MGt411 Quiz

Question # 1 of 20 ( Start time: 12:09:02 AM ) Total Marks: 1When a bond becomes more liquid relative to its alternatives, the demand curve for bonds shifts to the: Select correct option: Right (page # 49)LeftNo changeNone of the given options

Question # 2 of 20 ( Start time: 12:09:36 AM ) Total Marks: 1 According to the rule of 72 for reasonable rates of return, the time it takes to __________ the money will be t =72/i% Select correct option: Doubles (page # 27)Tripleshalves3/4

Question # 3 of 20 ( Start time: 12:10:22 AM ) Total Marks: 1 Which one of the following is the narrowest definition of money? Select correct option: CM1 (see page # 12)M2M3

Question # 4 of 20 ( Start time: 12:11:17 AM ) Total Marks: 1 An index number is a valuable tool because: Select correct option: The number by itself provides all of the useful information neededThe index provides a meaningful measurement scale to calculate percentage changesThe index is more stable than the data it reflectsIt does not require any calculations to compute percentage changes(not sure, but I selected option # 2, kindly verify it)

Question # 5 of 20 ( Start time: 12:12:34 AM ) Total Marks: 1 Yield curves show which of the followings? Select correct option: The relationship between bond interest rates (yields) and bond pricesThe relationship between liquidity and bond interest rates (yields)The relationship between risk and bond interest rates (yields)The relationship between time to maturity and bond interest rates (yields) (see page # 57)

Question # 6 of 20 ( Start time: 12:12:55 AM ) Total Marks: 1A zero coupon bond: Select correct option: Does not pay any coupon payments because the issuer is in defaultPays coupons only once a year versus the usual twice a yearPromises a single future payment (see page # 42)Pays coupons only if the bond price is below face value

Question # 7 of 20 ( Start time: 12:13:32 AM ) Total Marks: 1 Home loans and car loans are the example of which one of the following? Select correct option: Mortgage loansPledgeFixed Payment Loans (see page # 43)Ordinary loan

Question # 8 of 20 ( Start time: 12:14:45 AM ) Total Marks: 1 Without the ability of financial intermediaries to pool the resources of small savers: Select correct option: Borrowers needing large amounts of money would find it less costly to obtain the fundsThe economy would likely grow fasterPeople would likely save moreThe risk associated with lending would increase

Question # 9 of 20 ( Start time: 12:16:11 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 (see page # 53)Lower the default risk, higher the yieldHigher the default risk yield will remain constantLower the default risk yield will remain constant

Question # 10 of 20 ( Start time: 12:17:28 AM ) Total Marks: 1 Expectation hypothesis focuses on which one of the following? Select correct option: Risk premiumRisk free interest rateYield to maturityNone of the given options(Not sure, but I selected option# 2)

Question # 11 of 20 ( Start time: 12:18:49 AM ) Total Marks: 1Spreading involves: Select correct option: Finding assets whose returns are perfectly negatively correlatedBuilding a portfolio of assets whose returns move togetherInvesting in bonds and avoiding stocks during bad timesAdding assets to a portfolio that move independently(Confused b/w option # 1 & 4, read page # 41)

Question # 12 of 20 ( Start time: 12:19:20 AM ) Total Marks: 1 The____________ are an assessment of the creditworthiness of the corporate issuer. Select correct option: Bond yieldBond ratingsBond riskBond price

Question # 13 of 20 ( Start time: 12:19:36 AM ) Total Marks: 1 Which one of the following is the procedure of finding out the Present Value (PV)? Select correct option: DiscountingCompoundingTime value of moneyBond pricing

Question # 14 of 20 ( Start time: 12:20:00 AM ) Total Marks: 1 Which of the following best describes the relationship between Bond prices and yields? Select correct option: Move together inverselyBond yields do not change since the coupon is fixedMove together directlyAre independent of each other

Question # 15 of 20 ( Start time: 12:21:08 AM ) Which of the following institution take direct deposit from customer and give loan to customer directly? Select correct option: Zarai Tarkaytee Bank LTDSoneri Bank Khushali BankCredit union(I selected "Credit Union", not 100% sure)

Question # 16 of 20 ( Start time: 12:22:32 AM ) Total Marks: 1When the auto manufacturing industry does poorly due to a recession this is an example of: Select correct option: Idiosyncratic riskSystematic riskRisk premiumUnique risk(It should be "Systematic Risk", but again not 100% sure) see page # 39.

Question # 17 of 20 ( Start time: 12:23:42 AM ) Total Marks: 1 A bank can usually offer a saver a higher return for the same risk because: Select correct option: The bank can usually purchase assets at a higher cost than any one saverThe bank can pool the resources of larger savers and purchase lower denominated assetsEconomies of scale can be applied by the bank in its purchase of assetsNone of the given options

Question # 18 of 20 ( Start time: 12:24:51 AM ) Total Marks: 1 In a financial market where information is symmetric: Select correct option: The same information would be known by both parties in a transactionOne party to a transaction knows information the other party does notThe ability to obtain information is available to only one partyAll of the given options

Question # 19 of 20 ( Start time: 12:25:29 AM ) Total Marks: 1 The shape of the yield curve is usually: Select correct option: Upward sloping (page # 60)Downward slopingUpward sloping for shorter maturities and downward sloping for longer maturitiesFlat
http://www.orkut.com/Main#CommMemberManage?cmm=60174782&uid=10747545317727158390

Question # 20 of 20 ( Start time: 12:26:38 AM ) Total Marks: 1Which one of the following is true for financial intermediaries? Select correct option: Channel funds from savers to borrowersGreatly enhance economic efficiencyHave been an source of many financial innovationsAll of the given options