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July 5th, 2014, 03:55 PM
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Re: ICFAI University, MBA, Money, Banking and Credit Management (MB3G1B) Exam Papers

This is the ICFAI University, MBA, Money, Banking and Credit Management (MB3G1B) Exam Previous Years Question Paper:

1. Which of the following is not considered as an attribute of money?
(a) Durability
(b) Uniformity
(c) Divisibility
(d) Acceptability
(e) Stability in value.

2. Control of inflation has been regarded as the principal economic policy in all countries of the world. Which of
the following method(s) is adopted to control inflation?
I. Fiscal Policy.
II. Economic Policy.
III. Monetary Policy.
IV. Direct wage Controls.
(a) Only (I) above
(b) Both (I) and (II) above
(c) Both (II) and (III) above
(d) (I), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.

3. Which of the following is not treated as an advantage of ‘Intermediation’?
(a) Liquidity
(b) Risk pooling
(c) Familiarity
(d) Information
(e) Risk reduction.

4. The liquidity management and interest rates of ‘Local Area Banks’ (LABs) is governed by which of the
following Acts?
(a) Banking Regulation Act
(b) Reserve Bank of India Act
(c) Regional Rural Banks Act
(d) Negotiable Instruments Act
(e) National Bank for Agriculture & Rural Development (NABARD) Act.

5. When the guarantor extinguishes the liability of a debtor, he (the guarantor) acquires all the rights of the creditor.
This right is known as the right of
(a) Subrogation
(b) Appropriation
(c) Lien
(d) Set-off
(e) Assignment.

i. e x e
Page 2 of 17
6. Product Price Index measures
(a) The price of a selected basket of goods
(b) The price received by a producer
(c) The changes in price of a selected basket of goods
(d) The change in price of a selection of commodities
(e) The rise in price accompanied by increase in production.

7. Creeping inflation means
(a) Monthly increase in prices is more than 20 per cent
(b) The sustained rise in prices is about 10 per cent per annum
(c) Sustained rise in prices of annual increase of less than 3 per cent per annum
(d) The rise in prices is in the intermediate range of more than 3 to 6 per cent per annum
(e) The sustained rise in prices of annual increase of more than 5 per cent per annum.

8. Real rate of interest is
(a) The interest earned by an asset
(b) The rate which is expressed in terms of percentage
(c) The pure interest for the use of money or for the loan of money capital
(d) The payment made to cover risks or loss, payments for work etc
(e) The payment made to lender after reducing the discount allowed on a loan.

9. When financial intermediaries collect savings from individuals/others and pool them to give loans to others is
known as
(a) Default-risk intermediation
(b) Financial disintermediation
(c) Maturity intermediation
(d) Denomination intermediation
(e) Liquidity intermediation.

10.Which of the following is not considered as a Non-Banking Finance Company?
(a) Credit Rating agencies
(b) Merchant Banking companies
(c) Portfolio Management companies
(d) Loan and Investment companies
(e) Leasing and Hire-purchase companies.

11.Which of the following is/are the various model(s) of Government regulation of Banks?
I. Lender of Last Resort.
II. Rehabilitation.
III. Bank Bailouts.
IV. The Paternalistic Approach.
V. Market-Assisted Models.
(a) Only (I) above
(b) Both (I) and (II) above
(c) Both (II) and (III) above
(d) (I), (III) and (IV) above
(e) All (I), (II), (III), (IV) and (V) above.

12.Which of the following is classified/grouped under the head ‘other income’ in a bank’s Profit and Loss Account?
Income received
(a) On investments
(b) On loans and advances
(c) On balances with RBI
(d) By way of commission, exchange and brokerage
(e) By way of discount and Interest on bills.

Page 3 of 17
13.Which of the following is not coming under the category of ‘Other Subsidiary Registers’ maintained by a bank?
(a) Jewellery Register
(b) Standing Order Register
(c) Overdraft Sanction Register
(d) Demand Draft Register
(e) Letter of Guarantee Register.

14.A charge by a bank cannot be created on moveable assets by way of
(a) Banker’s lien
(b) Assignment
(c) Hypothecation
(d) Appropriation
(e) Pledge.

15.For the purpose of fixation of drawing power, stocks of imported raw material is valued at
(a) Invoice price plus demurrages, if any
(b) Invoice price plus customs duty and Sales tax
(c) Invoice price or market price whichever is higher
(d) Landed Cost excluding Sales tax and demurrage or market price whichever is lower
(e) Landed Cost including Sales tax or market price whichever is lower.

16.The rate at which over night money is borrowed in the market is known as
(a) Bank rate
(b) Swap rate
(c) Exchange rate
(d) Discount rate
(e) Call money rate.

17.Under loan evaluation procedure, which of the following is not an essential part of credit risk analysis?
(a) Ability to raise funds
(b) Cost of capital
(c) Regulatory environment
(d) Coverage ratios
(e) Interest rate risk management.

18.If the simple deposit multiplier is equal to 5, then the required reserve ratio is equal to
(a) 0.15
(b) 0.20
(c) 0.25
(d) 0.40
(e) 0.50.

19.Which type of letter of credit provides for advance payment before the actual presentation of documents?
(a) Red Clause Letter of Credit
(b) Revolving Letter of Credit
(c) Irrevocable Letter of Credit
(d) Green clause letter of Credit
(e) Back-to-Back Letter of Credit.

20.To qualify under Tier II capital, the subordinated debt instruments should have a minimum maturity of
(a) Two years
(b) Three years
(c) Five years
(d) Seven years
(e) Ten years.

Page 4 of 17
21.The credit facility in which the physical possession of the security is passed on to the lending banker but retains
the ownership with the borrower.
(a) Open Cash Credit (Hypothecation)
(b) Term loan Hypothecation
(c) Key Cash Credit (Pledge)
(d) Overdraft (Secured)
(e) Clean Loan.

22.Within how many days from the date of such payment or satisfaction, the report of satisfaction is to be filed with
Central Registrar by a Securitization or Reconstruction Company or Secured Creditor as the case may be
(a) 14 days from the date of payment or satisfaction
(b) 15 days from the date of satisfaction of the claim amount
(c) 30 days from the date of payment or satisfaction
(d) 60 days from the date of satisfaction of the claim amount
(e) 90 days from the date of satisfaction of the claim amount.

23.A Self- Help Group (SHG) is identified by which of the following features?
I. It is a registered or unregistered group of micro entrepreneurs.
II. Its members are homogenous with social and economic background.
III. They come together voluntarily, to save small amounts and contribute to a common fund regularly.
IV. The group members ensure proper end-use of credit and timely repayment.
(a) Both (I) and (II) above
(b) Both (II) and (III) above
(c) (I), (II) and (III) above
(d) (I), (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.

24.Which of the following liabilities is classified under demand liabilities for the computation of Net Demand and
Time Liabilities (NDTL)?
(a) Staff security deposits
(b) Unclaimed deposits
(c) Cumulative deposits
(d) India Development Bonds
(e) Deposits held as security for advances.

25.Security documents are not generally attested or witnessed. What is the effect of attesting/ witnessing of a
document?
(a) The nature of the contract does not change
(b) Attracts no stamp duty at all
(c) Attracts nominal stamp duty
(d) Attracts ad valorem stamp duty
(e) Attracts registration of documents.

26.Section 34 of the RDBFI Act excludes a similar act from the exercise of the ‘non-obstante clause’ contained in
its provisions. Identify.
(a) Reserve Bank of India Act
(b) The Transfer of Properties Act
(c) The Companies Act
(d) The Contract Act
(e) The Negotiable Instruments Act.

27.A bank’s Capital Adequacy Ratio (CAR) is at 11 percent, Average Risk Weight (ARW) is 60 percent and Capital
is Rs.180 crores. What are the total assets of the Bank?
(a) Rs.3,142 crores
(b) Rs.2,964 crores
(c) Rs.2,727 crores
(d) Rs.2,594 crores
(e) Rs.2,491 crores.

Page 5 of 17
28.As regards the features of a company vis-à-vis a partnership firm, which of the following statements is false?
(a) Death or insolvency of a partner dissolves the firm unless otherwise provided for
(b) The minimum number of partners in a firm is 2 and maximum is 20 in the case of banking business and
10 in the case of other businesses of a partnership firm
(c) The liability of a shareholder is limited to the extent of his share/guarantee in a company
(d) The creditors of a company can proceed only against the company and not against its members
(e) A partner cannot contract with his firm whereas a member of a company may.

29.Which of the following statements is false with regard to pre-shipment finance? Pre-shipment advance
(a) Period normally exceeds 191 days
(b) Covers the working capital needs of the exporter
(c) Is based on the existence of export order and/or letters of credit
(d) Is for purchase of raw materials, processing, packing, transportation and for warehousing of goods
(e) Liability is to be liquidated by submitting export documents within the stipulated period.

30.While computing the Net Demand and Time Liabilities (NDTL) which of the following liabilities is not to be
included?
(a) Borrowings from Exim Bank, IDBI etc.
(b) Staff security deposits
(c) Gold borrowed by banks from abroad
(d) India Development Bonds
(e) Net credit balance in the inter-branch adjustment account.

Rests of the questions are in the attachment, please click on it…….


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