Finance MCQs

Page No. 26

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


aMature issue

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bEarning issue

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cNew issue

✓


dRecent issue

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View Answer New issue

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


aProvision

✖


bGuarantee

✖


cWarrants

✓


dConvertibles

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View Answer Warrants

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


aRequired rate of redemption

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bRequired rate of earning

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cRequired rate of return

✓


dRequired option

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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

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bZero bonds

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cForeign bonds

✓


dGovernment bonds

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View Answer Foreign bonds

Rate of return (in percentages) consists of___________?


aCapital gain yield interest yield

✓


bReturn yield + stable yield

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cReturn yield + unstable yield

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dPar value + market value

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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

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bYield to call

✓


cYield to earning

✖


dYield to investors

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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

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b Investment risk premium

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cMaturity risk premium

✓


dDefaulter’s premium

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View Answer Maturity risk premium

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


aPayment interest

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bPar interest

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cCoupon interest

✓


dYearly interest rate

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View Answer Coupon interest

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