AIWMI CCRA-L2 CCRA - Level 2 Practice Questions| TestInsights

Question 1

An increase in the salaries of the bank employees due to new bank employee pay commission implemented by the Central Government will lead to deterioration of which of the following ratios:

A: Cost to Income Ratio

B: Net Interest Margin

C: Core Spread

AOnly A

BA B and C

COnly B

DOnly C

Correct : A

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AOnly A

BA B and C

COnly B

DOnly C

Question 2

Based on the common size statement analysis which of the following statement regarding employee cost is correct?

CCRA-L2 Exam Question 2 Exhibit 1

AThe employee cost is expected to contribute 8% to decrease in PAT in FY15

BThe employee cost is expected to contribute 7% to decrease in PAT in FY15

CThe employee cost is expected to contribute 6% to decrease in PAT in FY15

DThe employee cost is expected to contribute 5% to decrease in PAT in FY15

Correct : C

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AThe employee cost is expected to contribute 8% to decrease in PAT in FY15

BThe employee cost is expected to contribute 7% to decrease in PAT in FY15

CThe employee cost is expected to contribute 6% to decrease in PAT in FY15

DThe employee cost is expected to contribute 5% to decrease in PAT in FY15

Question 3

Bank A has an imaginary portfolio of USD 1000 Million distributed towards following four entities:

CCRA-L2 Exam Question 3 Exhibit 1

Bank A is stipulated to maintain a capital adequacy ratio of 11% on its risk weighted assets. It is being stipulated that the ratings for all the four entities is expected to be downgraded by 1 notch each. Estimate the amount of new capital required for Bank A?

AUSD 93.5 Million

BUSD 38.5 Million

CUSD 55 Million

DUSD 850 Million

Correct : B

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AUSD 93.5 Million

BUSD 38.5 Million

CUSD 55 Million

DUSD 850 Million

Question 4

Stand by letter of credits are typically taken as credit enhancement for___________

ACommercial Paper

BLong term Bond issues

CLong term debenture issues

DBank debt

Correct : D

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ACommercial Paper

BLong term Bond issues

CLong term debenture issues

DBank debt

Question 5

Which of the following is false in case of credit enhancements?

AIt reduces the default risk of the borrowing entity for the lender, thereby deteriorating the overall credit worthiness of the borrower

BCredit enhancement could be implicit or explicit

CCredit enhancement is a mechanism whereby external cash flows is extended by an entity which has a stringer credit profile, so that it benefits the fund raising entity

Correct : A

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AIt reduces the default risk of the borrowing entity for the lender, thereby deteriorating the overall credit worthiness of the borrower

BCredit enhancement could be implicit or explicit

CCredit enhancement is a mechanism whereby external cash flows is extended by an entity which has a stringer credit profile, so that it benefits the fund raising entity

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