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Financial Management MCQ Questions and Solutions with Explanations | Commerce

Financial Management MCQ Questions and answers with easy and logical explanations. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Financial Management MCQ is important for exams like B.COM, M.COM, BBA, BBM, CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other commerce department exam. Page-2 section-7

Each section contains 100 MCQs on Financial Management .
11
Yield of interest rate which is below than coupon rate, this yield is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Yield of interest rate which is below than coupon rate, this yield is classified as yield to call. Yield to call (YTC) is a financial term that refers to the return a bondholder receives if the security is held until the call date, before the debt instrument reaches maturity.
12
An inflation rate including in quoted interest rate on security, is inflation rate
Discuss
Answer & Solution
Answer: Option A
Solution:
An inflation rate including in quoted interest rate on security, is inflation rate expected over security life. Inflation is measured in a variety of ways depending upon the types of goods and services considered and is the opposite of deflation which indicates a general decline occurring in prices for goods and services when the inflation rate falls below 0 percent.
13
Market in which bonds are traded over-the-counter than in an organized exchange is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Market in which bonds are traded over-the-counter than in an organized exchange is classified as bond markets. The bond market (also debt market or credit market) is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market.
14
Coupon payment is calculated with help of interest rate, then this rate considers as
Discuss
Answer & Solution
Answer: Option C
Solution:
Coupon payment is calculated with help of interest rate, then this rate considers as coupon interest. A coupon rate is the yield paid by a fixed-income security; a fixed-income security's coupon rate is simply just the annual coupon payments paid by the issuer relative to the bond's face or par value.
15
An effect of interest rate risk and investment risk on a bond's yield is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
An effect of interest rate risk and investment risk on a bond's yield is classified as maturity risk premium. A maturity risk premium is the amount of extra return you'll see on your investment by purchasing a bond with a longer maturity date.
16
Coupon payment of bond which is fixed at time of issuance
Discuss
Answer & Solution
Answer: Option A
No explanation is given for this question. Let's Discuss on Board
17
According to Black Schools model, stocks with call option pays the
Discuss
Answer & Solution
Answer: Option B
No explanation is given for this question. Let's Discuss on Board
18
An exercise of option in future and part of option call value depends specifically on
Discuss
Answer & Solution
Answer: Option A
No explanation is given for this question. Let's Discuss on Board
19
Yield on Treasury bill with a maturity is classified as a risk free rate but must be equal to an
Discuss
Answer & Solution
Answer: Option C
Solution:
Yield on Treasury bill with a maturity is classified as a risk free rate but must be equal to an option expiration. An expiration date in derivatives is the last day that a derivative, such as options or futures, is valid.
20
Long-term equity anticipation security is usually classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Long-term equity anticipation security is usually classified as long-term options. Long-term equity anticipation securities (LEAPS) are publicly traded options contracts with expiration dates that are longer than one year.