MC090410137 2010 Latest Quiz For Post

Muhammad Soban Badar
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MC090410137 : Muhammad Soban Badar

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Question # 1 of 15 ( Start time: 06:57:13

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Debt instruments is categorized on the basis of which one of the following?
Select correct option:
Loan maturity period
Interest rates
Mode of payment of interest
Amount of the debt taken
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Which of the following would be included in a definition of risk?
Risk is a not measure of uncertainty
Risk is unavoidable
Risk doesn't have a time horizon
Risk seldom involves some future payoff
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Which of the following is NOT the component of monetary base?
Currency in the hands of the public
Reserves of the banking system
Deposits at the central bank
All of the given options
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__________ is the interest rate at which the present value annual reveneu equals the cost of the
investment.
Fixed rate of interest

Internal rate of return
Variable rate of interest
Nominal rate of interest
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----- example of channel fund from saver to borrower.
Bank
Mutual fund
Finance companies
All of above
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The return on holding a bond till its maturity is called:
Coupon rate
Yield to maturity
Current yield
Internal rate of return
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A sale of government bonds by the Fed, all else the same:
Increases the monetary base
Increases the high-powered money
Increases the non-borrowed monetary base
None of the given option
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MC090410137 : Muhammad Soban Badar Time

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Which of the following statement is true for the given sentence, "that tax affects the bond return"?
Because only interest income they receive from bond
Because principal amount and interest income they re
Because bond holders are taxpayers
Because all bond is sold with a condition that tax will
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An increase in the expected inflation shifts the bond demand to the _________.
Right
Left
No change
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Which one of the following agencies assesses the default risk of different issuers?
Insurance companies
Bond issuing
Credit rating
Recruitment agencies
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Factors that cause the excess reserve ratio to rise include:
A rise in expected deposit outflows
A decline in market interest rates
A rise in market interest rates
Both rise in expected deposit outflows and decline in
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Which one the following is NOT the way to manage liquidity risk?
By holding sufficient excess reserves
Through diversification
By adjusting assets
By adjusting liabilities
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Which one of the following is true for the relationship between the yield of taxable and tax exempt
bond?
Higher the tax rate wider the gap between the yield
Taxable bond yield is always greater than tax exemp
Higher the tax rate shorter the gap between yield of
Lower the tax rate wider the gap between yield of ta
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Home loans and car loans are the example of which one of the following?
Mortgage loans
Pledge
Fixed Payment Loans
Ordinary loan
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Which of the following type/s of transaction/s affect the balance sheets of both the central bank
and the banking system?
An open market operation
A foreign exchange intervention
Central bank
s extension of a discount loan
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The Dividend-Discount Model of stock valuation:
Takes the annual dividend, adds it to the expected f
Takes the net present value of expected dividends a
Takes the net present value of the expected future
Is an application of the net present value formula
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Quiz Start Time: 07:13 PM Time
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A typical bank will offer ________ type/s of checking accounts.
Only one type
Two types
Four types
Six or more types
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What is difference between warrant and check?
Check is cleared from bank but warrant is not cleared
Check is not necessarily pay able on demand but war
Warrant is not necessarily pay able on demand but c
None of above
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Which one of the following is the procedure of finding out the Present Value (PV)?
Discounting
Compounding
Time value of money
Bond pricing
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When the auto manufacturing industry does poorly due to a recession this is an example of:
Idiosyncratic risk
Systematic risk
Risk premium
Unique risk
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It arises when banks make additional profit by using derivatives
It arises when loan is not repaid
It arises because of sudden demands of funds
It arises when two sides of the balance sheet do not
It arises when banks make additional profit by using
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Home loans and car loans are the example of which one of the following?
Mortgage loans
Pledge
Fixed Payment Loans
Ordinary loan
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Which of the following would be considered characteristic of money?
It is store of value
It pays a higher return than most assets
It is in fixed supply
It is legal tender everywhere in the world
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In "gap analysis," the gap is the difference between a banks’s:
Deposits and loans

Long-term securities and short-termsecurities
Rate-sensitive assets and rate-sensitive liabilities
Assets and liabilities
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Excess reserve-to-deposit ratio is a factor that affects the quantity of money. This factor is
controlled by which of the following?
Central bank
Bank regulators
Commercial banks
Non bank public
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Beside default risk which one if the following factor affects the return on bond?
Taxes
Monetary policy
J unk bonds
Debt
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Which one of the following is the narrowest definition of money?
M1
M2
M3
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Which of the following is NOT an example of financial institutions?
Banks
Securities firms
Stock exchanges
Insurance companies
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What characteristic of money is not included in securities characteristics
Mean of payment
Unit of account
Store of value
Transfer of risk
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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
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When stock prices reflect fundamental values:
All investors will experience capital gains
All companies will have an easier task of obtaining fin
The allocation of resources will be more efficient
The overall level of the stock market should move hig
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The fact that a financial intermediary can use the same contract for many customers is an
example of:
Economies of Scope
The Law of Diminishing Marginal Returns
The Law of Increasing Opportunity Cost
Economies of Scale
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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
Have no relationship with each other (i.e. they are in
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Government bonds called …….. Where as corporate bonds are called ……
Zero coupon bond, coupon bond

Risky bond. Risk free bond
T bill, corporate bond
Console bond, junk bonds
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Which of the following financial instruments used primarily as store of value?
Options
Stocks
Home mortgage
Bonds
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One of major disadvantage of fiat money is
Only few resources are needed
It may be theft easily
Normally it is obsolete quickly
Pressure or corrupt government may print excessive
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If YTM is less than the coupon rate the price of the bond is __________.
Greater than its face value
Lower than its face value
Equals to its face value
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A zero coupon bond:
Does not pay any coupon payments because the issu
Pays coupons only once a year versus the usual twic
Promises a single future payment
Pays coupons only if the bond price is below face val
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Quiz Start Time: 07:26 PM 7
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When the Fed wants to increase the level of reserves in the banking system, it can:
Buy bonds from the public

Buy bonds from banks
Increase discount loans to banks
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Which one of the following agencies assesses the default risk of different issuers?
Insurance companies
Bond issuing
Credit rating
Recruitment agencies
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Total Marks: 1
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Which of the following would be considered characteristic of money?
It is store of value
It pays a higher return than most assets
It is in fixed supply
It is legal tender everywhere in the world
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Which of the following would be included in a definition of risk?
Risk is a not measure of uncertainty
Risk is unavoidable
Risk doesn't have a time horizon
Risk seldom involves some future payoff
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Considering the Liquidity Premium Theory, if investors expect short term interest rates to
decrease:
The yield curve must have a positive slope
The yield curve must be inverted
The yield curve could be flat
The slope of the yield curve should actually increase
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Which of the following patterns of term structure occur most frequently?
Ascending yield curve

Descending yield curve
Flat yield curve
Humped yield curve
Muhammad Soban Badar

0345-7216161
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MC090410137 2010 Latest Quiz For Post

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Muhammad Soban Badar

MC090410137 : Muhammad Soban Badar

Question # 1 of 15 ( Start time: 06:57:13

Select correct option:

Loan maturity period

Mode of payment of interest

Amount of the debt taken

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Question # 2 of 15 ( Start time: 06:58:31

Select correct option:

Risk is a not measure of uncertainty

Risk doesn't have a time horizon

Risk seldom involves some future payoff

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MC090410137 : Muhammad Soban Badar

Question # 3 of 15 ( Start time: 06:59:43

Currency in the hands of the public

Reserves of the banking system

Deposits at the central bank

All of the given options

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MC090410137 : Muhammad Soban Badar

Question # 4 of 15 ( Start time: 07:01:05

Select correct option:

Fixed rate of interest

Variable rate of interest

Nominal rate of interest

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MC090410137 : Muhammad Soban Badar

Question # 5 of 15 ( Start time: 07:02:10

Select correct option:

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MC090410137 : Muhammad Soban Badar

Question # 6 of 15 ( Start time: 07:02:59

Select correct option:

Internal rate of return

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MC090410137 : Muhammad Soban Badar

Question # 7 of 15 ( Start time: 07:03:34

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Increases the monetary base

Increases the high-powered money

Increases the non-borrowed monetary base

None of the given option

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MC090410137 : Muhammad Soban Badar Time

Question # 8 of 15 ( Start time: 07:05:02

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Because only interest income they receive from bond

Because principal amount and interest income they re

Because bond holders are taxpayers

Because all bond is sold with a condition that tax will

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MC090410137 : Muhammad Soban Badar

Question # 9 of 15 ( Start time: 07:05:42

Select correct option:

All of the given options

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MC090410137 : Muhammad Soban Badar

Question # 10 of 15 ( Start time: 07:06:45

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MC090410137 : Muhammad Soban Badar