CAIIB ABM Module A & C By Ashish Sir Class 9
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 risk arising from mismatches between assets and liabilities in terms of maturity, interest rate, and currency, ensuring liquidity and profitability.
What is the full form of ALCO in banking?
Asset Liability Committee managing balance sheet risks
What does the term 'Net Interest Margin (NIM)' represent in banking?
NIM is the difference between interest income earned on assets and interest paid on liabilities, expressed as a percentage of average earning assets, indicating a bank's core profitability.
What is 'Interest Rate Risk in Banking Book (IRRBB)'?
Risk of loss due to interest rate changes on banking book exposures
What is 'Duration Gap' in the context of interest rate risk management?
Duration Gap is the difference between the weighted average duration of assets and weighted average duration of liabilities; a positive gap indicates the bank is exposed to losses when interest rates rise.
What is the 'Bucket' concept used in ALM gap analysis?
Time bands grouping assets and liabilities by maturity for repricing analysis
How is 'Modified Duration' calculated and what does it measure?
Modified Duration = Macaulay Duration / (1 + yield/n); it measures the percentage change in a bond's price for a 1% change in yield, helping quantify interest rate sensitivity.
What is a 'Positive Gap' in repricing gap analysis?
Rate-sensitive assets exceed rate-sensitive liabilities in a period
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