Test 1060

Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform !

Subject: Risk Management in Banking and Insurance

Total Number of Question: 40

Time: 41 Minutes

Please check your email after completion of test for result.

All the best...

Name

Phone No

Area Pin Code

Which of the following is NOT a type of risk faced by banks?

Credit risk

Market risk

Production risk

Operational risk

None

What is the primary objective of risk management in banking and insurance?

Maximizing profitability

Minimizing operational expenses

Identifying, assessing, and mitigating risks

Increasing customer base

None

In risk management, which step comes first?

Risk control

Risk monitoring

Risk identification

Risk measurement

None

Which type of risk arises due to failure of internal processes, people, or systems in banks?

Market risk

Credit risk

Liquidity risk

Operational risk

None

Which regulatory body oversees risk management in Indian banks?

SEBI

IRDAI

RBI

NITI Aayog

None

Credit risk refers to the possibility of a borrower failing to __________.

Repay debt

Open a bank account

Withdraw funds

None

Which of the following is a tool for managing credit risk?

Credit scoring

Interest rate hikes

Liquidity ratio

Foreign exchange hedging

None

Market risk in banking is mainly associated with __________.

Loan defaults

Changes in interest rates, foreign exchange, and stock prices

Employee turnover

Cybersecurity threats

None

Which financial instrument is commonly used to hedge market risks?

Fixed deposits

Derivatives

Savings accounts

Personal loans

None

10.

Which type of risk occurs due to adverse movements in stock and bond prices?

Credit risk

Market risk

Liquidity risk

Legal risk

None

11.

Liquidity risk arises when a bank is unable to __________.

Generate high profits

Maintain adequate capital

Meet its short-term financial obligations

Issue new loans

None

12.

Which of the following can reduce liquidity risk?

Increasing non-performing assets

Holding liquid assets

Reducing credit scores

Ignoring capital adequacy norms

None

13.

Operational risk can be caused by __________.

Cybersecurity threats

Human errors

Fraudulent activities

All of the above

None

14.

Which Basel Accord focuses on risk management practices in banking?

Basel I

Basel II

Basel III

All of the above

None

15.

Which ratio is commonly used to assess liquidity risk?

CAR (Capital Adequacy Ratio)

LCR (Liquidity Coverage Ratio)

NPA (Non-Performing Asset)

ROE (Return on Equity)

None

16.

Which of the following is NOT a risk in the insurance industry?

Underwriting risk

Actuarial risk

Product risk

Credit creation risk

None

17.

In insurance, the risk of policyholders claiming more than expected is called __________.

Credit risk

Market risk

Underwriting risk

Reinvestment risk

None

18.

What is the role of reinsurance in risk management?

Increases premium collection

Transfers risk to another insurer

Reduces market volatility

Eliminates all risks

None

19.

Which regulatory body governs insurance companies in India?

RBI

IRDAI

SEBI

NITI Aayog

None

20.

Which type of risk arises when an insurance company miscalculates expected claims?

Market risk

Operational risk

Actuarial risk

Credit risk

None

21.

Basel III norms focus on __________.

Credit score improvement

Strengthening banking regulations

Reducing stock market risk

Increasing bank profitability

None

22.

The Capital Adequacy Ratio (CAR) ensures that banks have enough __________.

Employees

Loans

Capital to absorb losses

Fixed assets

None

23.

Risk diversification in banking means __________.

Concentrating lending in one sector

Investing in different asset classes

Avoiding all risks

Not giving loans

None

24.

Which of the following is a primary method of risk control in banks?

Increasing interest rates

Diversification

Ignoring compliance norms

Reducing digital banking

None

25.

Which international agreement sets the standard for banking risk management?

Kyoto Protocol

Basel Accords

Paris Agreement

Bretton Woods Agreement

None

26.

Which of the following is a quantitative risk assessment technique?

SWOT analysis

Monte Carlo simulation

PEST analysis

Risk brainstorming

None

27.

What does VaR (Value at Risk) measure in banking?

Maximum expected loss over a period

Creditworthiness of customers

Operational efficiency

Market share of the bank

None

28.

Which factor is most important in determining a bank’s credit risk?

Customer demographics

Borrower’s repayment history

Bank’s location

Number of employees in the bank

None

29.

Which risk measurement approach is used in Basel II for credit risk?

Standardized Approach

Advanced Measurement Approach

Liquidity Risk Approach

Hedging Approach

None

30.

Which of the following risk assessment methods uses historical data to predict future risk?

Scenario analysis

Stress testing

Trend analysis

Delphi method

None

31.

Cyber risk in banking is associated with __________.

Physical bank robberies

Online fraud, hacking, and data breaches

Stock market fluctuations

Customer service delays

None

32.

Which technology is widely used to manage risk in banking?

Artificial Intelligence (AI)

Manual record-keeping

Traditional filing systems

None

33.

A key method to mitigate cyber risk in banking is __________.

Ignoring online transactions

Multi-factor authentication (MFA)

Reducing digital banking services

Removing ATMs

None

34.

Which of the following is a major risk in digital banking?

High employee salaries

Cybersecurity threats

Increased cash deposits

Low ATM usage

None

35.

Which of the following is a preventive measure against cyber threats in banking?

Implementing firewalls and encryption

Reducing online banking services

Increasing physical branches

Avoiding technology investments

None

36.

Which risk arises when banks do not comply with legal and regulatory requirements?

Compliance risk

Credit risk

Interest rate risk

Actuarial risk

None

37.

The Basel III framework was introduced to strengthen which aspect of banking?

Risk management and capital adequacy

Customer service

Loan approval processes

Sales and marketing

None

38.

Which act in India regulates risk management in the insurance sector?

The Insurance Act, 1938

The Banking Regulation Act, 1949

The RBI Act, 1934

The SEBI Act, 1992

None

39.

Stress testing in banks is conducted to assess risks under __________.

Normal market conditions

Extreme but possible conditions

Guaranteed economic growth

Stable banking environments

None

40.

Which international body provides guidelines for banking regulations and risk management?

International Monetary Fund (IMF)

Basel Committee on Banking Supervision (BCBS)

United Nations (UN)

World Trade Organization (WTO)

None

1 out of 4

Great job on taking the INCOC Test!

We appreciate your interest in test.

Look out for results and future opportunities.

Stay Connected !!

Your quiz time is about to finish. Few seconds left.

1 2 3 4

Time's up

You cannot switch tabs while taking this quiz!

You are not allowed to switch tabs violation has been recorded.

you cannot minimize full screen mode!

You are not allowed to minimize full screen while taking this quiz, violation has been recorded.

Access denied! To begin the quiz, please grant this quiz access to your camera.

Time is Up!

support@incoc.in

Company

Events

Resources