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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 - Bank Financial Management - Sample Questions Set 1



1. Which of the following is true?
a) If a bank has oversold position, Bank will gain if the rate of foreign currency rises
b) If a bank has oversold position, Bank will gain if the rate of foreign currency declines
c) If a bank has oversold position, Bank will lose if the rate of foreign currency declines
d) If a bank has overbought position, Bank will gain if the rate of foreign currency declines

Answer - If a bank has oversold position, Bank will lose if the rate of foreign currency declines

2. NRE account cannot be opened in which of the following currencies?
a) Indian Rupees
b) USD
c) Euro
d) b and c

Answer - b and c

3. Value at Risk (VAR) concept can be described as
a) Downside risk potential
b) Measure of volatility
c) Measure of sensitivity
d) All of the above

Answer - Downside risk potential

4. RBI has put in place real time gross settlement system(RTGS) to mitigate the following risk
a) Market Risk
b) Settlement Risk
c) Operational Risk
d) Strategic Risk

Answer - Settlement Risk

5. Economic Equity Ratio is used to assess sustenance capacity of the bank. It is calculated using the formula
a) Net Interest Income / Shareholder Funds
b) Total Income / Shareholder Funds
c) Shareholder Funds / Total of Assets & Liabilities
d) Shareholder Funds / Total Assets

Answer - Shareholder Funds / Total Assets

6. If the fixed and variable cost at 50%production capacity is Rs.20000 and Rs.30000, respectively, the total cost at 70% capacity will be
a) 50000
b) 62000
c) 70000
d) 58000

Answer - 62000


7. Advance in the form of pledge should not be granted in respect of
a) Stock-in-process
b) Raw Material
c) Finished Goods
d) None of these

Answer - Stock-in-process

8. Inflation means
a) Increase in price
b) Decrease in value of money
c) Boom
d) a and b

Answer - a and b

9. Under Basel III, the risk weight for capital charge for credit risk on the basis of standardized approach for home loan of above Rs.75 lac, where loan to value (LTV) ratio is
a) 20%
b) 50%
c) 75%
d) 100%

Answer - 75%

10. No Frills' delivery of banking services at an affordable cost to the vast section of disadvantaged and low income groups is called
a) Vanilla Banking
b) Financial Inclusion
c) Financial Exclusion
d) Social Service

Answer - Financial Inclusion

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