Quiz 2

Section B
Time : 20 Minutes

Total Marks : 15
Please answer all questions

1. If interest rate is likely to go up and banks have to invest in Fixed Income

Securities of 5 years maturity the treasury manager would invest ................
coupon securities under ..................... category
c. High, AFS
a. High , HFT
b. Low, HFT
d. Low, AFS
2. If the interest in the call money is likely to go up , then RBI would most likely
to ................... the ................... .
c. Increase ;
a. Increase
;
b. Increase;
d. Reduce ;
LAF
Repo
Reverse Repo
LAF
Amount
Amount
3. MTM valuation is ...................... stringent for ......................... category of
investment of a bank
c. Most; HFT
a. Less ; HFT
b. Most ; AFS
d. All
the
above
4. In case of AFS investment, the security has to be sold within ................. from
the date of investment
d. None of
a. 1 month
b. 2 month
c. 90 days
the above
5. Out of the following which is not true for Call Money Transaction
b. Call money
c. Banks and
a. It
is
an
d. None
of
rate
is
Non Banks
unsecured
the above
determined
can access
transaction
by the RBI
the
call
money
market
freely
6. Regulator wants bank to public borrowing
a. Unsecured
b. Secured
c. Secured
d. None
of
with cash
the above
security
7. RBI wants the Bank to Bank borrowing should be
a. Secured
b. Unsecured
c. Equally
d. None
of
secured
the above
and equally
unsecured
8. Working capital of company means
c. Total
a. Total
fund
b. Total
non
d. None
of
Current
based limit
fund
based
the above
Asset
limit
9. Fund Based working capital for seasonal industry can be assessed under

method
a. MPBF

c. Cash
d. All
the
Budget
above
10. The minimum margin money for working capital finance as per first method
of lending under MPBF is
c. 25%
of
a. 25% of CA
b. 20% of CA;
d. None
of
Working
the above
Capital
Gap
b. Turn Over

Question No 11- 15.

The estimated current asset as on March 31, 2013 of a borrower is Rs 120 million out
of which loans and advances to group company from which the borrower is
purchasing raw material is Rs 10 millions. The estimated other current liability as on
March 31, 2012 of a borrower is Rs 30 million .
Find out :
11. The working capital requirement of the borrower ;
Rs 120 million since group company advance is just like advance to supplier.
12. The working capital gap of the borrower
The working capital gap is Rs 90 million
13. Minimum Net working capital if the assessment is carried out under 1st
method of lending
The Minimum Net working capital = Rs 22.5 million
14. The estimated net working capital
It should be minimum as nothing is said about estimated net working capital
and since the estimated net working capital can not go below minimum net
working capital . Rs 22.5 million
15. The MPBF Limit
Rs 67.5 million