CAIIB - RISK MANAGEMENT – MODULE B. G.R.Rao, Faculty, IIBF. WHAT IS RISK. EVERY ACTION HAS A REACTION IF REACTION IS FOR OUR BEENFIT; NO WORRY AND NO RISK IF IT IS AGAINST OUR INTEREST ONLY WE ARE WORRIED AND THAT IS RISK RISK IS THEREFORE POSSIBILITY OF A NEGATIVE RESULT FOR OUR ACTIONS
Related searches for Module B - Risk Management
G.R.Rao, Faculty, IIBF
SOURCE, IMPACT AND EVENT
Q. RAROC STANDS FOR
A. RISK ADJUSTED RETURN ON CAPITAL
B. RISK ADJUSTED RETURN ON COST.
C. RETURN ADJUSTED RISK ON CREDIT.
D NONE OF ABOVE.
Q.CREDIT DEFAULT SWAPS ARE
A. ONE OF CREDIT DERIVATIVES.
B. A KIND OF BANK GUARANTEE
C. A KIND OF LINE OF CREDIT.
D. STAND BY CREDIT.
Q. THE BETA FACTOR FOR CALCULATING OPERATIONAL RISK UNDER STANDARDIZED APPROACH FOR RETAIL BANKING IS
D. NONE OF ABOVE.
Q. PROBABILITY OF OCCURRENCE =4; POTENTIAL FINANCIAL IMPACT =4; IMPACT OF INTERNAL CONTROL =0%
WHAT IS ESTIMATED LEVEL OF OPERATIONAL RISK?
A transaction where financial securities are issued against cash flows generated from a pool of assets is called
A bank expects fall in price of a security if it sells it in the market. What is the name of such risk?
Credit rating agencies fix interest rates on bonds and debentures issued by companies
c. Cannot say
d. Only RBI can fix rate
An 8 year 8% semi annual bond has a BPV of Rs 125.The yield on the bond has increased by 5 basis points. What is the profit or loss suffered in price due to increase in yield?
A decline in CRR will cause the yield curve to on the bond has increased by 5 basis points. What is the profit or loss suffered in price due to increase in yield?
Given the rating migration of 100 a rated accounts in bank during a year as under, please answer the number of accounts who suffered rating migration.
A++ A+ A B+ B C Default
1 1 75 12 3 5 3
a. 2 b. 23 c. 25 d. 21
Expt. rate = p * r + q [ (1 + r) R -1]
Where p is probability of repayment q= 1-p
r is contractual rate and R is recovery rate
THANK YOU AND average contractual rate of 14%. Past experience indicates that the probability of repayment is 0.90 what would be the expected return rate of the corporation if the recovery rate of principal and interest is 0.95
WISHING YOU ALL
SUCCESS IN EXAMINATION