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Understanding ETFs Uses, Returns and Comparison with Mutual Funds and Stocks

 Exchange-Traded Funds (ETFs) have gained popularity among investors for their unique features and benefits. In this blog, we'll explore the uses of ETFs, their potential returns, how they differ from mutual funds and stock investments, and their safety profile. What is an ETF? An ETF is a type of investment fund that trades on stock exchanges, much like individual stocks. It holds a collection of assets, such as stocks, bonds, or commodities, and aims to track the performance of a specific index, sector, or asset class. Uses of ETFs Diversification : ETFs allow investors to gain exposure to a wide range of assets without having to purchase each individually. For instance, an ETF tracking the S&P 500 gives you exposure to 500 different stocks, reducing the risk associated with individual stock investments. Cost Efficiency : ETFs often have lower expense ratios compared to mutual funds. They typically pass on lower management costs to investors since they are often passively man
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Sample Questions for CAIIB - Advanced Bank Management - Sample Questions Set 5



1. If market quotes USD/INR as 43.61/63, at what rate can you buy USD at the given quote?
a) 43.61
b) 43.62
c) 43.63
d) 43.60

Answer - 43.63

2. Debt Equity denotes position of the firm
a) Profitability
b) Solvency
c) Liquidity
d) None

Answer - Solvency

3. Which of the following formula can be used for calculation of equated monthly installment (EMI)
a) P x r[ (l+r)n x (l+r)n —1]
b) P x r [ (l+r)n / (l+r)n +1]
c) P x r [ (l+r)n / (l+r)n —1]
d) P x r [ (l+r)n / (l+r)n ]
Answer - P x r [ (l+r)n / (l+r)n —1]

4. Mr X has purchased a bond at 10% for 6 years, with face value of Rs.1000 for Rs.900. What is his yield till maturity
a) 12.50%
b) 12.20%
c) 11.80%
d) 11.60%

Answer - 12.50%

5. Credit rating is a system of
a) Measuring Risk
b) Mitigating Risk
c) Migrating Risk
d) Credit Appraisal

Answer - Measuring Risk

6. Which of the following is not the purpose of Credit Audit
a) Improvement in the Quality of credit portfolio
b) Review sanction process and compliance status of large loan
c) Feedback on regulatory compliance
d) Stock Inspection

Answer - Stock Inspection

7. Project Loans an be given by the Bank to
a) Only Corporate
b) Only Corporate and Partnership Firm
c) Only Corporate, Partnership Firm and Societies
d) Any Business Entity

Answer - Any Business Entity

8. Total Priority Sector target for Foreign Bank, Operating in India is
a) 20%
b) 32%
c) 40%
d) 18%

Answer - 32%

9. When the required rate of return is less than the coupon rate then value of the bond is
a) less than face value
b) more than face value
c) equal to face value
d) Maturity Value

Answer - more than face value

10. Which of the following is not part of secured loans raised by a company
a) Inter-corporate borrowing
b) Debentures
c) Term loan from a bank
d) term loan from a financial institutions

Answer - Inter-corporate borrowing


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