Free Finance MCQs Mock Test Online with Answers

Q1 : The type of bonds that pay coupon interest are classified as ____________?

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

Q2 : 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

Q3 : The institutions that facilitate channeling of funds and all the related functions are classified as ___________?

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

Q4 : The example of derivative securities include ______________?

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

Q5 : 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

Q6 : 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

Q7 : 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

Q8 : The transfer of financial instruments from suppliers of funds to users of funds without any intermediary in between is classified as _____________?

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

Q9 : The put option considering interest rates and have multiple exercise dates is classified as __________?

A: swaps multiplier B: notion multiplier C: floor D: cap

Q10 : The depository institutions include ___________?

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

Q11 : The economic period in which the banks have excess funds is classified as _____________?

A: functional time line B: contract timing C: contraction period D: expansionary periods

Q12 : 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

Q13 : 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

Q14 : 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

Q15 : 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

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 intrinsic value of option is subtracted from exercise price of an option to calculate ____________?

A: forward price of asset B: price of underlying asset C: future price of asset D: spot price of asset

Q18 : 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

Q19 : 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

Q20 : 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

Q21 : When maturities of liabilities and assets are mismatched and risk incurred by financial intermediaries then this risk is classified as _____________?

A: interest rate risk B: channel rate risk C: economic risk D: issuance risk

Q22 : 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

Q23 : 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

Q24 : 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

Q25 : The preferred stock is considered as hybrid security because it includes ___________?

A: representation of ownership interest B: fixed periodic payment C: higher liquidity D: both A and B

Q26 : In capital markets, the major suppliers of trading instruments are ____________?

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

Q27 : The international banker’s acceptance usually arises from underlying _____________?

A: letter of confirmation B: letter of transfer C: letter of credits D: letter of buying

Q28 : The speed with which the prices of stocks are adjusted to unexpected news related to interest rates is called __________?

A: news efficiency B: adjusted efficiency C: expected efficiency D: market efficiency

Q29 : 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

Q30 : The certificate of deposits which are usually negotiable are issued by ____________?

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

Q31 : 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

Q32 : The transactions in market of treasury bills is mostly transacted over telephone and hence classified as ____________?

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

Q33 : 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

Q34 : 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

Q35 : In the Eurodollar market, the increase in demand of Euro dollars result in ____________?

A: increase in LIBOR B: decrease in LIBOR C: increase in KIBOR D: decrease in KIBOR

Q36 : The type of market in which the short term instruments are traded and purchased by economic units, is classified as __________?

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

Q37 : The repurchase agreements having maturity of longer term have denominations of ____________?

A: $40 million B: $10 million C: $20 million D: $30 million

Q38 : The mortgages used to purchase the shopping malls and office buildings are classified as ____________?

A: developed mortgages B: dwelling mortgages C: commercial mortgages D: non-commercial mortgages

Q39 : 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

Q40 : 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

Q41 : The drafts which are backed up by banks and are payable to seller of products or services are classified as ___________?

A: banker acceptance B: secured acceptance C: unsecured acceptance D: economic acceptance

Q42 : 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

Q43 : 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

Q44 : 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

Q45 : 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

Q46 : The type of negotiable certificate of deposits is usually classified as ___________?

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

Q47 : 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

Q48 : The risk stating the assets are sold at low prices because of sudden surge in withdrawals of liabilities is classified as ___________?

A: payment risk B: liquidity risk C: income risk D: balance risk

Q49 : 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

Q50 : The commercial mortgages, farm mortgages and home mortgages are categories of _____________?

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

Q51 : The negotiable certificate of deposit with one year maturity pays the interest ____________?

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

Q52 : 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

Q53 : 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

Q54 : The orders that are transacted at specified price are considered as ___________?

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

Q55 : The gross proceeds of stock is $37000 and the underwriter spread is $25000 ?

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

Q56 : If the 180 days T-bill have the maturity of one year with the value of $9250 and face value is $10000 then reported discount yield is __________?

A: 0.2 B: 0.13 C: 0.14 D: 0.15

Q57 : 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

Q58 : 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

Q59 : The money market where debt and stocks are traded and maturity period is more than a year is classified as __________? 0

A: shorter term markets B: capital markets C: counter markets D: long-term markets

Q60 : The feature of stock which allows stock holders to buy the shares below than market price is called __________?

A: shares offering B: price offering C: rights offering D: stock offering

Q61 : The depository institutions such as thrifts include _____________?

A: savings associations B: savings banks C: credit unions D: all of the above

Q62 : The financial instruments of public markets include _____________?

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

Q63 : 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

Q64 : 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

Q65 : 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

Q66 : 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

Q67 : 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

Q68 : 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

Q69 : 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

Q70 : The type of contract which involves the exchange of assets that will occur in future at the price settled daily, is classified as _____________?

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

Q71 : The change in interest rate measured in percentage for given interest rate change is classified as __________?

A: premium yield B: elasticity C: duration D: maturity yield

Q72 : 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

Q73 : 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

Q74 : The type of option that gives the right to buyer to buy the underlying option at specific exercise price is considered as _________? 0

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

Q75 : 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

Q76 : 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

Q77 : 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

Q78 : The financial instruments are traded in money markets and then traded in __________?

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

Q79 : 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

Q80 : If the financial intermediaries are appointed by the funds suppliers then these intermediaries are classified as ____________?

A: supplier monitor B: funds monitor C: delegated monitor D: allocation monitor

Q81 : 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

Q82 : The treasury bills are issued to raise significant amount of funds by ____________?

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

Q83 : 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

Q84 : If the exercise price of an option is $360 and the intrinsic value of an option is $160 then the price of an underlying asset is ___________?

A: 200 B: 520 C: 160 D: 360

Q85 : 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

Q86 : Stakeholders include:

A: Stakeholders B: Creditors and customs C: Employees and suppliers D: All of Them

Q87 : The type of preferred stock whose payments are missed and must be paid before paying dividends of common stock is classified as ___________?

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

Q88 : The call option considering interest rates and have multiple exercise dates is classified as ____________?

A: floor B: cap C: swaps multiplier D: notion multiplier

Q89 : The maximum maturity days of holding commercial paper are ___________?

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

Q90 : 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

Q91 : 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

Q92 : 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

Q93 : The major assets of commercial banks are _____________?

A: commercial loans B: consumer loans C: deposits D: both a and c

Q94 : The services provided by financial institutions as providing financing to any specific sector of economy such as real estate business are classified as _____________?

A: business allocation B: sector allocation C: economic allocation D: credit allocation

Q95 : The primary mortgages involve ____________?

A: three institutions B: single investor C: multiple investor D: multiple institutions

Q96 : 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

Q97 : 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

Q98 : The markets which reallocate liquid funds in relatively fixed amounts are classified as ___________?

A: capital markets B: debt markets C: secondary markets D: primary markets

Q99 : 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

Q100 : 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

Free Finance MCQs Mock Test Online with Answers

Time to prove what you know!

LAT Test

GAT Test

Contact Info

Free Finance MCQs Mock Test Online with Answers

Subscribe our Newsletter

LAT Test

GAT Test

Contact Info