CAIIB Paper 2 Module A Quiz 8

Time limit: 0

0 of 20 questions completed

Questions:

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Information

Questions: 20

You have already completed the Test before. Hence you can not start it again.

Test is loading...

You must sign in or sign up to start the Test.

You have to finish following quiz, to start this Test:

Your results are here!! for" CAIIB Paper 2 Module A Quiz 8 "

0 of 20 questions answered correctly

Your time:

Time has elapsed

Your Final Score is : 0
You have attempted : 0
Number of Correct Questions : 0 and scored 0
Number of Incorrect Questions : 0 and Negative marks 0

Not categorized
You have attempted: 0
Number of Correct Questions: 0 and scored 0
Number of Incorrect Questions: 0 and Negative marks 0

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Answered
Review

Question 1 of 20

1. Question
FX settlement risk: Herstatt risk is the risk that:
- A domestic ATM fails
- A passport scan is unclear
- An LC contains a typo only
- One currency is paid but the counter-currency is not received
Correct

Herstatt risk is principal settlement risk arising when the two currency legs settle at different times.

Incorrect

Herstatt risk is principal settlement risk arising when the two currency legs settle at different times.

Unattempted

Herstatt risk is principal settlement risk arising when the two currency legs settle at different times.
Question 2 of 20

2. Question
FX settlement risk — application: Which statement is most accurate in a CAIIB banking scenario concerning fx settlement risk?
- An LC contains a typo only
- One currency is paid but the counter-currency is not received
- A passport scan is unclear
- A domestic ATM fails
Correct

Herstatt risk is principal settlement risk arising when the two currency legs settle at different times. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Incorrect

Herstatt risk is principal settlement risk arising when the two currency legs settle at different times. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Unattempted

Herstatt risk is principal settlement risk arising when the two currency legs settle at different times. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.
Question 3 of 20

3. Question
PvP settlement: Payment-versus-payment arrangements reduce:
- All market risk
- Need for KYC
- All exchange-rate movements
- Principal settlement risk in FX transactions
Correct

PvP links the two currency legs so one settles if and only if the other settles, subject to system rules.

Incorrect

PvP links the two currency legs so one settles if and only if the other settles, subject to system rules.

Unattempted

PvP links the two currency legs so one settles if and only if the other settles, subject to system rules.
Question 4 of 20

4. Question
PvP settlement — application: Which statement is most accurate in a CAIIB banking scenario concerning pvp settlement?
- All exchange-rate movements
- Principal settlement risk in FX transactions
- Need for KYC
- All market risk
Correct

PvP links the two currency legs so one settles if and only if the other settles, subject to system rules. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Incorrect

PvP links the two currency legs so one settles if and only if the other settles, subject to system rules. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Unattempted

PvP links the two currency legs so one settles if and only if the other settles, subject to system rules. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.
Question 5 of 20

5. Question
Nostro reconciliation: Nostro reconciliation helps identify:
- The official exchange rate
- Unmatched entries, delays, errors and possible unauthorised transactions
- Guaranteed profits
- Need for KYC removal
Correct

Reconciling correspondent statements to internal books detects discrepancies, failed payments, duplicate entries and errors.

Incorrect

Reconciling correspondent statements to internal books detects discrepancies, failed payments, duplicate entries and errors.

Unattempted

Reconciling correspondent statements to internal books detects discrepancies, failed payments, duplicate entries and errors.
Question 6 of 20

6. Question
Nostro reconciliation — application: Which statement is most accurate in a CAIIB banking scenario concerning nostro reconciliation?
- Need for KYC removal
- The official exchange rate
- Guaranteed profits
- Unmatched entries, delays, errors and possible unauthorised transactions
Correct

Reconciling correspondent statements to internal books detects discrepancies, failed payments, duplicate entries and errors. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Incorrect

Reconciling correspondent statements to internal books detects discrepancies, failed payments, duplicate entries and errors. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Unattempted

Reconciling correspondent statements to internal books detects discrepancies, failed payments, duplicate entries and errors. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.
Question 7 of 20

7. Question
Country risk: Country risk may arise from:
- Political/economic events or restrictions affecting repayment and transfer of funds
- Staff training schedules
- Office furniture
- Only domestic cheque errors
Correct

Country risk includes events that impair payment, transfer or convertibility across borders.

Incorrect

Country risk includes events that impair payment, transfer or convertibility across borders.

Unattempted

Country risk includes events that impair payment, transfer or convertibility across borders.
Question 8 of 20

8. Question
Country risk — application: Which statement is most accurate in a CAIIB banking scenario concerning country risk?
- Staff training schedules
- Office furniture
- Political/economic events or restrictions affecting repayment and transfer of funds
- Only domestic cheque errors
Correct

Country risk includes events that impair payment, transfer or convertibility across borders. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Incorrect

Country risk includes events that impair payment, transfer or convertibility across borders. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Unattempted

Country risk includes events that impair payment, transfer or convertibility across borders. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.
Question 9 of 20

9. Question
Transfer risk: Transfer risk is the possibility that:
- A domestic account has a wrong IFSC
- A courier loses an invoice
- An option premium is low
- A borrower can pay locally but cannot transfer foreign currency abroad
Correct

Transfer restrictions can prevent cross-border remittance despite local ability to pay.

Incorrect

Transfer restrictions can prevent cross-border remittance despite local ability to pay.

Unattempted

Transfer restrictions can prevent cross-border remittance despite local ability to pay.
Question 10 of 20

10. Question
Transfer risk — application: Which statement is most accurate in a CAIIB banking scenario concerning transfer risk?
- A courier loses an invoice
- An option premium is low
- A borrower can pay locally but cannot transfer foreign currency abroad
- A domestic account has a wrong IFSC
Correct

Transfer restrictions can prevent cross-border remittance despite local ability to pay. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Incorrect

Transfer restrictions can prevent cross-border remittance despite local ability to pay. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Unattempted

Transfer restrictions can prevent cross-border remittance despite local ability to pay. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.
Question 11 of 20

11. Question
Sovereign risk: Sovereign risk relates most directly to:
- Government default, restructuring or adverse state actions affecting obligations
- A damaged debit card
- Office lease renewal
- Spot/forward difference
Correct

Sovereign risk concerns government-related default or policy actions that affect repayment and recoveries.

Incorrect

Sovereign risk concerns government-related default or policy actions that affect repayment and recoveries.

Unattempted

Sovereign risk concerns government-related default or policy actions that affect repayment and recoveries.
Question 12 of 20

12. Question
Sovereign risk — application: Which statement is most accurate in a CAIIB banking scenario concerning sovereign risk?
- Government default, restructuring or adverse state actions affecting obligations
- Office lease renewal
- A damaged debit card
- Spot/forward difference
Correct

Sovereign risk concerns government-related default or policy actions that affect repayment and recoveries. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Incorrect

Sovereign risk concerns government-related default or policy actions that affect repayment and recoveries. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Unattempted

Sovereign risk concerns government-related default or policy actions that affect repayment and recoveries. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.
Question 13 of 20

13. Question
Country limits: Country exposure limits help a bank:
- Avoid individual credit assessment
- Guarantee all borrowers in that country
- Control aggregate risk concentration linked to a jurisdiction
- Set the country‘s exchange rate
Correct

Country limits complement counterparty and sector limits by controlling aggregate jurisdiction exposure.

Incorrect

Country limits complement counterparty and sector limits by controlling aggregate jurisdiction exposure.

Unattempted

Country limits complement counterparty and sector limits by controlling aggregate jurisdiction exposure.
Question 14 of 20

14. Question
Country limits — application: Which statement is most accurate in a CAIIB banking scenario concerning country limits?
- Avoid individual credit assessment
- Guarantee all borrowers in that country
- Set the country‘s exchange rate
- Control aggregate risk concentration linked to a jurisdiction
Correct

Country limits complement counterparty and sector limits by controlling aggregate jurisdiction exposure. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Incorrect

Country limits complement counterparty and sector limits by controlling aggregate jurisdiction exposure. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Unattempted

Country limits complement counterparty and sector limits by controlling aggregate jurisdiction exposure. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.
Question 15 of 20

15. Question
Incoterms EXW: Under EXW, the seller‘s delivery obligation is generally fulfilled when goods are:
- Delivered to buyer‘s warehouse with import duty paid
- Unloaded at destination by seller
- Loaded on vessel at seller‘s cost in every case
- Placed at the buyer‘s disposal at the named place
Correct

EXW places relatively minimal delivery obligations on the seller; export-clearance practicalities should be considered.

Incorrect

EXW places relatively minimal delivery obligations on the seller; export-clearance practicalities should be considered.

Unattempted

EXW places relatively minimal delivery obligations on the seller; export-clearance practicalities should be considered.
Question 16 of 20

16. Question
Incoterms EXW — application: Which statement is most accurate in a CAIIB banking scenario concerning incoterms exw?
- Loaded on vessel at seller‘s cost in every case
- Unloaded at destination by seller
- Delivered to buyer‘s warehouse with import duty paid
- Placed at the buyer‘s disposal at the named place
Correct

EXW places relatively minimal delivery obligations on the seller; export-clearance practicalities should be considered. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Incorrect

EXW places relatively minimal delivery obligations on the seller; export-clearance practicalities should be considered. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Unattempted

EXW places relatively minimal delivery obligations on the seller; export-clearance practicalities should be considered. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.
Question 17 of 20

17. Question
CIP: CIP Incoterms are generally suitable for:
- Transactions where insurance is prohibited
- Any mode or combination of transport, with seller-arranged carriage and insurance
- Only ocean bulk shipments
- Only domestic road transport
Correct

CIP is multimodal; CIF is for sea/inland-waterway transport and their insurance obligations differ.

Incorrect

CIP is multimodal; CIF is for sea/inland-waterway transport and their insurance obligations differ.

Unattempted

CIP is multimodal; CIF is for sea/inland-waterway transport and their insurance obligations differ.
Question 18 of 20

18. Question
CIP — application: Which statement is most accurate in a CAIIB banking scenario concerning cip?
- Transactions where insurance is prohibited
- Only ocean bulk shipments
- Any mode or combination of transport, with seller-arranged carriage and insurance
- Only domestic road transport
Correct

CIP is multimodal; CIF is for sea/inland-waterway transport and their insurance obligations differ. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Incorrect

CIP is multimodal; CIF is for sea/inland-waterway transport and their insurance obligations differ. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Unattempted

CIP is multimodal; CIF is for sea/inland-waterway transport and their insurance obligations differ. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.
Question 19 of 20

19. Question
LC independence: The independence principle means the credit is:
- Automatically cancelled by a sales dispute
- Separate from the underlying sale contract for the bank‘s documentary undertaking
- A substitute for the sales contract in every respect
- Dependent on the buyer‘s opinion of goods
Correct

Banks examine documents against the credit and applicable rules rather than adjudicating the underlying sale dispute, subject to legal exceptions.

Incorrect

Banks examine documents against the credit and applicable rules rather than adjudicating the underlying sale dispute, subject to legal exceptions.

Unattempted

Banks examine documents against the credit and applicable rules rather than adjudicating the underlying sale dispute, subject to legal exceptions.
Question 20 of 20

20. Question
LC independence — application: Which statement is most accurate in a CAIIB banking scenario concerning lc independence?
- A substitute for the sales contract in every respect
- Separate from the underlying sale contract for the bank‘s documentary undertaking
- Automatically cancelled by a sales dispute
- Dependent on the buyer‘s opinion of goods
Correct

Banks examine documents against the credit and applicable rules rather than adjudicating the underlying sale dispute, subject to legal exceptions. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Incorrect

Banks examine documents against the credit and applicable rules rather than adjudicating the underlying sale dispute, subject to legal exceptions. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.

Unattempted

Banks examine documents against the credit and applicable rules rather than adjudicating the underlying sale dispute, subject to legal exceptions. In an exam scenario, apply the principle to the transaction facts and check the current RBI/FEMA or ICC rule where the question is regulatory.