CHAPTER 1:INTRODUCTION&OVERVIEW FINANCIAL SYSTEM
Question 1
Which of the following is NOT a function of financial intermediaries?
A. Lower transaction costs
B. Reduce exposure of investors to risk
C. Deal with asymmetric problems
D. Does not provide a safekeeping service for those with excess funds
Question 2
Which of the following are investment banks?
I. Affin Investment Bank Berhad
II. RHB Investment Bank Berhad
III. Bank Rakyat Investment Bank Berhad
IV. MIMB Investment Bank Berhad
A. I, II, and III
B. I, II, and IV
C. II, III, and IV
D. I and II
Question 3
What is market risk?
A. risk that promised cash flows from loans and securities held by financial institutions may not be paid in full
B. risk that incurred by a financial institution as the result of its activities related to contingent assets and liabilities.
C. risk that exchanges rate changes can affect the value of a financial institution’s assets and liabilities denominated in foreign currencies
D. risk incurred in trading assets and liabilities due to changes in interest rates, exchange rates, and other asset prices.
Question 4
Is it true that we can expect returns without taking any risks?
TRUE
FALSE
Question 5
Which are the 3 important components of financial system?
i. Provider and user of funds
ii. Financial instruments
iii. Financial stability
iv. Financial institutions
A. i, ii, iii
B. ii, iii, iv
C. i, ii, iv
D. i, iii, iv
Question 6
In Islamic banks, risk sharing is predetermined by interest rate.
TRUE
FALSE
Question 7
In which letter of credit the bank and customer will share the profit from the ventures as stated?
A. AL-WAKALAH
B. MUSYARAKAH
C. MURABAHAH
Question 8
Following statements is true regarding project financing in musyarakah (joint venture) EXCEPT for:
A. Both parties have the right to participate and have the option to waive the right
B. Both parties will negotiate profits and agree on how to distribute it.
C. All parties will bear the loss in proportion of their share in the financing
D. Bank and project initiators will provide maximum of capital at an agreed proportion.
Question 9
Which of the following is not a benefits of financial intermediaries?
A. Reduced costs
B. Risk diversification
C. Lowest possible price
D. Act as advisor to participants
Question 10
Which are the roles of BNM in Banking System?
i. Issue currency
ii. Act as a banker and financial advisor to the governmen
t
iii. Raise funds by collecting deposits
iv. Keeper of international reserves and safeguarding the value of RM
A. i, ii, iii
B. ii, iii, iv
C. i, ii, iv
D. All above
Question 11
Is it true MUSHARAKAH MUTANAQISAH is property financing in Islamic Bnking ?
TRUE
FALSE
Question 12
Following statement is true regarding exchange rate risk ,EXCEPT ;
A. Financial institution will be affected by changes in exchange rates.
B. Known as foreign exchange or currency risk
C. Financial institution will have to close out a long or short position at a loss due to an adverse movement in exchange rates.
D. A floating exchange rate is one that is determined by BNM.
Question 13
_____ refers to the risk of inefficiency in the operation leading to affecting an institution profitability.
A. Operational Risk
B. Liquidity Risk
C. Interest Rate Risk
D. Credit Risk
Question 14
All of the below are characteristics of the Islamic Bank, except:
A. Pay zakat and tax required by the government
B. Only pay tax as required by the government
C. Risk sharing based on pre-agreed proportion
D. Financing is not interest-oriented
Question 15
Underwriting is one of the services provided by ____
A. Commercial banker
B. Islamic banker
C. Bank negara Malaysia
D. Investment banker
Question 16
Capital market under financial markets is which derivatives securities are traded. Is this statement are true or false:
TRUE
FALSE