Top 350+ Solved Investment Management MCQ Questions Answer
Q. The net asset value of a mutual fund investing in stock rises with
a. Higher stock prices
b. Lower equity values
c. An increased number of shares
d. Increased liabilities
Q. Equity does NOT include
a. Cash and paid-in capital
b. Common stock and paid-in capital
c. Paid-in capital and retained earnings
d. Common stock, paid-in capital and retained earnings
Q. A liquid asset may
a. Be converted into cash
b. Be converted into cash with little chance of loss
c. Not be converted into cash
d. Not be converted without loss
Q. A negatively sloped yield curve suggests that
a. Short-term rates exceed long-term rates, and the Federal Reserve is following a tight monetary policy
b. Short-term rates exceed long-term rates, and the Federal Reserve is following an easy monetary policy
c. Long-term rates exceed short-term rates, and the Federal Reserve is following a tight monetary policy
d. Long-term rates exceed short-term rates, and the Federal Reserve is following an easy monetary policy
Q. The market price of a bond depends on the
a. Coupon rate, and terms of the indenture
b. Coupon rate, and maturity date
c. Terms of the indenture, and maturity date
d. Coupon rate, terms of the indenture, and maturity date
Q. While bond prices fluctuate,
a. Yields are constant
b. Coupons are constant
c. The spread between yields is constant
d. Short-term bond prices fluctuate even more
Q. If interest rates rise, the price of preferred stock
a. Is not affected
b. Rises
c. Falls
d. May rise or fall
Q. Municipal government debt
a. Pays more interest than corporate debt
b. Is often purchased by individuals with high incomes
c. Is exempt from estate taxation
d. Is not subject to interest rate risk
Q. The use of financial leverage by a firm may be measured by the
a. Ratio of debt to total assets
b. Firm’s beta coefficient
c. Firm’s retention of earnings
d. Ratio of the price of the firm’s stock price to its earnings
Q. As the debt ratio increases,
a. Fewer assets are debt-financed, and the ratio of debt-to-equity increases
b. Fewer assets are debt-financed, and the ratio of debt-to-equity decreases
c. More assets are debt-financed, and the ratio of debt-to-equity increases
d. More assets are debt-financed, and the ratio of debt-to-equity decreases
Q. Which of the following is not a characteristic of an exchange?
a. It requires one to be a member in order to be allowed to trade.
b. It allows securities to be listed on more than one exchange.
c. It provides liquidity to individuals who acquire securities in the primary market.
d. It allows exchange-listed issues to trade off the exchange floor with the aid of brokers.
Q. Which of the following is a false statement about the over-the-counter market?
a. Its market maker is called a dealer.
b. It is a telephone and computer-linked network for trading securities.
c. Larger issues of over-the-counter stocks are listed on the National Market System.
d. It only trades stocks of small firms.
Q. The exchange generating the largest volume in the United States is the:
a. American Stock Exchange
b. Chicago Stock Exchange
c. National Market System
d. New York Stock Exchange
Q. An example of a call market is the:
a. New York Stock Exchange
b. Hong Kong Stock Exchange
c. Pacific Stock Exchange
d. American Stock Exchange