1.

A signs promissory instrument in the following terms:

(a) Mr. B I.O.U. Rs.1000
(b) I promise to pay Rs. 500 seven days after my marriage with C
(c) I acknowledge to be indebted to B in Rs.1000 to be paid on demand, for value received
(d) I promise to pay Rs. 500 to B and to deliver my black horse on 1st January next

2. How many parties are there to a Promissory note and a bill of exchange?
(a) There are three parties to a Promissory note and four to a bill of exchange
(b) There are four parties to a Promissory note and three to a bill of exchange
(c) There is one party to a Promissory note and two to a bill of exchange
(d) There are two parties to a Promissory note and three to a bill of exchange

3. In a Cheque issued by A to B, amount is stated differently in figures and in words:

(a) the amount stated in words shall be the amount ordered to be paid
(b) the amount stated in figures shall be the amount ordered to be paid
(c) the Cheque will be returned to the bearer by the banker for correction by the drawer

4. When consent to an agreement is caused by coercion, fraud or misrepresentation, the

agreement is:
(a) Valid
(b) void
(c) Voidable at the option of a party whose consent was so caused
(d) Partially void

5. A Voidable contract is:

(a) An illegal agreement
(b) Partly valid agreement
(c) Void ab initio
(d) None of these

6. A minor in a firm enjoys the following rights:

(a) He may be admitted to the benefits of partnership
(b) He cannot have access to and inspect and copy any of the accounts of the firm
(c) None of these

7. A fully paid share-warrant of a company limited by shares is to be treated like a:

(a) Cheque
(b) negotiable instrument
(c) Bill of Exchange
(d) None of these

8. A private company can be incorporated by:

(a) 2 persons
(b) 3 persons
 (c) 7 persons
(d) None of these

9. A public company must have at least:

(a) 5 persons
(b) 7 persons
(c) 9 persons
(d) None of these

10. A private company cannot have more than:

(a) 20 members
(b) 30 members
(c) 50 members
(d) None of these

11. Eliason V. Hamshaw (1819) Sup Ct US 4 wheat on 225 deals with:

(a) Counter proposed
(b) Implied acceptance
(c) Manner of acceptance
(d) None of these

12. A and B contract to marry each other. Before the time fixed for the marriage A goes mad. In
such a case the contract is:
(a) Void
(b) Voidable
(c) Valid
(d) None of these

13. The maxim of Caveat Emptor in a contract of sale means:

(a) The seller guarantees the quality or fitness for any particular purpose supplied
(b) The buyer himself takes the risk as to the quality and condition of the goods
(c) There is an implied condition that the buyer can repudiate the contract at his option
(d) None of these

14. A agrees to sell to B a hundred tons of oil the agreement is:

(a) Valid
(b) Void
(c) Voidable
(d) Partially valid

15. An agreement entered into before marriage between a Muslim wife and husband that the wife
shall be at liberty to live with her parents after marriage is:
(a) Valid
 (b) Void
(c) Voidable at the option of husband
(d) None of these

16. A promises to obtain for B an employment in the Public Service and promises to pay rupees
1000 to A. The agreement is:
(a) Valid
(b) Void
(c) Voidable
(d) None of these

17. A void contract is:

(a) An illegal agreement
(b) Partly valid agreement
(c) Ceased to be a valid agreement
(d) None of these

18. An agreement to pay one hundred rupees to a holy man for prayers for the success of a suit in a
court is:
(a) Valid
(b) Void
(c) Voidable
(d) Partially Valid

19. A, for natural love and affection, promises to give his son B, Rs.100,000, and puts his promise to
B into writing and registers it. Will the contract be:
(a) Valid
(b) Void
(c) Partially Valid
(d) None of these

20. A contract B to sell his horse for Rs.500 by 10th January 2010. The horse so contracted dies on
8th January 2010. The contract is:
(a) Valid
(b) Void
(c) B can sue A for compensation
(d) A is liable for damages

21. Which of the following contracts is Voidable, where:

(a) A party is induced by undue influence
(b) One party under mistake of fact
(c) Both parties under mistake of fact
(d) None of these
22. In case of willful wrong a sub-agent is responsible to:
(a) Agent
(b) Principal
(c) Sole agent

23. A tender notice amounts to:

(a) Proposal
(b) Offer
(c) Invitation

24. A contract to sell the property by a minor through guardian is:

(a) Void
(b) Voidable
(c) Valid

25. How many parties are there in a contract of guarantee?

(a) 5
(b) 4
(c) 3
(d) None of these

26. Which of the following is eligible to become director of a company?

(a) Minor
(b) Un-discharged insolvent
(c) Person representing a creditor
(d) None of these

27. Extra-ordinary general meeting of a company includes:

(a) Annual general meeting
(b) Statutory meeting
(c) Plenary meeting
(d) None of these

28. Petition for winding up of a company may be moved by:

(a) Auditor General
(b) Advocate General
(c) Company Judge
(d) None of these

29. The Companies Act repealed by the Companies Ordinance, 1984 pertained to the year:
(a) 1930
(b) 1933
(c) 1935
(d) None of these
30. Penalty for improper use of word Limited is:
(a) Fine
(b) Imprisonment
(c) Imprisonment with fine
(d) None of these

31. In which of the following an arbitration agreement is not discharged by the death of party:
(a) Voluntary
(b) Statutory
(c) Contractual
(d) None of these

32. The assent of arbitrator appointed by court is:

(a) Optional
(b) Not required
(c) Necessary
(d) None of these

33. The number of Arbitration Act, 1940 is:

(a) XI
(b) XV
(c) XX
(d) None of these(X of 1940)

34. Nature of misconduct justifying removal of arbitrator should be:

(a) Legal
(b) Moral
(c) Procedural
(d) None of these

35. Suit by unregistered firm against third party is:

(a) Maintainable
(b) Barred
(c) Permissible
(d) None of these

36. The firm and firm-name are:

(a) Synonymous
(b) Interchangeable
(c) Different terms
(d) None of these

37. The partnership is:

 (a) Juristic person
(b) Juridical person
(c) Natural person
(d) None of these

38. The maker of a promissory note is liable as:

(a) Principal debtor
(b) Principal Creditor
(c) Undercharged surety
(d) None of these

39. Valid presentation of a cheque is within six months from:

(a) The date it is drawn
(b) Date of last correction
(c) Date of delivery
(d) None of these

40. An exception to No one can transfer what he does not have is:
(a) Registered gift
(b) Will
(c) Estoppels by owner
(d) None of these

41. Jurisdiction in company matters is to be exercised by:

(a) Civil Court
(b) Any Judge of High Court
(c) Company Bench of High Court
(d) None of these

42. Any alteration in Article of Association affecting the substantive right or liabilities of members of
the company can be made:
(a) If Board of Director pass such alteration
(b) By vote of simple majority of members
(c) By a vote majority of members
(d) None of these

43. A special audit of a company can be ordered by a commission on an application made by

members holding not less than:
(a) 20% Voting Rights
(b) 25% Voting Rights
(c) 51% Voting Rights
(d) None of these

44. A listed company in accordance with companies ordinance is required to have at least:
 (a) Two Director
(b) Seven Director
(c) Three Directors
(d) None of These

45. When a negotiable instrument may be construed either as a promissory note or bill of exchange,
law recognizes it as:
(a) Promissory note
(b) Bill of Exchange
(c) Ambiguous Instrument
(d) None of these

46. When a bill of exchange has been dishonoured, the holder can cause such dishonour to be
certified by a notary public, such certificate is a:
(a) Claiming
(b) Presentment
(c) Protest
(d) None of these(Noting)

47. If a cheque is transferred to any person to constitute him as a holder, the instrument is said to
be:
(a) Delivered
(b) Negotiated
(c) Presented
(d) None of these

48. A partner can be expelled from a Firm:

(a) By simple majority of partners
(b) If all partner consent to it
(c) Only by exercise of powers conferred by the Contract
(d) None of these

49. A new partner can be inducted in an existing partnership:

(a) By recommendation of any partner
(b) By the consent of all partners
(c) By the consent of half of the partners
(d) None of these

50. Any admission made by a partner regarding the affairs of the firm in ordinary course of business:
(a) Is evidence against the firm
(b) Has no validity against the firm
(c) Ordinary statement
(d) None of these
51. An agreement between partners imposing reasonable restriction on a partner for not carrying
on any business within a specified time or local limits on ceasing to be a partner is:
(a) Void
(b) Valid
(c) Illegal
(d) None of these

52. The goods which form the subject of a Sale can be:
(a) Existing Goods
(b) Existing and Future Goods
(c) Existing, Future and Contingent Goods
(d) None of these

53. If the seller make use of Pretended bidding to raise the price the sale is:
(a) Voidable
(b) Void
(c) Illegal
(d) None of these

54. The principle of indemnity does not apply in the case of:
(a) Life Insurance
(b) Marine Insurance
(c) Fire Insurance
(d) None of these

55. Promise which form the consideration or part of the consideration for each other are called:
(a) Agreement
(b) Contract
(c) Reciprocal Agreement
(d) None of these

56. Mr. Aslam applied to a bank for a loan at a time when there is stringency in the money market,
the banker declines to make the loan except at an unusually high rate of interest, this is called:
(a) Undue influence
(b) Transaction in the ordinary course of business
(c) Free consent
(d) None of these

57. When consent to an agreement is caused by coercion, fraud, or misrepresentation, the

agreement is:
(a) Valid
(b) Void
(c) Voidable
(d) None of these
58. A person who finds goods belonging to another and takes them into his custody; is subject to
the same responsibilities as:
(a) Trustee
(b) Owner
(c) Bailee
(d) None of these

59. An agreement in restraint of the marriage of any person other than a minor is called :
(a) Valid
(b) Invalid
(c) Illogical
(d) None of these(Void)

60. Authority of an appointed arbitrator or umpire can be revoked:

(a) At the discretion of either party
(b) With the leave of the Court
(c) Irrevocable
(d) None of these

61. The minimum number of members required for forming private company is:
(a) 1
(b) 3
(c) 5
(d) None of these

62. After its incorporation, the ordinary General Meeting of a company must be held within:
(a) One year
(b) the year of incorporation
(c) Eighteen months from the date of incorporation
(d) None of these

63. For how much days, a promissory note is entitled to days of grace to be at maturity when it is
not expressed to be either payable on demand or otherwise?
(a) 30 days
(b) 15 days
(c) 3 days
(d) None of these

64. Who among the following is appointed by a court to look after the estate of a person who died
without leaving a WILL?
(a) Agent
(b) Lawyer
(c) Lawyer
 (d) Administrator

65. According to URR525, which of the following is a request for reimbursement from the Claiming
Bank to the Reimbursing Bank?

(a) Reimbursement authorizations

(b) Reimbursement amendment
(c) Reimbursement claim
(d) Reimbursement undertaking

66. Which of the following is NOT a legal requirement for opening a bank account of a limited
company?
(a) Copy of Memorandum of Association
(b) Copy of Articles of Association
(c) Certificate of Incorporation
(d) Specimen signatures of all the directors

67. Which of the following is NOT the essential requirement for the endorsement as per Negotiable
Instrument Act, 1881?
(a) It should be on the instrument
(b) It should be made by the holder or the maker
(c) Signatures should be in ink and not by pencil or rubber stamp
(d) It should contain unconditional order

68. An endorsement is said to be Partial endorsement, if it satisfies which of the following

conditions?
(a) If the endorser signs his name only
(b) If the endorser adds a direction to pay the amount mentioned in the instrument to, or
to the order of, a specified person
(c) If the endorser restricts or excludes the right to further negotiate the instrument
(d) If the endorser purports to transfer to the endorsee only a part of the amount payable

69. Which of the following is the technical term used for Letter of Credit?
(a) Documentary credit
(b) Documentary evidence
(c) Documentary instrument
(d) Documentary proposal

70. All of the following are essentials of a valid acceptance of an instrument, EXCEPT:
(a) Must be conditional
(b) Signed by drawee or his agent
(c) Acceptance must appear on the bill
(d) Accepted bill must be delivered to the holder
(e) Essentials of Valid Acceptance
71. According to UCP 600, which of the following refers to the bank with which the credit is
available or any bank in the case of a credit available with any bank?
(a) Advising bank
(b) Issuing bank
(c) Nominated bank
(d) Paying bank.

72. According to Negotiable Instrument Act, 1881, which of the following is the essential of a
cheque?
(a) It should contain conditional order
(b) It must not be signed by drawer
(c) Cheque is not payable on demand
(d) It is payable to specified person

73. According to Negotiable Instrument Act, 1881, which of the following refers to an instrument in
writing (not being a bank note or a currency note) containing unconditional undertaking, signed
by the maker to pay on demand or at a fixed or determinable future time a certain sum of
money only to or to the order of a certain person, or to the bearer of the instrument?
(a) Promissory note
(b) Bill of exchange
(c) Cheque
(d) Bearer debentures

74. The letter of credit includes all of the following documents, EXCEPT:
(a) A commercial invoice
(b) A transport document
(c) A certificate of origin
(d) A certificate of investment

75. Who among the following is entrusted responsibilities of executing WILL?

(a) Agent
(b) Lawyer
(c) Executor
(d) Heir.

76. All of the following are salient features of Value Driven Culture of the bank, EXCEPT:
(a) Focus is on credit quality with strong risk management systems and controls
(b) Primary emphasis is on bank soundness and stability and a consistent market presence
(c) Underwriting is conservative and significant loan concentrations are not allowed
(d) Management is often attracted to high-risk and high-return borrowers

77. According to UCP 600, which of the following refers to the party on whose request the credit is
issued?
 (a) Applicant
(b) Issuer
(c) Beneficiary
(d) Issuing bank

78. How many articles are there in Uniform Customs and Practice for Documentary Credits (UCP
600)?
(a) 36 Articles
(b) 37 Articles
(c) 38 Articles
(d) 39 Articles

79. An endorsement is said to be Restrictive endorsement, if it satisfies which of the following

conditions?
(a) If the endorser signs his name only
(b) If the endorser adds a direction to pay the amount mentioned in the instrument to, or
to the order of, a specified person
(c) If the endorser restricts or excludes the right to further negotiate the instrument
(d) If the endorser purports to transfer to the endorsee only a part of the amount payable

80. According to Negotiable Instrument Act, 1881, which of the following is NOT the type of
promissory note?
(a) A promise to pay a certain sum of money to a person
(b) A promise to pay a certain sum of money to the order
(c) A promise to pay the bearer
(d) A promise to pay certain sum of money at some time

81. Which of the following is also known as core capital?

(a) Paid up capital
(b) Tier I capital
(c) Authorized capital
(d) Issued capital

82. Pledge of stocks as security for availing credit from bank is the example of which of the
following?
(a) Bailment
(b) Mortgage
(c) Lien
(d) Pledge

83. All of the following are parties to cheque, EXCEPT:

(a) Drawer
 (b) Drawee
(c) Accepter
(d) Payee

84. Which of the following is the most prominent assumed risk for banks?
(a) Default risk
(b) Credit risk
(c) Liquidity risk
(d) Interest rate risk

85. According to Negotiable Instrument Act, 1881, which of the following refers to a written
document by which a right is created in favor of some person?
(a) Agreement
(b) Contract
(c) Instrument
(d) Act

86. Under Prudential Regulations, the maximum tenure of the auto loan finance shall not exceed:
(a) Five years
(b) Six years
(c) Seven years
(d) Eight years

87. According to the Contract Act, 1872, which of the following is/are the legal requirement(s) to be
a competent party?
(a) Age of majority
(b) Sound mind
(c) No disqualification by law from contracting
(d) All of the given options

88. In letter of credit, which of the following is payable as soon as it is presented for payment?
(a) Demand draft
(b) Time draft
(c) Sight draft
(d) Order draft

89. Which of the following parts of prudential regulations covers Definitions?

(a) Part A
(b) Part B
(c) R1 to R28
(d) M1 & M2
90. Which of the following refers to the delivery of goods by one person to another for some
purpose, upon a contract that they shall, when the purpose is accomplished, be returned or
otherwise disposed of according to the directions of the person delivering them?
(a) Bailment
(b) Mortgage
(c) Lien
(d) Pledge

91. What is the bailment of goods as security for payment of a debt or performance of a promise
called?
(a) Hypothecation
(b) Mortgage
(c) Lien
(d) Pledge

92. Under UCP 600, which of the following refers to the term presentation?
(a) Delivery of goods to importer
(b) Advising Letter of Credit
(c) Delivery of documents under a credit to issuing bank or nominated bank
(d) Delivery of commercial invoice to a importer

93. Which of the following is NOT an essential of Bailment?

(a) Contract
(b) Specific purpose
(c) Delivery of goods
(d) Change of ownership

94. Under Prudential Regulations, the vehicle to be utilized for commercial purposes shall not be
included in which of the following?
(a) SME financing
(b) Corporate financing
(c) Consumer financing
(d) Micro financing

95. All of the following are salient features of Current Profit Driven Culture of the bank, EXCEPT:
(a) Primary emphasis is on loan volume and growth with the intent of having the largest
market share
(b) Underwriting is very aggressive and management accepts loan concentrations and
above-average credit risk
(c) Outcome is typically higher profit in good times, followed by lower profit in bad times
when loan losses increase
(d) Outcome is that loan quality suffers over time, while profit is modest because loan
growth comes from below-market pricing and greater risk taking
96. Which of the following is NOT the function of the credit process?
(a) Business development and credit analysis
(b) Underwriting or credit execution and administration
(c) Credit review
(d) Protecting the organization

97. Prudential Regulations issued by State Bank of Pakistan were announced on which of the
following dates?
(a) July 1, 1992
(b) August 29, 1991
(c) May 1, 1992
(d) July 29, 1991

98. Which of the following is not payable, until the lapse of a particular time period, stated on the
draft, in case of letter of credit?
(a) Demand draft
(b) Time draft
(c) Sight draft
(d) Order draft

99. According to Prudential Regulations, auto loan is issued to purchase a vehicle for which of the
following?
(a) Business use
(b) Personal use
(c) Social use
(d) Official use

100. Which of the following refers to the possibility that operating expenses might vary
significantly from what is expected?
(a) Credit risk
(b) Liquidity risk
(c) Market risk
(d) Operational risk

101. All of the following makes the endorsement complete, EXCEPT:

(a) The holder signs on the face or back of the instrument
(b) The instrument is delivered to the endorsee
(c) It is signed and delivered with the intention of vesting the endorsee with the rights of
the holder
(d) It is signed and delivered with the intention of vesting the endorsee with the duties of
the holder
102. Which of the following refers to an instrument in writing containing an unconditional
order, signed by maker, directing a certain person, to pay on demand or at fixed or
determinable future time a certain sum of money only to, or to the order of, a certain person or
to the bearer of the instrument?
(a) Promissory note
(b) Bill of exchange
(c) Cheque
(d) Bearer debentures

103. Which of the following is the party availing the facility in the hire-purchase agreement?
(a) Issuer
(b) Receiver
(c) Hirer
(d) Beneficiary

104. According to Negotiable Instrument Act, 1881, all of the following are types of the
cheque, EXCEPT:

(a) Bearer Cheques

(b) Order Cheques
(c) Crossed Cheques
(d) Blank Cheques

105. Which of the following is the fundamental objective of Bank Management?

(a) To maximize banks profit
(b) To be the top most bank in the competition
(c) To maximize shareholders wealth
(d) To earn extraordinary profits

106. Which of the following endorsements is also called general endorsement?

(a) Blank endorsement
(b) Full endorsement
(c) Restrictive endorsement
(d) Partial endorsement

107. Which of the following refers to a contract, by which one party promises to save the
other from loss caused to him by the conduct of the Promisor himself, or by the conduct of any
other person?
(a) Contract of guarantee
(b) Contract of surety
(c) Contract of indemnity
(d) Contract of liability
108. Which of the following international trade financing methods refers to A method in
which the exporter can avoid credit risk or the risk of nonpayment, since payment is received
prior to the transfer of ownership of the goods?
(a) Letter of credit
(b) Open account
(c) Documentary collection
(d) Payment in advance

109. Which of the following identifies preferred loan qualities and establishes procedures for
granting, documenting and reviewing loans?
(a) Credit process
(b) Credit policy
(c) Credit risk
(d) Credit exposure

110. Which of the following can be used as an alternative to the transferable letter of credit?
(a) Back-to-back letter of credit
(b) Irrevocable confirmed letter of credit
(c) Revolving credit
(d) Transferable letter of credit

111. In letter of credit, which of the following is a standard document evidencing the receipt
of goods for shipment and issued by a freight carrier engaged in the business of forwarding or
transporting goods?
(a) Commercial invoice
(b) Bill of lading
(c) Warranty of title
(d) Letter of indemnity

112. All of the following are examples of Quasi Negotiable Instruments, under the Negotiable
Instrument Act, 1881, EXCEPT:
(a) Dividend Warrants
(b) Share Warrants
(c) Bearer Debentures
(d) Promissory Note

113. Which of the following is included in Financial Institutions as per Prudential Regulation
issued by the State Bank of Pakistan?
(a) Banks
(b) Development Financial Institutions (DFIs)
(c) Non-Banking Finance Companies (NBFCs)
(d) Insurance Companies

114. In documentary credit, which of the following banks is usually a foreign bank?
 (a) Issuing bank
(b) Paying bank
(c) Advising bank
(d) Confirming bank

115. Under hire-purchase, at the time of delivery and possession of goods, which of the
following is issued by the bank?
(a) Delivery order
(b) Delivery note
(c) Delivery memo
(d) Physical delivery of goods

116. An endorsement is said to be Restrictive endorsement, if it satisfies which of the

following conditions?
(a) If the endorser signs his name only
(b) If the endorser adds a direction to pay the amount mentioned in the instrument to, or
to the order of, a specified person
(c) If the endorser restricts or excludes the right to further negotiate
(d) If the endorser purports to transfer to the endorsee only a part of the amount payable

117. According to the prudential regulations for the housing loan, the maximum monthly
installment for repayment of loan should not exceed which of the following?

(a) 25% of net disposable income of the borrower

(b) 40% of net disposable income of the borrower
(c) 50% of net disposable income of the borrower
(d) 60% of net disposable income of the borrower

118. A banking company can engage itself in which of the following businesses under section
7 of Banking Companies Ordinance, 1962?
(a) Borrowing, raising, or taking up of money
(b) The lending or advancing of money either upon or without security
(c) The granting and issuing of letters of credit
(d) All of the given options

119. All of the following are contents of the Articles of Association, under Banking Companies
Ordinance, 1962, EXCEPT:
(a) Transfer of shares
(b) Alteration of share capital
(c) Authorized capital
(d) Dividend

120. All of the following are examples of Negotiable Instruments, under the Negotiable
Instrument Act, 1881, EXCEPT:
 (a) Promissory note
(b) Bill of exchange
(c) Cheque
(d) Bearer debentures

121. According to the Banking and Companies Ordinance, 1962, which of the following refers
to Any company which transacts the business of banking in Pakistan?
(a) Microfinance Institution
(b) Banking Company
(c) Investment Bank
(d) A corporate Body

122. All of the following are requirements of the Memorandum, under Banking Companies
Ordinance, 1962, EXCEPT:
(a) Required to be printed
(b) Issue of shares and allotment of shares
(c) Should be divided into paragraphs
(d) Paragraphs to be consecutively numbered

123. Under Prudential Regulations, the vehicle to be utilized for commercial purposes shall
not be included in which of the following?
(a) SME financing
(b) Corporate financing
(c) Consumer financing
(d) Micro financing

124. What is the bailment of goods as security for payment of a debt or performance of a
promise called?
(a) Hypothecation
(b) Mortgage
(c) Lien
(d) Pledge

125. Who among the following is appointed by a court to look after the estate of a person
who died without leaving a WILL?
(a) Agent
(b) Lawyer
(c) Lawyer
(d) Administrator

126. According to the prudential regulations for housing finance, which of the following
charges are applied in order to secure the collateral for the loan?
(a) Hypothecation
(b) Mortgage
 (c) Pledge
(d) Lien

127. How many parties are involved in a Cheque?

(a) Two
(b) Three
(c) Four
(d) Five