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.
| 101. |
The bonds issued by corporations for relatively longer term are classified as |
| A. | long term bonds |
| B. | short term bonds |
| C. | corporate bonds |
| D. | Federal Reserve bonds |
| Answer» D. Federal Reserve bonds | |
| 102. |
The difference between face value of the bond and the call price of the bond is considered as |
| A. | call premium |
| B. | call provision |
| C. | discount premium |
| D. | discount provision |
| Answer» B. call provision | |
| 103. |
The rules and regulations placed on bond holders and bond issuers are classified in |
| A. | bond covenants |
| B. | private covenants |
| C. | federal covenants |
| D. | expansion covenants |
| Answer» B. private covenants | |
| 104. |
The bonds used in purpose of specific projects which are financed by the collateral for issuing bonds are classified as |
| A. | indenture bonds |
| B. | trustee bonds |
| C. | collateral bonds |
| D. | mortgage bonds |
| Answer» E. | |
| 105. |
The type of bonds which does not have U.S treasury as collateral and are swapped for outstanding loans are classified as |
| A. | collateral bonds |
| B. | sovereign bonds |
| C. | primary bonds |
| D. | secondary bonds |
| Answer» C. primary bonds | |
| 106. |
The bonds issued for longer term and must be sold in the country whose currency is not used in denomination of bonds are classified as |
| A. | interbank bonds |
| B. | intrabank bonds |
| C. | Australian bonds |
| D. | Eurobonds |
| Answer» E. | |
| 107. |
The face value of the bond is $550 and the call price of bond is $475 then the value of call premium is |
| A. | 1.16 |
| B. | 1025 |
| C. | 75 |
| D. | 0.0116 |
| Answer» D. 0.0116 | |
| 108. |
If market interest rate fells below the coupon rate then the bond will be sold |
| A. | below its par value |
| B. | above its par value |
| C. | equal to return rate |
| D. | seasoned price |
| Answer» C. equal to return rate | |
| 109. |
In financial markets, the STRIPS are also classified as |
| A. | treasury KIBOR notes |
| B. | treasury KIBOR bonds |
| C. | treasury zero coupon bonds |
| D. | treasury LIBOR bonds |
| Answer» D. treasury LIBOR bonds | |
| 110. |
The Eurobonds are placed for buying and selling in primary markets by the |
| A. | investment banks |
| B. | commercial banks |
| C. | euro transfer agencies |
| D. | currency deposit banks |
| Answer» B. commercial banks | |
| 111. |
The legal contract which states the legal rights of seller and buyer is classified as |
| A. | long term indenture |
| B. | federal indenture |
| C. | private indenture |
| D. | bond indenture |
| Answer» E. | |
| 112. |
The coupon payment accrued between last payment and settlement date is classified as |
| A. | paid interest |
| B. | unpaid interest |
| C. | zero interest |
| D. | accrued interest |
| Answer» E. | |
| 113. |
The principal amount in the Treasury Inflation Protection Securities is considered as |
| A. | tax adjusted principal |
| B. | inflation adjusted principal |
| C. | auction adjusted principal |
| D. | premium adjusted principal |
| Answer» C. auction adjusted principal | |
| 114. |
The types of notes and bonds issued by Treasury are |
| A. | fixed principal |
| B. | inflation indexed |
| C. | coupon index |
| D. | both a and b |
| Answer» E. | |
| 115. |
If the price of municipal bonds suddenly changes because of an unexpected interest rate change then the investment bank |
| A. | faces a high profit |
| B. | faces a loss |
| C. | face a inflation |
| D. | face an index risk |
| Answer» C. face a inflation | |
| 116. |
According to best efforts offering, the investment bank in return of providing services must |
| A. | not receive fee |
| B. | receive fee |
| C. | receive interest rate |
| D. | receive market rate of return |
| Answer» C. receive interest rate | |
| 117. |
The type of rating which all the credit rating agencies do not consider is classified as |
| A. | split rating |
| B. | sinking rating |
| C. | automated rating |
| D. | floating rating |
| Answer» B. sinking rating | |
| 118. |
The reinvestment risk of bond's is usually higher on |
| A. | income bonds |
| B. | callable bonds |
| C. | premium bonds |
| D. | default free bonds |
| Answer» C. premium bonds | |
| 119. |
The promised payments on the Eurobonds will be paid in the |
| A. | currency of denomination |
| B. | currency of home country |
| C. | currency of Australia |
| D. | currency of local market |
| Answer» B. currency of home country | |
| 120. |
The maturity date decides at the time of issuance of bond and legally permissible is classified as |
| A. | original maturity |
| B. | permanent maturity |
| C. | artificial maturity |
| D. | valued maturity |
| Answer» B. permanent maturity | |
| 121. |
The type of provision which forces bond holders to sell bonds to issuer at value above than par is classified as |
| A. | discount premium |
| B. | discount provision |
| C. | call premium |
| D. | call provision |
| Answer» E. | |
| 122. |
Considering the yields of bonds, the secured bonds as compared to unsecured bonds have |
| A. | higher yields |
| B. | lower yields |
| C. | untimed yields |
| D. | termed yields |
| Answer» B. lower yields | |
| 123. |
The year in which the Eurobonds are issued for the first time in financial markets is |
| A. | 1963 |
| B. | 1953 |
| C. | 1983 |
| D. | 1962 |
| Answer» B. 1953 | |
| 124. |
If the price at which stock is purchased exceeds the market value then the stock warrants will |
| A. | be exercised |
| B. | not be exercised |
| C. | be discounted |
| D. | not be discounted |
| Answer» B. not be exercised | |
| 125. |
The bonds issued by local and state governments with default risk are |
| A. | municipal bonds |
| B. | corporation bonds |
| C. | default bonds |
| D. | zero bonds |
| Answer» B. corporation bonds | |
| 126. |
If the trading of municipal bonds is infrequent, then secondary market is considered as |
| A. | thin markets |
| B. | thick markets |
| C. | higher underwriting |
| D. | lower underwriting |
| Answer» B. thick markets | |
| 127. |
The value of conversion option to bond holder is $220 and the rate of return on non-convertible bond is $350 then rate of return on convertible bond is |
| A. | 570 |
| B. | 130 |
| C. | 670 |
| D. | 1.59 |
| Answer» C. 670 | |
| 128. |
The bonds having longer maturity on original loans than promised payments are classified as |
| A. | developed bonds |
| B. | developing bonds |
| C. | Brady bonds |
| D. | swapped bonds |
| Answer» D. swapped bonds | |
| 129. |
The placement of financial issue in which investment bank and municipality together find the large buyers is classified as |
| A. | reserve placement |
| B. | federal placement |
| C. | private placement |
| D. | government placement |
| Answer» D. government placement | |
| 130. |
The issued bond which is considered as hybrid bond is called |
| A. | non-convertible bonds |
| B. | premium convertible bonds |
| C. | discount convertible bonds |
| D. | convertible bonds |
| Answer» E. | |
| 131. |
The junk bonds which are rated lower than triple B are also classified as |
| A. | high yield bonds |
| B. | low yield bonds |
| C. | zero floating bonds |
| D. | high floating rate bonds |
| Answer» B. low yield bonds | |
| 132. |
The issues sold by investment banks and guarantees the issuer by buying new issue at fixed price is classified as |
| A. | index commitment underwriting |
| B. | insurance underwriting |
| C. | default risk underwriting |
| D. | firm commitment underwriting |
| Answer» E. | |
| 133. |
The bonds that are considered as junk bonds and termed as higher yield are classified as |
| A. | expansion debentures |
| B. | premium debentures |
| C. | subordinated debentures |
| D. | ordinate debentures |
| Answer» D. ordinate debentures | |
| 134. |
The Eurobonds are denominated in only one currency which is |
| A. | Canadian dollars |
| B. | us dollars |
| C. | Euros |
| D. | Japanese yen |
| Answer» D. Japanese yen | |
| 135. |
The suppliers and demanders of the long term investment funds work closely in |
| A. | bond markets |
| B. | classical set markets |
| C. | open end markets |
| D. | close end markets |
| Answer» B. classical set markets | |
| 136. |
The sum of purchase price and the accrued interest on treasury bonds and notes is considered as |
| A. | dirty price |
| B. | clean price |
| C. | paid price |
| D. | unpaid price |
| Answer» B. clean price | |
| 137. |
The value generally promises to pay at maturity date and a firm borrows is considered as bond's |
| A. | bond value |
| B. | per value |
| C. | state value |
| D. | par value |
| Answer» E. | |
| 138. |
The tax free bonds issue for the welfare by industrial agencies or pollution control agencies are classified as |
| A. | agent bonds |
| B. | development bonds |
| C. | pollution control bonds |
| D. | both b and c |
| Answer» E. | |
| 139. |
The price of an outstanding bond decreases when the market rate is |
| A. | increased |
| B. | decreased |
| C. | earned |
| D. | never changed |
| Answer» B. decreased | |
| 140. |
The rate of interest which is usually discussed by investors whenever the rate of return is discussed, is classified as |
| A. | yield to maturity |
| B. | yield to return |
| C. | yield to earnings |
| D. | yield to investors |
| Answer» B. yield to return | |
| 141. |
The legal document in which the rights of issuing corporation and bondholders state is classified as |
| A. | legal rights classification |
| B. | indenture |
| C. | ownership statement |
| D. | guarantee statement |
| Answer» C. ownership statement | |
| 142. |
An interest rate which is used in the calculation of cash flows of bonds is called |
| A. | required rate of redemption |
| B. | required rate of earnings |
| C. | required rate of return |
| D. | required option |
| Answer» D. required option | |
| 143. |
The bonds that can be converted into the shares of common stock are classified as |
| A. | convertible bonds |
| B. | stock bonds |
| C. | shared bonds |
| D. | common bonds |
| Answer» B. stock bonds | |
| 144. |
The rate on debt that increases as soon as the market rises is classified as |
| A. | rising bet rate |
| B. | floating rate debt |
| C. | market rate debt |
| D. | stable debt rate |
| Answer» C. market rate debt | |
| 145. |
The required rate of return in calculating bond's cash flow is also classified as |
| A. | going rate of return |
| B. | yield |
| C. | earnings rate |
| D. | both a and b |
| Answer» E. | |
| 146. |
When the price of bond is calculated below its par value, it is classified as |
| A. | classified bond |
| B. | discount bond |
| C. | compound bond |
| D. | consideration earnings |
| Answer» C. compound bond | |
| 147. |
The type of options that permit the bond holder to buy stocks at stated price are classified as |
| A. | provision |
| B. | guarantee |
| C. | warrants |
| D. | convertibles |
| Answer» D. convertibles | |
| 148. |
The bond that has been issued in very recent timing is classified as |
| A. | mature issue |
| B. | earnings issue |
| C. | new issue |
| D. | recent issue |
| Answer» D. recent issue | |
| 149. |
The right held with the corporations to call the issued bonds for redemption is considered as |
| A. | artificial provision |
| B. | call provision |
| C. | redeem provision |
| D. | original provision |
| Answer» C. redeem provision | |
| 150. |
The type of provision which allows an orderly retirement of an issued bond is classified as |
| A. | whole call provision |
| B. | super fund provision |
| C. | floating fund provision |
| D. | sinking fund provision |
| Answer» E. | |