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

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Important Circulars DAILY QUIZ - CAIIB - 08-03-2018 Bank Promotion exams

Master Circulars Only for Bankers
Bank DA Rates Calculate the Linear Regression whose input values are RBI
Bank Holidays IIBF
X = [5,20,40,80,100] & Y = { 10,20,30,40,50}
Life Ins Companies IRDA
Non-Life Ins Companies a. 10.0914 + 0.3894 X SEBI
List of PSBs b. 10.9194 + 0.8934 X BCSBI
List of Private Banks c. 10.9194 + 0.3894 X CIBIL
List of Foreign Banks
d. 10.9994 + 0.8934 X Banking and Insurance
Financial Regulators Ministry of Finance
Ans - c
Public Grievances Excise & Customs
Banking Ombudsman Solution Income Tax Department
Planning Commission Linear regression formula NSE
Y = A + BX
Dept of Financial Services BSE

To find X Mean
Total Inputs(N) =(5,20,40,80,100)
Total Inputs(N)=5
Mean(xm)= (x1+x2+x3...xn)/N
Mean(xm)= 245/5
Mean(xm)= 49

To find Y Mean
Total Inputs(N) =(10,20,30,40,50)
Total Inputs(N)=5
Mean(Ym)= (y1+y2+y3...yn)/N
Mean(Ym)= 150/5
Mean(Ym)= 30

To find Slope
Slope = (∑XY - N x X x Y)/(∑X2 - N x X)
= [(50+400+1200+3200+5000) - (5 x 30 x 49)]/[(25+400+1600+6400+10000) -(
5x492)]
= (9850 - 7350) /(18425 - 12005)
= 2500/6420
= 0.3894

To find Intercept Value:

A = Ybar - Slope x Xbar
= 30 - (0.3894 x 49)
= 10.9194.

To find Linear Regression:

Y = A + Bx
Answer = 10.9194 + 0.3894 X
.............................................

A sum of Rs. 32800 is borrowed to be paid back in 2 years by two equal annual
installments allowing 5% compound interest. Find the annual payment.

a. 16470
b. 16740
c. 17460
d. 17640

Ans - d

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Explanation :

Here,

PV =?
P = Rs. 32800
T = 2 years
R = 5% = 0.05

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

32800 = P × (1.052 – 1) ÷ (0.05 × 1.052)

P = 32800 ÷ 1.8594
P = 17640
.............................................

A bond has been issued with a face value of Rs. 1000 at 8% Coupon for 3 years. The
required rate of return is 7%. What is the value of the bond?

a. 1062.25
b. 1625.25
c. 1026.25
d. 1052.25

Ans - c

Explanation :

Here,

FV = 1000
Coupon Rate (CR) = 0.08
t = 3 yr
R (YTM) = 0.07
Coupon = FV × CR = 80

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

So, Value of bond = 1026.25

(Since Coupon rate > YTM, so Bond’s Value > FV)

.............................................

Mr x is to receive Rs. 10000, as interest on bonds by end of each year for 5 years @ 5%
roi. Calculate the present value of the amount he is to receive.

a. 43925
b. 43295
c. 49325
d. 49235

Ans - b

Explanation :

Here,

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

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

PV to be received, if the amount invested at end of each year:

So,
FV = (100000÷0.05) * {(1+0.05)^5 – 1} ÷ (1+0.05)^5
= 43295
.............................................

A sack contains 4 black balls 5 red balls. What is probability to draw 1 black ball and 2
red balls in one draw ?

a. 12/21
b. 9/20
c. 10/21
d. 11/20

Ans – c

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Solution :

Since here total sample space is (4+5) = 9.

Out of 9, 3 (1 black & 2 red are expected to be drawn)
Hence sample space

n(S) = 9c3 or it can be written c(9, c..

c(9, c. = 9!/(9-c.!×3! i.e 84

Now out of 4 black ball 1 is expected to be drawn hence

n(B) = 4c1 i.e. 4

Same way out of 5 red balls 2 are expected be drawn hence

n(R) = 5c2 = 5!/3!×2! = 10

Then P(B U R) = n(B)×n(R)/n(S)

i.e 4×10/84 = 10/21
........................................................

Effect of 14% compounding quarterly on effective annual int rate ...... %

a. 14.25
b. 14.50
c. 14.75
d. 15.00

Ans - c

Solutions

Effective rate=(1+Annual ROI/N)^n-1

=1+14%/4)^4-1
=1.035^4-1
=1.1475-1
=1475
=14.75%
.............................................

X opened a recurring account with a bank to deposit Rs. 16000 by the end of each year
@ 10% roi. How much he would get at the end of 3rd year?

a. 52960
b. 52690
c. 52069
d. 52096

Ans - a

Explanation :

Here,

P = 16000
R = 10% p.a.
T = 3 yrs

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

FV = 16000 * (1.13 – 1) ÷ 0.1

= 52960
.............................................

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 is 10%, find the present value of cash
flow.

a. 1736767
b. 1737667
c. 1738767
d. 1736767

Ans - d

Explanation :

Here,

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Since 204000 is like EMI. So, to find P, we use the formula of EMI

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

204000 = P × 0.1 × 1.1^20 ÷ (1.120 – 1)

204000 = P × 0.1174596
P = 1736767
.............................................

Calculate the mean, SD and variance for random samples of a population 7, 9, 8, 6, 7,

12 and 10

a. 4.2568
b. 4.2658
c. 4.2856
d. 4.2865

Ans - c

Solution:

Mean = (7 + 9 + 8 + 6 + 7 + 12 + 10)/7
= 59/7
= 8.42857

σ = √( (1/7-1) * (7-8.42857)2 + (9-8.42857)2 + (8-8.42857)2 + (6-8.42857)2 + (7-

8.42857)2 + (12-8.42857)2 + (10-8.42857)2)
= √( (1/6) * (-1.428572 + 0.571432 + -0.428572 + -2.428572 + -1.428572 + 3.571432
+ 1.571432))
= √( (1/6) * (2.0408122449 + 0.3265322449 + 0.1836722449 + 5.8979522449 +
2.0408122449 + 12.7551122449 + 2.4693922449))
= √4.2856866361
σ = 2.07019

variance = σ2
= 2.07019 x 2.07019
= 4.2856
.............................................

Suppose you deposit 2000/- each year for the next three years into an account that
pays 8%. How much will you have in 3 years?

a. 6492.80
b. 6758.62
c. 6521
d. 6120.52

Ans – a

Solution :

This sum is based on the Future value of annuity at the end of period.

Since we have the equation

FV of annuity = A/r ×{(1+r)^n-1}
Now FV = 2000/0.08×{(1+0.08)^3-1}
i.e Rs 6492.80
........................................................

A man borrowed a certain sum of money & paid it back in 2 years in two equal
installments. If the roi (compound) was 4% p.a. and if he paid back Rs. 676 annually,
what sum did he borrow?

a. 1725
b. 1525
c. 1275
d. 1575

Ans - c

Explanation :

Here,

PV =?
P = Rs. 676
T = 2 years
R = 4% = 0.04
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PV = P / R * [(1+R)^T - 1]/(1+R)^T

PV = 676 × (1.042 – 1) ÷ (0.04 × 1.042)

= 1275
.............................................

A bond has been issued with a face value of Rs. 20000 at 12% Coupon for 3 years. The
required rate of return is 10%. What is the value of the bond?

a. 20595
b. 29095
c. 25095
d. 20995

Ans - d

Explanation :

Here,

FV = 20000
Coupon Rate (CR) = 0.12
t = 3 yr
R (YTM) = 0.10
Coupon = FV × CR = 2400

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

So, Value of bond = 20995

(Since Coupon rate > YTM, so FV < Bond’s Value)

.............................................

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

a. 58109
b. 58019
c. 58091
d. 58190

Ans - b

Explanation :

Here,

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

If invested at the beginning,

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

FV = 55256 × 1.05
= 58019
.............................................

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