All Free Management Sciences MCQs with Answers

• A. up and to the left
• B. up and to the right
• C. down and to the left
• D. down and to the right

Explanation: An increase in monetary expansion adds funds to the financial system, shifting the supply curve to the right.

• A. (1+r) c - 1
• B. (2+r) c - 2
• C. (3+r) c - 3
• D. (1+r) c - 5

Explanation: When r is the return per compounding period and c is the number of periods, the effective annual return is calculated as (1+r)^c − 1.

• A. support from World Bank
• B. decreases in funds traded
• C. increase in funds traded
• D. rise of international funds

Explanation: A leftward shift in the demand curve means borrowers want fewer funds at each interest rate, so the equilibrium amount of funds traded…

• A. term structure of segmentation
• B. term structure of interest rate
• C. term structure of premium
• D. term structure of inflation

Explanation: Liquidity preference, unbiased expectations, and market segmentation are competing explanations of the term structure of interest rates…

• A. compound interest
• B. investment risk
• C. interest rate
• D. stated rate

Explanation: When earned interest is added to the investment and itself earns further interest, the process is compounding.

• A. increase in availability
• B. decrease in availability
• C. decrease in interest rate
• D. increase in interest rate

Explanation: Present value falls as the interest rate rises because future cash flows are discounted more heavily.

• A. present value of annuity
• B. future value of annuity
• C. decreased value of annuity
• D. increased value of annuity

Explanation: Future value of an annuity accumulates a series of equal payments to their value at the end of the investment period.

• A. zero demand of funds
• B. equilibrium demands of funds
• C. higher demand of funds
• D. lower demand of funds

Explanation: In loanable-funds theory, a lower interest rate reduces the cost of borrowing, encouraging households and firms to demand more funds.

• A. global market is stagnant
• B. global market is not stagnant
• C. domestic market is stagnant
• D. domestic market is not stagnant

Explanation: Stagnant domestic economic growth generally reduces profitable investment opportunities, shifting the demand for funds to the left.

• A. decreased value of annuity
• B. increased value of annuity
• C. present value of annuity
• D. future value of annuity

Explanation: Present value of an annuity converts equal future payments into their equivalent value at the beginning of the investment period.

• A. higher
• B. zero
• C. upside
• D. lower

Explanation: An increase in demand for loanable funds puts upward pressure on the equilibrium interest rate, which is the borrowing cost of funds.

• A. domestic market is stagnant
• B. domestic market is not stagnant
• C. global market is stagnant
• D. global market is not stagnant

Explanation: Stagnant domestic growth creates fewer investment opportunities, so firms and other participants have less reason to borrow funds.

• A. compounded funds
• B. savings funds
• C. supply of loan-able funds
• D. demand of loan-able funds

Explanation: Suppliers of funds provide the supply of loanable funds, mainly through savings that can be lent or invested.

• A. special provisions
• B. liquidity and default risk
• C. inflation and real interest arte
• D. all of the aboveHire An Accountant

Explanation: Nominal interest rates reflect the real rate plus expected inflation, and are also affected by liquidity, default risk, and contractual…

• A. savings
• B. interest rate
• C. future value
• D. present valueGet Study Guides

Explanation: The loanable-funds theory explains how the interaction of saving and borrowing determines the equilibrium interest rate.

• A. interest portion of RIAPS
• B. interest portion of STORI
• C. interest portion of STRIPS
• D. interest portion of bondsCompare Personal Loans

Explanation: STRIPS separate a Treasury security into individual principal and interest cash flows, allowing investors to select maturities that match…

• A. call price of bond
• B. premium price of bond
• C. call price of stock
• D. discounted price of stock

Explanation: The call price is the amount an issuer must pay to redeem a callable bond, calculated as its face value plus the call premium.

• A. pays indexed prices
• B. pays same price
• C. pays different price
• D. pays inflated pricesGet Corporate Bonds

Explanation: In a single-price, or uniform-price, auction, all successful bidders receive the securities at the same accepted price.

• A. general obligation tax
• B. general obligation savings
• C. general obligation bonds
• D. general obligation notes

Explanation: General obligation bonds are supported by the issuer's full faith, credit, and taxing power rather than by a specific revenue-producing…

• A. clean price
• B. full price
• C. dirty price
• D. accrued price

Explanation: The clean price is the quoted bond price excluding accrued interest. The amount including accrued interest is called the dirty price or…