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JAIIB Paper 2 • Functions of Banks
Types of Collaterals, Modes of Charging Securities & Documentation
A pledge, a hypothecation, and a mortgage all secure a loan — but they create very different legal rights, and getting the wrong one wrong can cost a bank its recovery. Covers types of collateral (land, goods, LIP, shares, gold, vehicles), contract essentials, the five modes of charging securities, registration of charges, and loan documentation, with 50 exam-style MCQs with hidden answers.
📅 Updated: September 2026 • 34 min read
📊 At a Glance
Mode of Charge
Possession With
Pledge
Bank (bailee) — goods physically delivered
Hypothecation
Borrower — bank has only a charge, no possession
Mortgage
Borrower — charge on immovable property
Lien
Bank — right to retain, arises by operation of law/contract
1 Effectiveness of Securities — Secured vs Unsecured Loans
A secured loan is backed by a charge on specific asset(s), giving the lender a preferential right to recover dues from that asset on default. An unsecured loan relies purely on the borrower's creditworthiness/personal guarantee, with no specific asset charged — carrying higher risk and typically a higher interest rate. The "effectiveness" of a security depends on factors like marketability, stability of value, ease of valuation, and transferability of title — e.g., listed shares and gold are highly marketable; specialised machinery is not.
2 Types of Collateral Securities
🏠
Land & Buildings
Immovable property, charged via mortgage; requires clear, marketable title and proper valuation/legal search.
📦
Goods
Movable stock-in-trade/raw materials, typically charged via pledge or hypothecation.
📄
Documents of Title to Goods
e.g. a railway receipt, bill of lading, or warehouse receipt — possession of the document is treated as constructive possession of the goods themselves.
📜
Life Insurance Policies (LIP)
Assigned in the bank's favour; the surrender value serves as security, subject to the insurer's acknowledgment of assignment.
📈
Shares
Dematerialised shares pledged electronically (via depository); subject to market price volatility, requiring margin and periodic revaluation.
📃
Debentures
Debt securities of a company, charged as security; the underlying issuer's creditworthiness matters.
💰
Book Debts
A borrower's outstanding receivables, assigned/hypothecated in the bank's favour; requires verification of genuineness and ageing analysis.
🏦
Term Deposits
The borrower's (or a third party's) own FD with the bank, lien-marked as security — highly liquid, low-risk collateral.
🥇
Gold Ornaments
Pledged after appraisal (purity/weight) by an approved valuer; highly liquid, used extensively for agricultural/retail gold loans.
🧾
Supply Bills
Bills raised against supplies to government/reputed buyers, purchased/discounted by the bank as security-backed finance.
🚗
Vehicle Finance Security
The financed vehicle itself, hypothecated to the bank, with the hypothecation noted in the vehicle's registration certificate (RC).
3 Contract Essentials, Agency & Bailment
📜
Essentials of a Valid Contract
Offer, acceptance, lawful consideration, capacity of parties, free consent, and lawful object — all security documents are, first, contracts, and must satisfy these essentials to be enforceable.
🤝
Contract of Agency
Relevant where a Power of Attorney holder executes documents on the borrower's behalf — the agent's acts bind the principal within the authority granted.
📦
Contract of Bailment
Underlies a pledge — the bailor (borrower) delivers goods to the bailee (bank) for a specific purpose (security), with the bank owing a duty of reasonable care over the goods.
4 Types of Charges — Lien, Pledge, Hypothecation, Mortgage, Assignment
🔒
Lien
A right to retain possession of goods/property until dues are paid, WITHOUT a right to sell (except banker's general lien, which allows sale as an implied pledge in specific circumstances).
🎁
Pledge
Bailment of goods as security, with possession (actual or constructive) transferred to the pledgee (bank); the pledgee has the right to sell on default, after notice.
📦
Hypothecation
A charge on movable property WITHOUT transfer of possession — the borrower retains possession/uses the goods (e.g. stock-in-trade, vehicle) while the bank holds only a charge, enforceable by taking possession on default.
🏠
Mortgage
A charge on immovable property as security for a loan, transferring an interest in the property (not ownership) to the mortgagee; registered mortgage (via Deed) or equitable mortgage (via deposit of title deeds) are the two common banking forms.
✍️
Assignment
Transfer of an existing/future debt or actionable claim (e.g., book debts, LIP, supply bill proceeds) in the bank's favour, giving the bank the right to recover directly from the third-party debtor.
💡
Memory Trick: "LPHMA — Lien Pledges Have Mortgaged Assets"
Lien → Pledge → Hypothecation → Mortgage → Assignment — the five charge types in ascending order of legal complexity/possession transfer.
5 Registration of Charges
Why it matters: When a company creates a charge on its assets, the charge must be registered with the Registrar of Companies (ROC) within the prescribed timeline under the Companies Act, 2013, and simultaneously with CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest). An unregistered charge is void against a liquidator and other creditors — meaning the bank loses its priority claim on the secured asset in insolvency if registration is missed.
CERSAI's central registry was set up to prevent fraud from multiple lending against the same property (a recurring pre-CERSAI fraud pattern), by giving all lenders a single database to check existing charges before sanctioning a loan against immovable property.
6 Documentation
📝
Types of Documents
Demand promissory note (DPN), loan agreement, hypothecation/pledge/mortgage deed, guarantee deed, letter of continuity (for revolving facilities), and security-specific forms (e.g. share transfer form, LIP assignment form).
📋
Documentation Procedure
Documents must be stamped as per the applicable Stamp Act, correctly dated, signed by authorised signatories, and witnessed where required, before disbursement.
⏰
Limitation & Revival
Documents have a limitation period (generally 3 years from execution/last acknowledgment under the Limitation Act); banks obtain fresh acknowledgment of debt/revival letters periodically to keep the debt legally enforceable.
✓ Key Takeaways
Collateral effectiveness depends on marketability, value stability, and ease of transfer of title — from land and gold to book debts and vehicles.
Security documentation rests on basic contract law essentials, with pledge specifically rooted in the law of bailment.
The five charge types differ chiefly on possession and asset type: lien (retain, no sale generally), pledge (possession + sale right), hypothecation (no possession, movables), mortgage (immovables), and assignment (transfer of a debt/claim).
Charges on a company's assets must be registered with ROC and CERSAI — an unregistered charge is void against a liquidator/other creditors.
Loan documents must be properly stamped, signed, and periodically revived (acknowledgment of debt) to stay within the 3-year Limitation Act window.
📝 Top 50 JAIIB-Style MCQs on Collateral Securities, Charging & Documentation
Test your understanding with these 50 practice MCQs, closely modelled on the JAIIB (PPB) exam pattern. Each question has 5 options — the correct answer is hidden by default; tap "Show Answer" to reveal it along with a short explanation.
🔐 Effectiveness of Securities
1 A secured loan differs from an unsecured loan in that it:
A. Is backed by a charge on specific asset(s)
B. Relies purely on the borrower's signature with no other backing
C. Is always interest-free
D. Requires no documentation
E. Cannot be offered by any bank
Answer: A. A secured loan is backed by a charge on specific assets.
2 A key factor determining a security's "effectiveness" is:
A. Marketability and ease of valuation
B. The borrower's favourite colour
C. The bank's branch location
D. The day of the week the loan was sanctioned
E. None of these matter
Answer: A. Marketability and ease of valuation determine effectiveness.
📦 Types of Collateral
3 A document of title to goods (e.g. a warehouse receipt) represents:
A. Constructive possession of the underlying goods
B. No legal significance whatsoever
C. Ownership of the warehouse itself
D. A type of insurance policy
E. A currency instrument
Answer: A. Such documents represent constructive possession of goods.
4 A Life Insurance Policy used as bank security requires:
A. Assignment in the bank's favour, acknowledged by the insurer
B. No formalities of any kind
C. Cancellation of the policy first
D. Transfer of the policyholder's citizenship
E. Conversion into a fixed deposit
Answer: A. LIP security requires insurer-acknowledged assignment.
5 Dematerialised shares pledged as security are held via:
A. An electronic pledge through the depository
B. Physical share certificates handed over in person only
C. No formal mechanism; shares cannot be pledged
D. A locker rental agreement
E. A currency chest deposit
Answer: A. Demat shares are pledged electronically via the depository.
6 Gold ornaments accepted as bank security are:
A. Appraised for purity/weight by an approved valuer
B. Accepted with no verification at all
C. Never accepted by any Indian bank
D. Valued solely by the borrower's own estimate
E. Considered illiquid and hard to sell
Answer: A. Gold is appraised for purity/weight by an approved valuer.
7 Vehicle finance security is typically noted:
A. As a hypothecation charge in the vehicle's registration certificate (RC)
B. Nowhere; no documentation is required
C. Only in the borrower's personal diary
D. As a pledge, with the bank taking physical possession of the vehicle
E. As a lien on the borrower's savings account only
Answer: A. Vehicle hypothecation is noted in the RC.
📜 Contract Essentials, Agency & Bailment
8 A valid contract requires, among other elements:
A. Offer, acceptance, lawful consideration, and capacity of parties
B. No consideration of any kind
C. Only a verbal handshake
D. Registration with RBI for every contract
E. A minor's signature exclusively
Answer: A. Offer, acceptance, consideration, and capacity are contract essentials.
9 A pledge is legally rooted in the:
A. Law of bailment
B. Law of agency exclusively
C. Negotiable Instruments Act
D. Companies Act
E. FEMA
Answer: A. A pledge is founded on bailment law.
10 Under a contract of agency, an agent's acts within their authority:
A. Bind the principal
B. Never bind anyone
C. Bind only the agent personally, never the principal
D. Have no legal effect
E. Automatically void the principal's contract
Answer: A. An agent's authorised acts bind the principal.
🔒 Types of Charges
11 A pledge involves:
A. Delivery of possession of goods to the bank, with a right to sell on default
B. No transfer of possession at all
C. Transfer of ownership permanently
D. Only immovable property
E. A right to retain without any right to sell, ever
Answer: A. A pledge transfers possession, with a right to sell on default.
12 Hypothecation differs from pledge in that:
A. The borrower retains possession of the goods
B. The bank always takes physical possession
C. It applies only to immovable property
D. No charge is created at all
E. It is identical to a pledge in every respect
Answer: A. In hypothecation, the borrower retains possession.
13 A mortgage creates a charge on:
A. Immovable property
B. Only movable goods
C. Only shares
D. Only book debts
E. Nothing; mortgages don't create any charge
Answer: A. A mortgage charges immovable property.
14 An equitable mortgage is created by:
A. Deposit of title deeds
B. A registered mortgage deed exclusively
C. Pledge of gold ornaments
D. Hypothecation of stock
E. No documentation at all
Answer: A. An equitable mortgage arises from deposit of title deeds.
15 Assignment as a mode of charging security applies to:
A. Existing/future debts or actionable claims like book debts or LIP
B. Physical gold ornaments exclusively
C. Immovable land only
D. Motor vehicles exclusively
E. Nothing; assignment is not a recognised charge type
Answer: A. Assignment applies to debts/actionable claims.
16 A general lien gives the banker:
A. A right to retain goods/securities until dues are paid, with limited sale rights (implied pledge)
B. Automatic ownership of the goods
C. No rights of any kind
D. A right applicable only to immovable property
E. A right to destroy the goods
Answer: A. General lien allows retention, with a banker's lien acting as an implied pledge.
📋 Registration of Charges
17 A company's charge on its assets must be registered with:
A. The Registrar of Companies (ROC) and CERSAI
B. Only the local municipal office
C. No registration is ever required
D. Only a private notary
E. The Ministry of External Affairs
Answer: A. Charges must be registered with ROC and CERSAI.
18 An unregistered charge is:
A. Void against a liquidator and other creditors
B. Fully valid and enforceable against everyone regardless of registration
C. Automatically converted to a pledge
D. Irrelevant to insolvency proceedings
E. Enhanced in priority over registered charges
Answer: A. An unregistered charge is void against a liquidator/other creditors.
19 CERSAI was set up primarily to prevent:
A. Fraud from multiple lending against the same property
B. All lending activity in India
C. Interest rate changes
D. Currency fluctuations
E. Foreign remittances
Answer: A. CERSAI prevents multiple-lending fraud on the same property.
📝 Documentation
20 A Demand Promissory Note (DPN) is:
A. A standard loan document acknowledging the debt
B. A type of insurance policy
C. A currency note
D. An ATM card
E. Unrelated to loan documentation
Answer: A. A DPN is a standard debt-acknowledging loan document.
21 Loan documents must be:
A. Properly stamped per the applicable Stamp Act
B. Left entirely unstamped
C. Undated always
D. Unsigned by any party
E. Written only in a foreign language with no translation
Answer: A. Loan documents must be properly stamped.
22 Under the Limitation Act, loan documents generally remain enforceable for:
A. 3 years from execution/last acknowledgment
B. 100 years, with no renewal ever needed
C. 1 day only
D. Indefinitely, with no limitation period
E. 6 months only, non-renewable
Answer: A. The standard limitation period is 3 years, renewable via acknowledgment.
23 Banks obtain periodic "revival letters" or acknowledgments of debt to:
A. Keep the debt legally enforceable within the limitation period
B. Cancel the loan entirely
C. Reduce the loan amount to zero
D. Avoid any documentation
E. Transfer the loan to a different borrower
Answer: A. Revival letters keep the debt within the limitation window.
🧩 Mixed / Comprehensive
24 A bank financing a trader's stock-in-trade, where the trader continues to sell and replenish the stock daily, would most appropriately use:
A. Hypothecation
B. Pledge, requiring physical delivery every day
C. Mortgage, meant for immovable property
D. Assignment of a life insurance policy
E. A general lien only
Answer: A. Hypothecation suits stock the borrower continues to operate/sell.
25 A bank financing a warehouse's stored agricultural produce, taking physical custody via a warehouse receipt, is using:
A. A pledge (via constructive possession through the document of title)
B. A mortgage
C. Hypothecation
D. An assignment of book debts
E. No charge at all
Answer: A. Warehouse receipts create a pledge via constructive possession.
26 A home loan secured by the borrower's flat would use:
A. A mortgage
B. A pledge
C. Hypothecation
D. A lien on the borrower's salary account only
E. Assignment of a supply bill
Answer: A. A home loan is secured via mortgage on the property.
27 Which of the following best explains why hypothecation carries higher risk for a bank than pledge?
A. The bank has no possession of the goods, relying on the borrower's honesty and periodic verification
B. Hypothecation always carries zero risk, identical to pledge
C. Hypothecation gives the bank full ownership, eliminating all risk
D. Pledge is riskier since the bank holds possession
E. Risk has no connection to possession of the charged asset
Answer: A. Lack of possession in hypothecation increases the bank's risk exposure.
28 Which of the following best explains why banks periodically revalue shares pledged as security?
A. Share prices are volatile, so the margin/adequacy of cover must be reassessed regularly
B. Share prices never change once pledged
C. Revaluation is legally banned for pledged shares
D. Shares, once pledged, become immovable property
E. Revaluation applies only to gold, never shares
Answer: A. Share price volatility requires periodic margin reassessment.
29 Which of the following best explains why CERSAI registration is checked before sanctioning a property-backed loan?
A. To verify no prior undisclosed charge exists on the same property from another lender
B. CERSAI has no role in loan sanctioning
C. CERSAI registration is optional and rarely checked
D. CERSAI applies only to movable goods, never property
E. CERSAI is checked only after the loan is disbursed, never before
Answer: A. CERSAI check reveals any prior undisclosed charge on the property.
30 Which of the following would be an appropriate reason a bank insists on an equitable mortgage (deposit of title deeds) rather than a registered mortgage in some cases?
A. It is often quicker and less costly (lower stamp duty in some states), while still creating an enforceable charge
B. Equitable mortgages have no legal validity at all
C. Equitable mortgages are always mandatory by law for every property loan
D. Equitable mortgages apply only to movable goods
E. There is no practical difference between the two mortgage types
Answer: A. Equitable mortgage can be quicker/cheaper while remaining enforceable.
31 Which of the following best describes why a bank verifies "genuineness" and "ageing" when accepting book debts as security?
A. To ensure the receivables are real, collectible, and not stale/doubtful, which would undermine their value as security
B. Book debts require no verification at all
C. Ageing analysis is irrelevant to receivables quality
D. Genuineness checks apply only to gold, never receivables
E. Book debts are always 100% risk-free regardless of age
Answer: A. Verification ensures receivables are real and collectible, preserving security value.
32 Which of the following would be a valid example of a "supply bill" being used as security?
A. A bank discounting a bill raised by a contractor against a confirmed government supply order
B. A bank accepting an unrelated third party's personal cheque
C. A bank taking a lien on a savings account
D. A bank issuing a demand draft
E. A bank opening a current account
Answer: A. Discounting a genuine supply bill against a confirmed order is a classic example.
33 Which of the following would be the correct classification of a term deposit lien-marked as loan security?
A. Highly liquid, low-risk collateral
B. Illiquid and high-risk collateral
C. Not a recognised form of security at all
D. Equivalent in risk to unlisted, illiquid shares
E. Usable only for agricultural loans
Answer: A. A lien-marked FD is highly liquid, low-risk collateral.
34 Which of the following best explains why a banker's general lien on articles left for safe custody (with no lending relationship) may NOT apply?
A. Such articles were entrusted for a specific, non-lending purpose, excluding them from the general lien's scope
B. General lien always applies to every item in the bank's possession without exception
C. Safe custody articles are automatically pledged by law
D. Lien has no connection to the purpose of entrustment
E. Safe custody items are always subject to a mortgage instead
Answer: A. Purpose-specific entrustment excludes items from general lien.
35 Which of the following would be an appropriate step before a bank accepts land as collateral?
A. Conducting a legal title search and proper valuation
B. Accepting the land with no verification at all
C. Relying solely on the borrower's verbal assurance
D. Skipping valuation entirely
E. Accepting land only if it has no clear title
Answer: A. Legal title search and valuation are essential before accepting land.
36 Which of the following best explains why a pledgee (bank) owes a "duty of reasonable care" over pledged goods?
A. As bailee under a contract of bailment, the bank must care for the goods as a person of ordinary prudence would for their own goods
B. No such duty exists once goods are pledged
C. The duty of care applies only to hypothecated goods, never pledged goods
D. The pledgor (borrower) owes this duty, not the bank
E. This duty applies only to immovable property
Answer: A. As bailee, the bank owes a reasonable-care duty over pledged goods.
37 Which of the following would be a valid reason a bank cannot enforce a loan document after 5 years with no acknowledgment or repayment?
A. The claim may have become time-barred under the Limitation Act's 3-year window
B. Loan documents never expire, regardless of time elapsed
C. The Limitation Act does not apply to bank loans
D. Acknowledgment of debt has no legal effect on limitation
E. Only criminal law, not limitation law, governs loan enforcement
Answer: A. Without timely acknowledgment/action, the claim can become time-barred.
38 Which of the following would be an appropriate documentation step specific to a loan secured by a company's assets (versus an individual borrower)?
A. Filing the charge with the ROC within the prescribed timeline
B. No additional step is needed for corporate borrowers
C. ROC filing applies only to individual borrowers, never companies
D. Registration requirements are identical regardless of borrower type
E. ROC filing is optional and rarely relevant
Answer: A. Corporate-asset charges require ROC filing within the prescribed timeline.
39 Which of the following best describes the practical difference in a bank's recovery process between pledge and hypothecation on default?
A. A pledgee already holds possession and can sell directly after notice, while a hypothecatee must first take possession of the goods
B. Both processes are identical, with no distinction
C. A hypothecatee already holds possession, unlike a pledgee
D. Neither charge type allows any recovery on default
E. Only mortgages allow recovery; pledge/hypothecation do not
Answer: A. A pledgee can sell directly; a hypothecatee must first take possession.
40 Which of the following would be a plausible reason a bank prefers book debts assignment over a general lien for financing receivables?
A. Assignment gives the bank a direct, specific right to recover from the underlying debtor, unlike the more general and limited lien
B. Assignment and lien provide identical rights with no distinction
C. Lien always provides stronger recovery rights than assignment
D. Assignment applies only to immovable property
E. Book debts cannot legally be assigned under Indian law
Answer: A. Assignment gives a direct, specific recovery right against the debtor.
41 Which of the following would be an appropriate risk consideration for a bank accepting debentures as security?
A. The creditworthiness of the issuing company, since debenture value depends on the issuer's ability to pay
B. Debentures carry zero risk regardless of the issuer
C. The issuer's creditworthiness is irrelevant to debenture value
D. Debentures are treated identically to gold in risk terms
E. No due diligence is needed for debenture-backed loans
Answer: A. Issuer creditworthiness directly affects debenture security value.
42 Which of the following best explains why "capacity of parties" is essential for a valid loan/security contract?
A. A contract with a party lacking legal capacity (e.g. a minor) is void, making the security unenforceable
B. Capacity has no bearing on contract validity
C. Minors can always validly execute loan/security contracts
D. Only banks need capacity; borrowers do not
E. Capacity is relevant only to criminal law, not contracts
Answer: A. Lack of capacity (e.g., minority) voids the contract and its security.
43 Which of the following would be the most appropriate charge type for a bank financing a borrower's confirmed government supply contract proceeds?
A. Assignment/discounting of the supply bill
B. Mortgage of immovable property, unrelated to the contract
C. Pledge of gold ornaments
D. Hypothecation of an unrelated vehicle
E. No charge is needed for such financing
Answer: A. Assignment/discounting of the supply bill directly secures such financing.
44 Which of the following would be an appropriate description of why banks prefer CERSAI-searchable security interests over purely paper-based records?
A. A centralised digital registry allows quick, reliable verification across lenders, reducing fraud and disputes
B. CERSAI has no advantage over paper records
C. Paper records are always faster to search than CERSAI
D. CERSAI applies only to gold loans
E. Digital registries increase, not reduce, fraud risk
Answer: A. A centralised digital registry enables quick, reliable, fraud-reducing verification.
45 Which of the following best captures the distinction between "primary security" and "collateral security"?
A. Primary security is the asset directly created/acquired out of the loan (e.g., financed stock); collateral is additional security offered for further comfort
B. There is no distinction; the terms are identical
C. Collateral is always the primary asset financed by the loan
D. Primary security applies only to unsecured loans
E. Collateral security is mandatory for every single loan without exception
Answer: A. Primary security is loan-funded asset; collateral is additional comfort security.
46 Which of the following would be an appropriate reason a bank requires a witness for certain loan/security documents?
A. To provide independent evidence of proper execution, especially for documents like mortgage deeds requiring registration
B. Witnesses serve no legal purpose in documentation
C. Witness requirements apply to every single banking document with no exception
D. A witness replaces the need for the borrower's own signature
E. Witnesses are required only for gold loans
Answer: A. Witnesses provide evidence of proper execution for certain documents.
47 Which of the following would be an appropriate example of how "transferability of title" affects a security's desirability?
A. Listed shares with clear, easily transferable title are more desirable security than an asset with disputed/unclear title
B. Transferability has no bearing on a security's desirability
C. Disputed-title assets are always preferred as security
D. Title clarity matters only for gold, never other assets
E. All assets have identical transferability regardless of type
Answer: A. Clear, transferable title makes an asset more desirable as security.
48 Which of the following would be an appropriate consideration for a bank when a borrower offers a mix of pledge (gold) and hypothecation (stock) for the same working capital loan?
A. The bank documents and perfects each charge type appropriately per its distinct legal requirements
B. A single, identical document suffices for both charge types with no distinction
C. Mixing charge types is legally prohibited
D. Only one charge type can ever apply to a single loan
E. Hypothecation and pledge cannot coexist for the same borrower
Answer: A. Each charge type must be separately documented/perfected per its own legal requirements.
49 Which of the following best summarises why "types of charges" is one of the most heavily tested JAIIB PPB topics?
A. Correctly distinguishing lien, pledge, hypothecation, mortgage, and assignment is fundamental to how banks legally secure and recover loans
B. These charge types have no practical relevance to banking
C. Only one charge type exists in Indian banking law
D. Charge types are relevant only to insurance, not banking
E. The distinction between charge types was abolished in 2019
Answer: A. Correctly distinguishing charge types is fundamental to bank loan security/recovery.
50 Overall, which statement best summarises this topic?
A. Collateral ranges from land and gold to book debts and vehicles, each charged via one of five modes (lien, pledge, hypothecation, mortgage, assignment) rooted in basic contract/bailment law, with company charges requiring ROC/CERSAI registration and all documentation subject to proper stamping and the 3-year Limitation Act window
B. All collateral types use an identical single charge mechanism
C. Registration of charges is optional and has no legal consequence
D. Loan documents never expire or require revival
E. Pledge and hypothecation are legally identical concepts
Answer: A. This correctly captures the full collateral/charging/documentation framework.
Disclaimer: This article is prepared for educational and exam-preparation purposes only, summarising collateral, charging, and documentation norms as of September 2026. Candidates should cross-check the latest official IIBF syllabus and applicable statutes before the exam.