Assessment - Credit Analysis & Risk Management (Carm) MBA-4th Semester Lmtsm
- 1.Which of the following is an advantage of using equity as a source of funding?
- A.
It doesn't have additional financial commitments.
- B.
It’s very liquid and always accepted.
- C.
The cost of equity is usually lower than the cost of credit.
- D.
It won’t dilute existing shareholder’s value of change ownership percentage.
- 2.If you borrow Rs 5,000 with 4% interest compounded annually, how much total interest do you need to pay after 2 years?
- A.
408
- B.
404
- C.
400
- D.
412
- 3.Assuming all else is equal, which of the following loans is most likely to have the lowest total interest cost?
- A.
Secured non-amortizing loan
- B.
Unsecured amortizing loan
- C.
Secured amortizing loan
- D.
Unsecured non-amortizing loan
- 4.What is the advantage of a variable-interest loan?
- A.
Makes it easier for the borrower to plan for future payments
- B.
Protects the borrower from rising interest rates
- C.
Reduces the total interest payments
- D.
Borrower can capitalize on a reference rate decrease
- 5.What do the liquidity ratios tell you in the financial analysis?
- A.
The efficiency of inventory
- B.
The capital structure of a company
- C.
The company’s ability to pay off debt obligations
- D.
The profitability of the company
- 6.Where would ‘accounts payable’ most likely appear in a set of financial statements?
- A.
In the balance sheet under 'non-current liabilities'
- B.
In both the income statement and the balance sheet
- C.
In the balance sheet under 'current liabilities'
- D.
In the income statement before operating profit
- 7.What is the best definition of a non-current asset?
- A.
An asset intended for use on a continuing basis in the company's activities
- B.
Expenditure made to fulfil a revenue obligation
- C.
An asset purchased for resale
- D.
The total of current assets less current liabilities
- 8.What is the principal purpose of charging depreciation on non-current assets?
- A.
To show the assets at their market value in the balance sheet
- B.
To spread the cost of the assets over their estimated useful lives
- C.
To ensure that sufficient funds are available to replace the assets
- D.
To comply with the fundamental concept of prudence
- 9.Which of the following most likely indicates strong “Capital” for a company?
- A.
Unutilized lines of credit or loans
- B.
Increasing interest-bearing debt
- C.
Limited equity has been invested by the owners
- D.
Low-quality inventory
- 10.Which of the following ratios most likely indicates strong “Capacity” for a company?
- A.
Increasing accounts payables
- B.
High asset turnover ratio
- C.
High debt to equity ratio
- D.
Positive investing cash flows
- 11.Which of the following tools or methods is used to assess the general business environment?
- A.
MAST framework
- B.
PEST analysis
- C.
Cash flow analysis
- D.
SWOT analysis
- 12.Select the loan contract with the lowest risk.
- A.
A demand loan with monthly payments secured by assets
- B.
A term loan with a bullet principal payment at loan maturity secured by assets
- C.
An unsecured term loan with a bullet principal payment at maturity
- D.
An unsecured demand loan with monthly payments
- 13.What form of business ownership is generally the simplest for a small business?
- A.
Corporation
- B.
Partnership
- C.
Franchise
- D.
Sole proprietorship
- 14.Which of the following statements about business structures is not true?
- A.
In a general partnership, partners are only liable for the portion of capital they invested in the business
- B.
In a sole proprietorship, the owner retains all of the after-tax profits of the business
- C.
Joint venture allows for sharing of risks with a venture partner
- D.
In a limited liability corporation, profit distributions flow through to the members
- 15.Which of the following is not a feature of recently announces Auto Loans for MSME
- A.
Borrowers with up to Rs. 25 crores outstanding and Rs. 100 crore turnover are eligible
- B.
Loans to have 4-year tenor with moratorium period of 12 months on principal repayment
- C.
100% credit guarantee cover to Banks and NBFCs on principal and interest
- D.
Personal Asset Guarantee by promotors of the enterprise is must
- 16.Which of the followings is not a feature of Global tenders policy announced as part of COVID 19 financial package
- A.
Global tenders will be disallowed in Government procurement tenders up to Rs 200 crores
- B.
This will be a step towards Self-Reliant India and support Make in India
- C.
MSMEs will be able to attract global investments.
- D.
This will help MSMEs to increase their business.
- 17.What is approximate size if Indian real estate industry as a percentage to GDP
- A.
9%
- B.
5%
- C.
2%
- D.
7%
- 18.What is the percentage of interest subsidy offered to MIG 1 category under PMAY?
- A.
5%
- B.
4%
- C.
3%
- D.
2%
- 19.Which of the following about ‘No Cost EMI’ is not true?
- A.
Discount is merged towards reducing the interest
- B.
Processing Fee is generally charged to cover partial interest cost
- C.
Manufacturer sometimes also contribute towards compensating the interest
- D.
Lenders do not earn any interest in such transitions
- 20.What is approximate sales (units) in Indian Automotive industry in year 2019
- A.
5.50 million
- B.
4.18 million
- C.
3.37 million
- D.
6.48 million
- 21.Which of the following is not the recent industry trends in Indian automotive industry?
- A.
Low cost electric vehicle
- B.
Voluntary vehicle fleet modernization program
- C.
Focus of diesel run vehicles
- D.
Bharat Stage VI norms
- 22.The approximate market share of Bajaj Finance in electronic goods financing market is
- A.
25%
- B.
20%
- C.
10%
- D.
17%
- 23.EMI Stands for
- A.
Equal Monthly Instalment
- B.
Equated Monthly Instalment
- C.
Equal Monthly Income
- D.
Equated Monthly Income
- 24.Wrong punching of interest rate structure offered to a client in system while underwriting a loan is an example of
- A.
Market Risk
- B.
Credit Risk
- C.
Operational Risk
- D.
Financial Risk
- 25.Below is not a characteristic of retail banking
- A.
Risk diversification
- B.
Larger outreach
- C.
Focus on individual clients
- D.
Business lending services
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