All Free Management Sciences MCQs with Answers
Every Management Sciences question in the bank, across all chapters, each with the correct answer and a written explanation. Free and unlimited, with no account needed.
3,770 questions · page 25 of 189
- A. bond price > treasury price
- B. treasury price exercise price
- C. stock price < exercise price
- D. None of These
Explanation: A call option is out of the money when the stock price is below the exercise price, since exercising would require buying at a price…
Correct answer: stock price < exercise price- A. number of cumulative class
- B. number of votes assigned
- C. number of elective candidates
- D. number of common stock shares
Explanation: Under cumulative voting, each shareholder’s shares are multiplied by the number of directors to be elected, giving the shareholder that…
Correct answer: number of votes assigned- A. spot contract
- B. forward contract
- C. future contracts
- D. present contract
Explanation: A futures contract involves a standardized future exchange and is marked to market through daily settlement of gains and losses.
Correct answer: future contracts- A. market future prices
- B. market to market prices
- C. market to invest prices
- D. present market pricesHire An Accountant
Explanation: Mark-to-market prices are adjusted daily to reflect current market conditions and are used for daily settlement of futures positions.
Correct answer: market to market prices- A. 375
- B. 100
- C. 475
- D. 850
Explanation: An option premium equals intrinsic value plus time value, so intrinsic value is $475 minus $375, or $100.
Correct answer: 100- A. Gross proceeds
- B. cumulative proceeds
- C. non-cumulative proceeds
- D. net proceeds
Explanation: The underwriter's spread is the compensation deducted from the amount raised, so gross proceeds minus the spread gives net proceeds.
Correct answer: net proceeds- A. spot value of option
- B. time value of US treasury
- C. time value of option
- D. time value of bondCompare Credit Cards
Explanation: An option premium consists of intrinsic value and time value, so time value is the premium minus intrinsic value.
Correct answer: time value of option- A. Australian option
- B. American option
- C. European option
- D. Canadian option
Explanation: An American option may be exercised at any time up to and including its expiration date.
Correct answer: American option489. The underwriter spread of stock is added to net proceeds to calculate the value of ___________?
- A. over writer spread
- B. Gross proceeds
- C. participation proceeds
- D. non participation proceedsCompare Futures Brokers
Explanation: Underwriting spread is deducted from gross proceeds to obtain net proceeds, so adding it back to net proceeds reconstructs gross proceeds.
Correct answer: Gross proceeds490. The position which occurs because of selling floor and buying cap is classified as ___________?
- A. floating collar
- B. fixed collar
- C. currency collar
- D. collar
Explanation: A collar combines a cap and a floor to limit exposure to changing interest rates; selling a floor and buying a cap is a standard borrower…
Correct answer: collar- A. professional traders
- B. non-investment traders
- C. position traders
- D. future market traders
Explanation: Position traders take futures-market positions based on their expectations about future price movements in the underlying asset.
Correct answer: position traders- A. 0.0265
- B. 0.035
- C. 0.013
- D. 0.043
Explanation: When total return equals dividend return plus capital gain, the capital gain is 15% − 11.5% = 3.5%, expressed as 0.035.
Correct answer: 0.035- A. liquidity will be higher
- B. loss will be higher
- C. profit will be lower
- D. profit will be higher
Explanation: A put option becomes more valuable as the underlying asset's price falls because it gives the buyer the right to sell at the higher…
Correct answer: profit will be higher- A. non-cumulative preferred stock
- B. cumulative preferred stock
- C. non participating preferred stock
- D. participating preferred stock
Explanation: Participating preferred stock can receive dividends above its stated or promised rate when extra distributable earnings are available.
Correct answer: participating preferred stock- A. call option
- B. put option
- C. European option
- D. Australian option
Explanation: A put option gives its buyer the right, but not the obligation, to sell the underlying asset at a specified exercise price.
Correct answer: put option- A. news efficiency
- B. adjusted efficiency
- C. expected efficiency
- D. market efficiency
Explanation: Market efficiency concerns how quickly and accurately security prices incorporate new information, including unexpected interest-rate…
Correct answer: market efficiency- A. extrinsic value of European option
- B. intrinsic value of option
- C. extrinsic value of option
- D. intrinsic value of European option
Explanation: Intrinsic value is the amount an option is immediately in the money, based on the relationship between the underlying asset price and the…
Correct answer: intrinsic value of option- A. secondary market values
- B. current market values
- C. past market values
- D. primary market values
Explanation: Multiplying a company's shares outstanding by its current stock price gives its current market value, also called market capitalization.
Correct answer: current market values- A. value weighted index
- B. herring weighted index
- C. primary market index
- D. stock market index
Explanation: A value-weighted index compares the total current market value of its constituent stocks with their total value on a base date.
Correct answer: value weighted index- A. trading post
- B. issuance post
- C. silence post
- D. sellers post
Explanation: A trading post is the designated location on an exchange where securities transactions are conducted.
Correct answer: trading post