Financial Markets And Institutions Set 15

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 15

Q1 | ADR Stands for:
  • Asset Depository Receipt
  • Asian Depository Receipt
  • American Depository Receipt
  • Adjustable Depository Receipt
Answer: American Depository Receipt
Q2 | SEBI operates to fulfill the needs of these three groups, choose the one which is not in those three:
  • the issuers of securities
  • the police
  • the investors
  • the market intermediaries
Answer: the police
Q3 | The largest industry group receiving venture capital funding is
  • computer software.
  • medical/health.
  • computer hardware.
  • none of the above.
Answer: none of the above.
Q4 | The source of venture capital funding has
  • shifted from wealthy individuals to pension funds and corporations.
  • shifted from pension funds and corporations to wealthy individuals.
  • decreased since 1990.
  • none of the above.
Answer: shifted from wealthy individuals to pension funds and corporations.
Q5 | A typical venture capital firm has a ______ number of investors who eachcontribute a ______ amount of money to the fund.
  • large; small
  • small; large
  • large; large
  • small; small
Answer: small; large
Q6 | Most automobile financing is provided by
  • commercial banks.
  • thrifts.
  • finance companies owned by automobile companies.
  • finance companies owned by real estate brokers.
Answer: finance companies owned by automobile companies.
Q7 | Business finance companies provide specialized forms of credit to businesses by making loans and purchasing accounts receivable at a discount; this provision of credit is called
  • discounting.
  • factoring.
  • refinancing
  • sparking.
Answer: factoring.
Q8 | Which one of the following is a regarded as classic venture capital?
  • MBO finance
  • Early stage
  • Institutional
  • Corporate
Answer: Early stage
Q9 | Which agency regulates and supervises NBFCs?
  • Finance Ministry
  • SEBI
  • RBI
  • Respective state government
Answer: RBI
Q10 | Which of the following statements is/are correct? 1. NBFCs does not hold a banking license. 2. NBFC can issue Demand Drafts like banks.
  • Only 1
  • Only 2
  • Both
  • None
Answer: Only 1
Q11 | Consider the following statements 1. Chit Funds are type of NBFC 2. All NBFCs are ruled by RBI 3. RBI said any purchase of a stake of 26% or more in a company, or a change in more than 30% of its directors, would need the central bank's permission. Which of the above statements is/are correct?
  • 1,2
  • 2,3
  • 1,3
  • All
Answer: 1,3
Q12 | Which of the following NBFC converted itself into a commercial Bank?
  • Tata Finance
  • Reliance Capital Trust
  • Birla Mutual
  • Kotak Mahindra
Answer: Kotak Mahindra
Q13 | Indian Banks Association (IBA) has a common networking system for sharing the ATM facilities in Mumbai, which is known as
  • ATM Network
  • Shared Payment Network System
  • Cash Network
  • None of these
Answer: Shared Payment Network System
Q14 | Markets in which derivatives are traded are classified as
  • assets backed market
  • cash flow backed markets
  • mortgage backed markets
  • derivative securities markets
Answer: derivative securities markets
Q15 | Consider buying of put option, probability that a buyer would have negative payoff increases with the
  • increase in stock price
  • decrease in stock price
  • increase in maturity duration
  • decrease in maturity duration
Answer: increase in stock price
Q16 | Price of an option is subtracted form time value of option to calculate
  • book value index
  • market index
  • intrinsic value
  • extrinsic value
Answer: intrinsic value
Q17 | If intrinsic value of an option is $450 and price of an option is $560 then time value of anoption is
  • $110
  • $1,010
  • $450.00
  • $560
Answer: $110
Q18 | Type of swaps in which fixed payments of interest are exchanged by two counterparties for floating payments of interest are called
  • float-fixed swaps
  • interest rate swaps
  • indexed swaps
  • counter party swaps
Answer: interest rate swaps
Q19 | Type of bonds that pay coupon interest are classified as
  • forward bond
  • payment bonds
  • coupon bond
  • interest bonds
Answer: coupon bond
Q20 | For given change in interest rates, percentage change in present value of bond is classified as
  • price sensitivity
  • yield sensitivity
  • maturity sensitivity
  • premium sensitivity
Answer: price sensitivity
Q21 | Type of bond whose present value is lesser than that of its face value is classified as
  • discount bond
  • premium bond
  • coupon bond
  • interest bonds
Answer: discount bond
Q22 | For an investment, weighted average time to maturity is considered as
  • premium time
  • standard time
  • mean time
  • duration
Answer: duration
Q23 | Bonds that does not pay any interest rate are considered as
  • interest free bond
  • zero coupon bond
  • price less coupon bond
  • useless price bonds
Answer: zero coupon bond
Q24 | Which of the following is not a characteristic feature of venture capital firms?
  • Funding just one or a small number of firms.
  • Holding equity in the firms that are funded.
  • Having a long-term investment horizon.
  • Providing advice and assistance to the firms that are funded.
Answer: Funding just one or a small number of firms.
Q25 | Which of the following is a characteristic feature of venture capital firms?
  • Developing a portfolio of companies.
  • Holding debt in the firms that are funded.
  • Allowing firms to use the funds as they see fit.
  • Having a short-term investment horizon.
Answer: Developing a portfolio of companies.
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