L2 Unit – 6 – Quiz - Wealth Management Course that Top Wealth Managers Swear By

Question 1 of 25

1. Question

A formal, legal commitment to extend credit up to some maximum amount over a stated period of time

Trade Credit
Letter of Credit
Revolving Credit Agreement
Line of Credit

Question 2 of 25

2. Question

When a firm needs guaranteed, short-term funds available for a variety purposes, the bank loan will likely be

Line of Credit
Compensating Balance Arrangement
Revolving Credit Agreement
Transaction Loan

Question 3 of 25

3. Question

When does the asset legally belong to the purchaser under a hire purchase agreement?

Final installment is paid
Final installment is paid and purchaser agrees to a legal option to buy the asset
On date of first installment in repayment
Purchaser agrees to legal option to buy the asset

Question 4 of 25

4. Question

Which of the following is not one of the five C’s of credit analysis?

Capital
Capacity
Credit Process
Character

Question 5 of 25

5. Question

Which of the following is an example of Credit Information Company?

IMF
CRISIL
CIBIL
World Bank

Question 6 of 25

6. Question

What is the perceived benefit of borrowing from a credit union?

Lower Cost of Borrowing
Wider Access to Service Centers
High Technology based Service Levels
Numerous Product Choices

Question 7 of 25

7. Question

Mr. Mishra has taken a housing loan of Rs.1.5 cr for 20 years @ 12% p.a. reducing monthly. Calculate principal paid in
11th installment?

Rs.16,749
Rs.14,549
Rs.12,749
Rs.16,149

Question 8 of 25

8. Question

The working capital requirement is

Working capital plus short-term debt plus cash
Inventories plus receivables less payables
Working capital less short-term debt less cash
Inventories plus receivables less payables plus prepayments less accruals

Question 9 of 25

9. Question

As per the matrix for consumer protection for aggrieved consumers, which of the following steps comes last?

Office of Ombudsman
Consumer court under COPRA
Court of law
In house grievance redressal by the bank

Question 10 of 25

10. Question

Taking out a loan against your life insurance policy does not count as

Taxable Income
Deduction
Exemption
All of the above

Question 11 of 25

11. Question

Which of the following is a borrowing facility/loan advance?

Performance Guarantee
Bill received Under Letter of Credit
Both A & B
Term Finance

Question 12 of 25

12. Question

Which of the following would not make a distinction between a hire purchase and a normal purchase?

Purchaser pays for item by installments over a period of time
Cost to buyer is likely to be higher than it would be for a normal purchase
Asset does not belong to purchaser when delivery is received from supplier
Trade discounts cannot be offered on hire purchase

Question 13 of 25

13. Question

____________is the process that banks undertake to structure a credit facility to minimize risks and generate the best return, given the risks that the banks assume. The credit structure includes the term of the loan, collateral required, amortization requirement, timing of interest payments, and reporting requirements.

Security realization
Credit underwriting
Management quality
Financial condition

Question 14 of 25

14. Question

The information listed on your credit report includes several variables that __________uses to set your credit score.

RBI
S&P
CIBIL
SEBI

Question 15 of 25

15. Question

Which of the following situations is most likely to ring an alarm to wealth manager taking care of a client’s debts?

When more of the client’s income is being spent in unnecessary consumption expenses
If the net loan balance is increasing over time without any simultaneous increase in asset bases
When the client misses credit card payments frequently on account of carelessness
All of the above

Question 16 of 25

16. Question

Mr. Sarvesh has taken a housing loan of Rs.50,00,000 of 20 years @ 11% p.a. reducing monthly on floating bases. The bank would increases rate of interest to 12% p.a. after 3 years, what would be the new EMI?

Rs.45,740
Rs.54,740
Rs.54,140
Rs.50,740

Question 17 of 25

17. Question

Which of the following would be consistent with a conservative approach to financing working capital?

Financing short-term needs with long-term debt
Financing some long-term needs with short-term funds
Financing short-term needs with short-term funds
Financing seasonal needs with short-term funds

Question 18 of 25

18. Question

A bank customer can file a complaint against banking organization if reply is not received from the bank within a period of ____________after concerned bank has received complaint representation.

Three Months
Two Months
One Month
Six Months

Question 19 of 25

19. Question

Banking Ombudsman is appointed for

Handling and redress customer complaints against deficiency in certain banking services
Handling and redress banks complaints against customer's behavior
Providing decision on important banking operations like – CRR, SLR and MSF etc.
None of the above

Question 20 of 25

20. Question

The maximum period for which deduction is admissible under section 80E is

8 Years
3 Years
5 Years
2 Years

Question 21 of 25

21. Question

In a housing loan, the _________ the client’s margin contribution (his capital), the _________ is his psychological commitment to pay the loan.

Higher ;higher
Higher; lower
Lower ; higher
Higher ; zero

Question 22 of 25

22. Question

Which of the following are the functions performed by a credit bureau?
I) Provide details pertaining to credit history
II) Provide justified opinion whether the loan should be granted or not
III) Maintain a credit score based on factual information
IV) Provide personal identification and contact details
V) Provide details pertaining to current loans

All Except I and IV
All Except II and IV
All Except II
All Except V

Question 23 of 25

23. Question

Which of the following is most likely to be recommended to the wealth manager while dealing with loan and debt management of a client?
I) Maintain a personal relationship with client
II) Work on client psychology & attitude as much as you work on their finances
III) Motivate clients to take responsible credit
IV) Encourage clients to learn to enjoy with their money by spending where it pleases them
V) Check the credit report of the client

I, II, III and V
II, III and V
I, II, III, IV and V
I, II, and V

Question 24 of 25

24. Question

Mr. X has recently purchased a house worth Rs. 60 lakh for self-occupation by availing housing loan of Rs. 48 lakh at
8% p.a. rate of interest. The tenure of loan is 15 years. He has Rs. 15 lakh financial assets at present. He is expected to save annually Rs. 4,00,000 which he invests on a quarterly basis beginning a quarter from now in an instrument which is expected to provide return of 11% p.a. What would be his net worth six years from now? The value of the house which is for consumption purposes is not considered in the net worth so arrived.

Rs.60,98,490
Rs.25,75,000
Rs.35,23,490
Rs.96,21,979

Question 25 of 25

25. Question

Which of the following statements is most correct?

Current assets of the typical manufacturing firm account for over half of its total assets
Similar to the capital structure management, working capital management requires the financial manager to make a decision and not address the issue again for several months
Strict adherence to the maturity matching approach to financing would call for all current assets to be financed solely with current liabilities
For small companies, long-term debt is the principal source of external financing