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 41 of 189
- A. general obligation bonds
- B. general obligation notes
- C. general obligation tax
- D. general obligation savingsAccounting & Auditing
Explanation: General obligation bonds are backed by the issuer’s taxing power rather than by a particular asset or revenue stream.
Correct answer: general obligation bonds802. The financial institutions having loans swapped for bonds can sell all the bonds in ___________?
- A. under-developed markets
- B. developed markets
- C. primary markets
- D. secondary markets
Explanation: Bonds that have already been issued can be resold by financial institutions in the secondary market.
Correct answer: secondary markets- A. tax equivalent rate of return
- B. local rate of return
- C. withholding tax rate
- D. general sales tax rate
Explanation: The tax-equivalent rate of return converts tax-exempt municipal-bond interest into the taxable return needed for a fair comparison.
Correct answer: tax equivalent rate of return- A. STRIP
- B. separated security
- C. inflated security
- D. coupon paid security
Explanation: A STRIP separates a Treasury security’s principal from its periodic interest payments, allowing each cash flow to be traded separately.
Correct answer: STRIP- A. local markets
- B. state markets
- C. international markets
- D. national markets
Explanation: Foreign bonds, sovereign bonds issued across borders, and Eurobonds are instruments of international markets.
Correct answer: international markets- A. interbank bonds
- B. intrabank bonds
- C. Australian bonds
- D. EurobondsBonds
Explanation: Eurobonds are issued in a country other than the country whose currency denominates the bond.
Correct answer: EurobondsBonds- A. 12.65
- B. 15.65
- C. 17.65
- D. 20.65
Explanation: The stock’s current market price is found by dividing conversion value by the conversion ratio: $9,500 ÷ 460 = approximately $20.65.
Correct answer: 20.65- A. position in industry
- B. overall financial strength
- C. issuer's profitability and liquidity
- D. all of the above
Explanation: Rating agencies assess several aspects of the issuer, including its industry position, overall financial strength, profitability and…
Correct answer: all of the above- A. lower federal rate
- B. higher federal rate
- C. higher risk
- D. lower risk
Explanation: A bond indenture specifies protective covenants, repayment terms and restrictions on the issuer.
Correct answer: lower risk- A. bull dog bonds
- B. bull cat bonds
- C. Yankee bonds
- D. samurai bonds
Explanation: A foreign bond issued in Japan is called a Samurai bond. Yankee bonds are issued in the United States, so they are the common distractor.
Correct answer: samurai bonds- A. relatively lower
- B. relatively higher
- C. quantifiable
- D. not be quantifiable
Explanation: With other conditions unchanged, a bond's premium generally declines as its maturity approaches because there is less time for its…
Correct answer: relatively lower- A. unregistered bonds
- B. indenture bonds
- C. trustee bonds
- D. registered bonds
Explanation: In a registered bond, the issuer keeps the owner's name on record and sends coupon payments directly to that registered holder.
Correct answer: registered bonds- A. avoid taxes
- B. avoid interest hike
- C. avoid high floating rate
- D. avoid portfolio issues
Explanation: Eurobonds are issued outside the jurisdiction of the currency in which they are denominated, often allowing issuers to avoid certain…
Correct answer: avoid taxes- A. currency of denomination
- B. currency of home country
- C. currency of Australia
- D. currency of local market
Explanation: Eurobonds are issued in a currency different from the borrower’s domestic currency, and their interest and principal are paid in the…
Correct answer: currency of denomination815. The type of rating which all the credit rating agencies do not consider is classified as __________?
- A. split rating
- B. sinking rating
- C. automated rating
- D. floating rating
Explanation: A split rating occurs when different credit-rating agencies assign different ratings to the same debt issue, so the agencies do not reach…
Correct answer: split rating816. The default risk is measured by large traders, managers and investors with the help of _________?
- A. sinking analysis
- B. analyzing financial ratios
- C. portfolio scenario value
- D. automated machine analysis
Explanation: Default risk is commonly assessed by examining financial ratios such as leverage, interest coverage, liquidity, and profitability.
Correct answer: analyzing financial ratios- A. secured debt issues
- B. unsecured debt issues
- C. volatile debt issues
- D. collateral debt issues
Explanation: Mortgage bonds are backed by specific real-estate assets that can serve as security for the debt, giving bondholders a claim on the…
Correct answer: secured debt issues818. The bonds that are considered as junk bonds and termed as higher yield are classified as ________?
- A. expansion debentures
- B. premium debentures
- C. subordinated debentures
- D. ordinate debentures
Explanation: Subordinated debentures rank below senior debt for repayment and therefore carry greater risk, commonly requiring a higher yield and…
Correct answer: subordinated debentures- A. trustee
- B. trust department
- C. monitoring department
- D. indenture department
Explanation: A bond trustee represents and protects bondholders by monitoring the issuer’s compliance with the bond indenture and taking action in case…
Correct answer: trustee820. In best efforts offering, the price offered by investment banks is originally set by __________?
- A. municipality
- B. insurance companies
- C. negotiable transactions
- D. global placement
Explanation: In a best-efforts offering, the investment bank acts as an agent and does not guarantee that all securities will be sold; for a municipal…
Correct answer: municipality