MGT411 Solved MCQ2 from Quiz # 1
Chapter (1-15)
Solved by vuZs Solution Team
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Question # 2 of 20
When a bond becomes more liquid relative to its alternatives, the demand curve for bonds shifts to the:
Select correct option:
Right
Left
No change
None of the given options
Question # 4 of 20
Consumer Price Index (CPI) measures the:
Select correct option:
Changes in the quantity
Changes in the prices
Changes in the cost
Changes in the profit
Question # 5 of 20
A risk-averse investor will:
Select correct option:
Always prefer an investment with a lower expected return
Always prefer an investment with a certain return to one with the same expected return but any amount of uncertainty
Always require a certain return
Always focus exclusively on the expected return
Question # 9 of 20
Total Marks: 1
Which of the following best represent the true relationships between interest rates and bond prices?
Select correct option:
Move in the same direction
Move in opposite direction
Sometimes move in the same direction, some times in opposite direction
Have no relationship with each other (i.e. they are independent)
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Question # 10 of 20
Total Marks: 1
Which one of the following is a component of wealth that is held in a readily spendable form?
Select correct option:
Money
Bonds
Stocks
Income
Question # 11 of 20
Total Marks: 1
The return on the bond is equal to which of the following?
Select correct option:
Coupon rate + rate of capital gains
Current yield + rate of capital gains
Coupon rate - rate of capital gains
Current yield - rate of capital gains
Question # 13 of 20 ( Start time: 08:41:14 PM )
Time affects the value of which of the following?
Select correct option:
Financial Instruments
Financial Markets
Financial Institutions
Central Banks
Question # 14 of 20
Total Marks: 1
Which of the following statement is true about the relation ship between bond ,coupon payment and interest?
Select correct option:
Coupon payments fall, the interest rate falls, and Bond price will rise
Coupon payments rises, the interest rate falls, and Bond price will rise
Coupon payments fall, the interest rate falls, and Bond price will fall
Coupon payments rise, the interest rate falls, and Bond price will fall
Question # 15 of 20
Total Marks: 1
The current yield on a $10,000, 5% coupon bond selling for $8,000 is:
Select correct option:
5.00%
6.25%
7.50%
8.00%
solution = coupon payment/price (so coupon payment 5%of 10,000 = 500)
= 500/8000 = .0625 *100 = 6.25%
Question # 19 of 20
Total Marks: 1
There is no guarantee that a bond issuer will make the promised payments is known as which one of the following?
Select correct option:
Default risk
Inflation risk
Interest rate risk
Systematic risk
Question # 20 of 20
Total Marks: 1
What will be the result of the difference of real and nominal interest rate?
Select correct option:
The cost of borrowing
The effect of inflation
The price of bonds
The return of bonds
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