MCQOPTIONS
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MCQOPTIONS
This section includes 657 Mcqs, each offering curated multiple-choice questions to sharpen your Testing Subject knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
“ A debenture is a document which either creates a debt or acknowledge it” . who said? |
| A. | Justice Chitty |
| B. | Tophan’s Company law |
| C. | J. Betty |
| D. | Hoston D |
| Answer» B. Tophan’s Company law | |
| 2. |
Which of the following costs is not associated with inventories? |
| A. | Material cost |
| B. | Ordering cost |
| C. | Carrying cost |
| D. | Cost of long term debt locked in inventories |
| Answer» E. | |
| 3. |
Specific day at which bond value is repaid can be considered as |
| A. | alued date |
| B. | epayment date |
| C. | ayment date |
| D. | aturity date |
| Answer» E. | |
| 4. |
Type of bonds that are issued by foreign governments or foreign corporations are classified as |
| A. | ero risk bonds |
| B. | ero bonds |
| C. | oreign bonds |
| D. | overnment bonds |
| Answer» D. overnment bonds | |
| 5. |
Bonds that can be converted into shares of common stock are classified as |
| A. | onvertible bonds |
| B. | tock bonds |
| C. | hared bonds |
| D. | ommon bonds |
| Answer» B. tock bonds | |
| 6. |
According to top rating agencies S&P triple-A and double-A rating bonds are classified as an |
| A. | xtremely discounted |
| B. | xtremely safe |
| C. | xtremely risky |
| D. | xtremely inflated |
| Answer» C. xtremely risky | |
| 7. |
An interest rate which is used in calculation of cash flows of bonds is called |
| A. | equired rate of redemption |
| B. | equired rate of earning |
| C. | equired rate of return |
| D. | equired option |
| Answer» D. equired option | |
| 8. |
Required rate of return in calculating bond's cash flow is also classified as |
| A. | oing rate of return |
| B. | ield |
| C. | arning rate |
| D. | oth A and B |
| Answer» E. | |
| 9. |
Bond that has been issued in very recent timing is classified as |
| A. | ature issue |
| B. | arning issue |
| C. | ew issue |
| D. | ecent issue |
| Answer» D. ecent issue | |
| 10. |
Right held with corporations to call issued bonds for redemption is considered as |
| A. | rtificial provision |
| B. | all provision |
| C. | edeem provision |
| D. | riginal provision |
| Answer» C. edeem provision | |
| 11. |
Bonds having zero default risk are classified as |
| A. | .S bonds |
| B. | eturn security |
| C. | ssued security |
| D. | reasury bonds |
| Answer» E. | |
| 12. |
Bonds with deferred call have protection which is classified as |
| A. | rovision protection |
| B. | rovision protection |
| C. | eferred protection |
| D. | all protection |
| Answer» E. | |
| 13. |
Maturity date decides at time of issuance of bond and legally permissible is classified as |
| A. | riginal maturity |
| B. | ermanent maturity |
| C. | rtificial maturity |
| D. | alued maturity |
| Answer» B. ermanent maturity | |
| 14. |
Value generally promises to pay at maturity date and a firm borrows is considered as bonds |
| A. | ond value |
| B. | er value |
| C. | tate value |
| D. | ar value |
| Answer» E. | |
| 15. |
Price of an outstanding bond decreases when market rate is |
| A. | ncreased |
| B. | ecreased |
| C. | arned |
| D. | ever changed |
| Answer» B. ecreased | |
| 16. |
Legal document in which rights of issuing corporation and bondholder's state is classified as |
| A. | egal rights classification |
| B. | ndenture |
| C. | wnership statement |
| D. | uarantee statement |
| Answer» C. wnership statement | |
| 17. |
Bonds issued by government and backed by U.S government are classified as |
| A. | ssued security |
| B. | reasury bonds |
| C. | .S bonds |
| D. | eturn security |
| Answer» C. .S bonds | |
| 18. |
A premium which reflects possibility of issuer who does not pay principal amount of bonds is called |
| A. | easoned risk premium |
| B. | ominal risk premium |
| C. | efault risk premium |
| D. | uoted risk premium |
| Answer» D. uoted risk premium | |
| 19. |
Bond's promised rate of return is also considered as |
| A. | ield to earning |
| B. | ield to investors |
| C. | ield to maturity |
| D. | ield to return |
| Answer» D. ield to return | |
| 20. |
Coupon rate of bond is also called |
| A. | ominal rate |
| B. | remium rate |
| C. | uoted rate |
| D. | oth a and c |
| Answer» E. | |
| 21. |
In call provision, it is stated that company will pay to issue an amount |
| A. | igher than par value |
| B. | ower than par value |
| C. | qual to par value |
| D. | ero to par value |
| Answer» B. ower than par value | |
| 22. |
Type of bonds that pays no coupon payment but provides little appreciation are classified as |
| A. | epreciated bond |
| B. | nterest bond |
| C. | ero coupon bond |
| D. | ppreciation bond |
| Answer» D. ppreciation bond | |
| 23. |
Type of bond which pays interest payment only when it earns is classified as |
| A. | ncome bond |
| B. | nterest bond |
| C. | ayment bond |
| D. | arning bond |
| Answer» B. nterest bond | |
| 24. |
Value of stock is Rs 250 and call option obligation is Rs 100 then current value of portfolio would be |
| A. | s 125.00 |
| B. | s 150.00 |
| C. | s 350.00 |
| D. | s 2.50 |
| Answer» C. s 350.00 | |
| 25. |
An option that gives investors right to sell a stock at predefined price is classified as |
| A. | ut option |
| B. | all option |
| C. | oney back options |
| D. | ut of money options |
| Answer» B. all option | |
| 26. |
Input call parity relationship, present value of exercise price is added to call option which is equal to |
| A. | ut option stock |
| B. | all option + stock |
| C. | all option + market price |
| D. | ut option + market price |
| Answer» B. all option + stock | |
| 27. |
Situation in financial options in which strike price is less than current price of stock is classified as |
| A. | n-the-money |
| B. | ut-of-the-money |
| C. | ut-of-the-portfolio |
| D. | n-the-portfolio |
| Answer» B. ut-of-the-money | |
| 28. |
Stated value of bonds or face value is considered as |
| A. | tate value |
| B. | ar value |
| C. | ond value |
| D. | er value |
| Answer» C. ond value | |
| 29. |
An interest yield = 7.9% and capital gains yield = 2.5% then total rate of return is |
| A. | 0.00% |
| B. | .16% |
| C. | .31% |
| D. | .40% |
| Answer» B. .16% | |
| 30. |
Bonds issued by small companies tend to have |
| A. | igh liquidity premium |
| B. | igh inflation premium |
| C. | igh default premium |
| D. | igh yield premium |
| Answer» B. igh inflation premium | |
| 31. |
At last day when European and American option can be exercised is classified as |
| A. | uropean date |
| B. | merican date |
| C. | xpiration date |
| D. | oney date |
| Answer» D. oney date | |
| 32. |
An excess of actual price of option over an exercise value of option is classified as |
| A. | ime value options |
| B. | ctual options |
| C. | stimated options |
| D. | ptional pricing |
| Answer» B. ctual options | |
| 33. |
According to exercise value and option price, market value of option will be zero when |
| A. | tock price is maximum |
| B. | ption price is zero |
| C. | tock price is zero |
| D. | tock price is minimum |
| Answer» D. tock price is minimum | |
| 34. |
In binomial approach of option pricing model, value of stock is subtracted from call option obligation value to calculate |
| A. | urrent value of portfolio |
| B. | uture value of portfolio |
| C. | ut option value |
| D. | all option value |
| Answer» B. uture value of portfolio | |
| 35. |
Long-term equity anticipation security is usually classified as |
| A. | hort-term options |
| B. | ong-term options |
| C. | hort money options |
| D. | early call |
| Answer» C. hort money options | |
| 36. |
Yield on Treasury bill with a maturity is classified as a risk free rate but must be equal to an |
| A. | ption closing price |
| B. | ption beginning price |
| C. | ption expiration |
| D. | ption model |
| Answer» D. ption model | |
| 37. |
An exercise of option in future and part of option call value depends specifically on |
| A. | V of exercising cost |
| B. | V of exercising cost |
| C. | V of cost volatility |
| D. | V of cost volatility |
| Answer» B. V of exercising cost | |
| 38. |
According to Black Schools model, stocks with call option pays the |
| A. | ividends |
| B. | o dividends |
| C. | urrent price |
| D. | ast price |
| Answer» C. urrent price | |
| 39. |
Bond call provision that is not practiced even after several years of issuance is classified as |
| A. | riginal provision |
| B. | eferred call |
| C. | eferred provision |
| D. | ermanent provision |
| Answer» C. eferred provision | |
| 40. |
According to top rating agencies S&P double-B and other lower grade bonds are classified as |
| A. | evelopment bonds |
| B. | unk bonds |
| C. | ompounded bonds |
| D. | iscounted bonds |
| Answer» C. ompounded bonds | |
| 41. |
Bonds that do not pay original coupon payment but payment is made from additional bonds are classified as |
| A. | ayment in-kind bonds |
| B. | ayment off-kind bonds |
| C. | ind payment |
| D. | dditional bond |
| Answer» B. ayment off-kind bonds | |
| 42. |
An effect of interest rate risk and investment risk on a bond's yield is classified as |
| A. | einvestment premium |
| B. | nvestment risk premium |
| C. | aturity risk premium |
| D. | efaulter's premium |
| Answer» D. efaulter's premium | |
| 43. |
Coupon payment is calculated with help of interest rate, then this rate considers as |
| A. | ayment interest |
| B. | ar interest |
| C. | oupon interest |
| D. | early interest rate |
| Answer» D. early interest rate | |
| 44. |
Market in which bonds are traded over-the-counter than in an organized exchange is classified as |
| A. | rganized markets |
| B. | rade markets |
| C. | ounter markets |
| D. | ond markets |
| Answer» E. | |
| 45. |
An inflation rate including in quoted interest rate on security, is inflation rate |
| A. | xpected over security life |
| B. | xpected at deferred call |
| C. | t bond issuance |
| D. | xpected at time of maturity |
| Answer» B. xpected at deferred call | |
| 46. |
If market interest rate fall below coupon rate then bond will be sold |
| A. | elow its par value |
| B. | bove its par value |
| C. | qual to return rate |
| D. | easoned price |
| Answer» C. qual to return rate | |
| 47. |
Reinvestment risk of bonds is usually higher on |
| A. | ncome bonds |
| B. | allable bonds |
| C. | remium bonds |
| D. | efault free bonds |
| Answer» C. remium bonds | |
| 48. |
Rate of return (in percentages) is consists of |
| A. | apital gain yield interest yield |
| B. | eturn yield + stable yield |
| C. | eturn yield + instable yield |
| D. | ar value + market value |
| Answer» B. eturn yield + stable yield | |
| 49. |
If default probability is zero and bond is not called then yield to maturity is |
| A. | ature expected return rate |
| B. | ower than expected return rate |
| C. | igher than expected return rate |
| D. | qual to expected return rate |
| Answer» E. | |
| 50. |
Long period of bond maturity leads to |
| A. | ore price change |
| B. | table prices |
| C. | tanding prices |
| D. | ature prices |
| Answer» B. table prices | |