<<12345678910111213141516171819202122232425>> 1. The risk weighted assets of an Indian bank, with a capital of Rs.500 crore, stand at Rs.5000 crores. What additional amount of assets it can create with 20% risk weight?Rs.2777.75 croreRs.555.55 croreRs.50 croreRs.3124.96 croreQuestion 1 of 25 2. While expected losses are covered by specific reserves and provisions, how are unexpected losses handled?Charged to P/L account as inevitable lossesThrough capital allocation based on confidence levels, time horizon, diversification and correlationHandled as per extant IBA guidelinesTreatment for both expected and unexpected losses is sameQuestion 2 of 25 3. The pricing of products should provide a buffer against expected losses, what do unexpected losses indicate?They indicate the inferiority of credit portfolioThey point to immediate need to reduce the size of credit bookUnexpected loss is a measure of the amount of economic capital required to support the banks financial riskUnexpected losses also indicate the need to further fine tune the pricingQuestion 3 of 25 4. How is risk adjusted performance defined?Total risk weighted assets are an indicator of RAPMTotal profits minus total lossesProfit for each unit of assetProfit for each unit of risk capitalQuestion 4 of 25 5. What are the six factors that influence profitability for banks?Interest income, customer service, advertising revenue, salaries, rent expenses, other operating expensesInterest income, fee-based income, trading income, interest expenses, staff expenses, other operating expensesLoan defaults, utility bills, investment income, marketing expenses, branch expansion costs, rent expensesTrading income, legal fees, interest income, insurance premiums, lease payments, other operating expensesQuestion 5 of 25 6. Which committee introduced standardization in capital adequacy norms?Reserve Bank of India (RBI)Securities and Exchange Board of India (SEBI)Basel committeeInternational Monetary Fund (IMF)Question 6 of 25 7. What do banks need to balance in relation to capital adequacy?The number of branches and ATM machinesStaff salaries and bonusesThe trade-off between capital requirement and profitabilityThe amount of advertising and marketing expensesQuestion 7 of 25 8. How can banks optimize profitability and capital adequacy?By focusing solely on interest incomeBy reducing all expenses to a minimumBy reworking fee-based income areas with new products and eliminating outdated processesBy increasing investment in risky venturesQuestion 8 of 25 9. What has become the most important parameters for banks in the current banking scenario?Branch expansion and customer serviceProfitability and customer satisfactionProfitability and capital adequacyAdvertising revenue and market shareQuestion 9 of 25 10. What is NaBFID?A new commercial bank in IndiaA Development Financial Institution (DFI) focusing on long-term infrastructure financingA government agency for promoting agricultural developmentA regulatory body for the insurance sectorQuestion 10 of 25 11. When was the NaBFID Act enforced?28 March, 202119 April, 202128 April, 202119 March, 2021Question 11 of 25 12. How do Development Financial Institutions (DFIs) like NaBFID source funds?By accepting deposits from the publicBy borrowing from commercial banksFrom the market, government, and multi-lateral institutionsBy investing in the stock marketQuestion 12 of 25 13. What distinguishes Development Financial Institutions (DFIs) like NaBFID from traditional banks?DFIs focus solely on short-term financingDFIs do not accept deposits from individualsDFIs are not regulated by the governmentDFIs offer higher interest rates on savings accountsQuestion 13 of 25 14. What is the primary objective of profit planning in banks?Maximizing returns for shareholdersProviding fixed returns to depositorsMinimizing risks in financial dealingsFulfilling the role of a financial intermediaryQuestion 14 of 25 15. Which of the following is NOT a source of income for banks?Interest incomeFee-based incomeTreasury incomeCapital appreciation incomeQuestion 15 of 25 16. What role do banks play as trustees for depositors?Maximizing profits for the bank's ownersProviding fixed returns to the depositorsEngaging in risky financial dealingsMinimizing the bank's liabilitiesQuestion 16 of 25 17. How do banks generate interest income?By lending money to various sectorsBy charging fees for banking servicesBy investing in government securitiesBy selling treasury bondsQuestion 17 of 25 18. What is the purpose of economic capital in banking?To measure the profitability of business activitiesTo provide a buffer against unexpected lossesTo determine the pricing of banking productsTo evaluate shareholder value analysisQuestion 18 of 25 19. What does RAROC stand for?Risk Assessment Return on CapitalRisk-Adjusted Return on CapitalReturn on Assets and Risk Oversight CommitteeReturn on Risk-Adjusted CapitalQuestion 19 of 25 20. Which of the following is NOT a factor considered in RAROC?Expected lossUnexpected lossReturn on equity (ROE)Risk capitalQuestion 20 of 25 21. Why are measures like return on assets (ROA) and return on equity (ROE) considered inadequate for evaluating business lines in banking?They do not consider shareholder value analysisThey ignore the associated book value of assetsThey do not account for risksThey focus solely on expected lossesQuestion 21 of 25 22. How do NPAs impact a bank's profitability?They lead to a decrease in income and a decrease in capital requirements.They increase income and reduce capital requirements.They decrease income and increase capital requirements.They have no impact on profitability.Question 22 of 25 23. Which of the following is NOT a traditional fee-based activity for banks?RemittancesSafe custodyInternet bankingLetters of creditQuestion 23 of 25 24. What is the primary source of treasury income for banks?Trading in commoditiesTrading in equitiesTrading in foreign exchangeTrading in derivativesQuestion 24 of 25 25. How do banks aim to improve profitability by managing deposit costs?By increasing interest rates on savings depositsBy focusing on deposit mobilization under the CASA headBy reducing interest rates on term depositsBy offering high-interest rates on current depositsQuestion 25 of 25 Loading...
