This quiz works best with JavaScript enabled. Home > Economics > Finance > Markets > Financial Markets – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Markets Quiz 8 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. ..... a situation in which the outcome is not certain, but the probabilities can be estimated A) Bond. B) Equities. C) Portfolio diversification. D) Risk. Show Answer Correct Answer: D) Risk. 2. A bank pays 7% interest on its 1-year deposit. The Price-to-earning ratio of the FD is: A) 14.28. B) 15.28. C) 14.00. D) 7. Show Answer Correct Answer: A) 14.28. 3. In which type of financial markets are fresh shares issued and sold? A) Secondary market. B) Primary market. C) Capital market. D) Money market. Show Answer Correct Answer: B) Primary market. 4. A $ 1, 000 par value bond makes annual coupon payment of $ 75. If it offers a yield to maturity of 7.5 percent, what is the price of the bond? A) $ 750. B) $ 1200. C) $ 75. D) $ 1000. Show Answer Correct Answer: D) $ 1000. 5. Which of the following is the LEAST risky investment? A) Stocks. B) Corporate bonds. C) Mutual funds. D) U.S. Treasury bonds. Show Answer Correct Answer: D) U.S. Treasury bonds. 6. Compared to money market securities, capital market securities have A) More liquidity. B) Lower yields. C) Less risk. D) Longer maturity. Show Answer Correct Answer: D) Longer maturity. 7. The IMF and World Bank regulate the Global Financial System A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 8. Which of the following instruments are traded in a capital market? A) Repurchase agreements. B) Negotiable bank CDs. C) Corporate bonds. D) U.S. Treasury bills. Show Answer Correct Answer: C) Corporate bonds. 9. Who controls the capital market of India? A) RBI. B) NABARD. C) IRDA. D) SEBI. Show Answer Correct Answer: D) SEBI. 10. All the following companies can be categorized as having a high operating leverage EXCEPT: A) Asset Management Companies. B) Brokerage Firms. C) Registrar and Transfer Agents. D) FMCG. Show Answer Correct Answer: D) FMCG. 11. A federally chartered bank which is a member of the Federal Reserve System and the Federal Deposit Insurance Corporation. A) Member banks. B) Federal Reserve Board. C) Central bank. D) National bank. Show Answer Correct Answer: D) National bank. 12. In a(n) ..... market, dealers in different locations buy and sell securities to anyone who comes to them and is willing to accept their prices. A) Barter. B) Over-the-counter. C) Common. D) Exchange. Show Answer Correct Answer: B) Over-the-counter. 13. An option contract giving the owner the right, but not the obligation, to buy a stock in the future is ..... A) Put option. B) Call option. C) Futures. D) Spot. Show Answer Correct Answer: B) Call option. 14. Date when the Philippine Stock Exchange was formed from the merger of the Manila Stock Exchange and Makati Stock Exchange A) December 25, 1992. B) December 23, 1992. C) December 25, 1990. D) December 23, 1990. Show Answer Correct Answer: B) December 23, 1992. 15. What Is Leveraged Finance (LevFin)? A) Time Deposits of large institutions. B) Cashless credit issued by banks. C) Funding a company or business unit with more debt than would be considered normal for that company or industry. D) None of the above. Show Answer Correct Answer: C) Funding a company or business unit with more debt than would be considered normal for that company or industry. 16. ..... is a market for lending & borrowing of short term funds. A) Money Market. B) Primary Market. C) Capital Market. D) All of the Above. Show Answer Correct Answer: A) Money Market. 17. The process of spreading your assets among several different types of investments to reduce risks A) Common Stock. B) Diversification. C) Dividends. D) Emergency Fund. Show Answer Correct Answer: B) Diversification. 18. What market are Commodities traded on? A) Equity. B) Futures. C) Exchange. D) Credit. Show Answer Correct Answer: B) Futures. 19. A forward exchange rate is a rate relating to A) Past interest rate. B) Spot interest rate. C) Future interest rate. D) Currency exchange rate. Show Answer Correct Answer: D) Currency exchange rate. 20. A bank's capital is the funds it holds from profits and issuing shares. A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 21. What are these? NYSE-NASDAQ A) Stocks. B) Markets. C) Stock exhanges. D) Securities and exchanges. Show Answer Correct Answer: C) Stock exhanges. 22. Participants in the capital market includes A) Individuals. B) Corporate. C) Financial Institutions. D) All of the above. Show Answer Correct Answer: D) All of the above. 23. The return you get for purchasing bonds comes in the form of: A) Face value. B) Dividends. C) Coupons. D) None of above. Show Answer Correct Answer: C) Coupons. 24. Which of the following is a high risk investment? A) Municipal bonds. B) A CD. C) Treasury bonds. D) Junk bonds. Show Answer Correct Answer: D) Junk bonds. 25. A collection of financial assets A) Money market mutual fund. B) Portfolio. C) Prospectus. D) Equities. Show Answer Correct Answer: B) Portfolio. 26. Suppose the US dollar/Euro exchange rate is $ 1.5 = 1 Euro. A pizza costs 4.5 Euros. What is its value in US dollar? A) $ 4.50. B) $ 1. C) $ 6.75. D) $ 3. Show Answer Correct Answer: C) $ 6.75. 27. When an investment bank ..... securities, it guarantees a price for a corporation's securities and then sells them to the public. A) Undertakes. B) Overtakes. C) Overwrites. D) Underwrites. Show Answer Correct Answer: D) Underwrites. 28. What is the main objective of financial management? A) Maximising shareholders wealth. B) Strengthening financial position. C) Compliance of government rule. D) Satisfying employees. Show Answer Correct Answer: A) Maximising shareholders wealth. 29. Determine the Bid/ask spread with the following given data:Currency is Japenese yen;Bid rate is $ 0.0070;Ask rate is $ 0.0074;What is the bid/ask percentage spread? A) 0.054 or 5.4%. B) 0.044 or 4.4%. C) 0.034 or 3.4%. D) 0.064or 6.4%. Show Answer Correct Answer: A) 0.054 or 5.4%. 30. The money invested in the call money market provides high liquidity with ..... A) Medium Profitability. B) Limited Profitability. C) Low Profitability. D) High Profitability. Show Answer Correct Answer: C) Low Profitability. ← PreviousNext →Related QuizzesFinance QuizzesEconomics QuizzesFinancial Markets Quiz 1Financial Markets Quiz 2Financial Markets Quiz 3Financial Markets Quiz 4Financial Markets Quiz 5Financial Markets Quiz 6Financial Markets Quiz 7Financial Markets Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books