Management of Financial Institutions Questions, December- 2013
Posted by Ripon Abu Hasnat on Tuesday, September 16, 2014 | 0 comments
Banking Diploma Examination, December- 2013
MANAGEMENT OF FINANCIAL INSTITUTIONS (MFI)
Time- 3 hours, Full marks- 100, Pass marks-5O
The figures in the right margin indicate full marks. Answer any five questions.
1. a) Write down the difference between Commercial Bank and Central Bank.
b) Explain the role played by commercial Banks in an
2. a) Explain the problems and prospects of interest rate liberalization.
b) "As compared to other sectors economy, the banking sector is more regulated- Why? What is the impact of such regulation on banking performance?
c) What are the processes of obtaining long-term loan?
3. a) XYZ has 10 percent coupon bonds on the market with nine years left to maturity. Par value of bond is Tk. 1.000 and make annual payment. If the bond currently sells for Tk. 1075, what is its YTM?
b) Determine the duration of the following securities:
Face Value = 1k. 1.000; Coupon Rate = 6% p. a.
Terms of maturity = 2 years YTM = 8%
Coupon payment are to be made semi-annually.
4. a) Why ALM strategy is important in the context of deregulated banking environment of Bangladesh?
b) If a bank has an ROA of 0.80% and Equity Multiplier (EM) of 12, what is the ROE?
How does Bangladesh Bank control its money supply through open market operation?
5. a) What is the financial intermediary? Briefly explain the function of a financial intermediary.
b) Describe the different types of financial institutions.
c) Discuss the risk management process of a bank
6. The following information is for New Bank Ltd..:
(In millions Tk.)
Interest Income Tk. 1875
Interest Expense Tk. 1210
Total Assets Tk. 15765
Securities Gain (Loss) Tk. 21
Earnings Assets Tk. 12621
Total liabilities Tk. 15440
Taxes Tk. 16
Number of Common Shares Tk. 1.45,000
Non Interest Income Tk. 501
Non Interest Expense Tk. 685
Provision for Loan l.oss Tk. 381
You are required to calculate: ROE, ROA. NIM. EPS, Net Non Interest Margin and Net Operation Margin.
b) Discuss the various principles of insurance on which insurance companies operate.
7. a) Discuss the important aspects that should be considered by a banker while financing an industrial project.
b) What are the process of measuring and evaluating the performance of a financial institution? Discuss briefly.
8. Write Short Notes (Any Four):
a) Risk Premium
b) Call Option
c) National Payment Switch Bangladesh
d) Portfolio Management
e) Risk weighted Assets
f) Loan Classification
g) Wages theory of profit
h) Marine Insurance
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