All Free Management Sciences MCQs with Answers

• A. periodic dividend payments
• B. constant spot rate payment
• C. constant forward rate payment
• D. constant future rate payment

Explanation: A stockholder’s total return combines dividend income and capital gain, so removing the capital-gain component leaves the dividend return.

• A. floating swaps
• B. fixed swaps
• C. currency swaps
• D. notion swaps

Explanation: A currency swap exchanges cash flows denominated in different currencies, helping parties manage exchange-rate exposure caused by currency…

• A. representation of ownership interest
• B. fixed periodic payment
• C. higher liquidity
• D. both A and BGet Study Guides

Explanation: Preferred stock is hybrid because it represents an ownership interest like common stock while normally providing a fixed periodic dividend…

• A. 110
• B. 1010
• C. 450
• D. 560

Explanation: An option’s time value equals its market price minus intrinsic value: $560 − $450 = $110.

• A. assets backed market
• B. cash flow backed markets
• C. mortgage backed markets
• D. derivative securities markets

Explanation: Derivatives such as futures, options, forwards and swaps are traded in derivative securities markets.

• A. post order
• B. transacted order
• C. market order
• D. available order

Explanation: A market order instructs the broker to execute immediately at the best price currently available.

• A. day traders
• B. broker traders
• C. non-position traders
• D. commercial traders

Explanation: Day traders open and close their positions within the same trading day, avoiding an overnight position.

• A. floor broker
• B. roof broker
• C. broker of auction
• D. leverage investment broker

Explanation: A floor broker executes buy and sell orders on the exchange floor on behalf of public customers.

• A. European option
• B. Australian option
• C. call option
• D. put option

Explanation: A call option gives its holder the right to buy the underlying asset at the exercise price.

• A. swaps multiplier
• B. notion multiplier
• C. floor
• D. cap

Explanation: An interest-rate floor is composed of put-like options called floorlets and protects against rates falling below a specified level, with…

• A. non-cumulative proceeds
• B. net proceeds
• C. Gross proceeds
• D. cumulative proceeds

Explanation: Net proceeds are the amount the issuing company receives after underwriting discounts and issue expenses are deducted from the offering…

• A. exercise price ⁄ stock price
• B. exercise price - stock price
• C. exercise price + stock price
• D. exercise price x stock priceCommodities & Futures Trading

Explanation: A put is valuable intrinsically when the exercise price exceeds the stock price, giving the basic expression exercise price minus stock…

• A. divided class firm
• B. sub class firm
• C. dual class firm
• D. One class firm

Explanation: A dual-class firm has two or more classes of shares with different voting rights, such as superior voting rights for founder-held shares.

• A. maturity price
• B. strike price
• C. exercise price
• D. both B and C

Explanation: Strike price and exercise price are two names for the pre-specified price at which the option’s underlying asset may be bought or sold.

• A. strong security
• B. semi-strong security
• C. derivate security
• D. non-derivate securityFinancial Planning & Management

Explanation: A derivative security derives its value or payoff from an underlying security or other asset, such as a stock, bond, commodity or index.

• A. 60
• B. 57.2
• C. 55
• D. 63

Explanation: A price-weighted index is calculated by taking the arithmetic average of the stock prices: (50 + 60 + 55 + 58 + 63) ÷ 5 = 57.2.

• A. stock price > exercise price
• B. stock price treasury price
• C. treasury price < bond price
• D. None of These

Explanation: A call option is in the money when the market price of the underlying stock exceeds the exercise price, because exercising allows the…

• A. scalpers
• B. explorers
• C. temporary position holders
• D. professional position holders

Explanation: Scalpers take very short-term positions and may enter and exit trades within minutes, seeking small price differences.

• A. non clearing interest
• B. clearing interest
• C. close interest
• D. open interestInvesting

Explanation: Open interest is the total number of outstanding futures and options contracts that have not yet been closed or settled.

• A. corporate paper
• B. white voting paper
• C. screened paper
• D. proxy

Explanation: A proxy is the voting authorization or ballot through which a shareholder appoints someone to vote on the shareholder’s behalf at a…