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Your results are here!! for" JAIIB Paper 2 Module B Quiz 5 "
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Question 1 of 20
1. Question
Which statement correctly describes operating cycle?
Correct
Correct answer: The period from investment in inputs to collection of cash from sales. A longer cash-conversion cycle can increase working-capital requirements. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: The period from investment in inputs to collection of cash from sales. A longer cash-conversion cycle can increase working-capital requirements. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: The period from investment in inputs to collection of cash from sales. A longer cash-conversion cycle can increase working-capital requirements. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 2 of 20
2. Question
A credit officer is reviewing operating cycle. Which approach is most appropriate?
Correct
Correct answer: The period from investment in inputs to collection of cash from sales. A longer cash-conversion cycle can increase working-capital requirements. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: The period from investment in inputs to collection of cash from sales. A longer cash-conversion cycle can increase working-capital requirements. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: The period from investment in inputs to collection of cash from sales. A longer cash-conversion cycle can increase working-capital requirements. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 3 of 20
3. Question
For JAIIB purposes, which option best explains operating cycle?
Correct
Correct answer: The period from investment in inputs to collection of cash from sales. A longer cash-conversion cycle can increase working-capital requirements. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: The period from investment in inputs to collection of cash from sales. A longer cash-conversion cycle can increase working-capital requirements. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: The period from investment in inputs to collection of cash from sales. A longer cash-conversion cycle can increase working-capital requirements. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 4 of 20
4. Question
Which action follows sound banking practice in a case involving operating cycle?
Correct
Correct answer: The period from investment in inputs to collection of cash from sales. A longer cash-conversion cycle can increase working-capital requirements. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: The period from investment in inputs to collection of cash from sales. A longer cash-conversion cycle can increase working-capital requirements. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: The period from investment in inputs to collection of cash from sales. A longer cash-conversion cycle can increase working-capital requirements. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 5 of 20
5. Question
Which principle should guide a bank when dealing with operating cycle?
Correct
Correct answer: The period from investment in inputs to collection of cash from sales. A longer cash-conversion cycle can increase working-capital requirements. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: The period from investment in inputs to collection of cash from sales. A longer cash-conversion cycle can increase working-capital requirements. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: The period from investment in inputs to collection of cash from sales. A longer cash-conversion cycle can increase working-capital requirements. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 6 of 20
6. Question
Which statement correctly describes drawing power?
Correct
Correct answer: Eligible current assets after margins and deductions, within the sanctioned limit. Drawing power is based on eligible security and is not automatically equal to gross stock value or sanctioned limit. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Eligible current assets after margins and deductions, within the sanctioned limit. Drawing power is based on eligible security and is not automatically equal to gross stock value or sanctioned limit. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Eligible current assets after margins and deductions, within the sanctioned limit. Drawing power is based on eligible security and is not automatically equal to gross stock value or sanctioned limit. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 7 of 20
7. Question
A credit officer is reviewing drawing power. Which approach is most appropriate?
Correct
Correct answer: Eligible current assets after margins and deductions, within the sanctioned limit. Drawing power is based on eligible security and is not automatically equal to gross stock value or sanctioned limit. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Eligible current assets after margins and deductions, within the sanctioned limit. Drawing power is based on eligible security and is not automatically equal to gross stock value or sanctioned limit. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Eligible current assets after margins and deductions, within the sanctioned limit. Drawing power is based on eligible security and is not automatically equal to gross stock value or sanctioned limit. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 8 of 20
8. Question
For JAIIB purposes, which option best explains drawing power?
Correct
Correct answer: Eligible current assets after margins and deductions, within the sanctioned limit. Drawing power is based on eligible security and is not automatically equal to gross stock value or sanctioned limit. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Eligible current assets after margins and deductions, within the sanctioned limit. Drawing power is based on eligible security and is not automatically equal to gross stock value or sanctioned limit. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Eligible current assets after margins and deductions, within the sanctioned limit. Drawing power is based on eligible security and is not automatically equal to gross stock value or sanctioned limit. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 9 of 20
9. Question
Which action follows sound banking practice in a case involving drawing power?
Correct
Correct answer: Eligible current assets after margins and deductions, within the sanctioned limit. Drawing power is based on eligible security and is not automatically equal to gross stock value or sanctioned limit. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Eligible current assets after margins and deductions, within the sanctioned limit. Drawing power is based on eligible security and is not automatically equal to gross stock value or sanctioned limit. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Eligible current assets after margins and deductions, within the sanctioned limit. Drawing power is based on eligible security and is not automatically equal to gross stock value or sanctioned limit. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 10 of 20
10. Question
Which principle should guide a bank when dealing with drawing power?
Correct
Correct answer: Eligible current assets after margins and deductions, within the sanctioned limit. Drawing power is based on eligible security and is not automatically equal to gross stock value or sanctioned limit. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Eligible current assets after margins and deductions, within the sanctioned limit. Drawing power is based on eligible security and is not automatically equal to gross stock value or sanctioned limit. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Eligible current assets after margins and deductions, within the sanctioned limit. Drawing power is based on eligible security and is not automatically equal to gross stock value or sanctioned limit. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 11 of 20
11. Question
Which statement correctly describes margin on security?
Correct
Correct answer: The borrower‘s contribution or prescribed reduction from security value. Margin provides a cushion against valuation fluctuation and ensures borrower contribution. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: The borrower‘s contribution or prescribed reduction from security value. Margin provides a cushion against valuation fluctuation and ensures borrower contribution. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: The borrower‘s contribution or prescribed reduction from security value. Margin provides a cushion against valuation fluctuation and ensures borrower contribution. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 12 of 20
12. Question
A credit officer is reviewing margin on security. Which approach is most appropriate?
Correct
Correct answer: The borrower‘s contribution or prescribed reduction from security value. Margin provides a cushion against valuation fluctuation and ensures borrower contribution. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: The borrower‘s contribution or prescribed reduction from security value. Margin provides a cushion against valuation fluctuation and ensures borrower contribution. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: The borrower‘s contribution or prescribed reduction from security value. Margin provides a cushion against valuation fluctuation and ensures borrower contribution. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 13 of 20
13. Question
For JAIIB purposes, which option best explains margin on security?
Correct
Correct answer: The borrower‘s contribution or prescribed reduction from security value. Margin provides a cushion against valuation fluctuation and ensures borrower contribution. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: The borrower‘s contribution or prescribed reduction from security value. Margin provides a cushion against valuation fluctuation and ensures borrower contribution. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: The borrower‘s contribution or prescribed reduction from security value. Margin provides a cushion against valuation fluctuation and ensures borrower contribution. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 14 of 20
14. Question
Which action follows sound banking practice in a case involving margin on security?
Correct
Correct answer: The borrower‘s contribution or prescribed reduction from security value. Margin provides a cushion against valuation fluctuation and ensures borrower contribution. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: The borrower‘s contribution or prescribed reduction from security value. Margin provides a cushion against valuation fluctuation and ensures borrower contribution. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: The borrower‘s contribution or prescribed reduction from security value. Margin provides a cushion against valuation fluctuation and ensures borrower contribution. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 15 of 20
15. Question
Which principle should guide a bank when dealing with margin on security?
Correct
Correct answer: The borrower‘s contribution or prescribed reduction from security value. Margin provides a cushion against valuation fluctuation and ensures borrower contribution. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: The borrower‘s contribution or prescribed reduction from security value. Margin provides a cushion against valuation fluctuation and ensures borrower contribution. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: The borrower‘s contribution or prescribed reduction from security value. Margin provides a cushion against valuation fluctuation and ensures borrower contribution. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 16 of 20
16. Question
Which statement correctly describes DSCR?
Correct
Correct answer: Cash available for debt service divided by principal and interest due. DSCR measures cash-flow cover for scheduled debt service; a higher ratio generally indicates stronger cover. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Cash available for debt service divided by principal and interest due. DSCR measures cash-flow cover for scheduled debt service; a higher ratio generally indicates stronger cover. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Cash available for debt service divided by principal and interest due. DSCR measures cash-flow cover for scheduled debt service; a higher ratio generally indicates stronger cover. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 17 of 20
17. Question
A credit officer is reviewing DSCR. Which approach is most appropriate?
Correct
Correct answer: Cash available for debt service divided by principal and interest due. DSCR measures cash-flow cover for scheduled debt service; a higher ratio generally indicates stronger cover. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Cash available for debt service divided by principal and interest due. DSCR measures cash-flow cover for scheduled debt service; a higher ratio generally indicates stronger cover. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Cash available for debt service divided by principal and interest due. DSCR measures cash-flow cover for scheduled debt service; a higher ratio generally indicates stronger cover. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 18 of 20
18. Question
For JAIIB purposes, which option best explains DSCR?
Correct
Correct answer: Cash available for debt service divided by principal and interest due. DSCR measures cash-flow cover for scheduled debt service; a higher ratio generally indicates stronger cover. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Cash available for debt service divided by principal and interest due. DSCR measures cash-flow cover for scheduled debt service; a higher ratio generally indicates stronger cover. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Cash available for debt service divided by principal and interest due. DSCR measures cash-flow cover for scheduled debt service; a higher ratio generally indicates stronger cover. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 19 of 20
19. Question
Which action follows sound banking practice in a case involving DSCR?
Correct
Correct answer: Cash available for debt service divided by principal and interest due. DSCR measures cash-flow cover for scheduled debt service; a higher ratio generally indicates stronger cover. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Cash available for debt service divided by principal and interest due. DSCR measures cash-flow cover for scheduled debt service; a higher ratio generally indicates stronger cover. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Cash available for debt service divided by principal and interest due. DSCR measures cash-flow cover for scheduled debt service; a higher ratio generally indicates stronger cover. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 20 of 20
20. Question
Which principle should guide a bank when dealing with DSCR?
Correct
Correct answer: Cash available for debt service divided by principal and interest due. DSCR measures cash-flow cover for scheduled debt service; a higher ratio generally indicates stronger cover. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Cash available for debt service divided by principal and interest due. DSCR measures cash-flow cover for scheduled debt service; a higher ratio generally indicates stronger cover. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Cash available for debt service divided by principal and interest due. DSCR measures cash-flow cover for scheduled debt service; a higher ratio generally indicates stronger cover. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.