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 29 of 189
561. The funds transferred usually for a day between financial institutions are classified as __________?
- A. federal funds
- B. banker's funds
- C. debt funds
- D. secured fundsTry Prep Courses
Explanation: Federal funds are generally short-term, often overnight, funds transferred between financial institutions, especially through balances…
Correct answer: federal funds- A. banks
- B. financial market
- C. stock exchange
- D. business corporationsCompare Credit Cards
Explanation: Negotiable certificates of deposit are issued mainly by banks as time deposits that can be traded before maturity.
Correct answer: banks- A. liability on balance sheet
- B. assets on balance sheet
- C. income in income statement
- D. expense on income statement
Explanation: An institution lending federal funds has a claim against the borrowing institution, so the loan is recorded as an asset on its balance…
Correct answer: assets on balance sheet- A. treasury notes
- B. repurchase agreements
- C. commercial payable notes
- D. commercial receivable notes
Explanation: The Federal Reserve uses repurchase agreements to influence short-term liquidity, money supply, and interest rates by temporarily buying…
Correct answer: repurchase agreements- A. repurchasing commercial notes
- B. repurchase bills
- C. purchase agreement
- D. reverse repurchase agreement
Explanation: In a reverse repurchase agreement, one party buys a security and agrees to resell it to the other party at a specified future date.
Correct answer: reverse repurchase agreement- A. assets and liability
- B. cost and marketing
- C. supply and demand
- D. income and expense
Explanation: The federal funds rate is determined by the interaction of banks’ willingness to lend funds and other banks’ need to borrow them.
Correct answer: supply and demand- A. payables rating
- B. commercial rating
- C. poor credit rating
- D. better credit ratingAccounting & Auditing
Explanation: Commercial paper is normally issued by financially sound companies, so it can attract investors at a lower interest rate.
Correct answer: better credit ratingAccounting & Auditing- A. highest price
- B. lowest price
- C. zero price
- D. peak price
Explanation: In a uniform-price auction, the lowest price among the accepted bids becomes the price paid by all successful bidders.
Correct answer: lowest price- A. bank and COD buyer
- B. bank and stock market
- C. stock market and COD buyer
- D. indirect negotiations of buyers
Explanation: A certificate of deposit is issued by a bank to a buyer or depositor, and its rate is negotiated between these two parties.
Correct answer: bank and COD buyer- A. extensive secondary markets
- B. extensive primary markets
- C. premium money markets
- D. discounted money marketsEconomics
Explanation: Treasury bills can be quickly converted into cash because they are actively traded after issuance.
Correct answer: extensive secondary markets571. The markets which reallocate liquid funds in relatively fixed amounts are classified as ___________?
- A. capital markets
- B. debt markets
- C. secondary markets
- D. primary markets
Explanation: Secondary markets trade previously issued securities and therefore reallocate funds among investors while providing liquidity.
Correct answer: secondary markets- A. term instrument
- B. interim instrument
- C. primary instrument
- D. bearer instrument
Explanation: A bearer instrument belongs to whoever physically holds it, so the holder is entitled to receive its interest and principal.
Correct answer: bearer instrument- A. 250 days a year
- B. 150 days a year
- C. 365 day a year
- D. 360 day a year
Explanation: Certificates of deposit are money-market instruments, and their interest rates are conventionally quoted on a 360-day year.
Correct answer: 360 day a year- A. brokerage market
- B. contraction market
- C. expansion market
- D. Eurodollar market
Explanation: Eurodollars are US-dollar deposits held outside the United States, and the market in which they are borrowed and lent is called the…
Correct answer: Eurodollar market- A. security liability
- B. security buyer
- C. security seller
- D. security function
Explanation: A reverse repo is named from the security buyer's viewpoint: the buyer purchases the security and agrees to sell it back later.
Correct answer: security buyer- A. federal acceptance bid
- B. bankers' acceptance bid
- C. non-competitive bids
- D. competitive bids
Explanation: A non-competitive bid states the quantity of Treasury bills the bidder wants and accepts the yield determined at auction.
Correct answer: non-competitive bids- A. issuance to maturity
- B. within 1 to 2 days
- C. within 3 to 4 days
- D. within 4 to 5 days
Explanation: Commercial paper is normally a short-term investment held by investors from its issuance until its maturity date.
Correct answer: issuance to maturity- A. London intra bank offered rate
- B. London interbank offered rate
- C. euro interbank offered rate
- D. demand intra bank rate
Explanation: LIBOR stands for London Interbank Offered Rate and was widely used as a benchmark for short-term commercial and industrial lending.
Correct answer: London interbank offered rate- A. security seller
- B. security buyer
- C. security function
- D. security function
Explanation: A repo is described from the security seller's viewpoint: the seller receives cash now and promises to repurchase the security later.
Correct answer: security seller580. The repurchase agreements having maturity of one week or lesser have denominations of ____________?
- A. $10 million or more
- B. $20 million or more
- C. $25 million or more
- D. $15 million or more
Explanation: Short-term repurchase agreements with maturities of one week or less are commonly issued in large denominations of $25 million or more.
Correct answer: $25 million or more