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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 5



1. Adequacy of bank's liquidity position depends upon
a) Sources of Fund
b) Anticipated future funding needs
c) Present and Future earnings capacity
d) All of the above

Answer - All of the above

2. If type of trade is not mentioned, all the exchange rates quoted are a) Forward Transaction
b) Cash Transaction
c) Spot Transaction
d) Tom Transaction

Answer - Spot Transaction

3. Which of the following is not a function of integrated Treasury Department
a) Pricing of Products
b) Facilitation of Payment and Settlement of the bank
c) Issuance of Foreign currency denominated Traveler’s cheques
d) Assisting the bank management in ALM

Answer - Issuance of Foreign currency denominated Traveler’s cheques

4. Communication Risk is a type of
a) Market Risk
b) Credit Risk
c) Operational Risk
d) Interest Rate Risk

Answer - Operational Risk

5. The benchmark rates for term lending for USD are generally
a) LIBOR
b) MIFOR
c) MIBOR
d) None of These

Answer - LIBOR

6. When the delivery under Forex deal is completed on the 2nd working day following the date of contract the rate is called
a) Spot Rate
b) Forward Rate
c) TOM Rate
d) Transaction Settlement Rate

Answer - Spot Rate

7. Which one is supplementary Capital
a) Tier I
b) Tier II
c) Tier III
d) All of the above

Answer - Tier II

8. Which one is not quoted as a unit of foreign currency
a) JPY
b) GBP
c) Indonesian Rupiah
d) Kenyan Shilling

Answer - GBP

9. My Brother gave me gift of USD 20000. In which type of following accounts it can be credited?
a) RFC
b) RFC (Domestic)
c) EEFC
d) NRE

Answer - RFC (Domestic)

10. RBI monitors overdue export bills-not realized within the stipulated time by calling for a half yearly statement from ADs referred to as
a) BEF
b) XOS c) GTE-1
d) ST-9

Answer - XOS

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