MGT411 Financial Accounting II Online Quiz#2 Fall 2010 25 november

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Question # 1 of 15 ( Start time: 05:54:15 AM ) Total Marks: 1
Home loans and car loans are the example of which one of the following?
Select correct option:

Mortgage loans
Pledge
Fixed Payment Loans
Ordinary loan

Question # 2 of 15 ( Start time: 05:54:49 AM ) Total Marks: 1
What is the true relationship that exists between default risk and yield?
Select correct option:

Higher the default risk, higher the yield
Lower the default risk, higher the yield
Higher the default risk yield will remain constant
Lower the default risk yield will remain constant

Question # 3 of 15 ( Start time: 05:56:09 AM ) Total Marks: 1
Bonds without maturity dates are which of the followings?
Select correct option:

Zero coupon bonds
Coupon securities
Consols
Preferred Bonds

Question # 4 of 15 ( Start time: 05:56:45 AM ) Total Marks: 1
If the annual interest rate is 6%, the price of a 1-year Treasury bill with $100 face value would be:
Select correct option:

$94.00
$94.33
$95.25
$96.10

Question # 5 of 15 ( Start time: 05:57:31 AM ) Total Marks: 1
Sum of all the probabilities should be equal to which one of the following?
Select correct option:

Zero
One
Two
Three

Question # 6 of 15 ( Start time: 05:57:45 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

Question # 7 of 15 ( Start time: 05:58:24 AM ) Total Marks: 1
The return on the bond is equal to which of the following?
Select correct option:

Coupon rate + rate of capital gains
Current yield + rate of capital gains
Coupon rate - rate of capital gains
Current yield - rate of capital gains

Question # 8 of 15 ( Start time: 05:59:02 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: 05:59:39 AM ) Total Marks: 1
The current yield on a $10,000, 5% coupon bond selling for $8,000 is:
Select correct option:

5.00%
6.25%
7.50%
8.00%

Question # 10 of 15 ( Start time: 06:00:23 AM ) Total Marks: 1
A risk-averse investor will:
Select correct option:

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

Question # 11 of 15 ( Start time: 06:00:38 AM ) Total Marks: 1
Which is broadly used as money aggregate?
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M1
M2

M3
None of above

Question # 12 of 15 ( Start time: 06:00:58 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 # 13 of 15 ( Start time: 06:01:27 AM ) Total Marks: 1
When the auto manufacturing industry does poorly due to a recession this is an example of:
Select correct option:

Idiosyncratic risk
Systematic risk
Risk premium
Unique risk

Question # 14 of 15 ( Start time: 06:01:57 AM ) Total Marks: 1
Consumer Price Index (CPI) measures the:
Select correct option:

Changes in the quantity
Changes in the prices
Changes in the cost
Changes in the profit

Question # 15 of 15 ( Start time: 06:02:09 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