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# MGT411 Online Quiz # 2 Lecture no. 1 to 20 (May 07 to May 09, 2012)

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2nd Quiz(MGT411)

*Please correct me, if you find any mistake.

lushahz@gmail.com

__________ is the cost of using the borrowed money.

Dividend

Interest

Amount of loan

Which of the following is NOT a depository financial institution?

Credit Union

Savings and Loan

Commercial bank

Life Insurance Company

A __________ is a promise to make a series of payments on specific future date.

Stock

Bond

Loan

Cheque

If probability of occurrence is exactly zero then which of the following statement is true?

Event will occur

Event will not occur

Event must occur

All of the given options

You receive a check for \$100 two years from today. The discounted present value of this \$100 is:

\$100/(1+i)

\$100*(1+i)2

\$100*(1+i)

\$100/(1+i)2

Which of the following is NOT an example of financial institutions?

Banks

Securities firms

Stock exchanges

Insurance companies

Time affects the value of which of the following?

Financial Instruments

Financial Markets

Financial Institutions

Central Banks

Mark borrows \$8,000 and then repays \$8,600 to ABC bank. What is the amount of interest in this payment?

\$600

\$500

\$400

\$100

Stock exchange is an example of:

Financial company

Financial institution

Financial market

Bank

Which of the following is NOT a function of financial institution?

Insurance

Consumer credit

Brokers and agents registration

With direct finance we mean which of the following?

Individuals (or firms) borrow directly from the savers

Individuals (or firms) borrow directly from banks.

Individuals deposit savings directly in banks.

Firms deposit savings directly in banks.

Which of the following is regulatory body of listed companies in Pakistan?

Karachi Stock exchange 100 index

National Bank of Pakistan

Stock Exchange Commission of Pakistan

Central bank

Present value (PV) of bonds is determined by methodology of -----------

Compounding

Discounting

Future value

Profitability index

Which of the following is(are) step(s) while calculating of variance?

Compute expected value

Subtract expected value from each possible payoff

Square the result and multiply by its probability

All of the given options

The reason for the government to get involved in the financial system is to:

Protect investors

Ensure the stability of the financial system

Protect bank customers from monopolistic exploitation

All of the given options

Income is accounted flow variable because it is measured ----------

At a point of time

Over the period of timedoubted

On the Specific time

In monetary term

Traditional Whole Life Insurance Companies have ----------- throughout life of the policy.

What will be the future value of \$90 at the end of one year at 5% per annum?

90.5

94.5

98.5

100

Arbitrageurs in the stock markets and in foreign exchange markets are classified under

Risk neutral

Risk averse

Risk lover

Value at risk

Which of the following best represent the true relationships between interest rates and bond prices?

Move in the same direction

Move in opposite direction

Sometimes move in the same direction, some times in opposite direction

Have no relationship with each other (i.e. they are independent)

One more

MGT411_Online-Quiz#2_Spring_2012_(07-05-2012)

See the attached file

Attachments:

Solved to the best of my knowledge and with the help of handouts....Please confirm once...:)

Question # 1 of 20 ( Start time: 08:50:41 PM ) 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 # 2 of 20 ( Start time: 08:51:38 PM ) Total Marks: 1
Which of the following expression is true?
Select correct option:
Expected Return = P1X R1/P2XR2……… Pn/Rn
Expected Return = P1X R1-P2XR2………… Pn-Rn
Expected Return = P1X R1+P2XR2………. Pn+Rn
Expected Return = P1X R1XP2XR2………. Pn*Rn

Question # 3 of 20 ( Start time: 08:53:08 PM ) Total Marks: 1
Financial institutions facilitate the flow of resources among the parties and reduce ------------cost by issuing the standardized securities.
Select correct option:
Monitoring
Production
Transaction
Cost overrun

Question # 4 of 20 ( Start time: 08:54:37 PM ) Total Marks: 1
Mr A need 1000000 to buy a car for his personal use he contact with bank that give his loan this would be called
Select correct option:
Direct finance
Indirect finance
Facilitate payment
All of above

Question # 5 of 20 ( Start time: 08:55:55 PM ) Total Marks: 1
Which of the following statement is correct
Select correct option:
Debit cards and credit cards both are same
Debit card is just like a cheque, the money in our account is used for payments
Activation of debit card is compulsory for every account holder
All of above

Question # 6 of 20 ( Start time: 08:57:05 PM ) Total Marks: 1
Which of the following are used to monitor and stabilize the economy?
Select correct option:
Stock exchanges
Commercial Banks
Central Banks
Financial institutions

Question # 7 of 20 ( Start time: 08:57:37 PM ) Total Marks: 1
Behavior of investors can be classified into following types
Select correct option:
Risk-averse, risk neutral and risk lover
Risk aversion and risk lover
Value at risk, risk neutral and risk lover

Question # 8 of 20 ( Start time: 08:58:47 PM ) Total Marks: 1
___________ is the value today of a payment that is promised to be made in the future.
Select correct option:
Future value
Present value
Agreed value
None of the given options

Question # 9 of 20 ( Start time: 08:59:33 PM ) Total Marks: 1
Bonds that are issued by Government are called _________.
Select correct option:
Government bond
Treasury bond
Corporate bond
Callable Bonds

Question # 10 of 20 ( Start time: 09:00:22 PM ) Total Marks: 1
All the financial instruments primarily transfer the risk except
Select correct option:
Future
Options
Stock
Future contracts

Question # 11 of 20 ( Start time: 09:01:52 PM ) Total Marks: 1
Which of the following best expresses the payment a lender receives for lending their money for four years?
Select correct option:
PV(1+i)4
PV/(1 + i)4
4PV
PV/(1 - i)4

Question # 12 of 20 ( Start time: 09:02:30 PM ) Total Marks: 1
Which of the following expression is true?
Select correct option:
Cost of basket in base period / Cost of basket in that period *100
Cost of basket in that period / cost of basket in base period *100
Cost of basket in that period X Cost of basket in base period *100
Cost of basket in that period + Cost of basket in base period *100

Question # 13 of 20 ( Start time: 09:04:02 PM ) Total Marks: 1
Which of the following financial institution falls in the category of risk sharing institute?
Select correct option:
Commercial bank
Mutual fund
Insurance company
Pension fund

Question # 14 of 20 ( Start time: 09:05:34 PM ) Total Marks: 1
Financial development measured by
Select correct option:
M1/GDP
M2/GDP
M3/DGP
All of above

Question # 15 of 20 ( Start time: 09:06:35 PM ) Total Marks: 1
The longer the time (n) until the payment:
Select correct option:
The lower the present value
The higher the present value because time is valuable
The lower must be the interest rate
Time has no effect on present value

Question # 16 of 20 ( Start time: 09:07:07 PM ) Total Marks: 1
Standard deviations for the projects A, B, C and D have been computed as 15%, 20%, 22% and 25% respectively. Which of the following would be the best project keeping risk factor into consideration?
Select correct option:
15%
20%
22%
25%

Question # 17 of 20 ( Start time: 09:08:32 PM ) Total Marks: 1
The money that is used to start-up a new business is called ----------------
Select correct option:
Investment
Venture capital
Funding
None of the given options

Question # 18 of 20 ( Start time: 09:09:55 PM ) Total Marks: 1
If Government or Public company wants to issue new securities, which of the following market will trade this transaction?
Select correct option:
OTC Market
Money Market
Primary Market
Secondary Market

Question # 19 of 20 ( Start time: 09:11:18 PM ) Total Marks: 1
Present value (PV) of bonds is determined by methodology of -----------
Select correct option:
Compounding
Discounting
Future value
Profitability index

Question # 20 of 20 ( Start time: 09:12:15 PM ) Total Marks: 1
If Present Value, Future Value and Interest rate have been given then we can easily calculate ----.
Select correct option:
Fair value of given amount
Market value of amount
Time period
Initial investment

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