MGT411- Money

MCQ's Solved of MGT411- Money

Question No: 1 ( Marks: 1 ) - Please choose one

Which of the following is the final mode of payment?

► Money

► ATM

► Cheque

► Yet to discover

Question No: 2 ( Marks: 1 ) - Please choose one

Which of the following statement truly represents the main difference between debit card and store value card?

► Debit card is operated by ATM machine while Store value card doesn’t

► Debit card appearance is different from Store value card

► Debit card is not specific for user but store value card is specific

► Debit card is specific for user but store value card is not

Question No: 3 ( Marks: 1 ) - Please choose one

Which of the following statements is correct?

► If you can buy the same goods this year as you bought last year with less money the money supply decreased.

► To purchase the same goods today that were purchased one year ago requires more money, there must have been inflation

► To purchase the same goods today as one year ago requires less money, the money supply must have increased

► To purchase the same goods today that were purchased one year ago requires the same amount of money, there must have been inflation

Question No: 4 ( Marks: 1 ) - Please choose one

Which of the following is the difference that lies between the options and futures?

► Options is not binding whereas future is binding

► Futures carry risks but Options didn’t carry risk

► Centralized clearinghouses guarantee futures but not options contracts

► There is no difference between options and futures

Question No: 5 ( Marks: 1 ) - Please choose one

Which of the following describes the general formula for the calculation of the compound interest?

► FV ₌ PV/(1+i) ⁿ

► FV ₌ PV/(1-i) ⁿ

► FV ₌ PV*(1+i) ⁿ

► FV ₌ PV*(1-i) ⁿ

Question No: 6 ( Marks: 1 ) - Please choose one

What is true about the relationship between standard deviation and risk?

► Greater the standard deviation greater will be the risk

► Greater the standard deviation lower will be the risk

► Greater the standard deviation risk will be remained the same

► No relation between them

Question No: 7 ( Marks: 1 ) - Please choose one

Current yield is equal to which of the following?

► Price paid / yearly coupon payment

► Price paid *yearly coupon payment

► Yearly coupon payment / face value of bond

► Yearly coupon payment / price paid

Question No: 8 ( Marks: 1 ) - Please choose one

The risk premium of a bond will:

► Higher for investment-grade bonds than for high-yield bonds

► Positive but small if the risk of default is zero

► Decrease when the default risk rises

► Increase when the risk of default rises

Question No: 9 ( Marks: 1 ) - Please choose one

Requiring a large deductible on the part of an insured is one way insurers treat the problem of:

► Free-riding

► Moral hazard

► Adverse selection

► The Lemons market

Question No: 10 ( Marks: 1 ) - Please choose one

Which of the following does not include in marketable securities?

► Common stocks

► Bonds of the U.S. Treasury

► Treasury Bills

► Non transaction deposits

Question No: 11 ( Marks: 1 ) - Please choose one

___________ is a component of the liability side of the commercial bank’s balance sheet.

► Deposits

► Loans

► Securities

► All of the given options

Question No: 12 ( Marks: 1 ) - Please choose one

A stand by letter of credit is a form of:

► Loan

► Insurance

► Security

► Deposits

Question No: 13 ( Marks: 1 ) - Please choose one

Funds of depository institution are primarily used in which of the following?

► Corporate bonds, Government bonds, Stocks, Mortgage

► Cash, Loan, Securities

► Stocks, Government bonds, corporate bonds, commercial papers

► Commercial papers, Bonds

Question No: 14 ( Marks: 1 ) - Please choose one

Securities firms include _________.

► Brokerage firms

► Investment banks

► Mutual fund companies

► All of the given options

Question No: 15 ( Marks: 1 ) - Please choose one

_________is the combination of the term life insurance and savings account.

► Property insurance

► Health insurance

► Whole life insurance

► Casualty insurance

Question No: 16 ( Marks: 1 ) - Please choose one

Which of the following is a Primary source of funds of Finance company?

► Bonds

► Policy benefits to be paid out to futures

► Loan guarantees

► Shares sold to customers

Question No: 17 (Marks: 1) - Please choose one

What matters most during a bank run is _________________.

► The liquidity of the bank

► The solvency of the bank

► The number of depositors

► Safety of bank

Question No: 18 ( Marks: 1 ) - Please choose one

Khushhali bank is:

► A Finance company

► A Securities firm

► A Government sponsored enterprise

► An insurance company

Question No: 19 ( Marks: 1 ) - Please choose one

Under the purchase and assumption method of dealing with a failed bank, the FDIC ______________.

► Sells the failed bank to the Federal Reserve

► Finds another bank to take over the insolvent bank

► Takes over the day to day management of the bank

► Sells off the profitable loans of the failed bank in an open auction

Question No: 20 ( Marks: 1 ) - Please choose one

On which of the following success of monetary policy depends upon?

► It may be on the chance or by luck

► The institutional environment

► Competent people in responsible positions

► Both the institutional environment and Competent people in responsible positions

Question No: 21 ( Marks: 1 ) - Please choose one

For the Federal Reserve, the largest liability on their balance sheet is ________.

► Non-bank currency

► Reserves

► Government accounts

► Treasury certificates

Question No: 22 ( Marks: 1 ) - Please choose one

An open market purchase of U.S. Treasury securities by the Fed will cause the Fed's balance sheet to show _________.

► A decrease in the asset of securities and a decrease in the liability of reserves

► A decrease in the liability of reserves

► No change in the size of balance sheet except composition of assets

► An increase in the asset category of securities and the liability category of reserves