Financial Management MCQ Questions and Solutions with Explanations | Commerce

Markets dealing with residential loans, industry real estate loans, agricultural loans and commercial loans are called mortgage markets. The mortgage market can seem complicated to the uninitiated. The fact is that it is not as complicated as it is ever-changing. Most people have no idea how the market works. By understanding this, you will get a better idea about mortgage programs that are offered by certain lenders. Armed with this new information, you can make an informed decision in your quest for the perfect mortgage.

Type of financial security in which loans are secured by borrower's property is classified as mortgages. A mortgage is a debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments.

In financial markets, period of maturity more than five years of financial instruments is classified as long-term. Generally, a time frame for investing in which an asset is held for at least seven to ten years. The measure of a "long term" time frame can vary depending on the asset held or the investment objective. In business accounting measures, long term can be a period of time that exceeds 12 months.

Merrill Lynch, Morgan Stanley and Credit Suisse Group plan for raising capital is classified as investment banking houses. Investment banking is a special segment of banking operation that helps individuals or organisations raise capital and provide financial consultancy services to them.

Trading procedures dimensions include location dimension and method of matching orders. Trading process consists of two major steps Order openingand Order closing.

Trading place where traders meet one another to communicate is classified as outcry auction system. Open outcry is a method of verbal and hand signal communication used by traders at stock and futures exchanges. Signals and shouts convey trading information, intentions, and acceptance in the trading pits.

Rate of return which is asked by investors is classified as weighted average cost of capital. The weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is proportionately weighted. All sources of capital, including common stock, preferred stock, bonds, and any other long-term debt, are included in a WACC calculation.

Characteristic of corporation that it can continue its work even owners are decreased can be classified as unlimited life.

Type of financial securities that matures in less than a year are classified as money market securities. There are several money market instruments in most Western countries, including treasury bills, commercial paper, bankers' acceptances, deposits, certificates of deposit, bills of exchange, repurchase agreements, federal funds, and short-lived mortgage- and asset-backed securities.

Conglomerates that combine many financial institutions within a single corporation are classified as financial services corporations. Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, consumer-finance companies, stock brokerages, investment funds, individual managers and some government-sponsored enterprises.