vu mgt411 Final Term - Quiz No.3
vu mgt411 Money & Banking Quiz
This quiz belongs to book/course code vu mgt411 Money & Banking of vu organization. We have 9 quizzes available related to the book/course Money & Banking. This quiz has a total of 10 multiple choice questions (MCQs) to prepare and belongs to topic Final Term. NVAEducation wants its users to help them learn in an easy way. For that purpose, you are free to prepare online MCQs and quizzes.
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Question 1: What is difference between warrant and check?
Check is cleared from bank but warrant is not cleared by bank
Check is not necessarily pay able on demand but warrant is payable on demand
Warrant is not necessarily pay able on demand but check is payable on demand
None of above
Question 2: What will be the result of the difference of real and nominal interest rate?
The cost of borrowing
The effect of inflation
The price of bonds
The return of bonds
Question 3: __________ are organized to eliminate the need of costly information gathering.
Central bank
Commercial banks
Stock exchanges
Insurance companies
Question 4: A risk-averse investor will:
Always prefer an investment with a lower expected return
Always prefer an investment with a certain return to one with the same expected return but any amount of uncertainty
Always require a certain return
Always focus exclusively on the expected return
Question 5: Economic development measured by
Real GDP/population
Real GDP/ nominal GDP
Real GDP/Real GNP
None of above
Question 6: The Theory of Efficient Markets:
Allows for higher than average returns if the investor takes higher risk
Says Insider-information makes markets less efficient
Rules out high returns due to chance
Assumes people have equal luck
Question 7: Coupon bonds make the annual payments which are called as __________.
Annual payments
Fixed payments
Coupon payments
Maturity payment
Question 8: Which of the following best expresses the payment a lender receives for lending their money for four years?
PV(1+i)4
PV/(1 + i)4
4PV
PV/(1 - i)4
Question 9: Which one of the following is true for financial intermediaries?
Channel funds from savers to borrowers
Greatly enhance economic efficiency
Have been an source of many financial innovations
All of the given options
Question 10: Diversification is the principle of:
Holding more than one risk at a time
Reducing the risks we carry to just two
Creating risk to increase returns
Eliminating investments from our portfolio that have idiosyncratic risk
