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CAIIB-BFM-RECOLLECTED QUESTIONS FROM DEC 2017


Friends, Updating here the recollected questions from Dec 2017 Exams. Wish you all the very best for your exam.

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Which is not a derivative product ? - Repo (Swap, Option, Forward, Repo)
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ECB limit - USD 500 mn up to minimum period of 5 years and USD 20 mn up to minimum period of 3 years without prior approval of RBI
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STRIPS (Separate Trading of Registered Interest and Principal Securities) is a ...... zero-coupon securities
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Value at risk is a measure of? Gap risks in foreign exchange operations
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Which office not under treasury ? Options given are Mid office, back office, front office, legal office*
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Under standard assets, provision for loss, RSV should be?? Ans - less than 10%
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If interest of principle is not serviced for 90 days, what is the position of account? Ans - out of order
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Credit conversion factor - The credit conversion factor (CCF) converts the amount of a free credit line and other off-balance-sheet transactions (with the exception of derivatives) to an EAD (exposure at default) amount. This function is used to calculate the exposure at default.
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Coupon swap - A zero coupon swap is an exchange of income streams in which the stream of floating interest-rate payments is made periodically, as it would be in a plain vanilla swap, but the stream of fixed-rate payments is made as one lump-sum payment when the swap reaches maturity instead of periodically over the life of the swap.
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Word Mine in dealing room - Dealer takes the spot/forward/deposit whichever has been quoted from the counter party. It is dangerous to use the expression unless amounts have been qualified first. - Intrinsic Risk
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Abbreviation of EMV chip - Europay, MasterCard and Visa
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Gone concern - Defunct firm or one in the process of being wound up. Debts of such firms become due immediately in full, their market value is determined on the basis of auction or liquidation value of their tangible assets, and their goodwill counts for nothing.
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Provision coverage ratio = Cumulative provisions / Gross NPAs
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Intrinsic risk - Risk does not mean volatility; risk means losing your money. That happens when a business fails to deliver the operating performance embodied in the price an investor paid to acquire it.
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Call risk - Call risk is the risk that a bond issuer will redeem its bonds before they mature.
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Certificate of deposit - A certificate of deposit (CD) is a savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks.
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MSF - Marginal Standing Facility (MSF) rate refers to the rate at which the scheduled banks can borrow funds overnight from RBI against government securities. MSF is a very short term borrowing scheme for scheduled commercial banks.
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European option - A European option is an option that can only be exercised at the end of its life, at its maturity. European options tend to sometimes trade at a discount to its comparable American option. This is because American options allow investors more opportunities to exercise the contract.
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Full form of DAP - Delivered at Place
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Full form of CRILC - Central Repository of Information on Large Credits
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In market risk,risk measurement is done on the basis of sensitivity and ...................Ans - downside potential.
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Apart from stress testing and scenario analysis which test is done? Ans - Back testing.
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How many principles are there in Operation risk measurement. Ans - 10
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Among interest rate risk management techniques one is static simulation and other is...............simulation. Ans - Dynamic
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ECB is denominated in which currencies.....USD, Euro or JPY
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Consessive rate of interest on postshipment rupee export credit to gold card status holder can be extended maximum - 365 days
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One importer want import one machine from China.He has to open lc. The exporter wants advance payment. What type lc - Red clause
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Yield - The income return on an investment. This refers to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment's cost, its current market value or its face value.
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BPV - BPV is a method that is used to measure interest rate risk. It is sometimes referred to as a delta or DV01. It is often used to measure the interest rate risk associated with swap trading books, bond trading portfolios and money market books.
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What option is available to issuer in CP?
Issuer of CP can issue/hold CP in dematerialised or physical form
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FIMMDA/FEDAI/IBA formed MIBOR committee...name this company
Board of Financial Benchmarks India Pvt. Ltd (FBIL)
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ALCO committee meeting in ____ time period
Individual banks will have to decide the frequency for holding their ALCO meetings
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No of principles under SRP. Ans - 4
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No. imp areas in mkt disciplines. Ans - 13
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T-bill min investment. Ans - Rs. 25000
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NIM and EER Formula....
NIM = NII - NIE
EER = Equity / Total assets
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Dirty Bond is a bond with interest of broken period. One that is traded on a day between two successive coupon payment dates.
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Dirty price = clean price + accrued interest
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T-bill min investment. Ans - Rs. 25000
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Under LRS amt dat can be remitted per FY. Ans - USD 250,000
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NIM and EER Formula....
Net Interest Margin is the ratio of net interest income to average interest-earning assets = NIM = NII - NIE
EER = Equity / Total assets
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F.I can issue CDs for a period of? Ans - 1 to 3 years
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3 types of Forex exposures. Ans - Transaction, Translation and Economic Exposure
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25 day volatility of a stock is 3.75. Find daily volatility?
volatility stocks = root of no. of days * daily volatility
0.75
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C.D are issued in the form of? Ans - Usance Promissory Note
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Article 10 of UCP 600? Ans - Ammendment acceptance
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RWA of housing loan
Housing Loans - 50%
Housing Loans > Rs. 30 Lakhs - 75%
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Provision of sub - standard category (secured)? Ans - 15%
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Advanced measurement approach under operational risk, risk mitigation upto ..........%? Ans - 20%
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Minimum credit rating by sebi?
The minimum credit rating shall be 'A3' as per rating symbol and definition prescribed by SEBI.
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Full Form of PONV. Ans - point of non-viability
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Interbank Rate
The rate of interest charged on short-term loans made between banks. Banks borrow and lend money in the interbank market in order to manage liquidity and meet the requirements placed on them.

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