MCQOPTIONS
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MCQOPTIONS
This section includes 749 Mcqs, each offering curated multiple-choice questions to sharpen your Master of Arts in Economics (M.A. Economics) knowledge and support exam preparation. Choose a topic below to get started.
| 101. |
The value of one unit of investment in Mutual fund is called the _______________. |
| A. | Net Asset Value |
| B. | Issue value |
| C. | Market value |
| D. | Gross Asset value |
| Answer» B. Issue value | |
| 102. |
In the 'walking stick' hypothesis, the yield curve slopes: |
| A. | down and then up |
| B. | down |
| C. | up |
| D. | up and then down |
| Answer» E. | |
| 103. |
Money lent in the inter-bank market for 15 days or more is called ----------- |
| A. | Call money |
| B. | Term money |
| C. | Money at short notice |
| D. | All the above |
| Answer» C. Money at short notice | |
| 104. |
Rolling Settlement system was introduced by SEBI in the year |
| A. | 1994 |
| B. | 1998 |
| C. | 1996 |
| D. | 1999 |
| Answer» C. 1996 | |
| 105. |
Which of the following types of assets offers the highest expected return? |
| A. | Stocks. |
| B. | Long-term government bonds. |
| C. | Options and futures. |
| D. | Long-term corporate bonds. |
| Answer» B. Long-term government bonds. | |
| 106. |
————— represent claims for the payment of a sum of money sometimes in the futureand/or a periodic payment in the form of interest or dividend. |
| A. | Physical asset |
| B. | Fixed asset |
| C. | Financial asset |
| D. | All the above |
| Answer» D. All the above | |
| 107. |
The market which helps commercial banks to maintain their SLR requirement is |
| A. | Call loan market |
| B. | T-bills market |
| C. | Acceptance market |
| D. | Commercial bill market |
| Answer» B. T-bills market | |
| 108. |
According to the liquidity preference theory of interest, an increase in uncertainty, otherthings being equal, will: |
| A. | Decrease output and employment |
| B. | Increase risk aversion |
| C. | Reduce the demand for money |
| D. | Raise interest rates |
| Answer» E. | |
| 109. |
Financial institutions: |
| A. | provide access to the financial markets. |
| B. | are also known as financial intermediaries. |
| C. | include banks, insurance companies, securities firms, and pension funds. |
| D. | include all of the above. |
| Answer» C. include banks, insurance companies, securities firms, and pension funds. | |
| 110. |
Bonds that are sold in a foreign country and are denominated in that country’s currency are known as |
| A. | Foreign bonds. |
| B. | Eurobonds. |
| C. | Eurocurrencies. |
| D. | Eurodollars. |
| Answer» B. Eurobonds. | |
| 111. |
Which of the following are secondary markets? |
| A. | The New York Stock Exchange |
| B. | The U.S. government bond market |
| C. | The over-the-counter stock markets |
| D. | All of the above |
| Answer» E. | |
| 112. |
..................... is an unsecured short term promissory note issued by creditworthycompanies? |
| A. | commercial pape |
| B. | interbank participation certificate |
| C. | Repo |
| D. | Certificate of deposit |
| Answer» B. interbank participation certificate | |
| 113. |
..................... is a market for bankers’ acceptances |
| A. | discount market |
| B. | CDs market |
| C. | Interbank participation market |
| D. | Acceptance market |
| Answer» E. | |
| 114. |
Securities backed by _______ layed an important role in the financial crisis of 2007- 2009? |
| A. | asset backed securities. |
| B. | bonds. |
| C. | sub-prime mortgages. |
| D. | small business loans |
| Answer» D. small business loans | |
| 115. |
The lending ability of commercial bank increases when |
| A. | Reserve ratio is increased |
| B. | RBI credit is reduced |
| C. | RBI sells government securities |
| D. | None of the above |
| Answer» E. | |
| 116. |
An important financial institution that assists in the initial sale of securities in the primary market is the |
| A. | investment bank |
| B. | commercial bank. |
| C. | stock exchange. |
| D. | brokerage house |
| Answer» B. commercial bank. | |
| 117. |
Neo- Classical theory of interest was expounded by------------ |
| A. | Prof. Fisher |
| B. | Alfred Marshall |
| C. | Knot Wicksel |
| D. | JB Clark |
| Answer» D. JB Clark | |
| 118. |
Loanable Fund theory is also known as----------- |
| A. | Classical theory |
| B. | Neo-classical theory |
| C. | Demand and Supply theory |
| D. | Productivity theory |
| Answer» C. Demand and Supply theory | |
| 119. |
A central bank which sets the short-term rate of interest must: |
| A. | Buy treasury bills |
| B. | Meet the resulting demand for reserves |
| C. | Sell government bonds |
| D. | Change the reserve ratios |
| Answer» C. Sell government bonds | |
| 120. |
..................... is a process of admitting securities for trading on a recognised stock exchange. |
| A. | Registration |
| B. | filing |
| C. | listing |
| D. | admission |
| Answer» D. admission | |
| 121. |
Financial markets improve economic welfare because |
| A. | they allow funds to move from those without productive investment opportunities to those who have such opportunities. |
| B. | they allow consumers to time their purchases better. |
| C. | they weed out inefficient firms. |
| D. | they do (A) and (B) of the above. |
| Answer» E. | |
| 122. |
The concept of adverse selection helps to explain |
| A. | which firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets. |
| B. | why indirect finance is more important than direct finance as a source of business finance. |
| C. | why direct finance is more important than indirect finance as a source of business finance. |
| D. | only (A) and (B) of the above. |
| Answer» E. | |
| 123. |
SEBI has launched an online registration system for? |
| A. | REITs |
| B. | InvITs |
| C. | P-notes |
| D. | Only a and b |
| Answer» E. | |
| 124. |
---------- bills are drawn by contractors on the government departments for the goods suppliedby them. |
| A. | Usance bills |
| B. | T-bills |
| C. | Clean bills |
| D. | Supply bills |
| Answer» E. | |
| 125. |
According to --------- theory of interest, the rate of Interest is the price of credit which isdetermined by the demand and supply for loanable funds. |
| A. | Loanable Fund theory |
| B. | Productivity theory |
| C. | Abstinence theory |
| D. | None of these |
| Answer» B. Productivity theory | |
| 126. |
Any company making a public issue of value of more than Rs. ———— is required to file adraft offer document with SEBI. |
| A. | 100 lakh |
| B. | 25 lakh |
| C. | 50 lakh |
| D. | 10 lakh |
| Answer» D. 10 lakh | |
| 127. |
The presence of in financial markets leads to adverse selection and moral hazard problems that interfere with the efficient functioning of financial markets. |
| A. | noncollateralized risk |
| B. | free-riding |
| C. | asymmetric information |
| D. | costly state verification |
| Answer» D. costly state verification | |
| 128. |
ICICI was set up in ........................ |
| A. | 1955 |
| B. | 1964 |
| C. | 1989 |
| D. | 1935 |
| Answer» B. 1964 | |
| 129. |
Business finance companies provide specialized forms of credit to businesses by making loans and purchasing accounts receivable at a discount; this provision of credit is called |
| A. | discounting. |
| B. | factoring. |
| C. | refinancing |
| D. | sparking. |
| Answer» C. refinancing | |
| 130. |
Which of the following statements is true with regard to financial markets? |
| A. | They link the households which save funds and business firms which invest these funds. |
| B. | They work as an intermediary between the savers and the investors by mobilising funds between them. |
| C. | They allocate funds available for investment into their most productive investment opportunity. |
| D. | All of the above |
| Answer» E. | |
| 131. |
Intermediaries who link buyers and sellers by buying and selling securities at stated prices are called |
| A. | investment bankers. |
| B. | traders |
| C. | brokers |
| D. | dealers |
| Answer» E. | |
| 132. |
Which of the following statements is not true with regard to stock exchange? |
| A. | It provides a platform for buying and selling of new securities. |
| B. | It curbs the marketability of the securities. |
| C. | By providing a ready market, it extends liquidity to the securities. |
| D. | It provides a platform for buying and selling of old securities.` |
| Answer» C. By providing a ready market, it extends liquidity to the securities. | |
| 133. |
The process of holding shares in electronic form is known as |
| A. | Demutualisation |
| B. | Dematerialisation |
| C. | Speculation |
| D. | None of the above |
| Answer» C. Speculation | |
| 134. |
------------ market deals in unlisted securities |
| A. | Blue chip market |
| B. | Bear market |
| C. | Grey market |
| D. | Bull market |
| Answer» D. Bull market | |
| 135. |
The facility to carry forward a transaction from one settlement period to another is called --------- transaction |
| A. | Hand delivery |
| B. | Badla |
| C. | Cornering |
| D. | Arbitrage |
| Answer» C. Cornering | |
| 136. |
Which of the following statements is not true with regard to primary market? |
| A. | Is also known as the old issues market. |
| B. | It facilitates the transfer of investible funds from savers to entrepreneurs. |
| C. | It deals with new securities being issued for the first time. |
| D. | It facilitates the transfer of investible funds from savers to entrepreneurs. |
| Answer» B. It facilitates the transfer of investible funds from savers to entrepreneurs. | |
| 137. |
Forward Market Commission (FMC) established in the year----------- |
| A. | 1948 |
| B. | 1964 |
| C. | 1953 |
| D. | 1952 |
| Answer» D. 1952 | |
| 138. |
Bonds that are sold in a foreign country and are denominated in a currency other than that of the country in which they are sold are known as |
| A. | foreign bonds. |
| B. | Eurobonds. |
| C. | Euro-currencies. |
| D. | Eurodollars. |
| Answer» C. Euro-currencies. | |
| 139. |
Which of the following statements is not true with regard to capital market? |
| A. | The funds are raised for a short period of time. |
| B. | Both debt and equity funds can be raised. |
| C. | It is classified into two types. |
| D. | All of the above |
| Answer» B. Both debt and equity funds can be raised. | |
| 140. |
A corporation acquires new funds only when its securities are sold |
| A. | in the secondary market by an investment bank. |
| B. | in the primary market by an investment bank. |
| C. | in the secondary market by a stock exchange broker. |
| D. | in the secondary market by a commercial bank. |
| Answer» C. in the secondary market by a stock exchange broker. | |
| 141. |
Using a supply and demand framework, what is likely to happen to share prices in general if the central bank unexpectedly raises interest rates? |
| A. | The demand curve shifts to the left. |
| B. | The supply curve shifts to the left. |
| C. | Both curves shift outwa |
| Answer» B. The supply curve shifts to the left. | |
| 142. |
Which of the following gives long term finance? |
| A. | IDBI |
| B. | ICICI |
| C. | IFCI |
| D. | All the above |
| Answer» E. | |
| 143. |
-------- is a permission to quote securities officially on the trading floor of stock exchange |
| A. | Origination |
| B. | Underwriting |
| C. | Distribution |
| D. | Listing |
| Answer» E. | |
| 144. |
Raj Enterprises wishes to invest ₹1,10,000 in treasury bills. What is the maximumnumber of treasury bills it can buy with this fund? |
| A. | 6 |
| B. | 7 |
| C. | 4 |
| D. | 2 |
| Answer» D. 2 | |
| 145. |
Which of the following is not a protective function of stock exchange? |
| A. | Prohibition of fraudulent and unfair trade practices. |
| B. | Controlling insider trading. |
| C. | Regulation of takeover bids by companies. |
| D. | Promotion of fair practices and code of conduct in securities market. |
| Answer» D. Promotion of fair practices and code of conduct in securities market. | |
| 146. |
Which of the following is the disadvantage of SEBI |
| A. | Ease of Trading |
| B. | Tax saving |
| C. | Money Laundering |
| D. | All of them |
| Answer» B. Tax saving | |
| 147. |
It is a market for short-term funds which deals in monetary assets whose period ofmaturity is up to one year. |
| A. | Primary market |
| B. | Secondary market |
| C. | Capital market |
| D. | Money market |
| Answer» C. Capital market | |
| 148. |
IDBI was established in ........................ |
| A. | 1948 |
| B. | 1954 |
| C. | 1992 |
| D. | 1964 |
| Answer» E. | |
| 149. |
____________ is also called zero coupon bond. |
| A. | Trade bills |
| B. | Call money |
| C. | Treasury bills |
| D. | Commercial papers |
| Answer» D. Commercial papers | |
| 150. |
A "hybrid" fund is one that: |
| A. | invests in both bonds and stocks |
| B. | started as a closed-end investment company, but changed to a mutual fund |
| C. | has different "loads" for different classes of investors in the fund |
| D. | can serve as an investment vehicle, but also provides check-writing privileges. |
| Answer» D. can serve as an investment vehicle, but also provides check-writing privileges. | |