Free Finance MCQs Mock Test Online with Answers

Q1 : 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

Q2 : The obligations that are issued by US governments and are obligated for short term, are classified as ____________? 0

A: bankers treasury B: treasury bills C: treasury funds D: secured treasury

Q3 : The votes for each stock holder were multiplied to number of elected directors, to calculate ___________?

A: number of cumulative class B: number of votes assigned C: number of elective candidates D: number of common stock shares

Q4 : The example of derivative securities include ______________?

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

Q5 : In the syndicate, the leading bank which negotiates the transaction to issuing bank on behalf of the syndicate is called ___________?

A: originating house B: non originating house C: investment house D: non securitize house

Q6 : The method of auction of future contract in which the traders sell their future contracts at a specified price, by crying out in louder voices is classified as _____________?

A: traders gathered auction B: close outcry auction C: specified auction D: open outcry auction

Q7 : The form of market efficiency which states that prices of stock reflects the public and private information of the firm is classified as ___________? 0

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

Q8 : The principal investors of US treasury bills which are issued by US treasury do not include _____________?

A: mutual funds B: extensive funds C: corporations D: brokers and dealers

Q9 : The difference between net proceeds and gross proceeds is called __________?

A: non-participating spread B: participating spread C: under writer spread D: over writer spread

Q10 : The type of financial security which have linked payoff to another issued security is classified as ___________? 0

A: linked security B: derivative security C: payable security D: non-issuing security

Q11 : The selling price is added in to repurchase agreement paid interest to calculate ____________?

A: direct price of security B: repurchase price of securities C: purchase price of security D: transaction price of security

Q12 : The direct relationship between price change and interest rate change is represented by __________?

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

Q13 : 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

Q14 : The voting ballot that is sent to stock holders by the corporation is classified as ___________

A: corporate paper B: white voting paper C: screened paper D: proxy

Q15 : Consider buying the put option, if the price is lower at the expiration date of option then the ____________?

A: liquidity will be higher B: loss will be higher C: profit will be lower D: profit will be higher

Q16 : The type of security backed by mortgage cash flows and are packed by financial instruments is classified as _____________?

A: cash mortgage B: securitized mortgage C: financial mortgage D: instrumental mortgage

Q17 : The transactions in market of treasury bills is mostly transacted over telephone and hence classified as ____________?

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

Q18 : In treasury bills auction, the treasury bills are sold at ___________?

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

Q19 : The reduction of risk by holding large number of securities in portfolio of assets is classified as __________? 0

A: diversification B: selling ability C: reduction ability D: director ability

Q20 : The up-front fee which must be paid by the buyer to the seller is called ___________?

A: call premium B: discount premium C: strike premium D: exercise premium

Q21 : 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

Q22 : In capital markets, the major suppliers of trading instruments are ____________?

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

Q23 : 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

Q24 : 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

Q25 : 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

Q26 : The type of unit which guarantees that all the buying and selling will be made by traders of exchange is called ___________?

A: trading house B: guarantee house C: clearing house D: professional house

Q27 : The financial instrument which is used to raise funds for working capital is considered as ____________?

A: commercial paper B: commercial notes C: notes payable D: notes receivable

Q28 : The position which occurs because of selling floor and buying cap is classified as ___________?

A: floating collar B: fixed collar C: currency collar D: collar

Q29 : 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

Q30 : The repurchase agreements having maturity of one week or lesser have denominations of ____________?

A: $10 million or more B: $20 million or more C: $25 million or more D: $15 million or more

Q31 : The under writer spread is subtracted from gross proceeds to calculate ___________?

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

Q32 : The companies that collect funds from companies and individuals and invest in portfolios of assets are classified as ____________?

A: activity funds B: mutual funds C: penalty funds D: financing funds

Q33 : The situation in which the large portion of majority is borrowed from the broker of investor is classified as ___________?

A: future investment B: forward investment C: leveraged investment D: non-leveraged investment

Q34 : The repurchase price is subtracted from selling price, divided by selling price and multiplied to 360 by number of days, Up to maturity to calculate _____________?

A: repurchase agreement yields B: purchase agreement yields C: repurchase yields D: transaction yields

Q35 : The Federal Reserve increases the money supply by ___________?

A: selling treasury bills B: buying treasury bills C: selling Swiss bills D: buying Swiss bills

Q36 : The mortgages used to purchase the townhouses and apartment complexes are classified as ___________?

A: multi mortgage B: multifamily dwelling mortgages C: sovereign dwelling mortgages D: primary dwelling mortgages

Q37 : In zero coupon bonds, the increase in duration with respect to maturity must be at ___________?

A: decreasing rate B: increasing rate C: alarming rate D: inelastic rate

Q38 : The deposits that are required in future contract and considered as guarantee, that the conditions of contracts would be fulfilled is classified as ___________?

A: initial margin B: futures margin C: conditional margin D: non-conditional margin

Q39 : 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

Q40 : The indexes in which the price of stock of companies listed in stock market index are added together and is divided by an adjusted value are classified as ________?

A: herring indexes B: group indexes C: John indexes D: Dow Indexes

Q41 : The markets in which new securities are issued by the corporations to raise funds are called _____________?

A: primary markets B: secondary markets C: Gross markets D: proceeds markets

Q42 : The amount of money involved in swap transaction is classified as ___________?

A: notion principal B: swap principal C: transaction principal D: time value of swap

Q43 : 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

Q44 : The capital gain is 9% and the return to stockholder is 18% then the periodic payments of dividends are __________?

A: 0.18 B: 0.27 C: 0.25 D: 0.09

Q45 : The risk arises from trading of assets because of change in asset prices and exchange rates is classified as ____________?

A: asset risk B: trade risk C: market risk D: exchange risk

Q46 : In interest rate swap transaction, the party who pays the floating payments of interest is considered as __________?

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

Q47 : The investors held commercial papers generally from _____________?

A: issuance to maturity B: within 1 to 2 days C: within 3 to 4 days D: within 4 to 5 days

Q48 : 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

Q49 : The agreement between two parties to exchange cash flows in future and the cash flows are based on underlying instruments is classified as ___________?

A: swaps B: interchange C: exchange D: index

Q50 : 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

Q51 : The type of contract which involves the future exchange of assets at a specified price is classified as ___________?

A: future contracts B: present contract C: spot contract D: forward contract

Q52 : The Federal reserve, money market brokers and dealers, mutual funds and US treasury are all participants of ____________?

A: liquid markets B: money markets C: transaction markets D: functional markets

Q53 : All the constituencies with a stake in the fortunes of the company are termed as:

A: Stakeholders B: Directors C: Chief executives D: Subordinates

Q54 : In zero coupon bonds, the impact of higher duration on maturity is that _____________?

A: maturity will be zero B: maturity will be elastic C: maturity will be higher D: maturity will be lower

Q55 : The capital gains and dividends are considered as components of __________?

A: return B: equity C: spot rate contracts D: forward rate contracts

Q56 : The capital gain is subtracted from return to stockholders to calculate __________?

A: periodic dividend payments B: constant spot rate payment C: constant forward rate payment D: constant future rate payment

Q57 : A major facet of financial management involves providing the financing necessary to support:

A: Liabilities B: Debts C: Loans D: Assets

Q58 : 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

Q59 : The financial instruments are traded in money markets and then traded in __________?

A: money markets B: capital markets C: debt markets D: economic markets

Q60 : 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

Q61 : The buying price of stock is $35 and it can be sold for $30 whereas the dividend paid is $6 then return on stock is ____________?

A: 0.3667 B: 0.4667 C: 0.2667 D: 0.2667

Q62 : The transaction cost of trading of financial instruments in centralized market is classified as ____________?

A: flexible costs B: low transaction costs C: high transaction costs D: constant costs

Q63 : The negotiable certificate of deposit with one year maturity pays the interest ____________?

A: annually B: semiannually C: monthly D: every two weeks

Q64 : The bonds which are denominated in dollars and are issued in canters of London and Luxemburg are classified as _____________?

A: London bonds B: Eurodollar bonds C: central bonds D: decentralize bonds

Q65 : The maximum maturity days of holding commercial paper are ___________?

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

Q66 : The instrument used by Federal Reserve to smooth the money supply and interest rates include ____________?

A: treasury notes B: repurchase agreements C: commercial payable notes D: commercial receivable notes

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 intrinsic value of an option is $490 and the price of underlying asset is $290 then the exercise price of an option is ___________?

A: 290 B: 780 C: 490 D: 200

Q69 : The total count of all the contracts and options such as call, put and futures outstanding at the start of working day is classified as __________?

A: non clearing interest B: clearing interest C: close interest D: open interest

Q70 : 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

Q71 : Consider buying the call option, if the price of stock falls then the buyer of call option has ___________?

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

Q72 : 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

Q73 : 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

Q74 : In zero coupon bonds, the impact of lower duration on maturity is that __________?

A: maturity will be higher B: maturity will be lower C: maturity will be zero D: maturity will be elastic

Q75 : The retail certificate of deposits which are not traded have face value of ___________?

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

Q76 : The demand for heavy loans can cause ____________?

A: excess funds for banks B: deficiencies for banks C: organized reservation D: competitive reservations

Q77 : The composite value of traded stocks group of secondary markets is classified as ___________?

A: stock index B: stock market index C: limited liability index D: primary index

Q78 : 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

Q79 : The certificate of deposits which are usually negotiable are issued by ____________?

A: banks B: financial market C: stock exchange D: business corporations

Q80 : The intrinsic value of put option is ________________?

A: exercise price ⁄ stock price B: exercise price – stock price C: exercise price + stock price D: exercise price x stock price

Q81 : The type of option that can be exercised only at the date of expiration is classified as ____________?

A: European option B: Canadian option C: Australian option D: American option

Q82 : 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

Q83 : The financial intermediaries that make loans available and accept long term and short term debts for funding are considered as __________?

A: activity institutions B: investment companies C: mortgage companies D: finance companies

Q84 : The type of swaps in which the fixed payments of interest are exchanged by two counterparties for floating payments of interest are called _________?

A: float-fixed swaps B: interest rate swaps C: indexed swaps D: counter party swaps

Q85 : In the money markets, the excess supply of funds from agents is for _____________?

A: past terms B: future terms C: long term D: short term

Q86 : In public corporation, the claim of fundamental ownership is called __________?

A: common stock B: fundamental stock C: corporate stock D: claimed stock

Q87 : 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

Q88 : 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

Q89 : The market value size of outstanding instruments of capital markets depends on factors ____________?

A: primary cash flows B: number of issued securities C: market prices of securities D: both B and C

Q90 : The banks that deals with reciprocal agreements and accounts are considered as ____________?

A: correspondent banks B: non-correspondent banks C: reciprocal transactions D: functional banks

Q91 : The risk faced by financial institutions in which advancement of technology does not produce savings in cost is classified as ___________?

A: savings risk B: advance risk C: cost risk D: technology risk

Q92 : In commercial banks, the subordinate debentures and subordinate notes are considered as ___________?

A: stated rates B: banks debentures C: banks liabilities D: banks deposits

Q93 : The depository institutions include ___________?

A: mutual funds B: commercial banks and thrifts C: savings banks D: credit unions

Q94 : The non-competitive bidders get the allocation of treasury bills on __________?

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

Q95 : The markets in which transactions are done through computers and telephone without any specific location are classified as _____________?

A: past counter market B: future counter market C: over the counter markets D: capital counter market

Q96 : 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

Q97 : The type of bond for which the bonds present value is greater than bonds face value is classified as ____________?

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

Q98 : The negotiable deposit certificate are traded in ____________?

A: secondary markets B: primary markets C: direct markets D: indirect markets

Q99 : The time value of an option is added into intrinsic value to calculate __________?

A: market index of an option B: depreciated value of option C: appreciated value of option D: price of an option

Q100 : The non-competitive bidding of treasury bills also allow participation of ___________?

A: secured investors B: federal investors C: small investors D: large investors

Free Finance MCQs Mock Test Online with Answers

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