MGT411 Financial Accounting II solved mcqs Fall 2010

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Question # 1 of 15 ( Start time: 06:03:35 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: 06:04:23 AM ) Total Marks: 1
The money aggregate M2 includes each of the following EXCEPT:
Select correct option:

Small denomination time deposits.
Retail Money Market Mutual fund shares
U.S. Treasury bills
M1

Question # 3 of 15 ( Start time: 06:05:13 AM ) Total Marks: 1
The Financial Systems makes it easier to trade because it:
Select correct option:

Facilitate Payments
Channels Funds from Savers to Borrowers
Enables Risk Sharing
All of the given options

Question # 4 of 15 ( Start time: 06:05:30 AM ) Total Marks: 1
You receive a check for $100 two years from today. The discounted present value of this $100 is:
Select correct option:

$100/(1+i)
$100*(1+i)2
$100*(1+i)
$100/(1+i)2

Question # 5 of 15 ( Start time: 06:06:37 AM ) Total Marks: 1
Which one of the following is the narrowest definition of money?
Select correct option:

C
M1
M2
M3

Question # 6 of 15 ( Start time: 06:07:20 AM ) Total Marks: 1
In which of the following bonds we may ignore the default risk?
Select correct option:

Privately issued bonds
Government issued bonds
Bonds issued by Corporate

All of the given options

Question # 7 of 15 ( Start time: 06:07:47 AM ) Total Marks: 1
What characteristic of money is not included in securities characteristics
Select correct option:

Mean of payment
Unit of account
Store of value
Transfer of risk

Question # 8 of 15 ( Start time: 06:08:38 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 # 9 of 15 ( Start time: 06:09:00 AM ) Total Marks: 1
Which of the following expresses 6.5%?
Select correct option:

0.0065
6.50
0.650
0.0650

Question # 10 of 15 ( Start time: 06:09:19 AM ) Total Marks: 1
If YTM equals 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
Insufficient information

Question # 11 of 15 ( Start time: 06:09:34 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 # 12 of 15 ( Start time: 06:09:52 AM ) Total Marks: 1
The bond rating of a security refers to which of the followings?
Select correct option:

The size of the coupon payment relative to the face value
The return a holder is likely to receive
The likelihood the lender/borrower will be repaid by the borrower/issuer
The years until the bond matures

Question # 13 of 15 ( Start time: 06:10:17 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 # 14 of 15 ( Start time: 06:10:49 AM ) Total Marks: 1
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

Question # 15 of 15 ( Start time: 06:11:20 AM ) Total Marks: 1
________ is the interest rate at which the present value annual reveneu equals the cost of the investment.
Select correct option:

Fixed rate of interest
Internal rate of return
Variable rate of interest
Nominal rate of interest