MGT411 Solved MCQ5 from Quiz #2

MGT411 Solved MCQ5 from Quiz #2

Chapter 1-22

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Question # 1 of 20 ( Start time: 08:59:18 PM )  Total Marks: 1 

Which of the following best expresses the payment a lender receives for lending their money for four years? 

Select correct option: 

 PV(1+i)4 

 PV/(1 + i)4 

 4PV

 PV/(1 - i)4 

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Question # 2 of 20 ( Start time: 08:59:55 PM )  Total Marks: 1 

Bonds that are issued by Government are called _________. 

Select correct option: 

 Government bond

 Treasury bond

 Corporate bond

 Callable Bonds

Question # 3 of 20 ( Start time: 09:00:14 PM )  Total Marks: 1 

__________ is the interest rate at which the present value annual reveneu equals the cost of the investment. 

Select correct option: 

 Fixed rate of interest

 Internal rate of return

 Variable rate of interest

 Nominal rate of interest

  

Question # 4 of 20 ( Start time: 09:00:38 PM )  Total Marks: 1 

In which of the following bonds we may ignore the default risk? 

Select correct option: 

 Privately issued bonds

 Government issued bonds

 Bonds issued by Corporate 

 All of the given options

    

Question # 5 of 20 ( Start time: 09:00:53 PM )  Total Marks: 1 

Most of the people among us are ___________. 

Select correct option: 

 Risk lovers

 Risk enhancers

 Risk averse

 Risk tolerating

Question # 7 of 20 ( Start time: 09:01:26 PM )  Total Marks: 1 

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 # 8 of 20 ( Start time: 09:01:51 PM )  Total Marks: 1 

Which of the following is NOT included in the definition of M1? 

Select correct option: 

 Traveler's checks

 Demand deposits

 Currency 

 Gold coins issued by treasury

Question # 9 of 20 ( Start time: 09:02:04 PM )  Total Marks: 1 

Which one of the following is true for financial intermediaries? 

Select correct option: 

 Channel funds from savers to borrowers

 Greatly enhance economic efficiency

 Have been an source of many financial innovations

 All of the given options

  

Question # 10 of 20 ( Start time: 09:02:32 PM )  Total Marks: 1 

The lowest rating for an investment grade bond assigned by Moody's is: 

Select correct option: 

 BBB

 ABB

 Baa

 Aaa

 Question # 11 of 20 ( Start time: 09:03:58 PM )  Total Marks: 1 

If YTM is less than the coupon rate the price of the bond is __________. 

Select correct option: 

 Greater than its face value

 Lower than its face value

 Equals to its face value

 All of the given options

  

Question # 12 of 20 ( Start time: 09:05:29 PM )  Total Marks: 1 

What will be the effect on the present value if we double the future value of the payment? 

Select correct option: 

 It will decrease the value by one-half

 It will increase the value by one-half

 It will equally increase the value i.e. doubles the value

 It will have no effect on the value

     

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Question # 13 of 20 ( Start time: 09:06:06 PM )  Total Marks: 1  Which one of the following is the narrowest definition of money?  Select correct option:   C  M1  M2  M3 Question # 14 of 20 ( Start time: 09:06:50 PM )  Total Marks: 1  We need __________ to carry out day to day transactions.  Select correct option:   Money  Bonds  Stocks  Loans Question # 15 of 20 ( Start time: 09:07:01 PM )  Total Marks: 1  Which one of the following is the strategy of reducing overall risk by making two investments which are totally independent of each other?   Select correct option:   Spreading the risk  Standard deviation  Hedging the risk  Variance    Question # 16 of 20 ( Start time: 09:08:07 PM )  Total Marks: 1  The Segmented Markets Theory of term structure suggests that:  Select correct option:   Investors have strong preferences for bonds of a particular maturity (This is correct)  Investors have no preference for short-term bonds over long-term bonds, or vice versa  Interest rates on long-term bonds strongly influence the demand for short-term bonds  Bonds of different maturities are perfect substitutes for each other       Question # 17 of 20 ( Start time: 09:09:36 PM )  Total Marks: 1  The process of financial intermediation:  Select correct option:   Creates a net cost to an economy but is unavoidable  Is used primarily in underdeveloped countries  Is always used when a borrower needs to obtain funds  Increases the economy's ability to produce Question # 18 of 20 ( Start time: 09:09:56 PM )  Total Marks: 1  What will the yield curve look like if future short-term interest rates are expected to rise sharply?  Select correct option:   It will steeply slope upward  It will be horizontal  It will slightly slope upward  It will slope downward    Question # 19 of 20 ( Start time: 09:10:37 PM )  Total Marks: 1  Sum of all the probabilities should be equal to which one of the following?  Select correct option:   Zero  One  Two  Three