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CAIIB-BFM-RECOLLECTED QUESTIONS FROM JUNE 2019


Friends, Updating here the recollected questions from June 2019 Exams. Wish you all the very best for your exam.

..................................................................................................

Data pertaining to a bank Based on the date answer following

Net Worth = 1500.00
RSA = 22500.00 Cr RSL = 21000.00 Cr
DA = 1.80 DL = 1.10
Tier - I and Tier - II = 3500 Cr.

01. What is Weight (W) ?

a.0.77
b.0.93
c.1.07
d.0.16

Solution:
Calculate weight (W) = RSL/RSA
=21000/22500
= 0.93
.............................................

02. What is DGAP ?

a.0.77
b.0.62
c.0.73
d.None of the above

Solution
DGAP ( modified duration gap) = DA- W* DL
= 1.80-0.93*1.1
= 1.80-1.023
= 0.77
.............................................

03. What is Leverage Ratio?

a. 15.00
b. 14.33
c. 6.43
d. 6.14

Solution
Leverage ratio= RSA/ TIER1+TIER2
=22500/3500
=6.43
.............................................

04. What is Modified Duration of Equity?

a.4.95
b.3.99
c.3.68
d.9.56

Solution:
Modified duration of equity (MD)= DGAP* leverage ratio
= 0.77* 6.43
= 4.95 years
.............................................

05. If there is 200 bp change in Rate what is drop in Equity Value?

a.16.90%
b.9.90%
c.6.43%
d.4%

Solution
Equity value=Change in rate (BP)*MD
=200*4.95/100
=9.90%

.................................................


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