1. JRD lent Rs.400/- to X for
2 years and Rs’250 to Y for4 years and received altogether from both Rs,360 as
intt’ Find the rate of intt. Being calculation. Ans
20%
2. A certain sum of
money at simple intt. Amount
to rs.1012 in two and half
years and toRs.1067/20 in 4 years rate
of intt p.a is Ans:- 3.63
3. Difference between simple
interest and compound interest for 3
years @10% is Rs.93. the sum is,
Ans 3000
4. Simple interest on a
certain sum for 4 years is Rs. 200/-and
5 years is Rs.250 find the sum
5. If a
sum at compound intt becomes
rs.16900 in 2years and rs.17576 in 3 years find the rate of intt Ans 4%
6. Difference between compound intt. And simple intt. On
sum of rs.4000/-for 3 years at
5%p.a. is
7. A sum of money doubles itself at compound
intt’ in 15 years it will become
8 times in Ans
45 Years
8. A sum of money amount to Rs.1180 and rs.1300 in 3 years and 5 years
respectively at simple intt.p.a.
the sum is rs.----- Ans 180/-
Bond Valuation
1. What are bonds
2. Who issues bonds
3. Types of bonds
·
Straight
Bonds
·
Zero
Coupon Bonds
·
Deep Discount Bonds
Terms related to Bonds
Ø Face value
-----Straight bonds and face value
of Zero Coupon bonds
Ø Coupon rate
Ø Maturity
Ø Term to
Maturity
Ø Market Value
Ø Discount rate
Ø Yield
Ø Current Yield
Ø Yield To Maturity
Ø Market value
4. Bond Valuation
5. Present
value method of Bond valuation
6. Bond value with
Semi –annual Coupons (Interest)
7. Yield to Maturity
Assumption at the time of
calculation of YTM
Bond once purchased will be
held till maturity
Cash flow will be received and there will be no default
All cash flow are immediately
reinvested (else where) at the rate
which is equal to the promised Y
T M
Market value or Present value:-
CURRENT YIELD ON BONDS
Coupon Interest every Year
-------------------------------------------
Current Market Price
YTM Vs Current Yield
Theorems for bonds value
Required rate of return is denote with
symbol =Kd
|
Theorem
|
|
|
1.
When Kd=
coupon rate
|
result price
is = par value
|
|
2.
When Kd
> Coupon rate
|
result value of bond is < par value
|
|
3.
When
Kd<coupon rate
|
value of bond is > par value
|
|
4.
When Kd
>coupon rate
|
discount on bond declines
as maturity comes near
|
|
5.
When Kd
< coupon rate
|
Premium on bonds
reduces as maturity comes near
|
|
6.
Bond
prices is inversely
proportional to its
yields maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BONDS Valuation
1) Bond holders are ------ of the business (Bond Issuer)
2) A bond with face value Rs’5000/-carrries a coupon
rate of 12% Market price of this bond is quoted at Rs.4500/- what is the current yield of the bond
3) Bond is a type
of long term,interest bearing
note payable on maturity
4) When
the require rate of return (kd)
is greater than the coupon rate bond price
will trading at discount to face
value
5) An secure bond is a debenture bond
6) A convertible bond is a bond
that can be converted to
cash at any given time
7) A major advantage of raising capital through the sale
of bonds is that the interest
paid on bonds is a tax deductible item
8) The value which bond holder gets on maturity is called Redemption value
9) When the expected
rate of return(market discount rate)is lesser than coupon rate bond price will rise
10)
Zero coupon bonds do not
promise periodical intt.
11)
Zero coupon bonds normally are available at discount
to their face value
12)
Zero coupon bonds face
value = redemption value
13)
In perpetual bonds ,
--no maturity date, and no maturity value
but intt, is promised at definite
rate perpetually
14)
Current yield on bonds
is measured using the current
price and coupon .
15)
YTM of a bond is its internal rate of interest
16)
The concept of
Duration is also called Macaulay’s duration
17)
Duration of bond is less than its maturity period
Or term
Ans:-1
creditor 2. 13.33% 3. False 4.True
5.True 6. True 7. False 8.
TO 17 TRUE
CAPITAL ADEQUACY NORMS
TEST YOUR UNDERSTANDING
Q1. The RBI has
asked banks in India having overseas presence to implement the Basle Capital
Accord II from --------.
Q2. The Basle Committee on Banking Supervision
came out with the Basle Accord II
during the year___
Q3.
The capital required to be maintained by a bank as per the Capital
Adequacy requirement is called the___ capital.
Q4. The Basle Accord II rests on three
pillars namely Minimum Capital Requirement,
Supervisory Review and___
Q5. The total amount of Tier II capital can
be maximum___% the total amount of the Tier I Capital.
Q6. For the purpose of including in Tier II
capital the Revaluation reserve should be discounted at_____________________________________________________ ___%.
Q7. The maximum subordinated debt to be
included in Tier II Capital is % of
the Tier II capital.
Q8. The maximum amount a bank can invest in
the subordinated debt capital of other banks
is restricted to % of its capital.
Q9.
The maximum amount of perpetual bonds [IPDI] should not exceed ___
Capital of the issuing bank.
Q10. For computing capital requirement against
Credit risk, RBI has stipulated that banks should follow the Approach.
Q11.
For computing capital requirement against operational risk, RBI has stipulated
that banks should follow the
Approach.
Q12. The committee which recommended for
maintenance of capital adequacy norms by banks in all countries is known as committee.
Q13. Banks in India have been directed by RBI
to maintain a minimum capital adequacy ratio of___________________________________________________________ %.
Q14. As per RBI guideline, banks are required
to maintain a risk weight of__ % in
respect of personal loans and credit
card exposures.
Q15. As per RBI guideline, banks are
required to maintain a risk weight of
--------- % in respect of their exposure
to commercial real estates.
Q16. As per RBI guideline, banks are
required to maintain a minimum haircut of-------------% in case of gold and main index equity which are taken as
credit risk mitigants.
Q17. As per RBI guideline, out of these
securities namely Gold, Term Deposit, KVP and NSC the one which cannot be considered as a credit risk
mitigant is .
Q18.
Name the four external credit rating agencies which are in the approved list of
the RBI for providing rating of accounts for the purpose of capital adequacy.
Q19.
Name the three external credit rating agencies which are in the approved
list of the RBI for
providing
international rating of accounts for the purpose of capital adequacy.
Q20. In case of cash credit account the credit
conversion factor [CCF] for the un-drawn amount is_________________________________________________________ __%.
Q21. As per the Basle II accepted by RBI all
loans to staff fully covered by superannuation benefit or mortgage of house
will attract a risk weight of %.
Q22. As per the Basle II accepted by RBI, a
credit account to be included in Regulatory Retail Portfolio will be maximum
limit of Rs. .
Q23. As per the Basle II accepted by RBI, all
loans for purchase of residential property with a Loan to Value Ratio of more
than 75% will carry risk weight of___.
Q24. As per the RBI guidelines all Indian banks
having operational presence outside India have to operationalise the Internal
Capital Adequacy Assessment Process [ICAAP] from .
ANS.
1-31.3.08, 2-2004, 3- regulatory,
4- market
disclosure, 5-100%,
6-55%, 7- 50%,
8-10%,
9-15%, 10-Standardised approach,
11- Basic Indicator Approach, 12-
Basle Committee on Banking Supervision,
13- 9%, 14- 125%, 15- 100%,
16- 15%, 17- NSC,
18-CARE,
CRISIL, FITCH India, ICRA, 19-Fitch,
Moody's, Standard and Poor,
20-20%, 21-20%, 22-five crore, 23-100%, 24-March 31, 2008.
In case of housing loan
|
LTV Ratio
|
Sanction amount of Loan
|
Risk weight
|
|
LTV =< 75%
|
Upto Rs.30 lac
|
50%
|
|
LTV=<75%
|
>30lac <75 Lac
|
75%
|
|
LTV > 75%
|
Loan amount is less than
rs.75 lac
|
100%
|
|
Irrespective of LTV
|
Loan > Rs.75 lac
|
125%
|
LTV IN CASE OF Housing loan should not exceed 80%
No comments:
Post a Comment