CAIIB · Advanced Bank Management · Module A — Statistics
CAIIB ABM Unit 8 — Linear Programming: Free MCQs with Explanations
By Swarnakshi Jha (ex-banker) · Updated 29 October 2026 · Paper I of the December 2026 cycle (Sunday 6 December 2026)
This is the free practice page for CAIIB ABM Unit 8 — Linear Programming (Module A — Statistics). The CAIIB Mock Centre holds 94 questions on this unit alone, every one with a why-right / why-wrong explanation; below are the facts examiners keep returning to, five practice questions with explanations, and the traps that cost marks.
ABM · Module A94 MCQs in the Mock Centre5 free belowPaper on 6 December
Key facts examiners test from this unit
Formulating a linear programming problem — LP allocates limited resources among competing uses to maximise or minimise a linear objective subject to linear constraints and non-negativity.
The graphical method — plot each constraint, find the feasible region's corners, and pick the corner where the iso-profit line last touches (or that gives the best objective value).
The simplex method — add slacks, tabulate, enter the most negative Z-row variable, leave by the smallest ratio, pivot, and repeat until the Z row has no negatives; then read values, slacks and shadow prices.
5 free practice questions — tap an option
Five practice questions from this unit. Answers lock on the first tap, exactly as in the exam, and an explanation opens underneath. The Mock Centre has all 94 questions on this unit, from easy to tough, with caselets and key-in numericals, why every other option is wrong and the exam tip — and tracks your score and revision dates.
Question 1 of 5
Which statement about the objective of an LP is correct?
Why (d): The textbook says LP maximises or minimises (optimises) a function such as profit, loss, time or cost. (a) is wrong: Minimisation problems are LPs too, solved the same way. (b) is wrong: LP needs a linear objective as well as linear constraints. (c) is wrong: The objective is part of the formulation, written before any solution method is applied.
Question 2 of 5
Why must LP decision variables be non-negative?
Why (b): A firm cannot make −5 radios or lend −₹10 crore; the non-negativity conditions rule out such meaningless solutions. (a) is wrong: A negative value does not change the form of the function. (c) is wrong: Zero is a normal value (for example at the starting solution). (d) is wrong: Non-negativity says nothing about which constraints bind.
Question 3 of 5
What is an iso-profit line?
Why (a): "Iso-profit" means equal profit: any point on the line produces the same profit as any other point on it. (b) is wrong: That is a constraint line. (c) is wrong: The boundary is made of constraint lines. (d) is wrong: Iso-profit lines are drawn parallel to each other, not through the origin and optimum.
Question 4 of 5
What is the pivot entry in a simplex iteration?
Why (d): The textbook defines the pivot entry as the intersection of the highlighted (pivot) row and column; the pivot row is divided by it. (a) is wrong: Solution values are not pivots. (b) is wrong: That identifies the entering column. (c) is wrong: That identifies the pivot row.
Question 5 of 5
How is a "≥" constraint prepared for the simplex method?
Why (a): Subtracting a surplus turns the inequality into an equation; an artificial variable gives a starting solution and is later driven out. (b) is wrong: Adding slack suits only ≤ constraints. (c) is wrong: The requirement must be respected. (d) is wrong: That would destroy the constraint.
0 of 5 answered.
Traps in this unit
Mixed units in one constraint.
Forgetting x, y ≥ 0.
Slab rates break linearity; whole units break divisibility.
Practise all 94 questions on Unit 8. The free CAIIB demo opens Units 1–2 of every paper with full explanations; the ABM Online Mock Centre unlocks all 4,600+ ABM questions, the full-length papers with caselets and key-ins, module mocks and Smart Revision for 18 months (₹1,499).
Independent study aid — not affiliated with, endorsed by, or sponsored by the Indian Institute of Banking & Finance (IIBF). Exam pattern, dates, fees and passing criteria are set by IIBF — always confirm the current rules at iibf.org.in. CAIIB content follows rules and developments up to IIBF's cut-off of 30 June 2026 (where a rule changed later, the update box says so); verify from official sources before relying on them in practice.