MCQOPTIONS
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MCQOPTIONS
This section includes 175 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. |
Eurobonds are admired because |
| A. | they are less risky than traditional bonds |
| B. | European companies are considered very stable |
| C. | of absence of government regulation |
| D. | they are always denominated in euro |
| Answer» D. they are always denominated in euro | |
| 2. |
The gross proceeds of stock is $37000 and the underwriter spread is $25000 |
| A. | 25000 |
| B. | 37000 |
| C. | 12000 |
| D. | 62000 |
| Answer» D. 62000 | |
| 3. |
The difference between the intrinsic value of option and the price of option is classified as |
| A. | spot value of option |
| B. | time value of US treasury |
| C. | time value of option |
| D. | time value of bond |
| Answer» D. time value of bond | |
| 4. |
More instability in currency is called as |
| A. | country risk |
| B. | financial risk |
| C. | currency risk |
| D. | liquidity risk |
| Answer» D. liquidity risk | |
| 5. |
The feature of stock which allows stock holders to buy the shares below than market price is called |
| A. | shares offering |
| B. | price offering |
| C. | rights offering |
| D. | stock offering |
| Answer» D. stock offering | |
| 6. |
Portfolio Investment is dealing in |
| A. | Same securities |
| B. | Short term investment |
| C. | Different securities |
| D. | Don |
| Answer» D. Don | |
| 7. |
The type of traders who take position in the market of future, which is based on expectations of prices of underlying assets are classified as |
| A. | professional traders |
| B. | non-investment traders |
| C. | position traders |
| D. | future market traders |
| Answer» D. future market traders | |
| 8. |
Agency cost can be decreased by |
| A. | Centralized Structure |
| B. | Centralized and Decentralized Structure |
| C. | Centralized Structure |
| D. | None of it |
| Answer» E. | |
| 9. |
The intrinsic value of option is subtracted from exercise price of an option to calculate |
| A. | forward price of asset |
| B. | price of underlying asset |
| C. | future price of asset |
| D. | spot price of asset |
| Answer» C. future price of asset | |
| 10. |
Bid quote is for |
| A. | seller |
| B. | buyer |
| C. | hedger |
| D. | speculator |
| Answer» C. hedger | |
| 11. |
The type of index in which the current values of stock are added together and divided by the value of stock on base date, is classified as |
| A. | value weighted index |
| B. | herring weighted index |
| C. | primary market index |
| D. | stock market index |
| Answer» B. herring weighted index | |
| 12. |
Not aim of international capital market is |
| A. | preserving hard currencies to finance trade deficits |
| B. | reducing cost of money to borrowers |
| C. | reducing investor risk |
| D. | expanding money supply for borrowers |
| Answer» B. reducing cost of money to borrowers | |
| 13. |
Which of following is not a means in which agency troubles can be lessen through corporate rule? |
| A. | Executive compensation |
| B. | Threat of hostile takeover |
| C. | Acquisition of a foreign subsidiary |
| D. | Monitoring by large shareholders |
| Answer» D. Monitoring by large shareholders | |
| 14. |
Political hazard is related to danger of loss of worth due to |
| A. | Government or Public actions |
| B. | Exchange rate movements |
| C. | Poor corporate governance |
| D. | Unfavourable trade negotiations |
| Answer» B. Exchange rate movements | |
| 15. |
The method of auction of future contract in which the traders sell their future contracts at a specified price, by crying out in louder voices is classified as |
| A. | traders gathered auction |
| B. | close outcry auction |
| C. | specified auction |
| D. | open outcry auction |
| Answer» E. | |
| 16. |
The stock holder who does not have any voting rights in the corporation is considered as |
| A. | sub class voter |
| B. | preferred stockholder |
| C. | common stock holder |
| D. | cumulative voter |
| Answer» C. common stock holder | |
| 17. |
Foreign bonds issued in Japan are known |
| A. | bulldog bonds |
| B. | dragon bonds |
| C. | Yankee bonds |
| D. | samurai bonds |
| Answer» E. | |
| 18. |
The swaps that are classified as long term contracts are |
| A. | currency swaps |
| B. | notion swaps |
| C. | floating swaps |
| D. | fixed swaps |
| Answer» B. notion swaps | |
| 19. |
Joint venture is |
| A. | Not jointly owned by |
| B. | Jointly owned by two or more firms |
| C. | Acquired by firm |
| D. | It is licensing |
| Answer» C. Acquired by firm | |
| 20. |
Ask quote is for |
| A. | seller |
| B. | buyer |
| C. | hedger |
| D. | speculator |
| Answer» B. buyer | |
| 21. |
The form of market efficiency which states that prices of stock reflects the public and private information of the firm is classified as |
| A. | weak form of market efficiency |
| B. | strong form of market efficiency |
| C. | semi-strong form market efficiency |
| D. | expensive form market efficiency |
| Answer» C. semi-strong form market efficiency | |
| 22. |
If the stock price of call option is $300 and the exercise price of call option is $260 then the intrinsic value of option is |
| A. | 260 |
| B. | 560 |
| C. | 40 |
| D. | 300 |
| Answer» D. 300 | |
| 23. |
We multiply foreign revenue with rate with respect to that country is |
| A. | Forward rate |
| B. | Spot rate |
| C. | Cash Flows |
| D. | Portfolio Investment |
| Answer» C. Cash Flows | |
| 24. |
Features of international business that a organization may be exposed to |
| A. | Exchange rates |
| B. | Foreign economic conditions |
| C. | Political risk |
| D. | All of answers are correct |
| Answer» E. | |
| 25. |
Today, important factor that result in augmentation in international bond market is |
| A. | low interest rates |
| B. | high interest rates |
| C. | moderate interest rates |
| D. | all of above |
| Answer» B. high interest rates | |
| 26. |
Gold standard introduced in |
| A. | 1913 |
| B. | 1990 |
| C. | 1876 |
| D. | 1944 |
| Answer» D. 1944 | |
| 27. |
The capital gains and dividends are considered as components of |
| A. | return |
| B. | equity |
| C. | spot rate contracts |
| D. | forward rate contracts |
| Answer» B. equity | |
| 28. |
Below Product Cycle Theory, overseas demand can be primarily contented by |
| A. | Exporting |
| B. | Importing |
| C. | Licensing |
| D. | Mobility of funds |
| Answer» B. Importing | |
| 29. |
The under writer spread is $47500 and the gross proceeds are $34000 then net proceeds are |
| A. | 13500 |
| B. | 81500 |
| C. | 47500 |
| D. | 34000 |
| Answer» B. 81500 | |
| 30. |
The buying price of stock is $35 and it can be sold for $30 whereas the dividend paid is $6 then return on stock is |
| A. | 0.3667 |
| B. | 0.4667 |
| C. | 0.2667 |
| D. | 0.2667 |
| Answer» B. 0.4667 | |
| 31. |
The prospectus which describe the new securities are distributed before their registration is classified as |
| A. | red herring prospectus |
| B. | white herring prospectus |
| C. | preemptive prospectus |
| D. | securitized prospectus |
| Answer» B. white herring prospectus | |
| 32. |
Agency problem is between |
| A. | Manager and Employees |
| B. | Manager and Government |
| C. | Manager and Shareholders |
| D. | Parent to Subsidiary |
| Answer» D. Parent to Subsidiary | |
| 33. |
If a company agreements today for several future date of real currency exchange, they will be building use of a |
| A. | stock rate |
| B. | stock rate |
| C. | futures rate |
| D. | forward rate |
| Answer» E. | |
| 34. |
The sum of capital gains and dividend payments which are paid to stock holders on periodic basis is equal to |
| A. | return to common stockholders |
| B. | return on premium bonds |
| C. | return to stock holder |
| D. | return to preferred stock |
| Answer» D. return to preferred stock | |
| 35. |
The stock prices of five companies are $50, $60, $55, $58 and $63 then the initial value of price weighted index is |
| A. | 60 |
| B. | 57.2 |
| C. | 55 |
| D. | 63 |
| Answer» C. 55 | |
| 36. |
Consider buying the call option, if the price of stock falls then the buyer of call option has |
| A. | high potential of profit |
| B. | low potential of profit |
| C. | low potential of losses |
| D. | high potential of losses |
| Answer» E. | |
| 37. |
The prices that are adjusted day to day to picture the current conditions of future markets are classified as |
| A. | market future prices |
| B. | market to market prices |
| C. | market to invest prices |
| D. | present market prices |
| Answer» C. market to invest prices | |
| 38. |
Governments enforce currency limitations to |
| A. | protect a currency from speculators |
| B. | keep resident individuals and businesses from investing in other nations |
| C. | preserve hard currencies to finance trade deficits or repay debts |
| D. | all of above |
| Answer» E. | |
| 39. |
One of generally prevalent aspects conflicting with recognition of ambition of an MNC is existence of |
| A. | Agency problem |
| B. | Licensing |
| C. | Corporate Governance |
| D. | Management |
| Answer» B. Licensing | |
| 40. |
Effective tool of excellent corporate governance corporation are |
| A. | Board of directors |
| B. | Common stock shareholders |
| C. | Top executive officers |
| D. | All of answers are correct |
| Answer» B. Common stock shareholders | |
| 41. |
Which of following does not a type of direct foreign investment? |
| A. | Franchising |
| B. | International trade |
| C. | Joint ventures |
| D. | Acquisitions of existing operations |
| Answer» C. Joint ventures | |
| 42. |
The periodic payments of dividends are subtracted from return to stockholders to calculate |
| A. | gain on spot contract |
| B. | loss on spot contract |
| C. | gain on capital |
| D. | loss on capital |
| Answer» D. loss on capital | |
| 43. |
The speed with which the prices of stocks are adjusted to unexpected news related to interest rates is called |
| A. | news efficiency |
| B. | adjusted efficiency |
| C. | expected efficiency |
| D. | market efficiency |
| Answer» E. | |
| 44. |
The type of voting in which all the directors in voting lists are voted at same time is classified as |
| A. | cumulative voting |
| B. | non-cumulative voting |
| C. | dual class voting |
| D. | limited voting |
| Answer» B. non-cumulative voting | |
| 45. |
The type of voting in which the owner having half voting shares can elect board of directors is called |
| A. | directors voting |
| B. | half voting |
| C. | straight voting |
| D. | owners voting |
| Answer» D. owners voting | |
| 46. |
Slightest hazardous method by which organizations carry out international trade is |
| A. | Licensing |
| B. | Franchising |
| C. | International Trade |
| D. | establishment of new subsidiaries |
| Answer» D. establishment of new subsidiaries | |
| 47. |
Differences in nominal interest rates are removed in exchange rate is |
| A. | the fisher effect |
| B. | the Leontief paradox. |
| C. | the combined equilibrium theory. |
| D. | the purchasing power parity |
| Answer» B. the Leontief paradox. | |
| 48. |
Snyder Golf Co desire to build a golf club in Brazil they will do |
| A. | Exporting |
| B. | Importing |
| C. | Direct Forging Investment |
| D. | Licensing |
| Answer» D. Licensing | |
| 49. |
In a quote exchange rate, currency that is to be purchase with another currency is called : |
| A. | liquid currency |
| B. | foreign currency |
| C. | local currency |
| D. | base currency |
| Answer» E. | |
| 50. |
Which of following is not a cause for global investment? |
| A. | To gain access to important raw materials. |
| B. | To produce products and/or services more efficiently than possible domestically. |
| C. | To provide an expected risk-adjusted return in excess of that required. |
| D. | International investments have less political risk than domestic investments. |
| Answer» E. | |