# CSS[FPSC-U.S. Civil Service Commission]-USA/[USA] CURRENT AFFAIRS MCQ COMMERECE Set 2 Sample Test,Sample questions

## Question: `A collection of assets held by an investor is called`

1.corporate bond

2.random returns

4.portfolio

Posted Date:-2021-07-28 10:03:49

## Question: `According to residual dividend policy, a firm should pay a dividend of all left over when`

1.zero NPV projects have been funded

2.positive NPV projects have been funded

3.projects with IRR equal to risk-free interest rate have been funded

4.projects with IRR greater than risk-free interest rate have been funded

Posted Date:-2021-07-28 10:03:49

## Question: `According to the MM proposition, dividend policy is`

1.correlated

2.under-performed

3.relevant

4.irrelevant

Posted Date:-2021-07-28 10:03:49

## Question: `An asset that pays a fixed amount of cash each year for a specified number of years is called`

1.perpetuity

2.dividend

3.liquidity

4.annuity

Posted Date:-2021-07-28 10:03:49

## Question: `An investment should be accepted if`

1.Rate of Return > Opportunity Cost

2.Rate of Return < Opportunity Cost

3.Rate of Return = Opportunity Cost

4.A, B and C are irrelevant

Posted Date:-2021-07-28 10:03:49

## Question: `An investment should be accepted if its NPV is`

1.0

2.1

3.positive

4.negative

Posted Date:-2021-07-28 10:03:49

## Question: `An investor will receive \$5,000 and \$10,000 after one and two years from today respectively. If the interest rate during this period is 10% then what is the present value of this cash flow?`

1.\$12000

2.\$12450

3.\$12810

4.\$13705

Posted Date:-2021-07-28 10:03:49

## Question: `Any economic resource that can produce economic value to the holder is called`

1.asset

2.return

3.maturity

4.yield

Posted Date:-2021-07-28 10:03:49

## Question: `At maturity the bond holders get back their principal. The principal is called`

1.coupon

2.face value

3.yield

4.return

Posted Date:-2021-07-28 10:03:49

## Question: `Companies go public in order to`

1.avoid taxes

2.reduce management cost

3.raise more cash

4.get merge

Posted Date:-2021-07-28 10:03:49

## Question: `Companies go public with the help of`

1.venture capital firms

2.underwriters

3.shareholders

4.A, B and C

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## Question: `Corporations can return cash to their shareholders by`

1.paying cash dividends

2.stock repurchase

3.both A and B

4.none of these

Posted Date:-2021-07-28 10:03:49

## Question: `Financial managers are interested in __________ when see bond market`

1.yield to maturity

2.duration

3.volatility

4.term structure

Posted Date:-2021-07-28 10:03:49

## Question: `Firms that invest in new companies as they try to grow are called`

1.spinning

2.underwriters

3.venture capitalists

4.venture capital firms

Posted Date:-2021-07-28 10:03:49

## Question: `Governments and corporations issue bonds to`

1.borrow money

2.lend money

3.both A and B

4.none of these

Posted Date:-2021-07-28 10:03:49

## Question: `he relationship between short and long term interest rates is called __________ of interest rates.`

1.yield to maturity

2.duration

3.volatility

4.term structure

Posted Date:-2021-07-28 10:03:49

## Question: `If beta of a stock is __________ then it tends to amplify the overall market movement.`

1.0

2.1

3.greater than 1

4.between 0 and 1

Posted Date:-2021-07-28 10:03:49

## Question: `If stock prices increases, dividend yield`

1.also increases

2.decreases

3.remains same

4.increases to one and a half

Posted Date:-2021-07-28 10:03:49

## Question: `If two firms at different stages of production merge together, it is called __________ merger`

1.horizontal

2.vertical

3.straight

4.conglomerate

Posted Date:-2021-07-28 10:03:49

## Question: `If two firms in the same line of business merge together, it is called __________ merger.`

1.horizontal

2.vertical

3.straight

4.conglomerate

Posted Date:-2021-07-28 10:03:49

## Question: `If two firms in unrelated line of business merge together, it is called __________ merger.`

1.horizontal

2.vertical

3.straight

4.conglomerate

Posted Date:-2021-07-28 10:03:49

## Question: `In a well-functioning capital market if the firm pays no taxes then what is better about borrowing?`

1.Borrowing is not a good idea in this case

2.No difference who (firm or shareholders) borrows

3.It is better that the firm borrows

4.It is better that the shareholders borrow

Posted Date:-2021-07-28 10:03:49

## Question: `In a well-functioning markets two investments that offer the same payoff must have the same`

1.beta

2.return

3.risk

4.price

Posted Date:-2021-07-28 10:03:49

## Question: `In portfolio analysis __________ curves play an important role.`

1.circle

2.ellipse

3.parabola

4.hyperbola

Posted Date:-2021-07-28 10:03:49

## Question: `In the beginning, some companies receive equity investment from wealthy individuals. The wealthy individuals are called`

1.angel investors

2.corporate investors

3.venture capitalists

4.venture capital firms

Posted Date:-2021-07-28 10:03:49

## Question: `Investors require higher return on`

1.levered equity

2.unlevered equity

3.both levered and unlevered

4.bond equity

Posted Date:-2021-07-28 10:03:49

## Question: `Net Present Value is calculated as`

1.cash inflow - cash outflow

2.cash outflow - cash inflow

3.PV of cash inflow - PV of cash outflow

4.PV of cash outflow - PV of cash inflow

Posted Date:-2021-07-28 10:03:49

## Question: `Regular interest payment to the bond holders is called`

1.principal

2.coupon

3.face value

4.yield

Posted Date:-2021-07-28 10:03:49

## Question: `Risk __________ with the duration of bond.`

1.remains same

2.increases

3.decreases

4.multiplied

Posted Date:-2021-07-28 10:03:49

## Question: `Suppose our portfolio consists of two stocks A and B. What should be the correlation between them so that we have no risk in our portfolio?`

1.1

2.0

3.1

4.risk cannot be eliminated

Posted Date:-2021-07-28 10:03:49

## Question: `The average beta of all stocks in a market is`

1.1

2.0

3.1

4.1.5

Posted Date:-2021-07-28 10:03:49

## Question: `The contribution of an individual security to the risk of a well-diversified portfolio is measured by?`

1.beta

2.variance

3.standard deviation

4.CAPM

Posted Date:-2021-07-28 10:03:49

## Question: `The difference between the public-offer price and the price paid by the underwriter is called`

1.underpricing

3.commission

4.margin

Posted Date:-2021-07-28 10:03:49

## Question: `The measure for calculating how much two random variable change together is called`

1.variance

2.covariance

3.skewness

4.skewness

Posted Date:-2021-07-28 10:03:49

## Question: `The mixture of debt and equity, used to finance a corporation is also known as`

1.capital structure

2.capital budgeting

3.investing

4.treasury

Posted Date:-2021-07-28 10:03:49

## Question: `The money a investor receive for taking on a risk is called`

2.risk free rate

3.option value

4.arbitrage

Posted Date:-2021-07-28 10:03:49

## Question: `The normalized version of covariance is called`

1.regression

2.correlation

3.cross-section

Posted Date:-2021-07-28 10:03:49

## Question: `The present value of \$100 expected in two years from today at a discount rate of 5% is`

1.\$105

2.\$110.7

3.\$95

4.\$90.7

Posted Date:-2021-07-28 10:03:49

## Question: `The ratio between the amount of profit and investment is called the`

1.NPV

2.opportunity cost

4.rate of return

Posted Date:-2021-07-28 10:03:49

## Question: `The risk of a well-diversified portfolio depends on the __________ of the securities included in the portfolio.`

1.specific risk

2.market risk

3.both A and B

4.none of these

Posted Date:-2021-07-28 10:03:49

## Question: `The sensitivity of an asset to the market movements is called`

1.beta

2.variance

3.standard deviation

4.CAPM

Posted Date:-2021-07-28 10:03:49

## Question: `The success of a new company critically depends on`

1.managers

2.board of directors

3.shareholders

4.venture capitalists

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## Question: `The underwriters receive their payments in the shape of`

1.underpricing

3.commission

4.margin

Posted Date:-2021-07-28 10:03:49

## Question: `The value of correlation is always between __________ (inclusive).`

1.1 and 0

2.0 and 1

3.1 and 1

4.none of these

Posted Date:-2021-07-28 10:03:49

## Question: `The value of probability is always between __________ (inclusive).`

1.1 and 0

2.0 and 1

3.1 and 1

4.none of these

Posted Date:-2021-07-28 10:03:49

## Question: `Underwriters are also called`

1.bookrunner

2.venture capitalists

3.subscribers

4.angel investors

Posted Date:-2021-07-28 10:03:49

## Question: `What should be the goal of a corporation?`

1.to maximize the profit of the shareholders

2.to maximize the value of the corporation

3.both A and B

4.to take care of the interests of the management

Posted Date:-2021-07-28 10:03:49

## Question: `What will be value of \$100 after two years, if the interest rate during this period is 5%?`

1.\$105

2.\$107.5

3.\$110.25

4.\$95

Posted Date:-2021-07-28 10:03:49

## Question: `Which from the following is not the role of an underwriter?`

1.They provide procedural and financial advice

2.They buy the issue

3.They resell the issue to the public

4.They provide funds to the corporation

Posted Date:-2021-07-28 10:03:49

## Question: `Which from the following is true about stock repurchases?`

1.Repurchases are more flexible