Banking Quiz

1. A Bank may prefer to invest in corporate Bonds because? 

A.Bond is more liquid Asset 

B.Bond has an easy exit 

C.Bond can be sold at discount 

D.All of the above

2. Which of the following is not credit substitute? 

A.Commercial Paper

B.Mortgage Loan

C.Corporate Bond   

D.Certificate of Deposit 

3. The difference between a Bond and Loan is? 

A.The loan has normally fixed rate of interest. Bond price is dependent on market interest rate movements 

B Bonds are more liquid 

C.Yield to maturity value can be known easily in a bond 

D.All of the above

4. What is securitization? 

A. A process which converts conventional credit into tradable Treasure Assets 

B. Credit receivable of the Bank can be converted into Bonds i.e., pass through certificates 

C. These certificates can be traded in the market 

D. All of the above

5. The advantages of securitization for a Bank is? 

A.It provides liquidity to the issuing Bank 

B.The Bank capital does not get blocked 

C.Securitisation proceeds can be used for fresh lending

D.All of the above

6. Which of the following is true? 

A.Surplus funds with banks can be invested in pass through certificates

B.This will be indirect expansion of credit portfolio

C.both A and B

D.None of the above 

7. The process of credit Derivative involves?

A.The Protection Seller guarantees payment of principal and interest or both of the Asset owned by the Protection Buyer in case of credit default 

B.The Protection Buyer pays a premium to the Protection Seller 

C.Both A and B

D.None of the above

8. Which one of the following statements is incorrect? 

A.Advances against gold ornaments are exempt from NPA norms

B.Classification of NPA should be done borrower wise and not facility wise 

C.An NPA need not go through the various stages of classification 

D.The existence of security should be ignored if the value is less than 10 per cent of the outstanding in the borrowal account

9. Which one of the following statements is ‘false’?

A.The provision on standard assets can be included as Tier-II Capital 

B.Statutory reserves kept by foreign banks in India are eligible for inclusion under Tier-I Capital 

C.Nationalised banks can raise 51 per cent of their capital funds from the public

D.For foreign banks in India, foreign currency loans granted to India parties are not eligible for inclusion in capital funds 

10.Specially Developed Economic Zones (SEZs) in India where some of the economic laws and restrictions of the land are relaxed with the purpose of giving incentives to investors are commonly known as? 

A.Preferential Zones 

B.Economic Corridors 

C.Industrial Parks

D.Special Economic Zones