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 31 of 189
- A. direct price of security
- B. repurchase price of securities
- C. purchase price of security
- D. transaction price of securityInvesting
Explanation: In a repurchase agreement, the repurchase price equals the original selling price plus the agreed repo interest.
Correct answer: repurchase price of securities- A. economic rates
- B. foreign exchange risk
- C. selling rate
- D. buying rates
Explanation: Foreign exchange risk is the possibility that exchange-rate movements will change the value of assets, liabilities, or cash flows…
Correct answer: foreign exchange risk- A. money market instruments
- B. capital market instruments
- C. counter instruments
- D. long term instrumentsEconomics
Explanation: Government securities issued to raise funds for short periods, such as Treasury bills, are money-market instruments.
Correct answer: money market instruments- A. mutual funds
- B. commercial banks and thrifts
- C. savings banks
- D. credit unions
Explanation: Depository institutions accept deposits and lend a large portion of those funds; the main categories are commercial banks and thrifts.
Correct answer: commercial banks and thrifts605. The market value size of outstanding instruments of capital markets depends on factors ____________?
- A. primary cash flows
- B. number of issued securities
- C. market prices of securities
- D. both B and CFinancial Planning & Management
Explanation: The market value of outstanding capital-market instruments is calculated from the number of securities issued and their current market…
Correct answer: both B and CFinancial Planning & Management- A. supplier monitor
- B. funds monitor
- C. delegated monitor
- D. allocation monitor
Explanation: A financial intermediary is a delegated monitor when funds suppliers appoint it to monitor borrowers on their behalf.
Correct answer: delegated monitor- A. savings risk
- B. advance risk
- C. cost risk
- D. technology riskAccounting & Auditing
Explanation: Technology risk arises when technological advancement fails to generate the expected cost savings, leaving an institution at a cost…
Correct answer: technology riskAccounting & Auditing- A. insolvency risk
- B. solvency risk
- C. balanced risk
- D. unbalanced risk
Explanation: Insolvency risk occurs when an institution lacks sufficient capital to absorb a sudden fall in the value of its assets.
Correct answer: insolvency risk- A. largest
- B. smallest
- C. never paid
- D. none of the above
Explanation: Corporate equities, or stocks, generally form the largest component of capital-market instruments because corporations issue substantial…
Correct answer: largest610. In commercial banks, the subordinate debentures and subordinate notes are considered as ___________?
- A. stated rates
- B. banks debentures
- C. banks liabilities
- D. banks deposits
Explanation: Subordinated debentures and notes represent borrowed funds that the bank must repay, so they appear as bank liabilities.
Correct answer: banks liabilities- A. activity funds
- B. mutual funds
- C. penalty funds
- D. financing fundsBanking
Explanation: Mutual funds pool money from individuals and companies, then invest it in a diversified portfolio of securities or other assets.
Correct answer: mutual funds- A. demand and supply
- B. increased maturity
- C. decreased maturity
- D. instrument availability
Explanation: Foreign-exchange rates change as demand for a currency and its supply change in the market.
Correct answer: demand and supply- A. commercial banks
- B. commercial mortgages
- C. credit mortgages
- D. credit derivativeFinance
Explanation: Commercial banks are depository institutions whose principal assets are loans and advances made to households, businesses, and…
Correct answer: commercial banks- A. variable securities
- B. convertible securities
- C. liquidity
- D. constant securities
Explanation: Liquidity is the ease and speed with which an asset can be converted into cash without a substantial loss in value.
Correct answer: liquidity- A. London bonds
- B. Eurodollar bonds
- C. central bonds
- D. decentralize bonds
Explanation: Eurodollar bonds are dollar-denominated bonds issued outside the United States, commonly through financial centres such as London and…
Correct answer: Eurodollar bonds- A. asset transformers
- B. liability transformers
- C. issuing transformers
- D. claiming transformers
Explanation: Financial institutions act as asset transformers by issuing their own claims to investors and using the funds to acquire claims issued by…
Correct answer: asset transformers- A. trading institutions
- B. activity institutions
- C. investment banks
- D. mortgage banks
Explanation: Investment banks underwrite securities, arrange their issuance, and may provide brokerage and trading services.
Correct answer: investment banks- A. asset risk
- B. trade risk
- C. market risk
- D. exchange risk
Explanation: Market risk is the possibility of loss caused by changes in market prices, including asset prices, interest rates, and exchange rates.
Correct answer: market risk- A. flow market
- B. primary markets
- C. secondary markets
- D. funding markets
Explanation: Primary markets are where a publicly traded firm issues new shares or debt instruments and receives the funds raised.
Correct answer: primary markets- A. penalty companies
- B. insurance companies
- C. events dealers
- D. protecting companies
Explanation: Insurance companies provide financial protection against specified risks such as accidents, theft, and death in exchange for premiums.
Correct answer: insurance companies