CAIIB BFME Module B & C By Ashish Sir Class 5
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Bank Financial Management — CAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the primary objective of Risk Management in banks?
The primary objective is to identify, measure, monitor, and control risks to protect the bank's capital and earnings while ensuring sustainable business operations.
What is the Modified Duration used to measure in bond portfolio risk management?
Sensitivity of bond price to interest rate changes
What are the three pillars of Basel II framework?
The three pillars are Minimum Capital Requirements (Pillar 1), Supervisory Review Process (Pillar 2), and Market Discipline through disclosure (Pillar 3).
What is Convexity in the context of bond risk management?
Measure of curvature in price-yield relationship of bonds
What does Value at Risk (VaR) measure in banking?
VaR measures the maximum potential loss in a portfolio over a specified time horizon at a given confidence level, typically 95% or 99%.
What is the Pillar 1 requirement under Basel III framework?
Minimum capital requirement for credit, market, and operational risk
What is the difference between Expected Loss (EL) and Unexpected Loss (UL)?
Expected Loss is the average loss a bank anticipates over a period and is covered by provisions, while Unexpected Loss is the variability around the expected loss and is covered by capital.
What is the Capital Conservation Buffer (CCB) under Basel III?
Additional 2.5% of RWA capital buffer above minimum CRAR
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