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Exam Papers 
MGT604 (BNK604): Mangmnt of Financial Institutions MGT604 Midterm 2010 Paper Shared by Mehreen Humayun
MGT604 (BNK604): Mangmnt of Financial Institutions MGT604 Midterm 2010 Paper Shared by Mehreen Humayun MGT604 Midterm 2010 Paper Shared by Mehreen Humayun
MGT604 Midterm 2010 Paper Shared by Mehreen Humayun
MIDTERM EXAMINATION
MIDTERM EXAMINATION
Fall 2010
MGT604 - Management of Financial Institutions
Shared by Mehreen Humayun ( mehreen@vuzs.net)
Time: 60 min
Marks: 39
Question No: 1 ( Marks: 1 ) - Please choose one
►Financial intermediaries
► Financial markets
► Borrowers
► Lenders
Question No: 2 ( Marks: 1 ) - Please choose one
In Pakistan regulation and supervision of the banking industry is settled by:
► National bank
► SECP
►State bank
► Ministry of finance
Question No: 3 ( Marks: 1 ) - Please choose one
Through which one of the following central bank influences the money supply in an economy:
► Monetary policy
► Prudential regulations
► Banking ordinance
Question No: 4 ( Marks: 1 ) - Please choose one
Buying of securities results in printing of new money and lowering the supply of specific security this process is known as:
► Purchase of securities
►Repurchase of securities
► Discounting of securities
► Rediscounting of securities
Question No: 5 ( Marks: 1 ) - Please choose one
Financial regulators, such as the______________ supervises the capital markets in their respective countries to ensure that investors are protected against frauds.
► State bank
► International chamber of commerce
►Security & exchange commission
► Banking inspection department
Question No: 6 ( Marks: 1 ) - Please choose one
Which one of the following is NOT the division of exchange policy department?
► Policy division
► Exchange companies division
► Investment division
►Recruitment division
Question No: 7 ( Marks: 1 ) - Please choose one
Banks seek to maximize____________ for a given amount of risk on their balance sheet.
► Loans
► Deposits
►Securities
Lecture # 28
Banks seek to maximize profitability for a given amount of risk on their balance sheet.
Question No: 8 ( Marks: 1 ) - Please choose one
The amount of capital a bank is required to hold is the function of which one of the following?
►The amount of required reserve
► The credit rating requirement
► The amount and quality of assets
► Leverage requirement
Lecture # 16
The amount of capital a bank is required to hold is a function of the amount and quality of its assets.
Question No: 9 ( Marks: 1 ) - Please choose one
Mutual funds belong to a group of financial intermediaries known as:
►Investment companies
► Banks
► Pension funds
► Insurance companies
Question No: 10 ( Marks: 1 ) - Please choose one
Which one of the following is responsible for overall governance of the mutual funds?
► Directors
►Government
► Government's agent
► Shareholders
Lecture # 22
The directors of the fund are responsible for overall governance of the fund.
www.vuzs.net
www.vuzs.net
Question No: 11 ( Marks: 1 ) - Please choose one
ACAC is the acronym of which of the following?
► Access customer advocate center
►Agricultural credit advisory committee
► Agricultural credit accounting committee
► Agricultural credit accounting commission
Question No: 12 ( Marks: 1 ) - Please choose one
Which of the following functions is NOT performed by the audit department?
► Financial audit
► Operational audit
► Information technology audit
►Research & development
Question No: 13 ( Marks: 1 ) - Please choose one
Which of the following stands for GFS?
► Government Finance Statistics
► Global Field Services
►Global Financial System
► Global Forecast System
Question No: 14 ( Marks: 1 ) - Please choose one
Which of the following countries got the first loan from World Bank?
► Germany
► Norway
►France
► United States of America
Question No: 15 ( Marks: 1 ) - Please choose one
Which of the following channels of commercial banks is known as computerized telecommunications device?
► Branch
►Automated teller machine
► Telephone banking
► Online banking
Question No: 16 ( Marks: 1 ) - Please choose one
Which of the following role is played by the board of directors of a bank?
► Make deposits
► Make loans
►Oversee bank activities
► Handle withdrawals
Question No: 17 ( Marks: 1 ) - Please choose one
Which one of the following is responsible for the supervision of non banking financial institutions?
►State Bank
► Chamber of commerce
► Ministry of finance
Lecture # 19
The responsibility for supervision of nonbank finance companies has been separated and transferred to Securities Exchange Commission.
www.vuzs.net
www.vuzs.net
Question No: 18 ( Marks: 1 ) - Please choose one
In which of the following forms the National Investment Trust units are traded?
►Share
► Debenture
► Bond
► Certificate
Lecture # 23
Mutual Funds were introduced in Pakistan in 1962, with the public offering of National
Investment (Unit) Trust (NIT) which is an open-end mutual fund in the public sector.
Question No: 19 ( Marks: 3 )
For investment purpose customers always judge the profitability of the bank. To attract more customers how a bank can enhance its profitability?
Answer:
Banks can increase their customer base and their profitability by providing all services under one roof namely traditional banking services and the more modern financaial services like investment banking, credit card services, mutual fund services, life insurance products. Also by charging customers based on their credit profie i.e higher charges for low credit worthy clients they can increase their charges and fees. Also by developing new products which will be used by people in their everyday life and than charging a small fee for the same the banks can increase their profits.
Question No: 20 ( Marks: 3 )
Define merchant banks.
Answer:
Merchant banks are those banks which are involved in any type of trading. These kind of banks also provide shares to customers. They also buy and sell companies. They raise capital for the companies in various ways like IPO, Debt instruments and convertible instruments.
Question No: 21 ( Marks: 5 )
Pakistan is not able to sustain growth over the long term. Do you agree with this statement? Give reasons to support your answer.
Answer:
Pakistan has been trying like all its neighbours to achieve a growth in excess of 7%however there have been multiple of factors that has pegged it back namely, the US led war in Afghanistan, the earthquakes, which have happened, the riots that have taken place in Karachi, global slowdown, the ever present threat of a war with India. Inspite of all these factors Pakistan economy has shown great strength and determination in achieving growth of 7% in few years.
Question No: 22 ( Marks: 5 )
Banks provide investment facilities to its customers. How customers can judge the management soundness and profitability of the banks?
Answer:
The financial statements of the banks are not easy for everyone to interpret. As a result in order to judge the management soundness what one can do is check the various operational and profitability ratios of the concerned banks against the ones shown by the good banks and against the averages for the banking industry. One of the ratio is the amount of income generated against the expenses incurred to earn the same. This will enable us to know the margin of safety. Another way can be to compare the interest income against interest expense. Also one can compare how much fixed expenses are being incurred, how much are the overheads etc and compare with other banks to see the soundness of management.
Question No: 23 ( Marks: 5 )
If State Bank has capital shortage and wants to borrow, what are the possible sources through which it can get loan?
Answer:
In order to raise liquidity the SBP can do the following:
1) Sell securities in the open market and raise cash.
2) Change the reserve requirements of the bank.
3) Borrow from domestic lenders and financial institutions.
4) Issue new domestic bonds.
5) Borrow from external agencies like the IMF or ADB.
6) Issue foreign bonds to Pakistanis residing abroad.
7) Issue foreign bonds to the world markets.
You are here: Exam Papers MGT604 (BNK604): Mangmnt of Financial Institutions MGT604 Midterm 2010 Paper Shared by Mehreen Humayun
MGT604 (BNK604): Mangmnt of Financial Institutions MGT604 Midterm 2010 Paper Shared by Mehreen Humayun 
Exam Papers 
MGT604 (BNK604): Mangmnt of Financial Institutions BNK604 Midterm 2010 Paper Shared by Mehreen Humayun
MGT604 (BNK604): Mangmnt of Financial Institutions BNK604 Midterm 2010 Paper Shared by Mehreen Humayun BNK604 Midterm 2010 Paper Shared by Mehreen Humayun
BNK604 Midterm 2010 Paper Shared by Mehreen Humayun
Fall 2010
BNK604 - Management of Financial Institutions
Shared by Mehreen Humayun ( mehreen@vuzs.net)
http://groups.google.com/groups/vuzs
Time: 60 min
Marks: 39
Question No: 1 ( Marks: 1 ) - Please choose one
Pension funds are the example of:
►Financial intermediaries
► Financial markets
► Borrowers
► Lenders
Question No: 2 ( Marks: 1 ) - Please choose one
In Pakistan regulation and supervision of the banking industry is settled by:
► National bank
► SECP
►State bank
► Ministry of finance
Question No: 3 ( Marks: 1 ) - Please choose one
Through which one of the following central bank influences the money supply in an economy:
► Monetary policy
► Prudential regulations
►Open market operation
► Banking ordinance
Question No: 4 ( Marks: 1 ) - Please choose one
Buying of securities results in printing of new money and lowering the supply of specific security this process is known as:
► Purchase of securities
►Repurchase of securities
► Discounting of securities
► Rediscounting of securities
Question No: 5 ( Marks: 1 ) - Please choose one
Financial regulators, such as the______________ supervises the capital markets in their respective countries to ensure that investors are protected against frauds.
► State bank
► International chamber of commerce
►Security & exchange commission
► Banking inspection department
Question No: 6 ( Marks: 1 ) - Please choose one
Which one of the following is NOT the division of exchange policy department?
► Policy division
► Exchange companies division
► Investment division
►Recruitment division
Question No: 7 ( Marks: 1 ) - Please choose one
Banks seek to maximize____________ for a given amount of risk on their balance sheet.
► Profitability
► Loans
► Deposits
►Securities
Lecture # 28
Banks seek to maximize profitability for a given amount of risk on their balance sheet.
Question No: 8 ( Marks: 1 ) - Please choose one
The amount of capital a bank is required to hold is the function of which one of the following?
►The amount of required reserve
► The credit rating requirement
► The amount and quality of assets
► Leverage requirement
Lecture # 16
The amount of capital a bank is required to hold is a function of the amount and quality of its assets.
Question No: 9 ( Marks: 1 ) - Please choose one
Mutual funds belong to a group of financial intermediaries known as:
►Investment companies
► Banks
► Pension funds
► Insurance companies
Question No: 10 ( Marks: 1 ) - Please choose one
Which one of the following is responsible for overall governance of the mutual funds?
► Directors
►Government
► Government's agent
► Shareholders
Lecture # 22
The directors of the fund are responsible for overall governance of the fund.
www.vuzs.net
Question No: 11 ( Marks: 1 ) - Please choose one
ACAC is the acronym of which of the following?
► Access customer advocate center
►Agricultural credit advisory committee
► Agricultural credit accounting committee
► Agricultural credit accounting commission
Question No: 12 ( Marks: 1 ) - Please choose one
Which of the following functions is NOT performed by the audit department?
► Financial audit
► Operational audit
► Information technology audit
►Research & development
Question No: 13 ( Marks: 1 ) - Please choose one
Which of the following stands for GFS?
► Government Finance Statistics
► Global Field Services
►Global Financial System
► Global Forecast System
Question No: 14 ( Marks: 1 ) - Please choose one
Which of the following countries got the first loan from World Bank?
► Germany
► Norway
►France
► United States of America
Question No: 15 ( Marks: 1 ) - Please choose one
Which of the following channels of commercial banks is known as computerized telecommunications device?
► Branch
►Automated teller machine
► Telephone banking
► Online banking
Question No: 16 ( Marks: 1 ) - Please choose one
Which of the following role is played by the board of directors of a bank?
► Make deposits
► Make loans
►Oversee bank activities
► Handle withdrawals
Question No: 17 ( Marks: 1 ) - Please choose one
Which one of the following is responsible for the supervision of non banking financial institutions?
► Securities & exchange commission
►State Bank
► Chamber of commerce
► Ministry of finance
Lecture # 19
The responsibility for supervision of nonbank finance companies has been separated and transferred to Securities Exchange Commission.
www.vuzs.net
Question No: 18 ( Marks: 1 ) - Please choose one
In which of the following forms the National Investment Trust units are traded?
►Share
► Debenture
► Bond
► Certificate
Lecture # 23
Mutual Funds were introduced in Pakistan in 1962, with the public offering of National
Investment (Unit) Trust (NIT) which is an open-end mutual fund in the public sector.
Question No: 19 ( Marks: 3 )
For investment purpose customers always judge the profitability of the bank. To attract more customers how a bank can enhance its profitability?
Answer:
Banks can increase their customer base and their profitability by providing all services under one roof namely traditional banking services and the more modern financaial services like investment banking, credit card services, mutual fund services, life insurance products. Also by charging customers based on their credit profie i.e higher charges for low credit worthy clients they can increase their charges and fees. Also by developing new products which will be used by people in their everyday life and than charging a small fee for the same the banks can increase their profits.
Question No: 20 ( Marks: 3 )
Define merchant banks.
Answer:
Merchant banks are those banks which are involved in any type of trading. These kind of banks also provide shares to customers. They also buy and sell companies. They raise capital for the companies in various ways like IPO, Debt instruments and convertible instruments.
Question No: 21 ( Marks: 5 )
Pakistan is not able to sustain growth over the long term. Do you agree with this statement? Give reasons to support your answer.
Answer:
Pakistan has been trying like all its neighbours to achieve a growth in excess of 7%however there have been multiple of factors that has pegged it back namely, the US led war in Afghanistan, the earthquakes, which have happened, the riots that have taken place in Karachi, global slowdown, the ever present threat of a war with India. Inspite of all these factors Pakistan economy has shown great strength and determination in achieving growth of 7% in few years.
Question No: 22 ( Marks: 5 )
Banks provide investment facilities to its customers. How customers can judge the management soundness and profitability of the banks?
Answer:
The financial statements of the banks are not easy for everyone to interpret. As a result in order to judge the management soundness what one can do is check the various operational and profitability ratios of the concerned banks against the ones shown by the good banks and against the averages for the banking industry. One of the ratio is the amount of income generated against the expenses incurred to earn the same. This will enable us to know the margin of safety. Another way can be to compare the interest income against interest expense. Also one can compare how much fixed expenses are being incurred, how much are the overheads etc and compare with other banks to see the soundness of management.
Question No: 23 ( Marks: 5 )
If State Bank has capital shortage and wants to borrow, what are the possible sources through which it can get loan?
Answer:
In order to raise liquidity the SBP can do the following:
1) Sell securities in the open market and raise cash.
2) Change the reserve requirements of the bank.
3) Borrow from domestic lenders and financial institutions.
4) Issue new domestic bonds.
5) Borrow from external agencies like the IMF or ADB.
6) Issue foreign bonds to Pakistanis residing abroad.
7) Issue foreign bonds to the world markets.
You are here: Exam Papers MGT604 (BNK604): Mangmnt of Financial Institutions BNK604 Midterm 2010 Paper Shared by Mehreen Humayun
MGT604 (BNK604): Mangmnt of Financial Institutions BNK604 Midterm 2010 Paper Shared by Mehreen Humayun 
MCQs 
MGT604 (BNK604): Mangmnt of Financial Institutions BNK604-MCQ Solved with Ref-Mehreen Humayun-01
MGT604 (BNK604): Mangmnt of Financial Institutions BNK604-MCQ Solved with Ref-Mehreen Humayun-01 BNK604-MCQ Solved with Ref-Mehreen Humayun-01
BNK604-MCQ
Management of Financial Institutions
Lesson 1-22
Solved by Mehreen Humayun
Which one of the following introduced banking regulations?
State bank
Government
Securities & exchange commission
International chamber of commerce
State Bank of Pakistan commenced its operation on:
| Sept 1, 1947 |
| July 1, 1948 |
| July 1, 1949 |
| August 1, 1964 LESSON 6 |
Physical infrastructure includes:
| Technological expertise |
| Material |
| Electricity |
| All of the given options LESSON 14 Ref: |
The physical infrastructure includes power plants, power grids, oil and natural gas refineries, water treatment facilities, aqueducts, highways, railroads, ports, and hospitals.
AND
Physical infrastructure includes airports, bridges, tunnels, roads, ports, and other fixed portions of transportation systems, power generation and distribution facilities, water and waste facilities, government buildings, and public arenas.
How many teams are dedicated to the financial & operational audit by the audit department?
| 2 |
| 3 |
| 4 |
| 5 |
LESSON 10
Audit has three dedicated teams for Financial & Operational audit and one team for I.T audit.
Foundation of the banks is shaken due to which one of the following?
| Capital requirement |
| Reserve requirement |
| Loan quality |
| Value of security Lecture # 16 Loans are a bank's primary asset category and when loan quality becomes suspect, the foundation of a bank is shaken to the core. |
How many teams are dedicated to the IT audit by the audit department?
| 1 |
| 3 |
| 5 |
| 7 |
LESSON 10
Audit has three dedicated teams for Financial & Operational audit and one team for I.T audit.
Which one of the following is the best describes the word ISC?
| International security conference |
| International standards council |
| Integrated satellite control |
| Investment service cell |
Lecture # 7
Investment Services Cell (ISC)
The New York Stock Exchange is an example of:
| A financial instrument |
| A central bank |
| A financial market |
| A Financial institution |
Ref:
A good example of a financial market is a stock exchange.
Consultations with the IMF are a core function of:
| Economic Policy Department |
| Bank inspection department |
| Domestic market & monetary management department |
| Banking surveillance department |
Lecture # 9
ADB is the abbreviation of:
| Asian development bank |
| Asian domestic bank |
| Agricultural development bank |
| African development bank |
Lecture # 9
ADB: Asian development Bank.
Which of the following have direct relation with the increase in foreign remittances?
| Foreign direct investment |
| Foreign debts |
| Foreign exchange reserves |
| New relations Lecture # 14 Foreign remittances will help in building up the foreign exchange reserves, thereby reducing the demand on the public debt. |
The life insurance company provides insurance for all of these except:
| Life insurance |
| Annuities |
| Pension funds |
| Voyage |
Lecture # 2
Life insurance companies, which sell life insurance, annuities and pensions products.
Which of the following organization is established with a view of liberalization of international trade?
| World Bank |
| World trade organization |
| International monetary fund |
| Asian development bank |
Lecture # 12
(WTO) is an international organization designed to supervise and liberalize international trade.
All of the followings are the risk commercial banks faced EXCEPT:
| Liquidity risk |
| Credit risk |
| Interest rate risk |
| Capital adequacy risk |
Lecture # 16
Bank Crisis: Risks include liquidity risk (the risk that many depositors will request withdrawals beyond available funds), credit risk (the risk that those who owe money to the bank will not repay), Interest rate risk (the risk that the bank will become unprofitable if rising interest rates force it to pay relatively more on its deposits than it receives on its loans), among others.
How many countries are the members of Asian development bank from all over world?
| 15 |
| 17 |
| 19 |
| 20 |
Lecture # 12
ADB now has 67 members - of which 48 are from within Asia and the Pacific and 19 outside.
Which one of the following is an entity responsible for the monetary policy of its country?
Commercial bank
Central bank
Ministry of finance
Security and exchange commission
In which year Asian development bank started its operation in Pakistan?
1956
1968
1974
1982
Lecture # 12
ADB started its operations for Pakistan in 1968.
Currency and bank reserves together make up the monetary base called:
M1 & M2
M3 & M5
M2 & M5
M1 & M3
Lecture # 4
Currency and bank reserves together make up the monetary base, called M1 and M2.
Which of the following is the favorite sector in which investors have interest?
Agricultural
Corporate
Banking
Small & medium
Lecture # 14
With the rapid growth in Pakistan's economy, foreign investors are taking a keen interest in the corporate sector of Pakistan.
Mutual funds are managed by some specialists called:
| Banks |
| Money managers |
| Insurance companies |
| Leasing companies Lecture # 22 |
Mutual funds are operated by money mangers
Fiscal policy is the responsibility of:
Ministry of economic affairs
Ministry of finance
State bank of Pakistan
Ministry of trade & commerce
The market which facilitates the trading of short term debt financing is:
Capital market
Derivative market
Money market
Forex market
GDP can be defined as:
A measure of the total flow of goods and services produced over a specified time period, usually a year
Sum of the money values of all the final goods and services produced in a year by the residents
A measure of the money value of goods and services available to a nation from economic activity
How much the average person makes in that country
You are here: MCQs MGT604 (BNK604): Mangmnt of Financial Institutions BNK604-MCQ Solved with Ref-Mehreen Humayun-01
MGT604 (BNK604): Mangmnt of Financial Institutions BNK604-MCQ Solved with Ref-Mehreen Humayun-01 
MCQs 
MGT604 (BNK604): Mangmnt of Financial Institutions BNK604-MCQ Solved with Ref-Mehreen Humayun-02
MGT604 (BNK604): Mangmnt of Financial Institutions BNK604-MCQ Solved with Ref-Mehreen Humayun-02 BNK604-MCQ Solved with Ref-Mehreen Humayun-02
Management of Financial Institutions
BNK604-MCQ
Lesson 1-22
Solved by Mehreen Humayun
FERA refers to:
Federal emergency relief administration
Foreign exchange regulation act
Fire and explosion risk analyses
Frame error rate analysis
Lecture # 10
In which of the following channel banks contact their customers through telephones?
Automated teller machine
Branch
Telephone banking
Online banking
Lecture # 15
Which one of the following depicts the main purpose of creating the reserves?
To cover the deficiencies in banks of accounts
To meet the personal needs
To use as cash in hand
To fall back upon from contingent situations
The discounting rate of the first class bills by the state bank is called which of the following?
Bank Rate
Prime Lending Rate
Loan Rate
Discounting Rate
Lecture # 4
NPL can be defined as:
Non-Patent Literature
Non performing loan
National Price List
Non Procedural Language
Lecture # 18
Through which of the following we can lower the average cost of production?
Economies of scale
Economies of scope
Foreign exchange risk
Sovereign risk
Where directors hold majority their family representation has been limited up to what point?
15%
20%
25%
30%
Lecture # 18
Family representation on the Board of Directors of the banks where they hold majority ownership has been limited to 25 percent of the total membership of the Board.
Which of the following ordinance deals with delay in recovery of loans?
Financial institutions ordinance 2001
Banking company's ordinance 1962
Income tax ordinance 2001
Company's ordinance 1984
Lecture # 18
Legal difficulties and time delays in recovery of defaulted loans have been removed through a new ordinance i.e. The Financial Institutions (Recovery of Finances) Ordinance, 2001.
Banks are required to assess themselves from which of the following?
State bank
Credit rating agencies
Chamber of commerce
Ministry of finance
Lecture # 19
Which of the following institution has been charged with the supervision of non banking financial institutions?
Securities & exchange commission
State bank
Chamber of commerce
Ministry of finance
Lecture # 19
The responsibility for supervision of nonbank finance companies has been separated and transferred to Securities Exchange Commission.
The primary obligation of the central bank is to keep balance of trade and balance of payment in which of the following sequence:
Balance of Payment = 0
Balance of Payment > Balance of Trade
Balance of Trade > Balance of Payment
Balance of Payment = Balance of Trade
Which one of the following is not the main purpose behind the independence of central bank?
Legal independence
Goals independence
Resource independence
Management independence
Ref: The literature on central bank independence has defined a number of types of independence:
- Legal independence
- Goal independence
- Operational independence
- Management independence
SWIFT was established in which country?
Norway
Germany
France
Belgium
Lecture # 17
SWIFT is a cooperative society under Belgian.
Short-term obligations that are bought and sold in the money market include all EXCEPT:
Treasury bills
Raw commodities
Commercial paper
Banker's acceptances
The discounting rate of the first class bills by the state bank is called which of the following?
Bank Rate
Prime Lending Rate
Loan Rate
Discounting Rate
Which one of the following is the financial capital of Pakistan?
Karachi
Islamabad
Lahore
Faisalabad
Lecture # 6
The headquarters are located in the financial capital of Pakistan, Karachi.
Which of the following banks make the socially-responsible investments?
Private banks
Postal banks
Ethical banks
Offshore banks
Lecture # 15
Ethical banks: banks that prioritize the transparency of all operations and make only what they consider to be socially-responsible investments.
Which of the following department is charged with computation of domestic public debt?
| Banking inspection department Finance department Legal services department Economic policy department |
Lecture # 9
Which of the following is NOT a function of Commercial Banks?
| Print money Make loans Take deposits Invest money | |||
| Which of the following source contributes more towards profit generation for banks? Lending services ATM services Locker services Ancillary services Lecture # 15 Many banks offer ancillary financial services to make additional profit; for example, most banks also rent safe deposit boxes in their branches. All are the international donor agencies in Pakistan EXCEPT:
|
You are here: MCQs MGT604 (BNK604): Mangmnt of Financial Institutions BNK604-MCQ Solved with Ref-Mehreen Humayun-02
MGT604 (BNK604): Mangmnt of Financial Institutions BNK604-MCQ Solved with Ref-Mehreen Humayun-02 
MCQs 
MGT604 (BNK604): Mangmnt of Financial Institutions BNK604-MCQ Solved with Ref-Mehreen Humayun-03
MGT604 (BNK604): Mangmnt of Financial Institutions BNK604-MCQ Solved with Ref-Mehreen Humayun-03 BNK604-MCQ Solved with Ref-Mehreen Humayun-03
Management of Financial Institutions
BNK604-MCQ
Lesson 1-22
Solved by Mehreen Humayun
| |
| Buying of securities results in printing of new money and lowered the supply of specific security this process is known as: Purchase of securities Repurchase of securities Discounting of securities Rediscounting of securities Banks assess the position of their customers from: Marketing & promotion expenditures Total value of capital Total value of assets Overall financial condition of business |
Lecture # 15
Commercial Lending: For centuries, the banking industry only dealt with businesses, not consumers. Commercial lending today is a very intense activity, with banks carefully analyzing the financial condition of their business clients to determine the level of risk in each loan transaction.
The market where primary products are exchanged is known as:
| Stock market Equity market Commodity market Primary market Ref: Commodity markets are markets where raw or primary products are exchanged. |
Distribution of resources among the provinces is carried out through which of the following institution in Pakistan?
| National Finance Commission National Economic Council The Council of Common Interest All of the given options |
Lecture # 13
The Council of Common Interest, National Economic Council, and National Finance Commission are three institutions that are concerned with the distribution of the resources among the provinces.
The control of Prudential bank was handed over to which of the following group?
| Albarka group Alfalah group Al-habib group Saudi Pak group Lecture # 18 Which of the following banking reform has been introduced with an aim to facilitate the depositors to decide in which bank to deposit their saving? Credit rating Debit rating E-banking Taxation |
Lecture # 19
Which one of the following is NOT the responsibility of money & credit department?
| Analysis of lending rates Preparing credit plans Inflation watch Analyze developments in the financial markets |
| Family representation on the Board of Directors of the banks where they hold majority ownership has been limited to which of the following? 15% 20% 25% 30% Lecture # 18 |
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"Banks of issue" are the banks that issue _________ as legal tender.
| Currency Coins Banknotes Bills Lecture # 2 Which one of the following also known as the debt, credit, or fixed income market? Equity Market Bond Market Forex Market Stock Market Ref: The bond market (also known as the debt, credit, or fixed income market) is a financial market where participants buy and sell debt securities, usually in the form of bonds. |
| The market where primary products are exchanged is known as: Stock Market Equity Market Commodity Market Primary Market Ref: Commodities are agreements to buy and sell virtually anything except, for some reason. The primary commodities that are traded are oil, gold and agricultural products. |
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Which one of the following bank has the primary responsibility to stable the national currency and money supply?
Habib Bank Limited (HBL)
Allied Bank Limited (ABL)
State Bank of Pakistan (SBP)
Muslim Commercial Bank (MCB)
Lecture # 2
Which of the following provides strategic advisory services for mergers, acquisitions and other financial transactions?
Investment bank
Commercial bank
SME bank
Microfinance bank
Lecture # 2
Following are called as the Governor of the state bank EXCEPT:
Chief Executive officer
President
Managing Director
Acting manager
Lecture # 3
A central bank is usually headed by a governor, but the titles are president, chief executive, and managing director respectively.
What types of activities are performed by the Quasi Government entities?
Provide assistance to government
Manage foreign exchange reserves
Make investment on behalf of government
Financing imports and exports
Lecture # 3
The World Bank has announced the lending schedule for Pakistan in which they declared the loan of:
$ 4 billion
$ 6.5 billion
$ 8 billion
$ 9.5 billion
Lecture # 13
The World Bank unveiled a lending program of up to $6.5 billion for Pakistan under a new four-year, 2006-2009.
Central banks are ______ bodies.
Profit oriented
Private
Non-commercial
Commercial
Lecture # 15
Central banks are non-commercial bodies or government agencies often charged with controlling interest rates and money supply across the whole economy.
All of the followings are the functions of finance department EXCEPT:
Maintenance of books of accounts & preparation of statement of bank
Maintenance of foreign currency accounts
Intervention in foreign exchange market
Currency issuance and its overall management
Lecture # 8
The total members in the Asian development bank are:
59
65
67
70
Lecture # 12
Asian development bank: It is a multilateral development financial institution owned by 67 members, 48 from the region and 19 from other parts of the globe.
Which of the following is the difference between the monetary value of exports and imports in an economy over a certain period of time?
Balance of payment
Balance of trade
Capital account
Financial account
Lecture # 5
The balance of trade is the difference between the monetary value of exports and imports in an economy over a certain period of time.
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You are here: MCQs MGT604 (BNK604): Mangmnt of Financial Institutions BNK604-MCQ Solved with Ref-Mehreen Humayun-03
MGT604 (BNK604): Mangmnt of Financial Institutions BNK604-MCQ Solved with Ref-Mehreen Humayun-03 
MCQs 
MGT604 (BNK604): Mangmnt of Financial Institutions BNK604-MCQ Solved with Ref-Mehreen Humayun-06
MGT604 (BNK604): Mangmnt of Financial Institutions BNK604-MCQ Solved with Ref-Mehreen Humayun-06 BNK604-MCQ Solved with Ref-Mehreen Humayun-06
BNK604-MCQ
Management of Financial Institutions
Lesson 1-22
Solved by Mehreen Humayun
Which of the following factor can act as barrier to entry for new banks in banking industry?
High margins
High profitability
High tax rates
High returns
FCPEs stands for:
Faculty Center for Professional Excellence
FLIP Chart Production Environment
Fund for Children and Public Education
Former Centrally Planned Economies
Lecture # 1
The economic transformation under way in the former centrally planned economies
(FCPEs) was motivated in part by the recognition that central planning has failed to allocate financial and real resources efficiently.
The primary assets category of banks is:
Loans
Deposits
Reserves
Capital
Lecture # 16
Loans are a bank's primary asset category.
Which of the following banking reform has increased the manufacture of household products like refrigerators, microwave ovens, TVs etc.?
Capitan strengthening
Improved asset quality
Consumer financing
Mortgage financing
Lecture # 18
Consumer Financing: The State Bank has removed restrictions imposed on nationalized commercial banks for consumer financing. The positive experience of auto financing gives a lot of hope that the middle class of this country will be able to access consumer durables through banks. This will at the same time boost the manufacturing of TVs, air-conditioners, VCRs, washing and drying machines, deep freezers etc. in the country.
When prudential regulations were introduced for the first time?
1974
1989
1992
2001
Lecture # 10
Prudential Regulations were put in place first in 1992.
Capital account can also be called as:
Financial account
Cash account
Assets account
Reserve account
Lecture # 5
Capital account (or financial account)
As a depositor, you want high return on your saving, you will go for the bank with rating_____.
B rating
C rating
B or C rating
AA rating
According to new prudential regulation by State Bank of Pakistan, ________ requires asset conversion cycle and cash flow generation instead of collateral for loan approval.
Large enterprises
Medium enterprises
Small enterprises
SMEs
Lecture # 18
Prudential regulations for SMEs do not require collateral but asset conversion cycle and
cash flow generation as the basis for loan approval.
Short-term financial instrument used in the money market is known as
Document
Paper
Bond
Bill
Ref: Money market trades in short-term financial instruments commonly called "paper."
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