📝 One-liners · 66 cards
JAIIB AFM MARATHON 6
What is the primary objective of financial management in a bank?
The primary objective is to maximize shareholder wealth while maintaining adequate liquidity, solvency, and profitability within the regulatory framework set by RBI.
What is the meaning of 'yield to maturity' (YTM) for a bank's bond portfolio?
Total return expected if bond is held till maturity.
What does RAROC stand for and why is it important for banks?
RAROC stands for Risk-Adjusted Return on Capital. It helps banks measure profitability by adjusting returns for the risk undertaken, enabling better capital allocation decisions.
What is the difference between fixed-rate and floating-rate loans in banking?
Fixed rate is constant; floating rate changes with benchmark rate.
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