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BFS Practice

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1. A brokerage or analyst report will contain all of the following except?

a. Detailed description of the company, and its industry.

b. Opinion on why the analyst believes the company will succeed or fail.

-c. Recommendations to buy, sell, or hold the company.

d. Target price or performance prediction for the stock in a year.

e. Track record of the analyst writing the report.

2. 2 Marks

One should have the MMDA(Money Market Deposit Account) if one is looking for _______________________.

a. Quick, convenient and, frequent-access to the money

-b. A high rate of interest

c. Guaranteed rate of interest

d. Low fee

e. None of the listed Options

3. 2 Marks

______________ for securities lending, which bring lenders and borrowers together, may eliminate _______________.

a. Wholesale intermediaries; Niche intermediaries

-b. Internet auction systems; custodian and third party intermediaries

c. Custodian and third party intermediaries: Niche intermediaries

d. Niche intermediaries; custodian and third party intermediaries

e. Internet auction systems; Niche intermediaries

4. 2 Marks

Money laundering can best be described as the process by which ____________________________________________.

-a. money gained from criminal activity is processed so it appears to be gained from legitimate sources

b. criminals attempt to defraud the government

c. money gained from legitimate sources is hidden to avoid taxes

d. the police attempt to investigate organized crime

e. None of the listed Options

5. 3 MarksA U.S. importer who has agreed to pay 1 million Euros to a French exporter in 60 days decides to wait the full 60 days before paying. The importer is ______________________.

-a. a foreign exchange speculator

b. expecting the dollar to depreciate against the Euro

c. a hedger in the foreign exchange market

d. planning to pay a set amount of dollars for the items purchase

e. None of the listed Options

6. 1 Marks

The term POP stands for?

a. Private Offer Price

b. Private Option Price

-c. Public Offer Price

d. Public Option Price

e. Potential Offer Price

7. 1 Marks

Continuous Linked Settlement removes which of the following risks primarily

a. Exchange risk

-b. Temporal risk

c. Country risk

d. All of the listed options

e. None of the listed Options

8. 2 Marks

Which of the following is correct with reference to Indian banks?

a. Indian banks are unregulated

b. Saraswat Bank is the largest Indian bank

-c. Reserve Bank of India regulates the Indian banks

d. Indian banks cannot open branches outside of India

e. India's banking system is one of the weakest in the world

9. 1 Marks

EFT stands for _______________.

a. Express Funds Transfer

b. Electrical Funds Transfer

c. Elevated Funds Transfer

d. Emergency Funds Transfer

-e. Electronic Funds Transfer

.

10. 1 Marks

Banks are financial intermediaries that ____________________.

-a. link lenders (depositors) to borrowers

b. have been in existence now for over 50000 years

c. are not required

d. cause problems as their sales reps keep calling people to buy new products

e. should not be allowed to open Savings Accounts

11Which of the following is not a type of Swap?

Answer:a. Currency Swap'

b. Forward Swap

c. Swaption

-d. Interest Rate

12 Forfeiture regulation under the US patriot act allows _____________________________

Answer: -a. permits confiscation of any property derived from or used to facilitate domestic or international terrorism

b. Calls for the seizure of correspondent accounts held in foreign financial institutions for domestic banks who are in turn holding forfeitable assets

c. Permits foreign enforcement of domestic forfeiture orders

d. All of the listed options

e. None of the listed Options

13.Annual Percentage Rate for a loan takes into account the following?

Answer:

a. The interest rate charged

b. When and how often the interest must be paid

c. Other charges such as arrangement fee

d. When and how often these other charges must be paid

-e. All of the listed options

14.A young investor comes to an Investment Consultant and asks him for advice for his investments. He declares that he doesnt mind the risk but he would definitely like his money to grow as fast as possible. He would like to invest in a Mutual Fund which would satisfy these criteria. What would the consultants choice for his profile?

Answer:

a. Income Fund

b. Liquid Fund

-c. Growth Fund

d. Balanced Fund

e. Bank Deposit

15ABC corporation is a large client of BankNew and maintains $40 million in cash with the bank. BankNew however allows authorized representatives off ABC to write checks up to 10% over the balance maintained. This is an example of ____________________________________.

Answer:

-a. Overdraft

b. Accrual Loan

c. Held for Sale Loans

d. Undrawn Loan

e. Committed Loans

16. Which of the following is associated with the purpose of regulating financial institutions?

a. To ensure everyone makes money in the market

b. To ensure companies can cheat small investors in buying their securities

-c. To prevent failure of any financial institution

d. To ensure that various government departments can be created for regulation thus giving employment to many people

e. All of the listed options

17. Which of the following is true about Retail Banking business?

Answer:

a. The business focuses on small number of high net worth individuals

-b. The business focuses on large number of individuals each of whom may have a small amount of money to deposit with the Bank

c. The business focuses on large corporate bodies

d. The business focuses on small and medium enterprises

e. The business focuses on giving financial advice to customers to generate maximum returns on their investments

18.What is the best basis for the comparison of dividend paying stocks with other investments such as bonds, certificates of deposits etc?

Answer:

a. Interest spread

b. Exchange rate

-c. Interest rate

d. Equity yield

e. Dividend yield

19. Corporate Loans are ___________________________________

Answer:

a. always secured

-b. secured or unsecured

c. never secured

d. always unsecured

e. None of the listed Options

20. Services like the settlement, safekeeping, and reporting of customers marketable securities and cash are provided by _________________.

Answer:

-a. Custodian

b. Broker

c. Investment bank

d. Fund Administrator

e. Dealer

21. CRR stands for which of the following?

Answer:

-a. Cash Reserve Ratio

b. Common Reserve Ratio

c. Cash Refund Ratio

d. Cash Re-service Ratio

e. Cash Reserve Risk

22 1 Marks

The term CLS stands for

Answer:

a. Cautious Linked Settlement

-b. Continuous Linked Settlement

c. Competitive Linked Settlement

d. Comparitive Linked Settlement

e. Clearing Linked Settlement

23.1 Marks

Which of the following is not a risk management measure?

Answer:

a. Diversification

b. Hedging

c. Insurance

-d. Budgeting

e. All are risk management techniques

24 2 Marks

The quote for CTSH in NASDAQ was $ 43. The best buyer was at $ 42.5 and the best seller at $ 43.5.

How much is the bid-ask spread?

Answer:

a. $0.50

b. ($0.50)

-c. $1.00

d. ($1.00)

e. $86

25 1 Marks

The easiest way to calculate IRR (Internal Rate of Return) is________________________________________________.

Answer:

a. writing a Java program with 100 FPs

-b. using MS-Excel

c. using a supercomputer

d. using a 2GHz processor

e. writing JCLs running on a powerful Mainframe

26 3 Marks

You invest Rs.5000 at 10% p.a. compound interest compounded annually in a bank. After 2 years, what is the amount you have received from the bank?

Answer:

a. Rs. 12346

b. Rs. 7000

c. Rs. 2346

-d. Rs. 6050

e. Rs. 7546

27 1 Marks

The central bank in the US is called ________________.

Answer:

-a. Federal Reserve

b. Federal Reserve Board

c. Reserve Bank of United States

d. Central Bank of United States

e. Reserve Bank of America

28 ABC corporation is a large client of BankNew. BankNew extends a loan to XYZ corporation which is a supplier of ABC. This is an example of _______________________.

Answer:

a. Bill Discounting

-b. Supplier Loan

c. Asset Securitization Loan

d. Working Capital Loan

e. Revolving Line of Credit

29 2 Marks

The act of a loan amount being handed over to the borrower by the Bank is know as?

Answer:

-a. Disbursement

b. Distribution

c. Displacement

d. Dispersement

e. Diversification

30 1 Marks

Momentum investing would refer to ___________________________.

Answer:

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