Guess Paper 1: Credit Management Fall – 2020 Past Papers
University Name – Confidential
Time Allowed: 3 hours
Total Marks: 70, Passing Marks (35)
Q1: Choose the Correct option.
a. Current Ratio is equal to Current assets minus Current liabilities. (TRUE / FALSE)
b. Market Risk is restricted to a particular industry only. (TRUE / FALSE)
c. Liquidity Ratio helps in analyzing the cash position of the firm. (TRUE / FALSE)
d. Cheques and bills of exchanges are not considered as the credit instruments. (TRUE / FALSE)
e. Hedging is the process which is used to minimize the risk. (TRUE / FALSE)
f. Currency notes are issued by the State Bank of Pakistan. (TRUE / FALSE)
g. Income statement is a summary of the firm’s profitability over a period of time. (TRUE / FALSE)
Q2: Define Bank. Further write a comprehensive note on the evaluation and growth of commercial banks in Pakistan.
Q3: Define the word credit. There are some credit instruments which are used in trade and industrial development. Elaborate.
Q4: What is meant by Risk? Explain the various types of risks with the help of suitable examples.
Q5: Letter of credit is a useful document which is used in international trade. Explain along with its different
types.
Q6: Hedging is a risk management tool the function of which is to reduce or even eliminate a risky exposure.
Discuss in detail.
Q7: Attempt ANY TWO of the following;
a. Describe the concept of Credit Risk.
b. Differentiate between Discounting Rate and Interest Rate.
c. Differentiate between Commercial Bank and Central Bank.
Guess Paper 2: Credit Management Spring – 2020 Past Papers
Time Allowed: 3 hours
Total Marks: 70, Passing Marks (35)
Q1: Choose the Correct one.
a. Bill of exchange and Cheques are also considered as the credit instruments. (TRUE / FALSE)
b. Currency notes in Pakistan are issued by commercial banks. (TRUE / FALSE)
c. Market Risk is limited to a particular industry only. (TRUE / FALSE)
d. Current Ratio is equal to Current Assets minus Current Liabilities. (TRUE / FALSE)
e. Hedging is used to minimize the risk. (TRUE / FALSE)
f. Income Statement is a summary of the firm’s profitability over a period of time. (TRUE / FALSE)
g. Cheque is a bill of exchange but a bill of exchange often is not a cheque. (TRUE / FALSE)
Q2: Define the word credit. There are several types of credit instruments which are widely used in trade and industry. Discuss.
Q3: What is Letter of Credit? Explain the types of Letter of credit in detail. Support your writing with relevant examples.
Q4: Write a comprehensive note on the evaluation and growth of commercial banks in Pakistan.
Q5: What is meant by Hedging? Write a detailed note on the application and use of hedging.
Q6: Income Statement is a snapshot of the organization’s revenue and expenses. Explain.
Q7: Attempt ANY TWO of the following;
(a) What is Credit Risk?
(b) Define bill of exchange.
(c) Differentiate between Interest Rate and Discounting Rate.
Guess Paper 3: Credit Management Fall – 2019 Past Papers
Time Allowed: 3 hours
Total Marks: 70, Passing Marks (35)
Q1: Choose the Correct one.
a. The cash position of the firm is analyzed by Liquidity Ratio. (TRUE / FALSE)
b. Interest rate risk is a type of Market risk. (TRUE / FALSE)
c. Clean letter of credit is that type of letter of Credit which does not require any document to be accompanied with it. (TRUE / FALSE)
d. State Bank of Pakistan issues the currency notes in Pakistan (TRUE / FALSE)
e. Hedging is a risk management tool. (TRUE / FALSE)
f. Monetary Policy is made by State Bank of Pakistan. (TRUE / FALSE)
g. Letter of Credit and Bank Cheque both are the same things. (TRUE / FALSE)
Q2: Define Risk. Discuss the various types of risks in detail. Support your answer with suitable examples.
Q3: Define Bank. Further write a comprehensive note on the difference between Commercial
Bank and State Bank. Support your writing by focusing on the main functions of banks.
Q4: Hedging is used as a risk management tool in order to reduce or eliminate a risky exposure in an organization. Discuss in detail.
Q5: Write a detailed note on the use and importance of Letter of Credit in international trade.
Q6: Write a comprehensive note on credit risk and their implications. Put relevant examples.
Q7: Attempt ANY TWO of the following;
(a) Define Interest.
(b) What is meant by Income Statement?
(c) Differentiate between Market Risk and Business Risk.
Guess Paper 4: Credit Management Spring – 201 P9ast Papers
Time Allowed: 3 hours
Total Marks: 70, Passing Marks (35)
Q1: Read the following statements and choose whether True (T) or False (F).
No need of rewriting the whole statement on your answer sheet. Just write “T” or “F”.
- Currency notes in Pakistan are issued by the State Bank of Pakistan. (T / F)
- Liquidity Ratio is helpful in analyzing the cash status of the (T / F)
- Cheques and bills of exchanges are not considered as the credit instruments. (T / F)
- Clean letter of credit requires some documents to be accompanied with it. (T / F)
- Hedging is the process which is used to minimize the risk. (T / F)
- Market Risk is restricted to a particular industry. (T / F)
- Monetary Policy in Pakistan is made by Commercial Banks. (T / F)
Q2: What is meant by credit? Discuss several credit instruments which are significantly used in trade and industrial development.
Q3: What is Risk? Discuss various types of risks in detail. Support your answer with proper and relevant examples.
Q4: Letter of credit is an important document that is used in international trade. Explain its concept and types in detail.
Q5: Hedging is a risk management tool which is used to reduce or even eliminate a risky exposure. Elaborate.
Q6: Define Commercial Bank. Write a comprehensive note on the evaluation and growth of commercial banks in Pakistan.
Q7: Attempt ANY TWO of the following;
- What is meant by Liquidity Ratio?
- Write a short note on Income Statement.
- Briefly describe the concept of Credit Risk.
[OBJECTIVE]
Subject: Credit Management
Time Allowed: 15 Minutes
Maximum Marks: 10
NOTE: Attempt this Paper on this Question Sheet only. Please encircle the correct option. Division of marks is given in front of each question. This Paper will be collected back after expiry of time limit mentioned above.
Part-I Encircle the right answer, cutting and overwriting is not allowed. (10)
1. Bailment of goods as security for payment of debt is called.
A) Mortgage
B) Pledge
C) Hypothetication
D) Both A and B
2. Credit risk management an important issue in
A) Partnership
B) Sole proprietorship
C) Banking
D) None of the above
3. The net present value of a capital budgeting project is
A) The present value of the expected future cash flows divided by the initial cash outflow
B) The difference between the present value of the expected future cash flows and the initial cash outflow
C) The initial cash outflow divided by the average of expected future cash inflows
D) The initial cash outflow divided by the present value of the expected future cash flows
4. When working capital management is discussed, and tend to be thought of as forms of spontaneous financing.
A) Short-term debt, cash
B) Accounts payable, short-term debt
C) Accruals, cash
D) Accounts accruals
5. For a given maturity, which of the following securities has the lowest return?
A) Commercial paper
B) Negotiable certificates of deposit
C) Treasury bills
D) Eurodollar deposits
6. The basic rationale for extending credit is to
A) Reduce bad-debt losses
B) Increase sales
C) Increase the firm’s investments in receivables
D) Reduce collection costs
7. In capital budgeting, the hurdle rate is
A) The minimum rate of return acceptable to the firm
B) Essentially the same as the prime rate
C) The cost of equity, since it is higher than the cost of debt
D) The internal rate of return on a project
8. Credit information Bureau is established in
A) 1990
B) 1994
C) 1993
D) 1994
9. A credit analyst has to consider the drives of the firm’s economic future
A) Future earnings and cash flows
B) Capital Structure
C) Liquidity of assets
D) None of the above
10. Capital adequacy ratio is also known as
A) Capital to risk asset ratio
B) Capital risk premium
C) Capital Budgeting
D) CAMEL
[SUBJECTIVE]
Subject: Credit Management
Time Allowed: 2 Hour and 45 Minutes
Maximum Marks: 50
NOTE: ATTEMPT THIS (SUBJECTIVE) ON THE SEPARATE ANSWER SHEET PROVIDED.
Part-II Give Short answers, Each question carries equal marks. (20)
Q#1: What is credit Policy?
Q#2: What is appraisal of credit proposal?
Q#3: What are collateral securities?
Q#4: What is collection policy appraisal?
Q#5: What are the margin requirements?
Q#6: What is collection policy?
Q#7: What is commercial credit?
Q#8: What is defining default premium?
Q#9: What’s credit management?
Q#10: What is function of credit department?
Part-III Give detailed answers, Each question carries equal marks. (30)
Q#1: Explain the model of creating changes of securities? Commercial VS Bank credit?
Q#2: Explain the analysis of credit information and its financial and non-financial factors?
Q#3: Briefly explain the role of the working capital management in light of credit management?
