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Q1)What is risk Management?

o Risk taking
o Avoiding risk
o Taking calculated risk.
o Risk elimination

Q2) VAR of $5mn at 99% confidence level implies?

o 99% times loss is $5mn.


o !% of times loss is more than $1mn
o !% of times loss is less than $1mn
o 99% of times loss is less than $5mn.

Q3)Holding sufficient capital so that potential losses are covered.

o Physical Capital
o VAR capital
o Economic Capital

Q4)What is the process of considering entity wide risks and trying to integrate risk considerations in
business called?

o Scenario Analysis
o Stress Testing
o Calculating expected loss
o Enterprise risk Management

Q5)Expected returns of equities will be less than?

o Bonds
o Derivatives
o Fixed deposits
o Treasury bills

Q6)If market interest rate inreases what will happen to given security

o Bond price will decrease


o Bond Price will increase
o Bond price wont be affected.

Q7)Which risk cannot be diversified.

o All risks can be diversified


o No risk can be diversified
o General Market risk can be diversified
o Specific risk can be diversified

Q8)Commodity price risk does not show which of the following traits
o Monetary loss due to unhedged foreign currency position
o Less trading liquidity as compared to stocks
o Significan price discontinuities
o Concentration with few players

Q9)After a ratings downgrae what happens t he lending rates?

o Lending rates charged increases


o Lending rates charged decreases
o Lending rates dont get affected

Q10)If partys Net gain in positin is $400,000 and recovery rate is 30% than what is loss given
default?

o 300,000
o 280,000
o 120,000
o 0

Q11)When an entity is unable to buy or sell a security beacuse of inabilty to find a counterparty is
called as

o Concentration risk
o Funding liquidity risk
o Trading liquidity risk
o Credit risk

Q12)Which of the following is not an operational risk?

o Technology inadequacy
o Insufficient internal contol
o Fraud
o Downgrade of credit rating

Q13)Which of these is not a disadvatage of hedging?

o Hedging will incur Compliance costs


o Hedging securities may reveal companies info
o Hedging reduces risk.

Q14)Whic of the following stakeholders will want the risk to be as low as possible?

o Equity holder
o Debtholder
o Board of director
o Esop holders

Q15)Financial position risk pertains to


o Balance sheet
o Income statement
o Cash flow statement

Q16)Which department is responsible for prepring P&L

o Finance
o Operation
o Risk management
o Trading room mngt

Q17)Which vertical signs off official P&L

o Finance
o Operation
o Risk management
o Trading room mngt

Q18)Which department manages risk committee process?

o Finance
o Operation
o Risk management
o Trading room mngt

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