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Note: Though we had taken enough care to go through the questions, we advise
everyone to update oneself with the latest information through RBI website and other
authenticated sources.

November 2021

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CERTIFIED CREDIT PROFESSIONAL PREVIOUS YEAR QUESTIONS:

No. Questions
1 What will be the impact of the increasing proportion of aging population in
the economy?

A.) Higher demands for electronic and consumer goods

B.) Higher workforce in agriculture
C.) Easy availability of workforce in offices in urban areas
D.) Increased demand for health care products
2 Which one of the following need not be scrutinized and commented upon in
a periodic post-sanction inspection report?

A.) Advantages of chosen location to the unit.

B.) Unduly slow movement of part of finished goods.
C.) Internal Control measures existing at the unit.
D.) Frequent break down of machinery and disruption of production.
3 An increase in Mergers and Acquisition indicate:

A.) Poor economic conditions

B.) Good economic conditions
C.) Uncertain economic conditions
D.) Mergers and Acquisitions are never an indicates of economic conditions
4 A cash credit facility made available by a bank can typically be categorized
as __________.

A.) Revolving/ Secured credit

B.) Revolving/ Unsecured credit
C.) Non-Revolving/ Secured credit
D.) Non-Revolving/ Unsecured credit

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5 Which of the following facilities, bank is at a disadvantage in verifying the

end use of funds?

A.) Bill purchase

B.) Cash credit
C.) Letter of credit
D.) None of the above
6 ABC Bank sanctioned loan of Rs. 25 lakhs to XYZ & Co. to start trading of
'White' goods on 01/03/2016. Apart from primary security, collateral
security of landed property was obtained. The unit was closed on
01.03.2018 and the position of the account was as under:
(i) Outstanding Balance at the time of closure of unit was Rs.30 lakh.
(ii) Value of primary security available in the account at the time of closure
was negligible.
(iii) Value of collateral security offered at the time of sanction of advance
was Rs.12.50 lakh.
(iv) Distress sale value of the property was Rs. 8 lakhs as per the latest
assessment carried out while initiating recovery proceedings.
When Bank initiated recovery actions, mortgaged property could not be sold
because 110 KV line of the State Electricity Board was passing above the
property. What will be the amount of provision Bank will be required to
make as on 31/03/2016?

A.) Rs.25.20 lakh

B.) Rs.30.00 lakh
C.) Rs.22.50 lakh
D.) Rs.24.00 lakh
7 Two most popular forms of credit enhancement in securitization structures
are:

A.) Subordinates PTCs and Escrow Accounts

B.) Cash Collateral and Escrow Accounts
C.) Cash Collateral and Subordinate
D.) Corporate Guarantees and Asset Liability Mismanagement

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8 Commercial appraisal comprises the study of whether _____________.

A.) The firm is financially strong

B.) Products of the firm has good demand and market acceptance
C.) The capacity utilization is very high
D.) None of the above
9 Which one of the following is not a purpose of "credit monitoring"?

A.) Ensuring that the quality of the credit is maintained at the same level as
at the time of sanction and there is no slippage.
B.) Ensuring compliance of terms of sanction/covenants stipulated at the
time of sanction.
C.) Effecting reasonable/sizeable recovery in accounts, already classified as
NPA.
D.) Keeping track of the borrowing company's performance throughout the
period of the loan/Working Capital finance.
10 Three credit analysts were discussing the latest company Bill, 2012 to
identify the red flags related to the auditor rotation by the companies,
Analysts 1: As per company Bill 2012, all listed companies may have to
compulsory rotate auditor as depending on the kind of audit service
(individual or audit firm) it avails.
Analyst 2: In case a company indulges in service of an individual auditor, it
needs to be rotated every ten years.
Analyst 3: In case a company indulges a service of an audit firm, it need not
rotated auditor. Which of the above analyst are true?

A.) Analyst 1
B.) Analyst 1 & Analyst 2
C.) Analyst 2
D.) Analyst 2 & Analyst 3

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11 Owner's equity capital shows as a liability in the Balance Sheet. This is

based on the accounting concept of:

A.) Accrual concept

B.) Going concern concept
C.) Business entity concept
D.) Dual entry concept
12 A company had sales of Rs 8,30,000 and cost of goods sold was Rs
5,25,000. At the beginning of the year its accounts receivable were Rs
80,000 and its inventory was Rs 1,00,000. At the end of the year its accounts
receivable were Rs 86,000 and its inventory was Rs 1,10,000. The inventory
turnover ratio for the year was.

A.) 4.8
B.) 5
C.) 7.9
D.) 2.7
13 ITraxx Europe non-financial index relates to:

A.) Equity weighted index of 100 non-financial European reference entities.

B.) Equity weighted index of tap 125 European reference entities, selected
by traded volumes.
C.) Equity weighted index of 25 senior financial European reference
entities.
D.) Equity weighted index of 25 subordinated financial European reference
entities.
14 Basel I guidelines did not allow risk mitigation on exposures secured by

A.) Deposits under lien

B.) Government Securities
C.) Shares
D.) NSCs

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15 Which one of the following statements is not correct in respect of

partnership firm?

A.) It is for carrying on business by all any one of the partners

B.) Partnership firm carrying on banking business can have not more than
20 partners
C.) There must be an agreement between the partners
D.) There must be sharing of losses also
16 Other things held constant, which of the following will not affect the quick
ratio? (Assume that current assets equal current liabilities)

A.) Fixed Assets are sold for cash

B.) Cash is used to purchase Inventory
C.) Cash is used to pay-off accounts payable.
D.) Accounts receivable that are collected.
17 The purpose of acknowledgement of debt and security is _____________.

A.) To know the where abouts of the borrower

B.) To remain him of his repayment obligations
C.) To keep the security document alive
D.) All of the above
18 Which of the following is a operation related mechanism which can result
in taking a consolidated view instead of standalone view:

A.) Holding Company

B.) Corporate Guarantee
C.) Keep-well agreement
D.) Forward integration

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19 The original Z-score model developed by Mr. Altman is a factor of

_____variables.

A.) Five
B.) Four
C.) Six
D.) None of the above
20 __________refers to the risk involved in the payment mechanism i.e
channeling the cash flows generated by the pool and the credit enhancement
to investors.

A.) Systematic Risk

B.) Structural Risk
C.) Prepayment Risk
D.) Subordination Risk

Answer Key

1 D 6 A 11 C 16 D

2 A 7 C 12 B 17 C

3 B 8 B 13 A 18 D

4 A 9 C 14 C 19 A

5 B 10 A 15 B 20 B

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