Top 350+ Solved Investment Management MCQ Questions Answer

From 316 to 328 of 328

Q. An order to buy or sell a specified quantity of a stock at a specified price or better is called a:

a. limit order

b. not-held order

c. market order

d. day order

  • a. limit order

Q. The bid-ask spread set by the market maker is determined by the:

a. fixed operating cost

b. likelihood of trading with those who have superior information

c. stock exchange

d. cost of financing the inventory of securities

  • c. stock exchange

Q. Which of the following is not an explanation often given for initial price offering under pricing?

a. Scalping

b. Appraisal cost

c. Information asymmetry

d. Private placement

  • d. Private placement

Q. A _____________ is a person who acts as an intermediary between a buyer or seller in the market.

a. Dealer

b. Broker

c. floor broker

d. specialist

  • b. Broker

Q. Which of the following statements is false?

a. A bond issuer must pay periodic interest.

b. Bonds carry no corporate ownership privileges.

c. Bond prices remain fixed over time.

d. A bond is a financial contract.

  • c. Bond prices remain fixed over time.

Q. Which of the following statements is true?

a. Generally speaking, bonds are riskier than common stocks.

b. Low inflation is expected to have a negative effect on bond prices.

c. Bonds are usually less liquid than stocks.

d. A bondholder repays principal when the bond matures.

  • c. Bonds are usually less liquid than stocks.

Q. Most bonds:

a. are interest-bearing obligations of governments or corporations.

b. give bondholders a voice in the affairs of the corporation.

c. are money market securities.

d. are floating-rate securities.

  • a. are interest-bearing obligations of governments or corporations.

Q. Which of the following is not an advantage of investing in bonds?

a. Bonds are good sources of current income.

b. Bonds have unlimited profit potential.

c. Bond investments are relatively safe from large losses.

d. Bondholders receive their payments before shareholders can be compensate

  • b. Bonds have unlimited profit potential.

Q. Financial assets are also called:

a. tangible assets.

b. Securities

c. real assets.

d. physical assets.

  • b. Securities

Q. Which of the following types of assets offers the highest expected return?

a. Long-term government bonds.

b. Options and futures.

c. Stocks

d. Long-term corporate bonds.

  • b. Options and futures.

Q. Which of the following types of assets is least risky?

a. Stocks

b. Options and futures.

c. Long-term corporate bonds.

d. Short-term corporate bonds.

  • d. Short-term corporate bonds.
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