Sample Questions for Advanced Bank Management (ABM)

1. As per Budget proposals for 2016-17, amendments are proposed in the SARFAESI
Act 2002 to enable the sponsor of an Asset Reconstruction Company (ARC) to hold
up to ---- stake in the ARC and permit non institutional investors to invest in
Securitization Receipts.
(a)100% (b) 75% (c) 90% (d) 50%
2. Indias rank globally in respect of per capita GDP at PPP as per 2015 data of IMF is:
(a)124 (b)122 (c)123 (d) 212 (e) 9
3. Which of the following measure of money supply is referred to as broad money?
(a) M-1 (b) M-2 (c) M-3 (d) M-4 (e) none of these
4. Value of output=500, consumption of fixed capital=20, Value of intermediate
consumption=200, Net indirect taxes=30. GDP at factor cost will be:
(a) 320 (b)720 (c) 280 (d) 480 (e) 290
5. At the price of 4 per unit, a consumer buys 50 units of a commodity. If Price
Elasticity of demand is 2, how many units will the consumer buy at the price of 3
per unit?
(a) 75 (b) 25 (c) 150 (d) 100
6. If all factors of production of an industrial unit are doubled and its physical output
becomes 250% of the earlier output which of the following statements will be
correct?
(a) The factory is witnessing Constant Returns to Scale
(b) The factory is witnessing Increasing Returns to Scale
(c) The factory is witnessing Diminishing Returns to Scale
(d) either (a) or (b) above
7. We read in the newspapers that India is a global hub of BPO and KPO along with IT
and ITES. The full form of KPO is :
(a) Knowledge Process Outsourcing (b) Knowledgeable Protected Outstation
(c) Know Parental Organization (e) none of these
8. From the figures given in the table below for 10.06.2016 , choose the best option to
the questions that follow:
S.No. Data Item Amount in billions of Rupees
1 Currency in circulation with the public 17,482
2 Bankers deposits with RBI 4,120
3 Other deposits with RBI 134
4 Demand Deposits with Banks 8,702
5 Time Deposits with Banks 86,835
6 Post Office savings deposits 3,268
7 Post office time deposits (other than NSCs) 25,266
(i).The Reserve Money as on 10.06.2016 will come to Rs ------- billions.
(a) 21,736 (b) 30,438 (c) 21,602 (d) 28,634
(ii) Narrow money will amount to Rs ------ billions.
(a) 21,636 (b) 30,438 (c) 26,318 (d) 28,634
9. If I deposit a certain amount so that I receive a certain amount every month for an
indefinite period, this is an example of.
(a) Annuity Ordinary (b) Annuity Due (c) Perpetual Annuity
(d) Advance Annuity (e) none of these
10. I saved Rs.800,000 to be invested at 9% p.a, how much amount will I get for 10
years as annual instalment?
(a) Rs.122,653 (b) Rs 121,653 (c) Rs 124,653 (d) Rs 125,653
(e) none of the above
11. A bond of Face Value of Rs.5,000 carries a coupon interest rate of 10%. It is quoted
in the market at Rs.4, 000. What will be the YTM if the Term to Maturity is 4 years?
(a) 10 % (b) 14% (c) 17% (d) 19% (e) none of these
12. In the context of 3 years from now, how much is the difference between receiving
Rs.5,000 today or Rs.7000 after 3 years, if investment opportunity is there at 9%
p.a ?
(a) less by Rs 525 (b) more by Rs 525 (c) less by Rs 2,000
(d) more by Rs 2,000 (e) none of the above
13. A Rs 1,000 par value bond carries a coupon rate of 12% and will mature in 5 years.
If the required rate of return is 10%, the market value of the bond in nearest rupees
will be:
(a)Rs 1,070 (b) Rs 1,065 (c) Rs 1,076 (d) Rs 1,132 (e) Rs 1,087
14. Cash flows of a project are given below:
Year Cash flow in Rs
Y0 -800
Y1 -80
Y2 100
Y3 300
Y4 500
Y3 500
Using a discount rate of 10%, the NPV of the project will be:
(a)Rs 8.04 (b) Rs 87.28 (c) Rs 208.04 (d) Rs 459.17 (e) Rs 887.28
15. In an organization ensuring learning to prepare for the identified role to be
performed by the individual in the not too distant future is called:
(a) Training (b) Education (c) Development
(d) Simulation (e) Acclimatization
16. Mr. Albert Pinto joined a public sector bank as a clerk. He got promoted as junior
officer and subsequently moved up to Scale III in the bank. Thereafter he stopped
accepting promotions. His career pattern can be called:
(a) Steady Career Concept (b) Linear Career Concept (c) Spiral Career Concept
(d) Plateau Career Concept (e) none of these
17. That part of the behavior which is not known to individual himself but known to
others is called:
(a) Arena (b) Blind (c) Closed (d) Dark (e) none of these
18. According to Abraham Maslow as per Need Hierarchy Theory which needs comes
after safety need?
(a) Self Actualization Need (b) Social Need (c) Physiological Need
(d) Self Esteem Need (e) none of these
19. Under RBI guidelines dated 23rd April,2015 , a target of 8 percent of ANBC or Credit
Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher, has been
prescribed for Small and Marginal Farmers within agriculture, to be achieved in a
phased manner i.e., ---- percent by March 2016 and 8 percent by March 2017.
(a)5 (b)6% (c)7% (d)4% (e)3%
20. As per RBI guidelines, while issuing guarantees in favour of stock exchanges on
behalf of stock brokers in lieu of security deposit / margin requirements, banks
should ensure that a cash margin of ____ per cent within the overall margin of 50%
must be maintained.
(a)10 (b) 15 (c) 25 (d) 5 (e) 12.5
21. Banks should not grant loans to companies for:
(a)their working capital requirement (b) acquiring plant and machinery
(c) for buy-back of shares/securities (d) none of the above
22. Based on the following information, ----- pieces must be produced so that the
company does not incur any loss.
Sale price of each piece : Rs 125 Cash discount per piece : 20%
Wage cost per piece : Rs 40 Raw material per piece : : Rs 20
Office rent per month : Rs 11,000 Other fixed cost p.m. :Rs 17,000
(a) 525 (b) 100 (c) 700 (d) 625
23. As per RBI guidelines dated 17.12.2015, all rupee loans sanctioned and credit limits
renewed w.e.f. April 1, 2016 will be priced with reference to ------- which will be the
internal benchmark for such purposes.
(a)Benchmark Prime Lending Rate (BPLR) (b) Prime Lending Rate (PLR)
(c)Base Rate (d) Marginal Cost of Funds based Lending Rate (MCLR)
24. As per RBI guidelines, if principal or interest payment is not overdue for more than
30 days but account showing signs of incipient stress it will be classified as:
(a)SMA-0 (b) SMA-1 (c) SMA-2 (d) SMA-3
25. TReDS is institutional mechanism for facilitating the financing of trade receivables of
MSMEs through multiple financiers which MSMEs have to recover from:
(a) Corporates and other buyers (b) Government Departments
(c) Public sector undertakings (PSUs) (d) all of these (e) only (a) and (c)

Answers to Sample Questions on ABM

Q.No. Ans Q.No. Ans Q.No. Ans Q.No. Ans Q.No. Ans
1 A 2 B 3 D 4 E 5 A
6 B 7 A 8(i) A 8(ii) C 9 C 10 C
11 C 12 E 13 C 14 B 15 B
16 D 17 B 18 B 19 C 20 C
21 C 22 C 23 D 24 A 25 D