Financial Markets And Institutions Set 4

Master of Commerce (M.com),

Master of Business Administration (MBA)

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This set of Financial Markets and Institutions Multiple Choice Questions & Answers (MCQs) focuses on Financial Markets And Institutions Set 4

Q1 | NCDEX stands for-------------------
  • National Commodity Development Exchange
  • National Commodity and Derivatives Exchange
  • Natural Commodity and Development Exchange
  • None of these
Answer: National Commodity and Derivatives Exchange
Q2 | In ------------ NSE and BSE launched trading in commodities.
  • 2016
  • 2017
  • 2018
  • 2015
Answer: 2018
Q3 | The oldest Commodity market in India is---------
  • NMCE
  • MCX
  • ICEX
  • NCDEX
Answer: NMCE
Q4 | In the year 2018 NMCE merged with -----------
  • UCX
  • MCX
  • ICEX
  • NCDEX
Answer: ICEX
Q5 | ACE Derivatives Exchange Ltd is the commodity exchange developed in---------
  • America
  • Australia
  • Afghanistan
  • None of these
Answer: None of these
Q6 | Which of the following statements is false?
  • A bond issuer must pay periodic interest.
  • Bond prices remain fixed over time.
  • Bonds carry no corporate ownership privileges.
  • A bond is a financial contract.
Answer: Bond prices remain fixed over time.
Q7 | Which of the following statements is true?
  • Low inflation is expected to have a negative effect on bond prices.
  • Generally speaking, bonds are riskier than common stocks.
  • Bonds are usually less liquid than stocks.
  • A bondholder repays principal when the bond matures.
Answer: Bonds are usually less liquid than stocks.
Q8 | Most bonds:
  • are money market securities.
  • give bondholders a voice in the affairs of the corporation.
  • are interest-bearing obligations of governments or corporations.
  • are floating-rate securities.
Answer: are interest-bearing obligations of governments or corporations.
Q9 | Which of the following is not an advantage of investing in bonds?
  • Bonds have unlimited profit potential.
  • Bond investments are relatively safe from large losses.
  • Bonds are good sources of current income.
  • Bondholders receive their payments before shareholders can be compensated.
Answer: Bonds have unlimited profit potential.
Q10 | Which of the following is a capital market security?
  • Treasury bills.
  • Federal funds.
  • Federal agency bonds.
  • Eurodollars.
Answer: Federal agency bonds.
Q11 | Which of the following is a money market security?
  • Repurchase agreements.
  • Municipal bonds.
  • Mortgages.
  • U.S. Treasury notes.
Answer: Repurchase agreements.
Q12 | Corporations borrow for the short term by issuing:
  • corporate bills.
  • corporate bonds.
  • commercial paper.
  • bankers’ acceptances.
Answer: commercial paper.
Q13 | What is used to quote the rates on Eurodollar deposits?
  • Discount rate.
  • Federal funds rate.
  • Repo rate.
  • LIBOR.
Answer: LIBOR.
Q14 | Which of the following provides income that is fully exempt from taxation for the individualinvestor?
  • Municipal bonds.
  • Preferred stocks.
  • Treasury notes.
  • Treasury bills.
Answer: Municipal bonds.
Q15 | Which of the following is a residual claim on a firm’s assets?
  • Preferred stock.
  • Common stock.
  • Preference shares.
  • Participating preferred stock.
Answer: Common stock.
Q16 | Which of the following occurs four trading days before the date of record?
  • Distribution date.
  • Payment date.
  • Declaration date.
  • Ex-dividend date.
Answer: Ex-dividend date.
Q17 | Which of the following types of assets is least risky?
  • Short-term corporate bonds
  • Long-term corporate bonds.
  • Stocks.
  • Options and futures.
Answer: Short-term corporate bonds
Q18 | Which of the following types of assets offers the highest expected return?
  • Stocks.
  • Long-term government bonds.
  • Options and futures.
  • Long-term corporate bonds.
Answer: Stocks.
Q19 | Which of the following types of financial assets represents a creditor relationship with anentity?
  • Stocks.
  • Options.
  • Futures.
  • Bonds.
Answer: Bonds.
Q20 | Which of the following sequences lists financial assets from least risky to most risky?
  • Stocks, bonds, derivatives.
  • Bonds, derivatives, stocks.
  • Derivatives, bonds, stocks.
  • Bonds, stocks, derivatives.
Answer: Bonds, stocks, derivatives.
Q21 | Which of the following sequences lists financial assets from lowest expected return tohighest expected return?
  • Bonds, stocks, derivatives.
  • Bonds, derivatives, stocks.
  • Stocks, bonds, derivatives.
  • Derivatives, stocks, bonds.
Answer: Bonds, stocks, derivatives.
Q22 | Which of the following types of assets represents ownership interest in a corporation?
  • Bonds
  • Stocks.
  • Futures.
  • Options.
Answer: Stocks.
Q23 | Financial assets are also called:
  • securities.
  • real assets.
  • tangible assets.
  • physical assets.
Answer: securities.
Q24 | If people are willing to lend at 7% when inflation is 2% and continue to lend the sameamounts when inflation is 4% and interest rates have risen to 8%, they are assumed to be subject to:
  • Extrapolative expectations
  • Risk aversion
  • Asymmetric information
  • Money illusion
Answer: Money illusion
Q25 | The reason that finding the present value of a future sum of money requires us to discountit, is that:
  • Inflation will reduce its purchasing power
  • We can’t be certain of receiving it
  • We don’t know when we shall receive it
  • Waiting deprives us of its use
Answer: Waiting deprives us of its use
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