¤Virtual University Of Pakistan Network¤
MGT411 Money & Banking-quiz spring 2012
1. We have different option to invest the money, similarly we may deposit to earn the interest such Interest rate exist owing to -----.
A. Opportunity cost
B. Fixed cost
C. Variable cost
D. Semi- variable cost
2. If the bond price is less than its face value, what will be the relationship among current yield, coupon rate and YTM?
A. Current yield < coupon rate < Yield to Maturity
B. Yield to maturity > current yield >coupon rate
C. Coupon Rate > Current Yield > Yield to Maturity
D. Coupon Rate = Current Yield = Yield to Maturity
If current price = face value, then yield to maturity = current yield = coupon rate.
If current price < face value, then yield to maturity > current yield > coupon rate.
If current price > face value, then yield to maturity < current yield < coupon rate.
3. Arbitrageurs in the stock markets and in foreign exchange markets are classified under
A. Risk neutral
B. Risk averse
C. Risk lover
D. Value at risk
4. If probability of occurrence is exactly zero then which of the following statement is true?
A. Event will occur
B. Event will not occur
C. Event must occur
D. All of the given options
Event will not occur.
5. When the bond demand curve shift the leftward what will happen?
A. Bond demand increases
B. Bond demand decreases
C. Bond demand constant
D. All of above
Bond demand decreases
A shift in the demand curve to the left or right represents a change in consumer preferences. A shift to the right indicates that an item has become more commercially desirable and that a larger number will be sold at a given price. A shift to the left is just the opposite, indicating that a marketplace good is less desirable and that fewer items will be sold at a given price.
6. You deposit money into your bank account, which of the following entry Bank will pass in its books of account?
A. Debit cash account
B. Debt your account
C. Reverse the entry
D. Debit assets account
Debit cash account.
7. Yield to Maturity (YTM) is combination of -----------.
A. Current Yield and market price
B. Current Yield and Capital gain
C. Current Yield and Capital
D. Current Yield and capital investment
Current Yield and Capital gain.
8. Core principles of Money and Banking include each of the following except?
A. People act rationally
B. Time has value
C. Information is the basis for decisions
D. Risk requires compensation
People act rationally.
9. Bonds without maturity dates are which of the followings?
A. Zero coupon bonds
B. Coupon securities
D. Preferred Bonds
10. Which of the following represents the fisher’s equation?
A. Nominal interest rate = real interest rate + inflation
B. Nominal interest rate + inflation = real interest rate
C. Nominal interest rate = real interest rate - inflation
D. Nominal interest rate = real interest rate / inflation
Nominal interest rate = real interest rate + inflation.
NOV 2012 QUIZ