Risk Management

IIBM – Risk Management

Do you think the finance manager needs to be concerned about the low depreciation provision? Why?

Multiple Choices:

Q1. It represents the owner’s stake in the bank & it serves as a cushion for depositors & creditors to fall back in case of losses.

Capital
Reserve & Surplus
Deposits
Borrowings

Q2. This involves evaluating whether a bank has sufficient liquidity depends in large measure on the behavior of cash flows under the different conditions.

The maturity ladder
Alternative Scenarios
Measuring liquidity over the chosen time frame
Assumptions used in determining cash flows

Q3. This is the risk of adverse deviations of the mark-to-market value of the trading portfolio, due to market movements; during the period required to liquidate the transactions.

Market Risk
Liquidation Risk
Market liquidity Risk
Credit & counterparty Risk

Q4. __________ is buying or selling an asset only for the purpose of making profit from movement of the asset price over a period of time.

Arbitrage
Derivatives
D-mat account
Speculation

Q5. A combination of spot & forward transactions is called a ___________

Advances
Foreign bills
Swap
Loans

Q6. __________ Money refers to placement of funds beyond overnight for periods not exceeding 14 days.

Call money
Notice money
Term money
None

Q7. A short-term debt market paper issued by corporate, with a maximum maturity of 1 year.

Treasury Bills
Certificates of deposit
Repo
Commercial paper

Q8. It refers to the ability of a business concern to borrow or build up assets, on the basis of a given capital.

Leverages
Confirmation
DVP
Volatility

Q9. __________ Limits are kept in place to protect the bank from credit risk.

Exposure ceiling
Stop-loss
Organizational controls
Limits on trading positions

Q10. RAROC stands for _____________________.

the finance manager

Part Two:

Q1. Differentiate between options & Forward contract.

Q2. Write down the steps which are taken by RBI to encourage the derivative market.

Q3. What is Basic indicator Approach (BIA)?

Q4. Write a short note on profitability in Indian Banks.

Q5. Critically analyze the strategies adopted by Dinesh to retain the leading position.

Q6. What additional steps Dinesh could have taken to improve the profitability?

Q7. Evaluate the company’s investment decision with specific reference to the Agra plant.

Q8. Ha you been the finance manager, would you accept Ford Motors proposal? Why?

Q9. Do you think the finance manager needs to be concerned about the low depreciation provision? Why?

Q10. What according to you is the source of finance available to Ramakrishna Motors Ltd in case it is required to finance the Ford proposal for the Agra plant?

Q11. “When a steel company goes bankrupt, other companies in the same industry benefit because they have one less competitor. But when a bank goes bankrupt, other banks do not necessarily benefit.” Explain this statement.

Q12. “The existence of deposit insurance makes it particularly important for there to be regulations on the amount of capital banks hold.” Explain this statement.

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IIBM – Risk Management

Risk Management

Do you think the finance manager needs to be concerned about the low depreciation provision? Why?

Multiple Choices:

Q1. It represents the owner’s stake in the bank & it serves as a cushion for depositors & creditors to fall back in case of losses.

Capital

Reserve & Surplus

Deposits

Borrowings

Q2. This involves evaluating whether a bank has sufficient liquidity depends in large measure on the behavior of cash flows under the different conditions.

The maturity ladder

Alternative Scenarios

Measuring liquidity over the chosen time frame

Assumptions used in determining cash flows

Q3. This is the risk of adverse deviations of the mark-to-market value of the trading portfolio, due to market movements; during the period required to liquidate the transactions.

Market Risk

Liquidation Risk

Market liquidity Risk

Credit & counterparty Risk

Q4. __________ is buying or selling an asset only for the purpose of making profit from movement of the asset price over a period of time.

Arbitrage

Derivatives

D-mat account

Speculation

Q5. A combination of spot & forward transactions is called a ___________

Advances

Foreign bills

Swap

Loans

Q6. __________ Money refers to placement of funds beyond overnight for periods not exceeding 14 days.

Call money

Notice money

Term money

None

Q7. A short-term debt market paper issued by corporate, with a maximum maturity of 1 year.

Treasury Bills

Certificates of deposit

Repo

Commercial paper

Q8. It refers to the ability of a business concern to borrow or build up assets, on the basis of a given capital.

Leverages

Confirmation

DVP

Volatility

Q9. __________ Limits are kept in place to protect the bank from credit risk.

Exposure ceiling

Stop-loss

Organizational controls

Limits on trading positions

Q10. RAROC stands for _____________________.

Part Two:

Q1. Differentiate between options & Forward contract.

Q2. Write down the steps which are taken by RBI to encourage the derivative market.

Q3. What is Basic indicator Approach (BIA)?

Q4. Write a short note on profitability in Indian Banks.

Q5. Critically analyze the strategies adopted by Dinesh to retain the leading position.

Q6. What additional steps Dinesh could have taken to improve the profitability?

Q7. Evaluate the company’s investment decision with specific reference to the Agra plant.

Q8. Ha you been the finance manager, would you accept Ford Motors proposal? Why?

Q9. Do you think the finance manager needs to be concerned about the low depreciation provision? Why?

Q10. What according to you is the source of finance available to Ramakrishna Motors Ltd in case it is required to finance the Ford proposal for the Agra plant?

Q11. “When a steel company goes bankrupt, other companies in the same industry benefit because they have one less competitor. But when a bank goes bankrupt, other banks do not necessarily benefit.” Explain this statement.

Q12. “The existence of deposit insurance makes it particularly important for there to be regulations on the amount of capital banks hold.” Explain this statement.

We at Answer Sheet Help offer all types of online academic assistance, be it homework help, coursework help, case study help, Assignment help, Project Reports, Thesis, Research paper writing help.

The experts of our Answer Sheet Help services are highly qualified and professional. We have CAs CFAs & PhD on our panel who have years of experience in the writing of case study / Assignments.

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