CAIIB – ABFM – Mock Test- 08

Hello Student

Welcome and congratulations on deciding to use this Quiz!!

Successfully answering the questions will improve your understanding of the concept and help you score better in your exam.

IMPORTANT NOTE : Pl click all questions, so that you can see correct / incorrect status of you attempted test

Here is your Test…….. All the best

According to the initial definition, when is an entity considered a startup in India?

Up to ten years from the date of its incorporation/registration

If its turnover for any financial year does not exceed Rs. 100 crore

Up to five years from the date of its incorporation/registration

If it is a private limited company

What is the main focus of the "Unfreeze" phase in Lewin's Change Management Model?

Preparing the organization for change

Implementing the desired change

Resisting any form of change

Returning to the previous state

Who sets the market standards for the documentation involved in acquisition finance conducted in Indian rupees (INR)?

Securities and Exchange Board of India (SEBI)

Companies Act of 2013

There is no universally acknowledged market standard for such documentation

Reserve Bank of India (RBI)

Which of the following is NOT a pre-offer defense strategy used by target organizations?

Golden parachute

Staggered board

Poison pills

Pacman defense

What challenges are associated with early studies in artificial intelligence concerning knowledge representation? A) Combinatorial explosion causing exponential slowdown B) Access to common sense knowledge C) The sub-symbolic nature of common sense knowledge D) Formal knowledge representations in various contexts

A and B

A and C

A, B, and C

A, C, and D

What is the primary focus of effective financial management regarding corporate valuation?

Optimizing value creation for shareholders

Enhancing market share

Reducing operational costs

Maximizing revenue

What is the primary objective of Fund of funds funding?

Investing in public markets

Leveraged buyouts

Real estate private equity

Investing in other funds

What is the primary factor that influences the effectiveness of the decision-making process?

The level of risk associated with the decision

The assignment of probabilities to estimated outcomes

The quality of data, analytical skills, and experience of decision makers

The use of objective probability based on past experience

Why is the Contingency School of Management criticized?

It is criticized for providing standardized principles for specific situations.

It is criticized for being too expensive in terms of time and money.

It is criticized for being too rigid in its principles.

It is criticized for not emphasizing leadership styles enough.

10.

What is the main difference between extrinsic and intrinsic motivations?

Intrinsic motivations are driven by external rewards.

Extrinsic motivations come from outside sources, while intrinsic motivations come from within the individual.

Intrinsic motivations result from external factors.

Extrinsic motivations are more sustainable over time.

11.

How might a corporate benefit from diversification in terms of risk mitigation?

Diversification leads to higher profitability of individual projects.

Diversification can reduce overall risk and protect against cyclical downturns in specific projects

Diversification always results in increased shareholder favor.

Diversification adds substantial risk to the corporate profile.

12.

What is one drawback of using preference capital for financing from the perspective of equity shareholders?

Lower cost of funding

Dividend on preference shares is tax-deductible

Possibility of management interference in case of non-payment of dividends

Higher voting rights for equity shareholders

13.

How can historical data be used to estimate the sales-to-capital ratio in Step 4 of the analysis framework?

By solely relying on industry averages.

By assuming a fixed sales-to-capital ratio for all companies.

By looking at the history of the company and the industry averages.

By examining the company’s history, which is always available.

14.

What role does a venture capitalist undertake post-investment in a company?

Representation on the company’s board of directors for oversight

Involvement in day-to-day operations

Sole decision-making power in the company

Minimal participation in company activities

15.

What ae the special features of financial services companies that distinguishes them from other businesses. ? A) Use of debt for earning income B) Heavily Regulated Sector C) Difficulty in measuring reinvestment D) Capital Adequacy Norms

a, c and d

All of the above

a and b

None of the above

16.

What is a common strategy normally adopted by corporates to hedge against exchange rate fluctuations in foreign investments?

Relying solely on market index fluctuations

Hedging the entire amount of funds exposed to currency risk

Constructing a currency-specific hedge portfolio

Investing in unrated debt securities

17.

How does HTTP header analysis assist in mobile web analytics?

Providing fundamental device and browser data

Accessing browser logs

Tracking IP address changes

Identifying user devices

18.

What is one of the disadvantages of performance appraisals systems?

Managers conducting the appraisals may lack the necessary qualifications.

They accurately evaluate nebulous aspects like attitude and initiative.

They are not impacted by the elements used for evaluation.

They use elements that are always accurate and appropriate.

19.

What changes are expected in the market for venture capital? A) Venture capital becoming more decentralized B) Biotechnology and medical startups attracting significant interest C) Values of customers influencing the evolution of businesses D) Prospects for investment in private equity

A, B, and D

B and C

A and B

A, C, and D

20.

What distinguishes the H model from the traditional two-stage model in terms of the exceptional growth rate?

The H model assumes no exceptional growth rate, while the traditional two-stage model assumes a constant exceptional growth rate.

The exceptional growth rate remains constant in the H model but not in the traditional two-stage model.

The exceptional growth rate decreases linearly in the H model but not in the traditional two-stage model.

The H model assumes a higher exceptional growth rate than the traditional two-stage model.

DO NOT CLICK ‘SUBMIT’ BUTTON, WITHOUT READING THE FOLLOWING

1) Answers shall appear when you click ‘SUBMIT’ button, below.
2) If answer given by you is correct, it will be shown in GREEN font.
3) If answer given by you is incorrect, it will be shown in RED Font in addition to correct answers shown in GREEN Font.

4) If you want to improve your score, we suggest you to practice the following QUESTION BANK after revising the concepts.

FULL QUESTION BANK for all CAIIB papers