MS422 Bank Financial Management IGNOU exam question paper

MS-422: Bank Financial Management last 3 yrs paper

Briefly explain the scope and objectives of financial management in Banks. What are the various assets in which banks invest their funds? Why do they invest in Securities? Explain.
What do you understand by Capital Adequacy Ratio (CAR)? Explain the various items which form part of Tier I capital and Tier II capital. What purpose does this ratio serve?
What do you understand by ‘borrowed funds’ of a bank? Explain the various items which form part of Schedule 4 of a bank’s balance sheet
What are the functions of Treasury Department in Banks? Discuss the controls required for effective and efficient functioning of Treasury Department.
Explain the following:
(i) Call Money Market

(ii) Certificate of Deposits
Discuss the concept of credit risk and define its scope in the current environment. Explain the credit risk management framework adopted by banks.
What is ‘Operational Risk’? Explain the various methodologies used for measurement of operational risk.
Discuss the objectives of pricing of Bank products and explain the methods of pricing bank products. Describe the pricing strategies adopted by banks.

Briefly explain the role and functions of Financial Markets. List the various primary market instruments and discuss their basic characteristics.
What do you understand by ‘Owned Funds’ of Banks? Explain the items which are listed in Schedule 1 and 2 of bank’s balance sheet and discuss the provisions of Section 11 of the Banking Regulation Act, 1949 regarding paid up capital and reserves.
How is cost of capital computed for commercial banks? Discuss the important ratios used in assessing cost of capital and explain, how the rates on various liquidity enhancement instruments impact bank’s cost of capital.
Explain the following:
(i) Commercial Papers
(ii) Liquidity Adjustment Facility (LAF)
Explain the price determination mechanism of a bond and also discuss the pricing mechanism of zero coupon bonds. Discuss the relationship between the required yield and the price of a bond.
Explain the meaning and significance of credit risk. How is it measured? Discuss the approaches used for credit risk measurement
How does liquidity risk arise and what are its components? Discuss the techniques used for liquidity risk measurement and highlight the issues that may arise while using GAP approach for measurement of liquidity risk.
Explain the pricing issue in the context of banks. Describe the inputs required for pricing of banking products.

What do you understand by Financial Analysis of Banks? Explain the techniques of ratio analysis and DUPONT analysis as applied %r the financial analysis of banks.
What do you understand by Owned Funds of Banks? Discuss the functions of bank capital and describe the different elements that are listed in Schedule I and Schedule II of a banks balance sheet
What do you understand by ‘Cost of Capital’ for banks? Explain the relevant rates and facilities which affect the cost of funds Sr the banks.
Why do banks make short-term investments? List and describe the various money market • instruments used by the banks.
How is the price of a bond fixed? Explain the process for measuring the convexity of a bond.
. Explain the various methods used for project appraisal and discuss the techniques of measuring project risk.
What is Operational Risk? Describe the Ilmabodologies used Sr measurement of tperational risk.
Discuss the meaning and significance of cost analysis as an input Sr pricing of bank products.

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