CAIIB · Advanced Bank Management · Module A — Statistics
CAIIB ABM Unit 9 — Simulation: 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 9 — Simulation (Module A — Statistics). The CAIIB Mock Centre holds 106 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 A106 MCQs in the Mock Centre5 free belowPaper on 6 December
Key facts examiners test from this unit
Simulation: meaning, uses and applications — simulation imitates a real system with a model, so that the effects of changes can be studied without exposure or risk; it is only as good as its assumptions.
The simulation exercise: Monte Carlo with random numbers — turn past frequencies into probabilities and random-number intervals, generate periods with random numbers, apply each decision rule on the same numbers, and compare the averages.
Simulation methodology — define the problem, construct the model, specify values, run it, evaluate the results, propose a new experiment; choose fixed or variable time steps and a long enough run.
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 106 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
Why does each two-digit random number from 00 to 99 stand for a probability of 0.01?
Why (d): Random numbers are drawn so that each of the 100 values is equally likely, so a block of k numbers carries probability k ÷ 100. (a) is wrong: Uniform random numbers are flat, not bell-shaped. (b) is wrong: Random numbers have no bias towards low values. (c) is wrong: All numbers from 00 to 99 are used.
Question 2 of 5
A milk outlet buys at ₹32 a litre and sells at ₹36. What is its profit on a day when 55 litres are ordered and demand is 55 litres or more?
Why (a): All 55 litres sell: 55 × (36 − 32) = ₹220. (b) is wrong: ₹1,980 is the revenue, before cost. (c) is wrong: ₹260 is the profit on 65 litres. (d) is wrong: ₹180 is the profit on 45 litres.
Question 3 of 5
In a single-counter queue simulation, when does a customer's service start?
Why (c): Service can start only when the customer has arrived and the server is free, so it begins at the later of the two times; if the server is still busy, the customer waits. (a) is wrong: The next arrival has nothing to do with this customer's start. (b) is wrong: A busy server makes the customer wait. (d) is wrong: The earlier time would start service before the customer arrives or while the server is busy.
Question 4 of 5
Under fixed time increments, what happens if no event occurs in a period?
Why (c): With fixed time increments the clock moves forward one unit at a time whether or not anything happens, and each period's events (if any) are recorded. Jumping straight to the next event is the other method, variable (next-event) increments. (a) is wrong: Jumping to the next event is the variable (next-event) method. (b) is wrong: Each period is kept and recorded, events or not. (d) is wrong: The run length is set in advance; it is not extended for lack of events.
Question 5 of 5
In the run-length approach "until equilibrium", what does equilibrium mean?
Why (a): Of the textbook's ways of setting run length, the third runs the model until equilibrium: the point at which the simulated data correspond to the historical data, showing that the model reproduces reality. (b) is wrong: Equilibrium concerns the model matching history, not zero profit. (c) is wrong: Daily demand and supply need not match. (d) is wrong: Repeating random numbers is not the test.
0 of 5 answered.
Traps in this unit
"Simulation always needs a computer": rehearsals, models and games also count.
"Simulation is exact": it simplifies reality.
Starting service before the server is free.
Practise all 106 questions on Unit 9. 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.