Banking Questions and Answers with Fundamentals to Know. Series -34

BC / BF EXAM (IIBF) Series -34 ( PROBABLE QUESTIONS AND ANSWERS )
Chapter-5

1. A Housing loan is granted against the security of:

A.      pledge of the house financed

B.      hypothecation of the house financed

C.      mortgage of the house financed

D.      The lien of the house financed

2. The term "EMI" in a housing or vehicle loan is calculated on the basis of:

A.      The principal of the loan

B.      principal and interest on the loan

C.      interest on the loan

D.      principal and processing charges on the loan

3. Housing Loans are granted for______________

A.      short term

B.      medium-term

C.      long term

D.      either medium or long

4. A vehicle loan is granted against the security of ________________________

A.      pledge of the vehicle financed

B.      hypothecation of the vehicle financed

C.      mortgage of the vehicle financed

D.      hypothecation of all assets of the borrower

5. A loan for a refrigerator is granted against the security of__________________

A.      pledge of the item financed

B.      hypothecation of the item financed

C.      mortgage of the item financed

D.      mortgage of all assets of the borrower

6. Retail Loans include;

A.      home loans, auto loans, corporate loans

B.      home loans, auto loans, bridge loans

C.      auto loans, corporate loans, bridge loans

D.      home loans, auto loans, personal loans

7. Retail Loans are generally of:

A.      Large amounts

B.      Medium amounts

C.      Small amounts

D.      Medium and Small amounts

8. Retail Loans are generally granted to;

A.      professionals, individuals, companies

B.      a person to whom some money is owed

C.      individuals, institutions, companies

D.      professionals, salaried employees, corporations

9. Which one constitutes the largest percentage of retail loans in India?

A.      Auto loans

B.      Home Loans

C.      Personal Loans

D.      Overdrafts to Individuals

10. MUDRA Loans are provided to them whose credit needs are below Rs________ Lakh

A.      5

B.      15

C.      10

D.      3

Chapter-6

Read the questions or statements properly and choose the correct options.

1. Working capital needs are estimated by _________________________.

A.      operating cycle method

B.      projected turnover method

C.      cash budget method

D.      any of above

2. Term Loans means Loans___________________

A.      payable after one year to ten years

B.      repayments are done in installments

C.      term loans are utilized for the acquisition of fixed assets

D.      all of the above

3. Working capital means____________________

A.      requirements for the day to day transactions

B.      excess of current assets over current liabilities

C.      fixed assets-current assets

D.      current assets-current liabilities

4. In banker's parlance, credit risk in lending refers to;

A.      default of repayment by a borrower

B.      the default of bankers in maintaining SLR

C.      the default of a banker to release credit to a borrower

D.      change in the value of foreign currency

5. The banker can reduce risk in lending to a borrower by ____________________

A.      obtaining adequate security

B.      ensuring that there will be no problem of liquidity with the borrower

C.      ensuring that there will be no default on account of lack of liquidity and lack of willingness to pay on the part of the borrower

D.      doing due diligence under KYC guidelines

6. Customer profitability analysis means _______

(a) exercise done by banks before lending to a customer

(b) exercise before opening a new branch

(c) assess the profitability of the customer's business

(d) only (a) and (c)

7. Liquidity with a banker means;

A.      cash on hand

B.      cash and bank balances

C.      short term current assets to convert into cash

D.      all of the above

8. Cardinal principals of lending are:

A.      safety and liquidity

B.      profitability and diversification of risks

C.      productive purpose and security

D.      all of the above

9. Banks are commercial organizations and profit earning is the motto of banks to pay an adequate dividends to the shareholders.

A.      True

B.      False

10. It is to be seen that money lent should not be locked up for a long time and should return to the bank as per the repayment schedule. This is referred as ____________________

A.      profitability

B.      liquidity

C.      security

D.      diversification