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MGT411 Money and Banking MCQs

MGT411-Money and Banking study material for students of virtual university of Pakistan. Download Past(old) Papers solved/unsolved, past assignments, quiz, mcqs, lecture notes, video lectures, handouts, books of MGT411-Money and Banking

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<span style="'font-family: "Times New Roman","serif"; font-size: 14pt;"Times New Roman";'> <span style="'color: windowtext; font-family: "Times New Roman","serif"; font-size: 14pt;'>Given a choice between two investments with the same expected payoff:<span style="'color: windowtext; font-family: "Times New Roman","serif"; font-size: 14pt;'>

  • ► Most people will select the one with the highest variance
  • ► Most people will opt for the one with the higher standard deviation
  • ► Most people will be indifferent since the expected payoffs are the same
  • ► Most people will choose the one with the lower standard deviation
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<span style="'font-family: "Times New Roman","serif"; font-size: 14pt;"Times New Roman";'>Which of the following investment will be profitable?
  • IRR is less than cost of borrowing
  • IRR is equal to cost of borrowing
  • IRR is greater than cost of borrowing
  • IRR has no connection with cost of borrowing
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Which of the following statement is correct?

  • Higher the future value of payment shorter will be the time
  • Higher the future value of payment longer will be the time
  • Lower the future value of payment the shorter will be the time
  • Lower the future value of payment the longer will be the time
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<span style="'font-family: "Times New Roman","serif"; font-size: 14pt;"Times New Roman";'>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
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<span style="'color: windowtext; font-family: "Times New Roman","serif"; font-size: 14pt;'>In electronic transfer the most common method is to send money through a system maintained by Federal reserve called __________.<span style="'color: windowtext; font-family: "Times New Roman","serif"; font-size: 14pt;'>

  • Fedex
  • Fedwire
  • Fedtransfer
  • Fedmoney
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<span style="'font-family: "Times New Roman","serif"; font-size: 14pt;"Times New Roman";'>Among the following reasons, which is the most appropriate cause of inefficiency of the barter system over monetary system?
  • Barter system involves commodities
  • Barter system involves double coincidence of wants
  • Barter system lacks a system for future payments
  • Barter system lacks a system for storage of value
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<span style="'font-family: "Times New Roman","serif"; font-size: 14pt;"Times New Roman";'>Which of the following has created an opportunity for small investors to participate in economic activity?
  • Mutual funds
  • Small corporations
  • Stock brokers
  • Small investors cannot take part in economic activity
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<span style="'font-family: "Times New Roman","serif"; font-size: 14pt;"Times New Roman";'>Q1

<span style="'font-family: "Times New Roman","serif"; font-size: 14pt;"Times New Roman";'> The interest rate used in the present value calculation is often referred as.

  • Discount rate
  • Inflation rate
  • Nominal rate
  • Deflation rate
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<span style="'color: windowtext; font-family: "Times New Roman","serif"; font-size: 14pt;'>What will be the effect on yield to maturity when bond prices increase?<span style="'color: windowtext; font-family: "Times New Roman","serif"; font-size: 14pt;'>

  • Yield to maturity does not change
  • Yield to maturity decreases
  • Yield to maturity increases
  • None of the given options
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If a bond sells at a premium, where price exceeds face value, then we would expect to
see:
  • Market interest rate the same as the coupon rate
  • Market interest rates above the coupon rate
  • Market interest rates below the coupon rate
  • All of the given options
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