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. |
According to demand for funds curve, demand curve shifts down and to left if there is decrease in |
| A. | quilibrium supply |
| B. | quilibrium savings |
| C. | quilibrium demand |
| D. | quilibrium interest rate |
| Answer» E. | |
| 2. |
A swap that is used to evade risk of exchange rate exists because of currency mismatching is classified as |
| A. | loating swaps |
| B. | ixed swaps |
| C. | urrency swaps |
| D. | otion swaps |
| Answer» D. otion swaps | |
| 3. |
Situation in which large portion of majority is borrowed from broker of investor is classified as |
| A. | uture investment |
| B. | orward investment |
| C. | everaged investment |
| D. | on-leveraged investment |
| Answer» D. on-leveraged investment | |
| 4. |
Preferred stock is considered as hybrid security because it includes |
| A. | epresentation of ownership interest |
| B. | ixed periodic payment |
| C. | igher liquidity |
| D. | oth a and b |
| Answer» E. | |
| 5. |
Type of swaps in which fixed payments of interest are exchanged by two counterparties for floating payments of interest are called |
| A. | loat-fixed swaps |
| B. | nterest rate swaps |
| C. | ndexed swaps |
| D. | ounter party swaps |
| Answer» C. ndexed swaps | |
| 6. |
Price of an option is subtracted form time value of option to calculate |
| A. | ook value index |
| B. | arket index |
| C. | ntrinsic value |
| D. | xtrinsic value |
| Answer» D. xtrinsic value | |
| 7. |
Consider buying of put option, probability that a buyer would have negative payoff increases with the |
| A. | ncrease in stock price |
| B. | ecrease in stock price |
| C. | ncrease in maturity duration |
| D. | ecrease in maturity duration |
| Answer» B. ecrease in stock price | |
| 8. |
Markets in which derivatives are traded are classified as |
| A. | ssets backed market |
| B. | ash flow backed markets |
| C. | ortgage backed markets |
| D. | erivative securities markets |
| Answer» E. | |
| 9. |
If risk of financial security increases and supply curve shifts to left then impact on equilibrium of interest rate must |
| A. | ecreases |
| B. | ncreases |
| C. | ositive |
| D. | egative |
| Answer» C. ositive | |
| 10. |
Consider call option writing, probability that a buyer would have positive payoff increases with the |
| A. | ncrease in stock price |
| B. | ecrease in stock price |
| C. | ncrease in maturity duration |
| D. | ecrease in maturity duration |
| Answer» C. ncrease in maturity duration | |
| 11. |
Capital gain is subtracted from return to stockholders to calculate |
| A. | eriodic dividend payments |
| B. | onstant spot rate payment |
| C. | onstant forward rate payment |
| D. | onstant future rate payment |
| Answer» B. onstant spot rate payment | |
| 12. |
When price of underlying asset increases then good option is |
| A. | uy call option |
| B. | ell call option |
| C. | uy put option |
| D. | ell put option |
| Answer» B. ell call option | |
| 13. |
Type of contract which involves future exchange of assets at a specified price is classified as |
| A. | uture contracts |
| B. | resent contract |
| C. | pot contract |
| D. | orward contract |
| Answer» E. | |
| 14. |
Firm in which different voting rights are assigned for different classes of stock is classified as |
| A. | ivided class firm |
| B. | ub class firm |
| C. | ual class firm |
| D. | ne class firm |
| Answer» D. ne class firm | |
| 15. |
Indexes in which price of stock of companies listed in stock market index are added together and is divided by an adjusted value are classified as |
| A. | erring indexes |
| B. | roup indexes |
| C. | ohn indexes |
| D. | ow Indexes |
| Answer» E. | |
| 16. |
Intrinsic value of put option is |
| A. | xercise price // stock price |
| B. | xercise price - stock price |
| C. | xercise price + stock price |
| D. | xercise price x stock price |
| Answer» C. xercise price + stock price | |
| 17. |
Difference between net proceeds and gross proceeds is called |
| A. | on-participating spread |
| B. | articipating spread |
| C. | nder writer spread |
| D. | ver writer spread |
| Answer» D. ver writer spread | |
| 18. |
Underwriter spread of stock is added to net proceeds to calculate value of |
| A. | ver writer spread |
| B. | ross proceeds |
| C. | articipation proceeds |
| D. | on participation proceeds |
| Answer» C. articipation proceeds | |
| 19. |
Intrinsic value of an option is $490 and price of underlying asset is $290 then exercise price of an option is |
| A. | 290 |
| B. | 780 |
| C. | 490 |
| D. | 200 |
| Answer» D. 200 | |
| 20. |
Type of option that can be exercised before date of expiration as well as on expiry date is classified as |
| A. | ustralian option |
| B. | merican option |
| C. | uropean option |
| D. | anadian option |
| Answer» C. uropean option | |
| 21. |
Security which has characteristics of common stock and bonds both at same time is classified as |
| A. | referred stock |
| B. | oted stock |
| C. | umulative stock |
| D. | undamental stock |
| Answer» B. oted stock | |
| 22. |
Stock holder who does not have any voting rights in corporation is considered as |
| A. | ub class voter |
| B. | referred stockholder |
| C. | ommon stock holder |
| D. | umulative voter |
| Answer» C. ommon stock holder | |
| 23. |
Position which occurs because of selling floor and buying cap is classified as |
| A. | loating collar |
| B. | ixed collar |
| C. | urrency collar |
| D. | ollar |
| Answer» E. | |
| 24. |
Consider buying call option, if price of stock falls then buyer of call option has |
| A. | igh potential of profit |
| B. | ow potential of profit |
| C. | ow potential of losses |
| D. | igh potential of losses |
| Answer» E. | |
| 25. |
Gross proceeds of stock is $24000 and net proceeds are $35000 then under writers spread is |
| A. | 15,000 |
| B. | 13,500 |
| C. | 16,750 |
| D. | 11,000 |
| Answer» E. | |
| 26. |
According to futures contract, long position states |
| A. | urchase of forward contracts |
| B. | urchase of future contract |
| C. | ale of futures contract |
| D. | ales of forward contracts |
| Answer» C. ale of futures contract | |
| 27. |
Type of preferred stock whose paid dividends are more than promised dividends is classified as |
| A. | on cumulative preferred stock |
| B. | umulative preferred stock |
| C. | on participating preferred stock |
| D. | articipating preferred stock |
| Answer» E. | |
| 28. |
If stock price of call option is $300 and exercise price of call option is $260 then intrinsic value of option is |
| A. | 260 |
| B. | 560 |
| C. | 40 |
| D. | 300 |
| Answer» D. 300 | |
| 29. |
Consider buying put option, if price is lower at expiration date of option then the |
| A. | iquidity will be higher |
| B. | oss will be higher |
| C. | rofit will be lower |
| D. | rofit will be higher |
| Answer» E. | |
| 30. |
Return to stockholders is 15% and periodic dividend payments are 11.5% then gains on capital are |
| A. | .65% |
| B. | .50% |
| C. | .30% |
| D. | .30% |
| Answer» C. .30% | |
| 31. |
Type of liability in which stockholders losses are counted for only invested amount in firm is classified as |
| A. | ounted liability |
| B. | nvested liability |
| C. | nlimited liability |
| D. | imited liability |
| Answer» E. | |
| 32. |
Type of traders who take position in market of futures which is based on expectations of prices of underlying assets are classified as |
| A. | rofessional traders |
| B. | on-investment traders |
| C. | osition traders |
| D. | uture market traders |
| Answer» D. uture market traders | |
| 33. |
Type of voting in which all directors in voting lists are voted at same time is classified as |
| A. | umulative voting |
| B. | on-cumulative voting |
| C. | ual class voting |
| D. | imited voting |
| Answer» B. on-cumulative voting | |
| 34. |
Difference between price of underlying asset and exercise price of option is classified as |
| A. | xtrinsic value of European option |
| B. | ntrinsic value of option |
| C. | xtrinsic value of option |
| D. | ntrinsic value of European option |
| Answer» C. xtrinsic value of option | |
| 35. |
Form of market efficiency in which stock current prices reflects volume information and historic prices of company is classified as |
| A. | eak form of market efficiency |
| B. | trong form of market efficiency |
| C. | emi-strong form market efficiency |
| D. | xpensive form market efficiency |
| Answer» B. trong form of market efficiency | |
| 36. |
Speed with which prices of stocks are adjusted to unexpected news related to interest rates is called |
| A. | ews efficiency |
| B. | djusted efficiency |
| C. | xpected efficiency |
| D. | arket efficiency |
| Answer» E. | |
| 37. |
Type of voting in which owner having half voting shares can elect board of directors is called |
| A. | irectors voting |
| B. | alf voting |
| C. | traight voting |
| D. | wners voting |
| Answer» D. wners voting | |
| 38. |
In interest rate swap transaction, party who pays fixed payments of interest is classified as |
| A. | otion buyer |
| B. | otion seller |
| C. | wap buyer |
| D. | wap seller |
| Answer» D. wap seller | |
| 39. |
Pre-specified price at which underlying asset is bought and sold is called as |
| A. | aturity price |
| B. | trike price |
| C. | xercise price |
| D. | oth b and c |
| Answer» E. | |
| 40. |
Type of exchange members who only buy and sell for their personal account are classified as |
| A. | on-investment traders |
| B. | rofessional traders |
| C. | ommercial traders |
| D. | nvestment traders |
| Answer» C. ommercial traders | |
| 41. |
Type of preferred stock whose dividend payments are never paid to stock holders and are not considered in in arrears is classified as |
| A. | on-participating preferred stock |
| B. | articipating preferred stock |
| C. | on-cumulative preferred stock |
| D. | umulative preferred stock |
| Answer» D. umulative preferred stock | |
| 42. |
Process in which group of investment banks distribute securities is classified as |
| A. | ask groups |
| B. | yndicate |
| C. | nvestment groups |
| D. | ecuritize groups |
| Answer» C. nvestment groups | |
| 43. |
Types of corporate stock that are traded in exchange markets are |
| A. | ommon stock |
| B. | referred stock |
| C. | uoted stock |
| D. | oth a and b |
| Answer» E. | |
| 44. |
Type of trade members who take position for short period of time or sometimes for only few minutes are classified as |
| A. | calpers |
| B. | xplorers |
| C. | emporary position holders |
| D. | rofessional position holders |
| Answer» B. xplorers | |
| 45. |
Call option considering interest rates and have multiple exercise dates is classified as |
| A. | loor |
| B. | ap |
| C. | waps multiplier |
| D. | otion multiplier |
| Answer» C. waps multiplier | |
| 46. |
Intrinsic value of call option is considered as in money if |
| A. | tock price > exercise price |
| B. | tock price < exercise price |
| C. | ond price > treasury price |
| D. | reasury price < bond price |
| Answer» B. tock price < exercise price | |
| 47. |
In syndicate, leading bank which negotiates transaction to issuing bank on behalf of syndicate is called |
| A. | riginating house |
| B. | on originating house |
| C. | nvestment house |
| D. | on securitize house |
| Answer» B. on originating house | |
| 48. |
Stock prices of five companies are $50, $60, $55, $58, $63 then initial value of price weighted index is |
| A. | 60 |
| B. | 57.2 |
| C. | 55 |
| D. | 63 |
| Answer» C. 55 | |
| 49. |
Form of market efficiency which considers speed with which information at public level is impounded in prices of stock is classified as |
| A. | emi-strong form market efficiency |
| B. | xpensive form market efficiency |
| C. | eak form of market efficiency |
| D. | trong form of market efficiency |
| Answer» B. xpensive form market efficiency | |
| 50. |
Type of contract which involves exchange of assets will be occurred in future at price settled daily is classified as |
| A. | pot contract |
| B. | orward contract |
| C. | uture contracts |
| D. | resent contract |
| Answer» D. resent contract | |