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.
| 51. |
The type of option that gives the right to buyer to sell the underlying option at specific exercise price is considered as |
| A. | call option |
| B. | put option |
| C. | European option |
| D. | Australian option |
| Answer» C. European option | |
| 52. |
The under writer spread is subtracted from gross proceeds to calculate |
| A. | Gross proceeds |
| B. | cumulative proceeds |
| C. | non-cumulative proceeds |
| D. | net proceeds |
| Answer» E. | |
| 53. |
Bid-ask spread in foreign exchange market is the |
| A. | price of currency in foreign exchange market |
| B. | difference between bid and ask quotes for a currency |
| C. | price at which a bank will buy a currency |
| D. | price a bank will pay for a currency |
| Answer» C. price at which a bank will buy a currency | |
| 54. |
Order cost is cost of the |
| A. | executing order |
| B. | processing order |
| C. | opportunity cost |
| D. | none of these |
| Answer» C. opportunity cost | |
| 55. |
Largest number of buyers and sellers, greater the |
| A. | liquidity |
| B. | speculation |
| C. | hedging |
| D. | forward rate |
| Answer» B. speculation | |
| 56. |
The intrinsic value of call option is |
| A. | stock price ⁄ exercise price |
| B. | stock price - exercise price |
| C. | stock price + exercise price |
| D. | stock price x exercise price |
| Answer» C. stock price + exercise price | |
| 57. |
Greater exposure bigger the |
| A. | Investment |
| B. | Spot rate |
| C. | Forward rate |
| D. | Risk |
| Answer» E. | |
| 58. |
International Money Market is for about |
| A. | 2 years |
| B. | 3 years |
| C. | 5 years |
| D. | 1 years |
| Answer» E. | |
| 59. |
The deposits that are required in future contract and considered as guarantee, that the conditions of contracts would be fulfilled is classified as |
| A. | initial margin |
| B. | futures margin |
| C. | conditional margin |
| D. | non-conditional margin |
| Answer» B. futures margin | |
| 60. |
The voting ballot that is sent to stock holders by the corporation is classified as |
| A. | corporate paper |
| B. | white voting paper |
| C. | screened paper |
| D. | proxy |
| Answer» E. | |
| 61. |
The underwriter spread of stock is added to net proceeds to calculate the value of |
| A. | over writer spread |
| B. | Gross proceeds |
| C. | participation proceeds |
| D. | non participation proceeds |
| Answer» C. participation proceeds | |
| 62. |
The number of shares outstanding are 10000 and the price of stock is $50 then the current market price is |
| A. | 10000 |
| B. | 100000 |
| C. | 500000 |
| D. | 200000 |
| Answer» D. 200000 | |
| 63. |
The difference between price of underlying asset and exercise price of option is classified as |
| A. | extrinsic value of European option |
| B. | intrinsic value of option |
| C. | extrinsic value of option |
| D. | intrinsic value of European option |
| Answer» C. extrinsic value of option | |
| 64. |
The type of contract which involves the exchange of assets that will occur in future at the price settled daily, is classified as |
| A. | spot contract |
| B. | forward contract |
| C. | future contracts |
| D. | present contract |
| Answer» D. present contract | |
| 65. |
In real world, all factors of production are perfectly |
| A. | Mobile |
| B. | Immobile |
| C. | Somewhat mobile |
| D. | All of answers are correct |
| Answer» C. Somewhat mobile | |
| 66. |
The type of option that can be exercised before the date of expiration as well as on expiry date is classified as |
| A. | Australian option |
| B. | American option |
| C. | European option |
| D. | Canadian option |
| Answer» C. European option | |
| 67. |
Example of a market deficiency is |
| A. | Restrictions on transfer of labor |
| B. | Restrictions on transfer of funds |
| C. | Restrictions on capital flows during currency crisis |
| D. | All of answers are correct |
| Answer» E. | |
| 68. |
The major participants in forward markets are |
| A. | commercial banks |
| B. | broker deals |
| C. | investment banks |
| D. | all of the above |
| Answer» E. | |
| 69. |
The number of shares outstanding are multiplied to price of stock to calculate |
| A. | secondary market values |
| B. | current market values |
| C. | past market values |
| D. | primary market values |
| Answer» C. past market values | |
| 70. |
Licensing permits firms to employ their expertise in foreign marketplace without a |
| A. | Investment |
| B. | Acquisition of Subsidiary |
| C. | International trade |
| D. | Major investment in foreign countries |
| Answer» E. | |
| 71. |
Aim of MNC is to boost accounting profitability by shifting funds around the |
| A. | Country |
| B. | Region |
| C. | World |
| D. | Market |
| Answer» D. Market | |
| 72. |
The capital gains are 14% and the periodic payments to stock holder are 11% then the return on stock investment for stock holder is |
| A. | 0.3 |
| B. | 0.24 |
| C. | 0.25 |
| D. | 0.15 |
| Answer» C. 0.25 | |
| 73. |
Consider buying the call option, if the price of stock rises then the buyer of call option has |
| A. | low potential of losses |
| B. | high potential of losses |
| C. | high potential of profit |
| D. | low potential of profit |
| Answer» D. low potential of profit | |
| 74. |
A simultaneous purchase and sale of foreign exchange for two different dates |
| A. | currency devalue |
| B. | currency swap |
| C. | currency valuation |
| D. | currency exchange |
| Answer» C. currency valuation | |
| 75. |
If your local currency is in variable form and foreign currency is in fixed form quotation will be: |
| A. | indirect |
| B. | direct |
| C. | local form |
| D. | foreign form |
| Answer» C. local form | |
| 76. |
Subsidiary may be favourable to acquisitions because |
| A. | Easy to incorporate |
| B. | Can be tailored |
| C. | Can't be tailored |
| D. | Easy to manage |
| Answer» C. Can't be tailored | |
| 77. |
Choice of financial managing can be split down into choices of |
| A. | Financing and investment |
| B. | Investment, financing, and asset management |
| C. | Financing and dividend |
| D. | Capital budgeting, cash management, and credit management |
| Answer» C. Financing and dividend | |
| 78. |
The return to stockholders is 15% and the periodic dividend payments are 11.5% then the gains on capital are |
| A. | 0.0265 |
| B. | 0.035 |
| C. | 0.013 |
| D. | 0.043 |
| Answer» C. 0.013 | |
| 79. |
The gross proceeds of stock is $24000 and the net proceeds are $35000 then the under writers spread is |
| A. | 15000 |
| B. | 13500 |
| C. | 16750 |
| D. | 11000 |
| Answer» E. | |
| 80. |
The type of preferred stock whose dividend payments are never paid to stock holders and are not considered in arrears is classified as |
| A. | non-participating preferred stock |
| B. | participating preferred stock |
| C. | non-cumulative preferred stock |
| D. | cumulative preferred stock |
| Answer» D. cumulative preferred stock | |
| 81. |
Simplicity with which bondholders and shareholders can change their investments into cash is known |
| A. | barter |
| B. | hedging |
| C. | arbitrage |
| D. | liquidity |
| Answer» E. | |
| 82. |
Case of foreign exchange |
| A. | exchange of claims denominated in another currency. |
| B. | exchange of bank deposits |
| C. | exchange of cash issued by a foreign central bank. |
| D. | all of above. |
| Answer» E. | |
| 83. |
Exchange rate entail delivery of trade currency within two business days know as |
| A. | forward rate |
| B. | future rate |
| C. | spot rate |
| D. | bid rate |
| Answer» D. bid rate | |
| 84. |
Impact of 9/11 is |
| A. | Political Instability |
| B. | Terrorist Attack |
| C. | More foreign investment |
| D. | Economic Instability |
| Answer» E. | |
| 85. |
The security which has characteristics of common stock and bonds both at same time is classified as |
| A. | preferred stock |
| B. | voted stock |
| C. | cumulative stock |
| D. | fundamental stock |
| Answer» B. voted stock | |
| 86. |
Most unsafe mode by which firms perform worldwide business is |
| A. | Licensing |
| B. | Franchising |
| C. | International Trade |
| D. | establishment of new subsidiaries |
| Answer» E. | |
| 87. |
Global bond market consists of all bonds sold by issued companies, governments, or other firms |
| A. | within their own countries |
| B. | outside their own countries |
| C. | to London banks |
| D. | to developing nations only |
| Answer» C. to London banks | |
| 88. |
A specified country |
| A. | Other Country |
| B. | Other People |
| C. | Parent Company |
| D. | Other Subsidiary |
| Answer» D. Other Subsidiary | |
| 89. |
According to futures contract, the long position states the |
| A. | purchase of forward contracts |
| B. | purchase of future contract |
| C. | sale of futures contract |
| D. | sales of forward contracts |
| Answer» C. sale of futures contract | |
| 90. |
The intrinsic value of an option is $490 and the price of underlying asset is $290 then the exercise price of an option is |
| A. | 290 |
| B. | 780 |
| C. | 490 |
| D. | 200 |
| Answer» D. 200 | |
| 91. |
The total count of all the contracts and options such as call, put and futures outstanding at the start of working day is classified as |
| A. | non clearing interest |
| B. | clearing interest |
| C. | close interest |
| D. | open interest |
| Answer» E. | |
| 92. |
A merely household organization may be influenced by exchange rate variations if it faces at slightest some |
| A. | Domestic Competition |
| B. | Foreign competition |
| C. | Joint ventures |
| D. | All of answers are correct |
| Answer» C. Joint ventures | |
| 93. |
Mainly general type of Direct Foreign Investment (DFI) is |
| A. | Franchising |
| B. | establishment of new subsidiaries |
| C. | International trade |
| D. | Patent |
| Answer» C. International trade | |
| 94. |
Investors take political hazard as |
| A. | Encouraged |
| B. | Discouraged |
| C. | Attracted |
| D. | Make them happy |
| Answer» C. Attracted | |
| 95. |
When the earnings are reinvested instead of payments of dividends, then the capital gains |
| A. | must increases |
| B. | must decreases |
| C. | must be zero |
| D. | must be one |
| Answer» C. must be zero | |
| 96. |
Holding an inventory have |
| A. | buying cost |
| B. | selling cost |
| C. | opportunity cost |
| D. | exchange rate risk |
| Answer» D. exchange rate risk | |
| 97. |
The type of contract which involves the immediate exchange of funds and assets is classified as |
| A. | spot contract |
| B. | forward contract |
| C. | future contracts |
| D. | present contract |
| Answer» B. forward contract | |
| 98. |
The type of preferred stock whose payments are missed and must be paid before paying dividends of common stock is classified as |
| A. | non participating preferred stock |
| B. | participating preferred stock |
| C. | non-cumulative preferred stock |
| D. | cumulative preferred stock |
| Answer» E. | |
| 99. |
The type of preferred stock whose paid dividends are more than the promised dividends is classified as |
| A. | non-cumulative preferred stock |
| B. | cumulative preferred stock |
| C. | non participating preferred stock |
| D. | participating preferred stock |
| Answer» E. | |
| 100. |
The form of market efficiency which considers the speed with which the information at public level is impounded in the prices of stock is classified as |
| A. | semi-strong form market efficiency |
| B. | expensive form market efficiency |
| C. | weak form of market efficiency |
| D. | strong form of market efficiency |
| Answer» B. expensive form market efficiency | |