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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 3


1. The Value of derivative is determined by
a) The Value of underlying
b) National Principle Amount
c) FIMMDA
d) FEDAI

Answer - The Value of underlying

2. Security of a Bank migrates from A+ to A. Which risk is associated with bank
a) Market Risk
b) Operational Risk
c) Market Liquidation Risk
d) Credit Risk

Answer - Credit Risk

3. Nostro Account means
a) Account meant for Reconciliation
b) Accounts of foreign bank with Indian Bank
c) Current Account denominated in foreign currency maintained by bank with their correspondent bank in the home country of the currency
d) Short term investment with High security rated foreign bank

Answer - Current Account denominated in foreign currency maintained by bank with their correspondent bank in the home country of the currency

4. An NRE term deposit account can be opened for a minimum period of:
a) 1 Year
b) 5 Year
c) 6 Months
d) 2 Years

Answer - 1 Year

5. Which of the following types of Bill of Lading is not acceptable by a bank under LC?
a) On Board
b) Clean
c) Charter Party
d) All of the above

Answer - Charter Party

6. To be eligible for packing credit advances the customer
a) should not be in the caution list of RBI or specific approval list of ECGC
b) must be holding importer/exporter code number allotted by DGFT
c) should be recognized export house
d) a and b

Answer - a and b

7. When a bank sanctions a loan to a large borrower, which of the following risks it may not face
a) Liquidity
b) Market
c) Credit
d) Operation

Answer - Market

8. Change in interest rates will affect
a) Net interest income
b) Other income
c) Staff Expenses
d) All of the above

Answer - Net Interest Income

9. Promissory notes issued by Central Government to meet its
a) short term Certificate of Deposits
b) Commercial Papers
c) Capital Indexed Bonds
d) Treasury Bills

Answer - Treasury Bills

10. Supervisory Review under Basel-II framework refers to
a) Operational risk
b) Market Risk
c) Credit Risk
d) None of These

Answer - None of These

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