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 44 of 189
861. If the trading of municipal bonds is infrequent, then secondary market is considered as __________?
- A. thin markets
- B. thick markets
- C. higher underwriting
- D. lower underwriting
Explanation: A secondary market with infrequent trading has few active buyers and sellers, making it a thin market.
Correct answer: thin markets- A. developed bonds
- B. developing bonds
- C. Brady bonds
- D. swapped bonds
Explanation: Brady bonds were issued in the restructuring of developing-country sovereign debt and commonly replaced bank loans with longer-maturity…
Correct answer: Brady bonds- A. reserve placement
- B. federal placement
- C. private placement
- D. government placement
Explanation: A private placement sells securities directly to a limited group of large investors rather than through a broad public offering.
Correct answer: private placement- A. pledged bonds
- B. serial bonds
- C. series bonds
- D. parallel bonds
Explanation: Serial bonds mature in installments, with part of the issue repaid on each scheduled maturity date.
Correct answer: serial bonds- A. 3800
- B. 2800
- C. 4800
- D. 5800
Explanation: Conversion value equals the common-stock price multiplied by the conversion ratio: $15 × 320 shares = $4,800.
Correct answer: 4800- A. floating market
- B. risky market
- C. secondary market
- D. primary market
Explanation: Exchange-traded and over-the-counter transactions generally involve securities that have already been issued, so they are secondary-market…
Correct answer: secondary market- A. Common Size Analysis
- B. Horizontal Analysis
- C. Vertical Analysis
- D. None of the Above
Explanation: Horizontal analysis compares financial statement figures across successive periods, making it useful for measuring performance trends over…
Correct answer: Horizontal Analysis- A. Capital Structure
- B. Debt Structure
- C. Asset Structure
- D. Capital Rationing
Explanation: Capital rationing is the process of selecting the most profitable investment projects when available capital is limited.
Correct answer: Capital Rationing- A. Systematic Risk
- B. Idiosyncratic Risk
- C. Financial Risk
- D. Business Risk
Explanation: Systematic risk, also called market risk, arises from broad price movements affecting many financial investments and cannot be eliminated…
Correct answer: Systematic Risk- A. Idiosyncratic Risk
- B. Portfolio Risk
- C. Capital Structure Risk
- D. Systematic Risk
Explanation: Market risk is another name for systematic risk because it results from economy-wide or market-wide factors such as inflation, interest…
Correct answer: Systematic Risk- A. Operating Risk
- B. Financial Risk
- C. Debt Risk
- D. Business Risk
Explanation: Operating risk in this context refers to losses caused by failures in internal processes, policies, systems, or business operations.
Correct answer: Operating Risk- A. Dividend
- B. Portfolio
- C. Investment
- D. BVPS
Explanation: A portfolio is a collection or group of securities held as investments, such as shares, bonds, and other financial assets.
Correct answer: Portfolio- A. clean price bonds
- B. discount index bonds
- C. premium index bonds
- D. inflation index bonds
Explanation: Inflation-index bonds, such as Treasury Inflation-Protected Securities, adjust their principal or returns in line with inflation.
Correct answer: inflation index bonds- A. finance bonds
- B. revenue bonds
- C. financing bonds
- D. project bonds
Explanation: Revenue bonds are repaid from the cash flows or revenues generated by a specific project, such as a toll road or power facility.
Correct answer: revenue bonds- A. evaluate cash flow
- B. evaluate projects
- C. evaluate budgeting
- D. evaluate equity
Explanation: NPV, profitability index, payback and discounted payback are capital-budgeting tools used to assess whether proposed investment projects…
Correct answer: evaluate projects876. A type of project whose cash flows would not depend on each other is classified as ____________?
- A. project net gain
- B. independent projects
- C. dependent projects
- D. net value projects
Explanation: Independent projects have cash flows and acceptance decisions that do not depend on one another, so accepting one does not automatically…
Correct answer: independent projects- A. negative
- B. zero
- C. positive
- D. independent
Explanation: When the present value of project inflows is below the required investment, the project destroys value at the required return.
Correct answer: negative- A. hurdle number
- B. relative number
- C. negative numbers
- D. positive numbers
Explanation: Cash inflows represent revenues or receipts entering the project and are recorded as positive cash flows.
Correct answer: positive numbers- A. rise in marginal cost of capital
- B. fall in marginal cost of capital
- C. rise in transaction cost of capital
- D. rise in transaction cost of capital
Explanation: Large expansion programs can increase perceived risk and flotation costs, raising the additional cost of obtaining capital.
Correct answer: rise in marginal cost of capital- A. 25000
- B. 28000
- C. 33600
- D. 30000
Explanation: The present value of cash flows equals the initial cost multiplied by the profitability index: 6000 × 5.6 = 33,600.
Correct answer: 33600