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2283 - Pannala Ram Reddy College of Business Management

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2283 - Pannala Ram Reddy College of Business Management

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nies.hyd2001
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2283 – PANNALA RAM REDDY COLLEGE OF BUSINESS MANAGEMENT

MBA II YEAR III SEMESTER- II INTERNAL ASSESMENT – NOVEMBER 2024


SUB: BANKING & INSURANCE
NAME:………………………………………ROLLNO…………………………………….
Max Marks: 10
I .Assertion & Reason Marks: 1 x 5 = 5

1. Assertion (A): Banks regularly assess the creditworthiness of borrowers.


Reason (R): Assessing creditworthiness helps banks minimize the risk of loan defaults. ( )
a) Both (A) and (R) are true.
b) Both are true, but (R) is not the correct explanation for (A).
c) Both (A) and (R) are correct, and (R) is the correct explanation of (A).
d) Both (A) and (R) are false.

2. Assertion (A): Banks charge higher interest rates on loans to borrowers with lower credit
scores.
Reason (R): Higher interest rates compensate banks for the increased risk associated with
lending to less creditworthy borrowers. ( )
a) Both (A) and (R) are true.
b) Both are true, but (R) is not the correct explanation for (A).
c) Both (A) and (R) are correct, and (R) is the correct explanation of (A).
d) Both (A) and (R) are false.

3. Assertion (A): Banks charge higher interest rates on loans to borrowers with lower credit
scores.
Reason (R): Higher interest rates compensate banks for the increased risk associated with
lending to less creditworthy borrowers. ( )
a) Both (A) and (R) are true.
b) Both are true, but (R) is not the correct explanation for (A).
c) Both (A) and (R) are correct, and (R) is the correct explanation of (A).
d) Both (A) and (R) are false.

4. Assertion (A): Education loans often have lower interest rates than personal loans.
Reason (R): Education loans are seen as an investment in the borrower’s future earning
potential, which reduces the perceived risk for lenders. ( )
a) Both (A) and (R) are true.
b) Both are true, but (R) is not the correct explanation for (A).
c) Both (A) and (R) are correct, and (R) is the correct explanation of (A).
d) Both (A) and (R) are false.

5. Assertion (A): High levels of Non-Performing Assets (NPAs) negatively impact a bank’s
profitability.
Reason (R): NPAs reduce the bank’s income from interest and require provisions, which
increases the bank's expenses. ( )
a) Both (A) and (R) are true.
b) Both are true, but (R) is not the correct explanation for (A).
c) Both (A) and (R) are correct, and (R) is the correct explanation of (A).
d) Both (A) and (R) are false.
2283 – PANNALA RAM REDDY COLLEGE OF BUSINESS MANAGEMENT

II .Match the Following: Marks: 10*1/2=5

1. LIBOR ( ) a. 1967

2. NCC ( ) b. GNPA / Gross advances

3. Home Loans ( ) c. Repayment delayed beyond 90days

4. NPA ( ) d. Standard Base Rate

5. GNPA ( ) e. Long Term

6. IBA ( ) f. Unsecured loans with high Interest Rate

7. SARFA ( ) g. 1993

8. DRT ( ) h. Technique for loan pricing

9. CPA ( ) i. 2002

10. Credit Card Loans ( ) j. 1998

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