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Ms-422 Question Bank

Ms-422 Question Bank (6)

Ms-422 Question Bank, Bank financial Management

December, 2009

Ms-422: Bank Financial Management

1. (a) Briefly discuss the broad categories of development-financing Institutions in India.

(b) "The money market gives a considerable amount of liquidity to all participants in financial market". Discuss this statement and bring out the various types of instruments that are used in the money market in India. Is there a need for Banks to borrow funds ?

2. Explain the different sources from where Banks can borrow funds within India.

3. Discuss with suitable examples the main functions of a centralised Treasury Department in a Bank.

4. Discuss the important features of the following :

(a) Money Market Mutual Funds

(b) Inter Bank Participation Certificates

5. Why is measuring project risk important ? Discuss the different techniques of measuring project risk.

6. Explain the significance of operational risk and discuss the methodologies for measurement of operational risks.

7. "While the concept of liquidity gap is extremely simple to understand and use, there are few issues which need to be addressed in order to effectively use the gap approach". Discuss this statement and bring out these issues.

8. Discuss the significance of pricing in the context of Banks. Explain the objectives that are to be kept in mind while pricing the banks' products and services.

June, 2010

Ms-422: Bank Financial Management

1. "Financial Statements are analysed to answer several questions relating to the performance of an organisation". Discuss this statement and identify the questions that are likely to be answered with this analysis. Explain the techniques used for this purpose.

2. Briefly discuss the functions and importance of Bank Capital. Describe different elements that comprise Tier-I and Tier-II capital of Indian Banks.

3. What is the importance of cost of funds for Banks ? Discuss the Bank Rate Policy and

Liquidity Adjustment Facility introduced by Reserve Bank of India and discuss their impact on the cost of funds of a Bank.

4. Discuss the important features of the following :

(a) Certificate of Deposits

(b) Commercial Papers

5. Why do prices of Treasuries fluctuate ? How do you measure bond price volatility ?

6. Why is it important for banks to measure and manage the credit risk ? Discuss the broad approaches to credit risk measurement at individual loan intrinsic level.

7. Briefly explain the broad categories of risks that the Banks are exposed to. Discuss the various steps involved in managing the risks in Banks.

8. (a) Why do banks go for mergers ? Explain with suitable examples ?

(b) Discuss briefly the core principles that are to be incorporated while designing the future restructuring strategies of weak banks as suggested by the Verma Group.

June, 2011

Ms-422: Bank Financial Management

1.  What is meant by Capital Adequacy Ratio (CAR) ? Describe the element of Tier 1 and Tier II capital and explain the significance of this Norms.

2.  What is Call Money Market ? Who are the participants in Call Money Market and why do they participate ? Describe the prudential norms for call market borrowings and lendings.

3.  Comment on the cost of funds for banks and explain the impact of Bank rate and Liquidity Adjustment Facility (LAF) on cost of funds for banks.

4.  What are the risks faced by the banks ? How are they managed ? Explain the requirements of an effective risk management system.

5.  What is liquidity risk ? How does it arise ? Discuss the tools used to measure and manage it.

6.  Explain the pricing issues in the context of Banking industry and discuss the objectives of pricing for banking services.

7.  Discuss the legal frame work for Bank Mergers and Acquisitions in India.

8.  Explain how is the price of a bond determined ? Discuss how is the convexity of the price yield curve measured ? 

December, 2011

Ms-422: Bank Financial Management

1. Describe the specialised facilitators for Channelising Savings from Individuals to corporate in the form of capital, through primary markets effectively. Discuss their activities.

2. What do you mean by subordinated debt ? Describe the terms of their issue as subordinated debt instruments, for inclusion in Tier-II capital.

3. Describe the Foreign Exchange Rate system prevailing in India ? What are the determinants of exchange rates. Discuss the major buying and selling rates quoted by banks in India.

4. Explain the meaning, scope and objectives of Risk management. Discuss in detail, the value based risk management system.

5. Describe the critical areas in which accounting standards play a major role in preparation of financial statements of banking industry.

6. Explain the importance of money market and the measures that have been taken to prop-up this market. Describe the important features of Inter-Bank participation certificate.

7. (a) Distinguish between (i) take-over and merger and (ii) vertical merger and horizontal merger.

(b) Describe the procedure for amalgamation of banks as prescribed in Section 44 A of the Banking Regulations Act, 1949.

8. What do you understand by Liquidity Adjustment facility introduced by Reserve Bank of India for banks. Explain its modus operandi and significance of repo rate and reverse repo rate. 

December, 2012

Ms-422: Bank Financial Management

1.  Describe the assets and liabilities of banks as shown in their Balance Sheets. Explain the significance of Asset Liability Management in the context of bank financial management.

2.  What is Capital Adequacy Ratio (CAR) ? Describe different elements that comprise Tier-I and Tier-II Capital of Indian banks.

3.  What do you understand by 'Borrowed Funds of banks' ? Explain different sources of borrowings for banks and discuss their significance.

4.  What are the functions of the Treasury Department in banks ? Discuss the classification of securities as shown in the banks' balance sheets. Describe the three fold classification of investments as prescribed by Reserve Bank of India for valuation of investments.

5.  Write short notes on the following :

(a)  Money Market Mutual Funds

(b)  Floating Rate Note

(c)  Repos

(d)  Inter Bank Participation Certificates

6.  What is Credit Risk? Discuss the various approaches to credit risk measurement.

7.  What is liquidity risk? What is its significance in banks ? Discuss the approaches used to measure the liquidity risk.

8.  Why do the banks go for mergers ? Discuss the procedure for amalgamation of banks as prescribed under Section 44 A of the Banking Regulation Act, 1949. 

June, 2013

Ms-422 : Bank Financial Management

1. Discuss the techniques used for financial analysis of banks. Explain the specific ratios used for analysing the financial performance of banks.

2. What do you understand by 'Owned Funds of Banks' ? Explain the different types of 'Reserves and Surpluses' as are shown in a bank's balance sheet.

3. What do you understand by the cost of funds for banks ? Discuss how do the changes in bank rate, refinance rate, call money rate and Repo rate affect the cost of funds for the banks.

4. Write short notes on the following :

(a) Call money market

(b) Commercial Paper

(c) Inter-Bank Participation Certificate

(d) Certificates of Deposit

5. How is the price of a bond determined ? How is bond price volatility measured ?

6. Identify the risks faced by the banks. What are the steps in risk management ?

7. What is operational risk ? Discuss the various methodologies used for measurement of  operational risk.

8. Discuss the objectives of pricing of Bank Products. What are the inputs required for pricing of bank products? 

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