MGT411 Quiz 1 Set 3

Q1. If annual interest rate is 6% and Face value Rs. 100, what will be the price of 1 year Treasury bill (T-Bill)?

1. Rs.90.9
2. Rs.106
3. Rs.94.33
4. Rs.95

Correct answer: Rs.94.33

Q2. Which of the following is NOT included in the definition of M1?

1. Traveler’s checks
2. Gold coins issued by treasury
3. Demand deposits
4. Currency

Correct answer: Gold coins issued by treasury

Q3. A risky project normally requires ---------- rate of return.

1. Low
2. Average
3. Constant
4. High

Correct answer: High

Q4. Which of the following best describes checks?

1. Not acceptable by the U.S. Government for payment of taxes.
2. Money
3. Not a promise of any kind
4. A means of payment

Correct answer: A means of payment

Q5. Investor protection leads to ----------- willingness of investor for further investment.

1. Increase
2. Constant
3. Decrease
4. Lesser

Correct answer: Increase

Q6. Fiat money is accepted as payment for goods and services or in settlement of debts because

1. Fiat money is durable
2. Government can issue notes as per requirements
3. Fiat money requires a “double coincidence of wants”
4. It is issued by government decree

Correct answer: It is issued by government decree

Q7. In Repurchase agreements the focus is on that-----------------

1. Buyer will repurchase the securities from seller at his concern
2. Seller will buy back the securities at later time
3. Buyer will have choice that he may buy the securities as his own wish
4. Seller may sell securities at any price

Correct answer: Seller will buy back the securities at later time

Q8. What is true about the relationship between standard deviation and risk?

1. Greater the standard deviation greater will be the risk
2. Greater the standard deviation lower will be the risk
3. No relation between them
4. Greater the standard deviation risk remains the same

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

Q9. If shares of Pakistan State Oil ltd are held by a financial institution for the purpose of selling in the short term, these will come under the head of

1. Assets
2. Liabilities
3. Income
4. Contingent liabilities

Correct answer: Assets

Q10. Which of the following is NOT an example of financial institutions?

1. Insurance companies
2. Banks
3. Stock exchanges
4. Securities firms

Correct answer: Stock exchanges