CTP-4

Cancellation and re-booking of forward contracts is permitted. a. For exposures for any period for exporters and for exposures up to one year for others. b. Only for exporters. c. Only for importers. d. When cancelled within six months of booking the contract.

What is Open Position?. a. Any residual position of a bank at the end of the day-Overbought. b. Any residual position of a bank at the end of the day-Oversold. c. None of the above. d. A and B both.

The difference between buying and selling rate is called ...... a. Spread. b. Profit. c. Either “a” or “b”. d. “a” and “b” both.

Premature closing of a deposit will result in interest rate risk of type ...... risk. a. Basis. b. Yield curve. c. Embedded Option. d. Mismatch.

As per RBI guidelines on placement of Assets and Liabilities in to various buckets for understanding and managing Interest rate risks. Capital, Reserves and Surplus are to be treated as ...... a. Non interest rate sensitive. b. Interest Rate Sensitive. c. Depends on the source of the capital. d. Only 50% should be treated as not sensitive to interest rates.

Forward contracts without production of documentary evidence and on the declaration of the customer can booked ...... a. Only for exporters. b. Upto 50% of the limits worked on previous performance basis. c. Up to 100% of the limits worked on previous performance basis. d. Without any limit.

Borrowing from Reserve Bank of India are placed in bucket ...... a. Upto one month. b. 6 months or 1 year. c. 1 month to 3 months. d. none of these.

Given interest rate of currency A is more than that of B and interest rate of currency B is more than that of C. Which of the following is true?. a. Forward rate of currency ‘A’ would be at premium to that of C. b. Forward rate of currency ‘A’ would be at discount to that of B. c. Forward rate of currency ‘C’ would be at discount to that of B. d. Forward rate of currency ‘B’ would be at premium to that of A.

The features of a Derivative are ...... (i) It does not have independent value, (ii) The value of a Derivative is derived from an underlying market, (iii) Derivatives are used in both the financial and commodity markets. a. Only (i) and (ii). b. Only (i) and (iii). c. Only (ii) and (iii). d. (i), (ii) and (iii).

Which of the following is not a characteristics of forward contracts?. a. Forward contracts are zero risk contracts. b. Forward contracts are OTC contracts. c. Forward contract have opportunity costs associated with it. d. Forward contracts eliminates currency risk.

Which of the following statements is correct? (i) Under the Quanta swaps, payment of interest in home currency at rates applicable to foreign currency are allowed, (ii) In the coupon swaps floating rates in one currency are exchanged to fixed rate of another currency, (iii) Swaptions are swaps which collapse at a knock out level of market rates and swaps with built in options. a. Only (i) and (ii). b. Only (i) and (iii). c. Only (ii) and (iii). d. (i), (ii) and (iii).

Derivatives can be used by an exporter for managing ...... a. Currency Risk. b. Cargo Risk. c. Credit Risk. d. All of the above.

Treasury deals are normally done over phone or over a dealing screen. The deal terms are confirmed in writing by ...... a. Front office. b. back office. c. middle office. d. any of these.

What is IRS (Interest Rate Swaps)? (i) It is an OTC instrument generally issued by a Bank, (ii) This facilitates conversion-of floating rate into fixed and vice-versa, (iii) IRS is also used in Treasury operations to fill the Asset-Liability mismatch. a. Only (i) and (ii). b. Only (i) and (iii). c. Only (ii) and (iii). d. (i), (ii) and (iii).

Which of the following is/are correct regarding open position in forex? (i) Position limits are prescribed currency wise as also for aggregate position in Rupees, (ii) There are separate limits for 'day light' and 'over night'. a. Only (i). b. Only (ii). c. Either (i) or (ii). d. Both (i) and (ii).

Treasury bonds and notes pays interest rate is classified as. a. LIBOR rate monthly. b. coupon interest monthly. c. coupon interest semiannually. d. coupon interest annually.

Intrinsic value of a call option on forex forward is ...... The option premium. b. The difference between strike price and spot price. c. The difference between strike price and current forward rate. d. The difference between spot price and current forward rate.

Which of the following is not the primary source of income for bank treasury?. a. Buying and selling of foreign exchange. b. Interest on loans and advances. c. Interest on money market lending. d. All of the above.

The term RISK in business refers to ...... a. Chance of losing Business. b. Chance of making Losses. c. Uncertainty associated with expected event leading to loss or gain. d. Threat from competitors.

Derivatives are so called because ...... a. They are subsidiary products in the market. b. They are derived from combination of different assets. c. Their value is dependent on the value of some other fundamental variable. d. They are traded on derivative exchanges.

The following is not a feature of a derivative instrument ...... a. It is a financial instrument. b. Its use always leads to profit. c. It is executable on a future date. d. Its pay-off is dependent on the value of any other basic variable.

Which of them are important divisions of Treasuries? (i) Front Office, (ii) Middle Office, (iii) Rear office. a. Only (i) and (ii). b. Only (i) and (iii). c. Only (ii) and (iii). d. (i), (ii) and (iii).

...... do not maintain the overall risk of Treasury portfolio and monitors the liquidity and interest rate risks. (i) Front Office, (ii) Middle Office, (iii) Back office. a. Only (i) and (ii). b. Only (i) and (iii). c. Only (ii) and (iii). d. (i), (ii) and (iii).

The securities contracted basically on account of long term investment relationships or for steady income and statutory obligations are classified under...... (i) Held-To-Maturity, (ii) Held for Trading. a. Only (i). b. Only (ii). c. Either (i) or (ii). d. Both (i) and (ii.

The investments on the securities made to earn profits from the short-term price movements are classified under ...... (i) Held-To-Maturity, (ii) Held for Trading. a. Only (i). b. Only (ii). c. Either (i) or (ii). d. Both (i) and (ii.

Held for Trading Securities are normally sold in ...... days. 30. . 60. 90. 120.

Which of the followings is correct? (i) LIBOR is a rate charged by US federal Reserve for lending to banks, (ii) MIBOR is announced by NSE, (iii) MIFOR is announced by Reuters. a. Only (i) and (ii). b. Only (i) and (iii). c. Only (ii) and (iii). d. (i), (ii) and (iii).

What is significant about MIBOR? (i) It is one day money market rate in the Inter-Bank market being announced by NSE daily ate 9.50 a.m., (ii) NSE Pool the rate from various participating Banks and averages out after extreme top and bottom rates, (iii) It is a base rate for short term and medium term lending also. a. Only (i) and (ii). b. Only (i) and (iii). c. Only (ii) and (iii). d. (i), (ii) and (iii).

In which of the following currencies futures are traded in terms of US Dollar? (i) Euro, (ii) GBP and Japanese Yen, (iii) An Australian and Canadian Dollar. a. Only (i) and (ii). b. Only (i) and (iii). c. Only (ii) and (iii). d. (i), (ii) and (iii).

In case of banks, leverage is expressed by ...... a. Return on Assets. b. Net NPA ratio. Capital adequacy ratio. d. Capital to outside liabilities.

The investment policy should contain ....... (i) Permissible investments, (ii) SLR and non SLR investments, (iii) Private placement. a. Only (i) and (ii). b. Only (i) and (iii). c. Only (ii) and (iii). d. (i), (ii) and (iii).

Which of the following are essential requirements for formulation of policy guidelines? (i) It should be approved by the Board, (ii) It should comply with the guidelines of RBI and SEBI, (iii) It should follow current market practices. a. Only (i) and (ii). b. Only (i) and (iii). c. Only (ii) and (iii). d. (i), (ii) and (iii).

Suppose there is a contract of GBP 25000 traded at the Exchange for delivery on 30th June at 1.8650 as against spot exchange rate of 1.80. What does this contract imply? (i) The contract implies that seller would deliver to the holder of contract, GBP 25000 against payment of equivalent USD at 1.8650, (ii) On the settlement date, if market rate of GBP is more than 1.8650, the seller will pay to the holder the difference in contracted price and spot price, (iii) If the market price is less than the contracted price, the Buyer of the contract will bear the loss. a. Only (i) and (ii). b. Only (i) and (iii). c. Only (ii) and (iii). d. (i), (ii) and (iii).

What is a floating to floating rate swap? (i) It involves change of benchmark rate, (ii) If a corporate has opted for T-Bill linked rate and later prefers to have MIBOR, it can enter a swap and receive T-Bill rate and pay MIBOR linked equivalent rate. a. Only (i). b. Only (ii). c. Either (i) or (ii). d. Both (i) and (ii.

Delivery versus payment means one account is debited and another is credited ...... a. on the same day. b. by next day. c. at the same time. d. none of these.

In Treasury Operations, the term 'carry' means ...... a. Interest cost of funds locked in a trading position. b. Carrying forward the contract to next trading period. c. Carrying forward the settlement to next day. d. none of these.

Banks engage in maturity intermediation. This implies ...... a. Accepting deposits of various maturities. b. Extending credit of varying maturity. c. Creating assets of various maturities which is independent of maturities of individual liabilities. d. None of these.

A swap can be interpreted as a strip of ...... a. Fixed rate agreements only. b. Future contracts only. c. Fixed rate agreements or future contracts. d. None of the above.

"Marked to Market" means valuation of trading positions applying ...... a. Purchase price. b. current market value. c. current market value or purchase price whichever is lower. d. None of these.

What is ISDA master agreement? (i) Is a standardized agreement formulated by international swap and derivatives association, (ii) The agreement has been approved by FEDAI, (iii) Master agreement coves all the transactions between two counterparties globall. a. Only (i) and (ii). b. Only (i) and (iii). c. Only (ii) and (iii). d. (i), (ii) and (iii).

A loan became Doubtful on 12.2.2009. The outstanding is 6.00 lac. What will be provision on 31.3.2012. 6 lacs. 5 lacs. 2 lacks. 1 lacs.

D2 Category loan is having outstanding 4.00 lac, Value of Security 1.50 lac and ECGC cover 50%. Calculate provision as on 31.3.2012. 1.90 lacs. 2.10 lacs. 1.85 lacs. 1.50 lacs.

A D2 category loan is having outstanding Rs. 6.00 lac. The Collateral Security is Rs. 3.00 lac and Primary Security is Rs. 2.00 lac. There is also Guarantee of Rs. 10.00 lac. Calculate provision. 5 lacs. 4 lacs. 3 lacs. 2 lacs.

Advance portfolio of a bank is as under: Total advances = 40000 crore, Gross NPAs = 9%, Net NPAs = 2% Find out 1) Total Provision 2) Provisioning Coverage Ratio. 800 Crores, 77%. 900 Crores, 85%. 1000 crores, 95%. 750 crores, 68%.

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.

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.

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.

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.

8. Suppose a Bank prices the 3 month deposit at 91 day T-Bill + 1% and swap rate of the loan yield T-Bill+3%. What is the impact?. a) Fixed interest of the loan is swapped into floating rate. b) Bank has a spread of 2%. c) The Risk is protected during the period of loan. d) All of these.

30. Which of the following statements is correct regarding transfer pricing under Treasury operations?. a) If Bank procures deposit at 7% but the Treasury buys at a lower cost, the difference being the cost would be borne by the Bank. b) If the Bank lends at higher rate and sells the loan to Treasury at lower rate, the Balance being risk premium would be the income for the Bank. c) (a) and (b) both. d) None of these.

who is the regulator fo rthe mutul fund industry. AMFI. SEBI. RBI. IRDA.

which of the following activities do financial markets facilitates. Trading securities. Accounting. Liquidity Management. Cash payments.

which of the following are Non treasury Asset. Commercial papaer. Certificate of deposits. Loans and advacnes. Fixed deposits.

Role of the front office. settlement. Clearing. Trading. Accounitng.