D
hedged completely
[H2]High-Yield Core Concepts[/H2]
[CORE_CONCEPTS]
[C]**The Three Primary Pillars:** Under the latest **RBI Master Directions**, a bank's entire investment portfolio must be categorized strictly into HTM, AFS, or the **FVTPL Category**, with Held for Trading (HFT) acting as a sub-category.[/C]
[C]**Principal & SPPI Rules:** To qualify for HTM, instruments must pass the **SPPI Criteria**, where 'Principal' is strictly defined as the fair value of the security at initial recognition.[/C]
[C]**The AFS Dual Objective:** Available for Sale (AFS) securities are distinct because they are acquired with a dual objective: collecting contractual cash flows and selling the securities when advantageous.[/C]
[C]**The HTM 5% Cap Limit:** If a bank intends to sell more than 5% of its opening **HTM Portfolio** value for regulatory liquidity needs, those securities immediately lose their Held to Maturity eligibility.[/C]
[/CORE_CONCEPTS]
[H2]Semantic Comparison: Investment Classification MCQs vs Asset Classification (IRAC)[/H2]
[VERSUS_TABLE]
| Feature / Metric | Investment Classification MCQs | Asset Classification (IRAC) |
| **Core Definition** | Categorizes bank investments (HTM, AFS, FVTPL) based on business models. | Categorizes loans and advances (Standard, Sub-standard, Doubtful, Loss). |
| **Primary Use Case** | Used for managing market risk, liquidity, and portfolio valuation. | Used for managing credit risk, defaults, and NPA provisioning. |
| **Exam Importance** | Highly tested in Finance & Management and specialized banking papers. | Essential knowledge for General Banking and Credit Officer roles. |
[/VERSUS_TABLE]
[FAQ_BOX][H2]Frequently Asked Questions[/H2]
[FAQ_ITEM][Q]Why is **Investment Classification MCQs** critical for **RBI Grade B Exam, SBI PO, IBPS PO, and Bank Promotion Exams**?[/Q][A]It is a consistently high-scoring area. Examiners frequently repeat core concepts from this section, particularly regarding the SPPI test and HFT presumptive lists.[/A][/FAQ_ITEM]
[FAQ_ITEM][Q]Does this mock test cover the full syllabus?[/Q][A]Yes, these questions target the most highly-weighted concepts found in previous years' papers, updated with the latest RBI circular norms.[/A][/FAQ_ITEM]
[FAQ_ITEM][Q]What are the most repeated topics?[/Q][A]Based on our blueprint, Primary Categories & SPPI Rules and HFT Presumptive List & RBI Powers carry the highest weightage.[/A][/FAQ_ITEM]
[/FAQ_BOX]