JAIIB Exam 2025 – PPB Important Questions MCQs Quiz-22

28/02/2025

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JAIIB Exam 2025 PPB Important Questions MCQs Quiz-21

JAIIB Exam Quiz 2025: The JAIIB exam is scheduled for 2025 by IIBF. Here, we are providing JAIIB PPB MCQ-based quizzes on a regular basis. You can attempt the quizzes regularly to prepare for the upcoming JAIIB exam. The quizzes will be provided module-wise and unit-wise. You can attempt the JAIIB PPB quizzes from the links below and improve your preparation by practicing regularly. These quizzes will help you boost your score in the JAIIB exam and guide you to clear the exam on your first attempt.

1. Which statement is correct regarding First Method of Lending?
a) The contribution by the borrowing unit is fixed at a minimum 25% of the working capital gap from long-term funds.
b) This method of lending gives a current ratio of only 1.17:1
c) This approach was considered suitable for relatively new units set up by first time entrepreneurs and for sick/weak units as supportive measure.
d) All of the above

2. Which statement is correct regarding Second Method of Lending?
A. Under this method, the borrower is required to provide for a minimum of 25% of total current assets out of long-term funds.
B. This would give a minimum current ratio of 1.33:1.
C. Total liabilities inclusive of bank finance would never exceed 75% of gross current assets.
D. All of the above

3. M/s. ABC is a manufacturer of steel goods. The annual turnover for FY 2023-24 was Rs. 80.00 lakh, and it has targeted 25% growth in FY 2024-25. Find the working capital requirement and the bank finance for it.
a) Rs. 20 lakhs, Rs. 10 lakhs
b) Rs. 25 lakhs, Rs. 20 lakhs
c) Rs. 30 lakhs, Rs. 20 lakhs
d) Rs. 20 lakhs, Rs. 10 lakhs

4. _______is a concept used in the Indian banking sector to determine the amount of working capital limits the bank would make available to the borrower.
a) Working Capital Gap
b) Gross Working Capital
c) Net Working Capital
d) None of the above

5. Convertible debentures are likely to be converted to ______ wholly or partly as per the conversion rates fixed in advance.
a) Preference shares
b) Equity shares
c) Term Loan
d) Cash credit

6. _______ indicates the ability of a concern to service its term liabilities.
a) Return on equity
b) Debt service coverage ratio
c) Stock turnover ratio
d) Debtor turnover ratio

7. Which of the statement is correct?
a) A term loan is granted for the purpose of acquisition of capital asset.
b) term loans are repayable in instalments over a period ranging from 3 to 10 years.
c) The credit risk is greater in case of term loan than in case of working capital finance.
d) All of the above

8. Advantages of cash budget could be ________________.
(a) borrower has to plan the cash requirements
(b) banker can spot a danger signal quickly
(c) banker can plan his resources to meet credit demands.
(d) All of the above

9. What are the sources of working capital?
(a) Trade credits + Unsecured loans + Deposits
(b) Bank borrowings + Advance payments
(c) Net working capital
(d) All of above

10. In banker’s parlance, credit risk in lending refers to ________________.
(a) default of repayment by a borrower
(b) default of bankers in maintaining SLR
(c) default of a banker to release credit to a borrower
(d) None of above