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.
| 201. |
The number of covenants related to issued bonds are included in |
| A. | private indenture |
| B. | bond indenture |
| C. | long term indenture |
| D. | federal indenture |
| Answer» C. long term indenture | |
| 202. |
According to the bond holder point of view, the bonds issued with sinking fund provision are classified as |
| A. | floating risk discount |
| B. | less risky |
| C. | more risky |
| D. | floating risk premium |
| Answer» C. more risky | |
| 203. |
An inflation rate including in quoted interest rate on security, is the inflation rate |
| A. | expected over security life |
| B. | expected at deferred call |
| C. | at bond issuance |
| D. | expected at time of maturity |
| Answer» B. expected at deferred call | |
| 204. |
The call premium of bond is $760 and the call price of bond is $560 then face value of the bond is |
| A. | 200 |
| B. | 300 |
| C. | 1320 |
| D. | 0.0138 |
| Answer» B. 300 | |
| 205. |
The face value of the bond is $685 and the call price of bond is $378 then the value of call premium is |
| A. | 307 |
| B. | 1063 |
| C. | 2063 |
| D. | 3063 |
| Answer» B. 1063 | |
| 206. |
If the bond's call provision is practiced in first year of issuance then an additional payment is classified as |
| A. | issuance provision |
| B. | bond provision |
| C. | call provision |
| D. | first provision |
| Answer» D. first provision | |
| 207. |
The call premium of bond is $560 and the call price of bond is $340 then face value of the bond is |
| A. | 1.65 |
| B. | 220 |
| C. | 900 |
| D. | 0.0165 |
| Answer» C. 900 | |
| 208. |
If the coupon rate is more than going rate of interest then the bond will be sold |
| A. | more than its par value |
| B. | seasoned par value |
| C. | at par value |
| D. | below its par value |
| Answer» E. | |
| 209. |
The conversion values is $8500 and the conversion rate received on stock conversion is 430 then current market price of stock is |
| A. | 15.24 |
| B. | 13.24 |
| C. | 20.24 |
| D. | 19.24 |
| Answer» D. 19.24 | |
| 210. |
The bonds that are usually unsecured and are only backed by worthiness of issuing firm are classified as |
| A. | untimed indentures |
| B. | untimed debentures |
| C. | indentures |
| D. | debentures |
| Answer» E. | |
| 211. |
To make the promised payments, the federal money can |
| A. | raise taxes |
| B. | print money |
| C. | increase labor hours |
| D. | both a and b |
| Answer» E. | |
| 212. |
The call premium is $640 and the face value of the bond is $285 then the call price of bonds is |
| A. | 2.25 |
| B. | 355 |
| C. | 925 |
| D. | 0.0225 |
| Answer» D. 0.0225 | |
| 213. |
IN negotiated sale, the services provided by the investment banks are |
| A. | origination services |
| B. | document collection services |
| C. | advising services |
| D. | both a and c |
| Answer» E. | |
| 214. |
The bonds which are classified as junk bond status and have previously considered as investment grade bonds are called |
| A. | risen angel |
| B. | fallen angel |
| C. | fallen devil |
| D. | risen devil |
| Answer» C. fallen devil | |
| 215. |
As compared to Treasury bonds, the trading of municipal bonds in trading market is considered as |
| A. | more index inflation |
| B. | less indexed inflation |
| C. | less active |
| D. | more active |
| Answer» D. more active | |
| 216. |
The bond which is used as insurer to protect investors against the interest rate risk, is classified as |
| A. | zero coupon treasury notes |
| B. | zero coupon treasury bonds |
| C. | One payment bonds |
| D. | zero treasurer bonds |
| Answer» C. One payment bonds | |
| 217. |
The redemption option which protects investors against rise in interest rate is considered as |
| A. | redeemable at deferred |
| B. | redeemable at par |
| C. | redeemable at refund |
| D. | redeemable at finding |
| Answer» C. redeemable at refund | |
| 218. |
In the financial markets, the separate trading of registered interest and principal securities have abbreviation of |
| A. | STORI |
| B. | STRIPS |
| C. | RIAPS |
| D. | STORIAP |
| Answer» C. RIAPS | |
| 219. |
The value of conversion option to bond holder is $550 and the rate of return on non-convertible bond is $270 then rate of return on convertible bond is |
| A. | 0.0204 |
| B. | 2.04 |
| C. | 280 |
| D. | 820 |
| Answer» D. 820 | |
| 220. |
The price of treasury notes and treasury bonds without including accrued interest is classified as |
| A. | clean price |
| B. | full price |
| C. | dirty price |
| D. | accrued price |
| Answer» B. full price | |
| 221. |
The call premium of bond is subtracted from call price of bond to calculate |
| A. | face value of bond |
| B. | face value of stock |
| C. | book value of stock |
| D. | book value of bond |
| Answer» B. face value of stock | |
| 222. |
The financial institutions having loans swapped for bonds can sell all the bonds in |
| A. | under-developed markets |
| B. | developed markets |
| C. | primary markets |
| D. | secondary markets |
| Answer» E. | |
| 223. |
The indexed bonds that are issued by linking payments to inflation are classified as |
| A. | treasury inflation protected securities |
| B. | premium protected securities |
| C. | risk protected securities |
| D. | liquidity protected securities |
| Answer» B. premium protected securities | |
| 224. |
A market interest rate for specific type of bond is classified as bond's |
| A. | required rate of return |
| B. | required option |
| C. | required rate of redemption |
| D. | required rate of earnings |
| Answer» B. required option | |
| 225. |
With the consolidation of currencies, the created liquidity allows the Eurobond |
| A. | price and supply to decrease |
| B. | price and supply to increase |
| C. | demand and size to decrease |
| D. | demand and size to increase |
| Answer» E. | |
| 226. |
In firm commitment underwriting, the securities issued are then sold to investors at relatively |
| A. | higher price |
| B. | lower price |
| C. | indexed price |
| D. | commercial price |
| Answer» B. lower price | |
| 227. |
The bonds with coupon are attached to the bond for paying the interest when it becomes due are classified as |
| A. | trustee bonds |
| B. | local bonds |
| C. | bearer bonds |
| D. | nearer bonds |
| Answer» D. nearer bonds | |
| 228. |
The value of option issued to call debt is subtracted from rate of return on callable bond to calculate the rate of return on |
| A. | contributed bonds |
| B. | non-callable bonds |
| C. | callable bonds |
| D. | discounted bonds |
| Answer» C. callable bonds | |
| 229. |
The market in which bonds are traded over-the-counter than in an organized exchange is classified as |
| A. | organized markets |
| B. | trade markets |
| C. | counter markets |
| D. | bond markets |
| Answer» E. | |
| 230. |
The reason of default risk on municipal bonds is because of |
| A. | economic recession |
| B. | economically indexed |
| C. | not economically indexed |
| D. | active trading |
| Answer» B. economically indexed | |
| 231. |
As compared to unsecured bonds, the mortgage bonds are considered as |
| A. | more risky |
| B. | less risky |
| C. | term risk |
| D. | serial risk |
| Answer» C. term risk | |
| 232. |
The bonds that can be exchanged with the other stock issued by the same firm are classified as |
| A. | discount convertible bonds |
| B. | convertible bonds |
| C. | non-convertible bonds |
| D. | premium convertible bonds |
| Answer» C. non-convertible bonds | |
| 233. |
The yields of the municipal bonds is |
| A. | after tax rate of return |
| B. | before tax rate of return |
| C. | corporative rate of return |
| D. | federal rate of return |
| Answer» B. before tax rate of return | |
| 234. |
In the US treasury, the inflation indexed bond is classified as |
| A. | treasury inflation protection securities |
| B. | treasury inflation protection notes |
| C. | treasury inflation commercial papers |
| D. | inflation coupon protection securities |
| Answer» B. treasury inflation protection notes | |
| 235. |
An inflation rate included in the bond's interest rate is the one which is the inflation rate |
| A. | at bond issuance |
| B. | expected in future |
| C. | expected at time of maturity |
| D. | expected at deferred call |
| Answer» C. expected at time of maturity | |
| 236. |
Considering the coupon rate, the Brady bonds pay |
| A. | higher than traditional |
| B. | lower than promised |
| C. | higher than promise |
| D. | lower than traditional |
| Answer» C. higher than promise | |
| 237. |
Considering the ratings, the bonds that have lowest spread of interest as compared to similar maturity in Treasury Securities are classified as |
| A. | triple B rating bonds |
| B. | triple A rating bonds |
| C. | double A rating bonds |
| D. | double A rating bonds |
| Answer» C. double A rating bonds | |
| 238. |
The bond call provision that is not practiced even after several years of issuance is classified as |
| A. | original provision |
| B. | deferred call |
| C. | deferred provision |
| D. | permanent provision |
| Answer» C. deferred provision | |
| 239. |
The stated value of the bonds or the face value is considered as |
| A. | state value |
| B. | par value |
| C. | bond value |
| D. | per value |
| Answer» C. bond value | |
| 240. |
The call premium is added to face value of the bond to calculate |
| A. | call price of bond |
| B. | premium price of bond |
| C. | call price of stock |
| D. | discounted price of stock |
| Answer» B. premium price of bond | |
| 241. |
The convertible bonds are considered as hybrid bonds because they have properties of |
| A. | debts |
| B. | common equity |
| C. | both debt and equity |
| D. | ordinate and subordinated |
| Answer» D. ordinate and subordinated | |
| 242. |
The bonds issued by small companies tend to have |
| A. | high liquidity premium |
| B. | high inflation premium |
| C. | high default premium |
| D. | high yield premium |
| Answer» B. high inflation premium | |
| 243. |
According to top rating agencies S&P the triple-A and double-A rating bonds are classified as an |
| A. | extremely discounted |
| B. | extremely safe |
| C. | extremely risky |
| D. | extremely inflated |
| Answer» C. extremely risky | |
| 244. |
The value of conversion option to bond holder is $740 and the rate of return on non-convertible bond is $540 then rate of return on convertible bond is |
| A. | 0.0137 |
| B. | 1280 |
| C. | 1.37 |
| D. | 200 |
| Answer» E. | |
| 245. |
The interest rate on Eurobonds are paid |
| A. | monthly |
| B. | quarterly |
| C. | annually |
| D. | semiannually |
| Answer» D. semiannually | |
| 246. |
The STRIPS are used effectively to receive |
| A. | One set of payment |
| B. | Two sets of payments |
| C. | Three sets of payments |
| D. | Four sets of payments |
| Answer» B. Two sets of payments | |
| 247. |
The specific day at which bond value is repaid can be considered as |
| A. | valued date |
| B. | repayment date |
| C. | payment date |
| D. | maturity date |
| Answer» E. | |
| 248. |
The treasury bonds are exposed to additional risks and include |
| A. | reinvestment risk |
| B. | interest rate risk |
| C. | investment risk |
| D. | both a and b |
| Answer» E. | |
| 249. |
The bonds having zero default risk are classified as |
| A. | U.S bonds |
| B. | return security |
| C. | issued security |
| D. | treasury bonds |
| Answer» E. | |
| 250. |
The foreign bonds issued in Japan financial institutions are classified as |
| A. | bull dog bonds |
| B. | bull cat bonds |
| C. | Yankee bonds |
| D. | samurai bonds |
| Answer» E. | |