Questions Bank:

1. Gross working capital=

Ƒ&$&XUUHQW$VVHW
Ƒ&/&XUUHQW/LDELOLW\
□ CA-CL;
□ None of the above.

2. Net working capital=

Ƒ&$&XUUHQW$VVHW
Ƒ&/&XUUHQW/LDELOLW\
□ CA-CL;
□ None of the above.

3. Which of the followings is part of Operating Cycle?

□ Inventories (RM/WIP/FG)
Ƒ$FFRXQWV5HFHLYDEOHV
Ƒ$FFRXQWV3D\DEOHV
□ All of the above.

4. Which of the followings does influence Working Capital?

□ Nature of business
Ƒ6HDVRQDOLW\RI2SHUDWLRQ
Ƒ2SHUDWLQJF\FOH
□ All of the above.

5. If yearly operating expense of a firm is Tk.100.00 lac and no. of operating cycle per year is 4,
working capital requirement of that firm will be-
□ Tk.20 lac
Ƒ7NODF
Ƒ7NODF
□ None of the above.

6. Which of the followings is part of Current Asset?

□ Inventories
Ƒ0DUNHWDEOH6HFXULWLHV
Ƒ5HFHLYDEOHV
□ All of the above.

7. Which of the followings is not a part of Current Liability?

□ Accounts Payables
Ƒ6KRUW7HUP/RDQ
Ƒ&&+
□ Advance to suppliers.

8. A customer has CC (H) limit of Tk. 120 crore from our Bank. How much stock the customer
must have to withdraw the full amount if margin is 40%?

a) Tk. 300 crore

b) Tk. 120 crore
c) Tk. 200 crore
d) Tk. 180 crore

Page 1 of 20
9. A customer has CC (H) limit of Tk. 40.00 crore at 30% margin. On a particular day the customer
has stock of Tk. 30 crore. What is the drawing power of the customer?

a) Tk. 28 crore
b) Tk. 12 crore
c) Tk. 40 crore i.e. the whole limit
d) Tk. 21 crore

10. Which one of the following is a clean loan?

a) A Term Loan of Tk. 10 crore against collateral security of Tk. 15.00 crore
b) A Demand Loan of Tk. 10 crore against collateral property of Tk. 12.00 crore
c) A Time Loan of Tk. 10 crore without any collateral security
d) A Continuous Loan of Tk. 5 crore against collateral security of Tk. 3 crore

11. Which one of the following is an example of Demand Loan?

a) Overdraft
b) LIM
c) Term Loan
d) None of the above

12. Which one of the following is an example of Leverage ratio?

a) Debt to total asset ratio

b) Debt-Equity ratio
c) Debt to capital ratio
d) All of the above

13. Which one is the correct formula of Cash Conversion Cycle?

a) Inventory Turnover in Days + Receivables Turnover in Days – Payable Turnover in Days

b) Inventory Turnover in Days + Receivables Turnover in Days
c) Inventory Turnover in Days + Payable Turnover in Days - Receivables Turnover in Days
d) Receivables Turnover in Days - Payable Turnover in Days

14. How many types of inventories are there in a manufacturing company?

a) One
b) Two
c) Three
d) Four

15. Which one is the correct formula to calculate Debt Service Coverage Ratio?

a) EBITDA/(Interest + Current Maturity of Long-Term Debt)

b) EBIT/Interest
c) EBITDA/ Current Maturity of Long-Term Debt
d) EBITDA/Interest

Page 2 of 20
16. A person has applied for a loan from our Bank for Tk. 10.00 crore and offered landed
properties to secure the loan. The landed properties are located outside City Corporation area but
within Municipality/Pouroshova. What should be the Forced Sale Value (FSV) of the mentioned
properties?

a) Tk. 12.50 crore

b) Tk. 15.00 crore
c) Tk. 17.50 crore
d) Tk. 10.00 crore

17. A customer has CC (H) limit of Tk. 10.00 crore, SLC limit of Tk. 10.00 crore and LTR limit of
Tk. 5.00 crore. What is the maximum amount of EOL the customer can avail over his CC (H) limit?

a) 10% of CC(H) limit i.e. Tk. 1.00 crore

b) 10% of composite limit i.e. Tk. 2.50 crore
c) 10% of total funded limit i.e. Tk. 1.50 crore
d) None of the above

18. Which one of the following will not be treated as Default loan?

a) Substandard
b) Doubtful
c) Bad & Loss
d) All of the above are default loan

19. What is the rate of provision on Off-Balance Sheet exposures?

a) 0.25% on total exposure

b) 1.00% after deducting cash margin/eligible collateral
c) 1.00% on total exposure
d) 2.00% on total exposure

20. When interest is not charged in a loan account?

When the loan is classified as-

a) Substandard
b) Doubtful
c) Bad & Loss
d) Interest is charged in all cases.

21. In case of credit facilities provided against Pledge of goods such as CC(Pledge) or LIM,
ownership of goods is held with-

a) Banker
b) Borrower
c) Both
d) None of the above

22. In case of export sector, what percentage of total capital can be provided as loan (both
funded and non-funded) to an individual customer/group?

a) 15%
b) 25%
c) 35%
d) 50%
Page 3 of 20
23. If a credit facility is supported by Guarantee of other Banks or by Government Guarantee,
the Managing Director can approve loan up to:

a) Whole limit
b) Tk. 10.00 crore
c) Tk. 15.00 crore
d) Tk. 7.50 crore

24. Which one of the following is liquidity ratio?

a) Current Ratio
b) Quick Ratio
c) Cash Ratio
d) All of the above.

25. What are the parts of Cash Flow Statement?

a) Operating Activities & Investing Activities

b) Investing Activities & Financing Activities
c) Operating Activities, Financing Activities & Investing Activities
d) Operating Activities & Financing Activities

26. To learn the financial performance of a company, which of the following Financial Statements
should be considered?

a) Balance Sheet
b) Income Statement/Statement of Comprehensive Income
c) Statement of Cash Flow
d) a+b

27. A company has current liabilities of Tk. 10 crore, long -term liabilities of Tk. 7 crore, current
assets of Tk .15.00 crore and fixed assets of Tk. 10 crore. What is the current ratio of the
company?
a) 1.50 (Current Assest /Current Liablities)
b) 1.47
c) 2.14
d) 1.42

28. Which one of the following is a right of the Banker?

a) Assignment
b) Lien
c) Set-off
d) Mortgage
29. In which type of loan, ownership is automatically transferred to the customer after the
payment of last installment?
a) Lease Finance
b) Hire Purchase
c) Bridge Finance
d) All of the above

30. The Deputy Managing Director (Credit) can approve LC facilities at a minimum margin of:
a) 5%
b) 10%
c) 15%
d) 20%
Page 4 of 20
Page 5 of 20
 31. According to CRG template, which of the following is a component of Relationship Risk?
a) Experience
b) Security Coverage
c) Succession
d) Account Conduct

32. According to CRG template, which of the following is not a component of Business/Industry
Risk?

a) Size of Business
b) Industry growth
c) Market competition
d) Team work

33. Lending based solely on general standing and reputation of the borrower is known as:

a. Name Lending.
b. Customer Lending
c. Company Lending
d. Fame Lending

34. Pricing of the Loan is set by?

a. CRMD
b. Corporate Banking Division
c. ALCO
d. General Banking Division

35. Renewal of credit proposal should be sent before

a. 02 months before expiry

b. 03 months before expiry
c. SMA status
d. Quarter end

36. CRG is an important tool for which of the followings?

a) Credit Risk Pricing

b) Credit Risk Measurement
c) Credit Risk Mitigation
d) Credit Risk Monitoring

37. Which of the following mode of charge is much used in Syndication loan?
a) First Charge
b) Floating Charge
c) Pari-passu charge
d) Fixed Chrage

38. Which of the followings is a part of credit report analysis?

Ƒ0DQDJHULDO$VSHFW
Ƒ7HFKQLFDO$VSHFW
Ƒ)LQDQFLDO$VSHFW
□ All of the above.

Page 6 of 20
39. Which of the followings is not primary source of credit investigation?
Ƒ3HUVRQDO,QWHUYLHZ
Ƒ3K\VLFDOYLVLW
Ƒ/RDQ$SSOLFDWLRQ)RUP
□ Financial Report.

40. Which of the followings is not secondary source of credit investigation?

Ƒ$FFRXQW6WDWHPHQW
Ƒ&,%5HSRUW
Ƒ/RDQ$SSOLFDWLRQ)RUP
□ Financial Report.

41. Liquidity Ratio indicates to meet future-

Ƒ6KRUWWHUPILQDQFLDOREOLJDWLRQ
Ƒ/RQJWHUPILQDQFLDOREOLJDWLRQ
□ Both Short and Long term financial obligation;
□ None of the above.

42. Asset Utilization (Activity) Ratio indicates to meet-

Ƒ6KRUWWHUPILQDQFLDOREOLJDWLRQ
Ƒ/RQJWHUPILQDQFLDOREOLJDWLRQ
Ƒ:RUNLQJ&DSLWDOREOLJDWLRQ
□ None of the above.

43. Debt Service Coverage Ratio indicates to meet-

Ƒ,QWHUHVW6HUYLFLQJREOLJDWLRQ
Ƒ3ULQFLSDO6HUYLFLQJREOLJDWLRQ
Ƒ%RWK,QWHUHVW 3ULQFLSDO6HUYLFLQJREOLJDWLRQ
□ None of the above.

44. Interest Coverage Ratio indicates to meet-

Ƒ,QWHUHVW6HUYLFLQJREOLJDWLRQ
□ Principal Servicing obligation;
Ƒ%RWK,QWHUHVW 3ULQFLSDO6HUYLFLQJREOLJDWLRQ
□ None of the above.

45. Which indicates the profitability Ratio-

Ƒ*URVV3URILW0DUJLQ
Ƒ1HW3URILW0DUJLQ
Ƒ5HWXUQRQ(TXLW\
□ All the above.

46. Which does not indicate the Asset Utilization Ratio-

Ƒ5HFHLYDEOHV7XUQRYHU
Ƒ3D\DEOH7XUQRYHU
Ƒ,QYHQWRU\7XUQRYHU
□ Return on Asset.

Page 7 of 20
47. If a firm has high current and quick ratios, this is always a good indication that a firm is
managing its liquidity position well.
Ƒ<HV
Ƒ1R
□ Additional information is required to conclude;

48. Which of the following is considered a profitability measure?

a. Days sales in inventory

b. Fixed asset turnover
c. Cash coverage ratio
d. Return on Assets

49. If a firm has $100 in inventories, a current ratio equal to 1.2, and a quick ratio equal to 1.1,
what is the firm's Net Working Capital?
a. $0
b. $100
c. $200
d. $1,000
e. $1,200

50. IRR is a return when NPV is-

Ƒ 
Ƒ!
Ƒ
□ None of the above.

51. A project is financially viable when NPV is-?

Ƒ 
Ƒ!
Ƒ
□ None of the above.

52. If initial investment of a project is Tk.25.00 crore and its discounted cash flow is Tk.10.00
crore, Tk.11.00 crore and Tk.16.0 0 crore for the year 1, 2 and 3 respectively, what will be the
payback period of that project?

□ 2.25 years
Ƒ\HDUV
Ƒ\HDUV
□ None of the above.

53. Break Even Point is related to…. ?

□ Project Finance
Ƒ:RUNLQJ&DSLWDO)LQDQFH
□ Bridge Finance;
□ None of the above.

Page 8 of 20
54. Swing of an account is needed to monitor performance of the following loan account:

Ƒ&&+
Ƒ+%/
Ƒ7HUP/RDQ
□ LTR.

55. Credit Turnover is needed to monitor performance of the following loan account:

□ HBL
□ Term Loan
□ Bridge Loan;
□ None of the above.

56. How NPV is calculated?

□ Initial Investment – PV of future cash flows;

Ƒ39RIIXWXUHFDVKIORZV
Ƒ,QLWLDO,QYHVWPHQW39RIIXWXUHFDVKIORZV
□ None of the above.

57. Maximum tenor for any continuous loan is-

a. 1 yr b. 2 yr c. 3 yr

58. UCBL prefers to have collateral security located within Dhaka Metropolitan City equivalent to
……. times of the total funded limit.
a. 1 b. 1.25 c. 1.5
59. Sanctioning authority of any credit proposal is-
a. CRMD b. CBD c. CAD
60. Who has the authority to write-off and waiver of interest?
a. BOD b. EC c. MD
61. How much weight is given on Financial Risk in CRG?
a. 50% b. 30% c. 40%
62. Business experience, Teamwork are the parameters of-
a. Business Risk b. Relationship Risk c. Management Risk
63. What is the weighted score if the grading is “Good-Satisfactory Risk”?
a. 85+ b. 90+ c.80+
64. Which is the business unit?
a. CRM b. CBD c. CAD
65. Classified Loan rescheduling proposal is prepared by-
a. CRM b. CBD c. CAD d. Recovery Division
66. Business is only Originated by:
a. Branch b. Branch and CBD c. CRM and Branch
67. Time loan is allowed for maximum
a. 360 days b. 120 days c. 180 days
68. OAP is allowed for maximum
a. 30 days b. 60 days c. 90 days
69. Which is Accounts Receivables financing?
a. OD(G) b. CC(H) c. CC(pledge)
70. Routine audit and compliance of credit policy of UCBL is conducted by
a. BB b. ICCD C. External Auditors
71. Relationship department & disbursement authority should be
a. Separate b. not be separate
72. OAP is a-
Page 9 of 20
 a. Term loan b. Continuous loan c. Forced loan

73. Ownership of asset under lease finance

a. Bank b. Customer c. Insurance company
74. Possession of goods under LIM
a. Bank b. Customer c. Insurance company
75. What is the maximum exposure to single borrower a bank can make, both funded and non
funded facility other than RMG, Power sector and Padma Bridge?
a. 15% b. 35% c. 50%
76. A large loan consists what percentage of bank’s total capital
a. 8% b. 10% c. 12%
77. What type of loan CC (H) is?
a. Demand b. Continuous c. Term
78. What is generally the tenor of PAD in UCBL?
a. 20 days b. 21 days c. 22 days
79. Which one of the following is the highest delegation of credit approval authority
a. Board of Directors b. Managing Director c. EC committee
80. Which one is not risk component of risk grading score card?
a. Financial risk b. Operational risk c. Business Risk
81. Which is one of the following facilities is export credit
a. LIM b. PAD c. Packing credit
82. How much provision has to be kept for substandard loan?
a. 10% b. 20% c. 50%
83. What does APG stand for?
a. Advanced Payment Guarantee b. Advanced Purchase Guarantee c. Advanced
Performance Guarantee
84. What type of loan CC (P) is?
a. Demand b. Continuous c. Term

85. Marketable securities are primarily

□ Short-term debt instruments
□ Short-term equity securities
□ Long-term debt instruments
□ Long-term equity instruments

86. Which of the following is NOT a cash outflow for the firm?
1. Depreciation.
2. Dividends.
3. Interest payments
4. Taxes.

87. The type(s) of collateral generally used for a secured short-term loan is(are)
1. Inventory/receivables
2. Common Stock/Bond
3. Machinery
4. Real Estate/Land

88. Which of the following score shows that the firm has sufficient quick assets to meet its
current liability :
a) 0.75 : 1.00
b) 0.85: 1.00
c) 0.90 : 1.00
d) 1.00 : 1.00

Page 10 of 20
89. Working capital cycle of a manufacturing firm has been calculated 60 days. For how many
times adjustment shall be made in CC(H) account having 360 days validity :

a) 2 Times
b) 3 Times
c) 4 Times
d) 6 Times

90. As a relationship manager, you are in discussion with a client who intends to add a
machine for increasing their capacity in their project. The machine is to be procured from USA &
payment will be made after 360 days from the date of receipt of complied documents. What types
of facility they should be offered for accommodating the procurement :
a) Sight L/C
b) Usance L/C
c) Local L/C
d) No L/C required.

91. A project shows positive NPV but surprisingly the income statement shows loss. After
discounting the 1st year’s cash flow, it appears the whole initial investment has returned.
Mentionable, the firm pays their all relevant expenses in cash. The Income Statement is sketched
below :
Particulars Amount
Sales 120.00
(-) COGS (80.00)
Gross profit 40.00
(-) Salary (15.00)
(-) Rent (10.00)
(-) Depreciation (20.00)
(-) Stationery (5.00)
Net loss (10.00)
Which element of the above Income Statement has caused the NPV positive despite its incurring loss:

a) Salary
b) Rent
c) Depreciation
d) COGS

92. Networth of a firm equals to…..

□ Asset + Liability
□ Asset - Liability;
□ Asset;
□ None of the above.

93. Threat of new entrants is highest when…..

□ Economies of scale are high;
□ Capital Requirement is low;
□ Product is differentiated;
□ Customer’s switching cost is high.

Page 11 of 20
94. Intra-industry rivalry is fiercest when...

□ Large number of competitors in industry.

□ Large % of costs are fixed.
□ Product is undifferentiated.
□ All of the above.

95. ‘X Chemical Company’ is manufacturing plant having 120 nos. of worker. The firm has
total fixed asset of Tk.15.60 crore out of which value of land & building is Tk.13.70 crore. As per
definition provided by Bangladesh Bank, ‘X Chemical Company’ is –
a) Micro Enterprise
b) Small Enterprise
c) Medium Enterprise
d) Large Enterprise

96. ‘ABC Enterprise’ is a trading firm having 15 employees and total fixed assets of Tk.0.07
crore (excluding land & building). As per definition provided by Bangladesh Bank, the firm is–
a) Micro Enterprise
b) Small Enterprise
c) Medium Enterprise
d) Large Enterprise

97. ‘Creative Advertising Company’ is an advertising firm. There are 120 employees working in
the firm. Moreover, the firm has total fixed assets of Tk.2.05 crore (excluding land & building). As
per definition provided by Bangladesh Bank, the firm is –
a) Micro Enterprise
b) Small Enterprise
c) Medium Enterprise
d) Large Enterprise

98. ‘Grameen Handicraft’ is business firm involved in manufacturing of handicraft items.

There are 12 employees working in the firm. Moreover, the firm has total fixed assets of Tk.0.05
crore (excluding land & building). As per definition provided by Bangladesh Bank, the firm is –
a) Micro Enterprise
b) Small Enterprise
c) Medium Enterprise
d) Large Enterprise

99. Accounting Ratios are important tools used by-

(a)Managers
(b) Researchers
(c) Investors
(d) All of the above

100. Net Profit Ratio Signifies:

(a) Operational Profitability

(b) Liquidity Position
(c) Big-term Solvency
(d) Profit for Lenders

Page 12 of 20
101. In Net Profit Ratio, the denominator is:

(a) Net Purchases

(b) Net Sales
(c) Credit Sales
(d) Cost of goods sold

102. Return on Investment may be improved by:

(a)Increasing Turnover
(b) Reducing Expenses
(c)Increasing Capital Utilization
(d) All of the above.

103. There is deterioration in the management of working capital of XYZ Ltd. What does it refer
to?

(a)That the Capital Employed has reduced

(b)That the Profitability has gone up
(c)That debtors collection period has increased
(d)That Sales has decreased.

104. Which of the following does not help to increase Current Ratio?

(a) Issue of Debentures to buy Stock

(b) Issue of Debentures to pay Creditors
(c) Sale of Investment to pay Creditors
(d) Avail Bank Overdraft to buy Machine.

105. Debt to Total Assets Ratio can be improved by:

(a) Borrowing More
(b) Issue of Debentures
(c) Issue of Equity Shares
(d) Redemption of Debt.

106. Ratio of Net Income to Number of Equity Shares known as:

(a)Price Earnings Ratio
(b) Net Profit Ratio
(c)Earnings per Share
(d) Dividend per Share.

107. Trend Analysis helps comparing performance of a firm-

(a) With other firms
(b) Over a period of time for a firm
(c) With other industries
(d) None of the above.

108. A Current Ratio of Less than One means:

(a) Current Liabilities < Current Assets

(b) Fixed Assets >Current Assets
(c) Current Assets < Current Liabilities
(d) Share Capital > Current Assets.

Page 13 of 20
109. Suppliers and Creditors of a firm are interested in-

(a) Profitability Position

(b) Liquidity Position
(c) Market Share Position
(d) Debt Position.

110. Gross Profit Ratio for a firm remains same but the Net Profit Ratio is decreasing. The
reason for such behavior could be:

(a) Increase in Costs of Goods Sold

(b) If Increase in Expense
© Increase in Dividend
(d) Decrease in Sales.

111. Which of the following statements is correct?

(a) A Higher Receivable Turnover is not desirable

(b) Interest Coverage Ratio depends upon Tax Rate
(c) Increase in Net ProfittioRa
means increase in Sales
(d) Lower Debt -Equity Ratio means lower Financial Risk.

112. Which of the following helps analyzing return to equity Shareholders?

(a) Return on Assets

(b) Earnings Per Share
(c) Net Profit Ratio
(d) Return on Investment.

113. Financial Planning deals with:

(a) Preparation of Financial Statements

(b) Planning for a Capital Issue
(c) Preparing Budgets
(d) All of the above.

114. Which of the following is not a part of Master Budget?

(a) Projected Balance Sheet

(b) Capital Expenditure Budget
(c) Operating Budgets
(d) Budget Manual.

115. During year 1, the sales and Cost of goods sold were Rs.6,00,000 and Rs. 4,30,000
respectively. Next year, the sales are expected to increase by 10%. The Cost of goods sold for
next year would be:

(a) Rs. 4,30,000

(b) Rs. 4,90,000
(c) Rs. 4,73,000
(d) Rs.4,40,000.

Page 14 of 20
116. In 'Percentage of Sales' method of preparation of Projected Financial Statements, the
Operating Expenses should be projected on the basis of:

(a) % of Profit before tax

(b) % of Cost of goods Sold
(c) % ofGross Profit
(d) % of Sales.

117. Capital Budgeting is a part of:

(a) Investment Decision

(b) Working Capital Management
(c) Marketing Management
(d) Capital Structure

118. Capital Budgeting deals with:

(a) Long -term Decisions

(b) Short -term Decisions
(c) Both (a) and (b)
(d) Neither (a) nor (b).

119. Which of the following is not used in Capital Budgeting?

(a) Time Value of Money

(b) Sensitivity Analysis
(c) Net Assets Method
(d) Cash Flows.

120. Capital Budgeting Decisions are:

(a) Reversible
(b) Irreversible
(c) Unimportant
(d) All of the above

121. Depreciation is incorporated in cash flow statement, because it:

(a) Is unavoidable cost,

(b) Is a cash flow
(c)Non Cash Expense
(d) Involves an outflow.

122. Two mutually exclusive projects with different economic lives can be compared on the
basis of-

(a) Internal Rate of Return

(b) Profitability Index
(c) Net Present Value,
(d) Equivalent Annuity Value

Page 15 of 20
123. In Sensitivity Analysis, the emphasis is on assessment ofsensitivity of –

(a) Net Economic Life

(b) Net Present Value
(c) Both (a) and (b)
(d) None of (a) and (b)

124. The Rate of Government securities is also known as:

(a) Risk-free Rate of Interest

(b) Maximum Rate of Return
(c) Rate of Interest on Fixed Deposits
(d) None of the above

125. In order to calculate Weighted Average Cost of capital, weights may be based on:

(a) Market Values

(b) Target Values
(c) Book Values,
(d) All ofthe above.

126. Operating leverage helps in analysis of:

(a) Business Risk,

(b) Financing Risk
(c) Production Risk
(d)Credit Risk

127. Which of the following is studied with the help of financial leverage?

(a) Marketing Risk

(b) Interest Rate Risk
(c) Foreign Exchange Risk
(d) Financingskri

128. High degree of financial leverage means:

(a) High debt proportion

(b) Lower debt proportion
(c) Equal debt and equity
(d) No debt

129. Financial Leverage arises because of:

(a) Fixed cost of production
(b) Variable Cost
(c) Use of Debt Financing
(d) None of the above

130. 5Cs of the credit does not include:

(a) Collateral
(b) Character
(c) Conditions
(d) None of theabove.
Page 16 of 20
131. Which of the following is not an element of credit policy?

(a) Credit Terms

(b) Collection Policy
(c) Cash Discount Terms
(d) Sales Price.

132. Ageing schedule incorporates the relationship between:

(a) Creditors and Days Outstanding

(b) Debtors and DaysOutstanding
(c) Average Age of Directors
(d) Average Age All
of Employees.

133. Which of the following is not a technique of receivablesManagement?

(a)Funds Flow Analysis

(b)Ageing Schedule
(c)Days sales outstanding
(d)Collection Matrix

134. Which of the following is not a part of credit policy?

(a) Collection Effort

(b) Cash Discount
(c) CreditStandard
(d) Paying Practices of debtors.

135. Credit Policy of a firm should involve a trade-off between increased:

(a) Sales and Increased Profit

(b) Profit and Increased Costs Receivables
of
(c) Sales and Cost of goods sold
(d) None of the
above.

136. If the closing balance of receivables is less than the opening balance for a month then
which one is true out of :

(a) Collections>
Current Purchases
(b) Collections>Current Sales
(c) Collections<Current Purchases
(d) Collections < Current Sales

137. If the average balance of debtors has increased, which of the following might not show a
change in general?

(a)Total Sales
(b)Average Paya bles
(c)Current Ratio
(d)BadDebt loss

Page 17 of 20
138. Securitization is related to conversion of:

(a) Receivables
(b)Stock
(c)Investments
(d)Creditors

139. If the sales of the firm are BDT 60,00,000 and the average debtors are BDT15,00,000 then
the receivables turnover is:

(a) 4 times
(b) 25%
(c) 400%
(d) 0.25 times

140. Receivables Management deals with-

(a) Receipts of raw materials

(b) Debtors collection
(c) Creditors Management
(d) Inventory Management

141. Inventory holding cost may include-

(a) Material Purchase Cost

(b) Penalty charge for default
(c) Interest on loan
(d) None of the above

142. Use of safety stock by a firm would-

(a) Increase Inventory Cost

(b) Decrease Inventory Cost,
(c) No effect on cost
(d) None of the above.

143. The type of collateral (security) used for short-term loan is-

(a) Real estate

(b) Plant & Machinery
(c) Stock of good
s
(d) Equity share capital

144. Which of the following is a liability of a bank?

(a)Treasury Bills
(b)Commercial papers
(c)Certificate of
Deposits
(d)Junk Bonds

145. Commercial paper is a type of:

(a)Fixed coupon Bond

(b)Unsecured short-term debt
(c)Equity share capital
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(d)Government Bond

146. Which of the following is not a spontaneous source of short-term funds ?

(a)Trade credit
(b)Accrued expenses
(c)Provision for dividend
(d)All of the above

147. Which of the following is not applicable to commercial paper?

(a) Face Value

(b) Issue Price
(c) Coupon Rate
(d) None of the
above

State whether each of the following statements is True (T) or False (F):

1. Financial statements are an important

ce sour
of information to sharehold
ers and stakeholders
-True
2. In calculation of Acid Test Ratio, Inventor
y is included in current assets
-False
3. Debt-Equity Ratio is a measure
of long
-term solvency of a -True
firm
4. Ratio Analysis provides the
ution
solto the financi
al problems
-False
5. Return on Equity and Earningshare
per Sare one and the same-False
thing
6. GP Ratio and NP Ratio give the profitability of the firm int
from
of view
the po
of the shareholders
-False
7. Cash planning is a part of-term
long financial planning
-False
8. Financial forecasting
followed
is by financial planning
-True
9. Cash budget is an important element of profit-False
planning
10. Projected Financial Statements are prepared on the basis of opening financial statements
-False
11. There is no assumption required
thefor
preparationprojected
of financial statements
-False
12. Investment decisions and capital budgeting are
-False
same
13. Capital budgeting decisions are long term decisions
-True
14. In mutually exclusive decision situation, the firm can accept all feasible
-Falseproposals
15. Cash flows are the appropriate measure of costs and benefits from an investment
-True proposal
16. Cash flows and accounting profits are -True
different
17. Cash flows are same as profit before
-False
tax
18. Netcash flow is on after tax -True
basis
19. EBIT is also own
kn as operating profits
-True
20. If EBIT for two firms are same, then the EPS of these
wouldfirms
also always be same
-False
21. EPS depends upon the composition of capital-True
structure
22. Financial breakeven
level occurs when EBIT is-False
zero
23. At financial break
evenevel
l of EBIT, EPS would be-True
zero
24. The financing decision affects the
l operating
tota profitsthe
of firm
-False
25. The equity Shareholders get the residual profit -True
of the firm
Page 19 of 20
26. Receivables management deals only with the collection
cash fromof the
debtor
-False
27. Receivables management involves a tradeoff between costs and benefits
-True
of receivable
28. The objective of a credit policy is to curtail the credit period allowed
-False
to customers
29. Credit period allowed to customers must be equalperiod
to credit
allowed by the supplier to the
-False
firm
30. In order to minimize the level of receivables, a firm should follow a strict and aggressive collection
-False procedures
31. Inventory management does not include management work -False
in progress
32. Stock of finished
goods should be as high as possible so that no customer is denied
-False
the sale
33. Cost of stock out occurs whenever the firm has no
a particular
stock of item
-False
34. EC of the oard
B can approve the full exposure
of single borrower
limit- False
35. MD can re
-delegate to lower authorities for credit approval within approved
-True limit
36. Banks can approve credit facility having scored-True
Marginal
37. Any proposal received from Branch can be submitted
/Board
todirectly
EC -False
38. Risk grading framework is used to
y the
justif
overall health of the advance
- True
39. If CRG score of a client is SMA Bank can not extend credit facilities
-False
to that client
40. HP facility can allowed
be to meet WC requirement
-False
41. For issuance of any guaranty against any foreign
ter guaranty,
coun approval from BB is required
-False
42. Bank can allow loan exceeding 35% of its capital for power
-Truesector
43. For issuance of any guaranty in foreign currency, approval
is required
from BB
-True
44. Lease rental for Lessee is a capital expenditure
-False
45. OAP is a project loan-False
46. OD (WO) is allowed for working capital of a manufacturing concern-False
47. CC (H) is allowed against Accounts Receivables-False
48. In case of syndicated loan bank has to access the proposal independently -True
49. CRG is a dynamic process for measuring credit Risk-True
50. CRG encompass the following two things – a) Risk Grading Score card and b)Risk Grading Sheet -
True
51. After adjustment of Lease Finance outstanding , ownership of leased assets is automatically
transferred to the Lessee-False
52. After adjustme nt of HP outstanding , ownership of assets is automatically transferred to the
customer-True
53. Non-funded loan can be transformed into funded-True.

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