MCQOPTIONS
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MCQOPTIONS
This section includes 2436 Mcqs, each offering curated multiple-choice questions to sharpen your Commerce knowledge and support exam preparation. Choose a topic below to get started.
| 1201. |
According to put call parity relationship, call option plus present value of exercise price minus stock is to calculate |
| A. | resent value of option |
| B. | all option |
| C. | ut option |
| D. | uture value of option |
| Answer» D. uture value of option | |
| 1202. |
In financial planning, formula MAX [current price of stock-strike price, 0] is used to calculate |
| A. | ption return rate |
| B. | xercise value |
| C. | ption value |
| D. | tock value |
| Answer» C. ption value | |
| 1203. |
If current price increases from lower to higher then an |
| A. | ption value equal to one |
| B. | ption value will increase |
| C. | ption value will decrease |
| D. | ption value equal to zero |
| Answer» C. ption value will decrease | |
| 1204. |
Value of stock is Rs 1000 and current value of portfolio is Rs 1500 then obligation to cover call option will be |
| A. | s 6,667.00 |
| B. | s 2,500.00 |
| C. | s 2,000.00 |
| D. | s 500.00 |
| Answer» E. | |
| 1205. |
An investor who buys shares and writes a call option on stock is classified as |
| A. | ut investor |
| B. | all investor |
| C. | edger |
| D. | olatile hedge |
| Answer» D. olatile hedge | |
| 1206. |
Present value of portfolio is Rs 1300 and current value of stock in portfolio is Rs 2300 then current option price will be |
| A. | s 3,600.00 |
| B. | s 1,000.00 |
| C. | s 1,250.00 |
| D. | s 1,500.00 |
| Answer» C. s 1,250.00 | |
| 1207. |
Present value of portfolio is Rs 500 and current option price is Rs 1200 then value of stock included in portfolio will be |
| A. | s 1,700.00 |
| B. | Rs 1,700.00 |
| C. | s 700.00 |
| D. | Rs 700.00 |
| Answer» B. Rs 1,700.00 | |
| 1208. |
A type of contract in which contract holder has right to sell an asset at specific period for predetermining price is classified as |
| A. | ption |
| B. | ritten contract |
| C. | etermined contract |
| D. | eatured contract |
| Answer» B. ritten contract | |
| 1209. |
Third step in binomial approach of option pricing is to |
| A. | qualize beginning price |
| B. | qualize range of payoffs |
| C. | qualize domain of payoff |
| D. | qualize ending price |
| Answer» C. qualize domain of payoff | |
| 1210. |
An increase in value of option leads to low present value of exercise cost only if it has |
| A. | ow volatility |
| B. | nterest rates are high |
| C. | nterest rates are low |
| D. | igh volatility |
| Answer» C. nterest rates are low | |
| 1211. |
Second step in binomial approach of option pricing is to define range of values |
| A. | t expiration |
| B. | t buying date |
| C. | t exchange closing time |
| D. | t exchange opening time |
| Answer» B. t buying date | |
| 1212. |
High portfolio return is 6.5% and low portfolio return is 3.0% then HML portfolio will be |
| A. | .16% |
| B. | .50% |
| C. | .50% |
| D. | .4615 times |
| Answer» D. .4615 times | |
| 1213. |
Stock portfolio with highest book to market ratios is considered as |
| A. | portfolio |
| B. | portfolio |
| C. | portfolio |
| D. | to M portfolio |
| Answer» B. portfolio | |
| 1214. |
Tendency of people to blame failure on bad luck but given tribute of success to themselves is classified as |
| A. | elf-attribution bias |
| B. | elf-success bias |
| C. | elf-failure bias |
| D. | elf-condition bias |
| Answer» B. elf-success bias | |
| 1215. |
First step in determining an efficient portfolio is to consider |
| A. | et of attainable portfolios |
| B. | et of unattainable portfolios |
| C. | et of attributable portfolios |
| D. | et of attributable portfolios |
| Answer» B. et of unattainable portfolios | |
| 1216. |
In financial planning, most high option price will lead to |
| A. | onger option period |
| B. | maller option period |
| C. | esser price |
| D. | igher price |
| Answer» B. maller option period | |
| 1217. |
Current value of stock included in portfolio is subtracted from current option price to calculate |
| A. | uture value of stock |
| B. | resent value of portfolio |
| C. | uture value of portfolio |
| D. | resent value of stock |
| Answer» C. uture value of portfolio | |
| 1218. |
According to put call parity relationship, a call option minus put option in addition with present value of exercise is equal to |
| A. | inomial property |
| B. | onstant property |
| C. | onstant and variable property |
| D. | tock |
| Answer» E. | |
| 1219. |
An investor who writes stock call options in his own portfolio is classified as |
| A. | ue option |
| B. | overed option |
| C. | ndue option |
| D. | ncovered option |
| Answer» C. ndue option | |
| 1220. |
Difference between actual return on stock and predicted return is considered as |
| A. | robability error |
| B. | ctual error |
| C. | rediction error |
| D. | andom error |
| Answer» E. | |
| 1221. |
Second factor in Fama French three factor model is the |
| A. | ize of industry |
| B. | ize of market |
| C. | ize of company |
| D. | ize of portfolio |
| Answer» D. ize of portfolio | |
| 1222. |
Slope coefficient of beta is classified statistically significant if its probability is |
| A. | reater than 5% |
| B. | qual to 5% |
| C. | ess than 5% |
| D. | ess than 2% |
| Answer» D. ess than 2% | |
| 1223. |
An average return of portfolio divided by its coefficient of beta is classified as |
| A. | harpe's reward to variability ratio |
| B. | reynor's reward to volatility ratio |
| C. | ensen's alpha |
| D. | reynor's variance to volatility ratio |
| Answer» C. ensen's alpha | |
| 1224. |
In arbitrage pricing theory, required returns are functioned of two factors which have |
| A. | ividend policy |
| B. | arket risk |
| C. | istorical policy |
| D. | oth A and B |
| Answer» E. | |
| 1225. |
In regression of capital asset pricing model, an intercept of excess returns is classified as |
| A. | harpe's reward to variability ratio |
| B. | enor's reward to volatility ratio |
| C. | ensen's alpha |
| D. | enor's variance to volatility ratio |
| Answer» D. enor's variance to volatility ratio | |
| 1226. |
An indication in a way that variance of y-variable is explained by x-variable which is shown as |
| A. | egree of dispersion is one |
| B. | egree of dispersion is two |
| C. | egree of dispersion is three |
| D. | egree of dispersion is four |
| Answer» B. egree of dispersion is two | |
| 1227. |
An unsystematic risk which can be eliminated but market risk is the |
| A. | ggregate risk |
| B. | emaining risk |
| C. | ffective risk |
| D. | neffective risk |
| Answer» C. ffective risk | |
| 1228. |
Beta reflects stock risk for investors which is usually |
| A. | ndividual |
| B. | ollective |
| C. | eighted |
| D. | inear |
| Answer» B. ollective | |
| 1229. |
Present value of portfolio Rs 850 and current option price Rs 1620 then value of stock included in portfolio would be |
| A. | s 190.00 |
| B. | s 880.00 |
| C. | s 770.00 |
| D. | s 2,470.00 |
| Answer» D. s 2,470.00 | |
| 1230. |
First step in binomial approach of option pricing is to |
| A. | efine ending price of stock |
| B. | efine beginning price of stock |
| C. | efine range of values |
| D. | efine domain of values |
| Answer» B. efine beginning price of stock | |
| 1231. |
If stock market price is higher than strike price so call option |
| A. | rice will be lower |
| B. | ate will be higher |
| C. | rice will be higher |
| D. | ate will be lower |
| Answer» D. ate will be lower | |
| 1232. |
Current value of stock including in portfolio is subtracted from present value of portfolio to calculate |
| A. | ast month option price |
| B. | ast year option price |
| C. | urrent option price |
| D. | uture option price |
| Answer» D. uture option price | |
| 1233. |
Value of option which is considered as its worth as soon as it is expired is classified as |
| A. | inimum option value |
| B. | inimum value |
| C. | aximum value |
| D. | xercise value |
| Answer» E. | |
| 1234. |
Variability of stock price, option term to maturity and risk free rate are dependents of |
| A. | rice of an option |
| B. | xpiry of an option |
| C. | xercise of an option |
| D. | stimation of an option |
| Answer» B. xpiry of an option | |
| 1235. |
Movement of price or rise or fall of prices of options is classified as |
| A. | ption lattice |
| B. | ricing movement |
| C. | rice change |
| D. | inomial lattice |
| Answer» E. | |
| 1236. |
Input call parity relationship, put option minus call option in addition with stock is equal to |
| A. | xercise price present value |
| B. | xercise price future value |
| C. | ime line value |
| D. | ime value of bond |
| Answer» B. xercise price future value | |
| 1237. |
Type of option which cannot be exercised before an expiry date which is classified as |
| A. | uropean option |
| B. | merican option |
| C. | ustralian option |
| D. | oney option |
| Answer» B. merican option | |
| 1238. |
According to Black Scholes model, purchaser can borrow fraction of security at risk free interest rate which is |
| A. | hort term |
| B. | ong term |
| C. | ransaction cost |
| D. | o transaction cost |
| Answer» B. ong term | |
| 1239. |
Short term sources are |
| A. | ank credit |
| B. | ublic deposit |
| C. | ommercial papers |
| D. | ll of the above |
| Answer» D. ll of the above | |
| 1240. |
Net working capital is the excess of current asset over ____________. |
| A. | urrent liability |
| B. | et liability |
| C. | otal payable |
| D. | otal liability |
| Answer» B. et liability | |
| 1241. |
Which of the following would not be considered as capital market security? |
| A. | corporate bond |
| B. | common stock |
| C. | 6-month Treasury bill |
| D. | mutual fund share |
| Answer» D. mutual fund share | |
| 1242. |
The cost of capital of a long term debt is generally. |
| A. | ower than the owned funds |
| B. | qual to that of owned funds |
| C. | ore or less than owned funds |
| D. | igher than that of owned funds |
| Answer» E. | |
| 1243. |
If an investor states that Intel is overvalued at 65 times, he is referring to___________. |
| A. | arnings per share |
| B. | ividend yield |
| C. | ook value |
| D. | /E ratio |
| Answer» E. | |
| 1244. |
Long term fund sources are ___________. |
| A. | etained earnings |
| B. | ebentures |
| C. | hare capital |
| D. | ll of the above |
| Answer» E. | |
| 1245. |
Savings accounts are___________ but are not__________. |
| A. | egotiable; liquid |
| B. | arketable; liquid |
| C. | iquid; personal |
| D. | iquid; marketable |
| Answer» E. | |
| 1246. |
The decision to invest a substantial sum in any business venture expecting to earn a minimum return is called ____________. |
| A. | orking capital decision |
| B. | n investment decision |
| C. | production decision |
| D. | sales decision |
| Answer» C. production decision | |
| 1247. |
EBIT is usually the same thing as. |
| A. | unds provided by operations |
| B. | arnings before taxes |
| C. | et income |
| D. | perating profit |
| Answer» E. | |
| 1248. |
Operating leverage x Financial leverage =________ |
| A. | ombined Leverage |
| B. | inancial Combined Leverage |
| C. | perating Combined Leverage |
| D. | ixed leverage |
| Answer» B. inancial Combined Leverage | |
| 1249. |
Traditional approach confines finance function only to _________ funds |
| A. | aising |
| B. | obilizing |
| C. | tilizing |
| D. | inancing |
| Answer» B. obilizing | |
| 1250. |
Financial leverage helps one to estimate ____________. |
| A. | usiness risk |
| B. | inancial risk |
| C. | oth risks |
| D. | roduction risk |
| Answer» C. oth risks | |