CAIIB BFM Unit 17 Treasury Products

Discussion 12.10.2018

Correct me for wrong answers

1. Which treasury bill auction on non- reporting week...
a. 364 days
b. 91 days
c. 182 days
d. all the above
Ans-c

2. Which treasury bill auction on reporting week...
a. 364 days
b. 91 days
c. 182 days
d. all the above
Ans-a

3. Treasury uses a variety of money market instruments to optimize return on funds. Which of the following is not a money market instrument?
a. Treasury bills
b. CBLO
c. corporate debt paper
d. Certificate of deposit
Ans- a

4. CBLO full form?
Collaterlized borrowing n lending obligation

5. FIMMDA full form?
Ans- Fimmda- fixed income money market derivatives of association

6. Which of the following statements is correct?
a) Repo is a short term money market instrument
b) The Repo Rate and period is announced by RBI,
c) (a) and (b) both
d) None of these

7. Primary function of treasury?
Manage liquidity and meet the CRR requirement

8. Free remittance limit  for individuals to remit overseas freely?
2.5 lac dollars

9. Tenure of cash management bills?

10. Banks can invest surplus foreign exchange funds in the following:
1) inter bank loans
2) short term investments
3) nostro accounts
4) investment in overseas corporate securities
5) loans to overseas corporates
a) 1 to 5 all
b) 1 to 4 only
c) 1 to 3 only
d) 1 and 2 only
Ans-c

11.The interest on treasury bills is in the form of
a) floating rate
b) fixed rate
c) by way of discount
d) none of the above
Ans-c

12. The call money rates (interest rates) are indicated by which of the following
a) Treasury bill rate
b) base rate of 5 top most banks
c) MIBOR
d) bank rate
Ans- c

13. The time limit for issuing a CP is:
a) Minimum maturity 7 days b) Maximum maturity one year
c) (a) and (b) both d) None of these
Ans- C

14. The Benefits of T-Bills are:
a) It is Risk free investment
b) It yields interest higher than the call money market.
c) It is possible to trade T-Bill in secondary market
d) All these
Ans- D

15. Which of the following statements is correct?
a) Repo is a short term money market instrument
b) The Repo Rate and period is announced by RBI,c) (a) and (b) both d) None of these
Ans-c

16.Which of the following is significant about spot trade?
a) All rates quoted on the screen are for spot trade unless otherwise mentioned
b) TOD and TOM rates are generally quoted at a discount to the spot rate.
c) TOD and TOM rates are less favourable to buyer d) All these
Ans-d

17.Certificate of deposit issued
 a.corporate b.RBI c.Bank 4.NBFC
Ans-c

18. The features of a swap are:
a) A combination of spot and forward transactions is called a swap.
b) Buying in the spot market and selling same amount in forward market or vice-versa is swap.
c) Swap is mainly used for funding requirements_
d) All these
Ans- d

19.CBLO settlements take through.....?
Ans- Ccil

20.Tenure of cash management bills?
Ans- Less than 91 days

21. SLR cap?
Ans-40 %

22. Sweep Facility?
In NOSTRO ( Pg 410)

23. Indian Rupee is partially/fully convertible.
Ans- Partial

24. Treasury follows which all investment options to invest forex surplus?
Ans- govt security, corporate debt Paper, Debentures and bonds

25.All the exchange rates quoted on screen or in print are for........ unless otherwise mentioned
Ans-spot

26. Information vendors who provide dealing screens for buy n sell transactions are?
Ans- Reuters and bloomberg

27. STRIPS ?
Ans- Separate Trading of Registered Interest and Principal  Securities

28.F Trac?
Ans- Financial Market Trading Reporting and Confirmation Platform ( pg 415)

29. .Under notice money.. schedule commer banks borrowing shud not exceed ...... Of capital funds. Banks r allowed to borrw maximum of ..... Of capitsl funds
ans- 100,125