The Basel Committee has defined gross income as net interest income and plus net noninterest income and has allowed each relevant national supervisor to define gross income in accordance with the prevailing accounting practices. Accordingly the Reserve Bank of India in the draft guidelines issued on 11.03.2005 for implementation of the new capital adequacy framework has modified the Gross Income definition slightly. The Net Interest Income has been replaced by

A. Net Profit

B. Operating Profit

C. No Changes made

D. Interest Expended

If there is an expectation of large decline in interest rates, which of the following investments should you choose?

A. Low-coupon short term bond

B. High coupon short term bond

C. Long term zero coupon bond

D. Short term zero coupon bond

The income received by the approved superannuation fund on the investments made by the fund is

A. Exempt from income tax

B. Taxed as the concession rate of 10% of the income

C. Tax at the hands of employees concerned based on the share of each employee

D. Taxed under Capital Gains Tax depending upon the nature of investment

The economic environment covers following factors..........

A. Inflation

B. Unemployment

C. Productivity

D. All the above

Which of the following statement (s) is/are true about the rate risk?

A. Interest risk is the uncertainty associated with changes in interest rates, the possibility of loss resulting from increases in interest rates.

B. Interest risk refers to the tendency of security prices, especially fixed income securities, to move inversely with changes in the rate of interest.

C. Only option A

D. Option A & B both

If an investment has a correlation coefficient of 0.80 with the market, which of the following performance measures is the best measure of risks?

A. Jensen.

B. Sharpe & Jensen.

C. Sharpe.

D. Treynor.

The minimum capital that a private limited company needs to commence business is:

A. 5 lacs.

B. 4 lacs.

C. 1 lac.

D. 10 lacs.

Which of the following is true about systematic risk?

A. Systematic risk refers to those factors that affect the returns on all comparable investments.

B. When the market as a whole rises, the prices of most individual securities also rise.

C. There is a systematic relationship between the return on a specific asset and the return on all other assets in its class.

D. All of the above

In case of yearly, half yearly or quarterly premium payments …………… days of grace.

A. 10 Days

B. 15 Days

C. 20 Days

D. 30 Days

Under the current international monetary system,

A. each country can choose whether it wants a fixed or a floating exchange rate.

B. surveillance is conducted by the International Monetary Fund (IMF) over the exchangerate policies of its members.

C. there is joint floating by some countries.

D. All of the above.

The facility of mini-statement is available to customers __________

A. 24 x 7, at all times

B. Only on working days of the branch

C. Only during working hours of the branch where the customer maintains his a/c.

D. At all times when the server is up at the branch maintaining the customer’s account

If a typical market basket of goods and services cost Rs 120 in 1975, the base year, and Rs 180 in 1985, the price index in 1985 would be__________

A. 120

B. 150

C. 160

D. 180