Test Name Marks Answered Unanswered Correct Wrong
Verbal Ability and English

Read Instructions for the test.

  1. Negative marks are -0.33 per wrong answer
  2. Right answer is 1 mark
  3. No time limit but finish in 30 mins
  4. Solution can be found at below chapters:

Test series is based on following chapters.

  1. Aptitude Chapter 21: Reading Comprehensions
  2. Aptitude Chapter 21-A: Reading Comprehensions

Over the past few days alone, the China's Central bank has pumped extra cash into the financial system and cut interest rates. The aim is to free more cash for banks to lend and provide a boost for banks seeking to improve the return on their assets. The official data though suggested that bad loans make up only 1.4% of their balance sheets. How to explain the discrepancy ? One possible answer is that bad loans are lagging indicator i.e. it is only after the economy struggled for a while that borrowers began to suffer. Looked at this way, China is trying to anticipate problems keeping its banks in good health by sustaining economic growth of nearly 7% year-on-year.

Another more worrying possibility is that bad loans are worse than official data indicate. This does not look to be the cause for China's biggest banks, which are managed conservatively and largely focus on the country's biggest value and quality borrowers.But there is mounting evidence that when it comes to smaller banks, especially those yet to list on the stock market, bad loans piling up. That is important because unlisted lenders account for just over a third of the Chinese banking sector, making them as big as Japan's entire banking industry.

Although, non - performing loans have edged up slowly, the increase in special -mention loans (a category that includes those overdue but not yet classified as impaired loans) has been much bigger. Special mention loans are about 2% at most of China's big listed banks, suggesting that such loans must be much higher at their smaller, unlisted peers. Many of these loans are simple bad debts which banks have not yet admitted to. Another troubling fact is that fifteen years ago, the government created asset management companies (often referred to as bad banks ) to take on the non-performing loans of the lenders. after the initial transfer these companies had little to pay. But, last year, Cinda, the biggest of the bad banks, bought nearly 150 billion Yuan ( $ 24 billion) of distressed assets last year, two thirds more than 2013.

These assets would have raised the banks bad-loans ratio by a few tenths of a percentage point. Although such numbers do not seem very alarming, experts who reviewed last year's results for 158 banks of which only 20 listed found that'shadow loans', loans recorded as investments which may be a disguise for bad loans have grown to as much as 5-7 billion Yuan, or 5% of the industry's assets. These are heavily concentrated on the balance sheets bof smaller unlisted banks, and at the very least, all this points to a need for recapitalisation of small banks.

Passage - II

there is good news in the form of europe's unemployment falling from 11.1% in june to 10.0% in july. but unemployment generally lags behind the economic cycle. business surveys which provide more up to date readings of activity, point to continuing subdued recovery in europe.

the european commissions long running economic sentiment indicator which combines business as well as consumer confidence and tends to track GDP has been broadly stable since picking up in early 2015. this suggests that euro area is not about to break out of its unspectacular growth.

this is worrying as the euro zone economy is benefiting from a powerful triple stimulus. lower energy costs caused by a slump in oil prices have been providing the same effect as a tax cut.

a big program of quantitative easing has been underway since early in the year under which the european central bank is creating money to buy 60 billion pounds of bonds each month. As well as pushing down long term interest rates QE has helped push down euro in the currency markets to the benefit of exporters. Given the extent of help the euro area has been getting the growth should be faster. the sluggish performance leaves it vulnerable to china's slowdown.

a particular worry is the impact of weakening chinese growth on germany, the hub economy of the region, whose resilience has been crucial in sustaining europe since the euro crisis started five years ago. One reason has been strong chinese demands for traditional german manufacturing strengths. even though german exports appear to be holding up for the time being, that boost from china is waning.

lack lustre growth in the euro area will make it harder for the ECB to meet it goal of pushing inflation back towards its target of almost 2% . Although core inflation has moved up from its early position of 0.6% to 1% , headline inflation has been stuck at 0.2% over the summer.

There is increasing concern that the ECB's effort to break the grip of "lowflation" will be swamped by global deflationary effects. The ECB's council is not expected to make a change in policy and is likely to indicate that the ECB recognizes the downside risk to growth and stands ready to respond if they materialize. they may in turn produce a policy erasing later this year . one option would be to raise the amount of assets that it is buying each month from the current 60 billion. A more likely decision for the ECB would be to extend the planned length of its purchase for another year. whether that is enough is question for another day.

Passage - III

in a free country the man who reaches the position of a leader is one of outstanding character and ability. moreover it is always possible to foresee that he will reach such a position since early in life one can see his qualities of character. but this is not always true in case of a dictator. often he reaches his position of power through chance, very often through the unhappy state of the country. it is possible that hitler would never have become the leader of germany if that country had not driven to despair.

Passage - IV

a dog is a very intelligent animal and can be trained for many duties. some dogs work with the police and the army as sentries and trackers and there are medals that are awarded to dogs for bravery in action. other dogs act as seeing dogs for the blind and some sheeps are specially trained for rescue work among mountains and snow. jobs like herding sheep and cattle guarding homes are done by them.whenever man works and lives in the arctic circle, in the jungles, in the moors , in the mountains, the dog is his faithful acompanion and help.the common mongrel may possess these qualities just as much as the aristocratic hound.