Finance MCQs

Page No. 26

Bond that has been issued in very recent timing is classified as_______?


aMature issue


bEarning issue


cNew issue


dRecent issue


View Answer New issue

Type of options that permit bond holder to buy stocks at stated price are classified as______?


aProvision


bGuarantee


cWarrants


dConvertibles


View Answer Warrants

An interest rate which is used in calculation of cash flows of bonds is called______________?


aRequired rate of redemption


bRequired rate of earning


cRequired rate of return


dRequired option



If market interest rate rises above coupon rate, then bond will be sold_____________?


aEqual to return rate


bSeasoned price


cBelow its par value


dAbove its par value


View Answer Below its par value

Type of bonds that are issued by foreign governments or foreign corporations are classified as__________?


a Zero risk bonds


bZero bonds


cForeign bonds


dGovernment bonds


View Answer Foreign bonds

Rate of return (in percentages) consists of___________?


aCapital gain yield interest yield


bReturn yield + stable yield


cReturn yield + unstable yield


dPar value + market value



If market interest rate falls below coupon rate then bond will be sold__________?


aBelow its par value


bAbove its par value


cEqual to return rate


dSeasoned price


View Answer Above its par value

Yield of interest rate which is below than coupon rate, this yield is classified as_________?


aYield to maturity


bYield to call


cYield to earning


dYield to investors


View Answer Yield to call

An effect of interest rate risk and investment risk on a bond’s yield is classified as_________?


a Reinvestment premium


b Investment risk premium


cMaturity risk premium


dDefaulter’s premium


View Answer Maturity risk premium

Coupon payment is calculated with help of interest rate, then this rate considers as________?


aPayment interest


bPar interest


cCoupon interest


dYearly interest rate


View Answer Coupon interest

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