SOLVED CAIIB COMBINED PAPER 41:
1. A coupon Swap is defined as ......
(i) interest rate swap, where underlying benchmark interest rates are exchanged,
(ii) Interest rate swap, where fixed rate is exchanged with floating rate
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - c
2. Find the odd man out :
a. Futures
b. Value at Risk (VAR)
c. Options
d. Swaps
Ans - b
3. ALM system is built on three pillars, which are among them?
(i) Capital adequacy,
(ii) Information system,
(iii) Organization
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - c
4. Treasury in the normal course will manage ......
a. All funds raised through deposits
b. ALM book, Merchant book and Trading book
c. Liquidity
d. All deployment of funds through advances
Ans - b
5. ........... settlement takes place on the third day (two working days from trade days).
a. swap
b. forward
c. spot
d. repo
Ans - a
6. What are the two reserve requirements that treasury has to comply with?
a. PLR and SLR
b. CRR and SLR
c. Repo and CRR
d. VaR and CRR
Ans - b
7. The treasury is segregated into three main divisions. Of the three divisions, the front office is also known as ......
a. Dealing room
b. Treasury administration
c. Risk management
d. none of these
Ans - a
8. Buying or selling an asset only for the purpose of making profit from movement of the asset price over a period of time is known as ......
a. leveraging
b. speculation
c. arbitrage
d. deployment
Ans - b
9. For currency market to be more liquid, the buy-sell spread should be ......
a. narrower
b. wider
c. equal
d. none of these
Ans - a
10. Building up large volumes of business on relatively small capital is known as ......
a. derivative
b. arbitrage
c. swapping
d. leveraging
Ans - d
11. Change in interest rates will not affect ......
(i) Net interest income,
(ii) Other income,
(iii) Staff expenses
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - c
12. Currency futures are forward contracts ......
(i) With standard size,
(ii) With standard maturity date,
(iii) Traded on the exchange
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - d
(i) interest rate swap, where underlying benchmark interest rates are exchanged,
(ii) Interest rate swap, where fixed rate is exchanged with floating rate
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - c
2. Find the odd man out :
a. Futures
b. Value at Risk (VAR)
c. Options
d. Swaps
Ans - b
3. ALM system is built on three pillars, which are among them?
(i) Capital adequacy,
(ii) Information system,
(iii) Organization
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - c
4. Treasury in the normal course will manage ......
a. All funds raised through deposits
b. ALM book, Merchant book and Trading book
c. Liquidity
d. All deployment of funds through advances
Ans - b
5. ........... settlement takes place on the third day (two working days from trade days).
a. swap
b. forward
c. spot
d. repo
Ans - a
6. What are the two reserve requirements that treasury has to comply with?
a. PLR and SLR
b. CRR and SLR
c. Repo and CRR
d. VaR and CRR
Ans - b
7. The treasury is segregated into three main divisions. Of the three divisions, the front office is also known as ......
a. Dealing room
b. Treasury administration
c. Risk management
d. none of these
Ans - a
8. Buying or selling an asset only for the purpose of making profit from movement of the asset price over a period of time is known as ......
a. leveraging
b. speculation
c. arbitrage
d. deployment
Ans - b
9. For currency market to be more liquid, the buy-sell spread should be ......
a. narrower
b. wider
c. equal
d. none of these
Ans - a
10. Building up large volumes of business on relatively small capital is known as ......
a. derivative
b. arbitrage
c. swapping
d. leveraging
Ans - d
11. Change in interest rates will not affect ......
(i) Net interest income,
(ii) Other income,
(iii) Staff expenses
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - c
12. Currency futures are forward contracts ......
(i) With standard size,
(ii) With standard maturity date,
(iii) Traded on the exchange
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - d