Risk Management and Investment Quiz ( Session - 4,5,6 )

What type of risk is associated with interest rate changes?

• Credit Risk

• Market Risk

• Liquidity Risk

• Operational Risk

The probability of a borrower defaulting is captured under:

• LGD

• PD

• EAD

• Beta

Which ratio measures a bank's capital adequacy?

• ROE

• CAR

• P/E

• NIM

Stress testing in risk management is used to:

• Predict customer behavior

• Simulate extreme market conditions

• Track daily trades

• Improve liquidity

The 2020 Yes Bank crisis was primarily due to:

• High provisioning

• Poor technology

• Excessive bad loans and poor governance

• Market speculation

LGD stands for:

• Loss Given Delay

• Loan Growth Duration

• Loss Given Default

• Liquidity Gap Determinant

Which of the following is a qualitative risk management technique?

• VaR

• Scenario Analysis

• Regression Model

• Monte Carlo Simulation

If a borrower defaults on ₹100, and bank recovers ₹30, LGD is:

• 30%

• 70%

• 100%

• 50%

Capital Adequacy Ratio helps in:

• Profit tracking

• Compliance only

• Ensuring solvency and risk absorption

• Loan growth

Which risk management metric measures potential future loss?

• ROI

• P/E

• VaR

• EPS