MGT411 Financial Accounting II solved mcqs and quiz Fall 2010

[Xpert]

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Question # 1 of 15 ( Start time: 06:13:57 AM ) Total Marks: 1
The lowest rating for an investment grade bond assigned by Moody's is:
Select correct option:

BBB
ABB
Baa
Aaa

Question # 2 of 15 ( Start time: 06:14:23 AM ) Total Marks: 1
What is difference between warrant and check?
Select correct option:

Check is cleared from bank but warrant is not cleared by bank
Check is not necessarily pay able on demand but warrant is payable on demand
Warrant is not necessarily pay able on demand but check is payable on demand
None of above

Question # 3 of 15 ( Start time: 06:14:44 AM ) Total Marks: 1
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

Question # 4 of 15 ( Start time: 06:15:14 AM ) Total Marks: 1
Which of the following is the measure of likelihood that an event will occur?
Select correct option:

Risk
Probability
Frequency
Outcom

Question # 5 of 15 ( Start time: 06:15:43 AM ) Total Marks: 1
The price of a coupon bond can best be described as:
Select correct option:

The present value of the face value
The future value of the coupon payments and the face value
The present value of the coupon payments
Both The present value of the face value and of the coupon payments

Question # 6 of 15 ( Start time: 06:16:12 AM ) Total Marks: 1
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

Question # 8 of 15 ( Start time: 06:17:04 AM ) Total Marks: 1
Which of the following is NOT a depository financial institution?
Select correct option:

Credit Union
Savings and Loan
Commercial bank
Life Insurance Company

Question # 9 of 15 ( Start time: 06:17:32 AM ) Total Marks: 1
What is true relationship between return and risk?
Select correct option:

Lower the risk greater the return
Greater the risk greater the return
Greater the risk the return will remain constant
No relationship between them

Question # 10 of 15 ( Start time: 06:18:17 AM ) Total Marks: 1
Which of the following best describes the relationship between Bond prices and yields?
Select correct option:

Move together inversely
Bond yields do not change since the coupon is fixed
Move together directly
Are independent of each other

Question # 11 of 15 ( Start time: 06:18:48 AM ) Total Marks: 1
The GDP deflator is calculated as_________.
Select correct option:

Nominal GDP/Real GDP *100
Real GDP/Nominal GDP
Nominal GDP – Real GDP
Real GDP – Nominal GDP

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Question # 12 of 15 ( Start time: 06:19:29 AM ) Total Marks: 1
Which one of the following is the strategy of reducing overall risk by making two investments which are totally independent of each other?
Select correct option:

Spreading the risk
Standard deviation
Hedging the risk
Variance

Question # 13 of 15 ( Start time: 06:20:10 AM ) Total Marks: 1
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

Question # 14 of 15 ( Start time: 06:20:57 AM ) Total Marks: 1
Coupon bonds make the annual payments which are called as _________.
Select correct option:

Annual payments
Fixed payments
Coupon payments
Maturity payment

Question # 15 of 15 ( Start time: 06:21:20 AM ) Total Marks: 1
There is no guarantee that a bond issuer will make the promised payments is known as which one of the following?
Select correct option:

Default risk
Inflation risk
Interest rate risk
Systematic risk

[Xpert]

Question # 1 of 15 ( Start time: 06:25:11 AM ) Total Marks: 1
Which one of the following is the procedure of finding out the Present Value (PV)?
Select correct option:

Discounting
Compounding
Time value of money
Bond pricing

Question # 2 of 15 ( Start time: 06:25:27 AM ) Total Marks: 1
Financial instruments are evolved just as __________.
Select correct option:

Currency
Stock
Bond
Commodity

Question # 3 of 15 ( Start time: 06:25:40 AM ) Total Marks: 1
An increase in the expected inflation shifts the bond supply to the _______.
Select correct option:

Right
Left
No change
All of the given options

Question # 4 of 15 ( Start time: 06:26:00 AM ) Total Marks: 1
There is no guarantee that a bond issuer will make the promised payments is known as which one of the following?
Select correct option:

Default risk
Inflation risk
Interest rate risk
Systematic risk

Question # 5 of 15 ( Start time: 06:26:22 AM ) Total Marks: 1
Which one of the following is true for financial intermediaries?
Select correct option:

Channel funds from savers to borrowers
Greatly enhance economic efficiency
Have been an source of many financial innovations
All of the given options

Question # 6 of 15 ( Start time: 06:26:51 AM ) Total Marks: 1
Most of the people among us are _________.
Select correct option:

Risk lovers
Risk enhancers
Risk averse
Risk tolerating

Question # 7 of 15 ( Start time: 06:27:22 AM ) Total Marks: 1
Which of the following is the measure of likelihood that an event will occur?
Select correct option:

Risk
Probability
Frequency
Outcom

Question # 8 of 15 ( Start time: 06:27:33 AM ) Total Marks: 1
Which of the following expresses 6.5%?
Select correct option:

0.0065
6.50
0.650
0.0650

Question # 9 of 15 ( Start time: 06:27:48 AM ) Total Marks: 1
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

Question # 10 of 15 ( Start time: 06:28:00 AM ) Total Marks: 1
Time affects the value of which of the following?
Select correct option:

Financial Instruments
Financial Markets
Financial Institutions
Central Banks

Question # 11 of 15 ( Start time: 06:28:20 AM ) Total Marks: 1
An increase in wealth shifts the demand for bonds to the ________.
Select correct option:

Left
Right
No change
All of the given options

Question # 12 of 15 ( Start time: 06:28:55 AM ) Total Marks: 1
A business cycle downturn shifts the bond supply to the:
Select correct option:

Right
Left
No change
None of the given options

Question # 13 of 15 ( Start time: 06:29:17 AM ) Total Marks: 1
Stock exchange is an example of:
Select correct option:

Financial company
Financial institution
Financial market
Bank

Question # 14 of 15 ( Start time: 06:29:44 AM ) Total Marks: 1
If YTM is greater than the coupon rate the price of the bond is ________.
Select correct option:

Greater than its face value
Lower than its face value
Equals to its face value
All of the given options

Question # 15 of 15 ( Start time: 06:30:28 AM ) Total Marks: 1
Saving occurs normally in ……….
Select correct option:

Early age

Middle age

Old age

None of above