profitability of firms
0 c Reduced Money Supply in the economy
0 c[ Increased interest rates
55 Legal documents will be prepared in the post-closure stage State True or False
57 Liquidity refers to the ease with which an asset can be converted into cash.
State True or False
58 Following are the types of market risks except:
Answer: 0 a. Equity Risk
Marks: 1 0 b. Credit Risk
o c Commodity Risk
o d. Interest Rate Risk
o a Currency Risk
60 Asset allocation activity is performed by which of the following option?
Answer: Q a. None of the listed Options
Marks: 1 0 b Back office of an investment firm
o c Front office of an investment firm 0 d. Middle office of an investment firm
[ntermediate Save J L Submit the Quizj
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
61 Which of the following is true for stock markets?
Answer: Q a. Stock markets are never fair
Marks: 2 ® b. Stock markets facilitate secondary buying and selling of shares
0 c. Individual small investors can never make money in stock markets
0 d. Stock markets are always self regulated
0 e. There can only be one stock market in a country
62 Secured bonds
Answer: Q & are secured by assets of the issuing company and also have higher priority
.
for repayment than unsecured debt

Marks. 1 b. is issued only by large and financially sound companies
0 c. have higher priority for repayment than unsecured debt
0 d are secured by assets of the issuing company.
0:38:42
63 Participation of more number of banks reduces the risk of lead bank? State True or
False
11 12
Marks 2 Answer: GTrue QFalse0 : 2
9•.•: 3
.
8’ :
7j5
65 ATM’s fall under which of the following?

I: Front office
Marks: 2 II: Middle Office
Ill: Back Office
Answer: () & Ill only
Ø b. i only
0 c. Both II and Ill
0 d. II only
0 e Both I and II
70 Most common reasons for a corporate seeking a loan from a Bank include all of the
following EXCEPT:
Answer: 0 & Capacity expansions
Marks: 1 b. Paying bonuses to top executives
0 c. New projects
0 & Daily cash flow requirements
0 a Plant modernization
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
72 The risk that a given security or asset cannot be traded quickly enough in the marketto
prevent a loss (or make the required profit) is:
Answer: Q a Credit Risk
Marks: 3 0 b Financial Risk
0 c Business Risk
0 d. Liquidity Risk
74 Assets of a company that are reasonably expected to be realized in cash, or sold, or

consumed in the next one year are __________
Answer: cj & Current Assets

Marks: 1 b. Annual assets
0 c. Intangible assets
0 d Fixed Assets
75 The money bank receives as deposits becomes a banks
Answer: a Loss
Marks: 1 b Liability
QcAsset
0 e Profit
76 An export oriented firm, apart from facing usual risks associated with any firm, which
other very important risk it faces?
Answer: Q a. Legal Risk
Marks: 1 b. Credit Risk
0 c. Currency Risk
0 d. Operational Risk
0 e. Liquidity Risk
79 In a syndicated loan of 1 OOM, each participant commits for 25% of loan. But due to
exigencies if one participant reduces his share to 22% and others to share equally, what
will be revised share of other participants?
Marks: 3 Answer: Q a Oil
0 b. 0.3
0 c. 0.24
0 d. 0.26
QeO29
80 Great mines takes a loan from Bank of America to dig a new coal mine. The loan
would be repaid using the proceeds from the sale of coal from this mine. This is an
example of:
Marks: 1 Answer: Q Asset Securitization Loan
0 b Working Capital Loan
0 c. RevoMng Line of Credit
0 d. Supplier Loan
0 e. Bill Discounting
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
Answer: Q a Capitalized Loan
Marks: 3 0 b Amortized Loan
0 c. Discounted Loan
0 d True discounted Loan
0 a Demand loan
82 In Rolling Settlement trades are aggregated for a period of time State True or False
Answer: & Call and Put Options
Marks: 3 0 b Put Options and Swaps 0:38:2 1
0 c. Equities and Call Options
0 d Cash and Call Options 2 ::
0 e Equities and Futures 9 3

8:
Marks: 3 0 b. 0i655
0 c 0.0195
0 d. 0.0225
86 Role of syndicate is to:

Answer: Q a. Issue Derivatives
Marks: 2 , b. Ensure proper Risk Management
0 c. Participate in swaps
0 & Monitor bank regulations
0 a Place securities in a public offering
90 Which of the following is NOT correct for a personal loan?
Answer: 0 a. Loan amount is not linked to borrowers repayment capacity
Marks: 2 0 b. None of the listed Options
0 c. They are short term loans
0 d. The financer is not interested in the intention of the loan
0 e. No security required
[
Intermediate Save j Submit the Quiz
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
institutions?
Answer: Q a. To serve certain social objectives
Marks: 3 0 b. To prevent failure of any financial institution
0 c None of the listed options
0 d To provide stability of the money supply
guarantees

Answer: cj a All ofthe listed options 0:38:13
Marks: 3 0 b. A collective investment vehicle 12
0 c A pool of funds used to purchase securities on behalf ofinvestor011 : 2
.
0 d. A portfolio of stocks, bonds and other securities 9

8:
94 If a portfolio of stocks has a one day 5% VaR of S 1 Million. what does it mean?
Answer: 0 a There is a 5% chance that the value of the portfolio will fall by S 1 Million
or above over a one day period Marks: 1 , b None ofthe listed Options
0 c. There is a 5% chance that the value of the portfolio will increase by S 1 Million or
0 d There is a 95% chance that the value of the portfolio will increase by S 1 Million or
0 a There is a 95% chance that the value of the portfolio will fall by S 1 Million or above
over a one day period
97 Borrower is suppose to lock the rate at which stage of loan life cycle?
Answer ® & Loan Processing
Marks: 3 0 b Loan origination
0 c Loan closing
0 t Loan underwriting
98 In a typical trade cycle on an exchange. the successive functions of order matching.
determining obligations of participants. and undertaking settlement. are respectively
carried out by:
Marks: 2 Answer: Q & Broker/dealer exchange: clearing house
0 b. Exchange: depository: clearing house
0 c. Exchange: clearing house: depository
0 d Clearing house: clearing house: depository
Answer: & 30% discount is offered if payment is made before 15 of the month
Marks: 3 0 b 10% discount is offered if payment is made within 3 days. the payment
should however be made in 15 days
0 d 3% discount is offered if payment is made within 1 5 days
0 a 3% discount is offered if payment is made within 10 days
I 00 US Export and EURImport agree to carry out the transaction, goods worth $1
.000.000 under a confirmed term Letter of Credit with a maturity date of 60
days from the time of shipment The Acceptance commission © 1 8% pa equals
Calculate the acceptance commission
Marks: 3 Answer: Q a. 300
0 b 250
0 c. 2500
0 d. 3000
E Intermediate Save E Submitthe Quiz ]
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
101 IRR stands for which of the following option?
Answer: Q & International Rate of Return
Marks: 1 b Indexed Rate of Return
0 C. Indian Rate of Return
0 t Internal Rate of Return
0 a Internal Referenced Return
I 04 Which of the following is an Issuer & Acquirer?

Answer: Q a. First Data Corporation
Marks: 2 b. Elavon
® c. Tsys
Qd.Amex
I 06 Which of the following is not a derivative?

Answer 0 a. Options
Marks: 2 , b. Forwards
0 c. Futures
0 d. Bonds
0 e. Swaps
107 Company ABC has a gross profitofS50000 The operating expenses amounts to
S10000 The interest on loans availed amounts to 55000 and the taxes to be paid amounts
to 55000. Calculate the EPS if there aretotalof20000 shares
Marks: 3 Answer Q & 125
0 b. 2.5
0 c. 2
Ød. 1.5
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
I I 2 In Trade Finance the term LC stands for:

Answer: Q a Letter of Complaints
Marks: 1 b Letter of Credit
0 c Letter of Commerce
0 d Letter of Creditworthiness
0 e Letter of Commercials
0:37:51
I 14 What is the purpose of rebalancing?
-Answer: ( & To keep investments in line with original investment strategy
Marks. 3 0 b Reallocation of asset classes to gain competitive advantage
0 c To maximize the portfolio return by effectively timing the market
0 d All ofthe listed options
I 15 Which of the following are order types based on price?
Answer: o Limit Order
Marks: 2 , b. Stop Order
0 c. Market Order
0 t All ofthe listed options
0 e Stop Limit Order
I 18 Which of the following is NOT a player in a typical trade cycle?

Answer ® & Regulator
Marks: 3 0 b Clearing bank
0 c Custodian bank
0 d Trading member
0 e Clearing member
I I 9 Private Banking is so called because:
Answer: Q a. It is private to a group of individuals
Marks: 2 b. The banking services provided are confidential
0 It is done privately without anyone’s knowledge
0 t Personalized banking services are provided to the clients
0 a It deals with black money
KOL-23-Aug-1 I [1 1 :OOel 3:30]

Attempt I
Page: (Previous) 12345678910111213
121 Trade Finance primarily helps in:
Answer: Q a. Facilitating intra-company transactions
Marks: 1 b. Facilitating inter company transaction
0 c. Facilitating corporate lending
0 & Facilitating International transactions
0 a Facilitating setting up of new factories
I 22 A card holder swipes his card for USD 1 OO How much does the merchant
Answer: ® a. I: USD 100
II: USD 98 0 b I: USD 100
II: USD 2
0 c I: USD 98 O’3742 II: USD 98
0 d. L USD 100 12 II: USD 100 io : 2
9•.•: 3
8’ :
I 23 What term is used to describe an LC that remains valid for years thereby eliminating
the cost of separate LOs for each transaction with a regular client?
Answer: (j a Irrevocable LC
Marks: 2 b. Evergreen Clause
0 c Green clause
0 d Red Clause
0 a RevoMng LC
sell the share at that price What is the annualized return that the person has earned?
Marks: 3 Answer: Q a 05
0 b. 06667
0 c. None ofthe listed options
0 d 03333
0 a 0.2247
I 25 Stock Split is a type of Corporate Action
Answer: ® Optional
Marks: 1 b. Mandatory with Options
0 c. Mandatory
0 d. Voluntary
I 26 Which or the following are not institutional investors?
Answer: Q a Pension Funds
Marks: 1 b Banks
0 c. High Net worth Individuals
0 d Mutual Funds
0 e Hedge Funds
128 “Market timing” is used in: 2

Answer 0 a. Active approach of Asset allocation
Marks: 2 b. Passive approach of Asset allocation
0 d. It can be used in both the approaches
I 29 CRR stands for which of the following option?
Answer: a. Cash Reserve Risk
Marks: 1 b. Cash Return Ratio
0 c. Common Reserve Ratio
0 d. Cash Refund Ratio
0 e. Cash Reserve Ratio
I 30 If the Limit = $2000, margin = 20% and Asset Value = $2000. then Drawing Power for
Answer: Q 2200
Marks: 3 0 b 1600
0 c None of the listed Options
Qd.2400
Qe2000
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Submtthe Quizj
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KOL-05-Sep-1 I [14:30-17:00]
Attempt I
Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 (Next)
I Which of the following statements pertaining to Pooling is true?
Marks: 1 I: All value balances of a set of ‘participating’ accounts are centralized at the
end of each day
II: Banks offer both domestic and cross border zero balancing
Ill: The participating accounts bear credit or debit interest.
Answer: Q a. Ill only
0 b. Both I and II
0 c. II only
0 d. I only
Øe.IV
2 The clearing process is completed When delivery and payment have occurred. State
True or False
Marks: 2 Answer ®True 0 False
0:28:55
4 From the given options identify the service(s) that can be categorized under Asset
Servicing line of business.
Answer: cj a. Both I and II
0 b. II only
0 c. Ill only
Qd.IV
0 e. I only
6 NASDAQ is based out of _____________

Marks: 3 0 b. London
0 c. Chicago
0 d. Singapore
0 e. Hong Kong
Answer: Q a. Seller, Buyer
Marks: 1 0 b. Beneficiary’s Bank
0 c. None of the listed option
0 d. Issuing Bank
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
I I The Advising bank is used as a trusted bridge between the and when they do
___________ __________
not have an active relationship.

Answer: Q a. Beneficiary bank: Reimbursing bank
Marks: 2 , b. Importer: Exporter
Marks: 3 Answer: c a. 0.2247
0 c. 0.6667
0 d. 0.3333
Qe.0.5
0:28:18
I 6 Coming together of BNY and Mellon is an example of _____________
Answer 0 a. All of the listed options

Marks: 3 0 b. Acquisition
0 c. Takeover
0 d. Merger
0 e. Brokerage
I 7 If the Limit = $2000. margin = 20% and Asset Value = $2000. then Drawing Power for
Answer 0 a None of the listed Options
Marks: 3 0 b. 2200
0 c. 2400
0 d. 2000
Øe.1600
I 8 An investor has lost track of a particular company’s shares that he holds for the last 5
years. Now the investor wants the know the details like how many shares he owns, in
what form they exist etc. Whom should he contact?
Marks: 1 Answer: Q a The investor has to obtain the information only through an
authorized intermediary.
0 b. The investor has to contact the Custody service provider to get the details
0 c The investor can call the company directly and get the information
0 d. The investor has to contact to the Company’s transfer Agent to get the details
I 9 A card holder swipes his card for USD I 00 How much does the merchant
Answer: a. I: USD 100
II: USD 100 Qb.I:USD98
II: USD 98 0 c. I: USD 100
lI:USD2
0 d. I: USD 100 II: USD 98
20 NPV stands for
Answer: ® a. Net Present Value
Marks: 1 b. No Present Value
0 c. Net Past Value C d. New Present Value
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
22 Which of the following is NOT a function of Central Bank?

Answer 0 Stability of the financial system
Marks: 2 , b Conducting the nations monetary policy
0 c Monitoring foreign currency inflow and outflow
0 d Managing the branches of public banks
0 e Regulating the Banking institutions
Answer ® a O44 0.28.02
Marks: 2 ‘.
0 u no 12
Qc.051i0 2
QdO29 :“3
8
24 Choose the right option:
Answer 0 a Both close and open ended funds have a fixed maturity period
Marks: 2 b. Mutual funds don’t have a fixed maturity period
0 c. Close ended funds have a fixed maturity period
0 d. Open ended funds have a fixed maturity period
25 If the Point Of Purchase is S 52 and the amount given to the issuer is S 50 what is the
underwriter spread?
Answer: Q a 50
Marks:2 Qb52
0 c. 102
Øe2
26 Identity the three Cs of underwriting:
Answer: a. Collateral
Marks: 3 El b. Capacity
El c Credit
ci d. Cash
29 Ram deposits $1 00 in XYZ Bank. Puja takes a loan of $1 00 from XYZ Bank.
Answer: & Bank is paying 3% interest to Puja and charging 5% interest to Ram
.
Marks. 3 0 b. Bank is charging 3% interest to Puja and paying 5% interest to Ram

0 c. Bank is charging 5% interest to Puja and paying 3% interest to Ram
0 d. Bank is paying 5% interest to Ram and charging 5% interest to Puja
0 e None of the listed Options
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
Qe.M&A
32 A building society is a financial institution. owned by its members. that offers banking
and other financial services. especially mortgage lending and are
prevalent only in UK. State True or False
-

33 The BSE is a large primary financial market in which the initial issuer receives the
proceeds for the sale of securities State True or False
Marks: 2 Answer: GTrue 0 False
0:27:51
11 1:2 i
10 2
Answer: 0 a. II only
0 c. Both land II
Qd. l only
Answer: 0 a. True discounted Loan
Marks: 3 0 b. Discounted Loan
0 c Demand loan d. Amortized Loan
0 e. Capitalized Loan
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
42 Under Basic Indicator Approach for measurement of Operational risk. the banks have
to set aside an amount calculated as the percentage of___________
for operational risk management

Marks: 1 Answer: c a Net Income
Qb Net worth
0 c. Annual Gross Income
0 d Net Profit
0 a Quarterly Income
43 Which of the following are examples of emerging payments? 0:27:40
Answer: cj & All of the listed options
o 10 .2
0 c. Proximity Payments 9 1•
• .•
0 d. Digital Cash 8 4
44 Credit union members have what type of accounts (rather than checking)?
Answer: ® a. None of the listed options
0 c Basic
Qd Share Draft
47 If an investment pays interest at an annual rate of r % per year, compounded twice a

year. then what is the effective yield?
Answer ® & greater than r %
Marks: 2 o b All of the listed options
Qc. equal to r%
Q& less than r%
49 Identify the services offered by Retail Banks:

Answer: 0 a Savings and Checking Accounts
Marks: 1 0 b Personal Loans
0 c. All of the listed options
0 & Debit Cards
50 Increasing the Cash Reserve Ratio for banks would have an impact on which of the
following:
Answer: 0 & Reduced Money Supply in the economy
Marks: 2 0 b Profitability of firms
o c Increased Money Supply in the economy o d Increased interest rates
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
51 If the money multiplier is 1. the required reserve ratio must be:
Answer: Q a. 1
Marks: 2 ® b Greater than 100%
0 C. 0.5
0 d. Zero
52 In defined benefit plans. investment management of funds is done by and in
________
defined contribution plans. it can be done by Answer 0 a. Plan administrator plan

________
administrator
Marks: 2 , b Employer: employee
0 c. Trustee: trustee
0 d. Employee: employer
Answer: &j a. 80% Equity, 20% Debt
Marks: 2 b 60°/b Equity, 40% Debt 0:27:30
0 c. 40°/b Equity, 60% Debt 12
0 t 75% Equity, 25% Debt o 2
9
8
56 Which of the following market entities cannot provide securities lending service?
Answer: ® a. Sub-Custodians
Marks: 1 b. Custodians
0 c. Wholesale intermediaries
0 d. Securities market regulators
0 e. Niche intermediaries
57 In Normal Distribution 99°/b Confidence interval corresponds to __________
Answer: Q a. 3 Sd
Marks: 3 0 b. 1.65 Sd
Qc.1965d
Oct lSd
0 e. 2.33 Sd
58 How much will be the 1% legal fee on 30M USD?
Answer: Qa3M
Marks: 2 b 0.3M
0 c. 3000
Qe0.1 M
59 Which of the following is the most risky asset?
Answer: Q a Treasury bills
Marks: 1 b Investment in Real Estate
0 c. Triple A rated bond
0 d. Shares of a Blue chip company
0 e Investment in Mutual fund
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
62 Market Risk is defined as:

.Answer: G a. the possibility of loss over a given period of time related to uncertain
Marks. 1 b. the possibility of loss resulting from errors in instructing payments or settling
transactions
0 c. The possibility of loss as a result of default. such as when a customer default on a
loan 0:27:18
0 d. the possibility of loss when a contract cannot be enforced
C e. the possibility that a firm will be unable to generate funds to meet contractual
obligations as they fall ‘12I
7: e
65 Which of the following are characteristics of Savings Accounts?

Answer: 0 a. Funds deposited are generally for savings
Marks: 1 b. Provides Interest income to customers
0 c. Accountholder can make deposits & withdrawals but has limited check writing
capacity
0 d. Charge a small fee for maintaining the account especially if a minimum balance is
not maintained
0 e. All of the listed options
67 What term is used to describe an LC that remains valid for years thereby eliminating
the cost of separate LCs for each transaction with a regular client?
Answer: a. Red Clause
Marks: 2 b. Irrevocable LC
0 c. Revolving LC
0 d. Green clause
0 e. Evergreen Clause
68 Investing in shares will always result in a monetary gain. State True or False
Marks: 1 Answer: C True 0 False
70 Corporate Loans are:

Answer: Q a. Never unsecured
Marks: 1 b. Always unsecured
0 c Secured or unsecured
0 d. Never secured
0 e. Always secured
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
71 A Standard and Poor’s bond rating of D refers to:
Answer: Q a High quality investment grade bonds
Marks: 2 b Convertible bonds
0 C. Junk bonds
0 d Government bonds only
0 a Corporate bonds
72 Trading occurs between clearing and settlement State True or Ealse
75 Product development in sales and marketing refers to which of the following option?
Answer: a All of the listed Options
Marks: 3 0 b Collateral eg Cars in case of car loans. houses in case of mortgages
0 c. Identifying products such as SAP. Oracle for the bank
0 & Developing and differentiating deposits. loans etc
0 a Products that are bought using online payment such as e-commerce
76 A is a less risk-averse investor than S Hence what will be the consequences?
Answer: ® & For the same return. A takes higher risk than B.
Marks: 1 b For the same return, B tolerates lesser risk than &
0 c For the same risk, A requires a higher rate of return than R
0 d. For the same risk, A requires a lower rate of return than B.
77 Which of the following is true?
-Answer: Q a. Tax deduction can be claimed for the full value of the rental paid in case of
lease
Marks. 2 , b. Depreciation is claimed by the financier in Lease and not in case of Hire
Purchase
0 c. All of the listed Options
0 d. The financier owns the asset both in case of “Lease” and “Hire Purchase”
78 US Export and EURImport agree to carry out the transaction, goods worth $1
.000.000 under a confirmed term Letter of Credit with a maturity date of 60 days from the
time of shipment. The Acceptance commission © I .8% pa equals. Calculate the
acceptance commission.
Marks: 3 Answer: a. 300
0 b. 2500
0 c. 250
0 d. 3000
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
investments is Rs 55 million. The number of units is 1 million. What is the
NAV?
Marks: 2 Answer: a. Rs. 20
0 c. Rs. 75
® d. Rs. 55

Buy 120 Dell shares for $10.00 each 0:26:54
Marks: 2 Sell 70 Dell shares for $10.50 each
Buy 200 Cisco shares for $20.00 each if.12 i
Sell 20 Dell shares for $1 1 .00 each 10 2 .
Sell 50 Cisco shares for S2050 each 9 : 3

.
Sell 1 0 Dell shares for $9.00 each 8 4

the end of the day. 7 e
Answer: a Dell: 70 shares to give out: Cisco: 90 shares to receive: $3,000 to pay out to
the exchange
0 b. Dell: 20 shares to receive: Cisco: 1 50 shares to receive: $31 30 to pay out to the
exchange
0 c. Dell: 20 shares to pay out: Cisco: I 50 shares to receive: $3,780 to pay out to the
exchange
0 e. Dell: 150 shares to receive: Cisco: 20 shares to receive: $3130to receive from the
exchange
84 Credit derivative is all BUT:
Answer: Q a. Financial Instrument
Marks: 3 0 b. Traded over the counter
0 c. Facilitate greater efficiency
0 d. Transfers ask
85 Does a pure play investment bank accept deposits?
Answer: Q & Yes. if it is below 1 0% of market cap
Marks: 1 b. Only during IPO
0 c. No
Qe.Yes
86 What is coupon in reference to bonds?
Answer: oj a. the interest rate that the issuer pays to the bond holders
Marks: 2 , b. Cheap is to buy bond
0 c. Percentage change in a bond’s phce function with respect to interest rate
0 d. Number of days to maturity of bond
0 e. Present value of Bond
87 Which of the following is a type of underwriting spread?
Answer: Q a. Concession
0 c. Manager’s fee
0 e. Underwhter’s Allowance
Answer: Q & 3% discount is offered if payment is made within 1 5 days
.r
Marks. 3 0 b. 1 0% discount is offered if payment is made within 3 days. the payment

should however be made in 1 5 days
0 c. 3% discount is offered if payment is made within 10 days
0 d. 1 0% discount is offered if payment is made between 3 and 1 5 days
0 e 30% discount is offered if payment is made before 15 of the month
89 In an exchange on a particular day there is a buy trade for 1 50 shares of a particular
company and there are two sell trades for 70 and 60 shares of the same company. Can the
buy trade and sell trades be matched?
Marks: 2 Answer: Q & No
Qb.Yes
0 c. Yes, but only if the prices on the buy & sell side match
0 t Yes, but only if the number of shares on the buy & sell side match
90 What is the purpose of rebalancing?
Answer: Q a. Reallocation of asset classes to gain competitive advantage
Marks: 3 0 b. All of the listed options
0 c. To maximize the portfolio return by effectively timing the market
0 d. To keep investments in line with original investment strategy
Answer: 0 & Internal Rate of Return

o b. Simple Interest
o c. Compound Interest
o c[ External Rate of Return
0 a Net Present Value

Marks: 3
Answer: 0 a. Foreign exchange transactions

o b. Settlement services
o c. Fund administration
o d. Tax reclaims processing
0 a All of the listed options
There are 10000 shares of company XYZ. XYZ’s net income for the year 2008 is
$40000. The current market price of the share is $48. Find the PIE ratio.
Answer Øa.12
Qb.64
o c. 48
Qd. 192
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
From an investor’s standpoint. a debenture issued by the Excellent Company will
appear “safer” than a share of preferred stock issued by the Excellent Company.
State True or False
Answer: OTrue 0 False
Answer: 0 a. 0.0225
.
Marks. 3 0 b. None of the listed options

o c. 0.1655
0 d. 0.0195
97
Marks: 3 ;1
Search Desktop;0]
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
I 01 The amount of money that banks can lend is directly affected by the reserve
requirement set by the Central Bank State True or False
I 02 Risk Management is a function of
Answer ® a. Mid Office
Marks:3 Qb Traders
0 c. Specialists
Qd. Front Office
0 a Back Office
Answer: c & All of the listed options
Marks: 1 b Performance of the relevant industry
0 c. Performance of the company 0:26:32
0 t Market sentiment
0 e State of the country’s economy i 12
10 2
9
8
I 04 Who is a Underwriting Bank?
Answer: Q a Bank which underwrites a IPO
Marks: 2 , b Bank which insures a loan
0 c. Bank which does not insures a loan
0 d Bank which commits supply of funds in a syndicated loan
0 a Bank which underwrites a insurance
107 What is the purpose of Mortgage loan?

Answer: 0 a. Buying Property
Marks: 1 0 b Buying shares
o c Buying Car o c[ Buying farm equipment
108 Treasury bills can be transacted and settled on the same date State True or False
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
I I I CRR stands for which of the following option?
Answer: Q a. Cash Refund Ratio
Marks: 1 b Cash Reserve Risk
0 c. Cash Return Ratio
0 d Common Reserve Ratio
0 a Cash Reserve Ratio
I 13 Which of the following financial institutions are covered under the Anti-money
laundering. US PatriotAct? 0:26:22
Answer: oj a Securities brokers and dealers 12
Marks: 2 b. Banks and Trust companies 1o 2
QcMutualFunds 9
0 d. All ofthe listed options 8 4
7s
I 14 If you invest S 500for 3 years at 8 % simple interest. how much will you have at the
end of the 3 years?
Answer: Q & 580
Marks: 3 0 b. 680
0 c. 620
0 e. 606
I I 6 Which are the types of IRA?

Answer: a. SEP IRA
Marks: 2 , b. Simple IRA
0 c. Traditional IRA
Qe.RothIRA
I I 7 It is possible to nil an order to buy 1 UU snares of GTSri with o sen oroers for uTSri,
of 20, 30 and aü shares each, leaving 1 buy order with 20 shares on the order book. State
True or False
I I 8 A type of stock in which the stockholder is likely to get a percentage of dividends
each year based on the profits of the company is:
Answer: rj a. None of the listed options
Marks: 1 b. Preferred Stock
0 c. Common Stock
0 d. Convertible Stock
KOL-05-Sep-1 I [14:30-17:00]
Attempt I
Page: (Previous) 12345678910111213
123 What is financial leverage? 11 12

Answer 0 a. Investing in derivatives io 2
Marks: 2 ® b a private company transforming itself into a public company .• : •.
0 c. Investing in equity 8 4
0 d. Closing down a loss making company 6 ‘
0 e. Borrowing funds to increase return on equity
I 25 The term “settlement cycle” refers to the time period between the date on which an
investor first makes the decision to enter a trade to the date when the trade is settled. State
True or False
I 26 A Custodian has different types of assets under its custody and those assets earn
returns to the original investor in various forms. What are the types of returns that can be
taxed?
II: Interest
III: Capital Gain
Answer: cj a. IV
0 b. III only
0 c. Both I and II
0 d. I only
0 e. II only
I 27 What are Secondary markets defined as?
Answer Q a. Either auction or dealers markets and being only OTC market
Marks: 2 , b. Market where security is sold during IPO
0 d. Markets in which security are resold after they are originally issued.
a. True b. False

b. Less than offer
c. More than offer
e. Equal to offer

b. Central banks
c. Companies
a. True b. False

b. Terms loans
c. Cash
e. Receivables

b. Lot of research

a. True b. False
a. Market risk
c. Credit risk
d. Operational risk
e. Liquidity risk
a. Current account
b. Nostro account
c. Vostro account
d. Forex account
e. Overseas account
a. Pre-closure
b. Assignment
c. Participation
a. Futures
b. Spot
c. Forward
d. Stock
e. Option


ee. Bond prices increase
ff. Bond prices decrease
gg. Bond prices do not change
hh. Economy goes into deflation
ii. Interest rate never fall, they always go up.
ee. -2%
ff. 2%
gg. -1.96%
hh. Very high
ii. 1-2%
end of the 3 years?
ee. $1225
ff. None of listed option
gg. $1000
hh. $1070
ii. $1270

ee. Letter of commercials
ff. Letter of credit worthiness
gg. Letter of credit
hh. Letter of commerce
ii. Letter of complaints

y. Small investor are protected, hence it is a low risk investment avenue.
z. Banks are in the best position to lend out money at competitive
aa. Depositors are participant in primary and secondary markets.
bb. All of listed options.

y. For the same return, B tolerates lesser risk than B.
z. For the same return, A tolerates higher rate of return.
aa. For the same return, A tolerates lower rate of return.
bb. For the same return, A takes higher risk.

ee. Sweep facility
ff. Structured lending to client
gg. All
hh. Short term credit facilities
ii. Overdraft

ee. None
ff. To provide stability of money supply.
gg. To serve certain social objectives.
hh. To prevent failure of any financial institution.
ii. To offset moral hazard incentive provided by deposit insurance and other
guarantees.

y. Monte- Carlo simulation.
z. All equal time with software.
aa. Variance-Covariance matrix.
bb. Combination of Monte- Carlo and Historical Simulation.

ee. Payment to employers
ff. None
gg. Investment
hh. Loan
ii. Withdrawal
g. True b. False
can be refer.
ee. Market risk
ff. Interest rate risk
gg. Commodity risk
hh. Operational risk
ii. Liquidity risk
a. (i) $1780 (ii) $3000

c. (i) $3000 (ii) $1780
d. None
EE) $2500
FF) $3000
GG) $300
HH) none
II) $250
A) Issuing Bank
C) Beneficiary Bank
D) Seller
E) Buyer
A) Liquidity risk
D) Credit risk
A) A very high
B) 2
C) -1
D) -2
E) 1
A) Currency risk
B) Attrition
C) Credit risk
D) All of the above
D) Research
B) is too high
C) Is about right
D) is too low

B) Acceptance
C) Negotiate
D) Purchase
E) Discount

B) Tiger Woods
C) Any of the above
confirmation?
B) Back to back LC
C) LC
D) Standby LC
the end of the day
EE) IBM no exchange of shares ; MFST 90 shares to receive ; $1780 to pay out to
the exchange
FF) None of these
GG) IBM no exchange of shares ; MFST 90 share to receive ; $3000 to pay out to
exchange
HH) IBM 70 shares to given out ; MFST 90 shares to receive ; $3000 to pat out to
exchange
II) IBM no exchange of shares ; MFST 90 share to receive ; $1780 receive from the
exchange

EE) All of the listed option
FF) Documents
GG) Physical instrument like check and draft
HH) Electronic data files
II) Cash

EE) APR
FF) None
GG) IRR
HH) NPV
II) Rate of interest applicable for the loan
EE) learning services
FF) ‘None
GG) Merger and Acquisition
HH) Valuation of firm
II) Underwriting and distribution of equity issues.
EE) 500000
FF) 100000
GG) 400000
HH) 600000
II) Can not be determined
gain this year
EE) 200
FF) 500
GG) None
HH) 300
II) 400

Y) State regularity agency
Z) SEC
AA) Industry wide SRO
BB) All of the listed option

a. Demat
b. Personal loan
c. None
d. Hire Purchase
e. Auto loans
EE) Monetary policy
FF) None
GG) Money multiplier effect
HH) Profit making tendency of a bank
II) Fiscal policy

EE) Amount of bank capital expressed as % of the risk weighted credit exposure & market
risk.
FF) Amount of bank capital expressed as % of the risk weighted credit exposure
GG) Amount of bank capital expressed as % of the risk weighted credit exposure &
operational risk.
HH) Amount of bank capital expressed as % of the risk weighted credit exposure
II) None

EE) Calypso
FF) Summit
GG) Wall street system
HH) Front arena
II) Flex cube

EE) Managing large bond issues
FF) Raising huge money from the bank
GG) Managing large capital raising act
HH) Managing conflict between investment banks.
II) IPO distribution.
EE) Treasury bills have their interest paid in a lump sum at maturity
FF) None
GG) Treasury bills have greater interest risk than either treasury bond or treasury note
HH) Treasury note has maturity dates up to 10 yrs
II) Treasury bonds have maturity dates up to 30 yrs
EE) Account balance , Annuity

FF) Annuity , Annuity
GG) Account balance , Account balance
HH) None
II) Annuity , Account balance
EE) none
FF) Syndicate
GG) Allocation
HH) Assignment
II) Secondary

EE) issue card
FF) Set credit limits
GG) Set interest rates
HH) Set card fees
II) Security/ Risk management
involved
EE) Global custodian , domestic sub custodian , depository in foreign country and
sometime stock exchange in foreign country
FF) Depository in foreign country
GG) Global Custodian
HH) stock exchange in foreign country
II) domestic sub custodian

called
EE) Cash projection

FF) Investment manages universe
GG) Asset allocation
HH) Fund administration
II) Asset / liabilities analysis

EE) Facilitating international transaction
FF) Facilitating intra company transaction
GG) Facilitating international transaction , corporate lending and settling up of new
factories
HH) Facilitating corporate lending
II) Facilitating setting up of new factories

Y) a price at which a firm is ready to buy or sell
Z) When bid is equal to offer
AA) When the firm has a choice of deciding the securities to take
BB) a price at which a firm is ready to buy or sell it also means when bid is equal
to offer
EE) 6 month deposit of min balance of $1000
FF) 3 month deposit of min balance of $4000
GG) 12 month deposit of min balance of $1000
HH) None
II) 6 month deposit of min balance of $2000

EE) $3mn
FF) $4.5 mn
GG) $9mn
HH) $4.4mn
II) $1mn
EE) Loan of $2439
FF) Loan of $1710
GG) None
HH) Create a reserve of $100
II) Create a reserve of $190
Y) Mutual Fund
Z) Mortgage Company
AA) None
BB) Stock Exchange
ee. 45%
ff. 10%
gg. 25%
hh. 50%
ii. None
ee. Trade Credit
ff. Revolving Credit agreement
gg. Agreement Irrevocable Credit
hh. Line of Credit
ii. Letter of Credit
66. Odd 1 out

ee. Warren Buffet
ff. George Soros
gg. Bill Gates
hh. Ben Graham
ii. Peter Lynch
ee. Investment manager Universe
ff. Asset Allocation
gg. Asset Liability Analysis
hh. Fund Admin
ii. Compliance Reporting
y. Current rate – Base Rate
z. Cap – Current Rate
aa. Current Rate – Floor
bb. Base Rate – Floor
ee. Exporters Fund
ff. All
gg. Government Guarantee Program
hh. Time Frame
ii. Cost of Financing
g. True b. False
investors?
ee. Stock Repurchase Program
ff. Transition Management
gg. Transition Management & Commission Recapture
hh. Commission Recapture
ii. None

ee. the obligation to buy a futures contract
ff. the obligation to sell a futures contract
gg. the right & obligation to buy a futures contract
hh. the right but not the obligation to buy a futures contract
ii. the right but not the obligation to sell a futures contract

ee. Call Option
ff. Swaption
gg. Leaps
hh. Oil Futures
ii. Put Options
m. True
n. False
y. Beneficiary Bank & Reimbursing Bank
z. Importer Exporter
aa. Reimbursing Bank & Beneficiary Bank
bb. Issuing Bank & Confirming Bank
y. DC plans fix the monthly contribution from the employee making his financial planning
easier.
z. DC plans are seen by employees as investment which to accumulate retirement income.
aa. All
bb. Employer increasing wants employees to share responsibility for retirement
took clients order
ee. Salary
ff. Manager fee
gg. Wage
hh. Concession
ii. Underwriter

y. Listed market
z. Over the counter market
aa. Third market
bb. Fourth market

y. Market capitalization more than $200000
z. All
aa. Net worth greater than $500000
bb. Household income of max $50000 year.

y. The business focuses on small no. of high net worth individuals.
z. The business focuses on small and medium enterprises.
aa. The business focuses on large no. of individuals.
bb. The business focuses on large no. of corporation bodies.

ee. Trades in securities
ff. Quotes to its bets customer
gg. Intends to buy
hh. Intends to sell
ii. Quotes when it does not want to trade.
g. True b. False
y. Stock market
z. Retail banking
aa. Corporate banking
bb. Customer lending
84. Which is true?
y. Financer owns the asset both in case of ‘Lease’ and ‘hire Purchase’.
z. Tax deduction cab be claimed fro the full value of the rental paid in case of lease
aa. All
bb. Depreciation in claimed by the financer in lease and not in case of hire purchase.
ee. Global custodian,
ff. None
gg. Main custodian
hh. Sub custodian
ii. Secondary custodian

S) Bonds sell at a discount when Coupon Rate is less than Market Interest rate.
T) None
U) Bond is debt instrument giving issues.
EE) Capitalized loan
FF) True Discounted loan
GG) Amortized loan
HH) Demand loan
II) Discounted loan

EE) Commercial bankers
FF) Investment Bankers
GG) None
HH) Company Management
II) Company Management and Investment Bankers

EE) Bankers Acceptance reduces lending capacity
FF) Sight Drafts are negotiable instruments
GG) Bankers Acceptance demands immediate payment.
HH) None
II) Banks can raise funds by selling acceptance.
EE) Investible assets
FF) Location
GG) Age
HH) Net worth
II) Name
EE) Spot, futures
FF) Debt , Equity
GG) Primary , Secondary
HH) Money, Capital
II) Secondary, Primary
EE) Investment Management
FF) Asset Servicing
GG) None
HH) Trading
II) Investor Services.

Y) All
Z) Stands for Suspicious Activity Reports
AA) Customer Identification Program
BB) Requiring Businesses, which were only to report cash transactions involving more
than 1.00,000?
S) Yes under RTGS
T) No
U) Yes under net-settlement system

EE) 30 stocks
FF) 20 stocks
GG) 40 stocks
HH) 10 stocks
II) 50 stocks
D) All

EE) Interest rate and foreign exchange
FF) Liquidity and credit
GG) Credit and Interest rate
HH) Credit and Foreign exchange
II) All
1. 1345.1
2. 1243.1
3. 1231.1
4. None
5. 1235
1. Trading
3. Investor service
4. None
5. Asset Servicing

2. Client Partner
3. Commercial Paper
5. Credit Provision
1. All of the above
3. High Leveraging
4. High Speculation
ee. 2% discount is offered if payment is made within 15 days.
ff. 15% discount is offered if payment is made within 2 days; the payment should
gg. 30% discount is offered if payment is made before 15 of the month.
hh. 15% discount is offered if payment is made between 2 & 30 days;
ii. 15% discount is offered if payment is made within 30 days.
g. True b. False
answer)
ee. Irrevocable LC
ff. None
gg. Red clause
hh. Revolving LC
ii. Evergreen clause

ee. Plan sponsor
ff. Plan administrator
gg. Fund trustee
hh. None
ii. Government

ee. Committed amount
ff. Either disbursed or committed loan
gg. Unused amount of loan
hh. Disbursed amount
ii. None
s. Yes
t. No
u. Yes, but if prices on the buy & sell side match.
ee. None
ff. $1600
gg. $2200
hh. $2400
ii. $2000
ee. Setting risk limits
ff. Hedging
gg. Diversification
hh. Arbitrage
ii. Insurance

ee. Municipal bonds
ff. Bonds of govt. sponsed enterprise
gg. Corporate bonds
hh. US treasuries
ii. Shares
manager.
ee. None
ff. Plan administrator & trustee both have outsourced plan administration as well as fund
gg. Any
hh. Plan administrator gives investment instruction to investment manager while
ii. Trustee gives investment instruction to investment manager, while plan administrator
application?
ee. Issuer processor
ff. Collection agency
gg. Issuing bank
hh. Authorization engine
ii. Credit bureau.

ee. Consolidated Price index
ff. Consument popularity index
gg. Consumer product index
hh. Consumer price index
ii. None
ee. Credit scoring
ff. Credit increase
gg. Credit incrementation
hh. Credit revision
ii. Credit enhancement.
ee) 4
ff) 5
gg) 3
hh) 1
ii) 2

y) Monte- Carlo
z) Historical
aa) Variance-Covariance
bb) Variance-Covariance and Monte- Carlo

y) Plc
z) Pte
aa) Ltd
bb) Inc

ee) Govt. guarantee Program
ff) Time frame
gg) All
hh) Cost of financing
ii) Exporter fund.

ee) Risk management
ff) Front office
gg) Back office
hh) Trade
ii) Board of director
ee) Traders
ff) Back office
gg) Specialist
hh) Front office
ii) Mid office

y) Govt. regulation
z) Many traders
aa) Full info
bb) Cost effective trading

ee) Custodian bank
ff) Clearing bank
gg) Clearing member
hh) Trading member
ii) Regulator
ee) Primary
ff) Secondary
gg) Participant
hh) OTC
ii) Index

31. DJIA
32. Hangseng
33. EAFE index
35. S&P 500
_________ERISA
403b
401k
401b
403k
None
Participant
Government
Investment manager
Sponsor



derivatives
question/


Options:
28. All
e. None
e. All
f.
b. Interest earned
d. All
a. Issuing bank
b. Buyer
d. Seller
e. Beneficiary bank
a. LC
b. Direct debit
d. Counter trade
e. Cash in advance
a. Equally unlikely
b. Equally likely
c. ABC
d. XYZ
e. None

a. Pre-closure
b. Assignment
c. Participation

a. AAA,AA+,BBB,D
a. 118.8
b. Exactly 100
c. Exactly 200
d. Around 109
e. None

a. SEC
d. All
297. Odd man out:-

a. SEC
b. NYSE
c. NASDAQ
d. LSE
e. NSE
a. True
b. False

b. All
c. High speculation
d. High leveraging

b. Lot of research

a. All
d. Time frame

b. All

e. None
a. Line of credit
c. Letter of credit
e. Trade credit

a. Specialist
b. Traders
c. Back office
d. Front office
e. Mid office
a. Equities

a. E-trade
b. Charles Schwab
c. Sallie Mae
d. Federal reserve
e. a and b both
b. Style maps score
d. Alpha
e. None

d. None

a. 4th market
b. 3rd market
c. Listed market
d. 2nd market
e. OTC market
a. Discounted loans
c. Capitalized
d. Demand
e. Amortized


a. Unlisted market
c. Unlisted
d. Super
e. 2nd market

a. Sweep facility
c. All
e. Overdraft

a. Call
b. Put
c. Swaption
d. Oil futures
e. Leaps

a. Cash
b. Electronic data
c. Docs
e. All
c. Do not change
a. Bid
b. Indirect
c. Direct
d. Cross currency
e. Ask rate

f. Intends to buy
g. Intends to sell
i. None

d. Investment gain
a. Disbursed amount
b. Committed amount
c. Both
d. Either
e. None
324. Odd man out?
a. Equity
b. Stocks
c. Shares
e. Common stock
a. Sponsor
b. Custodian
d. Record keeper
e. Participant
as
a. Prime rate
b. Bond rate
c. Discount rate
d. Federal rate

1) Page 5
State T/F
2) Page 6
INFLATION
R= N-I.
3) Page 8
FV = PV*(1 + i)n
4) Page 8
5) Page 10
NPV of a project:
6) Page 14
7) Page 15
securities)
8) Page 16
Treasury Securities
9) Page 16
10) Page 17
Commercial paper
and inventories.
11) Page 19
12) Page 20
13) Page 20
Warrants
14) Page 20
reference rate.
15) Page 21
Forward contract
Futures contract
16) page21
imperfections.
17) Page 22
Call Options
Put Options
LEAPS
Swaps
18) Page 21
19) Page 22
another currency.
20) Page25
21) Page 26
22) Page 27
Federal Reserve
23) Page 27
24)Page 29
25) Page 29
What is a repo?
26) Page 30
27) Page 30
issuers
28) Page 49
29) Page 50
30) Page 52
31) Page 54
32)Page 57
Checking Accounts

Savings Account

33) Page 60
o Bearer Checks
o Bankers Checks
Debit Cards
Demand Drafts
34)Page 61
What is EFT?
35) Page 63

36) page 64

37) page 65-66

What is Fedwire?
government agencies
Full form of CHIPS?

What is SWIFT?

SWIFT 15022
38) Page 69
Read thoroughly..
39) Page 70 VVimp


Lease
Hire Purchase
40) Page 71
Kinds of repayments
41)Page 72
42) Page 73
Collar = cap-floor
43) Page 73
Charge Types
44) Page 76
45)Page 76-77
46) Page 82

47) page 83
Credit ratings
48) Page 84
49) Page 85

50) page 86
Accrual—Loans
Held-for-sale.
Trading
51) page 87
52) Page 89
53) Page 90
What do u mean by:
54) page 91
Payables Management
Liquidity Managemet
55) Page 92
Repricing risk
Yield curve risk.
Basis risk
Optionality
56) Page 94
One numerical on:
INR/Euro quote: (45.26*1.2461)/ (45.36*1.2458) = 56.40/.51
Definitions of:

Answer – two days
57) Page 95
Front Arena
Summit
Calapso
Wall Street Systems
58) Page 97
59) Page 99
60) Page 99-100

61) page 100

62)page 102
What is RGTS?
63)page 103
Read what is ACH?
64)page 104
Costs
Time frame
Risk factors
Exporters funds
65)page 105
What is BOL?
Full form of BOL?
66) page 105

PAYMENT METHODS
Cash in advance
67) page 106

68)page 107
2. Issuing bank
69)page 108
Read the steps..

71) page 110

Drafts
72) page 111

OPEN ACCOUNT
73) page 113

Full form of BAFT?
74) page 114

75)Page 117
76) page 119

77)page 120
78) page 121

A card Association
Issue cards
Set card fees
79) page 122

80) page 127


this.
of the customer.
81) page 128-129

Hedge Funds
82) page 131-132

come…
83)page 133
Asset Mix
84) page 135-136

85) page 137
Cost of execution
Trading speed
86) page 139

87) page 141


Vangaurd
ING Direct
Mellon
88) page 142

89) page 143

401k,IRA
90) page 148

2 questions
SYNDICATE
91) page 148-149


Hiring the Managers
Marketing
92) page 149

93) page 150

UNDERWRITING

Answer : concession
94) page 151

What is OTC?
95) page 153

Bid or ask rate:
96) page 154

97)page 160
France (Paris) CAC
Hong Kong Hang Seng
98) page 164

transactions.
99) page 164

MEASURING RISKS
The probability
monetary impact
100) page 164

What is var?
101) page 165

Numerical..
The 99% VaR over 10 days = 2.33 * 632,456 = $1,473,621
102) page 165
103) page 166

104) page 166

MANAGING RISKS
1. Diversification
4. Ignore the risk!
105) page 170

Read this page..
106) page 172
107) page 177

What is exchange?
what they want.

Ques: What is NYSE?

108) page 180-181

109) page 184-185


110) page 186
111) page 187

SPO
SAR
Discrimination test
415 LIMIT
5500 REPORTING
1059 Reporting
See the diagram..

112) page 188
Health Care
o Medical
o Prescription drug
o Behavioral health
o Dental
o Vision
o Long-term care
o Sick leave
o Term life
113) page 190 -191

114) page 194

SARBANES OXLEY ACT
115) page 196

Pillar 1
Pillar 2
Pillar 3
115) page 198

Check 21

Ans: to print notes
Some numerical questions I will send later
All the best


a. 4,1,3,2,5 b. 4,5,2,3,1 c. 1,2,3,4,5 d. 3,4,2,5,1 e. 2,5,1,3,4

4. A choice quote is _______________.

i. Domestic Sub-custodian
j. b. Stock exchange in foreign country
k. c. Global Custodian, Domestic Sub Custodian, Depository in Foreign Country and
l. d. Depository in foreign country e. Global Custodian

c. Data on SD is required for this b. A c. B





12. Retail loans are asset products offered by the bank. State True or False .
True False
a. 1% b. 2% c. Very high d. -1% e. -2%


c. Seller of USD
e. No role


a. Equities


22. A mutual fund with investment objective of achieving high capital gr owth approaches an investor

borrow securities?
24. The process of transferring obligation from one party to another is called _________
25. Which of the following methods eliminate country risk and commercial risk upon conf irmation?







ERISA
True False
inflation rate is:
40. If total spread on underwriting is $ 500000 and Manager's fee is $ 100000, w hat is the amount


c. Historical Simulation d. A combination of Monte Carlo and Historical Sim ulation


the day.
exchange




True False

___________.

confirmed term Letter of Credit with a maturity date of 60 days from th e time of shipment. The

c. DC plans fix the monthly contribution from the employee, making his financial planni ng easier
Patriot Act
notes.
62. Legitimate ways to cancel the credit card transactions within a limited time frame are
_________________

64. Bank New has a portfolio of $30 million worth of loans, which it wan ts to hedge. This is an

a. the risk of loss resulting from errors in processes, people and syst ems
factors
fall due.
True False

True False
c. Sub Custodian b. Secondary Custodian c. None of the listed Options
requirements.
True False


the paths followed by swap rates, policy surrender rates, mortgage prepaym ent rates for the

True False
79. If the funding cost of a Company goes up due to hardening of interest rates, this can be
attributed to

82. The purchase of any stock for immediate delivery is a ______ market transaction.
True False

87. The Advising bank is used as a trusted bridge between the __________ and ___________ ____


e. Time consuming



year?
True False
compliance reporting, fund administration, investment manager universe, etc. provided by an

depository
d. Through an International Central Securities Depository, which has direct links with the local
depository



105. Which of the following best describes how banks make loans?

True False
True or False.
True False

True False





120.Factoring is______________
million obligation?
g) No
h) Yes
i) Insufficient data to draw any conclusions
a) $ 6890.42
b) $ 6789.31
c) $ 6780.24
d) $ 7346.51
following payments:
Year 1 $ 100
Year 2 $ 100
Year 3 $ 100
Year 4 $ 1,200
rate?*
PV(2,0.7)=0.8734; PV(3,0.7) = 0.8163; PV(4,0.7)= 0.7629600
i. $1500
j. $ 1231.31
k. $ 1177.91
l. $ 1096.28
Direct Cost $ 122.7
Tax 23.35%

i. $ 106.38 Mn
j. $ 227.18 Mn
k. $ 104.48 Mn
l. $ 51.14 Mn

i. $ 106.38 Mn
j. $ 53.04 Mn
k. $ 52.94 Mn
l. $ 45.10 Mn

a) $ 45.1 Mn
b) $ 35.5 Mn
c) $ 34.56 Mn
d) $ 52.94 Mn

i. 0.76
j. 0.599
k. 0.58
l. 0.63
a) Working Capital
b) Asset
c) Owner’s Equity
d) Borrowings
Inventory $165,000
Equipment $500,000
Land $194,000
Cash $25,000
i) $ 944,000
j) $ 894,000
k) $ 900,000
l) $ 874,600

i. $ 250,000
j. $ 85,000
k. $ 225,000
l. $ 190,000

a) $ 165,000
b) $ 377,000
c) $ 350,000
d) $ 167,000

i. $ 0
j. $ 19,400
k. $ 50,000
l. $ 69,400

a) $ 727,000
b) $ 377,000
c) $ 350,000
d) $ 167,000
profits this year.
i. $0
j. $190,000
k. $100,000
l. $60,000
i. No, he doesn’t need an overdraft

j. Yes, and the min. limit should be Rs. 4,650
k. Yes, and the min. limit should be Rs. 6,600
l. Yes, and the min. limit should be Rs. 5,200
i. No, he doesn’t need an overdraft

j. Yes, and the min. limit should be Rs. 4,650
k. Yes, and the min. limit should be Rs. 6,600
l. Yes, and the min. limit should be Rs. 5,200
1. You invest Rs.5000 at 8% p.a. compound interest in a bank. After 5 years, what is the amount
Rs.12346 Rs. 7000 Rs. 2346 Rs. 7346 Rs. 7546
payments:
1 Rs. 2000
2 Rs. 2000
3 Rs. 22500
22512 22558 23021 21000 21500
interest is _____.
9.50%, 13.50% 9.50%, 5.50% 9.50%, 9.50%
rate is:
borrower?
5.10%?
investments?

year?
7.50% 6% 11% 7% 10%



Debenture


the listed Options

Options



36. Mutual funds





obligations?

Swaptions
TI)
30, 140 and 10 60, 60 and 60 93, 20 and 67 140, 30 and 10
140, 30 and 0
profits
Receive interest
assumption to make?
49. Municipal bonds


High Yield bonds


Take no action
would



A stock option.
Internal financing.

Both 2 and 3

Using debt finance

$9,752.54.
Both are equal
Only 1
Premium on the bond
Can never sell



82. Primary markets

$1000. $0. $300. $200. $70

Money.

day of maturity.
maturity.

70%. 14%. 10% 7% 12.5%

________ market
Primary; secondary
Secondary; primary
Money; capital
Spot; futures
Debt; equity

Funds; liquidity
Funds; low risk
Securities; funds

reasons?
failure.
bank that failed.
Private costs to the shareholders of the bank exceeds the social costs of the a general bank failure.



104. Financial intermediaries differ from other businesses in that bo th their assets and their


gather information

which the investment is made, can be hedged by using a forward or futures contract in f oreign

always sells at par

Supply and demand are the primary forces that determine exchange rates, but centra l banks

returned?
3.30% 7% 13% 30% 10%

Both 2 and 3
117. If a T-bill pays 5 percent, which of the following investments wou ld not be chosen by a risk-
averse investor?
0.80
An asset that pays 10 percent with a probability of 0.50 or 2.75 perc ent with a probability of 0.50
America

Both a and c

At a Macro level
At country level

99% 95% 96% 90% 68%






Approximately predict movements of asset to help minimize losses
95% 99% 99.99% 50% 100%
bank risk?
133. An investor's strategy of holding many risky assets in an attempt to reduce overall risk is called
------------
Diversification
0.008 0.036 0.053 0.017 -0.029 4


accepted


4



142. A Portfolio Manager is examining the stock performance of Company Dee. She sees that, in


All of above
Cannot say
investments, even though deposits were supposed to have less risk associated with them. It means
The scenario described above is impossible; there must be an error in measuremen t
certain
Cannot say
EXCEPT

include _____________
Deposits, loans.

k) Link lenders (depositors) to borrowers
l) Evaluate the likelihood of borrower repayment, reducing risk by developing a diversified
m) Create monopolies, monetary & fiscal policies.
n) Both Link lenders (depositors) to borrowers and Create monopolies, monetary & fiscal
policies.
o) Both Link lenders (depositors) to borrowers and Evaluate the likelihood of borrower
single borrower


k) The capacity to make direct commercial loans to the public.
l) The ability to inject or remove money held by the public by buying or selling U.S.
Treasury Bonds.
m) The ability to write legislation to generate increased government spending on public works
n) The ability, through its Internal Revenue Service division, to change federal income tax
o) all of the listed options.



deposits, the bank
k) Will not experience difficulties because its required reserves will be adequate t o meet
withdrawals
l) Will not experience difficulties because it will hold sufficient excess reserves to meet
withdrawals
m) Will experience difficulties but will not fail
n) Will fail unless it can obtain additional reserves or government assistance
o) Both Will not experience difficulties because its required reserves will be adequate to meet

k) If it can be carried easily from one place to another.
l) If it can be readily exchanged for another asset or good.
m) Only if it takes the form of cash.
n) If it is held by the public and earning interest.
o) Both If it can be carried easily from one place to another and If it can be readily exchanged
k) Although less liquid than Fed Notes, are money because they are accepted as money.
l) Although less liquid than Fed Notes, are money because they are assets of everyone who
holds them.
m) Are not money because they are liabilities for consumers who have been issued
Harvey Bucks.
n) Are not money because they are not backed by the Federal government.
o) None of the listed options
167. If Bank of Japan was buying Dollars fervently, it would most likely be for which of the following
reasons
k) To protect Japanese exporters from loss due to movement in Yen
l) To protect Japanese importers from loss due to movement in Yen
m) For speculative purposes
n) Both To protect Japanese exporters from loss due to movement in Yen and For speculative
purposes
168. A Commercial bank would be able to make money in which of the following ways
k) Make the lending rate below the deposit rate
l) Make the lending rate equal to the deposit rate
m) Keep the lending rate above the deposit rate but play the volume game
n) Either Make the lending rate below the deposit rate or Make the lending rate equal to the
deposit rate
o) Either Make the lending rate equal to the deposit rate or Keep the lending rate above the
Vehicle Loans
k) Create a Chinese wall between Commercial Banking and Securities Business
l) Create a Chinese wall between Corporate Banking and Retail Banking Business
m) To make the banks more efficient
n) To promote the concept of Universal Banking
o) Both To make the banks more efficient and To promote the concept of Universal Banking

k) An increase in the total money lent out into the system
l) An increase in the total money in the bank reserves in the system
m) A decrease in the total money in the bank reserves in the system
n) Both An increase in the total money lent out into the system and An increase in the
o) Both An increase in the total money lent out into the system and a decrease in the total
k) To ensure that the Bank doesn’t face a cash crunch due to heavy withdrawals
l) To ensure that the Central Bank can take this cash in case of its need
m) To contribute towards government needs in times of crisis
n) Both To ensure that the Central Bank can take this cash in case of its need and To
o) None of the listed Options
k) Increasing the growth rate of the economy
l) Decreasing the growth rate of the economy
m) Help interest-rate traders book profit
n) Both Increasing the growth rate of the economy and Help interest -rate traders book profit
o) To help the government raise funds

Channelize Savings
reasons?
k) The social costs to shareholders of a general bank failure are more than the private cost of
the bank failure.
l) The costs of regulation exceed the benefits.
m) The private costs of a bank failure exceed the social costs of general bank panic.
n) The social costs of a general bank failure exceed the private costs to the shareholders
Both To serve certain social objectives and To offset the moral hazard incentives provided by
k) To promote competition in the financial services markets.
l) To promote limited quantities of financial services at maximum prices.
m) To promote safety and soundness of depository institutions.
n) To protect the soundness of the deposit insurance fund.
o) Both To promote limited quantities of financial services at maximum prices and To promote

k) The amount of profit a bank makes after clearing all its costs including payment of interest to
deposit holders.
l) The difference in the purchase and sale prices of any financial instrument quoted by any
m) The difference between the lending rates and deposit rates of a bank.
n) Both The difference in the purchase and sale prices of any financial instrument

k) Banks are in the best position to lend out money at competitive rates to businesses and
individuals
l) Deposits are participants in primary and secondary markets
m) Banks are in the best position to lend out money at competitive rates to businesses and
n) All of above of small investors are protected, hence it is a low ri sk investment avenue
o) Banks
183. CRR stands for




k) Banks may loan out all the money they receive through deposits
l) When the central bank reduces CRR, amount of money in circulation in the economy
goes up
m) When the central bank issues securities in the market, amount of liquidity in the economy
goes up
n) All of the listed options

Lease Auto Loans




k) The financier owns the asset in case of “Lease” but not in case of “Hire Purchase”
l) Depreciation is claimed by the financier both in Lease and Hire Purchase
m) Callable bonds
n) Tax deduction can be claimed for the full value of the payment in lease but only to the extent


204. Collateral is?


207. In
case of discounted interest rate deal for a mortgage the following is true?
k) One receives a substantial cash sum when one takes the loan.
l) Interest rate is guaranteed to be set amount below the base rate
m) The payments are set at less than that lender’s going rate for a fixed period of time.
n) The payments go up and down as the mortgage rate changes but are guaranteed not to go
above a set level

k) The rate of interest can’t move above a set level
l) The rate of interest can’t move below a set level
m) The collar of the interest rate can’t move above a set level
n) The spread of the interest rate can’t move above a set level

k) Monthly payments goes partly towards the interest and partly towards the principal
l) If all the monthly payments are made, the loan will be repaid by the end of the term
m) Monthly payments would increase if interest rates rise
n) Monthly payments would decrease in interest rates fall

k) An interest only mortgage, along with a endowment policy to mature at the same time
l) An interest only mortgage that comes with life insurance policy
m) Another name of interest only mortgage
n) An interest only mortgage combined with tax saving investment policies
k) The interest rate charged
l) When and how often the interest must be paid
m) Other charges such as arrangement fee
n) When and how often these other charges must be paid
o) All of the listed options

k) Marketing institutions selling home loans
l) Lenders to the banks for home loan bought by retail customers
m) Regulatory bodies governing home loan market in US
n) Primarily asset management companies

k) They approve a merchant for accepting credit cards
l) They collect the merchant's online payments
m) They are members of Visa and Master Card Associations
n) They are members of Dinner’s club
k) They provide merchant accounts
l) They process the funds of merchants
m) They keep reports of all the activity of merchant accounts
n) They work on behalf of Acquiring banks

216. After a credit card transaction is initiated by a customer in a shop, the transaction’s information
is sent to?


k) Its based on one’s consolidated financial information from the Credit Report
l) Its a number calculated based on one’s credit history
m) Its used by lenders for a simpler "lend/don't lend" answer
n) Its a three digit number varying between 300 – 900




k) Monthly payments go towards the interest, while a lump sum payment at the end of the term
l) Monthly payments goes partly towards the interest and partly towards the principal
m) The interest due and not paid is added to the principal balance of the loan. interest
n) Such loans come at a very low processing fee

k) Capture of credit card number by the issuing bank during a transaction for authentication
l) Capture of the person using a card not owned by him
m) Conversion of the authorization amount into a billable transaction record.
n) Recording of a person’s credit details in the credit report.
k) Single customer interface across multiple departments
l) Increasing their cross-sell opportunities to customers
m) Improving internal processing efficiency and quality
n) all of the listed options
of 5 years.

235. EFT act covers


k) An account at a bank where funds have been deposited against which checks may be
written
l) An account, folder, or file where checks are stored
m) A type of bank account that allows withdrawals by phone or Internet
n) A form of documentation for transactions between you and the bank

238. Direct debits


240. ______________ preauthorizes banks to pay recurring bills like insurance premium, utility bills
automatically
241. ATM stands for

k) Automatic Transaction Machine; Almost anytime banking
l) Automated Teller Machine; Remote location transactions
m) Automatic Transaction Machine; Fund transfer between accounts
n) Automated Teller Machine; Direct Deposit
o) Automatic Transaction Machine; Personal Banking
242. Debit Card

k) Summary of Customer’s assets for unauthorized transfers
l) Summary of institution's liability if it fails stop certain transactions.
m) List of institute holidays
n) Circumstances under which institute will not disclose information to third party.
EFT act?
k) Customer has 30 days to notify the error from the date a statement is received
l) Financial Institution has 15 days to investigate the errors
m) Financial Institution has to communicate within 7 working days the result after
n) Financial Institution has to correct the error within one working day after detecting
the same.
o) Both Financial Institution has to communicate within 7 working days the result after

k) Customer liability is limited if the loss is reported before it is used without his/her
permission.
l) Customer liability varies depending on the delay in the reporting of the loss, if
m) Customer liability is limited if the unauthorized use occurs before reporting the loss.
n) Notification period can’t be extended even in the case of extenuating circumstances.
o) There can’t be unlimited liability

k) right to customer to stop payment on any EFT transaction
l) customer can stop payment if the purchase is defective or not delivered
m) customer can stop payment only for preauthorized regular payments
n) customers don’t have privileges for any transaction

k) issued for regularly occurring electronic payments that are pre-authorized
l) entitled to customer only when the electronic transaction is terminated
m) provides statement of all the transactions terminated for a given period
n) must show the amount and date of the transfer, and its type, such as "from savings to
checking”
true?
k) each year the Fed conducts billions of transactions valued in the trillions of dollars
l) funds transfers are originated and received through a sophisticated telecommunications
m) financial institutions can move their balances at the Fed or send funds to another
n) all of the listed options
2/3 1/3 4/5 All

k) your checking account at a financial institution is instantly reduced by the value of the
check
l) the store manager sends the check to a Federal Reserve Bank to be processed
m) the store manager deposits the check in the store’s account at a local financial
institution
n) your checking account at a financial institution is increased by the value of the check
o) All of the listed options

_____________

2004.
k) At the of the day, $17m will be transferred to B
l) At the end of the day, $25m will be transferred to A
m) At the end of the day, $8m will be transferred to A
n) All the transactions would settle individually real-time
o) Both At the of the day, $17m will be transferred to B and At the end of the day, $25m
account



are free of cost

k) FEDWIRE is gross settlement system
l) FEDWIRE is a private sector fund transfer system
m) CHIPS provide international fund settlement
n) FEDWIRE offers free services
o) FEDWIRE provides domestic fund settlement
k) Bob’s purchase of an electronic toilet seat with a wire transfer
l) Joe’s transfer, made in person, from his checking to his savings account, to post bail from
prison
m) Larry’s check written at the Three Strikes and Your Out Bowling Alley
n) Tim’s point of sale purchase from his business account to buy that new hardware store he
has always wanted

d) Booking System
a) $500
your card
d) $50

worth clients”

c) Net Worth
a) Tax benefit
b) Huge startup fee
a) Less than 1%
b) Between 1 to 4%
c) Between 6 to 10%
d) More than 10%
b) Capital Base
c) Tax planning



a) Household income
b) Net Worth
c) Cash Processing
b) Insurance
c) Foreign exchange
a) larger; larger
b) small; larger
c) small; small
d) larger; small



a) Credit Suisse
b) Fidelity
c) Merrill Lynch
b) Fidelity; UBS
d) All of above
c) Back office
d) Front Office
e) Middle Office

c) Networth

d) Hedge Funds
a) Tax haven
funds?
c) Highly leveraged
c) Risk management
d) Tax planning

c) Study loan
d) Credit cards



corporate.

a) Assignment
b) Participation.
e) Preclosure
a) Primary market
b) Index market
c) Secondary market
months?
a) 600 USD
b) 400 USD
c) 1400 USD
d) 1350 USD
e) 350 USD
a) 11,000 USD
b) 600 USD
c) 1,000 USD
d) 5,500 USD
e) 10,000 USD
a) Demand loan
c) Discounted Loan
d) Capitalized Loan
e) Amortized Loan

a) Amortized Loan
b) Capitalized Loan
c) Annuities
d) Discounted loan
a) Overdrafts
c) Corporate bonds
d) Advances
e) Credit line
a) Allocation
b) Syndicate
c) Secondary
d) Assignment

c) All of above

a) Extensive.
obligations.
rate obligations.
d) Line of credit
e) Term Loan
in the cash market.
d) All of above
time
a) Letter of credit
c) Line of credit
d) Trade credit
a) Revolving
b) Single payment
c) Installment
d) Retail
e) Corporate

closest to
a) 11.50%
b) 15%
c) 26.50%
d) 13.25%
e) 11.50%

d) Currency swap.

of the debt
issuance of debt
requirements
d) Manage; avoid
e) Assess; estimate

b) Transfers risk
a) Equity Loans
d) Personal Loans
e) Car Loan
a) Option A
b) Option B
c) Option C
d) Option D

a) 3000
b) 250
c) 2500
d) 300
b) Country risk
d) Risk of default.
e) Interest Risk

a) 1700
b) 1900
c) 190
d) 170
e) 2100

EXCEPT
a) Issuing Bank
c) Seller
e) Buyer

c) Red Clause
345. Credit cards


a) Discount
b) Purchase
c) Acceptance
d) Collection



a) Evergreen Clause
b) Red Clause
c) Irrevocable LC
d) Revolving LC

353. Draft can

intermediaries


356. Factoring is

situation?
a) Bill Discounting
b) Factoring
c) Forfaiting
d) Letter of Credit
e) Consignment
b) Open Account
c) Letter of Credit
d) Counter trade
e) Cash in Advance

a) Time consuming
b) Costly
361. BOL stands for

a) Bill of Letter
c) Bank of London
d) Bill of Leasing
e) Bill of Lading



commercial causes
Commerce
a) $1,200
b) $1,700
c) $710
d) $990
e) $250

__________________
a) Factoring
b) Leasing
c) Forfaiting
d) Bill discounting

a) Assess the risk
d) Letter of Credit

a) Time frame
c) Debt
a) Forex risk
b) Repricing risk
c) Optionality
d) Basis risk
c) Swaption
c) Options
true
risk
a) Repricing risk
b) Basis risk
c) Yield curve risk
d) Political risk
should go for
a) 1.2476/0.8200
b) 0.6793/0.6802
c) 0.6854/0.6860..
d) 1.2481/0.8195
a) 55.2344/0.4565
b) 36.3300/0.4016
c) 56.3849/0.5231
d) 56.5787/0.6138..

a) 45.37/45.32
b) 45.37/45/46
c) 45.37/45.40
d) 45.39/45.38


called

a) Pooling
b) Netting
c) Swapping


a) EFT
b) Cheque
d) Lockbox


a) National Banks
b) Regional banks
c) Corporates

a) Credit risk
c) Operational risk
d) Systemic risk

a) Exchange risk
b) Temporal risk
c) Country risk
d) All of these
a) Liquidity risk
c) Forex risk


a) UBS
c) JP Morgan Chase

b) Market Timing
b) Market Timing
a) Common stocks
b) Corporate bonds
c) Preferred stock
e) Municipal Bonds
portfolio funds.

a) Diversification

a) active.
b) passive.
c) indecisive.
d) rebalanced.
e) resilient

a) Bid-ask Spread
b) Illiquidity
c) Tax impact

b) Trading speed


c) stock selection


a) risk averse
b) diversification
e) budgeting
asset manager?
a) Hedge funds
b) Futures

including both.
a) I only
b) II only
c) Both I and II
d) Neither I or II
decreases.

b) Stocks
c) Bonds



objective is met


unsystematic risk.
a) I only
b) I and II only
c) I and III only
d) II and III only
e) I, II, and II

forecasts

a) Red Herring
b) Road-show
d) Advisor Contest
e) Beauty Contest

b) Sallie Mae
d) UBS


a) Retail Broker


a) $0.50
b) ($0.50)
c) $1.00
d) ($1.00)
e) $86


a) Jan 01, 2003
b) Dec 19, 2003
c) Dec 18, 2003
d) Dec 20, 2003
e) Dec 31, 2003

a) Equal proportion
a) 14.14%
b) 20%
c) 33.33%
d) 50%
e) 41.66%

a) London
b) Europe
c) Asia
d) Americas
e) Australia
a) Eurodollars
c) Foreign stocks
d) Sterling shares

a) Annual
b) Half Yearly
c) Quarterly
d) Monthly
e) Irregular
for 1 stock split?
increase
d) No impact
b) Record Date
c) Declaration Date
d) Dividend date
e) Payment Date
Dividend Date?
a) December 4
b) December 6
c) January 12
d) January 10
e) January 8
b) Outright Sale
c) Primary Offering
d) Select Sale

a) Primary Offering
c) Outright Sale
d) Select Sale
a) May 3
b) May 4
c) May 5
d) May 7
e) May 8

a) 14.14%
b) 20%
c) 33.33%
d) 50%
e) 41.66%

a) Margin Account
b) Nostro Account
c) Cash Account
d) IRA Account

a) Primary Market
b) Secondary Market
c) OTC Market
d) Fourth Market
a) Federal Reserve
b) FDIC
c) DTCC
d) ASA
secondary market?
a) Treasury Stock
b) Preference Stock
c) Promoter Stock
d) Trade able Stock
e) Non voting Stock
a) 0
b) 70 days
c) 71 days
d) 74 days
e) 75 days

a) Bearer bonds
d) Warrants
e) Debentures

a) Investor
b) Underwriter
c) Issuer
d) Stock Exchanges

a) End of every day
a) Difference
b) Spread
c) Profit
d) Quote

a) NASDAQ
b) OTC
c) NYSE
d) Instinet
a) Issuer
b) Investor
c) Underwriter
d) Stock Exchanges
e) Market Maker

d) New investments

c) Top 10% of NYSE
a) Holding Period
b) Blackout Period
a) Firm commitment
d) Outright Sales

a) NASDAQ
b) OTC
c) NYSE
d) Instinet
termed as
products
b) Liquidity risk
c) Credit risk
d) Equity risk
b) Asset Allocation
d) Administration
e) Treasury

b) Record Keeping

d) Both 2 and 3

c) Forex trading
d) Arbitraging

a) MT 15022
b) MT 5022
c) MT 2001
d) MT 199

a) Distressed debt
b) Private Equity
c) Venture Funds
d) IBM stock
e) LBOs

a) Stock splits
b) Trade Processing
d) Settlements
e) Clearing

d) Both 2 and 3
a) Foreign exchange
c) Cash projection
a) Fund Development
c) Transfer agency
a) Credit risk
b) Liquidity risk

to the transaction
_______________

custodians
custodians


following services?
b) Leveraged buyout
d) Busted takeover
a) Hedging
b) Market timing
c) Insurance
d) Diversification
a) Stockbrokers



d) All of above
e) None of above
514. SWIFT is a



a) SWIFT network
b) FEDWIRE
c) CHIPS
d) Clearing

a) Charles Schwab
c) Ameritrade
520. Private Equity


b) Use of options

c) Yes
a) Custodian
b) Broker
c) Investment bank
e) Dealer


Act
b) Mutual Funds
c) Counterfeiting


d) Tax services
service
approval


c) Money Laundering


legitimate sources
bank drafts

a) Regulations
c) Forfeiture

banks



a) All the levels
b) First & Second
d) Second & third
a) Credit unions
c) Mutual funds
documents
A. Interest risk
B. Market risk
D. Liquidity risk
E. Credit risk
F. Operational risk
G. Qualitative risk
a) A, C, F
b) E,B,F
c) A, B, G
d) B,D,G
e) E,C,A
a) December 2005
b) December 2007
c) December 2006
d) December 2004

a) 10
b) 92
c) 110
d) 176
e) 21

a) 1998
b) 1978
c) 1988
d) 1992

d) Operational risk
a) Operational risk
b) Market risk
c) Interest risk
d) Exchange risk
e) Credit risk

operational risk
market risk

b) People
d) All of above

factor
factor
assessment, in that

factors:
a) Method A
b) Method B
c) Method C
d) Method D
The 99% VaR over 10 days = 2.33 * 632,456 = $1,473,621

5. Check21
6. Liquidity
8. hedge,syndicate
9. Back to Back LC
10. Electronic
BFS L0 LATEST DUMPS
c. Assignment
d. Participation
e. Preclosure
392. Tax and insurance Premiums Collected as part of Loan repayment are handled through
which of the following type of account?
a. DMAT account
c. Escrow account
d. Fixed despoait

b. Poat-Acquisition
d. During a IPO
e. A merger

a. Retail Banking
b. Private Banking
e. Consumer Lending

b. Bank One
d. UBS
e. Credit Suisse
397. Ram deposits $100 in XYZ Bank. Puja takes a loan of $ 100 from XYZ Bank. Which of
the following is most likely to happen?
c. ………………….
d. ……………………
e. ……………………
lowest)
a. 0.
b. 0.
c. N
d. 0.
9.25 – 7.30 = 1.95
a. None
b. It crea……………………..
c. It crea……………………..
d. It crea……………………..
e. It crea……………………...
Solution:

1 5000 500 4500
2 4500 450 4050
3 4050 405 3645



c. …………………………
d. …………………………
a. True
b. Flalse
406. Assuming a 4% annual inflation rate, in how many years will the purchasing power of
$1,000 be cut in half?
a. 18 Years
b. 16 Years
c. 20 Years
d. 12 Years
e. 24 Years
trade is settled.


410. If the entry load is 2% and the NAV is Rs 10, then how much the investor will have to
pay for 100 units?
a. Rs. 1020
b. Rs 1500
c. Rs. 1200
d. Rs. 800

(10+(2/100*10))*100 =1020
b. Buyer’s bank
c. Seller
d. Advising bank
e. Seller’s bank
412. If a financial instrument has a 50% chance of paying 20% and a 50% chance of paying
60% percent. What would be the expected return?
a. 0.4
b. 0.2
c. 0.5
d. 0.8
= (50/100)*(20/100) + (50/100)*(60/100) = 0.4

a. No
b. Only during IPO
c. Yes

c. Rights issue
d. M&A
e. Stock Split
m. I only
n. Both I and II
o. II only
p. None of the listed options
Answer: I & II

Settlement
Settlement
Settlement
Settlement
a. …………………………………
b. …………………………………
c. …………………………………
d. …………………………………
418. There are 5 participants A, B, C, D, E in a 25M USD syndicated loan and A is the lead m
has agreed to pay 0.4% ($1,00,000) participant fee. How much each participant will share in
participant fee?
in the case market

a. The Exchange
b. Banks
e. Government
421. . ………………………
422. . ………………………
423. . ………………………
424. . ………………………
425. . ………………………
426. . ………………………
427. . ………………………
428. . ………………………
429. . ………………………
430. . ………………………
431. What is OTC?

a. Over The Counter
b. .………………………
c. ……………………….
d. ……………………….
e. ……………………….

c. Current Rate
434. Universal banks provide commercial banking as well as investment bank services under
one head . State True or False
a. True
b. False

a. Corporate Action
b. . ………………………
c. . ………………………
d. . ………………………

a. Sa……………………….
b. All………………………
c. Deb……………………..
d. Pe……………………….

m. I Only
n. II only
o. I & II
p. I, II & III

II: Interest paid
a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
exchange
exchange
exchange
exchange
Solution:

DELL Buy 120 $10.00 (1200)
DELL Sell 70 $10.50 735
CISCO Buy 200 $20.00 (4000)
DELL Sell 20 $11.00 220
CISCO Sell 50 $20.50 1025
DELL Sell 10 $9.00 90
Total (3130)

exchange.
a. SEC
b. FSA
c. Senate
d. Federal Reserve
fu………………………
a. True
b. False

a. Ver………………………
c. Eco………………………
d. Curr………………………
e. Dec………………………

a. True
b. False
a. Cash Value
b. Gold
d. Company Bond
e. Fixed Annuity

e. Treasury bills

a. Brokerage
b. Takeover
c. Acquisition
d. Merger

d. N

a. Personal Loan
b. Transfer Fund
c. Credit Services
b. Transactions
c. Investment
d. Support
452. Pooling and repackaging of cash-flow-producing financial assets into securities, which
are then sold to investors is called ____________
a. Leveraging
b. Securitization
d. Short Selling
True or False
a. True
b. False
454. GE shares are currently selling for $15.00 each. You bought 200 shares one year ago at
$12 and received dividend payments of $2 per share. What was your total capital gain this
year?
a. 600
b. 400
c. 1000
e. 200
Solution:
(200*15) + (200*2) – (200*12) = 1000
455. Securities with an original maturity of lesser than 1-year are traded on money markets.
State True or False
a. True
b. False

a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
457. _____________ is the legal and professional proceeding in which a lender, cbtains a
court orders …………..….a borrower’s equitable right of redemption.
a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
b. Global Custodian
c. Sub Custodian
e. Main Custodian
financing?
a. 2.5
b. 2
c. 1.25
d. 1.5
Solution:
Number of shares
= (50000-10000-5000-5000) / 20000 = 1.5
a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
a. . ………………………
b. . ………………………
c. . ………………………
d. . ………………………
e. . ………………………
a. True
b. False

a. Open Account
c. Letter of Credit
d. Counter trade
e. Cash in advance
p. None of the Listed Option
q. (a) $1880 (b)$ 3100
r. (a) $1,780 (b) 0 for IBM, $1795 for MSFT
s. (a) 0 for IBM, $1795 for MSFT (b) $1880
t. (a) $3100 (b) $1880
Solution:

IBM Buy 100 $11.00 (1100)
IBM Sell 50 $10.50 525
MSFT Buy 100 $20.00 (2000)
IBM Sell 20 $11.00 220
MSFT Sell 10 $20.50 205
IBM Sell 30 $9.00 270
Total (1880)

a. 0.03M
b. 30M
d. 3M
e. 0.3M
b. None…………..
472. In a securities lending transaction, if the buyer of securities provides cash as collateral,
then the seller of securities has to provide the buyer with a interest amount for the cash. What
is this interest amount called?
a. Rebate rate
c. Interest Rate
e. Return Rate

a. Never unsecured
b. Never secured
c. Always secured
d. Always unsecured

475. The amount owed by a company to suppliers in the next one year will be categorized
under __________________


a. Munis
b. Junk Bonds
c. Corporate bonds
d. Treasury Bills
e. Yarkee Bonds

a. Currency Risk
b. Commodity Risk
d. Credit Risk
e. Equity Risk
a. Money Policy
b. Money Making
c. Money Market
d. ……………….
e. ……………….
481. In terms of computation, which of the following is the fastest method for calculating
VaR?
482. ABC co. wants to identity the best way for making salary credits to its huge employee
base. Can you select the best option?
a. Paper Checks
c. Cash
483. In a economy where inflation is 4%, future value of 100 units of money after 2 year
would be which of the following option?
a. Exactly 108
c. Exactly 100
d. Around Rs. 104
e. 108.16
Solution:
n 2
FV = PV*(1 + i) = 100(1+0.04) = 108.16

inflation, then:
a. R = N – I
b. R = N * I
c. R = N + I
d. R = N/I
a. Federal Stafford
c. Federal PLUS

a. T+1
b. T+4
c. T+2
d. T+3
487. P&L Statements represent transactions over a period of time while the balance sheet
shows information as on Specific date. State True or False.
a. True
b. False

a. Put Option
b. Oil Futures
c. Swaption
d. Call Option

a. Junk bonds
c. Shares
d. Call Options
e. T-Bills
a. Market Risk
b. Business Risk
c. Credit Risk
d. Company Risk
e. Liquidity Risk
face?
a. Operational Risk
c. Legal Risk
d. Currency Risk
e. Credit Risk

borrowers
b. Trading Loans
c. Accrual Loans
d. Undrawn Loan
e. Committed Loans
a. 50 percentage
b. 45 percentage
c. 10 percentage
d. 25 percentage

True or False
a. True
b. False
State True or False
a. True
b. False
b. Fixed rate loan

a. Demand loan
c. Capitalized loan
d. Amortized loan
e. Discounted loan

a. Bonds
b. Futures
c. Options
d. Swaps
e. Forwards

a. 2200
b. 2000
c. 1600
d. 2400
Solution:

DP = (1-0.20)*2000 = 1600
504. …………………..………
a. 20000
b. 17000
c. 18000
d. 15000
or False
a. True
b. False

a. 2.33 Sd
b. 1.65 Sd
c. 1.96 sd
d. 3 Sd
e. 1 Sd
determined
determined.
a. 0.6667
b. 0.3333
c. 0.5
d. 0.2247

a. Purchase
b. Discount
c. Acceptance

a. TS2
b. Front Arena
c. ………………….
d. ………………….
e. …………………..
a. Freddie Mae
b. E-Trade
c. Ginnie Mae
d. Sallie Mae
e. Federal Reserve
confirmation?
a. SWIFT networks
b. FEDWIRE
c. By Fax
d. By Telephone
514. SPV means

515. NPV stands for

c. No Present Value
d. Net Past Value
State True or False
a. True
b. False
b. 600000
c. 400000
d. 100000
e. 500000
c. Simple Interest
Missing Question
lowest)?
a. AAA, AA+, BBB, D

b. AAA, AA-, D, BBB
c. D,C,B,A
d. D, AA-, B, AAA
e. AAA, AA+, D, AA-
a. Bond
b. Equity
c. Share
d. None
Ans: 20000
m. Spot, futures
n. Debt , Equity
o. Primary , Secondary
p. Money, Capital

a. Amex
b. T-sys
c. Elavon
http://www.creditmanagementworld.com/glossary/letterofcreditglossary.html
http://books.google.com/books?id=EqoN-
3wnMVgC&pg=PA38&lpg=PA38&dq=methods+of+payment+is+most+risky+to+the+Buyer&s
ource=bl&ots=vzMehoM1LA&sig=npc-
HsSsOitQrx5pVM5oueaKys8&hl=en&ei=DzOWTN2dNZGuvgOpmdnnCw&sa=X&oi=book_r
esult&ct=result&resnum=9&ved=0CDgQ6AEwCA#v=onepage&q&f=false
1) Page 5
State T/F
2) Page 6
INFLATION
R= N-I.
3) Page 8
FV = PV*(1 + i)n
4) Page 8
5) Page 10
NPV of a project:
6) Page 14
7) Page 15
securities)
8) Page 16
Treasury Securities
9) Page 16
10) Page 17
Commercial paper
and inventories.
11) Page 19
12) Page 20
13) Page 20
Warrants
14) Page 20
reference rate.
15) Page 21
Forward contract
Futures contract
16) page21
imperfections.
17) Page 22
Call Options
Put Options
LEAPS
Swaps
18) Page 21
19) Page 22
another currency.
20) Page25
21) Page 26
22) Page 27
Federal Reserve
23) Page 27
24)Page 29
25) Page 29
What is a repo?
26) Page 30
27) Page 30
issuers
28) Page 49
29) Page 50
30) Page 52
31) Page 54
32)Page 57
Checking Accounts

Savings Account


33) Page 60
o Bearer Checks
o Bankers Checks
Debit Cards
Demand Drafts
34)Page 61
What is EFT?
35) Page 63

36) page 64

37) page 65-66

What is Fedwire?
government agencies
Full form of CHIPS?

What is SWIFT?
SWIFT 15022
38) Page 69
Read thoroughly..
39) Page 70 VVimp


Lease
Hire Purchase
40) Page 71
Kinds of repayments
41)Page 72
42) Page 73
Collar = cap-floor
43) Page 73
Charge Types
44) Page 76
45)Page 76-77
46) Page 82

47) page 83
Credit ratings
48) Page 84
49) Page 85

50) page 86
Accrual—Loans
Held-for-sale.
Trading
51) page 87
52) Page 89
53) Page 90
What do u mean by:
54) page 91
Payables Management
Liquidity Managemet
55) Page 92
Repricing risk
Yield curve risk.
Basis risk
Optionality
56) Page 94
One numerical on:
INR/Euro quote: (45.26*1.2461)/ (45.36*1.2458) = 56.40/.51
Definitions of:

Answer – two days
57) Page 95
Front Arena
Summit
Calapso
Wall Street Systems
58) Page 97
59) Page 99
60) Page 99-100

61) page 100

62)page 102
What is RGTS?
63)page 103
Read what is ACH?
64)page 104
Costs
Time frame
Risk factors
Exporters funds
65)page 105
What is BOL?
Full form of BOL?
66) page 105

PAYMENT METHODS
Cash in advance
67) page 106

68)page 107
2. Issuing bank
69)page 108
Read the steps..

71) page 110

Drafts
72) page 111

OPEN ACCOUNT
73) page 113

Full form of BAFT?
74) page 114

75)Page 117
76) page 119

77)page 120
78) page 121

A card Association
Issue cards
Set card fees
79) page 122

80) page 127


this.
of the customer.
81) page 128-129

Hedge Funds
82) page 131-132

come…
83)page 133
Asset Mix
84) page 135-136

85) page 137

Cost of execution
Trading speed
86) page 139
87) page 141


Vangaurd
ING Direct
Mellon
88) page 142

89) page 143

401k,IRA
90) page 148

2 questions
SYNDICATE
91) page 148-149


Hiring the Managers
Marketing
92) page 149

93) page 150

UNDERWRITING
Answer : concession
94) page 151

What is OTC?
95) page 153

Bid or ask rate:
96) page 154

97)page 160
France (Paris) CAC
Hong Kong Hang Seng
98) page 164

transactions.
99) page 164

MEASURING RISKS
The probability
monetary impact
100) page 164

What is var?
101) page 165

Numerical..
The 99% VaR over 10 days = 2.33 * 632,456 = $1,473,621
102) page 165
103) page 166

104) page 166

MANAGING RISKS
1. Diversification
4. Ignore the risk!
105) page 170

Read this page..
106) page 172

107) page 177

What is exchange?
what they want.

Ques: What is NYSE?

108) page 180-181

109) page 184-185


110) page 186
111) page 187

SPO
SAR
Discrimination test
415 LIMIT
5500 REPORTING
1059 Reporting
See the diagram..
112) page 188

Health Care
o Medical
o Prescription drug
o Behavioral health
o Dental
o Vision
o Long-term care
o Sick leave
o Term life
113) page 190 -191

114) page 194

SARBANES OXLEY ACT
115) page 196

Pillar 1
Pillar 2
Pillar 3
115) page 198

Check 21

Ans: to print notes
45%
5%
50%
40%
Market Risk
Credit Risk
Liquidity Risk
Legal Risk
None of Above
Liquidity Risk
Market Risk
Credit Risk
Country Risk
Operational Risk

At a Macro level
At country level

Cannot Say
Analytical Methods
0.008
0.036
0.053
0.017
-0.029

Cash Reserve Ratio
Cash Refund Ratio
Cash Reserve Risk


Channelize Savings

Federal Reserve
loan of $244
loan of $171
loan is equal to
$1,500
$1,200
$1,600
$900

Base rate – Floor


Merchant
Payment gateway
Associations
Payment processor
Acquiring banks
Payment gateway
Issuing bank

Checking Accounts
Demat Account
Time Deposits

Low fee
EFTA stands for

reasons except to
make a profit
promote competition
foster innovation
CHIPS stand for



Services Provider
Back office
Front Office
Middle Office


Retirement planning
Risk management
Tax planning

Overdrafts
Corporate bonds
Advances
Credit line
Allocation
Syndicate
Secondary
Assignment

Total return swaps.
Currency swap.

Equity Loans
Personal Loans
Car Loan

Issuing Bank
Reimbursement Bank
Seller
Buyer
Red Clause

Open Account
Letter of Credit
Counter trade
Cash in Advance
BOL stands for

Bill of Letter
Bank of London
Bill of Leasing
Bill of Lading
BAFT stands for

Bill of Lading is
Letter of Credit

Interest rate swap
Swaption
Pooling
Netting
Swapping

EFT
Cheque
Lockbox

Diversification
Screens and Filters

Red Herring
Road-show
Advisor Contest
Beauty Contest


They are synonyms

Primary Market
Secondary Market
OTC Market
Fourth Market
Federal Reserve
FDIC
DTCC
ASA
Difference
Spread
Profit
Quote

NASDAQ
OTC
NYSE
Instinet

NASDAQ
OTC
NYSE
Instinet

Record Keeping
Reporting services
provided by _________________
Custodian
Broker
Investment bank
Fund Administrator
Dealer


Regulations
Criminal sanctions
Forfeiture

Amount of bank’s capital expressed as percentage of the risk weighted credit exposure, operational risk
& market risk
Doc 111

1)The central bank in US is called______
Federal reserve



m. Rakesh Jhunjunwala
n. Sachin Tendulekar
o. Warren Buffet
p. George Soros
e Peter Ujnah
post dated cheques

Disbursed amount

p. Notes
q. Stocks
r. Debentures
s. T-Bills
t. Minus
Increase
Back office

Private banking
T-note
Commercial Paper
214. If an investment pays interest at an annual rate of 5% per year, compounded twice a year than
the effective yield larger than 5.5%
a. True b. False

b. Less than offer
c. More than offer
e. Equal to offer

b. Central banks
c. Companies
second year?
a. True b. False

b. Terms loans
c. Cash
e. Receivables

b. Lot of research

a. True b. False
a. Market risk
c. Credit risk
d. Operational risk
e. Liquidity risk
222. Account maintained in the home currency by one bank is the name of another bank based abroad
is called as:
a. Current account
b. Nostro account
c. Vostro account
d. Forex account
e. Overseas account
a. Pre-closure
b. Assignment
c. Participation
a. Futures
b. Spot
c. Forward
d. Stock
e. Option


jj. Bond prices increase
kk. Bond prices decrease
ll. Bond prices do not change
mm. Economy goes into deflation
nn. Interest rate never fall, they always go up.
jj. -2%
kk. 2%
ll. -1.96%
mm. Very high
nn. 1-2%
229. If you invest $1000 for 3 years at 7% compound interest, how much will you have at the end of
the 3 years?
jj. $1225
kk. None of listed option
ll. $1000
mm. $1070
nn. $1270

jj. Letter of commercials
kk. Letter of credit worthiness
ll. Letter of credit
mm. Letter of commerce
nn. Letter of complaints

cc. Small investor are protected, hence it is a low risk investment avenue.
dd. Banks are in the best position to lend out money at competitive
ee. Depositors are participant in primary and secondary markets.
ff. All of listed options.

cc. For the same return, B tolerates lesser risk than B.
dd. For the same return, A tolerates higher rate of return.
ee. For the same return, A tolerates lower rate of return.
ff. For the same return, A takes higher risk.

jj. Sweep facility
kk. Structured lending to client
ll. All
mm. Short term credit facilities
nn. Overdraft
jj. None
kk. To provide stability of money supply.
ll. To serve certain social objectives.
mm. To prevent failure of any financial institution.
nn. To offset moral hazard incentive provided by deposit insurance and other guarantees.

cc. Monte- Carlo simulation.
dd. All equal time with software.
ee. Variance-Covariance matrix.
ff. Combination of Monte- Carlo and Historical Simulation.

jj. Payment to employers
kk. None
ll. Investment
mm. Loan
nn. Withdrawal
h. True b. False
239. If the corporate isn’t able to raise money from the market to pay off some loans the risk can be
refer.
jj. Market risk
kk. Interest rate risk
ll. Commodity risk
mm. Operational risk
nn. Liquidity risk
a. (i) $1780 (ii) $3000

c. (i) $3000 (ii) $1780
d. None
JJ) $2500
KK) $3000
LL) $300
MM) none
NN)$250
A) Issuing Bank
C) Beneficiary Bank
D) Seller
E) Buyer
244. While providing security lending services to its clients, which risk will a custodian have to manage
for its clients?
A) Liquidity risk
D) Credit risk
A) A very high
B) 2
C) -1
D) -2
E) 1
A) Currency risk
B) Attrition
C) Credit risk
D) All of the above

D) Research
B) is too high
C) Is about right
D) is too low

B) Acceptance
C) Negotiate
D) Purchase
E) Discount
B) Tiger Woods
C) Any of the above
B) Back to back LC
C) LC
D) Standby LC
disbursement. State TRUE or FALSE
a. True b. False
the day
JJ) IBM no exchange of shares ; MFST 90 shares to receive ; $1780 to pay out to the exchange
KK) None of these
LL) IBM no exchange of shares ; MFST 90 share to receive ; $3000 to pay out to exchange
MM) IBM 70 shares to given out ; MFST 90 shares to receive ; $3000 to pat out to exchange
NN) IBM no exchange of shares ; MFST 90 share to receive ; $1780 receive from the exchange

JJ) All of the listed option
KK) Documents
LL) Physical instrument like check and draft
MM) Electronic data files
NN)Cash

JJ) APR
KK) None
LL) IRR
MM) NPV
NN)Rate of interest applicable for the loan
JJ) learning services
KK) ‘None
LL) Merger and Acquisition
MM) Valuation of firm
NN)Underwriting and distribution of equity issues.
JJ) 500000
KK) 100000
LL) 400000
MM) 600000
NN)Can not be determined
JJ) 200
KK)500
LL) None
MM) 300
NN)400

CC)State regularity agency
DD)SEC
EE) Industry wide SRO
FF) All of the listed option

a. Demat
b. Personal loan
c. None
d. Hire Purchase
e. Auto loans
JJ) Monetary policy
KK) None
LL) Money multiplier effect
MM) Profit making tendency of a bank
NN)Fiscal policy

JJ) Amount of bank capital expressed as % of the risk weighted credit exposure & market risk.
KK) Amount of bank capital expressed as % of the risk weighted credit exposure
LL) Amount of bank capital expressed as % of the risk weighted credit exposure & operational risk.
MM) Amount of bank capital expressed as % of the risk weighted credit exposure operational
risk & market risk.
NN)None

JJ) Calypso
KK) Summit
LL) Wall street system
MM) Front arena
NN)Flex cube

JJ) Managing large bond issues
KK) Raising huge money from the bank
LL) Managing large capital raising act
MM) Managing conflict between investment banks.
NN)IPO distribution.
JJ) Treasury bills have their interest paid in a lump sum at maturity
KK) None
LL) Treasury bills have greater interest risk than either treasury bond or treasury note
MM) Treasury note has maturity dates up to 10 yrs
NN)Treasury bonds have maturity dates up to 30 yrs
JJ) Account balance , Annuity

KK) Annuity , Annuity
LL) Account balance , Account balance
MM) None
NN)Annuity , Account balance
group as lenders
JJ) none
KK)Syndicate
LL) Allocation
MM) Assignment
NN)Secondary

JJ) issue card
KK) Set credit limits
LL) Set interest rates
MM) Set card fees
NN)Security/ Risk management
JJ) Global custodian , domestic sub custodian , depository in foreign country and sometime stock
KK) Depository in foreign country
LL) Global Custodian
MM) stock exchange in foreign country
NN)domestic sub custodian
JJ) Cash projection
KK) Investment manages universe
LL) Asset allocation
MM) Fund administration
NN)Asset / liabilities analysis

JJ) Facilitating international transaction
KK) Facilitating intra company transaction
LL) Facilitating international transaction , corporate lending and settling up of new factories
MM) Facilitating corporate lending
NN)Facilitating setting up of new factories

CC)a price at which a firm is ready to buy or sell
DD)When bid is equal to offer
EE) When the firm has a choice of deciding the securities to take
FF) a price at which a firm is ready to buy or sell it also means when bid is equal to offer
JJ) 6 month deposit of min balance of $1000
KK) 3 month deposit of min balance of $4000
LL) 12 month deposit of min balance of $1000
MM) None
NN)6 month deposit of min balance of $2000

JJ) $3mn
KK) $4.5mn
LL) $9mn
MM) $4.4mn
NN)$1mn
JJ) Loan of $2439
KK) Loan of $1710
LL) None
MM) Create a reserve of $100
NN)Create a reserve of $190
CC)Mutual Fund
DD)Mortgage Company
EE) None
FF) Stock Exchange
is your return?
jj. 45%
kk. 10%
ll. 25%
mm. 50%
nn. None
description of
jj. Trade Credit
kk. Revolving Credit
ll. Agreement Irrevocable Credit
mm. Line of Credit
nn. Letter of Credit
278. Odd 1 out

jj. Warren Buffet
kk. George Soros
ll. Bill Gates
mm. Ben Graham
nn. Peter Lynch
jj. Investment manager Universe
kk. Asset Allocation
ll. Asset Liability Analysis
mm. Fund Admin
nn. Compliance Reporting

cc. Current rate – Base Rate
dd. Cap – Current Rate
ee. Current Rate – Floor
ff. Base Rate – Floor
jj. Exporters Fund
kk. All
ll. Government Guarantee Program
mm. Time Frame
nn. Cost of Financing
of securities.
h. True b. False
jj. Stock Repurchase Program
kk. Transition Management
ll. Transition Management & Commission Recapture
mm. Commission Recapture
nn. None

jj. the obligation to buy a futures contract
kk. the obligation to sell a futures contract
ll. the right & obligation to buy a futures contract
mm. the right but not the obligation to buy a futures contract
nn. the right but not the obligation to sell a futures contract
jj. Call Option
kk. Swaption
ll. Leaps
mm. Oil Futures
nn. Put Options
o. True
p. False
cc. Beneficiary Bank & Reimbursing Bank
dd. Importer Exporter
ee. Reimbursing Bank & Beneficiary Bank
ff. Applicant’s bank & Beneficiary’s bank
cc. DC plans fix the monthly contribution from the employee making his financial planning easier.
dd. DC plans are seen by employees as investment which to accumulate retirement income.
ee. All
ff. Employer increasing wants employees to share responsibility for retirement
order
jj. Salary
kk. Manager fee
ll. Wage
mm. Concession
nn. Underwriter

cc. Listed market
dd. Over the counter market
ee. Third market
ff. Fourth market

cc. Market capitalization more than $200000
dd. All
ee. Net worth greater than $500000
ff. Household income of max $50000 year.

cc. The business focuses on small no. of high net worth individuals.
dd. The business focuses on small and medium enterprises.
ee. The business focuses on large no. of individuals.
ff. The business focuses on large no. of corporation bodies.

jj. Trades in securities
kk. Quotes to its bets customer
ll. Intends to buy
mm. Intends to sell
nn. Quotes when it does not want to trade.
h. True b. False

cc. Stock market
dd. Retail banking
ee. Corporate banking
ff. Customer lending
296. Which is true?

cc. Financer owns the asset both in case of ‘Lease’ and ‘hire Purchase’.
dd. Tax deduction cab be claimed from the full value of the rental paid in case of lease
ee. All
ff. Depreciation is claimed by the financer in lease and not in case of hire purchase.
jj. Global custodian,
kk. None
ll. Main custodian
mm. Sub custodian
nn. Secondary custodian

V) Bonds sell at a discount when Coupon Rate is less than Market Interest rate.
W) None
X) Bond is debt instrument giving issues.
JJ) Capitalized loan
KK) True Discounted loan
LL) Amortized loan
MM) Demand loan
NN)Discounted loan

JJ) Commercial bankers
KK)Investment Bankers
LL) None
MM) Company Management
NN)Company Management and Investment Bankers

JJ) Bankers Acceptance reduces lending capacity
KK) Sight Drafts are negotiable instruments
LL) Bankers Acceptance demands immediate payment.
MM) None
NN)Banks can raise funds by selling acceptance.
JJ) Investible assets
KK) Location
LL) Age
MM) Net worth
NN)Name
the …….. market
JJ) Spot, futures
KK) Debt , Equity
LL) Primary , Secondary
MM) Money, Capital
NN)Secondary, Primary
JJ) Investment Management
KK) Asset Servicing
LL) None
MM) Trading
NN)Investor Services.

CC)All
DD)Stands for Suspicious Activity Reports
EE) Customer Identification Program
FF) Requiring Businesses, which were only to report cash transactions involving more than 1.00,000?
V) Yes under RTGS
W) No
X) Yes under net-settlement system

JJ) 30 stocks
KK) 20 stocks
LL) 40 stocks
MM) 10 stocks
NN)50 stocks

D) All
JJ) Interest rate and foreign exchange
KK) Liquidity and credit
LL) Credit and Interest rate
MM) Credit and Foreign exchange
NN)All
Marks: 2
1. 1345.1
2. 1243.1
3. 1231.1
4. None
5. 1235
1. Trading
3. Investor service
4. None
5. Asset Servicing

2. Client Partner
3. Commercial Paper
5. Credit Provision
1. All of the above
3. High Leveraging
4. High Speculation
jj. 2% discount is offered if payment is made within 15 days.
kk. 15% discount is offered if payment is made within 2 days; the payment should however
be made in 30 days.
ll. 30% discount is offered if payment is made before 15 of the month.
mm. 15% discount is offered if payment is made between 2 & 30 days;
nn. 15% discount is offered if payment is made within 30 days.
liabilities.
h. True b. False
jj. Irrevocable LC
kk. None
ll. Red clause
mm. Revolving LC
nn. Evergreen clause

jj. Plan sponsor
kk. Plan administrator
ll. Fund trustee
mm. None
nn. Government

jj. Committed amount
kk. Either disbursed or committed loan
ll. Unused amount of loan
mm. Disbursed amount
nn. None
sell orders.
v. Yes
w. No
x. Yes, but if prices on the buy & sell side match.
loan is equal to?
jj. None
kk. Drawing power = $1600
ll. $2200
mm. $2400
nn. $2000

jj. Setting risk limits
kk. Hedging
ll. Diversification
mm. Arbitrage
nn. Insurance

jj. Municipal bonds
kk. Bonds of govt. sponsed enterprise
ll. Corporate bonds
mm. US treasuries
nn. Shares
jj. None
kk. Plan administrator & trustee both have outsourced plan administration as well as fund
ll. Any
mm. Plan administrator gives investment instruction to investment manager while
nn. Trustee gives investment instruction to investment manager, while plan administrator appoints
jj. Issuer processor
kk. Collection agency
ll. Issuing bank
mm. Authorization engine
nn. Credit bureau.

jj. Consolidated Price index
kk. Consumer popularity index
ll. Consumer product index
mm. Consumer price index
nn. None
jj. Credit scoring
kk. Credit increase
ll. Credit incrementation
mm. Credit revision
nn. Credit enhancement.
jj) 4
kk) 5
ll) 3
mm) 1
nn) 2

cc) Monte- Carlo
dd) Historical
ee) Variance-Covariance
ff)Variance-Covariance and Monte- Carlo

cc) Plc
dd) Pte
ee) Ltd
ff) Inc

jj) Govt. guarantee Program
kk) Time frame
ll)All
mm) Cost of financing
nn) Exporter fund.

jj) Risk management
kk) Front office
ll) Back office
mm) Trade
nn) Board of director

jj) Traders
kk) Back office
ll) Specialist
mm) Front office
nn) Mid office

cc) Govt. regulation
dd) Many traders
ee) Full info
ff)Cost effective trading

jj) Custodian bank
kk) Clearing bank
ll) Clearing member
mm) Trading member
nn) Regulator
jj) Primary
kk) Secondary
ll) Participant
mm) OTC
nn) Index

36. DJIA
37. Hangseng
38. EAFE index
40. S&P 500
_________ERISA
403b
401k
401b
403k
None
Participant
Government
Investment manager
Sponsor


derivatives


Options:
32. All
BFS L0
1 Which of the following are not the benefits of using Credit derivatives?
a. A increasing the credit limit of the corporate
b. Credit derivatives can be used to create positions that can otherwise not easily be
c. Credit derivates can be used either to take on more risk or to avoid (hedge) it
d. Credit derivatives can be used both to diversify their credit risk exposures and free
2. What is OTC?
a. On the counter
b. options on the counter
c. operating the company
d. over the counter
3. In active approach, Asset allocation is more influenced by which of the following option?
a. value of Investment
b. Market Views
d. Investors risk preferences
4. A person purchase a share @ $50.00, after 2 years, the price is at $75 and he decides to
a. 0.5
b. 0.3333
c. 0.2247
d. 0.6667
5. An open end fund with 10,000 units outstanding had the total assets of Rs. 120, 000 and
the liabilities of Rs. 25,000. Calculate the funds NAV per unit.
a. Rs. 10
b. Rs. 12
c. Rs. 9.5
d. Rs. 14.5
6. Product development in sales and marketing refers to which of the following options
a. Collateral e.g. cars in case of car loans, houses in case of mortgages
b. Products that are bought using online payment such as e-commerce
c. Developing and differentiating deposits, loans, etc
e. Identifying products such as SAP, Oracle for the Bank
7. A bank has portfolio of $50 million worth of loans out of which it wants to sell $20 million
worth of loan to another financial institution, what is this process called?
a. Accrual loan
b. Undrawn loan
c. Trading Loans
d. Committed 1oans
e. Held for sale loans
8. Trading occurs between clearing and settlement. State true of false

a. True
b. false
9. Which of the following are examples of emerging payments?

b. Digital Cash
c. Proximity payments
d. EBPP
10. In defined benefits plan, the benefit is expressed as an ___________ and in defined
contributions plans, the benefit is expressed as an __________
a. account balance, annuity
b. account balance, account balance
c. annuity, account balances
d. annuity, annuity
11. Loan Serving starts after underwriting. State true or false

a. True
b. False
points of time, while he is comfortable with a return of X% p.a. Which method should
he use to compare the various investments?
a. Compound Interest
b. External rate of return
c. Net present value
d. Simple Interest
e. Internal rate of return
13. Ram deposits $100 in XYZ Bank. Puja takes a loan of a %100 from XYZ bank. Which
of the following is most likely to happen?
b. Bank is paying 5% interest to Ram and charging 5% interest to Puja
d. Bank is paying 3% interest to Puja and charging 5% interest to Ram
e. Bank is charging 5% interest to Puja and paying 3% interest to Ram
14. At the end of the trade cycle, the trades are ________ to determine the obligation of
the trading members to deliver securities/funds as per settlement schedule
a. Grossed
b. Aggregated
c. Netted
d. Offset
15. Principle- Strip and Coupon-Strips are used in reference to _________
a. Swaps
b. Bonds
c. Futures
d. Equity
e. Forwards
16. What is the difference between bankers acceptance and single draft
a. None of the listed options
b. Bankers acceptance demands immediate payment
c. Single draft are negotiable instruments
d. Bankers acceptance reduces banks lending capacity
e. Bank can raise funds by selling the acceptance
17. An institutional investor holds 50000 Microsoft shares. A custodian does the safe
keeping on the investor behalf. During this period, Microsoft announces dividend.
Based on this scenario which is the correct option from the following
a. The dividend amount will be processed by the custodian and credited to the
institutional investor account
c. Because the assets are with the custodian the dividend amount will be
credited to the custodian account
d. The custodian and the investor share a part of the dividend
18. Which of the following is a type of underwriting spread

a. Underwriters allowance
b. Managers fee
d. Concession
19. A custodian has different types of assets under its custody and those assets earn
returns to the original investor in various forms. What are the type of returns that
can be taxed?
I. Dividend
II. Interest
III. Capital Gain
IV. All of the listed options
a. III only
b. I only
c. II only
d. Both I and II
e. IV
20. A company ABC has a gross profit of $50000. The operating expenses amount to
$10000. The interest on loans availed amounts to $5000 and the taxes to be paid
amount to $5000. Calculate the EPS if there are total of 20000 shares
a. 2.5
b. 1.25
c. 2
d. 1.5
21. Coming together of BNY and Mellon is an example of ____________
b. Merger
c. Acquisition
d. Takeover
e. Brokerage
22. Which of the following is NOT a TOP 10 US bank?

a. Bank of America
b. JP Morgan Chase
c. Well Fargo
d. Citigroup
e. Lloyds TSB
23. Interest rate spread equal to?
a. Current Rate- Base Rate

b. Current Rate-Floor
c. Base Rate – Floor
e. Cap- Current Rate
24. Which are true in a ‘Basic or No fill Checking’ Account?

I. Limit the number of checks written
II. Interest paid
III. Limit the number of withdrawals made
a. II and III
b. I and III
d. I and II
25. In case of auto finance, monthly lease payments are usually lower than monthly loan
a. Customer is only paying for depreciation
b. Customer is only paying for taxes
c. Customer is only paying for Fees
e. Customer is only paying for rent charges
26. Which of this is a tax heaven?

a. Bermuda
b. US
c. Japan
d. Singapore
e. India
27. SPV means
a. Special principle vehicle
b. Security purpose vehicle
c. Special purpose vehicle
d. none of the listed option
e. Securitized planning vehicle
28. What does single EURO payment area (SEPA) do?

a. Creates a single payment market
b. Removes differences in intra and cross border payments
c. Applicable to direct debits, Credits and credit cards
29. Which of the following is not Core private banking function?

a. Research
b. Investment analysis and advice
c. Client management
d. Deposit mobilization
e. Sales and marketing
30. The advising bank is used as trusted bridge between the _______ and ______ when
they do not have an active relationship
a. Applicant bank, Beneficiary bank
b. Importer, Exporter
c. Beneficiary Bank, Reimbursing bank
d. Beneficiary bank and advisory Bank
(answer not in above 3 options) confirm
31. What is the primary source of incoming for the bank?

a. Deposits from public
b. Grants from central bank
c. Interest income
d. Fees for services
32. Tax and insurance premiums collected as part of loan repayment are handled through
which of the following type of account
a. Escrow account
b. Fixed Deposit
c. DMAT Account
d. Mutual Account
33. Which of the following risks for the investor is associated with corporate bonds but NOT
U. S. Treasury Securities?
a. Interest rate risk
b. Reinvestment Risk
c. Credit Rating Risk
d. Default Risk
34. On a trading day, at the NYSE, a broker undertakes the following trades
Buy 100 MSFT share for $20.00 each
How much did the broker pay out to the exchange in total in case of (a) Gross
settlement system (b) Net settlement system?
a. (a) $1780 (b) 0 for IBM, $1795 for MSFT
b. (a) $1880 (b) $3100
c. (a) $3100 (b) $1880
d. (a) 0 for IBM, $1795 for MSFT (b) $1780
35. Number of stages in syndicate loans are ________

a. 4
b. 5
c. 1
d. 2
e. 3
36. Investment bank assists in Mergers and acquisitions through which of the
following options?
b. Negotiating between the parties
c. Valuation of companies
d. Structuring the deals
e. Ensuring smooth transactions
37. The purpose of Community Development Banks (CDB) is to serve residents and
spur economic development in low to moderate income (LM) geographical
areas. State True of False
38. On a trading day at exchange, a broker undertakes the following trades

Buy 200 Microsoft shares for $10.00 each
Buy 100 Google share for $20.00 each
How much did the broker pay out to the exchange in total in case of (a) Gross
settlement system (b) Net settlement system?
a. (a) $4000 (b) $1235
b. (a) $1235 (b) $2235
c. (a) $260 for Microsoft, $975 for Google (b) $975 for Google, #260 for
Microsoft
d. (a) $1235 (b) $4000
39. What are Secondary markets defined as?
a. Market in which securities are resold after they are originally issued
b. Market where security is sold during IPO
d. Either auction or dealers market are being OTC market
40. Annuities are

a. Discounted Loan
b. Capitalized Loan
c. A loan that is paid in periodic equated installments with capitalized interest
d. True discounted loan
e. Amortized loan
41. __________ is the legal and professional proceeding in which a lender, obtains
a court order terminations of a borrowers equitable right of redemption
a. Foreclosure
b. Securitization
c. Sub-Prime
d. Credit –Freeze
a. By fax
b. FEDWIRE
c. By Telephone
d. SWIFT Network
43. In a nominal T+3 settlement cycle, when is the confirmation/ affirmation

completed?
a. True
c. T+2
d. T+3
e. T+1
44. Bank a base din US, provides safe keeping services for securities to its US
clients. It also has clients in France and Belgium, and provides securities safe
keeping services to these clients through banks C and D respectively. Which of
the following term best describes Bank A
a. Global Custodian
b. Secondary Custodian
d. Main Custodian
e. Sub Custodian
45. In Electronic Check conversion (ECC), what happens once the check is
processed?
b. Receive cash immediately
d. The customer signs a receipt authorizing the store to present the check
to the bank electronically and deposit the funds into the store’s account
46. P & L statements represent transactions over a period of time while

the balance sheet shows information as of a specific date. State True of
False
47. Which two risks of a financial institution may brings gains as well as losses?
a. liquidity Risk and Credit Risk
b. Credit Risk and Foreign Exchange Risk
c. Credit Risk and interest rate risk
e. Interest rate Risk and Foreign Exchange Risk

c. M & A
d. Rights Issue
e. Stock split
49. NPV stands for

a. Net Past value
b. Net Present value
c. New present value
d. No present value
50. What are Yankee Bonds also known as

a. Junk Bonds
b. T- Bills
d. Call options
e. Shares
51. The suitable strategy for an investor following active approach is to

a. Purchase both types of stocks
b. Purchase Undervalued stock and sell overvalued stock
c. Sell both type of stocks
d. Sell Undervalued stocks and purchase overvalued stock
market to prevent a loss (or make the required profit) is
a. Liquidity Risk
b. Credit Risk
c. Business Risk
d. Financial Risk
53. Which of the following is not a barter trade or a counter trade?

I. Compensate the seller in the currency buyer likes
II. Compensate the seller through bank draft
III. Compensate the seller in the currency Seller likes
IV. Compensate the seller in a manner other than transfer of money
a. I only
b. II only
c. IV only
d. I, II, and II
e. III only
54. The components to determine the rate of exchange in a forward contract are
b. Current spot rate, amount of currency bought/Sold
c. Forward rate adjustment and amount of currency bought of sold
d. Currency spot rate and forward rate adjustment
55. Which of the following are the functions of the relationship manager in a retails
bank?
a. New account opening
c. Product Sales
d. Account Maintenance
56. An investment strategy that arms to capitalize on the continuance of existing

trends in the market is called __________
a. Passive Investing
b. Momentum Investing
c. Contrarian Investing
d. Technical analysis
57. If the money multiplier is 1, the required reserve ratio must be

a. Zero
b. 0.5
c. 1
d. Greater than 100%
58. During Q1, 2008 the investment bank _________ was merged with JPMC after
it was unable to continue borrowing to finance its operations
a. Lehman Brothers
b. Bear Steams
c. AIG
d. Fannie- Mae
e. Washington Mutual
59. All of the following are the benefits of netting EXCEPT

a. Reduction in compliance risk
b. Reduction in the cost of the settlement
c. Reduction in the systemic Risk
d. Reduction in the number of deliveries and receipts
60. Which of the following is not a player in a typical trade cycle?

a. Clearing bank
b. Trading Members
c. Clearing members
d. Regulator
e. Custodian bank
61. Which of the following operation can not be done on LC (Letter of Credit)?
a. Acceptance
b. Discount
d. Purchase
62. On a trading day, at the NYSE, a broker undertakes the following trades
Buy 200 CISCO share for $20.00 each
Sell 50 CISCO shares for $20.50 each
Given that a net settlement system is being used. Find out the net position of the
broker at the end of the day
a. Dell 20 shares to receive, CISCO 150 shares to receive, $3130 to pay
out to the exchange
b. Dell 70 shares to give out, CISCO 90 shares to receive, $3000 to pay out to the
exchange
d. Dell 150 shares to receive, CISCO 20 shares to receive, $3130 to receive from
exchange
e. Dell 20 shares to pay out, CISCO 150 shares to receive, $3780 to pay out to
exchange
63. A bank is required to hold reserves at least equal to a prescribed traction of its
total deposit liabilities is called
a. SLR
b. ALM
c. ERP
d. SAR
64. XYZ Corporation is a large client of a bank and on a average for a period it
maintains $20 million in its bank account. However, The bank allows the
authorized representatives of XYZ to utilize the funds up to 15% over the
balance maintained. This is example of which of the following options?
a. Undrawn Loan
b. Accrual Loan
c. Overdraft
d. Held for sale loans
e. Committed loans
65. Which of the following methods of payment is most risky to the buyer?
a. Cash in Advance
b. Counter trade
c. Open account
d. Letter of credit
e. Documentary collection
66. Which of the following is not a example of an option?

a. Oil Futures
b. Swaption
c. Put option
d. LEAPS (Long term options)
e. Call option
67. IF the point of purchase is $52 and the amount given to the issuer is $50.
What is the underwriter spread?
a. 50
c. 102
d. 52
e. 2
68. A card holder swipes his card for USD 100. How much the merchant
I. Deduct form the card holder
II. Receive from the acquirer
a. I. USD 98 II. USD 98
b. I. USD 100 II. USD 98
c. I. USD 100 II. USD 2
d. I. USD 100 II. USD 100
69. The counterparty in a futures contract trade is

a. Banks
b. The buyer and Seller
c. Government
d. The exchange
e. The brokers who struck the deal
70. Identify the odd one out

a. Treasury Bills
b. Commercial papers
c. Bill of exchange
d. Stocks
e. Treasury Notes
71. GE shares are currently selling for $15.00 each. You bought 200 shares one
year ago @ $12 and received dividend payments of $2 per share. What was
your total dollar capital gain this year?
a. 1000
b. 500
d. 400
e. 200
72. Find out the one which does not come under the retail bank service?
a. Trade finance
b. Credit card services
c. Electronic banking
d. Personal loans
73. What does the call option gives buyer?

a. The right but not call option to buy
b. The right but not the obligation to sell
c. The obligation to sell
d. The right and obligation to buy
e. _______________
74. The money the bank receives ad deposits becomes a banks

a. Liability
b. Losses
c. All of the options
d. Assets
e. Profit
75. Trade finance primarily helps in

a. Facilitating intra-company transactions
b. Facilitating setting up of new factories
c. Facilitating inter company transactions
d. Facilitating corporate lending
e. Facilitating international transactions
76. Which of the following is a valid repayment type?

a. Bullet payment
c. Step down
d. Step up
e. Balloon
77. Most common reason for a corporate seeking a loan from a bank includes all of
the following EXCEPT
a. Paying bonuses to the top executives
b. Daily cash flow requirements
c. Capacity expansions
d. Plain Modernization
e. New Projects
78. _________ are profit of the business that have not been distributed to the
owner as of the balance sheet date
a. Share capital
b. Gross profit
c. Revenue
d. Retained earnings
79. Treasury bills can be transacted and settled on the same date. State
true or false.
80. If you invest $200 for 3 year @ 8% compound interest. How much will you
have at the end of the 3 years?
a. None of the listed options

b. 248
c. 252
d. 272
e. 310
81. In trade finance which of the following factors are considered while choosing
mode of financing?
a. Government guarantee program, Seller preference
b. Exporters fund, Risk factors, Cost of financing, time frame
d. Time frame, Cost of financing, Buyers trade associates
82. What is line of credit?

a. Revolving credit agreement
b. A formal legal commitment to extend credit up to maximum amount
over a stated period of time
c. Similar to credit card
e. Irrevocable credit provided by financial institution

a. Troubled assets reform program
c. Troubled asset relief program
d. Term asset Relief program
e. Term asset reform program
84. The type of loan in which spread varies over the life of the loan is called
________
b. Floating rate loan
c. Fixed rate loan
d. Semi- fixed rate loan
e. Negative spread loan
85. _________ of a securities trade involves the transfer of the securities from the
seller to the buyer
a. Trading
b. Settlement
c. Netting
d. Clearing
86. Banks are financial inter-mediatory that

a. should not be allowed to open saving accounts
b. link depositors to the borrowers
c. Do not operate efficiently in the financial system
d. Help connect public to the central banks
e. Are not required
87. Expand CNS

a. Continuous netting of securities
b. Company’s net securities
c. Clearing Net settlement
d. Continuous Net settlement
88. If the limit= $2000, margin =20%, and asset value =$2000, then drawing
power for an open ended loans is equal to?
a. 2000
b. 1600
c. 2400
d. 2200
89. In normal distribution 99% confidence interval corresponds to _________

a. 1.96 Sd
b. 2.33 Sd
c. 1 Sd
d. 1.65 Sd
e. 3 Sd
90. An investor indulging in short selling on share expects the share price
to decrease. Sate true or false
91. Inflation represents which of the following option
a. Increase in price
b. Decrease in price
c. Very high change in price
d. Economy crises
e. Currency Crises
92. Participation of more number of banks reduces the risk of lead bank.
State true or false
93. Money laundering refers to which of the following option

c. Converting the profits from common activities into legitimate funds
d. Short term borrowing and placements
94. VISA is involved in which of the following?

I. Providing the interchange the systems to transfer data and funds between
the members
II. Set credit limits
III. Issue Credit cards
a. both I and II
b. III only
c. I only
d. ---------
95. Which of the following combinations hold true?

a. Wire Transfer, more costly than other payment alternatives
b. Commercial letter of credit, improves applicants credit facilities
c. Foreign checks, not useful for cross border trade
d. Documentary collection, strict compliance rule apply
96. There are 5 participants A, B, C, D, E in a 25 million USD syndicated loan and

A is the lead manager. The borrower has agreed to pay 0.4% ($1, 00,000)
participant with share in participants will share in participant fee?
a. $1,00,000 will be received every month
b. $1,00,000 will be received affront
c. $1,00, 000 will be changed towards undrawn portion
e. $1,00, 000 will be received every time money is withdrawn
97. The price paid for use of a financial liability and financial asset is called
___________
a. Financial Asset
b. Principal Interest
c. Interest
d. Financial liability
98. If an invest pays an interest at an annual rate of r % per year, compounded

twice a year, then what is the effective yield?
b. Greater than r %
c. Equal to r %
d. Less than r %
99. VaR is measure of _______

a. Market Risk
b. Liquidity Risk
c. Credit Risk
d. Legal Risk
e. Operation Risk
100. Open ended loan allows the borrower additional amount subject to
the maximum amount less than a set value. State true or false
101. In private banking PTA stands for _______
a. payment to automate
b. Payable through account
c. Payable to automated means
d. Pay through action
e. Permission to act

a. Equity
b. Swaps
c. Overdraft
d. Put option
e. Call option
103. Bank ABC interest rate on deposits is 7.30% and the interest rate on loans is
9.25% during 2009. What is the spread for the bank?
a. 0.1655
b. 0.0225
d. 0.0195
104. If a bank gets a deposit of $5000. Assuming a reserve requirement of 10%

and that it circulates through 2 more banks, leading to which of the following
money multiplier effect?
a. It create a loan of $8550
c. It creates a loan of $12195
d. It creates a reserve of $500
e. It create a reserve of $1000
105. In a syndicated loan of 100M, each participant commit for 25% of loan. But
due to exigencies if one participant reduces his shares to 22% and offers to
share equality, what will be reserved share of other participants?
a. 0.3
b. 0.26
c. 0.29
d. 0.31
e. 0.24
106. You purchased stock for $40. One year later you received $2 as dividend and
sold the share for $48, How much is the return of the holding period?
a. 45 %
b. 10 %
c. 25 %
d. 50 %
107. The share price of a company may drop considerably from its current level, in
this scenario, what type of risk are the investors facing?
a. Company Risk
b. Liquidity Risk
c. Business Risk
d. Market Risk
e. Credit Risk
108. If R is the real rate of interest, N is the nominal rate of interest and I is the
rate of inflation, then
a. R= N - I
b. R= N * I
c. R= N / I
d. R= N + I
109. A clearing system in which a payment instructions between banks are
processed and settled individually and continuously through out the day is
called
a. RTGS
b. Clearing Services
c. Continuous linked settlement
d. Automated clearing house
e. Collection Services
110. If a bank erroneously posts the interest proceeds from a security held by a
investor A, into the account of investor B, this can be attributed to
a. Interest rate risk
b. Market Risk
c. Security Risk
d. Operational Risk
e. Liquidity Risk
111. Which of the following represents the correct hierarchy of corporate rating
(highest to lowest)?
a. D, AA, B, A
b. AAA, AA+, B, D
c. AAA, AA+, D, B,
d. AAA, AA, D, BB
112. The initial sale of security is in the _____ market, while subsequent trading in
the security is in the market ______
a. Money, Capital
b. Debt, Equity
c. Spot, Futures
d. Primary, Secondary
e. Secondary, primary
113. Purchase of account receivables at a discount is called ________

a. Bill of La___
b. Bills purchase
c. Discount
d. Forfeiting
e. Factoring
114. If total spread on underwriting $500000 and managers fee is $100000, What
is the amount which will be distributed in the syndicate
a. 500000
b. 400000
c. 100000
d. 600000

a. initial public offering
d. Corporate action
e. Private banking
116. I deposit $100 in a bank. Banks loans out $90 out of it to someone else who
then invest the money in setting up new factory, what is this process called?
a. Profit making tendencies of the investors
b. Sub-Prime effect
c. Economic boom effect
d. Money multiplier effect
117. The term ‘settlement cycle’ refers to which of the following option?
a. Time period between the date on which the investor first makes the decision to
enter a trade and the date when the trade is settled
b. Time period between the date on which the trade is executed and the
date on which the trade is settled
c. None of the listed options are correct
d. Time period between the date on which the trade is cleared and the date on
which the trade is settled
118. If a finance instrument has 50% chance of paying 20% and 50% chance of
paying 60%. What would be the expected return?
a. 0.8
b. 0.5
c. 0.4
d. 0.2
119. which of the following is not correct for a personal loan

a. They are short term loans
b. The finance is not interested in the intention of the loan
c. No security required
d. Loan amount is not linked to borrowers repayment capacity
120. Which of the following is not a measurement technique for Credit risk?
a. EAD
b. FIRB
c. Basic indicator approach
d. LGD
e. Probability of default

a. Front Arena
b. Pinnacle
c. Finnacle
d. TS2
e. Flex Cube
122. Which of the following is not a settlement method for a bank loans?
a. Participation
b. Securities Repository
c. Pre-closure
d. Sub-participation
e. Assignment
123. Company A has higher credit rating than company B, What does this mean?
b. Both are equally risky
c. Company B is more risky
d. Company A is more risky
e. There is no relation between credit rating and risk
124. Customer usually interact extensively with the banks mid and back
office. State true or false.
125. Secured bonds _______
a. are secured by assets of the issuing company and also have a higher
priority for repayment than unsecured debt
b. are only issued by large and financially sound companies
c. are secured by assets of the issuing company
d. have higher priority for repayment than unsecured debt
126. After a buyer and seller enter into a trade agreement, who indicates the issue
of LC?
a. None of the listed options Issuing bank
b. Buyer’s bank
c. Advising Bank
d. Sellers bank
e. Seller
127. Which of the following is true for stock market?

a. individual small investors can never make money in stock market
b. stock markets are always self regulated
c. stock markets are never fair
d. stock market facilitate secondary buying and selling of the shares
e. There can only be one stock market in the country
128. Securities with an original maturity of lesser than one year are traded on
money market. State true or false
129. From the given options identify the service(s) that can be categorized under
asset servicing line of the business
I. Corporate Action processing
II. Incoming Processing
III. Transfer agency services
IV. All of the listed options
a. I only
b. both I and II
c. III only
d. II only
e. IV
130. Identify the services offered by retail banks

b. Saving and checking accounts
c. Personal Loans
d. Debit Cards
a. True b. False

b. Less than offer
c. More than offer
e. Equal to offer

b. Central banks
c. Companies
second year?
a. True b. False

b. Terms loans
c. Cash
e. Receivables

b. Lot of research

a. True b. False
a. Market risk
c. Credit risk
d. Operational risk
e. Liquidity risk
is called as:
a. Current account
b. Nostro account
c. Vostro account
d. Forex account
e. Overseas account
a. Pre-closure
b. Assignment
c. Participation
a. Futures
b. Spot
c. Forward
d. Stock
e. Option

oo. Bond prices increase
pp. Bond prices decrease
qq. Bond prices do not change
rr. Economy goes into deflation
ss. Interest rate never fall, they always go up.
oo. -2%
pp. 2%
qq. -1.96%
rr. Very high
ss. 1-2%
the 3 years?
oo. $1225
pp. None of listed option
qq. $1000
rr. $1070
ss. $1270

oo. Letter of commercials
pp. Letter of credit worthiness
qq. Letter of credit
rr. Letter of commerce
ss. Letter of complaints

gg. Small investor are protected, hence it is a low risk investment avenue.
hh. Banks are in the best position to lend out money at competitive
ii. Depositors are participant in primary and secondary markets.
jj. All of listed options.

gg. For the same return, B tolerates lesser risk than B.
hh. For the same return, A tolerates higher rate of return.
ii. For the same return, A tolerates lower rate of return.
jj. For the same return, A takes higher risk.

oo. Sweep facility
pp. Structured lending to client
qq. All
rr. Short term credit facilities
ss. Overdraft

oo. None
pp. To provide stability of money supply.
qq. To serve certain social objectives.
rr. To prevent failure of any financial institution.
ss. To offset moral hazard incentive provided by deposit insurance and other guarantees.

gg. Monte- Carlo simulation.
hh. All equal time with software.
ii. Variance-Covariance matrix.
jj. Combination of Monte- Carlo and Historical Simulation.

oo. Payment to employers
pp. None
qq. Investment
rr. Loan
ss. Withdrawal
i. True b. False
refer.
oo. Market risk
pp. Interest rate risk
qq. Commodity risk
rr. Operational risk
ss. Liquidity risk
a. (i) $1780 (ii) $3000

c. (i) $3000 (ii) $1780
d. None
OO) $2500
PP) $3000
QQ) $300
RR)none
SS) $250
A) Issuing Bank
C) Beneficiary Bank
D) Seller
E) Buyer
for its clients?
A) Liquidity risk
D) Credit risk
A) A very high
B) 2
C) -1
D) -2
E) 1
A) Currency risk
B) Attrition
C) Credit risk
D) All of the above

D) Research
B) is too high
C) Is about right
D) is too low

B) Acceptance
C) Negotiate
D) Purchase
E) Discount
B) Tiger Woods
C) Any of the above
B) Back to back LC
C) LC
D) Standby LC
a. True b. False
the day
OO) IBM no exchange of shares ; MFST 90 shares to receive ; $1780 to pay out to the
exchange
PP) None of these
QQ) IBM no exchange of shares ; MFST 90 share to receive ; $3000 to pay out to exchange
RR)IBM 70 shares to given out ; MFST 90 shares to receive ; $3000 to pat out to exchange
SS) IBM no exchange of shares ; MFST 90 share to receive ; $1780 receive from the exchange

OO) All of the listed option
PP) Documents
QQ) Physical instrument like check and draft
RR)Electronic data files
SS) Cash

OO) APR
PP) None
QQ) IRR
RR)NPV
SS) Rate of interest applicable for the loan
OO) learning services
PP) ‘None
QQ) Merger and Acquisition
RR)Valuation of firm
SS) Underwriting and distribution of equity issues.
OO) 500000
PP) 100000
QQ) 400000
RR)600000
SS) Can not be determined
OO) 200
PP) 500
QQ) None
RR)300
SS) 400

GG) State regularity agency
HH)SEC
II) Industry wide SRO
JJ) All of the listed option

a. Demat
b. Personal loan
c. None
d. Hire Purchase
e. Auto loans
OO) Monetary policy
PP) None
QQ) Money multiplier effect
RR)Profit making tendency of a bank
SS) Fiscal policy

OO) Amount of bank capital expressed as % of the risk weighted credit exposure & market risk.
PP) Amount of bank capital expressed as % of the risk weighted credit exposure
QQ) Amount of bank capital expressed as % of the risk weighted credit exposure & operational risk.
RR)Amount of bank capital expressed as % of the risk weighted credit exposure operational
risk & market risk.
SS) None

OO) Calypso
PP) Summit
QQ) Wall street system
RR)Front arena
SS) Flex cube

OO) Managing large bond issues
PP) Raising huge money from the bank
QQ) Managing large capital raising act
RR)Managing conflict between investment banks.
SS) IPO distribution.
OO) Treasury bills have their interest paid in a lump sum at maturity
PP) None
QQ) Treasury bills have greater interest risk than either treasury bond or treasury note
RR)Treasury note has maturity dates up to 10 yrs
SS) Treasury bonds have maturity dates up to 30 yrs
OO) Account balance , Annuity

PP) Annuity , Annuity
QQ) Account balance , Account balance
RR)None
SS) Annuity , Account balance
group as lenders
OO) none
PP) Syndicate
QQ) Allocation
RR)Assignment
SS) Secondary

OO) issue card
PP) Set credit limits
QQ) Set interest rates
RR)Set card fees
SS) Security/ Risk management
OO) Global custodian , domestic sub custodian , depository in foreign country and sometime
PP) Depository in foreign country
QQ) Global Custodian
RR)stock exchange in foreign country
SS) domestic sub custodian
OO) Cash projection
PP) Investment manages universe
QQ) Asset allocation
RR)Fund administration
SS) Asset / liabilities analysis

OO) Facilitating international transaction
PP) Facilitating intra company transaction
QQ) Facilitating international transaction , corporate lending and settling up of new factories
RR)Facilitating corporate lending
SS) Facilitating setting up of new factories

GG) a price at which a firm is ready to buy or sell
HH)When bid is equal to offer
II) When the firm has a choice of deciding the securities to take
JJ) a price at which a firm is ready to buy or sell it also means when bid is equal to offer
OO) 6 month deposit of min balance of $1000
PP) 3 month deposit of min balance of $4000
QQ) 12 month deposit of min balance of $1000
RR)None
SS) 6 month deposit of min balance of $2000

OO) $3mn
PP) $4.5mn
QQ) $9mn
RR)$4.4mn
SS) $1mn
OO) Loan of $2439
PP) Loan of $1710
QQ) None
RR)Create a reserve of $100
SS) Create a reserve of $190
GG) Mutual Fund
HH)Mortgage Company
II) None
JJ) Stock Exchange
is your return?
oo. 45%
pp. 10%
qq. 25%
rr. 50%
ss. None
description of
oo. Trade Credit
pp. Revolving Credit
qq. Agreement Irrevocable Credit
rr. Line of Credit
ss. Letter of Credit
411. Odd 1 out

oo. Warren Buffet
pp. George Soros
qq. Bill Gates
rr. Ben Graham
ss. Peter Lynch
oo. Investment manager Universe
pp. Asset Allocation
qq. Asset Liability Analysis
rr. Fund Admin
ss. Compliance Reporting

gg. Current rate – Base Rate
hh. Cap – Current Rate
ii. Current Rate – Floor
jj. Base Rate – Floor
oo. Exporters Fund
pp. All
qq. Government Guarantee Program
rr. Time Frame
ss. Cost of Financing
of securities.
i. True b. False
oo. Stock Repurchase Program
pp. Transition Management
qq. Transition Management & Commission Recapture
rr. Commission Recapture
ss. None

oo. the obligation to buy a futures contract
pp. the obligation to sell a futures contract
qq. the right & obligation to buy a futures contract
rr. the right but not the obligation to buy a futures contract
ss. the right but not the obligation to sell a futures contract
oo. Call Option
pp. Swaption
qq. Leaps
rr. Oil Futures
ss. Put Options
q. True
r. False
gg. Beneficiary Bank & Reimbursing Bank
hh. Importer Exporter
ii. Reimbursing Bank & Beneficiary Bank
jj. Applicant’s bank & Beneficiary’s bank
gg. DC plans fix the monthly contribution from the employee making his financial planning easier.
hh. DC plans are seen by employees as investment which to accumulate retirement income.
ii. All
jj. Employer increasing wants employees to share responsibility for retirement
order
oo. Salary
pp. Manager fee
qq. Wage
rr. Concession
ss. Underwriter

gg. Listed market
hh. Over the counter market
ii. Third market
jj. Fourth market

gg. Market capitalization more than $200000
hh. All
ii. Net worth greater than $500000
jj. Household income of max $50000 year.

gg. The business focuses on small no. of high net worth individuals.
hh. The business focuses on small and medium enterprises.
ii. The business focuses on large no. of individuals.
jj. The business focuses on large no. of corporation bodies.

oo. Trades in securities
pp. Quotes to its bets customer
qq. Intends to buy
rr. Intends to sell
ss. Quotes when it does not want to trade.
i. True b. False

gg. Stock market
hh. Retail banking
ii. Corporate banking
jj. Customer lending
429. Which is true?

gg. Financer owns the asset both in case of ‘Lease’ and ‘hire Purchase’.
hh. Tax deduction cab be claimed from the full value of the rental paid in case of lease
ii. All
jj. Depreciation is claimed by the financer in lease and not in case of hire purchase.
oo. Global custodian,
pp. None
qq. Main custodian
rr. Sub custodian
ss. Secondary custodian

Y) Bonds sell at a discount when Coupon Rate is less than Market Interest rate.
Z) None
AA) Bond is debt instrument giving issues.
OO) Capitalized loan
PP) True Discounted loan
QQ) Amortized loan
RR)Demand loan
SS) Discounted loan

OO) Commercial bankers
PP) Investment Bankers
QQ) None
RR)Company Management
SS) Company Management and Investment Bankers

OO) Bankers Acceptance reduces lending capacity
PP) Sight Drafts are negotiable instruments
QQ) Bankers Acceptance demands immediate payment.
RR)None
SS) Banks can raise funds by selling acceptance.
OO) Investible assets
PP) Location
QQ) Age
RR)Net worth
SS) Name
the …….. market
OO) Spot, futures
PP) Debt , Equity
QQ) Primary , Secondary
RR)Money, Capital
SS) Secondary, Primary
OO) Investment Management
PP) Asset Servicing
QQ) None
RR)Trading
SS) Investor Services.

GG) All
HH)Stands for Suspicious Activity Reports
II) Customer Identification Program
JJ) Requiring Businesses, which were only to report cash transactions involving more than 1.00,000?
Y) Yes under RTGS
Z) No
AA) Yes under net-settlement system

OO) 30 stocks
PP) 20 stocks
QQ) 40 stocks
RR)10 stocks
SS) 50 stocks

D) All
OO) Interest rate and foreign exchange
PP) Liquidity and credit
QQ) Credit and Interest rate
RR)Credit and Foreign exchange
SS) All
Marks: 2
1. 1345.1
2. 1243.1
3. 1231.1
4. None
5. 1235
1. Trading
3. Investor service
4. None
5. Asset Servicing

2. Client Partner
3. Commercial Paper
5. Credit Provision
1. All of the above
3. High Leveraging
4. High Speculation
oo. 2% discount is offered if payment is made within 15 days.
pp. 15% discount is offered if payment is made within 2 days; the payment should however
be made in 30 days.
qq. 30% discount is offered if payment is made before 15 of the month.
rr. 15% discount is offered if payment is made between 2 & 30 days;
ss. 15% discount is offered if payment is made within 30 days.
liabilities.
i. True b. False
oo. Irrevocable LC
pp. None
qq. Red clause
rr. Revolving LC
ss. Evergreen clause

oo. Plan sponsor
pp. Plan administrator
qq. Fund trustee
rr. None
ss. Government

oo. Committed amount
pp. Either disbursed or committed loan
qq. Unused amount of loan
rr. Disbursed amount
ss. None
sell orders.
y. Yes
z. No
aa. Yes, but if prices on the buy & sell side match.
loan is equal to?
oo. None
pp. Drawing power = $1600
qq. $2200
rr. $2400
ss. $2000

oo. Setting risk limits
pp. Hedging
qq. Diversification
rr. Arbitrage
ss. Insurance

oo. Municipal bonds
pp. Bonds of govt. sponsed enterprise
qq. Corporate bonds
rr. US treasuries
ss. Shares
oo. None
pp. Plan administrator & trustee both have outsourced plan administration as well as fund
qq. Any
rr. Plan administrator gives investment instruction to investment manager while trustee
ss. Trustee gives investment instruction to investment manager, while plan administrator appoints
oo. Issuer processor
pp. Collection agency
qq. Issuing bank
rr. Authorization engine
ss. Credit bureau.

oo. Consolidated Price index
pp. Consumer popularity index
qq. Consumer product index
rr. Consumer price index
ss. None
oo. Credit scoring
pp. Credit increase
qq. Credit incrementation
rr. Credit revision
ss. Credit enhancement.
oo) 4
pp) 5
qq) 3
rr) 1
ss) 2

gg) Monte- Carlo
hh) Historical
ii)Variance-Covariance
jj) Variance-Covariance and Monte- Carlo

gg) Plc
hh) Pte
ii) Ltd
jj)Inc

oo) Govt. guarantee Program
pp) Time frame
qq) All
rr) Cost of financing
ss) Exporter fund.

oo) Risk management
pp) Front office
qq) Back office
rr) Trade
ss) Board of director

oo) Traders
pp) Back office
qq) Specialist
rr) Front office
ss) Mid office

gg) Govt. regulation
hh) Many traders
ii) Full info
jj) Cost effective trading

oo) Custodian bank
pp) Clearing bank
qq) Clearing member
rr) Trading member
ss) Regulator
oo) Primary
pp) Secondary
qq) Participant
rr) OTC
ss) Index

41. DJIA
42. Hangseng
43. EAFE index
45. S&P 500
_________ERISA
403b
401k
401b
403k
None
Participant
Government
Investment manager
Sponsor


derivatives


Options:
36. All
Question Bank for

b. Private Network
a. Got ownership
b. Voting Rights
c. All the above
36. Current account maintained by one bank with another bank abroad in the latter’s home
currency
a. VOSTRO
b. NOSTRO
37. Which of the following is not a Banking Activity?
a. Private Banking
b. Public Banking
c. Investment Banking
d. Retail Banking
38. What is LC in Banking Terms?
a. Line of Control
b. Legislative Council
c. Letter of Control
d. Letter of Credit
39. What is EMI?
a. Equated Monthly Installment
b. Equi Monthly Installment
c. Equal Monthly Installment
d. End Month Installment
40. What is CP?
a. Commercial Paper
b. Commercial Profit
41. Expand EFT.
a. Electronics Fund Transfer
42. Expand CLS.
a. Continuous Linked Settlements
43. Which of the following risks are avoided by Continuous Linked Settlements?
a. Temporal Risk
b. Spatial Risk
c. Market Risk
44. Which of the following locations is not specialized for Private Banking?
a. Switzerland
b. Mauritius
c. India
d. Cayman Islands
45. Don’t put all your eggs in the same basket. – This is a famous saying insisting what?
a. Hedging
b. Active aapproach
c. Diversification
46. Calulate the amount you will receive by the end of two years if you have invested
Rs.5000 at 10% rate of interest compounded annually:
a. 6050
b. 6000
c. 7200
d. 5050
47. Simple Interest is calculated based on
a. Principal Only
a. Principal Only
transactions.
a. Private Bank
b. Public Bank
d. Corporation Bank
c. Investment Banks
d. Brokerage Firms
53. Which of the following is not a Rating Agency?
a. RBI
54. What are the 3 pillars of Basel 2?
a. Quantitative, Qualitative and Market Forces
a. Credit Card
b. Debit Card
c. Stored Card
d. Gift Voucher
year?
a. 105
b. 95
c. 90
d. 110
57. If banks increase their cash reserve ratio what will be the impact?(not the same one but
similar)
58. Which of the following is not a bank account?
a. Money Market Deposit Account
b. Demat Account
c. Checking Account
d. Time Deposits
59. Expand IRR.
a. Internal Rate of Return
60. Which of the following is not a Retail Bank in India?
a. HSBC
b. ICICI
c. JPMC
d. SCB
61. Central Bank of a country is called as
a. Banker’s Bank
62. Servicing High Net worth Clients is called
a. Asset Management
b. Private Banking
c. Retail Banking
63. PTA stands for
a. Payable Through Account
a. Direct Receipt
b. Direct Debit
c. Post Dated Cheques
d. Salary Deductions
e. None of the above
c. June 09, 1984
d. August 10, 1984
a. NYSE
b. BSE
c. FSE
d. LSE
a. New York
b. Bombay
c. London
d. Singapore
a. Stocks
b. Shares
c. Equity
e. Common Stocks
2. 2 Marks
d. Low fee
3. 2 Marks
eliminate _______________.
4. 2 Marks
____________________________________________.
-a. money gained from criminal activity is processed so it appears to be gained from
legitimate sources
6. 1 Marks
7. 1 Marks
a. Exchange risk
-b. Temporal risk
c. Country risk
8. 2 Marks
9. 1 Marks
EFT stands for _______________.
10. 1 Marks
c. are not required

b. Forward Swap
c. Swaption
-d. Interest Rate

Answer:
criteria. What would be the consultants choice for his profile?
Answer:
a. Income Fund
b. Liquid Fund
-c. Growth Fund
d. Balanced Fund
e. Bank Deposit
15 ABC corporation is a large client of BankNew and maintains $40 million in cash with the
Answer:
-a. Overdraft
b. Accrual Loan
d. Undrawn Loan
e. Committed Loans

Answer:
Answer:
a. Interest spread
b. Exchange rate
-c. Interest rate
d. Equity yield
e. Dividend yield

Answer:
a. always secured
c. never secured
d. always unsecured
Answer:
-a. Custodian
b. Broker
c. Investment bank
e. Dealer

Answer:
22 1 Marks
Answer:
23.1 Marks
Answer:
a. Diversification
b. Hedging
c. Insurance
-d. Budgeting
24 2 Marks
Answer:
a. $0.50
b. ($0.50)
-c. $1.00
d. ($1.00)
e. $86
25 1 Marks
________________________________________________.
Answer:
-b. using MS-Excel
26 3 Marks
Answer:
a. Rs. 12346
b. Rs. 7000
c. Rs. 2346
-d. Rs. 6050
e. Rs. 7546
27 1 Marks

Answer:
-a. Federal Reserve
Answer:
a. Bill Discounting
-b. Supplier Loan
29 2 Marks
Answer:
-a. Disbursement
b. Distribution
c. Displacement
d. Dispersement
e. Diversification
30 1 Marks

Answer:
31 3 Marks
Answer:
-a. larger; larger
b. small; larger
c. small; small
d. larger; small
32 1 Marks
33 1 Marks
known as?
a. Public Offering
b. Corporate Action
c. Underwriting
34 3 Marks
Answer:
35 1 Marks
________________________.
Answer:
c. stock selection
36 1 Marks
Primary markets ____________________
Answer:
another.
37 3 Marks
Answer:
38 1 Marks
Answer:
39 1 Marks
Answer:
a. USA
b. India
c. Japan
d. UK
-e. Switzerland
40 1 Marks
Answer:
d. Economic crisis
e. Currency crisis
41 1 Marks
________________________.
Answer:
42 1 Marks
Answer:
-c. Demat Account
d. Time Deposits
43 1 Marks
Answer:
a. Warren Buffet
b. Peter Lynch
c. George Soros
44 1 Marks
a. More than 100
-b. Less than 100
c. Exactly 100
45 2 Marks
Answer:
b. Red Clause
c. Irrevocable LC
d. Transferable LC
46 2 Marks
Answer:
a. Money Policy
b. Money Market
-d. Monetary Policy
e. Money making
47 3 Marks
Answer:
a. S&P
c. Moody's
d. Fitch
e. Crisil
48 2 Marks
Answer:
50 2 Marks
America.
Answer:
a. Market Risk
-b. Credit Risk
c. Liquidity Risk
d. Legal Risk
51 1 Marks
following?
a. risk averse
-b. diversification
e. budgeting
52 1 Marks
Answer:
a. Visa
b. Mastercard
c. Amex
d. Discover
-e. HSBC Bank
53 1 Marks
Answer:
a. Direct Debit
b. Standing Order
-d. Account opening
e. Wire transfer
54 1 Marks
Answer:
c. Retail banking
-d. Private banking
55 1 Marks
Answer:
b. Outright Sale
d. Select Sale
56 2 Marks
Answer:
57 1 Marks

Answer:
-a. assess the risk
58 1 Marks
automatically.
b. EFT
-c. Direct Debit
d. Direct Credit
e. Direct Deposit
59 1 Marks
Answer:
a. Accrual Loans
b. Trading Loans
d. Undrawn Loan
e. Committed Loans
60 3 Marks
Answer:

Answer:
a. Client Partner
b. Credit Provision
63 1 Marks
Answer:
64 1 Marks
Answer:
a. Switzerland
b. Luxembourg
c. Caymen Islands
-d. Mumbai
e. Mauritius
Answer:
individuals
individuals

Answer:

Answer:
a. Core Custody
b. Asset Servicing
68 1 Marks
___________________________.
Answer:
69 1 Marks
Answer:
b. Hire Purchase
d. Lease
e. Auto Loans

Answer:
71 3 Marks
Answer:
d. Booking System
______________________________________.
Answer:
c. Attrition
d. Payment default
73 1 Marks
Answer:
a. Current accounts
b. Savings accounts
e. ATM facility

Answer:
75 1 Marks
Answer:
b. Record Keeping
-c. NAV calculation
Answer:
a. Federal Reserve
b. FDIC
c. DTCC
d. ASA
Answer:
a. Seller
b. Seller's bank
-c. Buyer's bank
d. Buyer
Answer:
a. Citibank
b. HSBC
-c. JP Morgan Chase
e. ABN Amro
79 Legal risk is the __________________________________________.

Answer:

Answer:

Answer:
a. Ginnie Mae
b. Fannie Mae
d. Sallie Mae
e. Federal Reserve

Answer:
customer?
a. Debit Card
-b. ATM Card
c. Stored Card
d. Gift Voucher

Answer:
a. Forex market
b. Money Market
-c. Stock Market
d. Mortgage Market
e. New York

Answer:

Answer:
a. Pooling
b. Netting
c. Swapping

Answer:

Answer:

Answer:
a. Corporate Bonds
b. Debentures
-c. Shares
d. Loans
e. Government Bonds
90 Electronic banking doesn’t cover the following services.

Answer:
b. ATM System
d. Internet payment
Answer:
c. Arbitrageur
92 SWIFT is a ______________________.
Answer:
true?
Answer:

Answer:
a. Follow stocks
b. Follow bonds
-c. Invest on behalf of the Investment Bank

Answer:
c. Direct receipts
d. Direct debits

Answer:

Answer

Answer:
b. Risk Mitigation
c. Risk Taking
d. Risk Assumption

Answer:
a. Straits Times
-b. Nikkei
c. Footsie
d. DAX
e. CAC
Answer:
45%
5%
50%
40%
Liquidity Risk
Market Risk
Credit Risk
Country Risk
Operational Risk

At a Macro level
At country level
Cannot Say
Analytical Methods
0.008
0.036
0.053
0.017
-0.029


Both An increase in the total money lent out into the system and an increase in the total money in
the bank reserves.

Channelize Savings
loan of $244
loan of $171
loan is equal to
$1,500
$1,200
$1,600
$900


Merchant
Payment gateway
Associations
Payment processor
Acquiring banks
Payment gateway
Issuing bank

Low fee
EFTA stands for

reasons except to
make a profit
promote competition
foster innovation
CHIPS stand for


Services Provider
Back office
Front Office
Middle Office


Retirement planning
Risk management
Tax planning

Overdrafts
Corporate bonds
Advances
Credit line
Allocation
Syndicate
Secondary
Assignment

Total return swaps.
Currency swap.

Equity Loans
Personal Loans
Car Loan

Issuing Bank
Reimbursement Bank
Seller
Buyer
Red Clause

Open Account
Letter of Credit
Counter trade
Cash in Advance
BOL stands for

Bill of Letter
Bank of London
Bill of Leasing
Bill of Lading
BAFT stands for

Bill of Lading is
Letter of Credit

Interest rate swap
Swaption

EFT
Cheque
Lockbox

Diversification
Screens and Filters
Red Herring
Road-show
Advisor Contest
Beauty Contest


They are synonyms

Primary Market
Secondary Market
OTC Market
Fourth Market
Difference
Spread
Profit
Quote

NASDAQ
OTC
NYSE
Instinet

NASDAQ
OTC
NYSE
Instinet

Record Keeping
Reporting services


Regulations
Criminal sanctions
Forfeiture


Amount of bank’s capital expressed as percentage of the risk weighted credit exposure, operational risk
& market risk


post dated cheques

Disbursed amount

u. Notes
v. Stocks
w. Debentures
x. T-Bills
y. Minus
Increase
T-note
Commercial Paper
a) Each year on a contractual basis, but before common dividends

b) After common dividends are paid.
c) Before interest is paid on debt.
d) If declared by the board of directors.
e) After both interest and common dividends are paid
2. Collateral is
a) A form of loan
b) Asset put up as security
4) Expansion for CPI

Ans is consumer price indices
6) Which term is not include in banking

a) Investment banking
b) Public banking
c) Private banking
d) Retail banking
8) Basel capital accord was instituted to coordinate global regulatory efforts to institute
Ans is Minimum; undercapitalized banks
9) Does Asset Allocation help reduce the investment risk?
a) yes
b) No - It only maximizes return
c) It increases risk
10) Dow Jones Industrial Average (DJIA) and Bombay Stock Exchange Index (Sensex) are
Ans is price weighted index
12) The money multiplier is 1 if the cash reserve is

a) less than 100%
b) more than 100%
c) none of the options
d) zero
e) 100
13) Currency reflects
a) Economy of the country
b) gdp of the country
c) Political situation of the country
d) cpi of the country
I think the ans is a
14) Is the interest earned by simple interest and compound interest same say true or false
The ans is false
15 In the simple interest the interest is also accumulate for the next year calculation
Ans is false
17 Assume that you have a holding in IBM Stock worth 100000. You have calculated the
standard deviation (SD) of change over ten day in IBM
Ans We have to take the square root for 10 and we have to multiply with 100000.
18. The fastest method for calculating risk is

Ans: variance covariance method.
19. Monte-Carlo Simulation

It is a simulation technique.
20. Asset/Liability Analysis,Asset Allocation, Asset Manager Solutions ,Cash Projection,

Compliance Reporting, Securities Lending, Fund Administration, Information, Products & Services,
Investment Manager Universe, Local Fund Servicing
These terms are related with
Ans is Investment Management
21 Buy/Sell Quantity Sock Price

10:00 Buy 100 IBM $10.00
10:30 Sell 50 IBM $10.50
11:00 Buy 100 MSFT $20.00
11:30 Sell 20 IBM $11.00
12:00 Sell 10 MSFT $20.50
3:30 Sell 30 IBM $9.00
What the broker purchase and what he sold is equal
Say yes or no
22. Buy/Sell Quantity Sock Price

10:00 Buy 100 IBM $10.00
10:30 Sell 50 IBM $10.50
11:00 Buy 100 MSFT $20.00
11:30 Sell 20 IBM $11.00
12:00 Sell 10 MSFT $20.50
3:30 Sell 30 IBM $9.00
Calculate the net profit and gross profit.
23. Expansion for OTC
Ans is over the counter.

24. Defined contribution plans have gained popularity because
Ans: employers have begun to ask their employees to share responsibility for their retirement.
25. Monetary losses resulting from inadequate or failed internal processes, people, and systems or from
external events. The events characterize the inherent risks in doing business.This risk is known as
Ans is operational risk
26 IRD in check 21 act is

Ans is Image Replacement Document
29 largest part of the spread and is paid to the broker/dealer that

actually took the client’s order is known as
Ans : Concession
27 share A is more volatile than share B The risk associated with Share A
Ans is more
30The total spread is 400000.The managers fee is 100000.The underwriter’s allowance is

Ans is 400000-100000=300000
61 3 Marks
Answer:
a. Amount of bank’s capital expressed as percentage of the risk weighted credit exposure
operational risk
market risk
d. Amount of bank’s capital expressed as percentage of the risk weighted credit
exposure, operational risk & market risk
a. True b. False

b. Less than offer
c. More than offer
e. Equal to offer

b. Central banks
c. Companies
a. True b. False

b. Terms loans
c. Cash
e. Receivables

b. Lot of research

a. True b. False
a. Market risk
c. Credit risk
d. Operational risk
e. Liquidity risk
488. Account maintained in the home currency by one bank in the name of another bank
a. Current account
b. Nostro account
c. Vostro account
d. Forex account
e. Overseas account
a. Pre-closure
b. Assignment
c. Participation
Ans:Novation
a. Futures
b. Spot
c. Forward
d. Stock
e. Option


tt. Bond prices increase
uu. Bond prices decrease
vv. Bond prices do not change
ww. Economy goes into deflation
xx. Interest rate never fall, they always go up.
tt. -2%
uu. 2%
vv. -1.96%
ww. Very high
xx. 1-2%
end of the 3 years?
tt. $1225
uu. None of listed option
vv. $1000
ww. $1070
xx. $1270

kk. Small investor are protected, hence it is a low risk investment avenue.
ll. Banks are in the best position to lend out money at competitive
mm. Depositors are participant in primary and secondary markets.
nn. All of listed options.

kk. For the same return, B tolerates lesser risk than B.
ll. For the same return, A tolerates higher rate of return.
mm. For the same return, A tolerates lower rate of return.
nn. For the same return, A takes higher risk.
tt. Sweep facility
uu. Structured lending to client
vv. All
ww. Short term credit facilities
xx. Overdraft

kk. Monte- Carlo simulation.
ll. All equal time with software.
mm. Variance-Covariance matrix.
nn. Combination of Monte- Carlo and Historical Simulation.

tt. Payment to employers
uu. None
vv. Investment
ww. Loan
xx. Withdrawal
j. True b. False
can be refer.
tt. Market risk
uu. Interest rate risk
vv. Commodity risk
ww. Operational risk
xx. Liquidity risk
a. (i) $1780 (ii) $3000

c. (i) $3000 (ii) $1780
d. None
TT) $2500
UU) $3000
VV) $300
WW) none
XX) $250

fail because of weakness in people, processes, systems or external events.
A) Issuing Bank
C) Beneficiary Bank
D) Seller
E) Buyer
A) Liquidity risk
D) Credit risk
A) A very high
B) 2
C) -1
D) -2
E) 1
A) Currency risk
B) Attrition
C) Credit risk
D) All of the above
D) Research
B) is too high
C) Is about right
D) is too low

B) Acceptance
C) Negotiate
D) Purchase
E) Discount

B) Tiger Woods
C) Any of the above
confirmation?
B) Back to back LC
C) LC
D) Standby LC
the end of the day
TT) IBM no exchange of shares ; MFST 90 shares to receive ; $1780 to pay out to
the exchange
UU) None of these
VV) IBM no exchange of shares ; MFST 90 share to receive ; $3000 to pay out to
exchange
WW) IBM 70 shares to given out ; MFST 90 shares to receive ; $3000 to pat out to
exchange
XX) IBM no exchange of shares ; MFST 90 share to receive ; $1780 receive from the
exchange

TT) All of the listed option
UU) Documents
VV) Physical instrument like check and draft
WW) Electronic data files
XX) Cash

TT) APR
UU) None
VV) IRR
WW) NPV
XX) Rate of interest applicable for the loan
TT) learning services
UU) ‘None
VV) Merger and Acquisition
WW) Valuation of firm
XX) Underwriting and distribution of equity issues.
TT) 500000
UU) 100000
VV) 400000
WW) 600000
XX) Can not be determined
gain this year
TT) 200
UU) 500
VV) None
WW) 300
XX) 400

KK) State regularity agency
LL) SEC
MM) Industry wide SRO
NN) All of the listed option

a. Demat
b. Personal loan
c. None
d. Hire Purchase
e. Auto loans
TT) Monetary policy
UU) None
VV) Money multiplier effect
WW) Profit making tendency of a bank
XX) Fiscal policy

TT) Calypso
UU) Summit
VV) Wall street system
WW) Front arena
XX) Flex cube

TT) Managing large bond issues
UU) Raising huge money from the bank
VV) Managing large capital raising act
WW) Managing conflict between investment banks.
XX) IPO distribution.
TT) Treasury bills have their interest paid in a lump sum at maturity
UU) None
VV) Treasury bills have greater interest risk than either treasury bond or treasury note
WW) Treasury note has maturity dates up to 10 yrs
XX) Treasury bonds have maturity dates up to 30 yrs
TT) Account balance , Annuity

UU) Annuity , Annuity
VV) Account balance , Account balance
WW) None
XX) Annuity , Account balance
TT) none
UU) Syndicate
VV) Allocation
WW) Assignment
XX) Secondary

TT) issue card
UU) Set credit limits
VV) Set interest rates
WW) Set card fees
XX) Security/ Risk management
involved
TT) Global custodian , domestic sub custodian , depository in foreign country and
UU) Depository in foreign country
VV) Global Custodian
WW) stock exchange in foreign country
XX) domestic sub custodian

called
TT) Cash projection

UU) Investment manages universe
VV) Asset allocation
WW) Fund administration
XX) Asset / liabilities analysis

TT) Facilitating international transaction
UU) Facilitating intra company transaction
VV) Facilitating international transaction , corporate lending and settling up of new
factories
WW) Facilitating corporate lending
XX) Facilitating setting up of new factories

KK) a price at which a firm is ready to buy or sell
LL) When bid is equal to offer
MM) When the firm has a choice of deciding the securities to take
NN) a price at which a firm is ready to buy or sell it also means when bid is equal
to offer
TT) 6 month deposit of min balance of $1000
UU) 3 month deposit of min balance of $4000
VV) 12 month deposit of min balance of $1000
WW) None
XX) 6 month deposit of min balance of $2000

TT) $3mn
UU) $4.5 mn
VV) $9mn
WW) $4.4mn
XX) $1mn
TT) Loan of $2439
UU) Loan of $1710
VV) None
WW) Create a reserve of $100
XX) Create a reserve of $190
KK) Mutual Fund
LL) Mortgage Company
MM) None
NN) Stock Exchange
tt. 45%
uu. 10%
vv. 25%
ww. 50%
xx. None
tt. Trade Credit
uu. Revolving Credit
vv. Agreement Irrevocable Credit
ww. Line of Credit
xx. Letter of Credit
66. Odd 1 out

tt. Warren Buffet
uu. George Soros
vv. Bill Gates
ww. Ben Graham
xx. Peter Lynch
tt. Investment manager Universe
uu. Asset Allocation
vv. Asset Liability Analysis
ww. Fund Admin
xx. Compliance Reporting
kk. Current rate – Base Rate
ll. Cap – Current Rate
mm. Current Rate – Floor
nn. Base Rate – Floor
tt. Exporters Fund
uu. All
vv. Government Guarantee Program
ww. Time Frame
xx. Cost of Financing
j. True b. False
investors?
tt. Stock Repurchase Program
uu. Transition Management
vv. Transition Management & Commission Recapture
ww. Commission Recapture
xx. None

tt. the obligation to buy a futures contract
uu. the obligation to sell a futures contract
vv. the right & obligation to buy a futures contract
ww. the right but not the obligation to buy a futures contract
xx. the right but not the obligation to sell a futures contract

tt. Call Option
uu. Swaption
vv. Leaps
ww. Oil Futures
xx. Put Options
s. True
t. False
kk. Beneficiary Bank & Reimbursing Bank
ll. Importer Exporter
mm. Reimbursing Bank & Beneficiary Bank
nn. Issuing Bank & Confirming Bank
The advising bank is used as a trusted bridge between the applicant’s/issuing bank and the
beneficiary’s bank when they do not have an active relationship.
kk. DC plans fix the monthly contribution from the employee making his financial planning
easier.
ll. DC plans are seen by employees as investment which to accumulate retirement income.
mm. All
nn. Employer increasing wants employees to share responsibility for retirement
took clients order
tt. Salary
uu. Manager fee
vv. Wage
ww. Concession
xx. Underwriter

kk. Listed market
ll. Over the counter market
mm. Third market
nn. Fourth market

kk. Market capitalization more than $200000
ll. All
mm. Net worth greater than $500000
nn. Household income of max $50000 year.

kk. The business focuses on small no. of high net worth individuals.
ll. The business focuses on small and medium enterprises.
mm. The business focuses on large no. of individuals.
nn. The business focuses on large no. of corporation bodies.

tt. Trades in securities
uu. Quotes to its bets customer
vv. Intends to buy
ww. Intends to sell
xx. Quotes when it does not want to trade.
j. True b. False
kk. Stock market
ll. Retail banking
mm. Corporate banking
nn. Customer lending
84. Which is true?
kk. Financer owns the asset both in case of ‘Lease’ and ‘hire Purchase’.
ll. Tax deduction cab be claimed fro the full value of the rental paid in case of lease
mm. All
nn. Depreciation in claimed by the financer in lease and not in case of hire purchase.
tt. Global custodian
uu. None
vv. Main custodian
ww. Sub custodian
xx. Secondary custodian

BB) Bonds sell at a discount when Coupon Rate is less than Market Interest rate.
CC) None
DD) Bond is debt instrument giving issues.
TT) Capitalized loan
UU) True Discounted loan
VV) Amortized loan
WW) Demand loan
XX) Discounted loan

TT) Commercial bankers
UU) Investment Bankers
VV) None
WW) Company Management
XX) Company Management and Investment Bankers

TT) Bankers Acceptance reduces lending capacity
UU) Sight Drafts are negotiable instruments
VV) Bankers Acceptance demands immediate payment.
WW) None
XX) Banks can raise funds by selling acceptance.
TT) Investible assets
UU) Location
VV) Age
WW) Net worth
XX) Name
TT) Spot, futures
UU) Debt , Equity
VV) Primary , Secondary
WW) Money, Capital
XX) Secondary, Primary
TT) Investment Management
UU) Asset Servicing
VV) None
WW) Trading
XX) Investor Services.

KK) All
LL) Stands for Suspicious Activity Reports
MM) Customer Identification Program
NN) Requiring Businesses, which were only to report cash transactions involving more
than 1.00,000?
BB) Yes under RTGS
CC) No
DD) Yes under net-settlement system
TT) 30 stocks
UU) 20 stocks
VV) 40 stocks
WW) 10 stocks
XX) 50 stocks

TT) Interest rate and foreign exchange
UU) Liquidity and credit
VV) Credit and Interest rate
WW) Credit and Foreign exchange
XX) All
1. 1345.1
2. 1243.1
3. 1231.1
4. None
5. 1235
1. Trading
3. Investor service
4. None
5. Asset Servicing
1. All of the above
3. High Leveraging
4. High Speculation
tt. 2% discount is offered if payment is made within 15 days.
uu. 15% discount is offered if payment is made within 2 days; the payment should
vv. 30% discount is offered if payment is made before 15 of the month.
ww. 15% discount is offered if payment is made between 2 & 30 days;
xx. 15% discount is offered if payment is made within 30 days.
j. True b. False

tt. Plan sponsor
uu. Plan administrator
vv. Fund trustee
ww. None
xx. Government

tt. Committed amount
uu. Either disbursed or committed loan
vv. Unused amount of loan
ww. Disbursed amount
xx. None
bb. Yes
cc. No
dd. Yes, but if prices on the buy & sell side match.
tt. None
uu. $1600
vv. $2200
ww. $2400
xx. $2000
tt. Setting risk limits
uu. Hedging
vv. Diversification
ww. Arbitrage
xx. Insurance

tt. Municipal bonds
uu. Bonds of govt. sponsed enterprise
vv. Corporate bonds
ww. US treasuries
xx. Shares
112 In benefit administration what are the relationships that exists between the plan
manager.
tt. None
uu. Plan administrator & trustee both have outsourced plan administration as well as fund
vv. Any
ww. Plan administrator gives investment instruction to investment manager while
xx. Trustee gives investment instruction to investment manager, while plan administrator
application?
tt. Issuer processor
uu. Collection agency
vv. Issuing bank
ww. Authorization engine
xx. Credit bureau.

tt. Consolidated Price index
uu. Consument popularity index
vv. Consumer product index
ww. Consumer price index
xx. None
tt. Credit scoring
uu. Credit increase
vv. Credit incrementation
ww. Credit revision
xx. Credit enhancement.
tt) 4
uu) 5
vv) 3
ww) 1
xx) 2

kk) Monte- Carlo
ll) Historical
mm) Variance-Covariance
nn) Variance-Covariance and Monte- Carlo

kk) Plc
ll) Pte
mm) Ltd
nn) Inc

tt) Risk management
uu) Front office
vv) Back office
ww) Trade
xx) Board of director

tt) Traders
uu) Back office
vv) Specialist
ww) Front office
xx) Mid office

kk) Govt. regulation
ll) Many traders
mm) Full info
nn) Cost effective trading

tt) Custodian bank
uu) Clearing bank
vv) Clearing member
ww) Trading member
xx) Regulator
tt) Primary
uu) Secondary
vv) Participant
ww) OTC
xx) Index

46. DJIA
47. Hangseng
48. EAFE index
50. S&P 500
_________ERISA
403b
401k
401b
403k
None
Participant
Government
Investment manager
Sponsor



derivatives
question/


Options:
40. All
e. None

e. All

b. Interest earned
d. All
a. LC
b. Direct debit
d. Counter trade
e. Cash in advance
a. Equally unlikely
b. Equally likely
c. ABC
d. XYZ
e. None

a. AAA,AA+,BBB,D
a. 118.8
b. Exactly 100
c. Exactly 200
d. Around 109
e. None

a. SEC
d. All
340. Odd man out:-

a. SEC
b. NYSE
c. NASDAQ
d. LSE
e. NSE
a. True
b. False

b. Lot of research

a. Specialist
b. Traders
c. Back office
d. Front office
e. Mid office
a. Equities

a. E-trade
b. Charles Schwab
c. Sallie Mae
d. Federal reserve
e. a and b both
b. Style maps score
d. Alpha

d. None

a. Unlisted market
c. Unlisted
d. Super
e. 2nd market

c. Do not change
a. Bid rate
b. Indirect
c. Direct
d. Cross currency
e. Ask rate


d. Investment gain
353. Odd man out?
a. Equity
b. Stocks
c. Shares
e. Common stock
a. Sponsor
b. Custodian
d. Record keeper
e. Participant
as
a. Prime rate
b. Bond rate
c. Discount rate
d. Federal rate

b. 12 months -> $1000
c. Cannot determine
d. 6 months -> $2000
e. 6 months -> $1000
359. Odd man out
a. None
b. Auto loans
c. Demat
d. Hire purchase
e. Personal loan

a. 2001
361. Risk averse

a. RTGS

a. always secured

a. $3M
Ans .collateral
79. ATM stands for
a. Time consuming
b. Costly

84. Mutual funds

a. Are less riskier than individual stocks as the fund managers invest in a diversified
portfolio
85. Warrants
sweetener
a. credit scores
a. all
a. APR
89. securitizing cash flows from future monthly sale of oil explored from its specified
offshore


a. all
a. employer

11) merril lynch
12) george soros
13) bell graham
14) bill gates
15) warren buffet
9) bear starter
10) lehmen brothers
11) icici securities
12) goldman sachs

1) True
2) False

2) All
10. Issue cards
5. bill discounting
6. raw material
5. 6%
6. 10%

… Risk ???
slightly higher.

9. call options

124. STP stands for .. Straight Through Processing

11. invester banks
12. commercial banks
15. none

9. none
Question Bank for

b. Private Network
a. Got ownership
b. Voting Rights
c. All the above
77. Current account maintained by one bank with another bank abroad in the latter’s home
currency
a. VOSTRO
b. NOSTRO
a. Principal Only
transactions.
a. Private Bank
b. Public Bank
d. Corporation Bank
c. Investment Banks
d. Brokerage Firms
a. Credit Card
b. Debit Card
c. Stored Card
d. Gift Voucher
year?
a. 105
b. 95
c. 90
d. 110
85. If banks increase their cash reserve ratio what will be the impact?
e.
86. Which of the following is not a Retail Bank in India?
a. HSBC
b. ICICI
c. JPMC
d. SCB
87. Central Bank of a country is called as
a. Banker’s Bank
c. June 09, 1984
d. August 10, 1984
a. NYSE
b. BSE
c. FSE
d. LSE
a. New York
b. Bombay
c. London
d. Singapore
a. Stocks
b. Shares
c. Equity
e. Common Stocks

a. SEC
b. SEBI
d. All OF the ABOVE
6. ATM is
human teller.
a. SEC
b. BAFT

a. 60 %
b. 75 %
c. 95 %
d. 50 %

a. 15022
b. 5022
c. 196
d.2000
i. Issuer Bank
j. Buyer
k. Seller
l. Beneficiary Bank

c. Quote at which one wants to buy or sell
15. Bank is
i. Unregulated and unsafe
j. Regulated and unsafe
k. Unregulated and safe
l. Regulated and safe

c. For Borrower and depositor
i. Lending rate less than deposit rate.
j. Lending rate greater than deposit rate.
k. Lending rate equal to deposit rate.
l. All of the above
k. An asset with standard deviation 5
l. An asset with standard deviation 4
m. An asset with standard deviation 3
n. An asset with standard deviation 2
o. An asset with standard deviation 1

i. Higher Liquidity higher risk
j. Leverage
k. Speculation
l. Risk aversion
20. What is GDR?

21. ACH

k. Listed Market
l. Primary Market
m. Secondary Market
n. Third Market
o. Fourth Market

i. NASDAQ
j. NYSE
k. LSE
l. SEC

g. Large investors
h. Small and medium investors
i. Financial Institutions

a. US
b. India
c. Pakistan
d. Bangladesh
31. Sweep transfers

e. Excess money from one account into another
f. Money from one persons account into another.
L0 Questions
a. Time consuming
b. Costly



a. all
a. employer

16) merril lynch
17) george soros
18) bell graham
19) bill gates
20) warren buffet
13) bear starter
14) lehmen brothers
15) icici securities
16) goldman sachs

1) govt. regulation
3) full information
4) many traders
1) True
2) False

… Risk ???

16. invester banks
17. commercial banks
20. none

12. none

Options:
44. All
a. 118.8
b. Exactly 100
c. Exactly 200
d. Around 109
e. None

366. Sales and brokers responds to which department when institution transfer their custody service from
one to another

a. Employer
2. Salary 50,000, increased to 55000. Inflation rate 20% in 2005. In 2006 what will be the employee’s
position
a. Living standard will be down

b. Salary will be increased to 65000
3. Private Banking’s functions 5 options had been given

4. Which is not the Retail banking’s functionality
a. Current Account
b. Credit Card
c. Trade Finance
d. Loans
5. Which one of the following is not done by Retail banking

a. Auto Loan
b. House Loan
c. Hire purchase
d. Lease Loan
6. True or False
a. In hire purchase the m/c will be owned by the customer after the payment period
7. US Patriot Act Question – 2

8. Retail banking customers
a. CORPORATES
b. Banks
9. Allowing to withdraw 20 %extra from Customer A’s account is know as

a. Overdraft(This is my guess)
b. And some options had been given in that
10. A bank is getting deposit from a customer and lending it to other customer. Which is the correct one
a. This is known as Money Multiplier effect(This is my guess)
b. Bank is trying to increase its profit
11. One person is having Rs.100 in hand. Which one of the following is correct
a. Having 100 now in hand is valuable than having the same 100 one year later
b. Both are same
c. Reverse of (a)
12. Odd man out

a. Munis
b. T-Bills
c. T-notes and bonds
d. Stock
13. Who will get the voting rights

a. Common Share holders
b. Preferred share holder
c. Holders of Debt
14. Who will get the money back first in case of default of a company
a. Common Share holders
b. Preferred share holder
c. Holders of Debt
15. Read something about Arbitrage. 2 questions were there in this
16. Where are we releasing the company’s share First time

a. Primary Market
b. Secondary Market
c. Some other options were there
17. One country (Country name had been given) is doing the business in one currency. Another country is
doing the business in another currency. How did they do the business?
a. Currency swap (My guess)
b. Some other options were also given in that
18. Which is not the Role of Central bank

a. Appointing Finance Minister
b. And some central bank’s role were given
19. Why people are going to portfolio managers
a. They don’t have time to monitor their portfolio
b. They don’t know how to advertise to sell and buy the instruments
c. Their investment is less
d. All of the above (my guess)
20. VAR is used in one of the following

a. Measuring Risk
b. Risk mitigation
c. Risk Analysis
21. Diversification Questions were there. Like Diversifications means one of the following and some options
were given in that
22. Some questions in the following were there
WHAT IS A BANK?
The term ‘Bank’ is used generically to refer to any financial institution that is licensed to accept deposits and issue
credit through loans.
Banks are the backbone of any economy, as all monetary transactions end up touching banks. The main functions of
banks are to:
 Channelize Savings
 Provide credit facilities to borrower
 Provide investment avenues to investors
 Facilitate the trade and commerce dealings
 Provide financial backbone to support economic growth of the country
 Minimize Cash Transactions
 Provide Services
WHY DO WE NEED A BANK?
 They provide a return (pay interest) on our saving

 Safety of principal and interest
 Convenience of being able to write checks and use debit cards
 Raising funds when we need
23. The first bank in the size

a. Citigroup
b. JPMorgan
c. Some other banks had been given
24. Glass-Steagall Act of 1933, created a Chinese wall between commercial banking and securities
businesses
25. Which is not involved in the Open ended loan

a. Limit (L) – max outstanding allowed
b. Margin (M) – percentage of limit that can be drawn
c. Asset value (AV) – value of underlying asset
d. Drawing Power (DP) - lower of L and (1-M)*AV
e. Something else had been given other than the above. That was the answer
26. Acquiring bank is involved in the following

a. Credit Card
b. Something else were also given
27. Read about the Retail Services done by retail banking 2 questions were there in that
28. Which is not coming under EFT? Read all the EFT transfer
29. ACH is meant for what?
a. Large amount in single transfer
b. Small amount in multiple transfers
c. Distant transfer
d. All of the above
e. None of the above
30. Read about Private Banking services.

31. Discretionary means what? The bank’s portfolio managers make investment decisions on behalf
of the customer.
32. Private Client Services is done by which of the following

a. Private Banking
b. Trade Finance
c. Retail Banking
33. What is the difference between Private Banking and Asset Management?
a. Private Banking focuses on retail investors while asset management is targeted towards
institutional investors
34. Passive Investment or some question related to “Passive” was there!!!!

35. The loan a bank is holding to sell it is known as
a. Held For Sale (my guess. The question was like that)
b. Accrual
c. Trading
36. Read Letter Of Credit Thoroughly…

Beneficiary bank, Issuing bank come in Trade Finance

2) Page 6
INFLATION
R= N-I.
3) Page 8
FV = PV*(1 + i)n
4) Page 8
5) Page 10
NPV of a project:
6) Page 14
7) Page 15
securities)
8) Page 16
Treasury Securities
9) Page 16
10) Page 17
Commercial paper
and inventories.
11) Page 19
12) Page 20
13) Page 20
Warrants
14) Page 20
reference rate.
15) Page 21
Forward contract
Futures contract
16) page21
imperfections.
17) Page 22
Call Options
Put Options
LEAPS
Swaps
18) Page 21
19) Page 22
another currency.
20) Page25
21) Page 26
22) Page 27
Federal Reserve
23) Page 27
24)Page 29
25) Page 29
What is a repo?
26) Page 30
27) Page 30
issuers
28) Page 49
29) Page 50
30) Page 52
31) Page 54
32)Page 57
Checking Accounts

Savings Account


33) Page 60
o Bearer Checks
o Bankers Checks
Debit Cards
Demand Drafts
34)Page 61
What is EFT?
35) Page 63

36) page 64

37) page 65-66

What is Fedwire?
government agencies

SWIFT 15022
38) Page 69
Read thoroughly..
39) Page 70 VVimp


Lease
Hire Purchase
40) Page 71
Kinds of repayments
41)Page 72
42) Page 73
Collar = cap-floor
43) Page 73
Charge Types
44) Page 76
45)Page 76-77
46) Page 82
47) page 83
Credit ratings
48) Page 84
49) Page 85

50) page 86
Accrual—Loans
Held-for-sale.
Trading
51) page 87
52) Page 89
53) Page 90
What do u mean by:
54) page 91
Payables Management
Liquidity Managemet
55) Page 92
Repricing risk
Yield curve risk.
Basis risk
Optionality
56) Page 94
One numerical on:
INR/Euro quote: (45.26*1.2461)/ (45.36*1.2458) = 56.40/.51
Definitions of:

Answer – two days
57) Page 95
Front Arena
Summit
Calapso
Wall Street Systems
58) Page 97
59) Page 99
60) Page 99-100

61) page 100
62)page 102
What is RGTS?
63)page 103
Read what is ACH?
66) page 105

PAYMENT METHODS
Cash in advance
67) page 106

69)page 108
Read the steps..

71) page 110

Drafts
72) page 111

OPEN ACCOUNT
73) page 113

Full form of BAFT?
74) page 114

75)Page 117
76) page 119

77)page 120
78) page 121

A card Association
Issue cards
Set card fees
79) page 122

80) page 127


this.
of the customer.
81) page 128-129

Hedge Funds
82) page 131-132

come…
84) page 135-136

85) page 137

Cost of execution
Trading speed
86) page 139

87) page 141


Vangaurd
ING Direct
Mellon
88) page 142

89) page 143

401k,IRA
90) page 148

2 questions
SYNDICATE
91) page 148-149


Hiring the Managers
Marketing
92) page 149

93) page 150

UNDERWRITING
Answer : concession
94) page 151

What is OTC?
95) page 153

Bid or ask rate:
96) page 154

97)page 160
France (Paris) CAC
Hong Kong Hang Seng
98) page 164

transactions.
99) page 164

MEASURING RISKS
The probability
monetary impact
100) page 164

What is var?
101) page 165

Numerical..
The 99% VaR over 10 days = 2.33 * 632,456 = $1,473,621
102) page 165
103) page 166

104) page 166

MANAGING RISKS
1. Diversification
4. Ignore the risk!
105) page 170

Read this page..
106) page 172

107) page 177

What is exchange?
what they want.
Ques: What is NYSE?

108) page 180-181

109) page 184-185


110) page 186
111) page 187

SPO
SAR
Discrimination test
415 LIMIT
5500 REPORTING
1059 Reporting
See the diagram..
112) page 188

Health Care
o Medical
o Prescription drug
o Behavioral health
o Dental
o Vision
o Long-term care
o Sick leave
o Term life

Ans: to print notes
a. True b. False

b. Less than offer
c. More than offer
e. Equal to offer

b. Central banks
c. Companies
second year?
a. True b. False

b. Terms loans
c. Cash
e. Receivables

b. Lot of research

a. True b. False
a. Market risk
c. Credit risk
d. Operational risk
e. Liquidity risk
is called as:
a. Current account
b. Nostro account
c. Vostro account
d. Forex account
e. Overseas account
a. Pre-closure
b. Assignment
c. Participation
a. Futures
b. Spot
c. Forward
d. Stock
e. Option


yy. Bond prices increase
zz. Bond prices decrease
aaa. Bond prices do not change
bbb. Economy goes into deflation
ccc.Interest rate never fall, they always go up.
yy. -2%
zz. 2%
aaa. -1.96%
bbb. Very high
ccc.1-2%
the 3 years?
yy. $1225
zz. None of listed option
aaa. $1000
bbb. $1070
ccc.$1270

c. Letter of credit


oo. For the same return, B tolerates lesser risk than B.
pp. For the same return, A tolerates higher rate of return.
qq. For the same return, A tolerates lower rate of return.
rr. For the same return, A takes higher risk.

yy. Sweep facility
zz. Structured lending to client
aaa. All
bbb. Short term credit facilities
ccc.Overdraft

tt. None
uu. To provide stability of money supply.
vv. To serve certain social objectives.
ww. To prevent failure of any financial institution.
xx. To offset moral hazard incentive provided by deposit insurance and other guarantees.

oo. Monte- Carlo simulation.
pp. All equal time with software.
qq. Variance-Covariance matrix.
rr. Combination of Monte- Carlo and Historical Simulation.

yy. Payment to employers
zz. None
aaa. Investment
bbb. Loan
ccc. Withdrawal
k. True b. False
refer.
yy. Market risk
zz. Interest rate risk
aaa. Commodity risk
bbb. Operational risk
ccc. Liquidity risk
a. (i) $1780 (ii) $3000

c. (i) $3000 (ii) $1780
d. None
YY) $2500
ZZ) $3000
AAA) $300
BBB) none
CCC) $250
A) Issuing Bank
C) Beneficiary Bank
D) Seller
E) Buyer
for its clients?
A) Liquidity risk
D) Credit risk
A) A very high
B) 2
C) -1
D) -2
E) 1
A) Currency risk
B) Attrition
C) Credit risk
D) All of the above

D) Research
B) is too high
C) Is about right
D) is too low

B) Acceptance
C) Negotiate
D) Purchase
E) Discount
B) Tiger Woods
C) Any of the above
B) Back to back LC
C) LC
D) Standby LC
a. True b. False
the day
YY) IBM no exchange of shares ; MFST 90 shares to receive ; $1780 to pay out to the exchange
ZZ) None of these
AAA) IBM no exchange of shares ; MFST 90 share to receive ; $3000 to pay out to exchange
BBB) IBM 70 shares to given out ; MFST 90 shares to receive ; $3000 to pat out to exchange
CCC) IBM no exchange of shares ; MFST 90 share to receive ; $1780 receive from the
exchange

YY) All of the listed option
ZZ) Documents
AAA) Physical instrument like check and draft
BBB) Electronic data files
CCC) Cash

YY) APR
ZZ) None
AAA) IRR
BBB) NPV
CCC) Rate of interest applicable for the loan
YY) learning services
ZZ) ‘None
AAA) Merger and Acquisition
BBB) Valuation of firm
CCC) Underwriting and distribution of equity issues.
YY) 500000
ZZ) 100000
AAA) 400000
BBB) 600000
CCC) Can not be determined
YY) 200
ZZ) 500
AAA) None
BBB) 300
CCC) 400

OO) State regularity agency
PP) SEC
QQ) Industry wide SRO
RR)All of the listed option

a. Demat
b. Personal loan
c. None
d. Hire Purchase
e. Auto loans
YY) Monetary policy
ZZ) None
AAA) Money multiplier effect
BBB) Profit making tendency of a bank
CCC) Fiscal policy

TT) Amount of bank capital expressed as % of the risk weighted credit exposure & market risk.
UU)Amount of bank capital expressed as % of the risk weighted credit exposure
VV) Amount of bank capital expressed as % of the risk weighted credit exposure & operational risk.
WW) Amount of bank capital expressed as % of the risk weighted credit exposure
XX) None

YY) Calypso
ZZ) Summit
AAA) Wall street system
BBB) Front arena
CCC) Flex cube

YY) Managing large bond issues
ZZ) Raising huge money from the bank
AAA) Managing large capital raising act
BBB) Managing conflict between investment banks.
CCC) IPO distribution.
YY) Treasury bills have their interest paid in a lump sum at maturity
ZZ) None
AAA) Treasury bills have greater interest risk than either treasury bond or treasury note
BBB) Treasury note has maturity dates up to 10 yrs
CCC) Treasury bonds have maturity dates up to 30 yrs
YY) Account balance , Annuity

ZZ) Annuity , Annuity
AAA) Account balance , Account balance
BBB) None
CCC) Annuity , Account balance
group as lenders
YY) none
ZZ) Syndicate
AAA) Allocation
BBB) Assignment
CCC) Secondary

YY) issue card
ZZ) Set credit limits
AAA) Set interest rates
BBB) Set card fees
CCC) Security/ Risk management
YY) Global custodian , domestic sub custodian , depository in foreign country and sometime stock
ZZ) Depository in foreign country
AAA) Global Custodian
BBB) stock exchange in foreign country
CCC) domestic sub custodian
YY) Cash projection
ZZ) Investment manages universe
AAA) Asset allocation
BBB) Fund administration
CCC) Asset / liabilities analysis

YY) Facilitating international transaction
ZZ) Facilitating intra company transaction
AAA) Facilitating international transaction , corporate lending and settling up of new factories
BBB) Facilitating corporate lending
CCC) Facilitating setting up of new factories

OO) a price at which a firm is ready to buy or sell
PP) When bid is equal to offer
QQ) When the firm has a choice of deciding the securities to take
RR) a price at which a firm is ready to buy or sell it also means when bid is equal to offer
YY) 6 month deposit of min balance of $1000
ZZ) 3 month deposit of min balance of $4000
AAA) 12 month deposit of min balance of $1000
BBB) None
CCC) 6 month deposit of min balance of $2000

YY) $3mn
ZZ) $4.5mn
AAA) $9mn
BBB) $4.4mn
CCC) $1mn
YY) Loan of $2439
ZZ) Loan of $1710
AAA) None
BBB) Create a reserve of $100
CCC) Create a reserve of $190
OO) Mutual Fund
PP) Mortgage Company
QQ) None
RR)Stock Exchange
is your return?
yy. 45%
zz. 10%
aaa. 25%
bbb. 50%
ccc.None
description of
yy. Trade Credit
zz. Revolving Credit
aaa. Agreement Irrevocable Credit
bbb. Line of Credit
ccc.Letter of Credit
558. Odd 1 out

yy. Warren Buffet
zz. George Soros
aaa. Bill Gates
bbb. Ben Graham
ccc.Peter Lynch
yy. Investment manager Universe
zz. Asset Allocation
aaa. Asset Liability Analysis
bbb. Fund Admin
ccc.Compliance Reporting

oo. Current rate – Base Rate
pp. Cap – Current Rate
qq. Current Rate – Floor
rr. Base Rate – Floor
yy. Exporters Fund
zz. All
aaa. Government Guarantee Program
bbb. Time Frame
ccc.Cost of Financing
of securities.
k. True b. False
yy. Stock Repurchase Program
zz. Transition Management
aaa. Transition Management & Commission Recapture
bbb. Commission Recapture
ccc.None

yy. the obligation to buy a futures contract
zz. the obligation to sell a futures contract
aaa. the right & obligation to buy a futures contract
bbb. the right but not the obligation to buy a futures contract
ccc.the right but not the obligation to sell a futures contract

yy. Call Option
zz. Swaption
aaa. Leaps
bbb. Oil Futures
ccc.Put Options
u. True
v. False
oo. Beneficiary Bank & Reimbursing Bank
pp. Importer Exporter
qq. Reimbursing Bank & Beneficiary Bank
rr. Applicant’s bank & Beneficiary’s bank
oo. DC plans fix the monthly contribution from the employee making his financial planning easier.
pp. DC plans are seen by employees as investment which to accumulate retirement income.
qq. All
rr. Employer increasing wants employees to share responsibility for retirement
order
yy. Salary
zz. Manager fee
aaa. Wage
bbb. Concession
ccc.Underwriter

oo. Listed market
pp. Over the counter market
qq. Third market
rr. Fourth market

oo. Market capitalization more than $200000
pp. All
qq. Net worth greater than $500000
rr. Household income of max $50000 year.

oo. The business focuses on small no. of high net worth individuals.
pp. The business focuses on small and medium enterprises.
qq. The business focuses on large no. of individuals.
rr. The business focuses on large no. of corporation bodies.

yy. Trades in securities
zz. Quotes to its bets customer
aaa. Intends to buy
bbb. Intends to sell
ccc.Quotes when it does not want to trade.
k. True b. False

oo. Stock market
pp. Retail banking
qq. Corporate banking
rr. Customer lending
576. Which is true?

oo. Financer owns the asset both in case of ‘Lease’ and ‘hire Purchase’.
pp. Tax deduction cab be claimed from the full value of the rental paid in case of lease
qq. All
rr. Depreciation is claimed by the financer in lease and not in case of hire purchase.
yy. Global custodian,
zz. None
aaa. Main custodian
bbb. Sub custodian
ccc.Secondary custodian

EE) Bonds sell at a discount when Coupon Rate is less than Market Interest rate.
FF) None
GG) Bond is debt instrument giving issues.
YY) Capitalized loan
ZZ) True Discounted loan
AAA) Amortized loan
BBB) Demand loan
CCC) Discounted loan

YY) Commercial bankers
ZZ) Investment Bankers
AAA) None
BBB) Company Management
CCC) Company Management and Investment Bankers

YY) Bankers Acceptance reduces lending capacity
ZZ) Sight Drafts are negotiable instruments
AAA) Bankers Acceptance demands immediate payment.
BBB) None
CCC) Banks can raise funds by selling acceptance.
YY) Investible assets
ZZ) Location
AAA) Age
BBB) Net worth
CCC) Name
the …….. market
YY) Spot, futures
ZZ) Debt , Equity
AAA) Primary , Secondary
BBB) Money, Capital
CCC) Secondary, Primary
YY) Investment Management
ZZ) Asset Servicing
AAA) None
BBB) Trading
CCC) Investor Services.

OO) All
PP) Stands for Suspicious Activity Reports
QQ) Customer Identification Program
RR)Requiring Businesses, which were only to report cash transactions involving more than 1.00,000?
EE) Yes under RTGS
FF) No
GG) Yes under net-settlement system

YY) 30 stocks
ZZ) 20 stocks
AAA) 40 stocks
BBB) 10 stocks
CCC) 50 stocks

D) All

YY) Interest rate and foreign exchange
ZZ) Liquidity and credit
AAA) Credit and Interest rate
BBB) Credit and Foreign exchange
CCC) All
Marks: 2
1. 1345.1
2. 1243.1
3. 1231.1
4. None
5. 1235
1. Trading
3. Investor service
4. None
5. Asset Servicing

2. Client Partner
3. Commercial Paper
5. Credit Provision
1. All of the above
3. High Leveraging
4. High Speculation
b. 15% discount is offered if payment is made within 2 days; the payment should however
be made in 30 days.
liabilities.
k. True b. False
tt. Irrevocable LC
uu. None
vv. Red clause
ww. Revolving LC
xx. Evergreen clause

yy. Plan sponsor
zz. Plan administrator
aaa. Fund trustee
bbb. None
ccc.Government

yy. Committed amount
zz. Either disbursed or committed loan
aaa. Unused amount of loan
bbb. Disbursed amount
ccc.None
sell orders.
ee. Yes
ff. No
gg. Yes, but if prices on the buy & sell side match.
loan is equal to?
yy. None
zz. Drawing power = $1600
aaa. $2200
bbb. $2400
ccc.$2000

yy. Setting risk limits
zz. Hedging
aaa. Diversification
bbb. Arbitrage
ccc.Insurance

yy. Municipal bonds
zz. Bonds of govt. sponsed enterprise
aaa. Corporate bonds
bbb. US treasuries
ccc. Shares
yy. None
zz. Plan administrator & trustee both have outsourced plan administration as well as fund
aaa. Any
bbb. Plan administrator gives investment instruction to investment manager while
ccc.Trustee gives investment instruction to investment manager, while plan administrator appoints
yy. Issuer processor
zz. Collection agency
aaa. Issuing bank
bbb. Authorization engine
ccc. Credit bureau.

yy. Consolidated Price index
zz. Consumer popularity index
aaa. Consumer product index
bbb. Consumer price index
ccc.None
yy. Credit scoring
zz. Credit increase
aaa. Credit incrementation
bbb. Credit revision
ccc. Credit enhancement.
yy) 4
zz) 5
aaa) 3
bbb) 1
ccc) 2

oo) Monte- Carlo
pp) Historical
qq) Variance-Covariance
rr) Variance-Covariance and Monte- Carlo

oo) Plc
pp) Pte
qq) Ltd
rr) Inc

tt)Govt. guarantee Program
uu) Time frame
vv) All
ww) Cost of financing
xx) Exporter fund.

yy) Risk management
zz) Front office
aaa) Back office
bbb) Trade
ccc) Board of director

yy) Traders
zz) Back office
aaa) Specialist
bbb) Front office
ccc) Mid office

oo) Govt. regulation
pp) Many traders
qq) Full info
rr) Cost effective trading
yy) Custodian bank
zz) Clearing bank
aaa) Clearing member
bbb) Trading member
ccc) Regulator
yy) Primary
zz) Secondary
aaa) Participant
bbb) OTC
ccc) Index

51. DJIA
52. Hangseng
53. EAFE index
55. S&P 500
_________ERISA
403b
401k
401b
403k
None
Participant
Government
Investment manager
Sponsor



derivatives


Options:
48. All
368. Risk Matrices was developed by:-

a. JP Morgan
b. Bank of California
c. Credit Suisse
d. SBI

e. None


e. All

b. Interest earned
d. All
a. LC
b. Direct debit
d. Counter trade
e. Cash in advance
a. Equally unlikely
b. Equally likely
c. ABC
d. XYZ
e. None

a. AAA,AA+,BBB,D
a. 118.8
b. Exactly 100
c. Exactly 200
d. Around 109
e. None
378. Odd man out:-

a. SEC
b. NYSE
c. NASDAQ
d. LSE
e. NSE
a. True
b. False

a. Specialist
b. Traders
c. Back office
d. Front office
e. Mid office
a. Equities

a. E-trade
b. Charles Schwab
c. Sallie Mae
d. Federal reserve
e. a and b both
b. Style maps score
d. Alpha

d. None

a. Unlisted market
nd
b. 2 , unlisted and OTC market
c. Unlisted
d. Super
nd
e. 2 market
387. Question on top 10 US bank
REBO

a. Bid
b. Indirect
c. Direct
d. Cross currency
e. Ask rate


d. Investment gain
391. Odd man out?

a. Equity
b. Stocks
c. Shares
e. Common stock

a. Sponsor
b. Custodian
d. Record keeper
e. Participant
394. When bank goes to the federal to borrow funds then the interest rate charged by fed is known as
a. Prime rate
b. Bond rate
c. Discount rate
d. Federal rate

a. 2001
396. Risk averse

397. Full form of EMI.

Equated Monthly Installment
398. BAFT full form

Banker’s Association for foreign trade
399. Which of the following is online settlement method
a. RTGS
401. Corporate bonds are

a. always secured
402. Full form of VaR

a. value at risk

Collateral
404. ATM stands for

a. Automated teller machine

a. Can be revoked without the consent of the Exporter
a. short term: non-financial
407. Mutual funds

a. Are less riskier than individual stocks as the fund managers invest in a diversified portfolio
408. Warrants
a. Warrants are call options – variants of equity. They are usually offered as bonus or sweetener
409. Difference between lease & hire purchase

a. all
410. Securitizing cash flows from future monthly sale of oil explored from its specified offshore
a. Asset securitization
411. Not a Treasury Management Systems –

Inter-bank
412. Pre shipment loans

a. Banks provide Pre-shipment finance - working capital for purchase of raw materials, processing
and packaging of the export commodities.
413. Function of CORPORATE FINANCE

a. all
414. Sales and brokers responds to which department when institution transfer their custody service
from one to another

a. Employer
1. If an investment pays interest at an annual rate of 5% per year, compounded

twice a year than the effective yield larger than 5.5%
a. True b. False
b. Less than offer
c. More than offer
e. Equal to offer
b. Central banks
c. Companies
a. True b. False
b. Terms loans
c. Cash
e. Receivables
b. Lot of research
a. True b. False
8. If the price of share pf cognizant changes from 65 to 60 this can be attributed
to:
a. Market risk
c. Credit risk
d. Operational risk
e. Liquidity risk
9. Account maintained in the home currency by one bank is the name of
another bank based abroad is called as:
a. Current account
b. Nostro account
c. Vostro account
d. Forex account
e. Overseas account
a. Pre-closure
b. Assignment
c. Participation
a. Futures
b. Spot
c. Forward
d. Stock
e. Option
15. If the price of a security on day 1&2 is $102 and $100 respectively. The
return is
a. -2%
b. 2%
c. -1.96%
d. Very high
e. 1-2%
16. If you invest $1000 for 3 years at 7% compound interest, how much will you
have at the end of the 3 years?
a. $1225
c. $1000
d. $1070
e. $1270
c. Letter of credit
a. Sweep facility
c. All
e. Overdraft
a. None
e. To offset moral hazard incentive provided by deposit insurance and
other guarantees.
b. None
c. Investment
d. Loan
e. Withdrawal
24. If the 5 bids available for stock are 64, 65, 63, 62.5 and 66 which one u will
sell? -> 66
25. When a bank issue a loan its liabilities & reserves increases by the amount of
the loan.
a. True b. False
26. If the corporate isn’t able to raise money from the market to pay off some
loans the risk can be refer.
a. Market risk
c. Commodity risk
d. Operational risk
e. Liquidity risk
How much did the broker pay out to the exchange in total in case of (i) Gross
settlement system (ii) Net Settlement System?
a. (i) $1780 (ii) $3000
c. (i) $3000 (ii) $1780
d. None
28. US export and Europe import agree to carry out the transaction of goods
word $100000 under a confirmed term LC with a maturity date of 60 days from
the time of shipment. The acceptance commission @ 1.5 % PA equals
A) $2500
B) $3000
C) $300
D) none
E) $250
30. The basic four parties involved in any transaction using LC are the following
EXCEPT
A) Issuing Bank
C) Beneficiary Bank
D) Seller
E) Buyer
31. While providing security lending services to its clients which risk will a
custodian have to manage for its clients
A) Liquidity risk
D) Credit risk
32. If the price of securities on day 1 and 2 are $100 and $102 respectively
.Returns is
A) A very high
B) 2
C) -1
D) -2
E) 1
A) Currency risk
B) Attrition
C) Credit risk
D) All of the above
D) Research
35. A mutual fund with investment objective of achieving high capital growth
approaches investor services firm for advice. The firm advices the mutual fund
to invest 80% of the fund in govt debt and 20% in equity. The allocation towards
debt advised by the firm
B) is too high
C) Is about right
D) is too low
B) Acceptance
C) Negotiate
D) Purchase
E) Discount
37. Who among the following is most likely to be a private banking client of a
bank?
B) Tiger Woods
C) Any of the above
38. Which of the following method eliminate country risk and commercial risk
upon confirmation?
B) Back to back LC
C) LC
D) Standby LC
42. The act of the loan amount being handed over to the borrower by the bank is
known as disbursement. State TRUE or FALSE -> TRUE
Given that a net settlement system is being used, find out the net position of the
broker at the end of the day
A) IBM no exchange of shares ; MFST 90 shares to receive ; $1780 to pay out
to the exchange
B) None of these
C) IBM no exchange of shares ; MFST 90 share to receive ; $3000 to pay out to
exchange
D) IBM 70 shares to given out ; MFST 90 shares to receive ; $3000 to pat out to
exchange
E) IBM no exchange of shares ; MFST 90 share to receive ; $1780 receive from
the exchange
B) Documents
E) Cash
A) APR
B) None
C) IRR
D) NPV
43. Which one of the following is not offered by investment banking division of a
bank?
B) ‘None
44. If total spread on underwriting is $500000 and manager fee is $100000. What
is the amount which will be distributed in the syndicate?
A) 500000
B) 100000
C) 400000
D) 600000
45. HPPL shares are currently selling for $25 each. You bought 200 shares one
year ago at $24 each and received dividend payment as $1.50 per share what was
total dollar capital gain this year
A) 200
B) 500
C) None
D) 300
E) 400
B) SEC
a. Demat
b. Personal loan
c. None
d. Hire Purchase
e. Auto loans
48. I deposited 100 in a bank .Bank loan out 90 out of it to someone else, who
then invest the money in setting u a new factory. This process is called
A) Monetary policy
B) None
E) Fiscal policy
A) Amount of bank capital expressed as % of the risk weighted credit exposure &
market risk.
C) Amount of bank capital expressed as % of the risk weighted credit exposure &
operational risk.
D) Amount of bank capital expressed as % of the risk weighted credit
exposure operational risk & market risk.
E) None
A) Calypso
B) Summit
D) Front arena
E) Flex cube
52. All of the following statements concerning US govt securities are correct
EXCEPT
B) None
C) Treasury bills have greater interest risk than either treasury bond or
treasury note
53. In defined benefit plan the benefit is expressed as ________ and in defined
contribution plan the benefit is expressed as an ________
D) None
54. What is the term used to indicate the arrangement of LARGE borrowing for
a corporate by a group as lenders
A) none
B) Syndicate
C) Allocation
D) Assignment
E) Secondary
A) issue card
D) Set card fees
56. in an international securities transaction, which of the following participant
will not be involved
A) Global custodian , domestic sub custodian , depository in foreign country and
C) Global Custodian
57. An insurer undertakes an analysis of a portfolio of insurance policy by
exploring scenarios for the path followed by swap rates, policy surrender rates,
mortgage prepayment rates for the mortgage backed security in the portfolio,
what is this process called
A) Cash projection
C) Asset allocation
C) Facilitating international transaction , corporate lending and settling up of
new factories
D) a price at which a firm is ready to buy or sell it also means when bid is
equal to offer
D) None
A) $3mn
B) $4.5 mn
C) $9mn
D) $4.4mn
E) $1mn
62. If a bank gets a deposit of $1000 assuming a CRR of 10% and that it
A) Loan of $2439
B) Loan of $1710
C) None
63. Which among the following is an investment company that pools money from
unit holders and invest in a variety of security?
A) Mutual Fund
B) Mortgage Company
C) None
D) Stock Exchange
64. You purchased a stock for $40. 1 year later you received $2 as Dividend. You
sold it at $48. What is your return?
a. 45%
b. 10%
c. 25%
d. 50%
e. None
65. A formal Legal commitment to extend credit to some max amount over a
state period of time is description of
a. Trade Credit
b. Revolving Credit
d. Line of Credit
e. Letter of Credit
66. Odd 1 out
a. Warren Buffet
b. George Soros
c. Bill Gates
d. Ben Graham
e. Peter Lynch
67. Development of Investment Objective and Investment policy falls under the
Purview of
b. Asset Allocation
d. Fund Admin
a. Exporters Fund
b. All
d. Time Frame
70. The NYSE is a large financial market in which the initial issue receives the
proceeds for the Sale of securities.
a. True b. False
71. Which of the following trading services reduces the trading cost for
institutional investors?
e. None
a. Call Option
b. Swaption
c. Leaps
d. Oil Futures
e. Put Options
a. True
b. False
75. The advising bank is called as trusted bridge between the ___________ &
__________ when they do not have active relationship. Options wrong
The advising bank is used as a trusted bridge between the applicant’s bank and the
beneficiary’s bank when they do not have an active relationship.
76. Which of the following according to you has resulted in defining contribution
plans gaining popularity over defined benefit plans
a. DC plans fix the monthly contribution from the employee making his financial
planning easier.
b. DC plans are seen by employees as investment which to accumulate
retirement income.
c. All
77. ________is typically largest part of spread and is paid to broker\dealer or
that actually took clients order
a. Salary
b. Manager fee
c. Wage
d. Concession
e. Underwriter
a. Listed market
c. Third market
d. Fourth market
b. All
c. Intends to buy
d. Intends to sell
82. Securities with original maturity greater than 1 year are traded on money
market.
a. True b. False
a. Stock market
b. Retail banking
d. Customer lending
84. Which is true?
b. Tax deduction cab be claimed fro the full value of the rental paid in case of
lease
c. All
d. Depreciation in claimed by the financer in lease and not in case of hire
purchase.
85. Bank a based in US provides safe keeping services for securities to its US
clients. It also has clients in France and Belgium and provides securities safe
keeping services to these clients through banks C & D respectively. Which best
describes bank A?
b. None
c. Main custodian
d. Sub custodian
B) None
A) Capitalized loan
C) Amortized loan
D) Demand loan
E) Discounted loan
C) None
D) None
B) Location
C) Age
D) Net worth
E) Name
A) Spot, futures
B) Debt , Equity
D) Money, Capital
92. Under what category can services like asset/liability analysis, asset
allocation, cash projection, compliance reporting, fund administration,
investment Management universe etc. provided by an institution can be
classified?
B) Asset Servicing
C) None
D) Trading
A) All
D) Requiring Businesses, which were only to report cash transactions involving
more than 1.00,000?
At the end of the day, the broker owes 1780 to the exchange while exchange
owes him 90 shares of MSFT. Is it possible?
A) Yes under RTGS
B) No
A) 30 stocks
B) 20 stocks
C) 40 stocks
D) 10 stocks
E) 50 stocks
C) basis for devising proper currency hedging strategy and opportunity for
receiving payment in advance of the due date.
D) All
E) All
1. 1345.1
2. 1243.1
3. 1231.1
4. None
5. 1235
investments, commission re-capture, foreign exchange transactions,
transaction management etc. can be classified under ____ group of
services. Marks: 1.
1. Trading
3. Investor service
4. None
5. Asset Servicing
2. Client Partner
3. Commercial Paper
5. Credit Provision
1. All of the above
3. High Leveraging
4. High Speculation
b. 15% discount is offered if payment is made within 2 days; the payment
should however be made in 30 days.
104. A bank is required to hold reverses at least equal to a pre-scribed fraction of
its total deposit liabilities.
a. True b. False
105 What term is used to describe n LC that remains valid for years thereby
eliminating the cost of separate LC’s for each transaction with a regular
client?(not sure bout the answer)
a. Irrevocable LC
b. None
c. Red clause
d. Revolving LC
e. Evergreen clause
a. Plan sponsor
c. Fund trustee
d. None
e. Government
a. Committed amount
d. Disbursed amount
e. None
108 In the exchange on a particular trading there is a buy market order for 100
CTSH shares and two sell market orders for 50 and 40 CTSH shares each, can
the buy order be matched against the two sell orders.
a. Yes
b. No
109 If the limit = $2000, margin = 20% and asset value = $2000 then drawing
power for an open ended loan is equal to?
a. None
b. $1600
c. $2200
d. $2400
e. $2000
b. Hedging
c. Diversification
d. Arbitrage
e. Insurance
a. Municipal bonds
c. Corporate bonds
d. US treasuries
e. Shares
112 In benefit administration what are the relationships that exits between the
plan administrator and the investment manager, and between Trustee and the
investment manager.
a. None
b. Plan administrator & trustee both have outsourced plan administration as well
as fund management to investment manager
c. Any
d. Plan administrator gives investment instruction to investment manager
while trustee appoints the investment manager.
e. Trustee gives investment instruction to investment manager, while plan
administrator appoints the investment manager.
application?
a. Issuer processor
c. Issuing bank
e. Credit bureau.
e. None
115 A bank decides to sanction only 10% of the loan sought by a company. The
company goes and pledges extra assets with the bank and the bank then agree to
sanction 50% of the loan sought. The company has indulged in the process of
a. Credit scoring
b. Credit increase
d. Credit revision
a) 4
b) 5
c) 3
d) 1
e) 2
a) Monte- Carlo
b) Historical
a) Plc
b) Pte
c) Ltd
d) Inc
b) Time frame
c) All
e) Exporter fund.
a) Risk management
b) Front office
c) Back office
d) Trade
a) Traders
b) Back office
c) Specialist
d) Front office
e) Mid office
a) Govt. regulation
b) Many traders
c) Full info
a) Custodian bank
b) Clearing bank
c) Clearing member
d) Trading member
e) Regulator
124 Once syndicate has sold all other trades participant, sub participant and
assignment are considered trade in what market?
a) Primary
b) Secondary
c) Participant
d) OTC
e) Index
1. DJIA
2. Hangseng
3. EAFE index
5. S&P 500
126 In defined contribution retirement plan .Tax sheltered annuities fall under
section of _________ERISA
403b
401k
401b
403k
None
126 In benefits administration, trustee and plan administrator submit
compliance report to______ which in turn qualifies the plan.
Participant
Government
Investment manager
Sponsor
130 Question related to credit derivatives as which of the following function is not
done by credit derivatives
131 Question related to credit derivatives it was fill up the blanks? Exactly don’t
remember the question/
Answer: the bank offers investment recommendations based on the Client’s
approval.
133 Question having few options like Income Processing, Tax Information Services,
Cash Sweep
Options:
4. All
1. Risk Matrices was developed by:- JP Morgan, Bank of California, Credit
Suisse, SBI
e. None
e. All
f.
b. Interest earned
d. All
7. Basic 4 parties involved in any transaction using letter of credit are following
except
a. Issuing bank
b. Buyer
d. Seller
e. Beneficiary bank
a. LC
b. Direct debit
d. Counter trade
e. Cash in advance
a. Equally unlikely
b. Equally likely
c. ABC
d. XYZ
e. None
a. Pre-closure
b. Assignment
c. Participation
a. AAA,AA+,BBB,D
a. 118.8
b. Exactly 100
c. Exactly 200
d. Around 109
e. None
a. SEC
d. All
14. Odd man out:-
a. SEC
b. NYSE
c. NASDAQ
d. LSE
e. NSE
15. From investor stand point a debenture issued by excellent company will appear
risky than share of preferred stock issued by excellent company
a. True
b. False
b. All
c. High speculation
d. High leveraging
b. Lot of research
a. All
d. Time frame
b. All
e. None
21. Formal legal commitment to extend credit up to some maximum amount over a
period of time is a description of
a. Line of credit
c. Letter of credit
e. Trade credit
a. Specialist
b. Traders
c. Back office
d. Front office
e. Mid office
23. Which of these instruments is not included as part of asset servicing services and
the category “Pricing/ Holdings” Valuation which includes accurate pricing,
rating etc.
a. Equities
a. E-trade
b. Charles Schwab
c. Sallie Mae
d. Federal reserve
e. a and b both
25. Measures of performance of an investment portfolio are all of the following
except:-
b. Style maps score
d. Alpha
e. None
d. None
a. 4th market
b. 3rd market
c. Listed market
d. 2nd market
e. OTC market
29. Which of the following loan requires the amount of interest that would be
earned on the loan to be paid upfront by borrower:-
a. Discounted loans
b. True discount
c. Capitalized
d. Demand
e. Amortized
a. Unlisted market
c. Unlisted
d. Super
e. 2nd market
a. Sweep facility
c. All
e. Overdraft
33. Standby letter is _____ secure than documentary collection and cheaper than
____
a. Call
b. Put
c. Swaption
d. Oil futures
e. Leaps
a. Cash
b. Electronic data
c. Docs
e. All
c. Do not change
a. Bid
b. Indirect
c. Direct
d. Cross currency
e. Ask rate
f. Intends to buy
g. Intends to sell
i. None
d. Investment gain
a. Disbursed amount
b. Committed amount
c. Both
d. Either
e. None
41. Odd man out?
a. Equity
b. Stocks
c. Shares
e. Common stock
a. Sponsor
b. Custodian
d. Record keeper
e. Participant
45. When bank goes to the fed to borrow funds then the interest rate charged by fed
is known as
a. Prime rate
b. Bond rate
c. Discount rate
d. Federal rate

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BFS L0 LATEST DUMPS

1. Which of the following is NOT a settlement Method for Bank Loans

3. What is the difference between Banker’s acceptance and sight draft

4. Red herring prospectus is issued during _______________

5. Which of the following is NOT a banking service?

6. Who among the following offers private banking services?

9.25 – 7.30 = 1.95 or 0.0195

CRR (Cash Reserve Ratio).

Deposit 10% Reserve Loaned Out

11. What does a CALL option give the buyer?

Put Options - The right, but not the obligation, to sell

14. Institution specializing transactions of mortgage loans for US banks are

18. When is a bank failure is is more likely to occur?

19. GDR stand for which of the following option?

NAV – Net Asset Value

= (50/100)*(20/100) + (50/100)*(60/100) = 0.4

23. Does a pure play investment bank accept deposits?

24. Which of the following is a corporate action?

26. Choose the correct order of occurrence of the following activities

30. The counterparty in a futures contracts trade is

41. What is OTC?

43. Interest rate spread is equal to?

45. Dividend declaration is an example of

46. Identity the services offered by Retail Banks.

47. VISA involved in which of the following?

48. Which are true in a “BASIC or No Frill Checking” Account?

Sock Buy/Sell Quantity Price Amount

Net position for DELL: +120 – 70-20-10 = 20

52. Inflation represents which of the following option?

53. Loan Servicing starts after underwriting state True or False

55. Which of the following is the most risky asset?

57. Coming together of BNY and Mellon is an example of __________________

58. CIP in the context of anti money laundering

59. Which among the following is a key feature of letter of credit?

(200*15) + (200*2) – (200*12) = 1000

66. Pick the odd one out

Operating Income = Gross Profit - Operating Expenses

= (50000-10000-5000-5000) / 20000 = 1.5

75. High-Net worth individuals generally have ____________________.

Methods of payment is most risky to the Seller – Open Account

Sock Buy/Sell Quantity Price Amount

Net position for IBM: +100 – 50-20-30 = 0

0 for IBM, $1,795 for MSFT,

79. How much will be the 1% legal fee on 30M USD

84. Who is a underwriting Bank?

86. What is a mutual fund?

88. Which of the following debt instrument involves lowest risk?

89. Following are the types of market risks except

FV: Future Value at the end of n time periods,

96. What is the settlement standard followed in the US?

98. Which of the following is not the example of options?……………………………

99. What are Yankee bonds also Know as?

102. The Federal funds rate

105. Money laundering refers to which of the following option?

109. Which of the following combination holds true?

111. Which of the following is not a derivative?

112. TARP stands for which of the following options?

Limit (L) – max outstanding allowed

116. In Normal Distribution 99% confidence interval corresponds to __________

119. Which of the following operations cannot be done on a LC (Letter of Credit)?

120. Which of the following is a treasury management system?

124. SPV means

125. NPV stands for

a. AAA, AA+, BBB, D

= (50/100)(20/100) + (50/100)(60/100) = 0.4

(20015) + (2002) – (200*12) = 1000