CAIIB 2020 Advanced Bank Management Mock Tests Set 1

An economy with a consistently negative inflation rate is best described as experiencing:

A new technology that reduces employee illness will most likely decrease

The relationship between savings (S), investment (I), government spending (G), government tax revenue (T), exports (X), and imports (M) is:

_________ are the goods for which the demand is inversely related to consumer?s income.

If both the supply and the demand for a good increase, the market price will

The country of Zurkistan is experiencing both high interest rates and high inflation. The government passes laws that reduce government spending and increase taxes. It takes many months before interest rates fall and inflation is reduced. This is an example of:

Which of the following is true about deflation?

A supply curve illustrates the relationship between

As a business owner you have determined that the demand for your product is inelastic. Based upon this assessment you understand that

If the price elasticity of demand for a good is 4.0, then a 10% increase in price would result in a:

In any competitive market, an equal increase in both demand and supply can be expected to always

Which of the following will cause a shift in the supply curve of a product?

In a competitive market for labor in which demand is stable, if workers try to increase their wage

Which of the following factors affects the market demand? I) Price of the commodity II) Income of the consumers III) Expectations of consumers regarding availability of goods IV) Composition of population

Which of the following statements is TRUE? (I)The demand for a good increases with the increase in the income of its buyer. (II)If the goods X and Y are substitutes, a rise in price of X will result in a right ward shift in demand curve of Y. (III) A budget set is a collection of such bundles of goods that give same satisfaction.

  Which one of the following would cause the demand curve for a commodity to shift to the left?

X and Y are substitute products. If the price of product Y increases, the immediate impact on product X is

A Banker makes following comments about the law of supply.  Statement 1: Law of supply represents the producer?s willingness to supply a commodity with respect to change in its substitute?s price, keeping all other factors constant. Statement 2: Law of supply represents the producer?s willingness to supply a commodity with respect to change in its own price, keeping all other factors constant.  Which statement provides the most reasonable explanation of the law of supply?

The slope of a demand curve is most often:

If a group of consumers decide to boycott a particular product, the expected result would be

An analyst lists the following changes for a product. ? The cost of production has increased by 10%. ? The price of a substitute has increased by 10%. ? The income of consumers has increased by 5%. What will be the combined impact on the demand and supply curves?

Which of the following is not likely to affect the supply of a particular good?

In microeconomics, the distinguishing characteristic of the long run on the supply side is that

During the recessionary phase of a business cycle

Which one of the following would not be included in the calculation of the gross domestic product (GDP)?

Maruti, Tata, Fiat, Ford and GM are only a few auto producers in the Indian market. Identify the form of market in which they sell their products?

Which of the following may provide a leading indicator of a future increase in gross domestic product?

A period of rising inflation

Suppose the economy is operating far below its full employment level. Now the government increases its spending without an increase in taxes. Given time, this will most likely result in:

National income of a country is same as

The most important requirement when planning a learning programme or event for a group of people is:

Providing training development opportunities, and career information programs, are all part of the ------------------?s role in career development.

A learning organization is one in which:

Which of the following is a process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications, to apply for jobs with an organization?

The notion of the learning organization:

The focus of Human Resource Management revolves around"

Demand for human resources and management is created by

In term loans, the economic/financial feasibility of a project involves analysis of which of the following aspects?

RBI has issued guidelines on fair practices code for lending. These guidelines pertain to:

Under Turnover Method of working capital assessment, it is assumed that the enterprise needs ______ of its annual turnover as gross working capital, out of which _____ will be provided by the bank and _____ will be brought in as margin by the enterprise.

Banks enter into a compromise with borrowers in case of default, because:

Which of the following statement is correct w.r.t. working capital finance to information technology and software industry? I) Banks may consider sanction of working capital limits based on the track record of the promoters. II) Banks can stipulate reasonable amount as promoters? contribution towards margin. III) Banks may obtain collateral security wherever available IV) The banks could obtain quarterly statements of cash flows to monitor the operations.

The aim of a rehabilitation programme is:

Which of the following is not an approach for assessment of credit risks, laid down under Basel 2 Accord? .

Which of the following are some of the safeguards that RBI has advised to banks w.r.t. co-acceptance of bills? I) While sanctioning co-acceptance limits to their customers, the need therefore should be ascertained, and such limits should be extended only to those customers who enjoy other limits with the bank. II) Only genuine trade bills should be co-accepted and the banks should be ensure that the goods covered by bills co-accepted are actually received in the stock accounts of the borrowers. III) Co-acceptances in respect of bills for ?. 50,000/- and above should be signed by two officials jointly, deviation being allowed only in exceptional cases, e.g. non-availability of two officials at a branch. IV) The valuation of the goods as mentioned in the accompanying invoice should be verified to see that there should not be over-valuation of stocks more than 10% of the invoice value.

For appraisal, the lender will normally depend on which of the following information - I) The background, credit history, market reports of the borrower.  II) The financial track record of the borrower as representing by the financial statements III)Techno-economic feasibility report of the activity of proposal IV) The influence of borrower in regional politics.

Select the INCORRECT sentence: 1. Term loans are provided for acquiring the fixed assets. 2. Working capital term loans are provided for sustaining current assets. 3. Term loan is payable as per demand. 4. Working capital term loans are payable as per repayment schedule

While issuing guarantees on behalf of customers, which of the following safeguards should be observed by banks? I) At the time of issuing financial guarantees, banks should be satisfied that the customer would be in a position to reimburse the bank in case the bank is required to make payment under the guarantee. II) In the case of performance guarantee, banks should exercise due caution and have sufficient experience with the customer to satisfy themselves that the customer has the necessary experience, capacity and means to perform the obligations under the contract, and is likely to commit any default. III) Banks can give guarantee if borrower has some relation with any political leader or administrative Officer. IV) Banks should, normally, refrain from issuing guarantees on behalf of customers who do not enjoy credit facilities with them.

Return on equity using the traditional DuPont formula equals:

Which of the following infrastructure sectors qualify under ?infrastructure lending?? I) Electricity II) Transport III) Energy IV) water and Sanitation

For assessing the LC requirement of an enterprise, which of the following points should be remembered by a banker? I) Average Amount of Each LC is dependent on the monthly consumption of goods and the economic order quantity II) The number of LCs to be opened in a year can be calculated by dividing annual consumption by EOQ III) The time taken for one LC to remain in force depends upon the lead time, the transit time and the usance available to purchaser from the date of receipt of goods.

Which of the following is a type of financing done by banks to the infrastructure sector? I) Take-out Financing II) Inter-institutional Guarantees III) Financing Promoter?s Equity IV)  Collaboration Financing

Seasonal working capital is

Which of the following is not a micro level action for mitigation of credit risk?

Shortage of working capital may result in

The margin of safety is provided to

?At the time of financing projects banks generally adopt which one of the following methodologies for determining the level of promoters? equity ? I) Promoters bring their entire contribution upfront before the bank starts disbursing its commitment. II)Promoters bring certain percentage of their equity (40% - 50%) upfront and balance is bought in stages. III)Promoters agree, ab initio, that they will bring in equity funds proportionately as the banks finance the debt portion.

Which of the following is not a macro level action for mitigation of credit risk?

Which of the following statements is correct w.r.t. syndication of loans? I) The term ?Syndication? is normally used for sharing a long-term loan to a borrower by two or more banks. II) This is a way of sharing the risk, associated with lending to that borrower, by the banks and is generally used for large loans. III) The borrower, intending to avail the desired amount of loan, gives a mandate to one bank (called Lead bank) to arrange for sanctions for the total amount, on its behalf. IV) The lead bank does the liaison work and common terms and conditions of sanction may be agreed in a meeting of participating banks, arranged by the lead bank.

Which of the following statements is/are correct w.r.t. factoring ? I) This is a method of financing the receivables of a business enterprise. II) Banks are permitted to do this business through subsidiaries and also departmentally. III) Under factoring, the factor not only purchases the book debts/receivables of the client, but may also control the credit given to the buyers and administer the sales ledger. IV) The purchase of book debts/receivables can be done only without recourse to the clients.

A decreasing trend of Debtors Velocity Ratio implies :

For calculating Debt Service Coverage Ratio (DSCR), the numerator will be :

Operating cycle in an industrial concern means

In the second method of lending under Tondon Committee:

Crop loan granted for long duration crop becomes NPA if :

Out of order account means an account where:

In an NPA account, interest or any other charge will be recognized as income as per which of the following:

How is the provision on standard assets treated?

An advance has been made by 3 banks under a consortium arrangement. The account becomes NPA with one of the banks, What should be done by other banks?

Choose incorrect statement(s) regarding an appeal to the Appellate Tribunal against the order of the Debt Recovery Tribunal:

As per the decision of Supreme Court in the case of_______ , the bank can take action simultaneously under Sarfaesi and also file case with DRT or normal court for recovery.

Credit Exposure ceiling for borrowers is linked to:

Which of the following statements is correct w.r.t. Corporate Debt Restructuring (CDR)? I)This mechanism is for restructuring the corporate debts of viable entities facing problems, outside the purview of BIFR, DRT and other legal proceedings. II) Borrowers enjoying credit facilities from more than one bank/Financial Institution (FI), with total outstanding (fund-based and non-fund based) exposure of ?. 20 crore or above are eligible. III) CDR framework has a four tier structure: a. CDR Standing Forum and its Core Group, b. CDR Empowered Group c.CDR Cell d.CDR review Group

Banks cannot grant advance against their own shares as per provisions of:

Which of the following is correct regarding the loan to directors of other banks or relatives of directors of own bank or directors of other banks?

Which of the following commodities are presently covered under stipulations of Selective Credit Control?

At the time of granting fresh facilities, which type of declarations is to be obtained from the borrowers?

Which of the following statements about the relationship between interest rates and the demand for and supply of money is most accurate? Interest rates affect:

An increase in price will result in an increase in total revenue if

A distinction between Giffen goods and Veblen goods is that:

An increase in price will result in no change in total revenue if

Laissez-faire economy is:

Market demand curve for a commodity is??????

The equilibrium state is achieved at ???????

According to the law of supply ???..

In which of the following situations would there be inelastic demand?

A period of rising inflation

Which of the following statements is true?

Which of the following statements concerning the NPV is not true?

The internal rate of return (IRR) is the

Priya purchased a bond with a face value of ? 1000 and Coupon of 8% and maturity of 4years. If YTM is reduced by 2%, the change in the price of the bond would be......

SCU and QXA are two stocks in the same industry. The variance of returns for each stock is 0.3025 and the returns are perfectly positively correlated. The covariance between the returns is closest to:

When considering two mutually exclusive capital budgeting projects with conflicting rankings (one has the higher positive NPV, the other has a higher IRR), the most appropriate conclusion is to choose the project with the:

A quantitative technique used to make predictions or estimates of the value of a dependent variable from given values of an independent variable(s) is

If the coefficient of correlation between two variables is zero, how might a scatter diagram of these variables appear?

An organization is using capital budgeting techniques to compare two independent projects. It could accept one, both, or neither of the projects. Which of the following statements is true about the use of net present value (NPV) and internal rate of return (IRR) methods for evaluating these two projects?

A regression analysis has the goal of:

If the correlation between two variables is -1.0, the scatter plot would appear along a:

Which of the following statements about the normal probability distribution is most accurate?

The central limit theorem states that, for any distribution, as n gets larger, the sampling distribution:

Which of the following statements is least accurate regarding covariance?

If X and Y are independent random variables:

A joint probability of A and B must always be:

Assume that an investment project?s assumed cash flows are not changed but the assumed weighted-average cost of capital is reduced. What impact would this have on the net present value (NPV) and the internal rate of return (IRR) of this project?

In maximization problem, optimal solution occurring at corner point yields the

Which of the following statements is most likely correct for a project costing $50,000 and returning $14,000 per year for 5 years?

In Random Sampling, we pick up one, keep it away and then pick another from the remaining. This is called...

The Bank should deal with the employee resistance by:

The amount of quality output for the number of input means

The matching model of HRM:

Human resource management helps improve

A manager may delegate any of the following except:

How could this situation have been managed better?

The most common criticism of HRM is that:

Which of the following comments about HRM is the most perceptive?

Identify which one is an added specific goal of human resource management:

The critical issue in this case is:

The purpose of HR policy is to:

The top management of ABC. Bank was in a triumphant mood after engaging XYZ Ltd, one of the top IT Companies as a consultant for a massive technology upgradation in the Bank. Their enthusiasm was short-lived, as the project did not progress well and the consultants were not able to deliver the desired results even after several months. In fact, the Consultants were of the view that it may never be possible to implement the project with 100% success as they seemed to be facing resistance from the employees at multi-levels. The employees at all levels seemed reluctant to cooperate. Their fear of Role erosion seemed palpable. What does ?Role erosion? mean in this context?

Best practice strategic HRM:

Expectancy theory focuses on the relationships between which three factors?

Best fit strategic HRM:

Workers' compensation benefits fall into all of these major categories except:

The most important aim of integrated HRM is to:

Managers can motivate people to avoid performing dysfunctional behaviors by using: I. Extinction II. Punishment III. Negative reinforcement

Intellectual capital is:

Managers who meet designated goals are _______.

Deployment of which resource is difficult to master

Human capital management is:

Employee involvement requires extensive additional HRM activity in which of these areas?

The human capital advantage is best achieved when:

How do companies facilitate workforce diversity?

To be effective, human capital metrics must:

How has technology changed HRM practices?

Human resources are most likely to make a major contribution to achieving human capital advantage if they are:

Identify the topmost goal of human resource management?

Which of these is a major dimension of HRM practices contributing to company competitiveness?