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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(Money Market Deposit Account) 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 e. None of the listed Options 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 e. None of the listed Options 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 e. None of the listed Options 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 d. All of the listed options e. None of the listed Options 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 d. All of the listed options e. None of the listed Options 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 doesnt 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 c. Held for Sale Loans 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 e. All of the listed options 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 e. None of the listed Options 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 (Internal Rate of Return) 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 refer 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 e. None of the listed Options 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 e. None of the listed Options 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 e. None 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 e. None of the listed Options 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 e. None of the listed Options 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 -e. All of the listed options

42 1 Marks Which is not a banking account? Answer: a. Checking Accounts b. Money Market Deposit Accounts -c. Demat Account d. Time Deposits e. None of the listed Options 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% e. None of the listed Options 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 e. None of the listed Options 46 2 Marks When the Central Bank of a country decides to change the interest rates, it is a manifestation of which of the following? 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 e. None of the listed Options 51 1 Marks &quot;Don't put all your eggs in one basket&quot; 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 Pick the odd one out. 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 e. None of the listed Options 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 e. None of the listed Options 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 e. All of the listed options 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 banks capital expressed as percentage of the risk weighted credit exposure b. Amount of banks capital expressed as percentage of the risk weighted credit exposure & operational risk c. Amount of banks capital expressed as percentage of the risk weighted credit exposure, & market risk d. Amount of banks capital expressed as percentage of the risk weighted credit exposure, operational risk & market risk e. None of the listed Options 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 -e. All of the listed options 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 e. All of the listed options 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 74 Warrants are the combination of which of these instruments? 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 e. None of the listed Options

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 e. None of the listed Options 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 e. None of the listed Options 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 -e. All of the listed options 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 doesnt 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

e. None of the listed Options 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 &amp; 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 e. None of the listed Options 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 d. All of the listed options e. None of the listed Options

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 dealers skill e. Equal to offer 3. Which of the following is usually not participant in stock market a. Small individuals 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
Ans:Novation

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 isnt able to raise money from the market to pay off some loans the risk can be refer. a. Market risk

b. c. d. e.

Interest rate risk Commodity risk Operational risk Liquidity risk

27. On the trading day at the NYSE a broker undertakes the following trades Buy 100 IBM shares for $10.00 each Sell 50 IBM shares for $10.50 each 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) B) C) D) E) $2500 $3000 $300 none $250

29. Operational risk is defined as? fail because of weakness in people, processes, systems or external events.

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 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 Buy 100 IBM shares for $10.00 each Sell 50 IBM shares for $10.50 each 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 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

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) B) C) D) E) 500000 100000 400000 600000 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) B) C) D) E) 200 500 None 300 400

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) B) C) D) E) Account balance , Annuity Annuity , Annuity Account balance , Account balance None 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) B) C) D) Cash projection Investment manages universe Asset allocation 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 applicants/issuing bank and the beneficiarys 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. b. c. d. e.

Salary Manager fee Wage Concession Underwriter

78. NASD is not an SRO for 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 30indicates 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 LCs for each transaction with a regular client? 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. b. c. d. e.

Credit scoring Credit increase Credit incrementation Credit revision 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 2. Hangseng 3. EAFE index 4. NASDAQ composite 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 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 dont remember the question/

Answer: option having TRANSFER


132 Question related to non-discretionary Investment Management

Answer: the bank offers investment recommendations based on the Clients 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 1. Risk Matrices was developed by:- JP Morgan, Bank of California, Credit Suisse, SBI 2. Research analyst may recommend to :- buy, hold and sell 3. 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 4. Under corporate stock repurchase program a. Corporate purchase their own shares from shareholders 5. 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. 6. One would go for bank deposits because a. Money easily available b. Interest earned c. Insurance cover available d. All 7. 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 8. From sellers point of view which method has least risk a. LC b. Direct debit c. Documentary collection d. Counter trade e. Cash in advance 9. 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 10. Which is not the settlement method for bank loans? a. Pre-closure b. Assignment c. Participation d. Sub participation e. Securities repository 11. Which is correct hierarchy of corporate ratings (high to low)? a. AAA,AA+,BBB,D 12. 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 13. Brokerage firms are regulated by

a. b. c. d.

SEC Industry wide SROs State regulatory Agency 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 16. Risk associated with hedge funds:a. High exposure in derivatives b. All c. High speculation d. High leveraging 17. Not a feature of private banking:a. High investment in technology b. Lot of research c. Commercial lending d. Specialist advice e. Understanding capital and investment needs 18. Which of the following affects the choice of payment method a. All b. Government guarantee method c. Exporters fund d. Time frame e. Cost of financing 19. Which risk may bring gains and losses? a. Credit risk and interest rate risk b. All c. Liquidity risk and foreign exchange risk d. Credit risk and foreign exchange risk 20. 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 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 b. Irrevocable credit c. Letter of credit d. Revolving credit agreement e. Trade credit 22. Security settlement is function of 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 b. Certificate of participation c. Government securities d. Certificate of deposit e. Services may be provided for all 24. 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 25. 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 26. Interest rate spread:a. Current rate floor b. Cap current rate c. Current rate-base rate d. Base rate-floor rate

e. None 27. Who insures stocks in stock market a. Security and exchange commission b. Federal deposit insurance corporation c. Us department of treasury d. None 28. NASD is not an SRO for 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 30. Limit = $2000 Margin=20% Asset value=2000 a. Drawing power = 1600 31. Over the counter market is also called a. Unlisted market b. 2nd , unlisted and OTC market c. Unlisted d. Super e. 2nd market 32. 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 33. Standby letter is _____ secure than documentary collection and cheaper than ____ a. More, commercial LOC 34. Which is not an option a. Call b. Put

c. Swaption d. Oil futures e. Leaps 35. question on top 10 US bank REBO

36. ACH transaction involves a. Cash b. Electronic data c. Docs d. Checks and drafts e. All 37. Interest rates falls a. Bond prices increase b. Bond prices decrease c. Do not change d. Economy goes to deflation 38. Rate at which bank purchases US dollars against home currency is :a. Bid rate 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 39. 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 40. Company would pay interest on what portion of the loan? a. Disbursed amount b. Committed amount c. Both d. Either e. None 41. Odd man out? a. Equity

b. Stocks c. Shares d. Convertible bonds e. Common stock 42. A bank cannot cover the money demanded by depositor, then it goes out to a. Federal reserve bank 43. Institutions involved in benefit administration process, discussing plans a. Sponsor b. Custodian c. Plan administration d. Record keeper e. Participant 44. Which of the following eliminates both country risk and commercial risk? a. Both standby LOC and LOC 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

46. Risk Matrices was developed by:- JP Morgan, Bank of California, Credit Suisse, SBI 47. Research analyst may recommend to :- buy, hold and sell 48. 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 49. ___ is the largest part of spread and is paid to broker/dealer that actually took the clients order a. Salary b. Wage c. Managers fee d. Concession e. Underwriters allowance 50. 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 51. If a price of share 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 52. Under corporate stock repurchase program a. Corporate purchase their own shares from shareholders 53. 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 54. 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 55. One would go for bank deposits because a. Money easily available b. Interest earned c. Insurance cover available d. All 56. 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 57. From sellers point of view which method has least risk a. LC b. Direct debit c. Documentary collection d. Counter trade e. Cash in advance 58. 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 59. Which of the following can be done on LC? a. Negotiate b. Purchase c. Acceptance d. Discount

e. All 60. Which is not the settlement method for bank loans? a. Pre-closure b. Assignment c. Participation d. Sub participation e. Securities repository 61. Which is correct hierarchy of corporate ratings (high to low)? a. AAA,AA+,BBB,D 62. 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 63. Inflation- 8%. Future value of 100 units of money after 2 years: a. 118.8 b. Exactly 100 c. Exactly 200 d. Around 109 e. None 64. Brokerage firms are regulated by a. SEC b. Industry wide SROs c. State regulatory Agency d. All 65. Odd man out:a. SEC b. NYSE c. NASDAQ d. LSE e. NSE 66. 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 67. Risk associated with hedge funds:a. High exposure in derivatives b. All c. High speculation d. High leveraging 68. Not a feature of private banking:a. High investment in technology b. Lot of research c. Commercial lending d. Specialist advice

e. Understanding capital and investment needs 69. Which of the following affects the choice of payment method a. All b. Government guarantee method c. Exporters fund d. Time frame e. Cost of financing 70. Which risk may bring gains and losses? a. Credit risk and interest rate risk b. All c. Liquidity risk and foreign exchange risk d. Credit risk and foreign exchange risk 71. 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 72. 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 73. Odd man out a. None b. Auto loans c. Demat d. Hire purchase e. Personal loan 74. 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 75. 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 76. Security settlement is function of a. Specialist b. Traders

c. Back office d. Front office e. Mid office 77. 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 78. 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 79. 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 80. Interest rate spread:a. Current rate floor b. Cap current rate c. Current rate-base rate d. Base rate-floor rate e. None 81. Who insures stocks in stock market a. Security and exchange commission b. Federal deposit insurance corporation c. Us department of treasury d. None 82. NASD is not an SRO for a. 4th market b. 3rd market c. Listed market d. 2nd market e. OTC market 83. 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

84. Limit = $2000 Margin=20% Asset value=2000 a. Drawing power = 1600 85. Over the counter market is also called a. Unlisted market b. 2nd , unlisted and OTC market c. Unlisted d. Super e. 2nd market 86. 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 87. Standby letter is _____ secure than documentary collection and cheaper than ____ a. More, commercial LOC 88. 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 89. Price of security on day 1&2 is $100 and $102 respectively. The return is a. -2% b. 2% c. -1.96% d. Very high e. 1-2% 90. Which is not an option a. Call b. Put c. Swaption d. Oil futures e. Leaps 91. question on top 10 US bank read page number 52 92. ACH transaction involves a. Cash b. Electronic data c. Docs d. Checks and drafts e. All 93. Interest rates falls a. Bond prices increase b. Bond prices decrease c. Do not change

d. Economy goes to deflation 94. Rate at which bank purchases US dollars against home currency is :a. Bid b. Indirect c. Direct d. Cross currency e. Ask rate 95. Offer price is the price at which the firm a. Intends to buy b. Intends to sell c. Trades in securities d. None 96. Presence of risk implies a. Standard deviation of return is 0 b. Uncertainties of final outcome c. Final wealth is lower d. Investment gain 97. Company would pay interest on what portion of the loan? a. Disbursed amount b. Committed amount c. Both d. Either e. None 98. Odd man out? a. Equity b. Stocks c. Shares d. Convertible bonds e. Common stock 99. A bank cannot cover the money demanded by depositor, then it goes out to a. Federal reserve bank 100. Institutions involved in benefit administration process, discussing plans a. Sponsor b. Custodian c. Plan administration d. Record keeper e. Participant 101. Which of the following eliminates both country risk and commercial risk? a. Both standby LOC and LOC 102. 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

103. CP full form in corporate lending a. commercial paper 104. when was US PATRICAT ACT passed a. 2001 105. Risk averse a. less risk/avoid risk 106. full form of EMI. Ans) Equated Monthly Installment. 107. if day 1and day 2 share price is $100 and $102. return is a. 2% 108. if day 1and day 2 share price is $102 and $100. return is a. -1.96% 109. 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 .collateral 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 Exporters bank can be revoked without the consent of the Importers bank cant be revoked with the consent of the Advising bank cant 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. 82. Capital adequacy ratio refers to a. Amount of banks capital expressed as percentage of the risk weighted credit exposure, operational risk & market risk 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 diversified portfolio 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 from future 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. 93. 95. function of A card Association a. security/risk management funtions of private banking 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. raw 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 .. Straight Through Processing 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 2. 0.4% per month & 1.2% per quarter 3. none

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. Current account maintained by one bank with another bank abroad in the latters home currency a. VOSTRO b. NOSTRO 5. Which of the following is not a Banking Activity? a. Private Banking b. Public Banking c. Investment Banking d. Retail Banking 6. What is LC in Banking Terms? a. Line of Control b. Legislative Council c. Letter of Control d. Letter of Credit 7. What is EMI? a. Equated Monthly Installment b. Equi Monthly Installment

c. Equal Monthly Installment d. End Month Installment 8. What is CP? a. Commercial Paper b. Commercial Profit 9. Expand EFT. a. Electronics Fund Transfer 10. Expand CLS. a. Continuous Linked Settlements 11. Which of the following risks are avoided by Continuous Linked Settlements? a. Temporal Risk b. Spatial Risk c. Market Risk 12. Which of the following locations is not specialized for Private Banking? a. Switzerland b. Mauritius c. India d. Cayman Islands 13. Dont put all your eggs in the same basket. This is a famous saying insisting what? a. Hedging b. Active aapproach c. Diversification 14. 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 15. Simple Interest is calculated based on a. Principal Only b. Principal and Accumulated Interest

16. Compound Interest is calculated based on a. Principal Only b. Principal and Accumulated Interest 17. 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. 18. Which of the following is not a possible risk while doing a project in Cognizant? No idea of the options and the answer 19. ICICI bank in India comes under the category of a. Private Bank b. Public Bank c. Co operative Bank d. Corporation Bank 20. What are FreddieMac and GinnieMae? a. Regulatory bodies of Insurance b. Institutions in Mortgage Markets c. Investment Banks d. Brokerage Firms 21. Which of the following is not a Rating Agency? a. RBI 22. What are the 3 pillars of Basel 2? a. Quantitative, Qualitative and Market Forces 23. Losing which of the following cards will have more impact? a. Credit Card b. Debit Card

c. Stored Card d. Gift Voucher 24. 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 25. If banks increase their cash reserve ratio what will be the impact? a. Money flow will be more b. Money flow will be less c. Reserve amount will be less d. None of the above 26. Which of the following is not a bank account? a. Money Market Deposit Account b. Demat Account c. Checking Account d. Time Deposits 27. Expand IRR. a. Internal Rate of Return 28. Which of the following is not a Retail Bank in India? a. HSBC b. ICICI c. JPMC d. SCB 29. Central Bank of a country is called as a. Bankers Bank 30. Servicing High Net worth Clients is called a. Asset Management b. Private Banking c. Retail Banking

31. PTA stands for a. Payable Through Account 32. Which of the following is not a repayment method? a. Direct Receipt b. Direct Debit c. Post Dated Cheques d. Salary Deductions e. None of the above 33. Details about 3 tiers of Federal communications privacy law. 34. 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 35. Benefits of Check 21. 36. SuperDot is used in which Stock Exchange? a. NYSE b. BSE c. FSE d. LSE 37. FTSE index is used in which stock exchange? a. New York b. Bombay c. London d. Singapore 38. 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 39. What are warrants?

40. Pick the odd man out. a. Stocks b. Shares c. Equity d. Convertible Bonds e. Common Stocks 41. Define risk in financial terms. a. Probability of loss