mf0007 treasury management mqp
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MODEL QUESTION PAPER
SUBJECT CODE:
SUBJECT : Treasury Management
SECTION A
1. A Depository Receipt is a financial security issued by ________, traded on a
________ stock exchange.
a. local company, foreign
b. local company, local
c. foreign company, local
d. foreign company, foreign
2. Functions of Treasury Management includes: Choose the odd choice
a. Framing Treasury Policies
b. Establishing a Treasury System
c. Funds Management
d.Liquidity Planning
3. Planning for Organic and Inorganic growth is the function of:
a. Integrated treasury of the bank
b. Treasury Management
c. Bank Management
d. Corportate general management
4. Expand CBLO:
a. Collaborated borrowings & lending Operations
b. Collateralized debt obligations
c. Collateralized borrowing & lending Obligations
d. Collateralized bank's lending Operations
5. The treasury operations are inefficient in
PSUs. They seldom
a. lend their surplus funds
b. borrow from money market
c. hold large cash reserves
d. none
6. Banks maintain two types of accounts with RBI:
a. Savings a/c and current a/c
b. Current a/c and subsidiary general ledger a/c
c. Fixed deposit a/c and Current a/c
d. Savings a/c and subsidiary general ledger a/c
7. Cash assets or near cash items are highly liquid and
____________.
a. They providing additional comfort & operational convenience
b. Bur they drag down operational profit
c. They provide additional income & operational convenience
d. None of the above
8. Which motive for holding cash deals with day to day, hour to hour
regular payments, taxes to the government etc?
a. precautionary motive
b. Speculative motive
c. Transaction motive
d. Survival motive
9. Parkinson's law says " If something can go wrong it will go
wrong" This statement relative ______________motive.
a. Precautionary
b. Transaction
c. Image-building
d. Statutory compliance
10. When the interest rate increase saving rate____________.
a. Decreases
b. Also increases
c. Remain stable
d. None
11. Cost-push inflation may result in stagnation in the economy
coupled with inflation is called .
a. Deflation
b. Hyper inflation
c. Stagflation
d. Normal inflation
12. _____________rate of interest encourage production function &
consumption function.
a. Low
b. High
c. Stable
d. None
13. How foreign exchange reserves of a country are created?
a. Exports
b. Imports
c. Remittance from foreign countries
d. Funds bought in by foreign investor
14. The value of the currency of the country is largely depends
on external & internal stability. Internal stability is influenced by.
a. Fiscal and monetary policies
b. FEMA
c. Foreign policies
d, Political issues
15. Risk related to natural factors like drought cyclones earth quakes
are termed to .
a. Un systematic or firm specific risk
b. Systematic risk
c. Diversifiable risk
d. Commodity risk
16. Loans to fictitious borrowers, borrowers of doubtful integrity,
collateral of dubious quality leads to .
a. High level of NPA
b. High level of frauds
c. High level of comption
d. High level of mismanagement
17. Which bank collapsed in the year 1995 due to unexpected loss in
derivative market?
a. Global trust bank
b. Freddie Maa
c. Barings bank
d. UTI bank
18. How to measure and determine the risk involved in the
loan and investment portfolio?
a. Classification of good & bad loans
b. Classification according to the age of loan
c. Classification according to grades & use of symbols
d. All of the above
19. The risk weight age for the loan given to movie- making
real estate or any speculative activity is:
a. 75% of loan amount as tier / capital
b. 100% of loan amount as tier / capital
c. 125% of loan amount as tier / capital
d. 150% of loan amount as tier / capital
20. RBI in its credit policy announced on April 23, 2007
reduced the risk weight age for housing loan from:
a. 150% to 100%
b. 150% to 75%
c. 75% to 50%
d. 100% to 50%
SECTION B
21. Foreign companies raising funds in India is:
a. ADRs
b. GDRs
c. IDRs
d. Equity shares
22. The new sources of funding agencies are ________,________ and
___________
a. Equity shares, derivatives & private equity
b. Venture capital, private equity and HNI individuals
c. Venture capital, derivatives & equity shares
d. Hedge funds, equity shares, derivatives
23. C Ds are similar to FDs. They are issued by banks for the receipt of deposit.
The main difference is:
a. CDs are negotiable certificate & transferable
b. FDs are negotiable certificate & transferable
c. CDs are not subject to restrictions
d. FDs are subject to restrictions
24. Well developed capital market attracts
a. Green field investments
b. FDI and FPI
c. Aid & Subsidies
d. Long term loans
25. The CRR is a good monetary tool in the hands of RBI during the period of inflacics
the RBI
a. Increase the CRR in order to drain the excess liquidity from the banking system
b. Increase the CRR in order to bring in excess liquidity from the banking system
c. Decrease the CRR in order to drain the excess liquidity from the banking system
d. Decrease the CRR in order to bring in excess liquidity from the banking system
26. According to which theory the rate of savings is
assumed to be function of rate of interest?
a. Loanable fund theory
b. Classical theory
c. Liquidity preference theory
d. Bond dynamics
27. The world foreign exchange market never sleeps
and works throughout the day and night . When
________market closes, _________ market is open.
a. New York , Frankfurt
b. London , Sydney
c. New York , Sydney
d. New York , London
28. What measures surplus or shortage of funds at specific maturity
data?
a. Time buckets
b. Maturity profile
c. Maturity ladder
d. Defeasance period
29. Each time span selected for calculating the maturity profile is
called a
a. Time bucket
b. Time span
c. Maturity ladder
d. Maturity profile
30. RBI to upgrade information infrastructure for ALM
introduced RTGS for:
a. Transfer of funds from one place to another
b. Quick clearance of cheques
c. Facilitating loan dispersal
d. Maintaining healthy credit-deposit ratio
31. What is key to the success of ALM?
a. Framing policies and procedures
b. Analyzing the credit risk
c. Proper implementation of the policies
d. Credit rate portfolio management
SECTION C
32. Match The Following
1. Borrowing long term funds to a. SEBI & the RBI
meet the capital expenditure
relates to:
2. For banking institutions, the b. strategic
dimension regulators are:
to Fin Mgt.
3. Sarbanes -Oxley Act was c. Framing
Treasury policy
4. Treasury Management d. Accounting
scandals
a. 1c, 2a, 3b,4d
b. 1c,2a, 3d,4b
c. 1a,2c,3d,4b
d. 1a,2c, 3b, 4d
33. Match the following
1. C Ps banks a. Issued by comm. banks
2. Banker's b. It is the money lent for 1 day
acceptance
3. C Ds c. issued by large corporate
4. call money d. Bill of exchange
a. 1c,2a,3d,4b
b. 1c,2d,3a,4b
c. 1b,2d,3a,4c
d. 1b2d,3a,4c
34. Match the following
1. Lock box system a. Digital image of the cheque to
the paying 'banker'
2. In truncation process the b. EFT & RTGS
collecting banker sends
3. Electronic clearance of c. To credit the proceeds even before
cheques is done through collection of cheques.
4. Quick credit of cheques d. A arrangement with post office to
is arrangement with bank collect the cheques directly to avoid
Delay in collection.
a. 1b, 2a, 3d, 4c
b. 1b, 2d, 3c, 4a
c. 1d, 2a, 3b, 4c
d. 1d, 2c, 3a, 4b
35. State True or False
a. Income funds are those mutual fund schemes that are offered to investor who
desire higher return than the interest rate offered by the banks, but are not
ready to take the risk arising out of the market fluctuation
b. Banks have to maintain 30 % of their time and demand liabilities in approved
securities SLR
c. The secondary market has is well developed for perpetual bond market.
d. When the interest rate goes up the market price of the bonds falls down.
a. T, F, F, T
b. F, F, F, T
c. T, F, T, T
d. T, T, F, T
36. State True or False:
1. The overseas investment limit for the Indian companies has been enhanced to
300 % of their net worth.
2. The overseas investment limit for the Indian companies has been enhanced to
200 % of their net worth.
3. According to FEMA, loans can be given to resident of foreign countries
4. Purchase or sale of immovable property outside India resident was permitted in
FERA act.
a. F, T, T, F
b. T, T, T, F
c. T, F, F, T
d. F, T, F, F
37. Match the following
1. CBLO market is for a. Reduction in cash receipts due to
external function
2. Corticated of deposit b. Very short term borrow
3. Systematic cash inflow c. Nick lesson
risk means
4. The collapse of Barings bank d. Negotiable instrument issued by
in 1995 was engineered by banks to borrow a huge amount
from a corporate.
a. 1b, 2d, 3c, 4a
b. 1d, 2a, 3a, 4c
c. 1b, 2d, 3a, 4c
d. 1a, 2b, 3c, 4d
38. State True or False:
1. In Basel regime, RBI increased the share capital of the banks substantially.
2. Banks are allowed to issue preference shares.
3. The biggest item on the liabilities side of a bank's balance sheet is deposits
4. Savings Bank deposit is also known as Time Deposit
a. T,T,T,T
B. T,F,F,F
c. T,T,T,F
d. T,F,T,F
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