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.
| 251. |
The current market price of common stock is $15 and the conversion rate received on conversion is $320 to calculate |
| A. | 3800 |
| B. | 2800 |
| C. | 4800 |
| D. | 5800 |
| Answer» D. 5800 | |
| 252. |
The type of bonds that pay no coupon payment but provide little appreciation are classified as |
| A. | depreciated bond |
| B. | interest bond |
| C. | zero coupon bond |
| D. | appreciation bond |
| Answer» D. appreciation bond | |
| 253. |
An official entity that represents the bondholders and ensures the stated rules in indenture is classified as |
| A. | trustee |
| B. | trust |
| C. | stated entity |
| D. | owner entity |
| Answer» B. trust | |
| 254. |
The type of markets which trades underwritten bonds syndicated by some other countries is classified as |
| A. | international markets |
| B. | national markets |
| C. | local markets |
| D. | state markets |
| Answer» B. national markets | |
| 255. |
An increase in interest rate leads to decline in value of |
| A. | junk bonds |
| B. | outstanding bonds |
| C. | standing bonds |
| D. | premium bonds |
| Answer» C. standing bonds | |
| 256. |
The treasury security in which the final principal payment is separated from periodic interest payment is classified as |
| A. | STRIP |
| B. | separated security |
| C. | inflated security |
| D. | coupon paid security |
| Answer» B. separated security | |
| 257. |
The main trading markets of Eurobonds are |
| A. | London and Luxembourg |
| B. | Australian markets |
| C. | Swiss banks counters |
| D. | Asian banks counters |
| Answer» B. Australian markets | |
| 258. |
For a taxable security, the tax exempted interest rate on municipal bonds used to determine the |
| A. | tax equivalent rate of return |
| B. | local rate of return |
| C. | withholding tax rate |
| D. | general sales tax rate |
| Answer» B. local rate of return | |
| 259. |
The financial firms such as mutual fund and insurance companies are also called |
| A. | insured financials |
| B. | guaranteed business |
| C. | credit business |
| D. | business financial |
| Answer» E. | |
| 260. |
The bond's promised rate of return is also considered as |
| A. | yield to earnings |
| B. | yield to investors |
| C. | yield to maturity |
| D. | yield to return |
| Answer» D. yield to return | |
| 261. |
The private placed stock and privately placed bonds are considered as |
| A. | most illiquid securities |
| B. | most liquid securities |
| C. | least liquid securities |
| D. | least illiquid securities |
| Answer» B. most liquid securities | |
| 262. |
The type of bonds which is fully backed by credit and faith of issuer is classified as |
| A. | general obligation tax |
| B. | general obligation savings |
| C. | general obligation bonds |
| D. | general obligation notes |
| Answer» D. general obligation notes | |
| 263. |
The factors considered by rating agencies on issuing bonds are |
| A. | position in industry |
| B. | overall financial strength |
| C. | issuer's profitability and liquidity |
| D. | all of the above |
| Answer» E. | |
| 264. |
The bonds issued by government and backed by U.S government are classified as |
| A. | issued security |
| B. | treasury bonds |
| C. | U.S bonds |
| D. | return security |
| Answer» C. U.S bonds | |
| 265. |
The real risk-free interest rate in addition with an inflation premium is equal to |
| A. | required interest rate |
| B. | quoted risk-free interest rate |
| C. | liquidity risk-free interest rate |
| D. | premium risk-free interest rate |
| Answer» C. liquidity risk-free interest rate | |
| 266. |
A premium which reflects possibility of issuer who does not pay principal amount of bonds is called |
| A. | seasoned risk premium |
| B. | nominal risk premium |
| C. | default risk premium |
| D. | quoted risk premium |
| Answer» D. quoted risk premium | |
| 267. |
The bonds issued by corporations and exposed to default risk are classified as |
| A. | corporation bonds |
| B. | default bonds |
| C. | risk bonds |
| D. | zero risk bonds |
| Answer» B. default bonds | |
| 268. |
The falling interest rate leads change to bondholder income which is |
| A. | reduction in income |
| B. | increment in income |
| C. | matured income |
| D. | frequent income |
| Answer» B. increment in income | |
| 269. |
If the coupon rate is equal to going rate of interest then the bond will be sold |
| A. | at par value |
| B. | below its par value |
| C. | more than its par value |
| D. | seasoned par value |
| Answer» B. below its par value | |
| 270. |
The long period of bond maturity leads to |
| A. | more price change |
| B. | stable prices |
| C. | standing prices |
| D. | mature prices |
| Answer» B. stable prices | |
| 271. |
The second mortgages pledged against bond's security are referred as |
| A. | loan mortgages |
| B. | medium mortgages |
| C. | senior mortgages |
| D. | junior mortgages |
| Answer» E. | |