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 30 of 189
- A. excess funds for banks
- B. deficiencies for banks
- C. organized reservation
- D. competitive reservations
Explanation: Heavy loan demand uses up a bank's available lendable funds and can create a deficiency or shortage of funds.
Correct answer: deficiencies for banks- A. 170 days
- B. 270 days
- C. 120 days
- D. 5 days
Explanation: Commercial paper in the United States traditionally has a maximum maturity of 270 days, allowing it to avoid registration as a long-term…
Correct answer: 270 days583. The liquidity status of certificate of deposit which is more negotiable is considered as __________?
- A. certified liquidity
- B. term liquidity
- C. more liquid
- D. less liquid
Explanation: A negotiable certificate of deposit can be sold in the secondary market, so greater negotiability gives it greater liquidity.
Correct answer: more liquid- A. secondary markets
- B. primary markets
- C. direct markets
- D. indirect markets
Explanation: Negotiable certificates of deposit can be resold before maturity, so they are traded in secondary markets.
Correct answer: secondary markets- A. selling treasury bills
- B. buying treasury bills
- C. selling Swiss bills
- D. buying Swiss bills
Explanation: When the Federal Reserve buys Treasury bills, it pays sellers by creating bank reserves, which increases the money supply.
Correct answer: buying treasury bills- A. bankers treasury
- B. treasury bills
- C. treasury funds
- D. secured treasury
Explanation: Treasury bills are short-term debt obligations issued by the U.S. Treasury, normally maturing within one year.
Correct answer: treasury bills- A. directly
- B. with brokers or dealers
- C. functional buyers
- D. both A and B
Explanation: Repos may be arranged directly between counterparties or through brokers and dealers. Therefore, both listed methods are possible.
Correct answer: both A and B- A. markets bid
- B. bankers bid
- C. competitive bids
- D. non-competitive bids
Explanation: A competitive bid specifies both the amount desired and the price or yield offered.
Correct answer: competitive bids- A. notes payable
- B. notes receivable
- C. commercial paper
- D. commercial notes
Explanation: Commercial paper consists of short-term, unsecured promissory notes issued mainly by financially sound corporations to meet short-term…
Correct answer: commercial paper- A. commercial paper
- B. commercial notes
- C. notes payable
- D. notes receivable
Explanation: Commercial paper is an unsecured short-term instrument commonly issued by corporations to finance working-capital requirements such as…
Correct answer: commercial paper- A. 250000
- B. 100000
- C. 150000
- D. 200000
Explanation: Retail CDs are generally nonnegotiable and are issued in denominations of $100,000 or less, unlike negotiable CDs, which commonly use…
Correct answer: 100000- A. primary instrument
- B. bearer instrument
- C. term instrument
- D. interim instrument
Explanation: Negotiable certificates of deposit are normally bearer instruments, meaning ownership passes through possession rather than registration…
Correct answer: bearer instrument- A. annual funds transaction
- B. liable funds transactions
- C. federal funds transaction
- D. functional funds transaction
Explanation: Federal funds transactions occur when banks lend or borrow excess reserve balances, usually overnight, among themselves.
Correct answer: federal funds transaction- A. mutual certificate of deposit
- B. euro dollar certificate of deposit
- C. expansionary certificate of deposit
- D. euro dollar contraction deposit
Explanation: Eurodollar certificates of deposit are dollar-denominated deposits issued by banks outside the United States.
Correct answer: euro dollar certificate of deposit- A. banker acceptance
- B. secured acceptance
- C. unsecured acceptance
- D. economic acceptanceAccounting & Auditing
Explanation: A banker’s acceptance is a time draft accepted and guaranteed by a bank, making it payable to the seller or beneficiary in a trade…
Correct answer: banker acceptance- A. $40 million
- B. $10 million
- C. $20 million
- D. $30 million
Explanation: Longer-term repurchase agreements, or term repos, commonly involve denominations of about $10 million.
Correct answer: $10 million- A. premium basis
- B. discount basis
- C. competitive basis
- D. federal basis
Explanation: Treasury bills do not pay periodic interest; instead, they are sold below face value and redeemed at face value.
Correct answer: discount basis- A. organized secondary markets
- B. organized primary market
- C. organized interest markets
- D. organized money marketsEconomics
Explanation: Commercial paper is generally difficult to resell quickly because it lacks a well-organized secondary market.
Correct answer: organized secondary markets- A. income in income statement
- B. expense on income statement
- C. liability on balance sheet
- D. assets on balance sheet
Explanation: Federal funds are borrowed reserves, so the borrowing institution records an obligation to repay them.
Correct answer: liability on balance sheet- A. functional time line
- B. contract timing
- C. contraction period
- D. expansionary periods
Explanation: During a contraction, loan demand and economic activity generally weaken, leaving banks with comparatively excess funds.
Correct answer: contraction period