Iibm - Risk Management

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Risk Management

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.

a. Capital

b. Reserve & Surplus

c. Deposits

d. 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.

a. The maturity ladder

b. Alternative Scenarios

c. Measuring liquidity over the chosen time frame

d. 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.

a. Market Risk

b. Liquidation Risk

c. Market liquidity Risk

d. 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.

a. Arbitrage

b. Derivatives

c. D-mat account

d. Speculation

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

a. Advances

b. Foreign bills

c. Swap

d. Loans

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

a. Call money

b. Notice money

c. Term money

d. None

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

a. Treasury Bills

b. Certificates of deposit

c. Repo

d. 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.

a. Leverages

b. Confirmation

c. DVP

d. Volatility

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