3/12/2018 Free Mock Test for JAIIB & CAIIB

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Important Circulars DAILY QUIZ - CAIIB - 09-03-2018 Bank Promotion exams

Master Circulars Only for Bankers
Bank DA Rates Given the following sample data: 2, 4, 8, 6, 10, and 12. RBI
Bank Holidays IIBF
1. Calculate Mean
Life Ins Companies IRDA
Non-Life Ins Companies a. 6 SEBI
List of PSBs b. 7 BCSBI
List of Private Banks c. 8 CIBIL
d. 9
List of Foreign Banks Banking and Insurance
Financial Regulators Ans - b Ministry of Finance
Public Grievances Excise & Customs
Banking Ombudsman 2. Calculate standard deviation Income Tax Department
Planning Commission NSE
a. 2.34
Dept of Financial Services b. 2.43 BSE
c. 3.42
d. 4.23

Ans - c intraday
3. Calculate coefficient of Standard Deviation Trading
a. 0.39
b. 0.43
Software
c. 0.49
90% Pro t NSE , MCX
d. 0.57

Ans - c

4. Calculate coefficient of variance

Technical
a. 46.86
b. 48.86
Chart
c. 53.86 Software
d. 56.86
Automatic
Ans - b
Buy Sell
Solution : Signal with
1. Mean - X(bar) = ∑X/n Target and
= 42/6
=7 Stop-Loss
X - (X−X(bar))^2
2 - (2−7)^2 = 25
4 - (4−7)^2 = 9
8 - (8−7)^2 = 1 Free Live Demo
6 - (6−7)^2 = 1
10 - (10−7)^2 = 9
12 - (12−7)^2 = 25

∑X=42
∑(X−X(bar))^2=70

2. Standard Deviation = √[(∑(X−X(bar))^2)/n]

S = √70/6

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= √35/3
= 3.42

3. Coefficient of Standard Deviation =S/X(bar)

= 3.427
= 0.49

4. Coefficient of Variation (C.V) = S/X(bar)×100

= (3.42/7) × 100
= 48.86%
.............................................

X wants to borrow Rs. 25000 immediately and another Rs. 20000 after a period of 2
years @ 10% roi. He wants to pay it in monthly installments for 5 years. Calculate the
amount of monthly payment.

a. 978
b. 987
c. 897
d. 879

Ans - d

Explanation :

Here,

First find PV of 20000 for 2 years @ 10%.

Here, t = 2*12 = 24 months and r = 10% ÷ 12 = 0.00833

PV = P / (1+R)^T

So,
PV = 20000 ÷ (1+0.0083)^24
= 16388.07
So, total amount = 25000 + 16388.07 = 41388.07

Now,
P = 41388.07,
R = 10% ÷ 12 = 0.00833,
T = 5 * 12 = 60 months

EMI = P * R * [(1+R)^T/(1+R)^T-1)]

EMI = (41388.07 * 0.00833) * {(1.0083)^60 ÷ (1.0083)^60 – 1)}

= 879
.............................................

Effective Interest Rate of 10% of annual interest and compounding semi-annually

a. 10 %
b. 10.25 %
c. 10.5 %
d. 10.75 %

Ans - b

Effective Interest Rate =(1+periodic Interest Rate)^n-1

=(1+10/2)^2-1
=(1.1025)-1
=(0.1025
=10.25%
.............................................

You are receiving Rs. 10000 every year for the next 5 years (at the end of the period)
and you invest each payment @ 5%. How much you would have at the end of the 5-
year period?

a. 55526
b. 55652
c. 55265
d. 55256

Ans - d

Explanation :

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Here,

P = 10000
R = 5% p.a.
T = 5 yrs

If invested at the end,

FV = P / R * [(1+R)^T - 1]

FV = 10000 × (1.05^5 – 1) ÷ 0.05

= 55256
.............................................

A Bond whose per value is Rs. 1000, bears a coupon rate of 12℅ and has a maturity 8
years. the Require rate of return on the bond is 14℅. What is the value of the bond?

a. 1389
b. 1398
c. 1938
d. 1983

Ans - c

Solution

Annual interest rate payable=1000*12%=120

Prinicpal repayment at the end of 8 year = Rs. 1000
=120 (PVIFA, 14%,8 years)+1000(PVIF,14%, 8 Years)
PVIFA= [1-(1+r)^ -n]/ r and PVIF=1/(1+R)^t
=120((1+r)^t-1/R*(1+R)^T))+1000(PVIF=1/(1+R)^t)
=120(1.14^8-1/0.14*(1.14)^8+1000(1/1.14^8)
=120(2.852586-1)/0.14*(2.852586)+1000(1/2.852586
=120(1.852586/0.14*2.852586+1000*0.3505591
=120*13.23276+350.5591
=1587.93+350.56
=1938.49
.............................................

You will be receiving Rs. 204000 at the end of each year for the next 20 years. If the
current discount rate for such a stream of cash flow is 10%, find the present value of
cash flow.

a. 1737760
b. 1736660
c. 1736770
d. 1737660

Ans - c

Explanation :

Here,

P = 204000
R = 10
T = 20

PV = P / R * [(1+R)^T - 1]/(1+R)^T

PV = 1736770
.............................................

Mr. X invested in 12.5%, 5-year bond of face value of Rs. 100. The expected market
rate is 15%. What is the duration of the bond?

a. 3.98 years
b. 3.89 years
c. 2.98 years
d. 2.89 years

Ans - a

Explanation :

Bond’s Duration = ΣPV×T ÷ ΣP

Bond Price = (1/(1+R)^t)((coupon*((1+R)^t-1)/R)+Face Value)

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ΣP = {12.5 × (1.155 -1) ÷ 0.15 + 100} ÷ 1.155

= 91.6196

Here a = 0.86956 and a^t = 0.497176

So, ΣPV × T = 12.5 × 6.66636 × {0.502824 ÷ 0.13044 – 2.4588} + 248.588

= 116.33046 + 248.588 = 364.92

So, Duration of the Bond

= 364.92 / 91.6196
= 3.98 years
.............................................

X wants to send his daughter to a management school after 5 years and will need
onetime payment of charges amounting to Rs. 7 lac. At 12% roi, how much he should
invest annually?

a. 111087
b. 110187
c. 118107
d. 118017

Ans - b

Explanation :

Here,

FV = 7 lac
R = 12% p.a.
T = 5 yrs

FV = P / R * [(1+R)^T - 1]

700000 = P * (1.125 – 1) ÷ 0.12

700000 = P * 6.352847
P = 110187
.............................................

An urn contains 10 black balls and 5 white balls. 2 balls are drawn from the urn one
after other without replacement. What is the probability that both drawn are black ?

a. 2/7
b. 3/7
c. 4/7
d. 6/7

Ans - 2

Solution :

Let E and F denote respective events that first and second ball drawn are black.

We have to find here P(E n F ) and P(E/F)

Now P(E) = P(Black in first drawn) = 10/15

Also given that the first ball is drawn i.e events E has occurred. Now there are 9 black
balls and 5 white balls left in the urn. Therefore the probability that the second ball
drawn is black, given that the ball first drawn is black nothing but conditional probability
of F given that E has occurred already.

Hence P(E/F) = 9/14

Now by the multiplication rule of probability

P(E n F) = P(E) × P(E/F)

= 10/15 × 9/14 = 3/7
........................................................

What amount you would need to invest in the annuity if you want to get paid Rs. 20,000
a year for 20 years when the roi is 5%?

a. 249244
b. 242944
c. 244299
d. 242499

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Ans - a

Explanation :

Here,

20000 is to be get paid each year, so the formula is derived from EMI formula:

PV = P / R * [(1+R)^T - 1]/(1+R)^T

PV = 20000 × (1.0520 – 1) ÷ (0.05 × 1.0520)

= 249244
.............................................

If a 6% coupon bond is trading for Rs.950.00, it has a current yield of ...... percent.

a. 6.50
b. 6.31
c. 6.10
d. 6.00

Ans - b

Solution

=1000*6%=60
=60/950
=6.31
.............................................

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