Mgt411 Online current quiz

Wider the range of outcome wider will be the _________.

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Risk

Profit

Probability

Lose

The interest rate that is involved in ___________ calculation is referred to as discount rate

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Present value

Future value

Intrinsic value

Discount value

The return on holding a bond till its maturity is called:

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Coupon rate

Yield to maturity

Current yield

Internal rate of return

following represents the fisher’s equation?

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Nominal interest rate = real interest rate + inflation

Nominal interest rate + inflation = real interest rate

Nominal interest rate = real interest rate - inflation

Nominal interest rate = real interest rate / inflation

Bonds without maturity dates are which of the followings?

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Zero coupon bonds

Coupon securities

Consols

Preferred Bonds

A risk-averse investor will:

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Always prefer an investment with a lower expected return

Always prefer an investment with a certain return to one with the same expected return but any amount of uncertainty

Always require a certain return

Always focus exclusively on the expected return

GDP deflator is called

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Retailer price index

Consumer price index

Producer price index

None of above

What will be the effect on the present value if we double the future value of the payment?

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It will decrease the value by one-half

It will increase the value by one-half

It will equally increase the value i.e. doubles the value

It will have no effect on the value

Government bonds called …….. Where as corporate bonds are called ……

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Zero coupon bond, coupon bond

Risky bond. Risk free bond

T bill, corporate bond

Console bond, junk bonds

Beside default risk which one if the following factor affects the return on bond?

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Taxes

Monetary policy

Junk bonds

Debt

Which of the following are used to monitor and stabilize the economy?

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Stock exchanges

Commercial Banks

Central Banks

Financial institutions

What will be the result of the difference of real and nominal interest rate?

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The cost of borrowing

The effect of inflation

The price of bonds

The return of bonds

Which of the following expresses 6.5%?

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0.0065

6.50

0.650

0.0650

Diversification is the principle of:

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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

Current accounts of commercial bank lies in which money aggregate definition?

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Currency

M1

M2

M3

Which of the following would be considered characteristic of money?

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It is store of value

It pays a higher return than most assets

It is in fixed supply

It is legal tender everywhere in the world

When the price of a bond is above face value:

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The yield to maturity will be above the coupon rate

The yield to maturity is below the coupon rate

The yield to maturity will equal zero

The yield to maturity will equal the coupon rate