Top 350+ Solved Investment Management MCQ Questions Answer

From 31 to 45 of 328

Q. Commercial paper is riskier than Treasury bills.

a. True

b. False

c. none

d. all

  • a. True

Q. The value of a bond and debenture is

a. Present value of interest payments it gets

b. Present value of contractual payments it gets till maturity

c. Present value of redemption amount

d. None of the above

  • d. None of the above

Q. Required rate of return>Coupon rate, the bond will be valued at

a. Premium

b. Par value

c. Discount

d. None of the above.

  • c. Discount

Q. If the coupon rate is constant, the value of bond when close to maturity will be

a. Issued value

b. Par value

c. Redemption value

d. All of the above

  • c. Redemption value

Q. A bond is said to be issued at premium when

a. Coupon rate>Required returns

b. Coupon rate=Required returns

c. Coupon rate

d. None of the above

  • a. Coupon rate>Required returns

Q. Value of a bond just depends on the interest payment is offers.

a. True

b. False

c. none

d. all

  • b. False

Q. For a bond YTM is always equal to coupon rate.

a. True

b. False

c. none

d. all

  • b. False

Q. Long period of bond maturity leads to

a. more price change

b. stable prices

c. standing prices

d. mature prices

  • a. more price change

Q. If coupon rate is equal to going rate of interest then bond will be sold

a. at par value

b. below its par value

c. more than its par value

d. seasoned par value

  • a. at par value

Q. Falling interest rate leads change to bondholder income which is

a. reduction in income

b. increment in income

c. matured income

d. frequent income

  • a. reduction in income

Q. Bonds issued by corporations and exposed to default risk are classified as

a. corporation bonds

b. default bonds

c. risk bonds

d. zero risk bonds

  • a. corporation bonds

Q. Which of the following might be found in a bond indenture?

a. A dividend restriction clause.

b. A subordination clause.

c. A sinking fund clause.

d. All of the above.

  • d. All of the above.

Q. The contract between a bond issuer and a bondholder is called:

a. a debenture.

b. a charter.

c. a general obligation.

d. an indenture.

  • d. an indenture.

Q. Which of the following would cause the required return on a bond to increase, everything else held equal?

a. The bond’s rating changes from B to BB.

b. The bond is senior to the issuer’s other bonds.

c. The borrower is subject to dividend restrictions.

d. The bond is callable

  • d. The bond is callable
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