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.
| 51. |
The debt which depict the historical accumulated record of federal government expenditures is classified as |
| A. | national debt |
| B. | international debt |
| C. | global debt |
| D. | contraction debt |
| Answer» B. international debt | |
| 52. |
The names of foreign bonds are used to denote |
| A. | country of premium |
| B. | country of origin |
| C. | country of selling |
| D. | country of discount |
| Answer» C. country of selling | |
| 53. |
The type of Eurobonds which are convertible are considered as |
| A. | related to international market |
| B. | related to equity |
| C. | related to common stock |
| D. | related to national market |
| Answer» C. related to common stock | |
| 54. |
The type of bonds that have tangible property as a collateral are classified as |
| A. | collateral security |
| B. | commercial trust notes |
| C. | equipment trust certificates |
| D. | equipment bonds |
| Answer» D. equipment bonds | |
| 55. |
When characteristics of bonds are perceived as unfavorable or favorable to the holders of the bond, then differences of yield spread |
| A. | must not changes |
| B. | must changes |
| C. | must be debited |
| D. | must be credited |
| Answer» C. must be debited | |
| 56. |
The investors who want cash flows in near terms shows preference for |
| A. | interest portion of RIAPS |
| B. | interest portion of STORI |
| C. | interest portion of STRIPS |
| D. | interest portion of bonds |
| Answer» D. interest portion of bonds | |
| 57. |
Besides the equity related bonds, the type of Eurobonds that are convertible are classified as |
| A. | bonds with interbank rate |
| B. | bonds with intra market rate |
| C. | bonds with equity warrants |
| D. | bonds with common stock |
| Answer» D. bonds with common stock | |
| 58. |
The dimensions in bonds markets are |
| A. | treasury notes and bonds |
| B. | corporate bonds |
| C. | municipal bonds |
| D. | all of the above |
| Answer» E. | |
| 59. |
In the dimension of default risk, the municipal bonds are considered as |
| A. | default risk free |
| B. | not default risk free |
| C. | not indexed |
| D. | must be indexed |
| Answer» C. not indexed | |
| 60. |
The information about the sovereign borrowers and corporate borrowers is generated by the |
| A. | bond rating agencies |
| B. | bond issuance agencies |
| C. | federal placement |
| D. | private pavement agencies |
| Answer» B. bond issuance agencies | |
| 61. |
The coupon payment is calculated with the help of interest rate, then this rate considers as |
| A. | payment interest |
| B. | par interest |
| C. | coupon interest |
| D. | yearly interest rate |
| Answer» D. yearly interest rate | |
| 62. |
The risk associated with Eurobonds and usually bears by underwriters is related to |
| A. | company annual sale |
| B. | future sale of bonds |
| C. | past sale of bonds |
| D. | initial sale of bond |
| Answer» E. | |
| 63. |
The conversion values is $9500 and the conversion rate received on stock conversion is 460 then current market price of stock is |
| A. | 12.65 |
| B. | 15.65 |
| C. | 17.65 |
| D. | 20.65 |
| Answer» E. | |
| 64. |
The marginal income tax rate is 28% and before tax rate of return is 14.5% then the after tax rate of return is |
| A. | 0.0744 |
| B. | 0.0844 |
| C. | 0.0944 |
| D. | 0.1044 |
| Answer» E. | |
| 65. |
The call premium of bond is $630 and the call price of bond is $240 then face value of the bond is |
| A. | 0.0263 |
| B. | 870 |
| C. | 390 |
| D. | 2.63 |
| Answer» D. 2.63 | |
| 66. |
The Eurobonds are issued by financial firms to |
| A. | avoid taxes |
| B. | avoid interest hike |
| C. | avoid high floating rate |
| D. | avoid portfolio issues |
| Answer» B. avoid interest hike | |
| 67. |
The bonds that are not pledged against revenue stream or specific assets are classified as |
| A. | general obligation bonds |
| B. | general obligation notes |
| C. | general obligation tax |
| D. | general obligation savings |
| Answer» B. general obligation notes | |
| 68. |
The corporate bonds are also considered as |
| A. | trustee bonds |
| B. | registered bonds |
| C. | unregistered bonds |
| D. | indenture bonds |
| Answer» C. unregistered bonds | |
| 69. |
The issuance of securities in which investment bank does not guarantee back up price and act as distributor, in planning of issue is considered as |
| A. | best efforts offering |
| B. | least good index |
| C. | least good premium |
| D. | least good discount price |
| Answer» B. least good index | |
| 70. |
The treasury securities are exempted from |
| A. | federal taxes |
| B. | local and state taxes |
| C. | federal discounts |
| D. | deferral premium |
| Answer» B. local and state taxes | |
| 71. |
For municipal bonds, the trading in secondary markets are classified as |
| A. | infrequent origination |
| B. | static trading |
| C. | frequent trading |
| D. | infrequent trading |
| Answer» E. | |
| 72. |
The foreign bonds issued in United Kingdom financial institutions are classified as |
| A. | Yankee bonds |
| B. | samurai bonds |
| C. | bull dog bonds |
| D. | Euro bonds |
| Answer» D. Euro bonds | |
| 73. |
If the default probability is zero and the bond is not called then the yield to maturity is |
| A. | mature expected return rate |
| B. | lower than expected return rate |
| C. | higher than expected return rate |
| D. | equal to expected return rate |
| Answer» E. | |
| 74. |
The municipal bonds are traded to finance |
| A. | short term capital outlays |
| B. | long term capital outlays |
| C. | long term finance outlays |
| D. | long term bonds outlays |
| Answer» C. long term finance outlays | |
| 75. |
To improve the attractiveness for investors, the bonds are partially backed by |
| A. | US.T-Bonds |
| B. | UK-T-Bonds |
| C. | UK-B-bonds |
| D. | US-B-Bonds |
| Answer» B. UK-T-Bonds | |
| 76. |
The value of option issued to call debt is $940 and return rate on callable bond is $480 then return rate on non-callable bond is |
| A. | 460 |
| B. | 1520 |
| C. | 1420 |
| D. | 1620 |
| Answer» B. 1520 | |
| 77. |
The debentures that are considered as junior bonds as compared to debentures and mortgage bonds are classified as |
| A. | subordinated debentures |
| B. | ordinate debentures |
| C. | expansion debentures |
| D. | premium debentures |
| Answer» B. ordinate debentures | |
| 78. |
When the bonds are called and redeem, they must be ceased to |
| A. | earn interest |
| B. | pay interest |
| C. | earn floating rate |
| D. | earn funding rate |
| Answer» B. pay interest | |
| 79. |
In firm commitment underwriting procedure, the more risk is at the side of |
| A. | investment bank |
| B. | insurance firm |
| C. | reissuing firm |
| D. | reselling firm |
| Answer» B. insurance firm | |
| 80. |
The foreign bonds issued in United States financial institutions are classified as |
| A. | bull dog bonds |
| B. | bull cat bonds |
| C. | Yankee bonds |
| D. | samurai bonds |
| Answer» D. samurai bonds | |
| 81. |
The bonds rated lower than triple-B bonds by the 'Standard and Poor's' are considered as |
| A. | split bonds |
| B. | automated bonds |
| C. | junk bonds |
| D. | sinking bonds |
| Answer» D. sinking bonds | |
| 82. |
The requirement of certain amount of issued bond that must be retired every year is classified as |
| A. | sinking fund provision |
| B. | sinking fund premium |
| C. | sinking fund discount |
| D. | floating fund provision |
| Answer» B. sinking fund premium | |
| 83. |
In the capital markets, the instruments which are traded having maturity of more than one year is classified as |
| A. | contraction mortgages |
| B. | bonds and mortgages |
| C. | expansion bonds |
| D. | expansion mortgages |
| Answer» C. expansion bonds | |
| 84. |
The auction of the TIPS security is classified as |
| A. | premium bid auction |
| B. | discount bid auction |
| C. | multiple bid auction |
| D. | One bid auction |
| Answer» E. | |
| 85. |
The Eurobonds are traded in |
| A. | only in issuing country |
| B. | stagnant exchange |
| C. | telephonic market |
| D. | over the counter market |
| Answer» E. | |
| 86. |
The source of funds for the repayment of municipal bonds is considered as |
| A. | local tax and revenue |
| B. | global tax and revenue |
| C. | print notes |
| D. | commercial notes |
| Answer» B. global tax and revenue | |
| 87. |
The bond which is denominated in dollars and is issued in European financial markets is considered as |
| A. | Australian bonds |
| B. | Eurobonds |
| C. | interbank bonds |
| D. | interbank bonds |
| Answer» C. interbank bonds | |
| 88. |
The securities with the lower default risk and having highest credit quality are assigned the rating of |
| A. | double B |
| B. | triple B |
| C. | triple A |
| D. | double A |
| Answer» D. double A | |
| 89. |
The rate of return on non-callable bonds is added into value of issuer option to calculate |
| A. | return on assets |
| B. | return on callable bond |
| C. | return on non-callable bonds |
| D. | return on equity |
| Answer» C. return on non-callable bonds | |
| 90. |
The bond holder can make profit by returning the bonds and exchanging with other securities, if market value with conversion value |
| A. | exceed non-convertible value |
| B. | exceed collateral value |
| C. | exceed mortgage value |
| D. | exceeds market value of bond |
| Answer» E. | |
| 91. |
The type of bonds in which there are many maturity dates and part of issue is paid off at every maturity date is considered as |
| A. | pledged bonds |
| B. | serial bonds |
| C. | series bonds |
| D. | parallel bonds |
| Answer» C. series bonds | |
| 92. |
The holders of debentures receive their payments or bonds yields only after the holders of |
| A. | registered debt holders |
| B. | secured debt holders |
| C. | unsecured debt holders |
| D. | unregistered debt holders |
| Answer» C. unsecured debt holders | |
| 93. |
The currency in which the Eurobonds are denominated is decided by the |
| A. | buyers of bond |
| B. | issuers of bonds |
| C. | close market prices |
| D. | open market prices |
| Answer» C. close market prices | |
| 94. |
The exchange markets and over the counter markets are considered as two types of |
| A. | floating market |
| B. | risky market |
| C. | secondary market |
| D. | primary market |
| Answer» D. primary market | |
| 95. |
The call premium is $456 and the face value of the bond is $234 then the call price of bonds is |
| A. | 1.95 |
| B. | 0.0195 |
| C. | 222 |
| D. | 690 |
| Answer» E. | |
| 96. |
As compared to general obligation bonds, the revenue bonds are considered as |
| A. | more inflated |
| B. | less inflated |
| C. | less risky |
| D. | more risky |
| Answer» E. | |
| 97. |
Considering the bonds characteristics, the corporate and treasury bonds have many |
| A. | different characteristics |
| B. | similar characteristics |
| C. | nearer characteristics |
| D. | bearer characteristics |
| Answer» B. similar characteristics | |
| 98. |
The marginal income tax rate is 46.8% and before tax rate of return is 15.5% then the after tax rate of return is |
| A. | 0.0725 |
| B. | 0.08246 |
| C. | 0.1025 |
| D. | 0.0925 |
| Answer» C. 0.1025 | |
| 99. |
According to marketability feature, the bonds which are attached to stock warrants have |
| A. | decreased floatation |
| B. | increased floatation |
| C. | increased marketability |
| D. | decreased marketability |
| Answer» D. decreased marketability | |
| 100. |
The firms that attach bonds to the stock warrants are usually |
| A. | less discounted |
| B. | more risky |
| C. | less risky |
| D. | more discounted |
| Answer» C. less risky | |