 MODULE II : KEY RISKS AND THEIR MEASUREMENT - CREDIT RISK

 Chapter 1: Quiz

Started on Tuesday, 15 August 2023, 2:25 PM

State Finished

Completed on Tuesday, 15 August 2023, 2:33 PM

Time taken 7 mins 50 secs

Question 1
Incorrect
Mark 0.00 out of 1.00

Flag question
Question text
The value of an asset in doubtful category is Rs 100 crore and the realization value of security is
only Rs 40 crore. What must be the provisioning for the asset
Select one:
a. Rs 50 crores

b. Rs 40 crores
c. Rs 70 crores
d. Rs 60 crores
Feedback
The correct answer is: Rs 70 crores

Question 2
Incorrect
Mark 0.00 out of 1.00

Flag question
Question text
Which one of the following is not a systematic risk for a company
Select one:

a. Global recession
b. Management problems
c. Fall in commodity prices
d. Increase in interest rates
Feedback
The correct answer is: Management problems

Question 3
Incorrect
Mark 0.00 out of 1.00

Flag question
Question text
Which one of the following risk elements is assessed from ratings provided by credit rating
agencies
Select one:

a. LGD
b. EAD
c. PD
d. NPA
Feedback
The correct answer is: PD

Question 4
Correct
Mark 1.00 out of 1.00

Flag question
Question text
The chance of credit rating of a firm improving or worsening is captured in
Select one:

a. Transition probability
b. Correlation
c. Exposure at default
d. Loss given defaulty
Feedback
The correct answer is: Transition probability

Question 5
Correct
Mark 1.00 out of 1.00

Flag question
Question text
When a issuer fails to pay the coupon or the principal of bonds as per terms, the risk is called as
Select one:
a. Market risk
b. Operational risk
c. Reputational risk

d. Credit risk
Feedback
The correct answer is: Credit risk

Question 6
Correct
Mark 1.00 out of 1.00

Flag question
Question text
Which one of the following is a most associated property with "Through the Cycle" rating
Select one:
a. Uses current information for rating
b. Reactive to business cycles

c. Stable rating over period of time

d. Accurate estimate of default probability
Feedback
The correct answer is: Stable rating over period of time

Question 7
Incorrect
Mark 0.00 out of 1.00

Flag question
Question text
How much credit exposure does a bank have to a particular borrower at the time of default can
be known through
Select one:
a. LGD
b. EAD

c. PD
d. NPA
Feedback
The correct answer is: EAD

Question 8
Incorrect
Mark 0.00 out of 1.00

Flag question
Question text
What type of risk is a bank is exposed to due to adverse rating movement of a borrower
Select one:
a. Operational risk
b. Market risk

c. Reputational risk
d. Credit risk
Feedback
The correct answer is: Credit risk
Question 9
Incorrect
Mark 0.00 out of 1.00

Flag question
Question text
Which of the following methodology do banks follow in determining their internal ratings
Select one:

a. Both TTC and PIT

b. Point in time (PIT)
c. Depending upon the borrower
d. Through the cycle (TTC)
Feedback
The correct answer is: Point in time (PIT)

Question 10
Incorrect
Mark 0.00 out of 1.00

Flag question
Question text
In the Altman’s original US bankruptcy prediction model, below what value of Z score would a
borrower be classified as risky
Select one:
a. 0.51
b. 1.81
c. 4.50

d. 3.00
Feedback
The correct answer is: 1.81

Finish review
BACK
https://www.nibmindia.org/ E-mail: learning@nibmindia.org