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MGT411 Midterm MCQs 2024 by Miss Mehwish

Money & Banking PDF 753 KBUpdated 23 Oct 2026
Midterm past paper MGT411 Midterm MCQs 2024 by Miss Mehwish PDF 753 KB
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Midterm past paper
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MGT411 Money & Banking
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PDF 753 KB
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23 Oct 2026
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MGT411(Mega File) · Mid Term (Live Quiz) · Past Papers for Mids./Finals are also Available

  1. Keeping other things constant, price of Zero Coupon bond increases as the interest rate

o O Constant

o O Increases

o ✅ Decreases

o O None of given options

Q2. The return on the bond is equal to which of the following?

o O Current yield - rate of capital gains

o ✅ Current yield + rate of capital gains

o O Coupon rate - rate of capital gains

o O Coupon rate + rate of capital gains

3. An investor is deprived from promised payment due to organization's bankruptcy is an

example of:

o O All of the given options

o O Inflation risk

o O Interest rate risk

o ✅ Default risk

4. An increase in the expected inflation shifts the bond demand to the

o O No change

o ✅ Left

o O All of the given options

  1. Keeping all other things constant, if inflation is expected to increase in future bond supply

curve shifts to:

o O Left

o O Downward

o ✅ Right

6. B to D grade bonds fall in the category of:

o O Long term speculative grade bonds

o O Short term investment grade bonds

o O Long term investment grade bonds

o ✅ Short term speculative grade bonds

Q7. Which of the following best describes the relationship between Bond prices and yields?

o ✅ Move together inversely

o O Are independent of each other

o O Bond yields do not change since the coupon is fixed

o O Move together directly

  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?

o O Project B - 20%

o O Project D - 25%

o ✅ Project A - 15%

o O Project C - 22%

9. The relationship between the price and the interest rate for a zero coupon bond is

o O Non-existent

o ✅ Volatile

o O Stable

Q10. The risk premium for an investment:

  1. Is negative for risk averse investors

✅ Increases with risk O Is a fixed amount added to the risk free return

O Is negative for U.S. Treasury Securities

  1. Question: The working and activities of the banking sector are regulated by:

o Securities and Exchange Commission of Pakistan

o Board of Investment

o

State Bank of Pakistan ✅

o Securities firms

  1. Question: Which of the following financial institutions does not fall in the category of securities

firms?

o Brokers

o

Commercial bank ✅

o Mutual fund companies

o Investment bank

  1. Question: Coupon bonds make the annual payments which are called as:

o Annual payments

o Fixed payments

o

Coupon payments ✅

o Maturity payment

  1. Question: Borrowers want to borrow --------~ whereas lenders favor --------:

o Large-size loans, Small-size loans

o Short-term loans, Long-term loans

o

Long-term loans, short-term loans ✅

o Small-size loans, large-size loans

  1. Question: If a bond sells at a premium, where the price exceeds face value, then we would

expect to see:

o

o

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