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. |
The bond markets are important because. |
| A. | they are easily the most widely followed financial markets in the United States |
| B. | they are the markets where foreign exchange rates are determined |
| C. | they are the markets where interest rates are determined |
| D. | they are the markets without risk |
| Answer» D. they are the markets without risk | |
| 2. |
The forward market is especially well-suited to offer hedging protection against. |
| A. | translation risk exposure |
| B. | transactions risk exposure |
| C. | political risk exposure |
| D. | taxation |
| Answer» C. political risk exposure | |
| 3. |
The operating risk in the host country does not include the risk of. |
| A. | change in the government policies |
| B. | exchange control |
| C. | price control |
| D. | sanctions |
| Answer» E. | |
| 4. |
Foreign Exchange Regulation Act was replaced with The Foreign Exchange Management Act in the year. |
| A. | 1973 |
| B. | 1994 |
| C. | 1999 |
| D. | 1995 |
| Answer» B. 1994 | |
| 5. |
The legal settlement of international trade disputes is. |
| A. | Negotiation |
| B. | Arbitration |
| C. | Litigation |
| D. | Conciliation |
| Answer» B. Arbitration | |
| 6. |
Equilibrium interest rate increases and economic conditions decreases then supply curve must shift to |
| A. | down and to left |
| B. | down and to right |
| C. | up and to left |
| D. | up and to right |
| Answer» D. up and to right | |
| 7. |
Suppliers, funds consumers, foreign and government intervening intermediaries are classified as participants of |
| A. | financial markets |
| B. | setting interest arte |
| C. | setting compounding rate |
| D. | setting savings rate |
| Answer» B. setting interest arte | |
| 8. |
Interest rate equilibrium is increased and supply curve of funds shifts to left or upward is result of |
| A. | increase in future value |
| B. | decrease in future value |
| C. | increase in total wealth |
| D. | decrease in total wealth |
| Answer» E. | |
| 9. |
Repurchase price is subtracted from selling price divided by selling price and multiplied to 360 by number of days Up to maturity to calculate |
| A. | repurchase agreement yields |
| B. | purchase agreement yields |
| C. | repurchase yields |
| D. | transaction yields |
| Answer» B. purchase agreement yields | |
| 10. |
Repurchase price is $380, selling price is $310 and number of days till maturity are 4 then yield of repurchase agreement is 2500 |
| A. | 9.58% |
| B. | 11.58% |
| C. | 16.58% |
| D. | 12.58% |
| Answer» D. 12.58% | |
| 11. |
In Capital Market Line every investment is |
| A. | infinitely divisible |
| B. | finitely divisible |
| C. | a & b |
| D. | all of answer correct |
| Answer» B. finitely divisible | |
| 12. |
Hold two securities as an alternative of will not decrease hazard occupied by an investor if two securities are |
| A. | perfectively positive correlated |
| B. | perfectively negative correlated |
| C. | no correlation |
| D. | all of answer correct |
| Answer» B. perfectively negative correlated | |
| 13. |
Economic period in which banks have excess funds is classified as |
| A. | functional time line |
| B. | contract timing |
| C. | contraction period |
| D. | expansionary periods |
| Answer» D. expansionary periods | |
| 14. |
Financial instruments traded in money markets are then traded in |
| A. | money markets |
| B. | capital markets |
| C. | debt markets |
| D. | economic markets |
| Answer» C. debt markets | |
| 15. |
Deposit issued by bank, usually negotiable and have specific maturity date and interest rate is classified as |
| A. | indirect certificate |
| B. | direct certificate |
| C. | negotiable certificate |
| D. | deposit certificate |
| Answer» D. deposit certificate | |
| 16. |
Commercial papers cannot be converted in to cash with easy and quick transactions because of lack of |
| A. | organized secondary markets |
| B. | organized primary market |
| C. | organized interest markets |
| D. | organized money markets |
| Answer» B. organized primary market | |
| 17. |
Retail certificate of deposits which are not traded have face value of |
| A. | $250,000 |
| B. | $100,000 |
| C. | $150,000 |
| D. | $200,000 |
| Answer» C. $150,000 | |
| 18. |
The transactions that came into being when borrowing and lending of excess money occurs are considered as |
| A. | annual funds transaction |
| B. | liable funds transactions |
| C. | federal funds transaction |
| D. | functional funds transaction |
| Answer» D. functional funds transaction | |
| 19. |
Federal reserve, money market brokers and dealers, mutual funds and US treasury are all participants of |
| A. | liquid markets |
| B. | money markets |
| C. | transaction markets |
| D. | functional markets |
| Answer» C. transaction markets | |
| 20. |
Short term promissory notes and are unsecured, not collateralized against securities is classified as |
| A. | notes payable |
| B. | notes receivable |
| C. | commercial paper |
| D. | commercial notes |
| Answer» D. commercial notes | |
| 21. |
Maturity of debt instruments which faces more price fluctuations is |
| A. | primary maturity |
| B. | capital maturity |
| C. | short term maturity |
| D. | long term maturity |
| Answer» E. | |
| 22. |
Issuers that are not involved directly in funds transferring are classified as |
| A. | individual issuers |
| B. | corporate issuers |
| C. | local issuers |
| D. | global issuers |
| Answer» C. local issuers | |
| 23. |
Process of selling and buying of stocks and bonds is classified as |
| A. | s-trade |
| B. | b-trade |
| C. | e-trade |
| D. | stock trade |
| Answer» D. stock trade | |
| 24. |
Type of security backed by mortgage cash flows and are packed by financial instruments is classified as |
| A. | cash mortgage |
| B. | securitized mortgage |
| C. | financial mortgage |
| D. | instrumental mortgage |
| Answer» C. financial mortgage | |
| 25. |
Currency in which Eurobonds are denominated is decided by |
| A. | buyers of bond |
| B. | issuers of bonds |
| C. | close market prices |
| D. | open market prices |
| Answer» C. close market prices | |
| 26. |
Example of derivative securities includes |
| A. | swap contract |
| B. | option contract |
| C. | futures contract |
| D. | all of above |
| Answer» E. | |
| 27. |
Type of market in which securities with less than one year maturity are traded is classified as |
| A. | money market |
| B. | capital market |
| C. | transaction market |
| D. | global market |
| Answer» B. capital market | |
| 28. |
International Monetary Fund formal existence came into being in |
| A. | 12-05-44 |
| B. | 27-07-44 |
| C. | 27-12-45 |
| D. | 27-09-45 |
| Answer» D. 27-09-45 | |
| 29. |
The primary component of the current account is the. |
| A. | balance of trade |
| B. | balance of money market flows |
| C. | balance of capital market flows |
| D. | unilateral transfers |
| Answer» B. balance of money market flows | |
| 30. |
Syndication of loans is done in |
| A. | Eurocredit market |
| B. | Eurobond market |
| C. | Euronote market |
| D. | All the above |
| Answer» B. Eurobond market | |
| 31. |
Factors considered by rating agencies on issuing bonds are |
| A. | position in industry |
| B. | overall financial strength |
| C. | issuer |
| D. | all of above |
| Answer» E. | |
| 32. |
Type of risk in which value of liabilities and assets is affected by exchange rate is classified as |
| A. | economic rates |
| B. | foreign exchange risk |
| C. | selling rate |
| D. | buying rates |
| Answer» C. selling rate | |
| 33. |
Negotiable deposit certificate are traded in |
| A. | secondary markets |
| B. | primary markets |
| C. | direct markets |
| D. | indirect markets |
| Answer» B. primary markets | |
| 34. |
Rate of return on non-callable bonds is $890 and value of issuer option is $670 then return on callable bond is |
| A. | 1.33% |
| B. | $1,560 |
| C. | $220 |
| D. | $1.33 |
| Answer» C. $220 | |
| 35. |
Fixed price at which stock is purchased from issuer by investment banks is called |
| A. | non-cumulative proceeds |
| B. | net proceeds |
| C. | Gross proceeds |
| D. | cumulative proceeds |
| Answer» C. Gross proceeds | |
| 36. |
Interest rate which is not reinvested but is earned is classified as |
| A. | invested interest |
| B. | simple interest |
| C. | earned interest |
| D. | unstated interest |
| Answer» C. earned interest | |
| 37. |
For the purpose of translation exposure, historical rate is the rate prevalent on the date |
| A. | The parent company was established |
| B. | The foreign subsidiary was established |
| C. | The investment in the subsidiary was made by the parent company |
| D. | The asset was acquired or the liability was incurred |
| Answer» E. | |
| 38. |
For contingency exposure of foreign exchange, the best derivative that can be used to hedge is |
| A. | Forwards |
| B. | Futures |
| C. | Options |
| D. | Swaps |
| Answer» D. Swaps | |
| 39. |
The acronym CIRCUS stands for |
| A. | Current Interest Rate Swap |
| B. | Circular Currency Swap |
| C. | Combined Income Range Currency Swap |
| D. | Combined Interest Rate and Currency Swap |
| Answer» E. | |
| 40. |
Determination of forward rates is explained by |
| A. | Purchasing power parity theory |
| B. | Uncovered interest arbitrage |
| C. | Demand and Supply for spot currency |
| D. | demand and supply of currency in future |
| Answer» B. Uncovered interest arbitrage | |
| 41. |
The marking to market in respect of a currency future refers to |
| A. | Putting up for sale specific lot of futures |
| B. | Adjusting the margin money of buyer and seller to reflect the current value of futures |
| C. | Quoting rates for different maturities |
| D. | Allotting futures among different brokers |
| Answer» C. Quoting rates for different maturities | |
| 42. |
Bond issued simultaneously in several global financial center is |
| A. | Domestic Bond |
| B. | Foreign Bond |
| C. | Global Bond |
| D. | Euro Bond |
| Answer» D. Euro Bond | |
| 43. |
Which of the following is not an example of an international trade draft? |
| A. | Time draft |
| B. | Sight draft |
| C. | Both the first and second answers are correct |
| D. | Usance draft |
| Answer» D. Usance draft | |
| 44. |
Investors who want cash flows in near terms shows preference for |
| A. | interest portion of RIAPS |
| B. | interest portion of STORI |
| C. | interest portion of STRIPS |
| D. | interest portion of bonds |
| Answer» D. interest portion of bonds | |
| 45. |
As compared to public issues, interest premiums on privately placed issues overtime have |
| A. | increased |
| B. | increased floatation rate |
| C. | decreased |
| D. | zero interest coupon |
| Answer» D. zero interest coupon | |
| 46. |
To make promised payments, federal money can |
| A. | raise taxes |
| B. | print money |
| C. | increase labour hours |
| D. | both a and b |
| Answer» E. | |
| 47. |
Value of option issued to call debt is $940 and return rate on callable bond is $480 then return rate on non-callable bond is |
| A. | $460 |
| B. | $1,520 |
| C. | $1,420 |
| D. | $1,620 |
| Answer» B. $1,520 | |
| 48. |
Year in which Eurobonds are issued for first time in financial markets is |
| A. | 1963 |
| B. | 1953 |
| C. | 1983 |
| D. | 1962 |
| Answer» B. 1953 | |
| 49. |
Types of notes and bonds issued by Treasury are |
| A. | fixed principal |
| B. | inflation indexed |
| C. | coupon index |
| D. | both a and b |
| Answer» E. | |
| 50. |
For municipal bonds, trading in secondary markets are classified as |
| A. | infrequent origination |
| B. | static trading |
| C. | frequent trading |
| D. | infrequent trading |
| Answer» E. | |