Free Finance MCQs Mock Test Online with Answers

Q1 : The interest rate paid on the traded Eurodollars is called as __________?

A: London intra bank offered rate B: London interbank offered rate C: Euro interbank offered rate D: Demand intra bank rate

Q2 : The type of Eurodollars deposits denominated in banks outside United States is classified as __________?

A: mutual certificate of deposit B: euro dollar certificate of deposit C: expansionary certificate of deposit D: euro dollar contraction deposit

Q3 : The legal document required by Securities Exchange Commission stating associated risks and detailed description of issues is classified as ______________?

A: prospectus B: stated document C: risk detailed document D: exchange commission document

Q4 : When the price of underlying asset increases then the good option is __________?

A: buy the call option B: sell the call option C: buy the put option D: sell the put option

Q5 : The financial instrument such as commercial paper can be sold ____________?

A: issued by commercial banks B: directly C: with brokers or dealers D: functional buyers

Q6 : The price of underlying asset is added into intrinsic value of option to calculate ___________?

A: forward price of option B: exercise price of option C: book value of option D: spot price of option

Q7 : The non-competitive bidders get the allocation of treasury bills on __________?

A: federal basis B: last basis C: firstly basis D: preferential basis

Q8 : If the price of an option is $475 and the time value of money is $375 then the intrinsic value of an option is ____________?

A: 375 B: 100 C: 475 D: 850

Q9 : The type of market in which securities with less than one year maturity are traded, is classified as ___________?

A: money market B: capital market C: transaction market D: global market

Q10 : When the earnings are reinvested instead of payments of dividends, then the capital gains ___________?

A: must increases B: must decreases C: must be zero D: must be one

Q11 : The type of institutions that write securities, engage in brokerage and security trading are considered as _____________? 0

A: trading institutions B: activity institutions C: investment banks D: mortgage banks

Q12 : The bankers acceptance which is usually time draft is fully backed by ___________?

A: commercial banks B: Swiss banks C: agriculture banks D: functional banks

Q13 : The financial instruments of public markets include _____________?

A: transfer funds B: bearer bonds C: shares D: bonds

Q14 : The type of instrument whoever holds it, gets the interest and principal amount is classified as ___________?

A: term instrument B: interim instrument C: primary instrument D: bearer instrument

Q15 : The price at which the stock is sold to investors by the investment banks is called ____________?

A: Gross proceeds B: cumulative proceeds C: non-cumulative proceeds D: net proceeds

Q16 : The submitted bids in the treasury bills auction consist of types which are _____________?

A: competitive bids B: non-competitive bids C: treasury bids D: both A and B

Q17 : The risk arises when the technology system may got malfunction is classified as ___________?

A: system risk B: technology risk C: operational risk D: support risk

Q18 : The maximum maturity days of holding commercial paper are ___________?

A: 170 days B: 270 days C: 120 days D: 5 days

Q19 : The more the coupon payment or promised interest payment ____________?

A: the higher its duration B: the lower its duration C: zero duration D: One year duration

Q20 : The price which is paid by the bidders and is accepted by all other bidders is classified as _____________?

A: highest price B: lowest price C: zero price D: peak price

Q21 : In interest rate swap transaction, the party who pays the fixed payments of interest is classified as __________?

A: notion buyer B: notion seller C: swap buyer D: swap seller

Q22 : The transactions in market of treasury bills is mostly transacted over telephone and hence classified as ____________?

A: decentralized B: centralized C: federalize D: commercialize

Q23 : The inverse relationship between price change and interest rate change is represented by ___________?

A: negative discount B: negative duration C: positive duration D: positive discount

Q24 : The type of bonds that pay coupon interest are classified as ____________?

A: forward bond B: payment bonds C: coupon bond D: interest bonds

Q25 : The difference between price of underlying asset and exercise price of option is classified as __________?

A: extrinsic value of European option B: intrinsic value of option C: extrinsic value of option D: intrinsic value of European option

Q26 : The gross proceeds of stock is $24000 and the net proceeds are $35000 then the under writers spread is __________? 0

A: 15000 B: 13500 C: 16750 D: 11000

Q27 : The type of liability in which the stockholders losses are counted for only the invested amount in the firm is classified as ___________?

A: counted liability B: invested liability C: unlimited liability D: limited liability

Q28 : In primary markets, the property of shares which made it easy to sell newly issued security is considered as ____________?

A: increased liquidity B: decreased liquidity C: money flow D: large funds

Q29 : The commercial mortgages, farm mortgages and home mortgages are categories of _____________?

A: swapped mortgages B: sovereign C: secondary mortgages D: primary mortgagees

Q30 : The example of derivative securities include ______________?

A: swap contract B: option contract C: futures contract D: all of the above

Q31 : The underwriter spread of stock is $17000 and the net proceeds of stock are $24000 then the gross proceeds are ____________?

A: 41000 B: 7000 C: 17000 D: 24000

Q32 : The example of derivative securities is ___________?

A: return backed security B: mortgage backed security C: cash flow backed security D: interest backed security

Q33 : Consider buying the call option, if the price of stock rises then the buyer of call option has __________?

A: low potential of losses B: high potential of losses C: high potential of profit D: low potential of profit

Q34 : The ownership of mortgaged property will be transferred to financial institution if the ____________?

A: borrower defaults B: borrower does not default C: borrower want less rate D: borrower want profit

Q35 : The price of an option is subtracted form time value of option to calculate __________?

A: book value index B: market index C: intrinsic value D: extrinsic value

Q36 : The stock prices of five companies are $50, $60, $55, $58 and $63 then the initial value of price weighted index is ____________?

A: 60 B: 57.2 C: 55 D: 63

Q37 : A swap that is used to evade the risk of exchange rate exists because of currency mismatching is classified as __________?

A: floating swaps B: fixed swaps C: currency swaps D: notion swaps

Q38 : The treasury bills have high liquidity because of ____________?

A: extensive secondary markets B: extensive primary markets C: premium money markets D: discounted money markets

Q39 : The orders that are transacted at specified price are considered as ___________?

A: red herring order B: limit order C: unlimited order D: assets order

Q40 : In capital markets, the major suppliers of trading instruments are ____________?

A: government and corporations B: liquid corporations C: instrumental corporations D: manufacturing corporations

Q41 : Financial panic that produce large losses for public can cause ___________?

A: serious damage to economy B: problems for investors C: pulling of funds D: soundness of institutes

Q42 : The type of negotiable certificate of deposits is usually classified as ___________?

A: primary instrument B: bearer instrument C: term instrument D: interim instrument

Q43 : The type of voting in which all the directors in voting lists are voted at same time is classified as ___________?

A: cumulative voting B: non-cumulative voting C: dual class voting D: limited voting

Q44 : The type of option that gives the right to buyer to sell the underlying option at specific exercise price is considered as _____________?

A: call option B: put option C: European option D: Australian option

Q45 : As compared to US certificate of deposit, the interest rate paid on the Eurodollar certificate of deposits is ____________?

A: higher than other one B: lower than other one C: contraction than other one D: expansionary than other one

Q46 : The bonds that does not pay any interest rate are considered as ___________?

A: interest free bond B: zero coupon bond C: price less coupon bond D: useless price bonds

Q47 : The type of financial security having payoffs which are connected to some securities issued some time back, is classified as ____________?

A: linked security B: previous security C: payoff security D: derivative security

Q48 : The particular place at which the transactions of New York stock exchange occurs is classified as __________?

A: trading post B: issuance post C: silence post D: sellers post

Q49 : The rates of certificate of deposits are mostly negotiated between ___________?

A: bank and COD buyer B: bank and stock market C: stock market and COD buyer D: indirect negotiations of buyers

Q50 : The type of preferred stock whose paid dividends are more than the promised dividends is classified as ____________?

A: non-cumulative preferred stock B: cumulative preferred stock C: non participating preferred stock D: participating preferred stock

Q51 : The process of selling and buying of stocks and bonds is classified as ____________?

A: s-trade B: b-trade C: e-trade D: stock trade

Q52 : According to futures contract, the long position states the ___________?

A: purchase of forward contracts B: purchase of future contract C: sale of futures contract D: sales of forward contracts

Q53 : The duration which is divided by the interest rate plus one is classified as ____________?

A: decreased duration B: increase duration C: modified duration D: at par duration

Q54 : The types of corporate stock that are traded in exchange markets are ___________?

A: common stock B: preferred stock C: quoted stock D: both A and B

Q55 : The agreement which incurs the transaction between two parties and promise held that second party will repurchase security at specific price is classified as ___________?

A: repurchasing commercial notes B: repurchase bills C: repurchase agreement D: reverse repurchase agreement

Q56 : The residual claims, limited rights, limited liability and dividend payments on discrete basis are considered as ____________?

A: characteristics of fundamental stock B: characteristics of claimed stock C: characteristics of common stock D: characteristics of preferred stock

Q57 : In treasury bills auction, the treasury bills are sold at ___________?

A: premium basis B: discount basis C: competitive basis D: federal basis

Q58 : The government regulates financial markets for two reasons which are __________?

A: increase information available to investor B: ensure the soundness of financial system C: create a sound atmosphere D: Both A and B

Q59 : The type of traders who take position in the market of future, which is based on expectations of prices of underlying assets are classified as ___________?

A: professional traders B: non-investment traders C: position traders D: future market traders

Q60 : Agency theory suggests that managers(the agents), particularly those of large , publically-owned firms, may have different objectives from those of the:

A: Workers B: Subordinates C: Shareholders D: Employees

Q61 : The treasury bills are issued to raise significant amount of funds by ____________?

A: US treasury B: Australian treasury C: Swiss treasury D: functional treasury

Q62 : The money market where securities are issued by governments to obtain funds for short term is classified as ___________?

A: money market instruments B: capital market instruments C: counter instruments D: long term instruments

Q63 : The type of bond whose present value is lesser than that of its face value is classified as ___________?

A: discount bond B: premium bond C: coupon bond D: interest bonds

Q64 : The Board of Directors sets company-wide policy and advices the CEO and other senior executies, who manage the company’s:

A: Managerial activities B: Year-to-Year activities C: Day-to-Day activities D: Financial activities

Q65 : The type of bids which states complete description about quantity of bids and prices of bids is classified as ____________?

A: markets bid B: bankers bid C: competitive bids D: non-competitive bids

Q66 : The gross proceeds of stock is $37000 and the underwriter spread is $25000 ?

A: 25000 B: 37000 C: 12000 D: 62000

Q67 : The interest rate at which the federal funds are borrowed and can be lent is classified as ____________?

A: borrowing rate B: supplying rate C: lending rate D: federal funds rate

Q68 : The type of risk in which payments are interrupted by the intervention of foreign governments is considered as ____________?

A: channel risk B: globalization risk C: state risk D: country risk

Q69 : Consider the call option writing, the probability that a buyer would have positive payoff increases with the ___________?

A: increase in stock price B: decrease in stock price C: increase in maturity duration D: decrease in maturity duration

Q70 : The situation in which the claims by financial institutions is more considerable for investors then the claims issued by corporations, is classified as _____________? 0

A: asset transformers B: liability transformers C: issuing transformers D: claiming transformers

Q71 : The issuers that are not involved directly in funds transferring are classified as __________?

A: individual issuers B: corporate issuers C: local issuers D: global issuers

Q72 : The type of preferred stock whose dividend payments are never paid to stock holders and are not considered in arrears is classified as ____________?

A: non-participating preferred stock B: participating preferred stock C: non-cumulative preferred stock D: cumulative preferred stock

Q73 : The form of market efficiency which considers the speed with which the information at public level is impounded in the prices of stock is classified as ____________?

A: semi-strong form market efficiency B: expensive form market efficiency C: weak form of market efficiency D: strong form of market efficiency

Q74 : The margin which must be maintained as soon as futures contract takes place is classified as ___________?

A: spot margin B: maintenance margin C: futures margin D: forwards margin

Q75 : The type of trade members who take position for short period of time or sometimes for only few minutes are classified as ___________?

A: scalpers B: explorers C: temporary position holders D: professional position holders

Q76 : The major participants in forward markets are __________?

A: commercial banks B: broker deals C: investment banks D: all of the above

Q77 : The group of dealers and brokers in financial institutions also include ____________?

A: money and security brokers B: capital brokers C: mortgage brokers D: expansionary brokers

Q78 : The depository institutions that concentrate loans in one segment such as consumer loans are considered as ___________?

A: thrifts B: state bank C: global bank D: multinational institutions

Q79 : Maximizing Shareholder wealth:

A: Relieves the firms responsibility towards society B: Does not relieve the firm’s responsibility towards society C: Partially relives the firm’s responsibility towards society D: None of Them

Q80 : The liquidity status of certificate of deposit which is more negotiable is considered as __________?

A: certified liquidity B: term liquidity C: more liquid D: less liquid

Q81 : The government issues treasury bills at the discounted rate from ____________?

A: face value B: book value C: premium value D: federal value

Q82 : The orders that are transacted at best available price are classified as _________?

A: post order B: available order C: transacted order D: market order

Q83 : In the Eurodollar market, the decrease in demand of Euro dollars results in ___________?

A: increase in KIBOR B: decrease in KIBOR C: decrease in federal funds rate D: increase in federal funds rate

Q84 : The maturity of debt instruments which faces more price fluctuations is ____________?

A: primary maturity B: capital maturity C: short term maturity D: long term maturity

Q85 : The capital gains are 14% and the periodic payments to stock holder are 11% then the return on stock investment for stock holder is __________?

A: 0.3 B: 0.24 C: 0.25 D: 0.15

Q86 : The promissory notes issued by company for short term fund raising are unsecured are classified as _____________?

A: unsecured notes B: debt paper C: term paper D: commercial paper

Q87 : For a particular security transaction, the agreement is classified as ‘reverse repo’ with the point of view of ____________?

A: security liability B: security buyer C: security seller D: security function

Q88 : The institutions classified as depository ones and have loans as their major assets are classified as __________?

A: commercial banks B: commercial mortgages C: credit mortgages D: credit derivative

Q89 : The type of funds that have transfer transactions between financial institutions are classified as __________?

A: federal funds B: premium funds C: discount funds D: mean funds

Q90 : The bidder who can receive the allocation of treasury bills before all other bidders is the result of ___________?

A: highest bidder B: lower bidder C: zero bidder D: non-competitive bidder

Q91 : The additional debt instruments or equity instruments of publicly traded firm are included in the markets classified as ____________?

A: flow market B: primary markets C: secondary markets D: funding markets

Q92 : The saving banks, insurance companies, mutual funds and commercial banks are all examples of ____________?

A: non-financial institutions B: derivative institutions C: financial institutions D: payable institutions

Q93 : The intrinsic value of call option is considered as out of the money, if _____________?

A: bond price > treasury price B: treasury price exercise price C: stock price < exercise price D: None of These

Q94 : In foreign financial markets, the growth is represented by the factors such as ____________?

A: savings in foreign countries B: investment opportunities C: accessible information D: all of the above

Q95 : The retail certificate of deposits which are not traded have face value of ___________?

A: 250000 B: 100000 C: 150000 D: 200000

Q96 : The type of preferred stock in which the dividend does not increase or decrease with the increase or decrease in profit of firm is classified as ____________?

A: non-cumulative preferred stock B: cumulative preferred stock C: non-participating preferred stock D: participating preferred stock

Q97 : The type of markets in which derivative securities are traded is classified as ___________?

A: derivative security markets B: trading markets C: classified markets D: non-trading markets

Q98 : The stocks or shares that are sold to investors without transacting through financial institutions are classified as ______________?

A: direct transfer B: indirect transfer C: global transfer D: pension transfer

Q99 : The market price of a firm’s stock represents the focal judgment of all market participants as to the value of the: 0

A: Particular market B: Particular firm C: Particular creditor D: Particular debtor

Q100 : The interest rate that investors receive on financial security to calculate fair value of security is classified as ___________?

A: forward rate of return B: unturned rate of return C: required rate of return D: termed rate of return

Free Finance MCQs Mock Test Online with Answers

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