Free Finance MCQs Mock Test Online with Answers

Q1 : The corporate equities or corporate stocks represent the portion in instruments of capital markets, which is ___________?

A: largest B: smallest C: never paid D: none of the above

Q2 : 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

Q3 : The difference between purchase price of treasury bills and the face value of treasury bills is considered as __________?

A: premium B: discount C: return D: mean value

Q4 : 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

Q5 : 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

Q6 : 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

Q7 : The technique by which companies reduce cost of transaction services and results in increased efficiency is classified as ____________?

A: economies of cost B: economies of scale C: economies of efficiency D: economies of transaction

Q8 : In public corporation, the claim of fundamental ownership is called __________?

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

Q9 : The process in which the group of investment banks distribute the securities is classified as __________?

A: task groups B: syndicate C: investment groups D: securitize groups

Q10 : 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

Q11 : Corporate governance encompasses the relationship among a company’s:

A: Shareholders and board of director B: Board of directors and senior management C: Shareholders and senior management D: Shareholders, board of directors and senior management

Q12 : For an investment, the weighted average time to maturity is considered as ___________?

A: premium time B: standard time C: mean time D: duration

Q13 : 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

Q14 : The prospectus which describe the new securities are distributed before their registration is classified as ____________?

A: red herring prospectus B: white herring prospectus C: preemptive prospectus D: securitized prospectus

Q15 : 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

Q16 : 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

Q17 : The type of trading member who takes position every day and also liquidate it on the same day is classified as __________?

A: day traders B: broker traders C: non-position traders D: commercial traders

Q18 : The risk which arises all the activities from contingent liabilities and assets is considered as ____________?

A: off balance sheet risk B: income statement risk C: balance of trade risk D: balance of payment risk

Q19 : 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

Q20 : 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

Q21 : The non-competitive bidders get the allocation of treasury bills on __________?

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

Q22 : 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

Q23 : 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

Q24 : 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

Q25 : The investment decision is the most important of the firm’s three major decisions, when it comes to:

A: Value creation B: Value addition C: Value proposition D: Value deletion

Q26 : 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

Q27 : 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

Q28 : 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

Q29 : The rate which is used in major banks in United States as a rate for industrial and commercial loans is _____________?

A: London intra bank offered rate B: London interbank offered rate C: euro interbank offered rate D: demand intra bank rate

Q30 : 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

Q31 : 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

Q32 : The funds transferred usually for a day between financial institutions are classified as __________?

A: federal funds B: banker’s funds C: debt funds D: secured funds

Q33 : 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

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 : 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

Q36 : A major facet of financial management involves providing the financing necessary to support:

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

Q37 : ___________ is concerned with the acquisition, financing, and management of assets with some overall goal in mind.

A: Financial management B: Profit maximization C: Agency theory D: Social responsibility

Q38 : 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

Q39 : The non-competitive bidding of treasury bills also allow participation of ___________?

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

Q40 : 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

Q41 : 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

Q42 : The return to stockholders is 15% and the periodic dividend payments are 11.5% then the gains on capital are ___________?

A: 0.0265 B: 0.035 C: 0.013 D: 0.043

Q43 : The transactions that came into being when borrowing and lending of excess money occurs, are considered as _________?

A: annual funds transaction B: liable funds transactions C: federal funds transaction D: functional funds transaction

Q44 : The capital gains and dividends are considered as components of __________?

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

Q45 : The under writer spread is subtracted from gross proceeds to calculate ___________?

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

Q46 : 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

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 : The pre-specified price at which the underlying asset is bought and sold is called as ___________?

A: maturity price B: strike price C: exercise price D: both B and C

Q49 : The risk which arises from insufficient capital available to balance the sudden decrease in assets value is classified as ___________?

A: insolvency risk B: solvency risk C: balanced risk D: unbalanced risk

Q50 : 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

Q51 : The investors of the coupon bond will receive cash flow very soon if the ____________?

A: maturity is lower B: maturity is higher C: interest payment is higher D: interest payment is lower

Q52 : The accounting entry of the institutions who lend federal funds to other institutions is posted as __________?

A: liability on balance sheet B: assets on balance sheet C: income in income statement D: expense on income statement

Q53 : The agreement which incurs the transaction between two parties and promise held that second party will sell security at specific maturity is classified as __________?

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

Q54 : 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

Q55 : 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

Q56 : Having some overall goal in mind, financial management is concerned with:

A: Acquisition of assets B: Financing of assets C: Management of assets D: All of them

Q57 : An individual authorized by another person, called the principle, to act on the latter’s on behalf is known as an/a:

A: Agent B: Servant C: Subordinate D: Assistant

Q58 : 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

Q59 : 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

Q60 : 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

Q61 : The deposit issued by bank are usually negotiable and have specific maturity date and interest rate, hence it is classified as _____________?

A: indirect certificate B: direct certificate C: negotiable certificate D: deposit certificate

Q62 : 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

Q63 : The intrinsic value of call option is _____________?

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

Q64 : Annual cash dividends divided by annual earnings; or alternatively, dividends per share divided by earning per share is termed as:

A: Earning per share ratio B: Proposed dividend ratio C: Dividend payout ratio D: Expected dividend ratio

Q65 : The stock holder who does not have any voting rights in the corporation is considered as ____________?

A: sub class voter B: preferred stockholder C: common stock holder D: cumulative voter

Q66 : 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

Q67 : The gross proceeds of stock is $37000 and the underwriter spread is $25000 ?

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

Q68 : In financial transactions, the risk that there will be no profit in selling of this asset is classified as _____________?

A: price risk B: profit risk C: selling risk D: financial 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 short term promissory notes are unsecured and not collateralized against securities, hence it is classified as ___________?

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

Q71 : 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

Q72 : 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

Q73 : The authority which intervenes directly or indirectly in foreign exchange markets by altering the interest rates is considered as ____________?

A: centralized instruments B: centralized stocks C: central government D: central corporations

Q74 : 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

Q75 : 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

Q76 : The type of voting in which the owner having half voting shares can elect board of directors is called __________?

A: directors voting B: half voting C: straight voting D: owners voting

Q77 : The transactions in market of treasury bills is mostly transacted over telephone and hence classified as ____________?

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

Q78 : The exchange rate of foreign currency fluctuate day to day because of __________?

A: demand and supply B: increased maturity C: decreased maturity D: instrument availability

Q79 : The process of issuing treasury bills is classified as ____________?

A: treasury trading auction B: treasury fund auction C: treasury bills auction D: treasury bills transfer

Q80 : 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

Q81 : 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

Q82 : 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

Q83 : 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

Q84 : The loan which is made available for businesses or individuals to buy land, home or other property is classified as ___________?

A: secondary loan B: primary loan C: mortgages D: swapped mortgages

Q85 : 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

Q86 : The periodic payments of dividends are subtracted from return to stockholders to calculate ____________?

A: gain on spot contract B: loss on spot contract C: gain on capital D: loss on capital

Q87 : The financial instruments of public markets include _____________?

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

Q88 : 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

Q89 : 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

Q90 : The major participants in forward markets are __________?

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

Q91 : The commercial paper issued with low interest rate thus the commercial paper are categorized as ___________?

A: payables rating B: commercial rating C: poor credit rating D: better credit rating

Q92 : 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

Q93 : 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

Q94 : 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

Q95 : The intrinsic value of call option is considered as in the money if ___________?

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

Q96 : The negotiable certificate of deposit with one year maturity pays the interest ____________?

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

Q97 : The certificate of deposits which are usually negotiable are issued by ____________?

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

Q98 : The contract which gives the rights to holders to sell or buy the asset at specific time period rather than giving the obligation is classified as ___________?

A: option B: contract C: obligatory contract D: non-obligatory contract

Q99 : The institutions deal in financial functions and protects corporations and individuals against accidents, theft and death are considered as ____________?

A: penalty companies B: insurance companies C: events dealers D: protecting companies

Q100 : The type of exchange members who only buy and sell for their personal account are classified as __________?

A: non-investment traders B: professional traders C: commercial traders D: investment traders

Free Finance MCQs Mock Test Online with Answers

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