Top 350+ Solved Financial Markets and Institutions MCQ Questions Answer
Q. The stocks or shares that are sold to investors without transacting through financial institutions are classified as
a. direct transfer
b. indirect transfer
c. global transfer
d. pension transfer
Q. The type of financial security which have linked payoff to another issued securityis classified as.
a. linked security
b. derivative security
c. payable security
d. non- issuing security
Q. In primary markets, the property of shares which made it easy to sell newly issued security is considered as
a. increased liquidity
b. decreased liquidity
c. money flow
d. large funds
Q. The depository institutions such as thrifts includes
a. savings associations
b. savings banks
c. credit unions
d. all of above
Q. The money market where debt and stocks are traded and maturity period is more than a year is classified as
a. shorter term markets
b. capital markets
c. counter markets
d. longterm markets
Q. The example of derivative securities includes
a. swap contract
b. option contract
c. futures contract
d. all of above
Q. In foreign financial markets, the growth is represented by the factors such as
a. savings in foreign countries
b. investment opportunities
c. accessible information
d. all of above
Q. The authority which intervenes directly or indirectly in foreign exchange markets by Altering the interest rates is considered as
a. centralized instruments
b. centralized stocks
c. central government
d. central corporations
Q. Which of the following are functions of a financial system? 1. The operation of a payments system. 2. Providing the means of portfolio adjustment. 3. Helping to reduce unemployment. 4. Channelling funds between lenders and borrowers. 5. Helping speculators to bet on price movements.
a. 1 and 5
b. 2, 3 and 5
c. 1, 2 and 4
d. 2 to 5
Q. The regulation of the banking industry is of particular importance in modern economies because:
a. banks are large and very profitable.
b. everyone in the economy has a bank account.
c. banks employ many people.
d. banks provide the principal means of payment for the economy.
Q. Statutory regulation is likely to create larger compliance costs than self-regulation because:
a. self-regulation does not involve lawyers and the courts.
b. consumers are better able to assess risk under self-regulation.
c. statutory regulators are often over-cautious.
d. statutory regulation is controlled by consumers.
Q. Moral hazard caused by regulation can only be removed from financial transactions if:
a. regulations are regularly revised to keep pace with the changing circumstances of the market.
b. the regulations prevent agency capture.
c. all regulation is self-regulation.
d. participants in the finance industry do not feel protected by the regulations.
Q. The public debt of a country is not necessarily a burden on the economy to the extent that:
a. it grows less rapidly than GDP.
b. people receive good public services.
c. people are happy to hold government bonds.
d. it can be financed without adding to inflation.
Q. If the public debt can be financed without adding to inflation or causing interest ratesto rise, it is said to be:
a. only a burden on future generations.
b. following the golden rule of the public finances.
c. in primary balance.
d. sustainable
Q. Interest rate expectations have been thought to be an important influence on bond sales because:
a. government bond-holders are, by and large, are income risk averse.
b. interest rates have always been very unstable.
c. the bond market is dominated by people interested mainly in capital gains.
d. government bond-holders hold extrapolative expectations.