MCQOPTIONS
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MCQOPTIONS
This section includes 271 Mcqs, each offering curated multiple-choice questions to sharpen your Financial Management/Financial Markets knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
The default risk is measured by large traders, managers and investors with the help of |
| A. | sinking analysis |
| B. | analyzing financial ratios |
| C. | portfolio scenario value |
| D. | automated machine analysis |
| Answer» C. portfolio scenario value | |
| 2. |
The rate of return (in percentages) consists of |
| A. | capital gain yield interest yield |
| B. | return yield + stable yield |
| C. | return yield + instable yield |
| D. | par value + market value |
| Answer» B. return yield + stable yield | |
| 3. |
A financial guarantee ensure that the lander will be paid |
| A. | principle and interest |
| B. | debt and cash |
| C. | capital and profit |
| D. | cash and interest |
| Answer» B. debt and cash | |
| 4. |
As compared to public issues, the interest premiums on privately placed issues overtime have |
| A. | increased |
| B. | increased floatation rate |
| C. | decreased |
| D. | zero interest coupon |
| Answer» D. zero interest coupon | |
| 5. |
The principal value of TIPS is increased or decreased and is based on the measure of |
| A. | consumer price index |
| B. | manufacturing price index |
| C. | auction selling index |
| D. | inflation payment index |
| Answer» B. manufacturing price index | |
| 6. |
The treasury bonds and notes pay the interest rate is classified as |
| A. | LIBOR rate monthly |
| B. | coupon interest monthly |
| C. | coupon interest semiannually |
| D. | coupon interest annually |
| Answer» D. coupon interest annually | |
| 7. |
The value of option issued to call debt is $780 and return rate on callable bond is $370 then return rate on non-callable bond is |
| A. | 1250 |
| B. | 1150 |
| C. | 1350 |
| D. | 410 |
| Answer» E. | |
| 8. |
If the maturity date of the bond is closer than the premium of bond will be |
| A. | relatively lower |
| B. | relatively higher |
| C. | quantifiable |
| D. | not be quantifiable |
| Answer» B. relatively higher | |
| 9. |
An usage of proceeds of new issue to retire issue with high-rate is classified as |
| A. | refunding operation |
| B. | funding operation |
| C. | proceeds operation |
| D. | deferred operation |
| Answer» B. funding operation | |
| 10. |
The value of option issued to call debt is $670 and return rate on callable bond is $540 then return rate on non-callable bond is |
| A. | 1210 |
| B. | 1010 |
| C. | 130 |
| D. | 1020 |
| Answer» D. 1020 | |
| 11. |
The municipal bonds are the securities issued by local and state |
| A. | schools |
| B. | governments |
| C. | city and country |
| D. | all of the above |
| Answer» E. | |
| 12. |
The foreign bonds that are issued before the Eurobonds are also called as |
| A. | traditional international bonds |
| B. | traditional local bonds |
| C. | traditional global bonds |
| D. | traditional currency bonds |
| Answer» B. traditional local bonds | |
| 13. |
The municipal bonds are more considerable to |
| A. | full price investors |
| B. | household investors |
| C. | corporation investors |
| D. | clean price investors |
| Answer» C. corporation investors | |
| 14. |
As compared to non-convertible bonds, the yield on the convertible bond is |
| A. | relatively lower |
| B. | relatively higher |
| C. | relatively zero |
| D. | relatively discounted |
| Answer» B. relatively higher | |
| 15. |
The type of bonds that are issued by foreign governments or foreign corporations are classified as |
| A. | zero risk bonds |
| B. | zero bonds |
| C. | foreign bonds |
| D. | government bonds |
| Answer» D. government bonds | |
| 16. |
The conversion values is $7000 and the conversion rate received on stock conversion is 370 then current market price of stock is |
| A. | 16.92 |
| B. | 18.92 |
| C. | 13.92 |
| D. | 11.92 |
| Answer» C. 13.92 | |
| 17. |
The financial securities which are issued to finance government expenditures and national debt are classified as |
| A. | treasury notes and bonds |
| B. | contraction bonds |
| C. | expansion bonds |
| D. | dollar bonds |
| Answer» B. contraction bonds | |
| 18. |
The mortgage bonds issued by the corporations are considered as |
| A. | secured debt issues |
| B. | unsecured debt issues |
| C. | volatile debt issues |
| D. | collateral debt issues |
| Answer» B. unsecured debt issues | |
| 19. |
The department who is appointed by the bond holders as the representative or monitor of bonds is considered as |
| A. | trustee |
| B. | trust department |
| C. | monitoring department |
| D. | indenture department |
| Answer» B. trust department | |
| 20. |
The single bid auction of TIPS securities mean that all bidders |
| A. | pays indexed prices |
| B. | pays same price |
| C. | pays different price |
| D. | pays inflated prices |
| Answer» C. pays different price | |
| 21. |
The call premium is $385 and the face value of the bond is $285 then the call price of bonds is |
| A. | 100 |
| B. | 770 |
| C. | 670 |
| D. | 570 |
| Answer» C. 670 | |
| 22. |
The markets in which bonds are traded and issued are classified as |
| A. | corporate markets |
| B. | treasury markets |
| C. | bond markets |
| D. | municipal markets |
| Answer» D. municipal markets | |
| 23. |
The banks, mutual funds and insurance companies are considered as |
| A. | major suppliers |
| B. | major investors |
| C. | major portfolio holders |
| D. | major rates decider |
| Answer» B. major investors | |
| 24. |
If the bonds are used as an investment vehicle by the investors of institutions then the bond must be |
| A. | automated |
| B. | discounted |
| C. | rated |
| D. | stocked |
| Answer» D. stocked | |
| 25. |
In best efforts offering, the price offered by investment banks is originally set by |
| A. | municipality |
| B. | insurance companies |
| C. | negotiable transactions |
| D. | global placement |
| Answer» B. insurance companies | |
| 26. |
The interest rate on floating rate Eurobonds is paid |
| A. | annually |
| B. | semiannually |
| C. | monthly |
| D. | quarterly |
| Answer» C. monthly | |
| 27. |
As compared to publicly placed issues, the privately placed bonds are issued for |
| A. | lower paid interest rates |
| B. | higher paid interest rates |
| C. | registered interest rates |
| D. | unregistered interest rates |
| Answer» C. registered interest rates | |
| 28. |
The denominations in which Eurobonds are issued are |
| A. | $10000 and $20000 |
| B. | $5000 and $10000 |
| C. | $6000 and $11000 |
| D. | $8000 and $15000 |
| Answer» C. $6000 and $11000 | |
| 29. |
The face value of the bond is $450 and the call price of bond is $250 then the value of call premium is |
| A. | 0.018 |
| B. | 200 |
| C. | 700 |
| D. | 1.8 |
| Answer» C. 700 | |
| 30. |
The current selling price of the municipal bonds available to bond holders is used to calculate |
| A. | yield to income tax |
| B. | yield to municipal bonds |
| C. | yield to tax rate |
| D. | yield to revenue bonds |
| Answer» C. yield to tax rate | |
| 31. |
The financial institutions generally such as insurance companies and banks are prohibited to buy anything but |
| A. | split grade bonds |
| B. | investment grade bond securities |
| C. | portfolio grade bonds |
| D. | sinking grade bonds |
| Answer» C. portfolio grade bonds | |
| 32. |
The current market price is multiplied to the conversion rate received on conversion to calculate |
| A. | conversion value |
| B. | current value |
| C. | market value |
| D. | stock value |
| Answer» B. current value | |
| 33. |
The price accepted in single bid auction system is the one which is the |
| A. | most lowest |
| B. | most highest |
| C. | least lowest |
| D. | least highest |
| Answer» B. most highest | |
| 34. |
The non-competitive bids of securities are submitted through the |
| A. | federal savings bank |
| B. | state savings banks |
| C. | Federal Reserve banks |
| D. | state reserve banks |
| Answer» D. state reserve banks | |
| 35. |
The temporary imbalances between operating receipts and operating expenditures are funded with the help of |
| A. | state bonds |
| B. | federal bonds |
| C. | municipal bonds |
| D. | reserve bonds |
| Answer» D. reserve bonds | |
| 36. |
Who are the primary issuers of capital market securities? |
| A. | Federal, local government & corporation |
| B. | Federal corporation |
| C. | government debts |
| D. | stock calculator |
| Answer» B. Federal corporation | |
| 37. |
The coupon payment of bond which is fixed at time of issuance |
| A. | remains same |
| B. | becomes stable |
| C. | becomes change |
| D. | becomes low |
| Answer» B. becomes stable | |
| 38. |
The financial instruments such as treasury bonds and notes have |
| A. | lesser cost fluctuations |
| B. | wider price fluctuations |
| C. | less price fluctuations |
| D. | wider cost fluctuations |
| Answer» C. less price fluctuations | |
| 39. |
The type of bonds in which whole issues get mature on a single date is considered as |
| A. | term bonds |
| B. | under bonds |
| C. | collateral bonds |
| D. | trustworthy bonds |
| Answer» B. under bonds | |
| 40. |
The rate of return on non-callable bonds is $370 and value of issuer option is $250 then the return on callable bond is |
| A. | 120 |
| B. | 0.0148 |
| C. | 620 |
| D. | 1.48 |
| Answer» D. 1.48 | |
| 41. |
The longer debt instrument issued by government and corporations is considered as |
| A. | contraction bonds |
| B. | expansion bonds |
| C. | dollar bonds |
| D. | bonds |
| Answer» E. | |
| 42. |
The type of bonds issued by the governments outside the home country of issuer of bond are classified as |
| A. | outside bonds |
| B. | foreign bonds |
| C. | issuing country bonds |
| D. | denominated bonds |
| Answer» C. issuing country bonds | |
| 43. |
The treasury bills are issued on |
| A. | treasury basis |
| B. | corporate basis |
| C. | premium basis |
| D. | discount basis |
| Answer» E. | |
| 44. |
For the municipal bonds, the initial market is through |
| A. | local placement |
| B. | public offering |
| C. | government placement |
| D. | index placement |
| Answer» C. government placement | |
| 45. |
The foreign bonds, sovereign bonds and Eurobonds are classified as types of |
| A. | local markets |
| B. | state markets |
| C. | international markets |
| D. | national markets |
| Answer» D. national markets | |
| 46. |
The rate of return on non-callable bonds is $890 and value of issuer option is $670 then the return on callable bond is |
| A. | 0.0133 |
| B. | 1560 |
| C. | 220 |
| D. | 1.33 |
| Answer» C. 220 | |
| 47. |
The private placement of issues are considered as |
| A. | registered issue |
| B. | unregistered issue |
| C. | federal issue |
| D. | negotiable issue |
| Answer» C. federal issue | |
| 48. |
If the revenue bonds becomes default, the bondholders must |
| A. | not be paid |
| B. | be paid |
| C. | be sold |
| D. | not be sold |
| Answer» C. be sold | |
| 49. |
In financial markets, the bond indenture results in |
| A. | lower federal rate |
| B. | higher federal rate |
| C. | higher risk |
| D. | lower risk |
| Answer» E. | |
| 50. |
The situation in which the investment bank faces no risk of mispricing regarding security is considered as |
| A. | least good premium |
| B. | least good discount price |
| C. | best efforts offering |
| D. | least good index |
| Answer» D. least good index | |