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Financial Forensics · End Term · May 2024 · FN

Financial Forensics · End Term · May 2024 FN

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Question 203 MCQ · 1.0 marks

If a model predicts the positive class for all observations in a binary classification problem with both positive and negative cases present, which of the following statements is true?
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Precision is 100%, but Recall is not necessarily 100%.
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Both Recall and Precision are 100%.
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Recall is 100%, but Precision is not necessarily 100%.
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Neither Recall nor Precision are 100%.
6406533052713.
None of these

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Question 204 MCQ · 1.0 marks

What is the KS of the below gains table?
Source diagram or notation
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43.40
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41.73
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66.77
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38.89
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Data Insufficient

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Question 205 MCQ · 1.0 marks

What is the Capture Rate of Bads at top 20%?
Source diagram or notation
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100%
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68.33%
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83.33%
6406533052722.
48.33%
6406533052723.
Data Insufficient

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Question 206 MCQ · 1.0 marks

What is the Capture Rate of applications having score greater than 195?
Source diagram or notation
6406533052724.
100%
6406533052725.
68.33%
6406533052726.
0%
6406533052727.
48.33%
6406533052728.
Data Insufficient

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Question 207 MCQ · 1.0 marks

The Bankruptcy Bank, one of the major lending banks, has hired you to build a credit underwriting model to help their automated lending decisions. Their definition of default is 60-89 DPD. There is historical loans data since January 1, 2021 till 31, July 2024. Which of the following is true – as of July 31, 2024?
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Jan’21– Jul’24 is used for performance data
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Apl’24 – Jul’24 is used for observation data
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Jan’21 – Apl’24 is used for observation data
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May’24 – Jul’24 is used for performance data
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Jan’21 – Jan’24 is used for observation data

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Question 208 MCQ · 1.0 marks

Rollrate analysis is used to determine which of the following?
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Vintages to be used in the data
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Feature selection
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Target variable definition
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None of these

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Question 209 MCQ · 1.0 marks

Which of the following possibly happens after approving credit?
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Underwriting
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Reject Inferencing
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Propensity
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Collections
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Fraud check

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Question 210 MCQ · 1.0 marks

Stemming is slower than Lemmatization
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TRUE
6406533052746.
FALSE

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Question 211 MCQ · 1.0 marks

Which of the following is not a text preprocessing technique?
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Stopword removal
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Stemming
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Encoding
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Lowercase conversion
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None of these

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Question 212 MCQ · 1.0 marks

Given the sentence: "Customer sign-up rates have increased by 25% in the last quarter." Output: ['customer', 'sign', 'up', 'rates', 'increased', '25', 'last', 'quarter'] Which of the following text preprocessing techniques was NOT applied to the sentence?
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Lowercasing
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Removing punctuation
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Lemmatization
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Tokenization
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None of these

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Question 213 MCQ · 1.0 marks

What is reject inferencing in the context of machine learning?
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A technique to infer missing data points
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A method to handle rejected cases in a dataset
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A process to reject outliers in the dataset
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A way to accept all data points without filtering

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Question 214 MCQ · 1.0 marks

In the context of reject inferencing, what does 'good reject' refer to?
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An incorrectly inferred rejected case
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A rejected case that should have been accepted based on model prediction
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A correctly rejected case
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A rejected case used as a reference for model adjustments

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Question 215 MCQ · 1.0 marks

In a credit risk scenario, if a model has high recall but low precision, it implies that:
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The model correctly identifies a high percentage of non-risky customers but makes many mistakes in identifying risky customers.
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The model correctly identifies a high percentage of risky customers but also incorrectly labels many non-risky customers as risky.
6406533052767.
The model correctly identifies a high percentage of non-risky customers and makes few mistakes in identifying risky customers
6406533052768.
The model correctly identifies a high percentage of risky customers and makes few mistakes in identifying non-risky customers.

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Question 216 MCQ · 1.0 marks

Which scenario is likely to occur if a credit risk model is optimized solely for high recall?
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Most non-risky customers will be correctly identified.
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Most risky customers will be correctly identified.
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Many non-risky customers will be incorrectly labeled as risky.
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Many risky customers will be incorrectly labeled as non-risky.

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Question 217 MCQ · 1.0 marks

In a SHAP summary plot, what does the colour of the points typically represent?
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The magnitude of the SHAP values
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The type of model used
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The value of the feature (e.g., high or low)
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The importance of the feature

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Question 218 MCQ · 1.0 marks

What does “local predictability” refer to in the context of SHAP explanations?
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The ability of SHAP values to explain the contribution of features to individual predictions
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The general accuracy of the model across the entire dataset
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The average SHAP value for a feature across multiple predictions
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The consistency of SHAP values across different models

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Question 219 MCQ · 1.0 marks

If average total assets increase, but net income, net sales, and average stockholders' equity remain the same, what is the impact on the return on assets ratio?
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Remains the same.
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Increases.
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Decreases.
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Cannot be determined without additional information.

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Question 220 MCQ · 1.0 marks

Info Systems Inc. has sales of ₹ 2,820, costs of goods sold of ₹ 2,160, inventory of ₹504, and accounts receivable of ₹ 430. How many days, on average, does it take Info Systems Inc. to sell its inventory?
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85.17 days
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65.23 days
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84.00 days
6406533052790.
55.66 days

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Question 221 MCQ · 1.0 marks

You have been awarded an insurance settlement of ₹ 250,000 that is payable one year from today. What is the minimum amount you should accept today in exchange for this settlement if you can earn 6.7 percent on your investments?
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₹ 232,866.67
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₹ 234,301.78
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₹ 242,408.19
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₹ 250,000.00

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Question 222 MCQ · 1.0 marks

An insurance settlement offer includes annual payments of ₹ 36,000, ₹ 42,000, and ₹ 50,000 over the next three years, respectively, with the first payment being made one year from today. What is the minimum amount you should accept today as a lumpsum settlement if your discount rate is 7 percent?
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₹ 111,144.18
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₹ 105,000.10
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₹ 118,924.27
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₹ 114,556.88

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Question 223 MCQ · 1.0 marks

Scott has been offered an employment contract for ten years at a starting salary of ₹ 65,000 with guaranteed annual raises of 5 percent. What is the current value of this offer at a discount rate of 7 percent?
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₹ 638,724.17
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₹ 602,409.91
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₹ 558,845.85
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₹ 630,500.00

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Question 224 MCQ · 1.0 marks

Which statement concerning the net present value (NPV) of an investment or a financing project is correct?
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A financing project should be accepted if, and only if, the NPV is exactly equal to zero.
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An investment project should be accepted only if the NPV is equal to the initial cash flow.
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Any type of project should be accepted if the NPV is positive and rejected if it is negative.
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Any type of project with greater total cash inflows than total cash outflows, should always be accepted.

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Question 225 MCQ · 1.0 marks

Wilson's Market is considering two mutually exclusive projects that will not be repeated. The required rate of return is 13.9 percent for Project A and 12.5 percent for Project B. Project A has an initial cost of ₹54,500, and should produce cash inflows of ₹16,400, ₹28,900, and ₹31,700 for Years 1 to 3, respectively. Project B has an initial cost of ₹69,400, and should produce cash inflows of ₹0, ₹48,300, and ₹42,100, for Years 1 to 3, respectively. Which project, or projects, if either, should be accepted and why?
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Project A; because its NPV is positive while Project B's NPV is negative
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Project A; because it has the higher required rate of return
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Project B; because it has the largest total cash inflow
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Neither project; because neither has an NPV equal to or greater than its initial cost

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Question 226 MCQ · 1.0 marks

It’s always good to have the debt equity ratio of 1 to have a lower WACC:
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TRUE
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FALSE

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Question 227 MCQ · 1.0 marks

Which of the following statements are true with respect to ACF and PACF plots I. ACF plots are used to determining the order of Autoregressive models. II. PACF plots are used to determining the order of Autoregressive models. III. PACF plots just computes the Pearson’s correlation between the variable and it’s lagged versions. IV. ACF plots just computes the Pearson’s correlation between the variable and it’s lagged versions.
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I and III
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II and IV
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I and IV
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II and III

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Question 228 MCQ · 1.0 marks

What does the term 'liquidity' refer to in the context of a Balance Sheet?
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The amount of cash a company has on hand.
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The company's ability to pay off its short-term obligations.
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The total value of a company’s assets.
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The value of the company's long-term investments.

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Question 229 MCQ · 1.0 marks

Source diagram or notation
6406533052826.Source diagram or notation
6406533052827.Source diagram or notation
6406533052828.Source diagram or notation
6406533052829.Source diagram or notation

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Question 230 MCQ · 1.0 marks

Which of the following would NOT appear in the P&L statement?
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Sales Revenue
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Utilities Expense
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Long-term Debt
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Depreciation Expense

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Question 231 MCQ · 1.0 marks

ABC Bank has given INR 1,00,000 as an loan to it’s customer at the rate of 8.5% p.a. in January 2023. At the end of the year the customer paid back 1,08,500 to the bank.While preparing the cash flow statement for 2023 under which header will the bank account this cash inflow:
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Cash flow from Operations
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Cash flow from Finance
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Cash flow from Investment

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Question 232 NAT · 1.0 marks

What is the Roll Back rate for 150+ DPD after 18 MOB? (Express your answer as percentage)
Source diagram or notation

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Question 233 NAT · 1.0 marks

What is the Roll Forward rate for 120-149 DPD after 18 MOB? (Express your answer as percentage)
Source diagram or notation

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Question 234 NAT · 1.0 marks

XYZ Consulting paid dividends of ₹ 3,300 and total equity of ₹ 39,450. The debt-equity ratio is 1 and the retention ratio (the ratio of a company's retained income to its net income) is 40 percent. What is the return on assets expressed in percentage?

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Question 235 NAT · 1.0 marks

Anu’s foods has net income of ₹ 39,900, net sales of ₹ 3,18,600, total assets of ₹ 6,63,000, common stock of ₹ 1,06,800 with a par value of ₹1 per share, and retained earnings of ₹2,24,400. The stock has a market value of ₹ 5.45 per share. What is the price-earnings ratio expressed in percentage?

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Question 236 NAT · 1.0 marks

ABC Inc. has net working capital of ₹ 580, net fixed assets of ₹ 2,326, sales of ₹ 6,900, and current liabilities of ₹ 890. How many rupees worth of sales is generated from every ₹ 1 in total assets?

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Question 237 NAT · 1.0 marks

A firm has a return on equity of 25 percent. The total asset turnover is 2.4 and the profit margin is 8 percent. The total equity is ₹ 4,100. What is the net income?

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Question 238 NAT · 1.0 marks

Sully will receive a perpetuity of ₹ 40,000 per year forever, while Jake will receive 4,00,000 annual payment for the next 2 years. If the interest rate is 6.5 percent, how much more are Sully’s payments worth?

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Question 239 NAT · 1.0 marks

The risk-free rate of return is 3.6 percent and the market risk premium is 7.84 percent. What is the expected rate of return on a stock with a beta of 1.3?

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Question 240 NAT · 1.0 marks

Suppose the risk free rate in the market is 5%, the expected market return is 7% and the beta of the stock is 1.4, at what rate the expected return of a stock changes with respect to the market premium?

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Question 241 NAT · 1.0 marks

Holmes, Inc., is a 90% equity and 10% debt financed firm. The unlevered beta is 0.60, the market risk premium is 6.67 percent, and the risk-free rate is 3.30 percent. What is the expected rate of return on this stock? Consider the tax rate as 30%. Express your answer as a decimal

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Question 242 NAT · 0.5 marks

Source diagram or notation
Based on the above data, answer the given subquestions.
Compute the EBITDA

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Question 243 NAT · 0.5 marks

Source diagram or notation
Based on the above data, answer the given subquestions.
Compute the Net Profit

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