Free CAIIB Online Mock Test


Retail banking

1. Which of the following is not a characteristic of standalone model for processing of retail loans?
1
Better Understanding of the customer requirements
2
No standardized approach
3
Quality will be uniform as the activity is exclusive
4
Compliance of appraisal norms maybe biased based on the customer profile

Explanation: Stand alone model for retail loan processing refers to processing of retail loans independently at the branch level, based on the discretionary powers.

2. Which of the following is not a characteristic of Centralised model for processing of retail loans?
1
Exclusive activity and hence will be faster and professional in approach.
2
Quality will be uniform as the activity is exclusive
3
Uniform and impersonal appraisal standards
4
Standardized approach

Explanation: Better Understanding of the customer requirements are the part of Stand Alone Model and not for Centralised Model.

3. For retail banking business which of the following segments are important?
1
Mass Market
2
Mass Affluent
3
Super Affluent
4
All the above

Explanation: Mass Market, Mass Affluent and Super Affluent are the most important segments for banks with regard to their retails banking initiatives.

4. How many needs have been identified as per Maslow's Need Hierarchy Theory of Motivation?
1
2
2
3
3
4
4
5

Explanation: According to Maslow, human behavior is related to his needs. It is adjusted as per the nature of needs to be satisfied. In hierarchy of needs theory, Maslow identified five types of human need arranged in a hierarchy of their importance and priority; (i) Physiological, (ii) Safety needs, (iii) Social, (iv) Esteem, (v) Self-actualization.

5. Which of the following products match the physiological needs of a customer?
1
Core Saving Accounts; Personal Accident Cover; Housing Loans
2
Recurring, Fixed Deposit Products
3
Life Insurance Products - Endowment Products with low premium, long tenor and high maturity amounts
4
Insurance and Mutual Fund Products

Explanation: Physiological needs are the basic needs for sustaining human life. These needs include food, shelter, clothing, rest, air, water, sleep and sexual satisfaction. These basic human needs (also called biological needs) lie at the lowest level in the hierarchy of needs as they have priority over all other needs. So, Core Saving Accounts, Personal Accident Cover, Housing Loans are the products of physiological needs of a customer.

6. Which of the following products match the security needs of a customer?
1
Core Saving Accounts; Personal Accident Cover; Housing Loans
2
Recurring, Fixed Deposit Products
3
Consumer Loans; Personal Loans; Car loans
4
None of these

Explanation: Security / Safety Needs are the needs connected with the psychological fear of loss of job, property, natural calamities or hazards, etc. So, Recurring, Fixed Deposit Products the security needs of a customer.

7. Which of the following products match the social needs of a customer?
1
Core Saving Accounts; Personal Accident Cover; Housing Loans
2
Recurring, Fixed Deposit Products
3
Consumer Loans; Personal Loans; Car loans
4
Special Term Deposit Products; Term Insurance Products; Second Housing Loans/Home;

Explanation: Social needs advance our tribal nature. These are the needs for belonging, love, affection as well as for relationships with family and friends and companionship. These needs are met through pleasing and fulfilling relationships with others. Examples of social needs are Belongingness, love, affection, intimacy, family, friends, relationships, etc.

8. Which of the following products match the esteem needs of a customer?
1
Special Term Deposit Products; Term Insurance Products; Second Housing Loans/Home
2
Improvement/Home Decor Loans
3
Loans for Professional Development for Doctors, Engineers, Lawyers, Chartered Accountants,
4
Management Consultants, Architects

Explanation: Esteem needs are for a higher position within a group and act to foster pride in their work and in themselves as individuals. These needs include self-esteem, respect, achievement, confidence, recognition, and accomplishment.

9. In the context of service quality, empathy means which of the following?
1
Making an effort to know customers and their needs
2
Resolving customer's problems quickly
3
Ability to perform the promised service dependably and accurately
4
Re-credit of wrongly debited charges properly

Explanation: Empathy means Caring, individualized attention the firm provides its customers.

10. Which of the following statements is not correct regarding product life cycle of a bank product?
1
Banks should aim for keeping the product in the maturity stage as long as possible, so that business and profit maximization happens continuously
2
Product life cycle is different for different products
3
A product always travel through the product life cycle process
4
None of these

Explanation: Product life cycle (PLC) is the cycle through which every product goes through from introduction to withdrawal or eventual demise.

11. Which of the following is the feature of Introduction stage in product life cycle?
1
The sales volume of the product-picks up.
2
There is more growth and sales volume peaks.
3
There will be staleness because of competition
4
There is low sales volume

Explanation: The first stage is the introduction stage when the product is introduced. When a product is introduced the sales volume will be low and revenue from the products will not be sufficient to cover the cost of producing, marketing and servicing.

12. In which of the following stage in product life cycle, the product becomes less attractive for the consumers resulting in drop in sales volume and profits?
1
Introduction stage
2
Growth Stage
3
Maturity Stage
4
Decline Stage

Explanation: The final stage of the product life cycle called as 'decline stage'. In this stage, the product becomes less attractive for the consumers due to various reasons and results in drop in sales volume and profits.

13. In which of the following stages in product life cycle, the product is likely to break even and start generating profits for the organization?
1
Introduction stage
2
Growth Stage
3
Maturity Stage
4
Saturation stage

Explanation: The Growth stage is the second of stages in the product life cycle, and for many manufacturers this is the key stage for establishing a product's position in a market, increasing sales, and improving profit margins.

14. In which of the following stages in product life cycle, sales volume peaks, there is a wide customer base which will result in maximization of sales with inflow of business and profits?
1
Introduction stage
2
Growth Stage
3
Maturity Stage
4
Saturation stage

Explanation: The maturity stage occurs after the introduction and growth stages. The maturity stage is the longest stage of the product life cycle. In this stage, sales growth begins to decline; the company reaches the highest point in the demand cycle; and advertising strategies have minimal impact on sales growth.

15. In which of the following stages in product life cycle, the business and profits stagnate, and customer develop a tendency of indifference to the product?
1
Introduction stage
2
Growth Stage
3
Maturity Stage
4
Saturation stage

Explanation: Saturation is the fourth stage of every product lifecycle and this is where customers have other preferences that are cheaper and better. When saturation occurs, a product starts to decline.

16. Product obsolescence contributes to the products:
1
Natural death
2
Premature death
3
Growth
4
None of the above

Explanation: Product obsolescence refers to the time and state in which a piece of technology or product ceases to be useful, productive or compatible. It may occur when a company stops producing, marketing or supporting a sold or developed product.

17. In case of banks, augmented products mean those products:
1
Which are provided for financial inclusion
2
Which are provided only to High Net worth individuals
3
Which are developed from formal products by combining two core products and adding value to the product in terms of benefits and comforts to the customer
4
Which are provided through select branches

Explanation: The Augmented product is the non-physical part of the product. It usually consists of lots of added value, for which you may or may not pay a premium.

18. Which of the following is not a core product?
1
Saving Bank Account
2
Current account
3
Term Deposit account
4
None of these

Explanation: A core product is a company product or service that is most directly related to its core competencies. It enables the use, benefit or problem-solving service for which the consumer is purchasing the product.

19. Which of the following is not a feature of the Core Product?
1
These products are essential products
2
These products need not have a strong marketing content
3
These products will have a stable life in the growth stage of product life cycle
4
None of these

Explanation: A core product is a company product or service that is most directly related to its core competencies. It enables the use, benefit or problem-solving service for which the consumer is purchasing the product.

20. In the present context, which of the following can be considered as Augmentation of product?
1
Offering ATM/Debit card
2
Issue of Cheque Book
3
Tagging Group life or health insurance product
4
None of these

Explanation: An augmented product is a commodity that has both the primary physical attributes and the non-physical attributes that are added to increase the product's value.