Cloze Test : SBI PO 2017 (Pre) English Practice Exercise


Since the Brexit vote, banks’ share prices have beaten those of many other sectors of the economy. Economists feared financial (1)____ and recession, and few investors wanted to be associated with a sector that had been so badly damaged by the financial crisis. But eight months on the banks are doing better than expected. By recent standards, at least, their results have not been that bad. In 2016 Barclays avoided making a loss. And on February 22nd Lloyds, now almost exclusively a Britain-focused bank, posted its highest pre-tax profits for a decade. As in other countries, since the referendum banks’ share prices have
doing better than expected. By recent standards, at least, their results have not been that bad. In 2016 Barclays avoided making a loss. And on February 22nd Lloyds, now almost exclusively a Britain-focused bank, posted its highest pre-tax profits for a decade. As in other countries, since the referendum banks’ share prices have (2)___ the rest of the market.
How to explain this? A strong economy has supported banks’ revenues. Defying predictions, GDP growth in the second half of 2016 was faster than in the first. (3)___ has edged down. Fears of a wave of defaulting customers have not materialised: in the owner-occupied and Meanwhile, looser monetary policy in the wake of the Brexit vote has not done as much damage as some had predicted. The worry had been that the cut in interest rates in August from 0.5% to 0.25% would (4)___ bank profitability by squeezing the margins between borrowing and lending rates. In fact the Bank of England is now in effect supporting such margins through its “term funding scheme”, which channels ultra-cheap money to institutions that lend more to customers, says Tony Yates of Birmingham University.
The cost of cleaning up for past misdeeds has in recent years eaten away at banks’ (5)___. But the end is now in sight. In 2016 Lloyds set aside £1bn ($1.2bn) for claims relating to mis-sold payment-protection insurance (PPI), a quarter of the previous year’s amount. In November overall PPI payouts were about 40% lower than a year earlier, according to the Financial Conduct Authority, a regulator. Analysts at Deutsche Bank reckon that British banks’ PPI liabilities will be fairly low in the coming year; 2019 may mark the deadline for claiming compensation.
One-off charges, however, remain a curse for Royal Bank of Scotland (RBS). On February 24th it reported a loss of £7bn in 2016. The bank insists that its core (6)___ is now healthy. Yet American regulatory bodies have (7)___ it of mis-selling mortgage-backed securities, and the bank has set aside billions to settle the claims. The cost of righting past misdeeds may be even higher in 2017. Unsurprisingly, RBS’s shares have had a poor year.
That is bad news for British taxpayers, who have a £40bn stake in RBS after it was taken into public ownership during the (8)___ crisis. That adds perhaps 2% of GDP to the national debt. With a budget looming on March 8th, the government is desperate to reduce its debt pile. But it will be some time before it can entirely (9)____ RBS (as it has almost done with Lloyds, which was also bailed out). After taking account of the cost of financing the bail-out, RBS’s share price must roughly double for the (10)____to recoup what it put in. Britain’s banks may be beating expectations, but they are a long way from being fighting fit.
( Source: The Economist)

1. Which word best suits for (1)
a) volatility
b) insecurity
c) Instability
d) Inclusion
e) Stability


2. Which is the apt word for (2) 
a) Plunged
b) Outperformed
c) Moved
d) Resonated
e) Prudent


3. Which suits the best for (3)
a) Labour
b) Crisis
c) Production
d) Unemployment
e) Trend


4. Which suits for (4)
a) Outrun
b) Overwhelm
c) Enrich
d) Credent
e) Dent


5. Which suits for (5)
a) Revenue
b) Assets
c) Income
d) Profits
e) Dividend


6. Which suits for (6)
a) Trade
b) Business
c) Department
d) Tranche
e) Sector


7. Which suits for (7)
a) Admitted
b) Adhered
c) Accused
d) Revealed
e) Claimed


8. Which suits for (8) 
a) Economic
b) Recession
c) Market
d) Financial
e) Global


9. Which Suits best for (9)
a) Liberalise
b) Privatise
c) Globalise
d) Amalgamate
e) Absorb


10. Which suits for (10)
a) Stakeholders
b) Owner
c) Government
d) Socialist
e) Capitalists
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