All Free Management Sciences MCQs with Answers

• A. 1963
• B. 1953
• C. 1983
• D. 1962

Explanation: The first widely recognized Eurobond was issued in 1963 by Autostrade, an Italian motorway company.

• A. international markets
• B. national markets
• C. local markets
• D. state markets

Explanation: International markets handle bonds issued across national borders, often through underwriting syndicates made up of institutions from…

• A. federal savings bank
• B. state savings banks
• C. Federal Reserve banks
• D. state reserve banks

Explanation: In the US Treasury market, non-competitive bids are submitted through Federal Reserve Banks, which process Treasury auction orders for…

• A. treasury inflation protection securities
• B. treasury inflation protection notes
• C. treasury inflation commercial papers
• D. inflation coupon protection securities

Explanation: US Treasury inflation-indexed bonds are called Treasury Inflation-Protected Securities, or TIPS.

• A. private indenture
• B. bond indenture
• C. long term indenture
• D. federal indenture

Explanation: A bond indenture is the legal agreement that states the bond's terms and includes covenants governing the issuer's conduct.

• A. fixed principal
• B. inflation indexed
• C. coupon index
• D. both A and B

Explanation: Treasury issues both conventional securities with a fixed principal and inflation-indexed securities whose principal adjusts with…

• A. trustee bonds
• B. local bonds
• C. bearer bonds
• D. nearer bonds

Explanation: Bearer bonds traditionally have detachable coupons that the holder presents to receive interest when it falls due.

• A. secondary stock system
• B. primary stock system
• C. automated stock system
• D. automated bond system

Explanation: The Automated Bond System, or ABS, was the New York Stock Exchange system designed for automated bond quotation and order execution.

• A. bond rating agencies
• B. bond issuance agencies
• C. federal placement
• D. private pavement agencies

Explanation: Bond rating agencies assess and publish information about the creditworthiness of sovereign and corporate borrowers.

• A. registered debt holders
• B. secured debt holders
• C. unsecured debt holders
• D. unregistered debt holders

Explanation: Debentures are generally unsecured, so their holders rank behind secured creditors, whose collateral gives them priority in repayment.

• A. infrequent origination
• B. static trading
• C. frequent trading
• D. infrequent trading

Explanation: Municipal bonds usually trade infrequently in secondary markets because many issues are held by investors until maturity and are less…

• A. short term capital outlays
• B. long term capital outlays
• C. long term finance outlays
• D. long term bonds outlays

Explanation: Municipal bonds generally finance long-lived public projects such as roads, schools, and water systems, which are long-term capital…

• A. collateral security
• B. commercial trust notes
• C. equipment trust certificates
• D. equipment bonds

Explanation: Equipment trust certificates are secured by tangible equipment, such as aircraft, railway cars, or other transport assets.

• A. registered issue
• B. unregistered issue
• C. federal issue
• D. negotiable issue

Explanation: A private placement is offered to a limited group of investors and is generally exempt from the public registration process.

• A. $10000 and $20000
• B. $5000 and $10000
• C. $6000 and $11000
• D. $8000 and $15000

Explanation: Eurobonds are commonly issued in denominations of $5,000 and $10,000, making option b the standard pair.

• A. One set of payment
• B. Two sets of payments
• C. Three sets of payments
• D. Four sets of payments

Explanation: STRIPS separate a bond’s principal and coupon payments, allowing an investor to receive a single payment at maturity from each stripped…

• A. automated
• B. discounted
• C. rated
• D. stocked

Explanation: Institutional investors generally require bonds to be rated so that the issuer’s credit risk and default probability can be assessed.

• A. 16.92
• B. 18.92
• C. 13.92
• D. 11.92

Explanation: The current stock price equals conversion value divided by the conversion rate: $7,000 ÷ 370 = about $18.92.

• A. after tax rate of return
• B. before tax rate of return
• C. corporative rate of return
• D. federal rate of return

Explanation: Municipal bond interest is generally exempt from federal income tax, so its relevant yield is treated as an after-tax rate of return.

• A. Australian bonds
• B. Eurobonds
• C. interbank bonds
• D. interbank bonds

Explanation: A bond issued in a European financial market but denominated in a currency such as U.S. dollars is a Eurobond.