CAIIB ABM Module A & C By Ashish Sir Class 4
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Advanced Bank Management — CAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the primary objective of Asset Liability Management (ALM) in banks?
ALM aims to manage the balance sheet risks arising from mismatches in assets and liabilities, ensuring liquidity, profitability, and solvency by optimizing the risk-return trade-off.
What is the concept of Interest Rate Risk in Banking Book (IRRBB)?
Risk of loss from interest rate movements affecting banking book.
How is Net Interest Margin (NIM) calculated?
NIM is calculated as (Interest Income − Interest Expense) / Average Earning Assets × 100, and it measures the profitability of a bank's lending and borrowing activities.
What is Repricing Risk in the context of ALM?
Risk arising when assets and liabilities reprice at different times.
What does the term 'Gap Analysis' refer to in the context of ALM?
Gap Analysis measures the difference between rate-sensitive assets and rate-sensitive liabilities over a given time horizon, helping banks assess their exposure to interest rate risk.
What is Basis Risk in interest rate risk management?
Risk from imperfect correlation between different interest rate indices.
What is a Positive Gap in ALM and what does it indicate?
A Positive Gap exists when Rate Sensitive Assets (RSA) exceed Rate Sensitive Liabilities (RSL), indicating that rising interest rates will benefit the bank by increasing its net interest income.
What is Yield Curve Risk in ALM?
Risk from unexpected changes in shape of the yield curve.
Video classes for this chapter
More chapters in Module E - Extras
Master the full ABM syllabus
Every chapter of Advanced Bank Management — videos, tests, notes and one-liner decks in one place.