BFM-C treasury management by Neeraj Agnihotri ( ICFAI)

1. RBI pays interest on the cash balances in excess of which of the following to bank, of their NDTL?

a) 2%

b) 3%

c) 5%

d) 6%

ans: b

2. while the exposure limits are generally left to the banks discretion. RBI has imposed which ceiling of total business in a year with individual brokers.

a) 2%

b) 5%

c) 10%

d) 15%

ans : b

3. Ability of a business concern to borrow or build up assets on the basis of a given capital is called.

a) debt service coverage ratio

b) good will

c) reputation

d) Leverage

ans: D

4. Protection of risk in a transaction usually through derevatives product is called.

a) insurance

b) swap

c) hedge

d) arbitrage

ans: c

5. For the organization point of view treasury is considered to be

a) Investment centre

b) Fund management department

c) service centre

d) commercial bank

e) Non of these

ans: c

6. A treasury transaction with a customer is known as…..

a) Marchant banking business

b) Trading business

c) investment business

d) commercial banking

e) Retail banking

Ans: a

7. Which act relating to foreign exchange has replace earlier one?

a) Foreign Exchange Management Act

b) Foreign Exchange Regulation Act

c) Both the above

d) none of these

ans :a

8. RBI has permitted banks to borrow and invest through their overseas correspondents in foreign currency subject to which of the following ceilings.

a 25% of there Tier-I Capital

b 25% of there Tier-I Capital or USD 10 million

c 25% of there Tier-I Capital or USD 10 million whichever Is higher.

d 25% of there Tier-I Capital or USD 10 million whichever Is lower

ans-: c

9. The treasury is run by a few specialist staff engaged in high value transaction per trn size generally not being below:

a Rs 10 million

b Rs 20 “

c Rs 50 “

d None of these

Ans : c

10 Treasury has open position which is also known as

a Trading position

b Open position

c Proprietary position

d) a & C both

e) a

ans : d

11. Security dealars deals with of the following market.

A primary mkt

B secondary mkt

C Open mkt

D OTC

E all of these

Ans: b

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

Ans ; A

13. which of the following is not a free currency in the foreign exchange market ?

A USD

B Rupee

C EUR

D All of these

Ans : b

14. which of following statement is not correct relating to TOD and TOM

A Rates are generally quoted at discount to the spot rate

B Rates are less favorable to the buyer of the currency

C Rates are generally quated at a premium to the spot rate

D Non of these

Ans : c

15 The interest rate differential is added to the spote rate of

A Low interest yielding currency

B high interest yielding currency

C Both

D non of these

Ans A

16. Buying of USD (with Rupees) in the market and selling same in forward market or vice versa is called

A spot trn

B Forward tsn

C swap tsn

D convertible tsn

Ans: c

17 Call money refers to placement of fund……..

A same day

B overnight

C next day

D Two days

E Non of these

Ans: b

18. Notice money refers to placement of funds for period not exceeding……

A over night

B two days

C 7 days

D 10 days

E 14 days

Ans : e

19. Term money refers to placement of funds for period not exceeding…

A 01 yr

B 02 yr

C 03 yr

D 05 yr

Ans ;A

20. Treasury Bills are issued by whom

A RBI

B State PSUs

C GOI

D IMF

E IRDA

Ans :C

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

Ans : c read qtn carefully total three qtns aare there..

22. 364 t bill is auction on fourthnightly basis for amt of RS ……….crore by GOI

A 500

B 1000

C 1500

D 2000

Ans : c

23. 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

Ans : b

24. ECB( external commercial borrowings) indian companies can borrow ................without approval of RBIa. usd 500 mn up to minimum period of 5 yrsb. usd 20 mn upto minimum period of 3 yrsc. both a and b are correctd. without RBI approval they cannot borrow at allans C.page no 333 bfm

25individuals are now permitted to remit overseas freely without rbi approval uptoa. 100000 usd/yearb. 200000 usd/yrc. 300000 usd/yr

d. not possible without rbi approval ans : b page 334 b pe

26. certificate of deposit is a negotiable debt instrument has maturity period of 07 to 1 yr and minimum amt is Rs 01 lakh basically issued by……….

A RBI

B Banks

C Treasury

D Corporate

E None

Ans : b

27 the difference between buying and selling rate is calleda) spreadb) profitc) a onlyd) a& b

Ans:d

28 placement of funds for overnight is calleda) notice moneyb) call moneyc) term money d) all the above

Ans : b

29. Treasury discount bills of exchange, of short term nature with a tenure of

A 1 to 3 month

B 3 to 6 m

C 6 to 9 m

D 9 to 12 m

Ans : b

30. govt security are issued by..A central finance ministryB ministry of commerceC central govt

D RBIAns : d31. The basis point value is associated withA risk pricingB risk measurementC risk mitigationD risk control Ans: b32. Deventures are governed by

A Law of contract

B Company Law

C Negotiable instrument

D non of these

Ans: b

33. all exposure limit are reviewed ….

A once in a qtrB once in half yrC once in a yrD no limitAns: c

34 interest cost of funds locked in a trading position is called

A swapB pre-settlementC carryD speculationE options

Ans:c

35. A situation where the depoiter of abank lose confidence in the bank and withdraw therir balances immediately, is called A liquidation of the bankB falilue of bankC run on the bankD out of the moneyAns: c

36. The capacity of abank oa business organization to absorb losses on account of market risk. A risk absorption capacityB risk aversion capacityC risk taking capacityD risk appetite

Ans:d