Professional Documents
Culture Documents
Decoding Jaiib Caiib
Decoding Jaiib Caiib
Decoding Jaiib Caiib
CAIIB
DECODED
POWERED BY
SCAN ME &
SUBSCRIBE NOW
JAIIB/DBF Important Dates
JAIIB/DBF Important Dates For May-June Exam 2024
·Non-Members Of Institute
·To be eligible, applicants must have successfully completed the 12th standard examination in
any field or its equivalent. Alternatively, candidates who have cleared the BC/BF examination
conducted by IIBF are also eligible.
Note: Individuals who are members of the Institute are not eligible to take the DB&F examination
since they are already eligible to appear for the JAIIB examination
Experienced Faculties
CHECK DETAILS
Experienced Faculties
CHECK DETAILS
Module A: Statistics
Definition of Statistics, Importance & Limitations & Data Collection, Classification &
Tabulation:Importance of Statistics; Functions of Statistics; Limitation or Demerits of Statistics;
Definitions; Collection of Data; Classification and Tabulation; Frequency Distribution, Sampling
Techniques:Random Sampling; Sampling Distributions; Sampling from Normal Populations; Sampling
from NonNormal Populations; Central Limit Theorem; Finite Population Multiplier, Measures of
Central Tendency & Dispersion, Skewness, Kurtosis: Arithmetic Mean; Combined Arithmetic Mean;
Geometric Mean; Harmonic Mean; Median and Quartiles; Mode; Introduction to Measures of
Dispersion; Range and Coefficient of Range; Quartile Deviation and Coefficient of Quartile Deviation;
Standard Deviation and Coefficient of Variation; Skewness and Kurtosis,Correlation and Regression:
Scatter Diagrams; Correlation; Regression; Standard Error of Estimate, Time Series:Variations in Time
Series; Trend Analysis; Cyclical Variation; Seasonal Variation; Irregular Variation; Forecasting
Techniques,Theory of Probability: Mathematical Definition of Probability; Conditional Probability;
Random Variable; Probability Distribution of Random Variable; Expectation and Standard Deviation;
Binomial Distribution; Poisson Distribution; Normal Distribution; Credit Risk; Value at Risk; Option
Valuation, Estimation: Estimates; Estimator and Estimates; Point Estimates; Interval Estimates;
Interval Estimates and Confidence Intervals; Interval Estimates of the Mean from Large Samples;
Interval Estimates of the Proportion from Large Samples Linear Programming Graphic Approach;
Simplex Method, Simulation:Simulation Exercise; Simulation Methodology
Sources of Finance and Financial Strategies: Equity Capital, Internal Accruals, Preference Capital,
Term Loans, Debentures, Alternative Financing Strategies in the Context of Regulatory Requirements,
Financial and Operating Leverages: Financial Leverage, Degree of Financial Leverage and its
Behaviour, Operating Leverage, Degree of Operating Leverage and its Behaviour, Combined or Total
Leverage, Capital Investment Decisions: Objective of capital investment decisions, Estimation of
project cash flows, Forecasting and its relation to regulation of capital for short, medium and long
term periods, Relationship between sales, production and other functional budgets, Cash Forecasts,
Cost analysis for projects, Methods of Investment appraisal;Social Cost Benefit Analysis, Capital
Budgeting for International Project Investment Decisions: Foreign Investment Analysis, Special
Considerations-Foreign & Home Currency Cash Flows, Foreign Currency Discount Rates
Computation, International Portfolio Investment and Institutional Constraints, Direct and Indirect
Channels for International Portfolio Investment, Exchange and Country Risk, Return and Risk of
Foreign Investment, Capital asset pricing model, Arbitrage pricing theory; International Capital
Budgeting Issues involved in overseas projects, Approaches for evaluation of overseas projects,
Evaluation methods, , Impact of transfer pricing, Adjustment of Risk and Uncertainty in Capital
Budgeting Decision: Sources & Perspectives on Risk, Sensitivity Analysis, Scenario Analysis, Hillier
Model, Simulation Analysis, Decision Tree Analysis, Corporate Risk Analysis, Managing Risk, Project
Selection Under Risk, Risk Analysis in Practice, Decision Making: Decision Making using Cost-
Volume-Profit (CVP) Analysis, Decision Making using Relevant Cost Concepts, Decision Making using
Activity Based Costing, Ethical and Non-Financial Considerations Relevant to Decision Making
Corporate Valuations: Approaches to Corporate Valuation, Adjusted Book Value Approach, Stock and
Debt Approach, Direct Comparison Approach, Discounted Cash Flow Approach, Steps involved in
valuation using DCF Approach, Discounted Cash Flow Valuation: Estimating Inputs, Approaches to
Discounted Cash Flow Models, Various discounted Cash Flow Models, Dividend Discount Model,
Applicability of the Dividend Discount Model, Other Non-DCF valuation models: Relative valuation
model, Equity Valuation Multiples Model, , Enterprise value multiples Model, Choosing the right
multiples, Book value approach Model, Stock and debt approach, Special cases of valuation:
Intangibles –Brand, Human valuation etc., Real estate Firms, Start-up firms, Firms with negative or
low earnings, Financial Service companies, Distressed firms, Valuation of cash and cross holdings,
Warrants and convertibles, Cyclical & non-cyclical companies, Holding companies, E-commerce
firms, Mergers, Acquisitions and Restructuring: Types of Transactions, Reasons for Merger,
Mechanics of a Merger, Costs and Benefits of a Merger, Exchange Ratio in a Merger, Purchase of a
Division / Plant, Takeovers, Leveraged Buyouts, Acquisition Financing, Business Alliances, Managing
Acquisitions, Divestitures, Holding Company, Demergers, Deal structuring and financial strategies:
Negotiations, Payment and legal considerations, Tax and accounting considerations, Tax reliefs and
benefits in case of Amalgamation in India, Financial reporting of business combinations, Deal
Financing, Financing of cross border acquisitions in India.
Q2. Consider the following statements regarding agriculture and select the Incorrect one.
(a) It is the largest unorganized sector in India
(b) It employs 93.4 percent of the total unorganized labor force of the economy
(c) It accounts for 17.8% of India’s GVA
(d) The share of Agriculture in GDP valuation is constantly growing since the reforms of 1991
S2. Ans.(d)
Sol. India on its path to development is following the norms of a developing economy with structural changes in the
workforce as well, which accounts for moving from an agrarian economy to an industrial economy. The share of
agriculture in the GDP has been reducing as a result of the same.
Q4. What is/are the reason/s the third plan spanning 1961-65 wasn’t able to accomplish its objectives?
(a) The war with China
(b) The war with Pakistan
(c) The drought of 1961
(d) All of the above
S4. Ans.(d)
Sol. All of the above reasons are responsible for the shortcoming of the achievement of the third plan.
Q7. The advantage of futures contracts relative to forward contracts is that futures contracts:
(a) are standardized, making it easier to match parties, thereby increasing liquidity.
(b) specify that more than one bond is eligible for delivery, making it harder for someone to corner the market and
squeeze traders.
(c) all of the above
(d) None of the above
S7. Ans.(c)
Sol. Both (a) & (b) are the advantage of futures contracts relative to forward contracts.
Q8. If a firm must pay for goods it has ordered with foreign currency, it can hedge its foreign exchange rate risk
by?
(a) selling foreign exchange futures short
(b) buying foreign exchange futures long
(c) staying out of the exchange futures market
(d) none of the above
S8. Ans.(b)
Sol. If a firm must pay for goods it has ordered with foreign currency, it can hedge its foreign exchange rate risk by
buying foreign exchange futures long.
Q9. The price specified on an option that the holder can buy or sell the underlying asset is called?
(a) Premium
(b) Coupon rate
(c) The Exercise price
(d) Market value
S9. Ans.(c)
Sol. The exercise price is the price specified on an option that the holder can buy or sell the underlying asset
Q10. Match the following measures in credit appraisal with their descriptions:
A) Verification of information
B) Field verification
C) Validation of required approvals and licenses
D) Applicant's capacity to borrow
1. Checking if the information provided by the applicant is supported by the relevant documents.
2. Ensuring that the person requesting credit has the authority and legal capacity to sign a loan agreement.
3. Visiting the factory or office of the applicant to assess their business operations and management skills.
4. Verifying all the necessary approvals and licenses required for the business to operate.
(a) A-1, B-3, C-4, D-2
(b) A-2, B-1, C-4, D-3
(c) A-3, B-4, C-1, D-2
(d) A-4, B-3, C-2, D-1
Q12. Which of the following statements regarding the credit appraisal process are true?
A) The credit rating score of the applicant is the primary criterion for decision-making
B) If the credit rating score falls below the cutoff point set by the lending bank's management, the proposal will be
rejected
C) The lender checks whether the purpose of the loan aligns with the bank's credit policy
D) The lender ensures that approving the loan does not breach the concentration limits prescribed by the bank
E) If the proposal fails to meet any of these criteria, it will be approved
(a) A, B, C, and D are true, and E is false
(b) A, B, C, D, and E are true
(c) A and B are true, C and D are false, and E is true
(d) A is true, B, C, D, and E are false
S12. Ans.(a)
Sol. The credit appraisal process involves various criteria that the lending bank considers before approving or
rejecting a credit proposal. The credit rating score of the applicant is the primary criterion for decision-making, and if
it falls below the cutoff point set by the lending bank's management, the proposal will be rejected. The lender also
checks whether the purpose of the loan aligns with the bank's credit policy and whether the proposed activity of the
borrower is on the restricted list. Additionally, the lender ensures that approving the loan does not breach the
concentration limits prescribed by the bank. Therefore, options A, B, C, and D are true. However, option E, which
states that the proposal will be approved if it fails to meet any of these criteria, is false, as the proposal will be
rejected if it fails to meet any of these criteria.
Q13. What was the major difference between FERA and FEMA?
(i) FERA treated offenses related to foreign exchange as criminal offenses, while FEMA treated them as civil
offenses
(ii) FEMA is extended to the whole of India, while FERA excluded the Gujarat International Foreign Tec-City
(iii) FERA regulated foreign exchange transactions, while FEMA regulated foreign investment in India
(iv) FERA was introduced in 1947, while FEMA was introduced in 1973
(a) Only i, and ii
(b) Only i
(c) Only ii
(d) All from i to iv
S13. Ans.(b)
Sol. FERA (Foreign Exchange Regulation Act) and FEMA (Foreign Exchange Management Act) are two acts related
to foreign exchange in India. The major difference between the two acts is that FERA treated offences related to
foreign exchange as criminal offences, while FEMA treated them as civil offences. Option (i) is therefore correct.
Option (ii) is incorrect as FEMA is also applicable to the whole of India.
Option (iii) is incorrect as FERA and FEMA both regulate foreign exchange transactions, but FERA focused more on
regulating foreign exchange transactions while FEMA regulates foreign investment in India.
Option (iv) is incorrect as FERA was introduced in 1973 and FEMA was introduced in 1999.
Q18. What are the benefits that can be associated with a good credit score?
A. Easy availability of credit such as loans, quick processing of loan and credit card applications,
B. the possibility of negotiating or waiving processing fees as well as choosing prepayment options
C. ability to negotiate interest rates
D. Improved sustainability of business models.
(a) A, C, D
(b) A, B, D
(c) A, B, C
(d) A, B, C, D
S.18. (c)
Sol. the benefits of having a good credit score, include easy availability of credit such as loans, quick
processing of loan and credit card applications, the ability to negotiate interest rates, and the possibility of
negotiating or waiving processing fees as well as choosing prepayment options.
Q19. In Schedule 3 of the Companies Act,2013, which division speaks about the financial statements for
a company who are required to comply with companies (accounting standard) rules 2006 without
complying to Ind AS?
(a) I
(b) II
(c) III
(d) IV
S19. Ans.(a)
Sol. Schedule 3 of the Companies Act, 2013
Division 1- financial statements for a company whose financial statements of the company are complied
with companies (accounting standard) rules 2006
Division 2- financial statements for a company whose financial statements of the company are complied
with companies (Indian accounting standard) rules, 2015
Division 3- financial statements for Non-Banking Financial Companies whose financial statements are
drawn up in compliance of the with companies (Indian accounting standard) rules, 2015
Q21. Every company has to transfer ____________ to reserve fund as per the RBI Notification.
(a) 25% of the profit
(b) 75% of the profit
(c) 25 % of the total income
(d) 75% of the total income.
S21. Ans.(a)
Sol. Every banking company incorporated in India is required to create a Reserve Fund and to transfer at least 25% of its
profit to the reserve fund as per RBI notification.
Q22. The banking company has to write off _________ Expenses before paying dividends.
(a) Revenue
(b) Operating
(c) Capital
(d) Outstanding
S22. Ans.(c)
Sol. Before paying any dividend, a banking company has to write off completely all its
capitalised expenses including preliminary expenses, organisation expenses, share-
selling commission, brokerage, and amounts of losses incurred by tangible assets.
Q23. Bank has to maintain a certain minimum cash balance to meet requirements is known as _________
(a) Statutory Liquidity Ratio
(b) Cash revenue ratio
(c) Capital reserve
(d) cash reserve ratio.
S23. Ans.(b)
Sol. To smoothly meet cash payment requirements, banks have to maintain certain minimum ready cash balances at all
times. This is called as Cash Reserve Ratio (CRR).
Q24. What are the various safety arrangements that need to be put in place at bank branches and ATMs?
(a) Electronic security tools
(b) Fire protection-related measures
(c) Security guards related measures
(d) All of the above
S24. Ans.(d)
Sol. d)
Explanation – All of the above safety arrangements need to be put in place at bank branches and ATMs
Q25. Which of the following statement(s) is/are true for Money laundering?
i) It is a process of converting illegal money into clean money
ii) The offences under this crime are non-bailable
iii) The minimum imprisonment under the crime is 2 years
(a) Only i
(b) Both i and ii
(c) Both i and iii
(d) All of the above
S25. Ans.(b)
Q26. Which among the following lending principles states, "The money should return to the banks as per the repayment
schedule?"
(a) Liquidity
(b) Safety
(c) Security
(d) Diversification of risks
S26. Ans.(a)
Sol. a)
Explanation – Liquidity states that the money should return to the banks as per the repayment schedule
Q28. What is the maximum exposure of banks to each of leasing, hire purchase and factoring services in relation to total
advances?
(a) 5%
(b) 10%
(c) 15%
(d) 20%
S28. Ans.(b)
Sol. b)
Explanation – The maximum exposure of banks to each of leasing, hire purchase and factoring services in relation to total
advances is 10%
Q2. Where an organization takes into account the effect its strategic decisions have on society, this is known as:
(a) Corporate governance
(b) Business policy
(c) Business ethics
(d) Corporate social responsibility
S2. Ans.(d)
Sol. Corporate social responsibility
Q4. The frequency distribution given below refers to the heights in centimetres of 100 people. Determine the mean
value of the distribution, correct to the nearest millimetre.
1. 150–156 = 5
2. 157–163 = 18
3. 164–170 = 20
4. 171–177 = 27
5. 178–184 = 22
6. 185–191 = 8
(a) 168.7 cm
(b) 170.7 cm
(c) 171.7 cm
(d) 173.7 cm
S4. Ans.(c)
Sol. 171.7 cm
Exp: Mean value
= {(5 x 153) + (18 x 160) + (20 x 167) + (27 x 174) + (22 x 181) + (8 x 188)} / 100
= 17169 / 100 = 171.7 cm
Q5. Since the population size is always larger than the sample size, then the sample statistic
(a) can never be larger than the population parameter
(b) can never be equal to the population parameter
(c) can never be smaller than the population parameter
(d) none of the above is correct
S5. Ans.(d)
Sol. Sample statistics will depend upon the sample chosen. It can be less than, greater than, or equal to the population
parameter. It can assume the value of zero.
Q7. For the purpose of Section 42 of RBI which of the following is not included in the demand and time liabilities
(a) saving bank and current deposits
(b) capital and reserves
(c) term deposits up to 1 year
(d) borrowing
S7. Ans.(b)
Sol. Capital and reserves are part of the equity of the bank and are not taken as demand and time liabilities for CRR
purposes i.e. Section 42 of the Reserve Bank of India Act
Q8. The directions issued by RBI to banks u/s 35A of Banking Regulation Act:
(a) are binding on the banks only
(b) are applicable to banks as well as public
(c) are not binding on the bank but are only advisory in nature
(d) are binding on the banks if they give acceptance to the same
S8. Ans.(a)
Sol. The directions of RBI to banks u/s 35A of the Banking Regulation Act are binding on the banks There are
penalties for non-compliance of such directives.
Q9. If there is a transaction of a bank with a borrower that violates the RBI guidelines:
(a) the violation would invalidate the transaction
(b) the bank will be liable for prosecution by RBI
(c) the transaction will be automatically cancelled
(d) all the above
S9. Ans.(b)
Sol. As per the Supreme Court judgement in Bol Finance Ltd vs The Custodian, such transaction will not be
invalidated but RBI can initiate prosecution of the bank concerned
Q13. On the basis of Which of the following the spot rate is determined in the Foreign Market
1. Balance of payment
2. Monetary and Fiscal policy
3. Economic Growth and Interest rates
(a) 1 and 2.
(b) 2 and 3
(c) 1 and 3
(d) 1,2 and 3
S13. Ans.(d)
Sol. Spot rate in the Foreign Market is determined using Fundamental reasons such as Balance of payment,
Monetary and Fiscal policy, Econic Growth, Interest rates.
Balance of payment - A surplus BOP leads to a stronger currency, while a deficit
weakens a currency.
•Economic growth rate - a high growth leads to a rise in imports and a fall in the value of
·currency, and vice versa.
•Fiscal policy - an expansionary policy, e.g., lower taxes can lead to a higher economic
·growth.
•Monetary policy - the way, a central bank attempts to influence and control interest and
·money supply can impact the value of currency of their country.
•Interest rates - high domestic interest rates tend to attract overseas capital, thus the currency appreciates in the
short term. In the longer term, however, high interest rates slow the economy down, thus weakening the currency.
Political issues - political stability is likely to lead the economic stability, and hence a steady currency, while political
instability would have the opposite effect.
Q15. Consider the following statements regarding arbitrage and choose the incorrect ones:
(a) It refers to the simultaneous buying and selling of commodities in two or more markets to make a profit from
temporary discrepancies in Prices.
(b) A simple arbitrage involves transactions in two centres
(c) A compound arbitrage involves transactions in three or more centres.
(d) Arbitrage in a future market where the trader buys an under-priced asset and sells it short is known as cash
and carry arbitrage.
S15. Ans.(d)
Sol. Arbitrage in the forex market refers to the simultaneous buying and selling of commodities in two or more
markets to make a profit from a temporary discrepancy in Prices. A simple arbitrage involves transactions in two
centres, Whereas A compound arbitrage involves transactions in three or more centres. Arbitrage in the futures
market refers to wherein a trader buys the underlying asset in the cash/spot market and sells the future of that
asset is known as Cash and carry arbitrage. It takes place when the price of the asset in the future is greater than
its price in the cash market. when the trader buys an under priced asset and sells it short is known as Reverse
cash and carry arbitrage.
Q16.The management function of controlling provides the following advantages to the organization:
(a) Assists in accomplishing personal Goals:
(b) Helps in minimizing errors
(c) Making Efficient and effective use of Board of Directors
(d) validates decisions of standards
S16. Ans.(b)
Sol. The management function of controlling provides the following advantages to the organization Assists in
accomplishing Organizational Goals, helps in minimizing errors, Making Efficient and effective use of resources
and validates accuracy of standards
Q17. Which of the following are the main limitations of Controlling in Management?
(a) It may be costly to implement, especially in smaller firms.
(b) It is difficult to compare the actual performance with the accepted standards, specially in case of standards
not expressed in quantitative terms, like job satisfaction, team spirit and employee morale etc.
(c) There is little or no control on external factors like government policies, changes in consumer behavior,
technological changes, competition, etc.
(d) All of the above
S17. Ans.(d)
Sol. Main limitations of Controlling in Management it may be costly to implement, especially in smaller firms, it is
difficult to compare the actual performance with the accepted standards and there is little or no control on external
factors like government policies, changes in consumer behavior, technological changes, competition, etc.
Q19. Equity capital has which of the following features as well as advantages?
(a) It is divided into units called Equity Shares
(b) Each unit has the same value called nominal value.
(c) All subscribers to the Equity Shares are governed by a common document called Memorandum and Articles
of Association
(d) All of the above
S19. Ans.(d)
Sol. All of the above are features of Equity Share Capital
Experienced Faculties
CHECK DETAILS
PRAVEEN RANA
MBA, JAIIB, CAIIB, NISM, NCFM, CCOC
(a) Helped 10,000+ Bankers Qualify JAIIB/CAIIB Exams
(b) 12+ Years of Experience
PRIYANSHU MAHESHWARI
CA, MBA (Finance), JAIIB
(a) Helped 5000+ Bankers qualify JAIIB/CAIIB Exams
(b) 12+ Years of Experience
SUPRABHA MUDGAL
MBA, JAIIB Qualified, Ex-Bank SO (HR)
(a) Helped 1000+ Bankers Qualify JAIIB/CAIIB Exams
(a) 10+ Years of Experience
(c) Experienced Nodal Officer for IBPS (Recruitment and Selection)
AMANJYOT KAUR
Experienced Faculty for JAIIB and CAIIB
(a) Mentored more than 10000+ Bankers
(b) 9+ Years of Experience
VISHAL MANTRI
JAIIB & CAIIB Subject Expert, CDCS Trainer, BE, NET/SET
Certified Bank Trainer (IIBF)
(a) Helped 15,000+ Bankers Qualify JAIIB/CAIIB Exams
(b) 10+ Years of Experience
Experienced Faculties
CHECK DETAILS
Experienced Faculties
CHECK DETAILS