MGT411 Final Term Past Papers by Naive Enigma

Q1. Which of the following is the final mode of payment? (1 marks)

1. Money
2. ATM
3. Cheque
4. Yet to discover

Correct answer: Money

Q2. Which of the following statement truly represents the main difference between debit card and store value card? (1 marks)

1. Debit card is operated by ATM machine while Store value card doesn’t
2. Debit card appearance is different from Store value card
3. Debit card is not specific for user but store value card is specific
4. Debit card is specific for user but store value card is not

Correct answer: Debit card is operated by ATM machine while Store value card doesn’t

Q3. Which of the following statements is correct? (1 marks)

1. If you can buy the same goods this year as you bought last year with less money the money supply decreased.
2. To purchase the same goods today that were purchased one year ago requires more money, there must have been inflation
3. To purchase the same goods today as one year ago requires less money, the money supply must have increased
4. To purchase the same goods today that were purchased one year ago requires the same amount of money, there must have been inflation

Correct answer: To purchase the same goods today that were purchased one year ago requires more money, there must have been inflation

Q4. Which of the following is the difference that lies between the options and futures? (1 marks)

1. Options is not binding whereas future is binding
2. Futures carry risks but Options didn’t carry risk
3. Centralized clearinghouses guarantee futures but not options contracts
4. There is no difference between options and futures

Correct answer: Futures carry risks but Options didn’t carry risk

Q5. Which of the following describes the general formula for the calculation of the compound interest? (1 marks)

1. FV = PV/(1+i) n
2. FV = PV/(1-i) n
3. FV = PV*(1+i) n
4. FV = PV*(1-i) n

Correct answer: FV = PV*(1+i) n

Q6. What is true about the relationship between standard deviation and risk? (1 marks)

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4. Greater the standard deviation greater will be the risk page35
5. Greater the standard deviation lower will be the risk
6. Greater the standard deviation risk will be remained the same
7. No relation between them

Correct answer: Greater the standard deviation greater will be the risk page35

Q7. Current yield is equal to which of the following? (1 marks)

1. Price paid / yearly coupon payment
2. Price paid *yearly coupon payment
3. Yearly coupon payment / face value of bond
4. Yearly coupon payment / price paid page43

Correct answer: Yearly coupon payment / price paid page43

Q8. The risk premium of a bond will: (1 marks)

1. Higher for investment-grade bonds than for high-yield bonds
2. Positive but small if the risk of default is zero
3. Decrease when the default risk rises
4. Increase when the risk of default rises

Correct answer: Increase when the risk of default rises

Q9. Requiring a large deductible on the part of an insured is one way insurers treat the problem of: (1 marks)

1. Free-riding
2. Moral hazard
3. Adverse selection
4. The Lemons market

Correct answer: Free-riding

Q10. Which of the following does not include in marketable securities? (1 marks)

1. Common stocks
2. Bonds of the U.S. Treasury
3. Treasury Bills
4. Non transaction deposits page76

Correct answer: Non transaction deposits page76

Q11. ___________ is a component of the liability side of the commercial bank’s balance sheet. (1 marks)

1. Deposits page77
2. Loans
3. Securities
4. All of the given options

Correct answer: Deposits page77

Q12. tent (1 marks)

A stand by letter of credit is a form of:

1. Loan
2. Insurance page80
3. Security
4. Deposits

Correct answer: Insurance page80

Q13. Funds of depository institution are primarily used in which of the following? (1 marks)

1. Corporate bonds, Government bonds, Stocks, Mortgage
2. Cash, Loan, Securities page89
3. Stocks, Government bonds, corporate bonds, commercial papers
4. Commercial papers, Bonds

Correct answer: Cash, Loan, Securities page89

Q14. Securities firms include _________. (1 marks)

1. Brokerage firms
2. Investment banks
3. Mutual fund companies
4. All of the given options Securities Firms Includes firms whose principal lines

of business are in securities brokerage, financial advisory services, investment banking and/or securities trading

Q15. _________is the combination of the term life insurance and savings account. (1 marks)

1. Property insurance
2. Health insurance
3. Whole life insurance page86
4. Casualty insurance

Correct answer: Whole life insurance page86

Q16. Which of the following is a Primary source of funds of Finance company? (1 marks)

1. Bonds page89
2. Policy benefits to be paid out to futures
3. Loan guarantees
4. Shares sold to customers

Correct answer: Bonds page89