AIWMI CCRA CCRA Questions & Answers

• Question 41:

  Which of the following statement is false?

  A. DEF Ltd. has received a speculative grade rating as its outstanding rating is B+

  B. Non-Convertible debenture of PQR Ltd. has a speculative rating since its outstanding rating is C

  C. ABC Ltd. short term is BBB- for its commercial paper

  D. XYZ has an investment grade rating as his outstanding rating is A1

  Correct Answer: B

• Question 42:

  If you yield curve is humped and the medium rates drop, what will happen to the yield curve?

  A. It will move from negative to positive

  B. It will shift up in a uniform fashion

  C. It will become steeper

  D. It will flatten

  Correct Answer: C

• Question 43:

  In Steepening short term rates ______relative to long term rate A. falls

  B. rises

  C. is independent of each other

  D. remains constant

  Correct Answer: A

  Reference: https://www.analystforum.com/forums/cfa-forums/cfa-level-ii-forum/91348766

• Question 44:

  Under an advance factoring contract, following flow of money takes place:

  A: Factor pays a percentage of the invoice face value to the seller at the time of sale

  B: The remainder of the purchase price is held by factor until the payment by the account debtor is made.

  C:

  The cost associated with the transaction is paid upfront by the seller to the factoring agent.

  A.

  Only B

  B.

  A, B and C

  C.

  Only C

  D.

  Only A and B

  Correct Answer: D

  Reference: https://www.google.com/url? sa=tandrct=jandq=andesrc=sandsource=webandcd=2andcad=rjaanduact=8andved=2ahUKEwjgyrT_jdzeAhXlAMAKHS5AC ywQFjABegQIBBACandurl=https%3A%2F%2Fwww.ansarbank.com%2FAssets%2FData% 2Fuserfiles% 2Ffiles%2FFactoring(zarineh).docxandusg=AOvVaw0OaoifqINnnvz3sRedVCii

• Question 45:

  Loss assets should be written off. If loss assets are permitted to remain in the books for any reason, ______percent of the outstanding should be provided for.

  A. 150

  B. 75

  C. 100

  D. 50

  Correct Answer: C

  Reference: https://currentaffairs.gktoday.in/tags/provision-coverage-ratio

• Question 46:

  Two economies HardLand and SincereLand have provided following information with respect to their economies in USD Billion:

  

  Based on the above information which entity is better in terms of current account deficit %?

  A. Sincereland by 583 bps

  B. Hardland by 56 bps C. Sincereland by 56 bps

  D. Hardland by 583 bps

  Correct Answer: B

• Question 47:

  The longer the term to maturity of bond:

  A. term to maturity and price of a bond are not related

  B. The lesser is the risk associated with price of a bond

  C. The higher is the return from the bond

  D. The more risk in the price of a bond

  Correct Answer: D

  Reference: https://www.investopedia.com/university/advancedbond/advancedbond5.asp

• Question 48:

  Mr. Gopi, while teaching the CCRA course to students described Altman's Model and stated that following variables do exist for Altman's Model:

  1.

  total debt/total assets,

  2.

  retained earnings/total assets.

  3.

  earnings before interest and taxes/total assets,

  4.

  market value equity/book value of total liabilities,

  5.

  sales/total assets

  Exactly how many variables are incorrectly identified?

  A. Exactly Four

  B. Exactly One

  C. Exactly Two

  D. Exactly Three

  Correct Answer: A

  Reference: https://www.investopedia.com/terms/a/altman.asp

• Question 49:

  If XYZ Ltd. incurs (with purchase and installation of machinery) using cash, which of the following ratios will remain unchanged, if all other things remain constant?

  A. None of the three

  B. Asset Turnover ratio

  C. Current Ratio

  D. Quick Ratio

  Correct Answer: C

• Question 50:

  The following information pertains to bonds:

  

  Further following information is available about a particular bond `Bond F'

  There is a 10.25% risky bond with a maturity of 2.25% year(s) its current price is INR105.31, which corresponds to YTM of 9.22%. The following are the benchmark YTMs.

  

  Assume that the general market rates have increased. An issuer, Revolution Ltd has plans to roll over its existing commercial paper and forth coming reset dates for its floating rate bonds are very near. Which of the following ratios for revolution will get impacted?

  A. Interest Coverage and Return on assets

  B. DSCR, and Return on Assets

  C. DSCR, Interest Coverage and Return on assets

  D. DSCR and interest Coverage

  Correct Answer: A