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MCQOPTIONS
This section includes 2331 Mcqs, each offering curated multiple-choice questions to sharpen your UGC-NET knowledge and support exam preparation. Choose a topic below to get started.
| 1101. |
If the coupon rate is constant, the value of bond when close to maturity will be |
| A. | Issued value |
| B. | Par value |
| C. | Redemption value |
| D. | All of the above |
| Answer» D. All of the above | |
| 1102. |
An order to buy or sell a specified quantity of a stock at a specified price or better is called a |
| A. | day order |
| B. | market order |
| Answer» F. | |
| 1103. |
The value of a bond and debenture is |
| A. | Present value of interest payments it gets |
| B. | Present value of contractual payments it gets till maturity |
| C. | Present value of redemption amount |
| D. | None of the above |
| Answer» E. | |
| 1104. |
Blue chip stocks: |
| A. | are common stocks of large, financially sound corporations with a good history of dividend payments and consistent earnings growth |
| B. | are common stocks of medium-size firms having earnings growth in excess of the industry average |
| C. | have high growth potential but are very risky |
| D. | tend to do well in recessionary periods, but do not do well when the economy is booming |
| Answer» B. are common stocks of medium-size firms having earnings growth in excess of the industry average | |
| 1105. |
The contract between a bond issuer and a bondholder is called: |
| A. | a debenture. |
| B. | a charter. |
| C. | a general obligation. |
| D. | an indenture. |
| Answer» E. | |
| 1106. |
A bond that makes no coupon payments (and thus is initially priced at a deep discount to par value) is called a_______ bond. |
| A. | Treasury |
| B. | municipal |
| Answer» F. | |
| 1107. |
The exchange generating the largest volume in the United States is the: |
| A. | New York Stock Exchange |
| B. | National Market System |
| C. | Pacific Stock Exchange |
| D. | Chicago Stock Exchange |
| Answer» B. National Market System | |
| 1108. |
As the debt ratio increases, |
| A. | Fewer assets are debt-financed, and the ratio of debt-to-equity increases |
| B. | Fewer assets are debt-financed, and the ratio of debt-to-equity decreases |
| C. | More assets are debt-financed, and the ratio of debt-to-equity increases |
| D. | More assets are debt-financed, and the ratio of debt-to-equity decreases |
| Answer» D. More assets are debt-financed, and the ratio of debt-to-equity decreases | |
| 1109. |
A ________ provides an account of the total revenue generated by a firm during a period(usually a financial year, or a quarter) |
| A. | Accounting analysis statement |
| B. | financial re-engineering statement |
| C. | promotional expenses statement |
| D. | profit& loss statement |
| Answer» E. | |
| 1110. |
According to the semi-strong form of the EMH, investors who invest in a stock after a highly positive announcement concerning the stock can expect to earn a(n) |
| A. | normal return because the stock will be fairly priced when purchased. |
| B. | extraordinary return because the new information will not affect the price until later. |
| C. | loss because things often are not what they seem. |
| D. | zero return because the next price is expected to be the same as the last price |
| Answer» B. extraordinary return because the new information will not affect the price until later. | |
| 1111. |
Which of the following is not a method employed by fundamental analysts? |
| A. | Analyzing the Fed's next interest rate move |
| B. | Relative strength analysis |
| C. | Earnings forecasting |
| D. | Estimating the economic growth rate |
| Answer» C. Earnings forecasting | |
| 1112. |
Stock returns are generally expected to be independent across weekdays, but a number of studies have found returns on Monday to be lower than in the rest of the week. This departure from market efficiency is also sometimes called the _____ effect. |
| A. | Monday-Friday |
| B. | Weekday |
| C. | Monday |
| D. | Weekend |
| Answer» C. Monday | |
| 1113. |
Which of the following goals will be considered by the individuals who invest in upcoming companies and wait till the companies to grow and then harvest their profits and move on to other company? |
| A. | Short-term high priority goals |
| B. | Money making goals |
| C. | Long-term high priority goals |
| D. | Lower priority goals |
| Answer» D. Lower priority goals | |
| 1114. |
Which of the following would cause the required return on a bond to increase, everything else held equal? |
| A. | The bond’s rating changes from B to BB. |
| B. | The bond is senior to the issuer’s other bonds. |
| C. | The borrower is subject to dividend restrictions. |
| D. | The bond is callable |
| Answer» E. | |
| 1115. |
Common stock is an example of a capital market security. |
| A. | True |
| B. | False |
| C. | none |
| D. | all |
| Answer» B. False | |
| 1116. |
Total risk for common stocks is: |
| A. | The sum of systematic risk and diversifiable risk. |
| B. | Measured by beta. |
| C. | The sum of market risk and systematic risk. |
| D. | The sum of diversifiable risk and unsystematic risk |
| Answer» B. Measured by beta. | |
| 1117. |
The use of financial leverage by a firm may be measured by the |
| A. | Ratio of debt to total assets |
| B. | Firm’s beta coefficient |
| C. | Firm’s retention of earnings |
| D. | Ratio of the price of the firm’s stock price to its earnings |
| Answer» B. Firm’s beta coefficient | |
| 1118. |
A stock has an intrinsic value of $15 and an actual stock price of $13.50. You know that thisstock |
| A. | has a Tobin's q value < 1 |
| B. | signals buy opportunity |
| C. | has an expected return less than its required return |
| D. | has a beta > 1 |
| Answer» C. has an expected return less than its required return | |
| 1119. |
Markets are inefficient when prices of securities assimilate and reflect information aboutthem. |
| A. | True |
| B. | False |
| C. | none |
| D. | all |
| Answer» B. False | |
| 1120. |
The net asset value of a mutual fund investing in stock rises with |
| A. | Higher stock prices |
| B. | Lower equity values |
| C. | An increased number of shares |
| D. | Increased liabilities |
| Answer» C. An increased number of shares | |
| 1121. |
Horse racing, game of cards, lottery are the typical examples of ______________ |
| A. | Investment |
| B. | Speculation |
| C. | Gambling |
| D. | Arbitrage |
| Answer» D. Arbitrage | |
| 1122. |
A portfolio comprises of two stocks A and B. Stock A gives a return of 8%and stock B Gives a return of 7%. Stock A has a weight of 60% in the portfolio. What is the Portfolio Return? |
| A. | 9% |
| B. | 11% |
| C. | 10% |
| D. | 8% |
| Answer» E. | |
| 1123. |
Which of the following securities is most liquid? |
| A. | Money market instruments |
| B. | Capital market instruments |
| C. | Gilt-edged securities |
| D. | Index Futures |
| Answer» C. Gilt-edged securities | |
| 1124. |
When technical analysts say a stock has good relative strength, they mean the: |
| A. | total return on the stock has exceeded the total return on other stocks in the same industry. |
| B. | ratio of the price of the stock to a market index has trended upwards. |
| C. | stock has performed well compared to other stocks in the same industry. |
| D. | recent trading volume in the stock has exceeded the normal trading volume. |
| Answer» C. stock has performed well compared to other stocks in the same industry. | |
| 1125. |
“The yield curve will be downward sloping if the market believes that future short-term interest rates will be less than current short-term interest rate.” This statement about the term structure of interest rates is most consistent with the: |
| A. | forward rate hypothesis. |
| B. | market segmentations hypothesis. |
| C. | liquidity preference hypothesis. |
| D. | unbiased expectations hypothesis |
| Answer» E. | |
| 1126. |
If the beta of a stock is 1.8 and the overall market declines 20%, the expected return is: |
| A. | -36% |
| B. | -18%. |
| C. | -20%. |
| D. | -28% |
| Answer» B. -18%. | |
| 1127. |
___ is the institution which provides a platform for trading of existing securities having longterm maturity. |
| A. | SEBI |
| B. | WTO |
| C. | Stock Exchange |
| D. | RBI |
| Answer» D. RBI | |
| 1128. |
A _____________ is a person who acts as an intermediary between a buyer or seller in the market. |
| A. | Dealer |
| B. | Broker |
| C. | floor broker |
| D. | specialist |
| Answer» C. floor broker | |
| 1129. |
Which of the following types of financial assets represents a creditor relationship with an entity? |
| A. | Options |
| B. | Futures |
| C. | Stocks |
| D. | Bonds |
| Answer» B. Futures | |
| 1130. |
An example of a call market is the: |
| A. | New York Stock Exchange |
| B. | Hong Kong Stock Exchange |
| C. | Pacific Stock Exchange |
| D. | American Stock Exchange |
| Answer» C. Pacific Stock Exchange | |
| 1131. |
Which of the following causes a lower required return on a bond? |
| A. | Dividend restrictions are placed on the company. |
| B. | The bond is subordinated to other debt. |
| C. | The bond has no collateral. |
| D. | Both the first and second option. |
| Answer» B. The bond is subordinated to other debt. | |
| 1132. |
Value of a bond just depends on the interest payment is offers. |
| A. | True |
| B. | False |
| C. | none |
| D. | all |
| Answer» C. none | |
| 1133. |
The Yield to Maturity of a bond is the same as_____________? |
| A. | The present value of the bond |
| B. | The bonds internal rate of return |
| C. | The future value of the bond |
| D. | None of these |
| Answer» C. The future value of the bond | |
| 1134. |
Commercial paper is riskier than Treasury bills. |
| A. | True |
| B. | False |
| C. | none |
| D. | all |
| Answer» B. False | |
| 1135. |
Which of the following bonds has the shortest duration? |
| A. | Coupon = 15%, time to maturity = 15 years, yield to maturity = 10% |
| B. | Coupon = 12%, time to maturity = 20 years, yield to maturity = 10% |
| C. | Coupon = 15%, time to maturity = 15 years, yield to maturity = 15% |
| D. | Coupon = 10%, time to maturity = 20 years, yield to maturity = 10% |
| Answer» D. Coupon = 10%, time to maturity = 20 years, yield to maturity = 10% | |
| 1136. |
The objective of fundamental analysis for a security in a market is to identify either it is: |
| A. | Under priced |
| B. | Over priced |
| C. | Both under priced and over priced |
| D. | None of the above |
| Answer» D. None of the above | |
| 1137. |
If security prices exhibits semi-strong form of efficiency, one will not gain if he |
| A. | Depicts the prices in the form of charts to identify pattern which will beat the market. |
| B. | Buys stock of a company which has declared a bonus issue or has gone for a stock split |
| C. | Refers to insiders’ advice |
| D. | Both (a) and (b) above. |
| Answer» E. | |
| 1138. |
The market price of a bond depends on the |
| A. | Coupon rate, and terms of the indenture |
| B. | Coupon rate, and maturity date |
| C. | Terms of the indenture, and maturity date |
| D. | Coupon rate, terms of the indenture, and maturity date |
| Answer» E. | |
| 1139. |
The daily opening price is represented on a candlestick chart by the: |
| A. | channel. |
| B. | real body. |
| C. | trendline. |
| D. | shadow. |
| Answer» C. trendline. | |
| 1140. |
An order to buy or sell a specified quantity of a stock at a specified price or better is called a: |
| A. | limit order |
| B. | not-held order |
| C. | market order |
| D. | day order |
| Answer» B. not-held order | |
| 1141. |
The transit risk caused by fire is covered under ________ policy |
| A. | Excess policy |
| B. | Floating policy |
| C. | All risk policy |
| D. | transit policy |
| Answer» E. | |
| 1142. |
Which clause specifies the perils insured in a scheduled form of policy? |
| A. | Preamble Clause |
| B. | Recital Clause |
| C. | Operative Clause |
| D. | Consideration Clause |
| Answer» D. Consideration Clause | |
| 1143. |
The document which embodies the contract in insurance is called………… |
| A. | security |
| B. | policy |
| C. | certificate |
| D. | none of these |
| Answer» C. certificate | |
| 1144. |
A health insurance should be |
| A. | Affordable |
| B. | Continuous |
| C. | Universal |
| D. | All of those |
| Answer» E. | |
| 1145. |
________ means goods or commodities carried in a ship |
| A. | Hull |
| B. | Cargo |
| C. | Fright |
| D. | Wares |
| Answer» C. Fright | |
| 1146. |
Crop insurance covers the risks of __________ |
| A. | Natural fire |
| B. | Storm |
| C. | Drought |
| D. | Allof these |
| Answer» E. | |
| 1147. |
The insurance industry till august 2000 had only two nationalised players ,LIC and …. |
| A. | NI |
| B. | GIC |
| C. | IRDA |
| D. | none of these |
| Answer» C. IRDA | |
| 1148. |
From the following which is a character of Life Insurance Services |
| A. | Intangibility |
| B. | Heterogeneity |
| C. | Inseparability |
| D. | All of these |
| Answer» E. | |
| 1149. |
________ is a social device for eliminating or reducing theloss of society from certain risk. |
| A. | Premium |
| B. | Policy |
| C. | Insurance |
| D. | Contract |
| Answer» D. Contract | |
| 1150. |
Which of the following terms matches closest with ‘Family Floater’? |
| A. | Health insurance |
| B. | Property insurance |
| C. | Accidental injury |
| D. | Consequential loss |
| Answer» B. Property insurance | |