MCQOPTIONS
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MCQOPTIONS
This section includes 91 Mcqs, each offering curated multiple-choice questions to sharpen your Financial Management/Financial Markets knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
The financial instruments are traded in money markets and then traded in |
| A. | money markets |
| B. | capital markets |
| C. | debt markets |
| D. | economic markets |
| Answer» C. debt markets | |
| 2. |
The loan which is made available for businesses or individuals to buy land, home or other property is classified as |
| A. | secondary loan |
| B. | primary loan |
| C. | mortgages |
| D. | swapped mortgages |
| Answer» D. swapped mortgages | |
| 3. |
As compared to US certificate of deposit, the interest rate paid on the Eurodollar certificate of deposits is |
| A. | higher than other one |
| B. | lower than other one |
| C. | contraction than other one |
| D. | expansionary than other one |
| Answer» B. lower than other one | |
| 4. |
The transactions in market of treasury bills is mostly transacted over telephone and hence classified as |
| A. | decentralized |
| B. | centralized |
| C. | federalize |
| D. | commercialize |
| Answer» B. centralized | |
| 5. |
The interest rate at which the federal funds are borrowed and can be lent is classified as |
| A. | borrowing rate |
| B. | supplying rate |
| C. | lending rate |
| D. | federal funds rate |
| Answer» E. | |
| 6. |
The 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 | |
| 7. |
If the 175 days T-bill have the maturity of one year with the value of $8000 and face value is $10000 then reported discount yield is |
| A. | 0.525 |
| B. | 0.4114 |
| C. | 0.4214 |
| D. | 0.4514 |
| Answer» C. 0.4214 | |
| 8. |
The transaction of federal funds usually take place in the form of |
| A. | functional loans |
| B. | annual loans |
| C. | unsecured loans |
| D. | secured loans |
| Answer» D. secured loans | |
| 9. |
The type of market in which the short term instruments are traded and purchased by economic units, is classified as |
| A. | money markets |
| B. | capital markets |
| C. | debt markets |
| D. | economic markets |
| Answer» B. capital markets | |
| 10. |
In treasury bills auction, the treasury bills are sold at |
| A. | premium basis |
| B. | discount basis |
| C. | competitive basis |
| D. | federal basis |
| Answer» C. competitive basis | |
| 11. |
The 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 | |
| 12. |
The type of negotiable certificate of deposits is usually classified as |
| A. | primary instrument |
| B. | bearer instrument |
| C. | term instrument |
| D. | interim instrument |
| Answer» C. term instrument | |
| 13. |
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 | |
| 14. |
The limit of getting treasury bills auctioned in a treasury auction is that no bidder can get more than |
| A. | 0.35 |
| B. | 0.3 |
| C. | 0.25 |
| D. | 0.2 |
| Answer» B. 0.3 | |
| 15. |
The deposit issued by bank are usually negotiable and have specific maturity date and interest rate, hence it is classified as |
| A. | indirect certificate |
| B. | direct certificate |
| C. | negotiable certificate |
| D. | deposit certificate |
| Answer» D. deposit certificate | |
| 16. |
The treasury bills have high liquidity because of |
| A. | extensive secondary markets |
| B. | extensive primary markets |
| C. | premium money markets |
| D. | discounted money markets |
| Answer» B. extensive primary markets | |
| 17. |
The markets which reallocate liquid funds in relatively fixed amounts are classified as |
| A. | capital markets |
| B. | debt markets |
| C. | secondary markets |
| D. | primary markets |
| Answer» D. primary markets | |
| 18. |
The banks that deals with reciprocal agreements and accounts are considered as |
| A. | correspondent banks |
| B. | non-correspondent banks |
| C. | reciprocal transactions |
| D. | functional banks |
| Answer» B. non-correspondent banks | |
| 19. |
The type of bids which states complete description about quantity of bids and prices of bids is classified as |
| A. | markets bid |
| B. | bankers bid |
| C. | competitive bids |
| D. | non-competitive bids |
| Answer» D. non-competitive bids | |
| 20. |
The repurchase agreements usually called repos, can be traded |
| A. | directly |
| B. | with brokers or dealers |
| C. | functional buyers |
| D. | both a and b |
| Answer» E. | |
| 21. |
The funds transferred usually for a day between financial institutions are classified as |
| A. | federal funds |
| B. | banker's funds |
| C. | debt funds |
| D. | secured funds |
| Answer» B. banker's funds | |
| 22. |
The negotiable certificate of deposit with one year maturity pays the interest |
| A. | annually |
| B. | semiannually |
| C. | monthly |
| D. | every two weeks |
| Answer» C. monthly | |
| 23. |
The repurchase agreements having maturity of one week or lesser have denominations of |
| A. | $10 million or more |
| B. | $20 million or more |
| C. | $25 million or more |
| D. | $15 million or more |
| Answer» D. $15 million or more | |
| 24. |
The instrument used by Federal Reserve to smooth the money supply and interest rates include |
| A. | treasury notes |
| B. | repurchase agreements |
| C. | commercial payable notes |
| D. | commercial receivable notes |
| Answer» C. commercial payable notes | |
| 25. |
The interest rate paid on the traded Eurodollars is called as |
| A. | London intra bank offered rate |
| B. | London interbank offered rate |
| C. | Euro interbank offered rate |
| D. | Demand intra bank rate |
| Answer» C. Euro interbank offered rate | |
| 26. |
The non-competitive bidders get the allocation of treasury bills on |
| A. | federal basis |
| B. | last basis |
| C. | firstly basis |
| D. | preferential basis |
| Answer» E. | |
| 27. |
The process of issuing treasury bills is classified as |
| A. | treasury trading auction |
| B. | treasury fund auction |
| C. | treasury bills auction |
| D. | treasury bills transfer |
| Answer» D. treasury bills transfer | |
| 28. |
The financial instrument such as commercial paper can be sold |
| A. | issued by commercial banks |
| B. | directly |
| C. | with brokers or dealers |
| D. | functional buyers |
| Answer» C. with brokers or dealers | |
| 29. |
The principal issuer of the commercial papers are commercial banks and the major investors of principal investors includes |
| A. | brokers and dealers |
| B. | corporations |
| C. | other financial institutions |
| D. | all of the above |
| Answer» E. | |
| 30. |
The 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 | |
| 31. |
The certificate of deposits which are usually negotiable are issued by |
| A. | banks |
| B. | financial market |
| C. | stock exchange |
| D. | business corporations |
| Answer» B. financial market | |
| 32. |
The accounting entry of the institutions who borrow federal funds is as |
| A. | income in income statement |
| B. | expense on income statement |
| C. | liability on balance sheet |
| D. | assets on balance sheet |
| Answer» D. assets on balance sheet | |
| 33. |
The government issues treasury bills at the discounted rate from |
| A. | face value |
| B. | book value |
| C. | premium value |
| D. | federal value |
| Answer» B. book value | |
| 34. |
The agreement which incurs the transaction between two parties and promise held that second party will sell security at specific maturity is classified as |
| A. | repurchasing commercial notes |
| B. | repurchase bills |
| C. | purchase agreement |
| D. | reverse repurchase agreement |
| Answer» E. | |
| 35. |
The international banker's acceptance usually arises from underlying |
| A. | letter of confirmation |
| B. | letter of transfer |
| C. | letter of credits |
| D. | letter of buying |
| Answer» D. letter of buying | |
| 36. |
The economic period in which the banks have excess funds is classified as |
| A. | functional time line |
| B. | contract timing |
| C. | contraction period |
| D. | expansionary periods |
| Answer» D. expansionary periods | |
| 37. |
The government regulates financial markets for two reasons which are |
| A. | increase information available to investor |
| B. | ensure the soundness of financial system |
| C. | create a sound atmosphere |
| D. | both a and b |
| Answer» E. | |
| 38. |
The principal investors of US treasury bills which are issued by US treasury do not include |
| A. | mutual funds |
| B. | extensive funds |
| C. | corporations |
| D. | brokers and dealers |
| Answer» B. extensive funds | |
| 39. |
The group of dealers and brokers in financial institutions also include |
| A. | money and security brokers |
| B. | capital brokers |
| C. | mortgage brokers |
| D. | expansionary brokers |
| Answer» B. capital brokers | |
| 40. |
The operating tool used by Federal Reserve to influence the supply of bank to control demand and supply of repurchase agreements is classified as |
| A. | selling window |
| B. | buying window |
| C. | premium window |
| D. | discount window |
| Answer» E. | |
| 41. |
The repurchase agreements having maturity of longer term have denominations of |
| A. | $40 million |
| B. | $10 million |
| C. | $20 million |
| D. | $30 million |
| Answer» C. $20 million | |
| 42. |
The agreement which incurs the transaction between two parties and promise held that second party will repurchase security at specific price is classified as |
| A. | repurchasing commercial notes |
| B. | repurchase bills |
| C. | repurchase agreement |
| D. | reverse repurchase agreement |
| Answer» D. reverse repurchase agreement | |
| 43. |
The bankers acceptance which is usually time draft is fully backed by |
| A. | commercial banks |
| B. | Swiss banks |
| C. | agriculture banks |
| D. | functional banks |
| Answer» B. Swiss banks | |
| 44. |
The primary mortgages involve |
| A. | three institutions |
| B. | single investor |
| C. | multiple investor |
| D. | multiple institutions |
| Answer» C. multiple investor | |
| 45. |
The interest rate of certificate of deposits is quoted using a time span of |
| A. | 250 days a year |
| B. | 150 days a year |
| C. | 365 day a year |
| D. | 360 day a year |
| Answer» E. | |
| 46. |
The price which is paid by the bidders and is accepted by all other bidders is classified as |
| A. | highest price |
| B. | lowest price |
| C. | zero price |
| D. | peak price |
| Answer» C. zero price | |
| 47. |
The submitted bids in the treasury bills auction consist of types which are |
| A. | competitive bids |
| B. | non-competitive bids |
| C. | treasury bids |
| D. | both a and b |
| Answer» E. | |
| 48. |
The type of funds that have transfer transactions between financial institutions are classified as |
| A. | federal funds |
| B. | premium funds |
| C. | discount funds |
| D. | mean funds |
| Answer» B. premium funds | |
| 49. |
The type of Eurodollars deposits denominated in banks outside United States is classified as |
| A. | mutual certificate of deposit |
| B. | euro dollar certificate of deposit |
| C. | expansionary certificate of deposit |
| D. | euro dollar contraction deposit |
| Answer» C. expansionary certificate of deposit | |
| 50. |
The negotiable deposit certificate are traded in |
| A. | secondary markets |
| B. | primary markets |
| C. | direct markets |
| D. | indirect markets |
| Answer» B. primary markets | |