1. We have different option to invest the money, similarly we may deposit to earn the interest such Interest rate exist owing to -----. A. Opportunity cost B. Fixed cost C. Variable cost D. Semi- variable cost Opportunity cost.
2. If the bond price is less than its face value, what will be the relationship among current yield, coupon rate and YTM? A. Current yield < coupon rate < Yield to Maturity B. Yield to maturity > current yield >coupon rate C. Coupon Rate > Current Yield > Yield to Maturity D. Coupon Rate = Current Yield = Yield to Maturity Ref If current price = face value, then yield to maturity = current yield = coupon rate. If current price < face value, then yield to maturity > current yield > coupon rate. If current price > face value, then yield to maturity < current yield < coupon rate.
3. Arbitrageurs in the stock markets and in foreign exchange markets are classified under A. Risk neutral B. Risk averse C. Risk lover D. Value at risk Risk averse.
4. If probability of occurrence is exactly zero then which of the following statement is true? A. Event will occur B. Event will not occur C. Event must occur D. All of the given options Event will not occur.
5. When the bond demand curve shift the leftward what will happen? A. Bond demand increases B. Bond demand decreases C. Bond demand constant D. All of above Bond demand decreases A shift in the demand curve to the left or right represents a change in consumer preferences. A shift to the right indicates that an item has become more commercially desirable and that a larger number will be sold at a given price. A shift to the left is just the opposite, indicating that a marketplace good is less desirable and that fewer items will be sold at a given price.
6. You deposit money into your bank account, which of the following entry Bank will pass in its books of account? A. Debit cash account B. Debt your account C. Reverse the entry D. Debit assets account Debit cash account.
7. Yield to Maturity (YTM) is combination of -----------. A. Current Yield and market price B. Current Yield and Capital gain C. Current Yield and Capital D. Current Yield and capital investment Current Yield and Capital gain.
8. Core principles of Money and Banking include each of the following except? A. People act rationally B. Time has value C. Information is the basis for decisions D. Risk requires compensation People act rationally.
9. Bonds without maturity dates are which of the followings? A. Zero coupon bonds B. Coupon securities C. Consols D. Preferred Bonds Consols.
10. Which of the following represents the fisher’s equation? A. Nominal interest rate = real interest rate + inflation B. Nominal interest rate + inflation = real interest rate C. Nominal interest rate = real interest rate - inflation D. Nominal interest rate = real interest rate / inflation Nominal interest rate = real interest rate + inflation.
Which of the following is not true about bank? Banks are non-profitable organisation
Which of the following is included in bank’s liabilities?
By holding sufficient excess reverse a bank can manage liquidity risk.
Which of the following practice is NOT used to manage foreign exchange risk?
Return on Assets indicates:
6. Difference between the yield that a bank receives on its lending and the cost it bears on its borrowing is known as: Bank Capital Net worth
Inflation creates which kind of risk specifically? Systematic risk
Customers' accounts are included in which of the following category in a bank’s balance sheet.
There are two types of life insurance
Projected change in interest rate is 2% and gap between interest rate sensitive assets and interest rate sensitive liabilities is Rs. -5600 (minus five thousand six hundred rupees). What will be the change in bank’s profit, after change in interest rate? It will: True/Fales
Successful Central bank True
Which of the following is included in the government-sponsored enterprise? True
Profitability of one bank may vary from the profitability of other banks due to following factor/s: True/Fales
14. Suppose that machinery used by Bank-Twenty for sorting and clearing checks breaks down. This is a manifestation of: Operational risk True
15. Which of the following are the primary uses of funds of Finance Company? True
Which of the following practice is NOT used to manage foreign exchange risk?True
Which of the following is include in bank’s liabilities False
The idea that central banks should be independent of political pressure is a new True