SOLVED CAIIB COMBINED PAPER 39:
1. What is the important operational feature of integrated treasury ?
a. Having a common dealing room
b. Having a common Mid/back offices
c. Looking for interest arbitrage across currency markets and be in a position to shift swiftly, a placement in Rupee denominated commercial paper to lending in USD in global inter-bank market and also being to source funds in global markets and swap the funds into domestic currency or vice versa. depending on market opportunities
d. All the above
Ans - d
2. The treasury is segregated into three main divisions. Of the three divisions, the mid office is also known as ......
a. Dealing room
b. Treasury administration
c. Risk management
d. none of these
Ans - c
3. Forward exchange rates are arrived at on the basis of interest rate differentials of two currencies, ...... from spot exchange rate.
a. added
b. deducted
c. either of the two
d. none of these
Ans - c
4. Buying and selling is performed under ......
a. Dealing room
b. Treasury administration
c. Risk management
c. Risk management
Ans - a
5. Liquidity risk is reflected as ......
(i) Maturity mismatch,
(ii) cash inflow and outflow,
(iii) NPAs, total assets and performing loans
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - a
6. In a rising interest rate scenario, which of them following are least preferred?
(i) Deposits with fixed rates and advances with fixed rates,
(ii) Advances with floating rate of interest and Deposits with fixed rate of interest,
(iii) Deposits with floating rates and advances with fixed rates
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - b
7. Derivatives can be used to hedge aggregate risks as reflected in the asset-liability mismatches. In this case a dynamic management of hedge is necessary not because ......
(i) The risks are dynamic,
(ii) The composition of assets and liabilities is always changing,
(iii) A close monitoring of hedge is an RBI requirement
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - b
8. The participants in the derivatives market generally exchange the following agreement ......
a. IFEMA
b. ICON
c. ISDA
d. A stamped agreement devised by respective banks
Ans - c
9. Integrated Treasury in Banking set up refers to ......
a. Computerization of all bank branches
b. Computerization of all treasury operations
c. Centralization of all back office operations of forex branches
d. Integration of money market, securities market and foreign exchange operations
Ans - d
10. The treasury is segregated into three main divisions. Of the three divisions, the back office is also known as ......
a. Dealing room
b. Treasury administration
c. Risk management
d. none of these
Ans - b
11. Short term funds flow have maturity ......
a. more than 6 months but less than 1 year
b. less than 1 year
c. more than 1 year but less than 2 years
d. none of these
Ans - b
12. The salient feature of convertible bond is ......
a. Conversion of physical bonds into demat form
b. Option to convert the bond in to equity on a fixed date or during a fixed period and the price is pre-determined
c. Automatic reinvestment in another bond on maturity
d. Absence of coupon
Ans - b
a. Having a common dealing room
b. Having a common Mid/back offices
c. Looking for interest arbitrage across currency markets and be in a position to shift swiftly, a placement in Rupee denominated commercial paper to lending in USD in global inter-bank market and also being to source funds in global markets and swap the funds into domestic currency or vice versa. depending on market opportunities
d. All the above
Ans - d
2. The treasury is segregated into three main divisions. Of the three divisions, the mid office is also known as ......
a. Dealing room
b. Treasury administration
c. Risk management
d. none of these
Ans - c
3. Forward exchange rates are arrived at on the basis of interest rate differentials of two currencies, ...... from spot exchange rate.
a. added
b. deducted
c. either of the two
d. none of these
Ans - c
4. Buying and selling is performed under ......
a. Dealing room
b. Treasury administration
c. Risk management
c. Risk management
Ans - a
5. Liquidity risk is reflected as ......
(i) Maturity mismatch,
(ii) cash inflow and outflow,
(iii) NPAs, total assets and performing loans
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - a
6. In a rising interest rate scenario, which of them following are least preferred?
(i) Deposits with fixed rates and advances with fixed rates,
(ii) Advances with floating rate of interest and Deposits with fixed rate of interest,
(iii) Deposits with floating rates and advances with fixed rates
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - b
7. Derivatives can be used to hedge aggregate risks as reflected in the asset-liability mismatches. In this case a dynamic management of hedge is necessary not because ......
(i) The risks are dynamic,
(ii) The composition of assets and liabilities is always changing,
(iii) A close monitoring of hedge is an RBI requirement
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - b
8. The participants in the derivatives market generally exchange the following agreement ......
a. IFEMA
b. ICON
c. ISDA
d. A stamped agreement devised by respective banks
Ans - c
9. Integrated Treasury in Banking set up refers to ......
a. Computerization of all bank branches
b. Computerization of all treasury operations
c. Centralization of all back office operations of forex branches
d. Integration of money market, securities market and foreign exchange operations
Ans - d
10. The treasury is segregated into three main divisions. Of the three divisions, the back office is also known as ......
a. Dealing room
b. Treasury administration
c. Risk management
d. none of these
Ans - b
11. Short term funds flow have maturity ......
a. more than 6 months but less than 1 year
b. less than 1 year
c. more than 1 year but less than 2 years
d. none of these
Ans - b
12. The salient feature of convertible bond is ......
a. Conversion of physical bonds into demat form
b. Option to convert the bond in to equity on a fixed date or during a fixed period and the price is pre-determined
c. Automatic reinvestment in another bond on maturity
d. Absence of coupon
Ans - b