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Quiz 14
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Q.1
Mortgages used to purchase townhouses and apartment complexes are classified as
multi mortgage
multifamily dwelling mortgages
sovereign dwelling mortgages
primary dwelling mortgages
Q.2
Mortgages used to purchase shopping malls and office buildings are classified as
developed mortgages
dwelling mortgages
commercial mortgages
non-commercial mortgages
Q.3
Position which came in to existence because of holding assets more than liabilities is considered as
net long in currency
net short in currency
net surplus in assets
net surplus in liabilities
Q.4
Commercial mortgages, farm mortgages and home mortgages are categories of
swapped mortgages
sovereign mortgages
secondary mortgages
primary mortgagees
Q.5
Reasons for smaller exposure of foreign exchange than US money center are
regulations
prudent individuals
smaller size of assets
all of above
Q.6
In equilibrium position, spread between foreign and domestic rate of interest must be equal to spread of
domestic rates
forward and spot exchange rates
forward rate
spot rates
Q.7
Negotiable certificate of deposit with one year maturity pays interest
annually
semi-annually
monthly
every two weeks
Q.8
Obligations that are issued by US governments and are obligated for short term are classified as
bankers treasury
treasury bills
treasury funds
secured treasury
Q.9
Exchange rate entail delivery of trade currency within two business days know as
forward rate
future rate
spot rate
bid rate
Q.10
Differences in nominal interest rates are removed in exchange rate is
fisher effect
Leontief paradox.
combined equilibrium theory.
purchasing power parity
Q.11
Global bond market consists of all bonds sold by issued companies, governments, or other firms
within their own countries
outside their own countries
to London banks
to developing nations only
Q.12
Primary mortgages involves
three institutions
single investor
multiple investor
multiple institutions
Q.13
Ownership of mortgaged property will be transferred to financial institution if
borrower defaults
borrower does not default
borrower want less rate
borrower want profit
Q.14
In United States, JPMorgan Chase is considered as
largest foreign exchange trading
smaller foreign exchange trading
largest bond holder
smaller bond holder
Q.15
Capital Market Line is firstly initiated by
Mohsin
Linter
Markowitz
William Sharpe
Q.16
Theory which considers change in exchange rate with fluctuations in inflation rates is classified as
liquidated power parity
purchasing power parity
selling power parity
volatile power parity
Q.17
Services such as commercial trade transactions and positions in financial investments provided by financial institutions are classified as
trade services
investment services
agent services
commercial services
Q.18
Particular place at which transactions of New York stock exchange occurs is classified as
trading post
issuance post
silence post
sellers post
Q.19
Direct relationship between price change and interest rate change is represented by
positive duration
positive discount
negative discount
negative duration
Q.20
Change in interest rate measured in percentage for given interest rate change is classified as
premium yield
elasticity
duration
maturity yield
Q.21
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
Q.22
For an investment, weighted average time to maturity is considered as
premium time
standard time
mean time
duration
Q.23
Simplicity with which bondholders and shareholders can change their investments into cash is known
barter
hedging
arbitrage
liquidity
Q.24
Eurobonds are admired because
they are less risky than traditional bonds
European companies are considered very stable
of absence of government regulation
they are always denominated in euro
Q.25
More instability in currency is called as
country risk
financial risk
currency risk
liquidity risk
Q.26
Foreign bonds issued in Japan are known
bulldog bonds
dragon bonds
Yankee bonds
samurai bonds
Q.27
Loan which is made available for businesses or individuals to buy land, home or other property is classified as
secondary loan
primary loan
mortgages
swapped mortgages
Q.28
Inflation rate in United States is added into real rate of interest to calculate
quoted interest rate in United States
nominal interest rate in United States
interest rate in United States
discount rate of country
Q.29
For a foreign exchange of specific currency, non-hedged position is classified as
open position
close position
currency long position
currency short position
Q.30
Position which came in to existence because of holding assets less than liabilities is considered as
net surplus in assets
net surplus in liabilities
net long in currency
net short in currency
Q.31
Theory according to which difference between expected appreciation and foreign interest must be equal to domestic interest rate is called
interest rate parity theorem
appreciation parity theorem
domestic parity theorem
foreign interest parity theorem
Q.32
Type of contract which involves immediate exchange of funds and assets is classified as
spot contract
forward contract
future contracts
present contract
Q.33
Major participants in forward markets are
commercial banks
broker deals
investment banks
all of above
Q.34
Type of bonds that pay coupon interest are classified as
forward bond
payment bonds
coupon bond
interest bonds
Q.35
Investors of coupon bond will receive cash flow very soon if
maturity is lower
maturity is higher
interest payment is higher
interest payment is lower
Q.36
Inverse relationship between price change and interest rate change is represented by
negative discount
negative duration
positive duration
positive discount
Q.37
Duration which is divided by interest rate plus one is classified as
decreased duration
increase duration
modified duration
at par duration
Q.38
Type of bond for which bonds present value is greater than bonds face value is classified as
coupon bond
interest bonds
discount bond
premium bond
Q.39
In zero coupon bonds, impact of higher duration on maturity is that
maturity will be zero
maturity will be elastic
maturity will be higher
maturity will be lower
Q.40
Bonds that does not pay any interest rate are considered as
interest free bond
zero coupon bond
price less coupon bond
useless price bonds
Q.41
In zero coupon bonds, impact of lower duration on maturity is that
maturity will be higher
maturity will be lower
maturity will be zero
maturity will be elastic
Q.42
Intrinsic value of call option is
stock price // exercise price
stock price - exercise price
stock price + exercise price
stock price x exercise price
Q.43
Number of shares outstanding are multiplied to price of stock to calculate
secondary market values
current market values
past market values
primary market values
Q.44
Rule which states that similar set of goods and services produced in various countries should have equal price is classified as
law of similar mortgage rate
law of one type manufacturing
law of similar labour rules
law of one price
Q.45
For given change in interest rates, percentage change in present value of bond is classified as
price sensitivity
yield sensitivity
maturity sensitivity
premium sensitivity
Q.46
Larger fluctuations in portfolio value of foreign exchange of financial institutions leads to
greater liquidity of assets
greater volatility of rates
lesser volatility of rates
lesser liquidity of assets
Q.47
In zero coupon bonds, increase in duration with respect to maturity must be at
decreasing rate
increasing rate
alarming rate
inelastic rate
Q.48
More coupon payment or promised interest payment
higher its duration
lower its duration
zero duration
One year duration
Q.49
Interest rate that investors receive on financial security to calculate fair value of security is classified as
forward rate of return
unturned rate of return
required rate of return
termed rate of return
Q.50
Gross proceeds of stock is $37000 and underwriter spread is $25000
$25,000.00
$37,000
$12,000
$62,000
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