Preview Questions Retail Banker | Role Specific Skill

Question 1: In loan processing, what is the significance of calculating the Debt-to-Income (DTI) ratio for a borrower?

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It identifies the ideal loan term based on borrower income levels

It measures the borrower's creditworthiness by evaluating their credit score

It helps determine the borrower's ability to manage monthly payments based on their income and existing debt

It determines the amount of collateral required for loan approval

Question 2: Which key risk indicator (KRI) is most relevant for tracking market risk in retail banking?

Which action should you take?

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Branch operating costs

Interest rate sensitivity of the loan portfolio

Employee turnover

Customer retention rates

Question 3: Which regulatory consideration is critical when providing financial advice to clients in the BFSI industry?

Which action should you take?

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Avoiding discussion of product risks

Prioritizing only high-net-worth clients

Maximizing the bank's product sales

Ensuring suitability of recommendations based on the client's profile

Question 4: What is the purpose of the Truth in Lending Act (TILA) disclosure during the loan processing phase?

Which action should you take?

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To determine the applicant's eligibility for the loan

To ensure the borrower receives clear and accurate information regarding loan terms and costs

To verify the authenticity of the collateral provided by the borrower

To assess the borrower's ability to repay the loan

Question 5: What is the main benefit of tax-deferred investment options in financial advice for clients with high incomes?

Which action should you take?

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They offer tax-free income upon withdrawal, which benefits high-income earners

They allow the client to delay taxes on earnings until withdrawal, potentially lowering their current tax liability

They have no contribution limits and allow for unlimited tax-deferred growth

They provide an immediate tax deduction upon contribution, reducing taxable income in the short term

Question 6: What is the purpose of monitoring Politically Exposed Persons (PEPs) in banking?

Which action should you take?

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To identify potential conflicts of interest

To prevent political influence on banking policies

To mitigate risks of corruption and money laundering

To encourage larger deposits