6 242
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6 238
.Currencies are delivered on Jul 15, 2013 for a sale contract dated Jul 12, 2013. July
13, 2011 is a holiday. Which of the following exchange rate is used to settle this
transaction? A)Ready or cash rate B)Tom rate C)Spot rate D)Forward rate
6 238
. If the spot exchange rate between $/rs is 66.7905
3 months forward rate available at 67.6450.
Interest rate in India 6.75% and interest rate in USA is 0.25% (annualized) Arbitrage opportunity exist in
6 238
. If the spot exchange rate between $/rs is 66.7905
3 months forward rate available at 67.6450.
Interest rate in India 6.75% and interest rate in USA is 0.25% (annualized) Arbitrage opportunity exist where Interest rate is Lower Equal Higher None
6 238
If the spot exchange rate between $/rs is 66.7905
3 months forward rate available at 67.6450.
Interest rate in India 6.75% and interest rate in USA is 0.25% (annualized)
Forward rate differentials between spot and forward market is
a)4.95%
b)5.11%
c) 5.51%
d)5.71%
6 238
Repost from CAIIB MADE SIMPLE
A bank buys a CDS to protect its investment in a corporate bond. What does the bank pay to the protection seller in exchange for this protection?
a) The full principal amount of the corporate bond upfront.
b) A one-time fee based on the bond's value.
c) Periodic payments (premiums) throughout the CDS contract.
d) Nothing, as the protection seller assumes all the risk.
6 238
Repost from CAIIB MADE SIMPLE
An investor owns a corporate bond but is concerned about the company's ability to repay. Which financial instrument can help them manage this risk?
a) A mutual fund that invests in a variety of companies.
b) A credit default swap (CDS) on the specific corporate bond.
c) A margin loan to purchase additional shares in the company.
d) An increased interest rate on the bond to compensate for the risk.
6 238
Repost from CAIIB MADE SIMPLE
A bank has a large portfolio of car loans that is limiting its ability to offer new business loans. Which option would BEST help the bank address this situation?
a) The bank should lower its interest rates on car loans to attract more customers.
b) The bank can securitize the car loan portfolio to free up capital.
c) The bank should increase its deposit rates to attract more funds from customers.
d) The bank can partner with another bank to share the risk of the car loans
6 238
Repost from CAIIB MADE SIMPLE
A normal population has a mean of 60 and a standard deviation of 5. What is the z-score for a value of 65?
a) 1
b) 2 c) 3 d) 4
6 238
Repost from CAIIB MADE SIMPLE
If a random variable X follows the standard normal distribution, what is the range of values for X?
a) X > 0
b) X < 0 c) X can take any value between -∞ and +∞ d) X can take any value between 0 and +∞
6 238
Repost from CAIIB MADE SIMPLE
The average number of accidents on a highway is 1 per day. What is the probability that there will be no accidents on the highway in a day?
A) 0.3679
B) 0.7358 C) 0.0000 D) 1.0000
6 238
Repost from CAIIB MADE SIMPLE
What is the measure of skewness for a Poisson distribution with mean λ?
a) β1 = 0
b) β1 = 1 c) β1 = λ d) β1 = λ/2
6 238
Repost from CAIIB MADE SIMPLE
What is the formula for calculating the mode of a binomial distribution?
a) M = np
b) M = (n+1)p c) M = p(1-p) d) M = np(1-p)
6 238
Repost from CAIIB MADE SIMPLE
Which of the following scenarios can be modeled using a binomial distribution?
a) The amount of rainfall in a particular region over a month
b) The number of customers who visit a coffee shop in a day
c) The success rate of a new drug in curing a disease
d) The amount of time taken by a person to travel from home to work
