Question
ABC Bank Ltd has extended a Rs.10 crore loan at 5% over
the repo rate. The loan is to be repaid in equal quarterly instalments. The bank’s funding of the loan is to be done by 5 years deposit, interest rate on it being 6.5%. Which of the following risk associated with this transaction can lead to variation in the bank’s net interest income in one year?Solution
Repricing risk is the risk of changes in interest rate charged (earned) at the time a financial contract's rate is reset . Here the interest on the loan extended (asset) is variable while that on the deposits (liability) is fixed. Any change in the interest rate will impact the net interest income by repricing of the loan of the bank and changing the net spread between interest earned and interest paid.
Consumer sovereignty implies that consumers:Â
SEZ is an abbreviation for which term, denoting areas that drive economic growth?Â
Which is not correct about New Development Bank (NDB)?
The production function of a firm is a relationship between which two factors?Â
Geological Survey of India (GSI) has approved the setting up of a geopark in ____________, the country’s first.
As per the Income Tax Act of 1961, Section 115JB, the Minimum Alternate Tax (MAT) is calculated at what percentage of the book profit?Â
Who is considered the father of modern economics.
Which of the following is NOT a feature of the manufacturing sector in India?Â
An increase in demand for a good will cause the equilibrium price to ______ and the equilibrium quantity to ______.Â
Which goods are described by the law of diminishing marginal utility?Â
