MGT411 Quiz

Shared By:- Naaz Aslam

The risk premium for an investment:
Select correct option:

Increases with risk
Is a fixed amount added to the risk free return
Is negative for U.S. Treasury Securities
Is negative for risk averse investors

Which of the following institution take direct deposit from customer and give loan to customer directly?
Select correct option:

Zarai Tarkaytee Bank LTD
Soneri Bank
Khushali Bank
Credit union

The interest rate that is involved in _____________ calculation is referred to as discount rate
Select correct option:

Present value
Future value
Intrinsic value
Discount value

The current yield on a $10,000, 5% coupon bond selling for $8,000 is:
Select correct option:

5.00%
6.25%
7.50%
8.00%

Which of the variable measured in point of time?
Select correct option:

Flow variable
Stock variable
Both flow variable and stock variable
None of above

Which of the following is NOT a depository financial institution?
Select correct option:

Credit Union
Savings and Loan
Commercial bank
Life Insurance Company

When the auto manufacturing industry does poorly due to a recession this is an example of:
Select correct option:

Idiosyncratic risk
Systematic risk
Risk premium
Unique risk

At which money aggregate definitions relation is stronger with inflation and growth
Select correct option:

M1
M2
M3
None of above

Which one of the following is the narrowest definition of money?
Select correct option:

C
M1
M2
M3

The relationship between the price and the interest rate for a zero coupon bond is best described as:
Select correct option:

Volatile
Stable
Non-existent
Inverse

Wider the range of outcome wider will be the ___________.
Select correct option:

Risk
Profit
Probability
Lose

Investors will hold higher compensation for the __________ investment.
Select correct option:

More risky
Less risky
Fixed return
Less dividend

A __________ is a promise to make a series of payments on specific future date.
Select correct option:

Stock
Bond
Loan
Cheque


Previously financial markets are located in which of the following?
Select correct option:

Coffee houses or Taverns
Stock exchanges
Bazaar
Coffee houses and Stock exchanges

Diversification is the principle of:
Select correct option:

Holding more than one risk at a time
Reducing the risks we carry to just two
Creating risk to increase returns
Eliminating investments from our portfolio that have idiosyncratic risk

Which of the following is NOT a depository financial institution?
Select correct option:

Credit Union
Savings and Loan
Commercial bank
Life Insurance Company

Which of the following best describes checks?
Select correct option:

A means of payment
Money
Not a promise of any kind
Not acceptable by the U.S. Government for payment of taxes.

Which of the following financial instruments used primarily as store of value?
Select correct option:

Options
Stocks
Home mortgage
Bonds

Time affects the value of which of the following?
Select correct option:

Financial Instruments
Financial Markets
Financial Institutions
Central Banks

Which one of the following is the narrowest definition of money?
Select correct option:

C
M1
M2
M3

What is true about the relationship between standard deviation and risk?
Select correct option:

Greater the standard deviation greater will be the risk
Greater the standard deviation lower will be the risk
Greater the standard deviation risk remains the same
No relation between them

The reason for the government to get involved in the financial system is to:
Select correct option:

Protect investors
Ensure the stability of the financial system
Protect bank customers from monopolistic exploitation
All of the given options


What will be the result of the difference of real and nominal interest rate?
Select correct option:

The cost of borrowing
The effect of inflation
The price of bonds
The return of bonds

Which of the following is the least liquid of all?
Select correct option:

Money
Bonds & stocks
Lands & buildings
None of the given options

A brilliant example of risk require compensation
Select correct option:

Taking a safe debt
Insurance policy
A person work in office
None of above

According to the rule of 72 for reasonable rates of return, the time it takes to __________ the money will be t =72/i%
Select correct option:

Doubles
Triples
halves
3/4


Debt instruments is categorized on the basis of which one of the following?
Select correct option:

Loan maturity period
Interest rates
Mode of payment of interest
Amount of the debt taken

Which of the following is the measure of likelihood that an event will occur?
Select correct option:

Risk
Probability
Frequency
Outcom

Which of the following would be included in a definition of risk?
Select correct option:

Risk is a not measure of uncertainty
Risk is unavoidable
Risk doesn't have a time horizon
Risk seldom involves some future payoff

Which one of the following is a component of wealth that is held in a readily spendable form?
Select correct option:

Money
Bonds
Stocks
Income