CAIIB 2020 Bank Financial Management Mock Tests Set 6

EXIM bank’s ________ enables the exporters’ market entry efforts by sharing the initial costs of ______.


Options are :

  • PLI Programme, PLI Premium
  • ELS Programme, ELS Premium
  • Lakshya Programme, consignment margin
  • Swarozgar Programme, Entry Premium

Answer :PLI Programme, PLI Premium

R-Returns Statements submitted to RBI under FEMA shows-


Options are :

  • statement showing balances in NOSTRO, VOSTRO accounts
  • Bank-wide single return of fortnightly data on forex operations
  • data on transactions related to FCNRB deposits
  • data on transactions in NRE and NRO deposit accounts

Answer :Bank-wide single return of fortnightly data on forex operations

CAIIB 2020 Bank Financial Management Mock Tests Set 7

Under FEMA, Which of the following statement shows balances in NOSTRO, VOSTRO accounts which are sent to RBI?


Options are :

  • R- Return
  • BAL Statement
  • STAT 5
  • STAT 6

Answer :BAL Statement

A put option is in the money (ITM) if


Options are :

  • the strike price is less than market price
  • the strike price is more than the market price
  • the market price is equal to the strike price
  • a put option can never be in the money

Answer :the strike price is more than the market price

Persons going abroad for studies abroad, can draw exchange up to ________ per academic year. However, AD Category I bank and AD Category II may allow remittances (without seeking prior approval of the Reserve Bank of India) exceeding this limit based on the estimate received from the institution abroad.


Options are :

  • USD 350,000
  • USD 150,000
  • USD 250,000
  • USD 100,000

Answer :USD 250,000

CAIIB 2020 Bank Financial Management Mock Tests Set 1

Notice money refers to


Options are :

  • Funds placed overnight
  • Placement of funds beyond overnight but not exceeding 14 days
  • Funds placed for periods in excess of 3 months but not exceeding 1 year
  • Funds placed after giving a notice of placement

Answer :Placement of funds beyond overnight but not exceeding 14 days

An arbitrageur in foreign exchange is a person who ......


Options are :

  • earns illegal profit by manipulating foreign exchange
  • causes differences in exchange rates in different geographic markets
  • simultaneously buys large amounts of a currency in one market and sell it in another market
  • None of the above

Answer :simultaneously buys large amounts of a currency in one market and sell it in another market

As per FEDAI rules, a “Known holiday” is one which is known at least ____working days before the date.


Options are :

  • 1
  • 2
  • 3
  • 4

Answer :3

CAIIB 2020 Bank Financial Management Mock Tests Set 10

As per FEDAI rules, Normal transit period comprises of the average period normally involved from the date of negotiation/purchase/discount till the receipt of bill proceeds. Normal transit period for Bills drawn in Rupees under Letters of Credit (L/C) where reimbursement is provided at centre of negotiation is -


Options are :

  • 7 days
  • 20 days
  • 3 days
  • 21 days

Answer :3 days

Persons of Bangladesh nationality can open the Non-Resident Ordinary accounts.


Options are :

  • With permission from FD concerned.
  • Without permission from RBI.
  • With permission from RBI and permission from concerned FD
  • With permission from the concerned Circle Office.

Answer :Without permission from RBI.

As per FEDAI rules, The bank carrying out interbank Vostro transfer by RTGS should mention which of the following statement in the “Remark” column of the RTGS message?


Options are :

  • “We undertake to send form A3 separately”.
  • “We undertake to send all KYC details separately”.
  • “We undertake to send form XAS separately”.
  • “We undertake to send RTGS details to RBI separately”.

Answer :“We undertake to send form A3 separately”.

CAIIB 2020 Bank Financial Management Mock Tests Set 11

Under FEMA, a resident Indian is defined as one:


Options are :

  • who stays in India for more than 182 days ( in other words ,183 days and above ) in the preceding financial year
  • who stays in India throughout the preceding financial year
  • who stays in India for a period of six months in the preceding financial year
  • who stays in India indefinitely.

Answer :who stays in India for more than 182 days ( in other words ,183 days and above ) in the preceding financial year

On 15th June, Customer presented a sight bill for USD 100000 for Purchase under LC.  Transit period is 20 days and Exchange margin is 0.15%. The spot rate is 34.80/90. Forward differentials: July - .65/.57 ,Aug - 1.00/.97 ,Sep - 1.40/1.37 How much amount will be credited to the account of the Exporter? (Please note- Rates used are for example purposes only and should not be compared with current prevailing rates)


Options are :

  • 28.0988
  • 34.0988
  • 40.0988
  • 44.0988.

Answer :34.0988

As per FEDAI rules, With respect of transfer of funds between Vostro Accounts between two banks. In case ,beneficiary bank does not get from A3 within ____working days, they must lodge a claim with the remitting bank within ____ days, from the date of transfer of funds.


Options are :

  • 5,10
  • 5,15
  • 7,21
  • 7,15

Answer :5,15

CAIIB 2020 Bank Financial Management Mock Tests Set 12

The benchmark rates of which of the following currencies is NOT correctly matched?


Options are :

  • INR – NSE – MIBOR overnight rate
  • STG – Base rate of Barclays Bank
  • USD – Prime rate of Citibank N A
  • EUR – 3 month rate of Swiss National Bank

Answer :EUR – 3 month rate of Swiss National Bank

Foreign Currency notes can be accepted for FCNR/NRE deposits if:


Options are :

  • The currency notes are tendered by Power of Attorney holder of the depositor
  • The currency notes are tendered by the depositor in person
  • The currency notes are tendered by Non-Resident relatives of the depositor
  • The currency notes are tendered by any of his resident friends and relatives.

Answer :The currency notes are tendered by the depositor in person

Inflow of USD 200,000.00 by TT for credit to your exporter's account, being advance payment for exports (credit received in Nostro statement received from New York correspondent). What rate you will take to quote to the customer, if the market is 55.21/25?


Options are :

  • 55.21
  • 55.21-Bank commission
  • 55.25
  • 55.25- Bank commission

Answer :55.21-Bank commission

CAIIB 2020 Bank Financial Management Mock Tests Set 13

‘R’ returns are submitted to RBI as on every


Options are :

  • month
  • 10th, 20th & 30th
  • 15th & last working day of the month
  • every week

Answer :15th & last working day of the month

"Our account is with you" refers to ...... account.


Options are :

  • NOSTRO
  • VOSTRO
  • LORO
  • Mirror

Answer :NOSTRO

Which of the following is NOT a correct track to raise loans through ECBs(External Commercial Borrowings)?


Options are :

  • Track I: Medium term foreign currency denominated ECB with minimum average maturity of 3/5 years.
  • Track II: Long term foreign currency denominated ECB with minimum average maturity of 10 years.
  • Track III: Indian Rupee (INR) denominated ECB with minimum average maturity of 3/5 years.
  • Track IV: USD denominated ECB with minimum average maturity of 3/5 years.

Answer :Track IV: USD denominated ECB with minimum average maturity of 3/5 years.

CAIIB 2020 Bank Financial Management Mock Tests Set 14

Interest earned/accrued on FCNR deposits is paid:


Options are :

  • in Indian rupees only and cannot be repatriated
  • in the same currency in which FCNR is maintained and can be repatriated along with the principal amount
  • In foreign currency but interest cannot be repatriated
  • in Indian rupees only but interest can be repatriated

Answer :in the same currency in which FCNR is maintained and can be repatriated along with the principal amount

The FCNR deposit should be renewed within —————; Otherwise ————— interest is payable for the broken period:


Options are :

  • 14 days; Simple interest at 1 month LIBOR (prevailing on the date of maturity or on the date of renewal, whichever is lower) less 0.50 for respective currency, rounded off to lower 0.25%.
  • 30 days; ROI prevailing on the date of request
  • 6 months; ROI is lower of the rate prevailing on the date of placing the deposit or date of request for payment
  • 14 days; if not renewed no interest at all

Answer :14 days; Simple interest at 1 month LIBOR (prevailing on the date of maturity or on the date of renewal, whichever is lower) less 0.50 for respective currency, rounded off to lower 0.25%.

In documentary credit transactions


Options are :

  • all parties deal with documents and not goods
  • all parties deal in documents and goods as well
  • buyer and seller deal in goods and banks in documents
  • all parties deal in goods only

Answer :all parties deal with documents and not goods

CAIIB 2020 Bank Financial Management Mock Tests Set 2

Mr. D Souza issued an LC favouring Texas Exporters. The addresses of both applicant and beneficiary in the LC are as follows- Applicant’s address is- Mr. D Souza, Cochin, Kerala and Beneficiary’s address is- Mr. Martin Bakers Street Arizona, US After the transaction happened between applicant and beneficiary. The beneficiary sent the documents to his negotiating bank. Now the issuing bank received the documents from the negotiating bank and it sent them to the applicant. Applicant noticed the changed address of the beneficiary as- Mr. Martin H. No. 256, new lane, Florida, Us Noticing this discrepancy in the documents Mr. D Souza returned the documents which were send back to the negotiating bank by the issuing bank.


Options are :

  • The issuing bank has done correctly by not honouring the documents.
  • The issuing bank is wrong in returning the documents as the address need not be the same as those stated in the LC
  • The issuing bank is wrong in returning the documents as the address need not be the same as those stated in the LC but must be within the same country as the respective addresses mentioned in the credit.
  • The issuing bank is correct in sending back the documents and Mr. Martin must re-send the documents containing address as given in the LC.

Answer :The issuing bank is wrong in returning the documents as the address need not be the same as those stated in the LC but must be within the same country as the respective addresses mentioned in the credit.

Spot Rate - 35.6000/6500 Forward 1M=3500/3000 2M=5500/3000 3M=8500/8000 Transit Period - 20 days. Exchange Margin - 0.15%. Find 2 M Forward Buying Rate. (Please note- Rates used are for example purposes only and should not be compared with current prevailing rates)


Options are :

  • 31.1971
  • 34.1971
  • 31.6976
  • 34.6976

Answer :34.6976

Taking advantage by selling and buying of a currency in two different markets to take advantage of price differential prevailing at these markets is called as ......


Options are :

  • Hedging
  • Arbitration
  • Swap
  • Speculation

Answer :Arbitration

CAIIB 2020 Bank Financial Management Mock Tests Set 3

Forex transactions are classified according to date of deal and date of delivery. Which of the following are correct regarding type of exchange transaction? (i) TOM: delivery of foreign exchange takes place on the next working day of the contract, (ii) spot: which is to be settled on the same day, (iii) Forward: delivery of foreign exchange takes place beyond second working day of the contract


Options are :

  • Only (i) and (ii)
  • Only (i) and (iii)
  • Only (ii) and (iii)
  • (i), (ii) and (iii)

Answer :Only (i) and (iii)

A dual-currency bond pays coupon interest in a currency:


Options are :

  • of the bondholder’s choice.
  • other than the home currency of the issuer.
  • other than the currency in which it repays principal.

Answer :other than the currency in which it repays principal.

Mr. Patil, issued an LC favouring Mr. Dominic. But he was shocked to see the handwritten documents which were sent by Mr. Dominic. He returned the documents to the issuing bank which in turn returned back to the negotiating bank stating that presentation is not valid. On Enquiry Mr. Dominic said that these documents are handwritten by him only, thus these are valid documents. But Mr. Patil was in no mood to accept these documents as genuine.


Options are :

  • Mr. Patil is correct in returning as the document must be typed and should contain valid stamp and signature of Mr. Dominic.
  • Mr. Patil is not correct, Since the documents are hand written and thus this is valid presentation and Mr. Patil should honour that.
  • Mr. Patil is correct in returning because as per Article 17 (related to Original Documents and Copies) the handwritten document is not a genuine document.
  • Mr. Patil is correct in returning since Mr. Dominic has acted unethically by sending a handwritten document.

Answer :Mr. Patil is not correct, Since the documents are hand written and thus this is valid presentation and Mr. Patil should honour that.

CAIIB 2020 Bank Financial Management Mock Tests Set 4

A 10-year bond pays no interest for three years, then pays $229.25, followed by payments of $35 semiannually for seven years, and an additional $1,000 at maturity. This bond is a:


Options are :

  • step-up bond.
  • zero-coupon bond.
  • deferred-coupon bond.

Answer :deferred-coupon bond.

Comment / Suggestion Section
Point our Mistakes and Post Your Suggestions