Assessment - Credit Analysis & Risk Management (Carm) MBA-4th Semester Lmtsm

30 Questions | Total Attempts: 110

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Assessment - Credit Analysis & Risk Management (Carm) MBA-4th Semester Lmtsm


Questions and Answers
  • 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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