McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) , Bachelor of Commerce in Finance (B.Com Finance) .
Chapters
| 101. |
The material wealth of a society is equal to the sum of _________. |
| A. | All financial assets |
| B. | All real assets |
| C. | All financial and real assets |
| D. | All physical assets |
| Answer» B. All real assets | |
| 102. |
_______ are financial assets |
| A. | Bonds. |
| B. | Machines |
| C. | Stocks. |
| D. | A and C. |
| Answer» A. Bonds. | |
| 103. |
_______ are examples of financial intermediaries |
| A. | Commercial banks |
| B. | Insurance companies |
| C. | Investment companies |
| D. | All of the above. |
| Answer» D. All of the above. | |
| 104. |
Financial intermediaries exist because small investors cannot efficiently ________. |
| A. | Diversify their portfolios |
| B. | Gather all relevant information |
| C. | Assess credit risk of borrowers |
| D. | All of the above |
| Answer» D. All of the above | |
| 105. |
Firms that specialize in helping companies raise capital by selling securities are called--- |
| A. | Commercial banks |
| B. | Merchant banks |
| C. | Savings banks |
| D. | Credit unions |
| Answer» B. Merchant banks | |
| 106. |
Financial assets ______. |
| A. | Directly contribute to the country's productive capacity |
| B. | Indirectly contribute to the country's productive capacity |
| C. | Contribute to the country's productive capacity both directly and indirectly. |
| D. | Do not contribute to the country's productive capacity either directly or indirectly. |
| Answer» B. Indirectly contribute to the country's productive capacity | |
| 107. |
The sale of a mortgage portfolio by setting up mortgage pass-through securities is an example of ________. |
| A. | Credit enhancement |
| B. | Securitization. |
| C. | Unbundling |
| D. | Derivatives. |
| Answer» B. Securitization. | |
| 108. |
Merchant bankers perform the following role(s) ___________. |
| A. | Market new stock and bond issues for firms. |
| B. | Provide advice to the firms as to market conditions, price, etc. |
| C. | Provide consultancy services for expansion etc |
| D. | All of the above |
| Answer» D. All of the above | |
| 109. |
The means by which individuals hold their claims on real assets in a well-developed economy are ___________. |
| A. | Investment assets |
| B. | Depository assets |
| C. | Derivative assets |
| D. | Financial assets |
| Answer» D. Financial assets | |
| 110. |
Commercial banks differ from other businesses in that both their assets and their liabilities are mostly ________. |
| A. | Illiquid |
| B. | Financial. |
| C. | Real. |
| D. | Owned by the government |
| Answer» B. Financial. | |
| 111. |
Although derivatives can be used as speculative instruments, businesses most often use them to _________. |
| A. | Attract customers |
| B. | Appease stockholders. |
| C. | Offset debt. |
| D. | Hedge. |
| Answer» D. Hedge. | |
| 112. |
A fixed-income security pays ____________. |
| A. | A fixed level of income for the life of the owner. |
| B. | A fixed level of income for the life of the security. |
| C. | A variable level of income for owners on a fixed income |
| D. | A fixed or variable income stream at the option of the owner. |
| Answer» B. A fixed level of income for the life of the security. | |
| 113. |
Money market securities ____________. |
| A. | Are short term. |
| B. | Are highly marketable |
| C. | Generally very low risk. |
| D. | All of the above |
| Answer» D. All of the above | |
| 114. |
A mutual fund in which shares are issued only when the fund is organized is called a ________fund. |
| A. | Closed-end. |
| B. | Load. |
| C. | No-load |
| D. | Open-end |
| Answer» A. Closed-end. | |
| 115. |
The value of the mutual fund's portfolio minus the mutual fund's liabilities divided by the number of shares outstanding is called the:. |
| A. | Book value |
| B. | Outstanding balance |
| C. | Per share value |
| D. | Net asset value. |
| Answer» D. Net asset value. | |
| 116. |
When one investment company manages a group of mutual funds, it is called a(n):. |
| A. | Family funds |
| B. | Exchange fund |
| C. | Diversification fund |
| D. | Versatility fund |
| Answer» A. Family funds | |
| 117. |
Mr. Manoj is buying shares in a mutual fund that invests in companies that are all within the same industry. What type of mutual fund has he purchased? |
| A. | A sector fund |
| B. | A small cap fund. |
| C. | An index fu |
| Answer» A. A sector fund | |
| 118. |
A market for existing financial securities that are currently traded between investors is called the____________ market |
| A. | Fundamental. |
| B. | Efficient. |
| C. | Secondary. |
| D. | Primary. |
| Answer» C. Secondary. | |
| 119. |
Mr. Praveen is thinking about buying an investment. The investment option that he is thinking about buying is an investment where investors pool their money. One of the key features is that it is managed by professional managers. What investment is Mr. Praveen thinking about purchasing?. |
| A. | Common Stock |
| B. | Corporate Bond |
| C. | Real Estate. |
| D. | Mutual Fund. |
| Answer» D. Mutual Fund. | |
| 120. |
Financial intermediaries’ _________. |
| A. | Solve some of the problems associated with asymmetric information. |
| B. | Decrease transaction costs for borrowers and lenders |
| C. | Allow borrowers and lenders to engage in risk sharing |
| D. | All of the above |
| Answer» D. All of the above | |
| 121. |
Which of the following assets is most liquid?. |
| A. | 2 year Treasury bonds |
| B. | Shares of common stock |
| C. | Passbook savings accounts. |
| D. | Gold bars |
| Answer» C. Passbook savings accounts. | |
| 122. |
Under “securitisation process”, the bank or financial institution which gives loan is known as; |
| A. | SPV |
| B. | Obligor |
| C. | Originator |
| D. | Credit enhancer |
| Answer» C. Originator | |
| 123. |
Under “securitisation process”, original borrower is known as; |
| A. | SPV |
| B. | Obligor |
| C. | Originator |
| D. | Credit enhancer |
| Answer» B. Obligor | |
| 124. |
Under “securitisation process”, organisation which gives insurance and guarantee is known as; |
| A. | SPV |
| B. | Obligor |
| C. | Originator |
| D. | Credit enhancer |
| Answer» D. Credit enhancer | |
| 125. |
Under “securitisation process”, ---------- are instruments which issued subsidiary company in respect of receivables of holding or parent company |
| A. | Pass through certificate |
| B. | Pay through certificate |
| C. | Preferred stock certificate |
| D. | None of these |
| Answer» C. Preferred stock certificate | |
| 126. |
-------- certificate under securitisation have multiple maturity structure. |
| A. | Pass through certificate |
| B. | Pay through certificate |
| C. | Preferred stock certificate |
| D. | Interest only certificate |
| Answer» B. Pay through certificate | |
| 127. |
-------- certificate under securitisation have single maturity structure. |
| A. | Pass through certificate |
| B. | Pay through certificate |
| C. | Preferred stock certificate |
| D. | Principle only certificate |
| Answer» A. Pass through certificate | |
| 128. |
Which of the following is / are securitisable asset/debt? |
| A. | Credit card receivable |
| B. | Lease finance |
| C. | Mortgage loan |
| D. | All the above |
| Answer» D. All the above | |
| 129. |
Which of the following is / are securitisable asset/debt? |
| A. | Hire purchase receivable |
| B. | Receivable from Govt. |
| C. | Term loan to financial reputed company |
| D. | All the above |
| Answer» D. All the above | |
| 130. |
Which of the following is / are not securitisable asset/debt? |
| A. | Credit card receivable |
| B. | Bills receivable |
| C. | Mortgage loan |
| D. | All the above |
| Answer» B. Bills receivable | |
| 131. |
Which of the following is not related to securitisation process? |
| A. | Special purpose vehicle |
| B. | Credit rating agency |
| C. | Credit enhancer |
| D. | None of these. |
| Answer» D. None of these. | |
| 132. |
Which of the following is tripartite system? |
| A. | Financial lease |
| B. | Operating lease |
| C. | Leverage lease |
| D. | Swap lease |
| Answer» C. Leverage lease | |
| 133. |
Equipment lease transaction is treated as contract of............ |
| A. | Bailment |
| B. | Pledge |
| C. | Guarantee |
| D. | Agency |
| Answer» A. Bailment | |
| 134. |
............ lease is for a limited period |
| A. | Financial lease |
| B. | Operating lease |
| C. | Leverage lease |
| D. | Swap lease |
| Answer» B. Operating lease | |
| 135. |
The entire lease rental is treated as........ in the books of lessor |
| A. | Expense |
| B. | Income |
| C. | Receivable |
| D. | Capital |
| Answer» B. Income | |
| 136. |
Leased asset is shown in the balance sheet of.................. |
| A. | Lessee |
| B. | Lessor |
| C. | Lender |
| D. | Both lessor and lessee in 50:50 ratio |
| Answer» B. Lessor | |
| 137. |
Who can claim investment allowance in relation to leased asset? |
| A. | Lessee |
| B. | Lessor |
| C. | Lender |
| D. | Both lessor and lessee in 50:50 ratio |
| Answer» B. Lessor | |
| 138. |
An average lease agreement involves............. |
| A. | Two parties |
| B. | Three parties |
| C. | Four parties |
| D. | None of these |
| Answer» A. Two parties | |
| 139. |
................. Leasing companies are formrd to promote the sale of its parent company |
| A. | Leverage |
| B. | Financial |
| C. | Vendor |
| D. | Swap |
| Answer» C. Vendor | |
| 140. |
.......... fund generates regular income to the investors on periodical basis. |
| A. | Balanced fund |
| B. | Income fund |
| C. | Growth fund |
| D. | All of these |
| Answer» B. Income fund | |
| 141. |
Income-cum- growth fund is also known as................. |
| A. | Balanced fund |
| B. | Nest eggs |
| C. | Open ended fund |
| D. | Long haul |
| Answer» A. Balanced fund | |
| 142. |
............... fund concentrate mainly on capital appreciation. |
| A. | Balanced fund |
| B. | Income fund |
| C. | Growth fund |
| D. | All of these |
| Answer» C. Growth fund | |
| 143. |
Pure growth fund is also known as |
| A. | Nest eggs |
| B. | Balanced fund |
| C. | Leverage fund |
| D. | Stop gap arrangement |
| Answer» A. Nest eggs | |
| 144. |
Investors generally use............... as a ‘parking place’ or ‘stop gap arrangement” |
| A. | Balanced fund |
| B. | Income fund |
| C. | Growth fund |
| D. | MMMF |
| Answer» D. MMMF | |
| 145. |
................. mutual fund otherwise known as “intrinsic value” |
| A. | Income |
| B. | Capital |
| C. | Portfolio |
| D. | Net asset value |
| Answer» C. Portfolio | |
| 146. |
Best suited fund for a business people is............... |
| A. | Balanced fund |
| B. | Income fund |
| C. | Growth fund |
| D. | Taxation fund |
| Answer» C. Growth fund | |
| 147. |
The facility offered to the investors to shift from one scheme to another under same fund is known as |
| A. | Roll over facility |
| B. | Re purchase facility |
| C. | Re issue facility |
| D. | Lateral shifting facility |
| Answer» D. Lateral shifting facility | |
| 148. |
Which of the following is a type of international factoring? |
| A. | Two factor system |
| B. | Single factor system |
| C. | Direct export factor system |
| D. | All of these |
| Answer» D. All of these | |
| 149. |
................ literally means “relinquish rights to something”. |
| A. | Securitisation |
| B. | Factoring |
| C. | Forfaiting |
| D. | Credit rating |
| Answer» C. Forfaiting | |
| 150. |
Investment Information and Credit Rating Agency of India (IICRA) is a |
| A. | Private company |
| B. | Public company |
| C. | Govt. Company |
| D. | Statutory company |
| Answer» B. Public company | |
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