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 dealer’s skill
e. Equal to offer

3. Which of the following is usually not participant in stock market

a. Small individual’s 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

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 isn’t able to raise money from the market to pay off some
loans the risk can be refer.
a. Market risk
b. Interest rate risk
c. Commodity risk
d. Operational risk
e. 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) $2500
B) $3000
C) $300
D) none
E) $250
29. Operational risk is defined as?

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) 500000
B) 100000
C) 400000
D) 600000
E) 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) 200
B) 500
C) None
 D) 300
E) 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) Account balance , Annuity

B) Annuity , Annuity
C) Account balance , Account balance
D) None
E) 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) Cash projection
B) Investment manages universe
 C) Asset allocation
D) 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 agreement
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 applicant’s bank and the
beneficiary’s 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. Salary
b. Manager fee
c. Wage
d. Concession
e. 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 30”indicates 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 LC’s for each transaction with a regular client?
(not sure bout the answer)
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. Credit scoring
b. Credit increase
c. Credit incrementation
d. Credit revision
e. 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 don’t
remember the question/
Answer: option having “TRANSFER”
132 Question related to non-discretionary Investment Management
Answer: the bank offers investment recommendations based on the Client’s
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 seller’s 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. SEC
b. Industry wide SROs
c. State regulatory Agency
d. 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. Exporter’s 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 – check not sure
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
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