BFM-C treasury management by Neeraj Agnihotri ( ICFAI)
1. RBI pays interest on the cash balances in excess of which of the
following to bank, of their NDTL? a) 2% b) 3% c) 5% d) 6% ans: b 2. while the exposure limits are generally left to the banks discretion. RBI has imposed which ceiling of total business in a year with individual brokers. a) 2% b) 5% c) 10% d) 15% ans : b 3. Ability of a business concern to borrow or build up assets on the basis of a given capital is called. a) debt service coverage ratio b) good will c) reputation d) Leverage ans: D 4. Protection of risk in a transaction usually through derevatives product is called. a) insurance b) swap c) hedge d) arbitrage ans: c 5. For the organization point of view treasury is considered to be a) Investment centre b) Fund management department c) service centre d) commercial bank e) Non of these ans: c 6. A treasury transaction with a customer is known as.. a) Marchant banking business b) Trading business c) investment business d) commercial banking e) Retail banking Ans: a 7. Which act relating to foreign exchange has replace earlier one? a) Foreign Exchange Management Act b) Foreign Exchange Regulation Act c) Both the above d) none of these ans :a 8. RBI has permitted banks to borrow and invest through their overseas correspondents in foreign currency subject to which of the following ceilings. a 25% of there Tier-I Capital b 25% of there Tier-I Capital or USD 10 million c 25% of there Tier-I Capital or USD 10 million whichever Is higher. d 25% of there Tier-I Capital or USD 10 million whichever Is lower ans-: c 9. The treasury is run by a few specialist staff engaged in high value transaction per trn size generally not being below: a Rs 10 million b Rs 20 c Rs 50 d None of these Ans : c 10 Treasury has open position which is also known as a Trading position b Open position c Proprietary position d) a & C both e) a ans : d 11. Security dealars deals with of the following market. A primary mkt B secondary mkt C Open mkt D OTC E all of these Ans: b 12. What is the minimum marketable investment in treasury. A Rs 5 crore B Rs 10 C Rs 20 D Rs 50 E non of these Ans ; A 13. which of the following is not a free currency in the foreign exchange market ? A USD B Rupee C EUR D All of these Ans : b 14. which of following statement is not correct relating to TOD and TOM A Rates are generally quoted at discount to the spot rate B Rates are less favorable to the buyer of the currency C Rates are generally quated at a premium to the spot rate D Non of these Ans : c 15 The interest rate differential is added to the spote rate of A Low interest yielding currency B high interest yielding currency C Both D non of these Ans A 16. Buying of USD (with Rupees) in the market and selling same in forward market or vice versa is called A spot trn B Forward tsn C swap tsn D convertible tsn Ans: c 17 Call money refers to placement of fund.. A same day B overnight C next day D Two days E Non of these Ans: b 18. Notice money refers to placement of funds for period not exceeding A over night B two days C 7 days D 10 days E 14 days
Ans : e 19. Term money refers to placement of funds for period not exceeding A 01 yr B 02 yr C 03 yr D 05 yr Ans ;A 20. Treasury Bills are issued by whom A RBI B State PSUs C GOI D IMF E IRDA Ans :C 21 treasury bill is issued for 91 days to 364 days by GOI 91 days t bill is auction on weekly basis for amount Rs.crore. A 100 B 200 C 500 D 1000 Ans : c read qtn carefully total three qtns aare there.. 22. 364 t bill is auction on fourthnightly basis for amt of RS .crore by GOI A 500 B 1000 C 1500 D 2000 Ans : c 23. A commercial paper carried credit risk , issued for period of 14 days to 01 yr for minimum amt of 05 lakh and face value of Rs 100 only by.and it should be in D mat form. ( Read QTN care fully) A RBI B corporate C commercial bank D central govt Ans : b 24. ECB( external commercial borrowings) indian companies can borrow ................without approval of RBI a. usd 500 mn up to minimum period of 5 yrs b. usd 20 mn upto minimum period of 3 yrs c. both a and b are correct d. without RBI approval they cannot borrow at all ans C .page no 333 bfm 25individuals are now permitted to remit overseas freely without rbi approval upto a. 100000 usd/year b. 200000 usd/yr c. 300000 usd/yr d. not possible without rbi approval ans : b page 334 b pe
26. certificate of deposit is a negotiable debt instrument has maturity period of 07 to 1 yr and minimum amt is Rs 01 lakh basically issued by. A RBI B Banks C Treasury D Corporate E None Ans : b 27 the difference between buying and selling rate is called a) spread b) profit c) a only d) a& b Ans:d 28 placement of funds for overnight is called a) notice money b) call money c) term money d) all the above Ans : b 29. Treasury discount bills of exchange, of short term nature with a tenure of A 1 to 3 month B 3 to 6 m C 6 to 9 m D 9 to 12 m Ans : b
30. govt security are issued by.. A central finance ministry B ministry of commerce C central govt D RBI Ans : d 31. The basis point value is associated with A risk pricing B risk measurement C risk mitigation D risk control Ans: b 32. Deventures are governed by A Law of contract B Company Law C Negotiable instrument D non of these Ans: b 33. all exposure limit are reviewed . A once in a qtr B once in half yr C once in a yr D no limit Ans: c
34 interest cost of funds locked in a trading position is called
A swap B pre-settlement C carry D speculation E options Ans:c
35. A situation where the depoiter of abank lose confidence in the bank and withdraw therir balances immediately, is called A liquidation of the bank B falilue of bank C run on the bank D out of the money Ans: c
36. The capacity of abank oa business organization to absorb losses on account of market risk. A risk absorption capacity B risk aversion capacity C risk taking capacity D risk appetite