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 37 of 189
- A. increased
- B. increased floatation rate
- C. decreased
- D. zero interest coupon
Explanation: Interest premiums on privately placed issues have generally decreased over time as the private-placement market became more competitive…
Correct answer: decreased- A. split bonds
- B. automated bonds
- C. junk bonds
- D. sinking bonds
Explanation: Standard & Poor’s ratings below BBB are below investment grade and are commonly called junk bonds.
Correct answer: junk bonds723. The current market price is multiplied to the conversion rate received on conversion to calculate ?
- A. conversion value
- B. current value
- C. market value
- D. stock value
Explanation: Conversion value is calculated by multiplying the current market price of the underlying stock by the bond’s conversion ratio.
Correct answer: conversion value- A. economic recession
- B. economically indexed
- C. not economically indexed
- D. active trading
Explanation: Municipal bonds can face default when recession weakens local economic activity, tax collections, and the issuer’s ability to meet debt…
Correct answer: economic recession- A. triple B rating bonds
- B. triple A rating bonds
- C. double A rating bonds
- D. double A rating bonds
Explanation: Triple-A bonds have the highest credit quality, so investors demand the smallest yield spread over Treasury securities of similar…
Correct answer: triple A rating bonds- A. zero coupon treasury notes
- B. zero coupon treasury bonds
- C. One payment bonds
- D. zero treasurer bonds
Explanation: Zero-coupon Treasury bonds provide a fixed amount at maturity and do not require reinvestment of periodic coupon payments, helping protect…
Correct answer: zero coupon treasury bonds- A. floating risk discount
- B. less risky
- C. more risky
- D. floating risk premium
Explanation: A sinking fund requires the issuer to retire part of the debt periodically, reducing the amount outstanding and the eventual repayment…
Correct answer: less risky- A. discount buying
- B. premium selling
- C. auction process
- D. direct selling
Explanation: The coupon rate on Treasury Inflation-Protected Securities is set through the Treasury auction process, while the principal is adjusted…
Correct answer: auction process- A. default risk free
- B. not default risk free
- C. not indexed
- D. must be indexed
Explanation: Municipal bonds are not completely free from default risk because the issuing government may face weak revenues or financial distress.
Correct answer: not default risk free730. The convertible bonds are considered as hybrid bonds because they have properties of _____________?
- A. debts
- B. common equity
- C. both debt and equity
- D. ordinate and subordinated
Explanation: Convertible bonds begin as debt instruments but give their holders the option to convert them into common shares, giving them an equity…
Correct answer: both debt and equity- A. split grade bonds
- B. investment grade bond securities
- C. portfolio grade bonds
- D. sinking grade bonds
Explanation: Investment-grade bonds meet the minimum credit-quality standards normally required for purchase by regulated institutions such as banks…
Correct answer: investment grade bond securities- A. discount premium
- B. discount provision
- C. call premium
- D. call provision
Explanation: A call provision allows the issuer to require bondholders to surrender their bonds, usually at a call price above par that includes a call…
Correct answer: call provision- A. least good premium
- B. least good discount price
- C. best efforts offering
- D. least good index
Explanation: Under a best-efforts offering, the investment bank does not guarantee the sale of the securities, so it avoids the inventory and…
Correct answer: best efforts offering- A. risen angel
- B. fallen angel
- C. fallen devil
- D. risen devil
Explanation: A fallen angel is a bond that was originally investment grade but was later downgraded to junk status.
Correct answer: fallen angel- A. raise taxes
- B. print money
- C. increase labor hours
- D. both A and B
Explanation: The federal government can finance promised payments by raising tax revenue or creating additional money, although printing money may…
Correct answer: both A and B736. The principal amount in the Treasury Inflation Protection Securities is considered as ____________?
- A. tax adjusted principal
- B. inflation adjusted principal
- C. auction adjusted principal
- D. premium adjusted principal
Explanation: Treasury Inflation-Protected Securities adjust their principal according to changes in the Consumer Price Index, so the relevant amount is…
Correct answer: inflation adjusted principal- A. company annual sale
- B. future sale of bonds
- C. past sale of bonds
- D. initial sale of bond
Explanation: In an underwriting arrangement, the underwriter may bear the risk that the bonds cannot be sold as expected during the initial offering.
Correct answer: initial sale of bond- A. bond markets
- B. classical set markets
- C. open end markets
- D. close end markets
Explanation: Bond markets bring together suppliers of long-term funds, such as investors, and demanders of funds, such as corporations and governments.
Correct answer: bond markets- A. non-convertible bonds
- B. premium convertible bonds
- C. discount convertible bonds
- D. convertible bonds
Explanation: Convertible bonds are hybrid securities because they combine regular debt features, such as interest and repayment, with the holder's…
Correct answer: convertible bonds- A. traditional international bonds
- B. traditional local bonds
- C. traditional global bonds
- D. traditional currency bonds
Explanation: Foreign bonds issued before the development of Eurobonds are commonly called traditional international bonds.
Correct answer: traditional international bonds