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1 Finance MCQs

Financial securities issued by local and state governments are called ____________?

  • Municipal bonds
  • Reserve bonds
  • State bonds
  • Federal bonds
0 Comments
Correct Answer: A. Municipal bonds

Explanation:

Financial securities issued by local and state governments are called Municipal Bonds. These ... Read More Details

2 Finance MCQs

The principal value of TIPS (Treasury Inflation-Protected Securities) changes based on ____________?

  • Consumer Price Index
  • Manufacturing Price Index
  • Auction Selling Index
  • Inflation Payment Index
0 Comments
Correct Answer: A. Consumer Price Index

Explanation:

The principal value of TIPS increases or decreases based on the Consumer Price Index (CPI), ... Read More Details

3 Finance MCQs

The interest on floating-rate Eurobonds is paid ____________?

  • Annually
  • Semiannually
  • Monthly
  • Quarterly
0 Comments
Correct Answer: B. Semiannually

Explanation:

Floating-rate Eurobonds typically pay interest semiannually, meaning twice a year. This is a ... Read More Details

4 Finance MCQs

If revenue bonds default, the bondholders will ____________?

  • Not be paid
  • Be paid
  • Be sold
  • Not be sold
0 Comments
Correct Answer: A. Not be paid

Explanation:

Revenue bonds are repaid using income from the specific project they finance. If ... Read More Details

5 Finance MCQs

The rules and regulations imposed on bondholders and bond issuers are called ____________?

  • Bond covenants
  • Private covenants
  • Federal covenants
  • Expansion covenants
0 Comments
Correct Answer: A. Bond covenants

Explanation:

Bond covenants are legally binding terms and conditions included in a ... Read More Details

6 Finance MCQs

An issuance where the investment bank buys the new securities at a fixed price, guaranteeing the issuer, is called ____________?

  • Index commitment underwriting
  • Insurance underwriting
  • Default risk underwriting
  • Firm commitment underwriting
0 Comments
Correct Answer: D. Firm commitment underwriting

Explanation:

In firm commitment underwriting, the investment bank purchases the entire issue of securities ... Read More Details

7 Finance MCQs

If the conversion value is $8,500 and the conversion rate is 430, the current market price of the stock is ____________?

  • 15.24
  • 13.24
  • 20.24
  • 19.24
0 Comments
Correct Answer: D. 19.24

Explanation:

The formula for calculating the current market price of stock is:


Read More Details

8 Finance MCQs

A long-term debt instrument issued by governments or corporations is called ____________?

  • Contraction bonds
  • Expansion bonds
  • Dollar bonds
  • Bonds
0 Comments
Correct Answer: D. Bonds

Explanation:

A bond is a long-term debt security issued by governments or corporations to ... Read More Details

9 Finance MCQs

Financial securities issued to finance government expenditures and national debt are called ____________?

  • Treasury notes and bonds
  • Contraction bonds
  • Expansion bonds
  • Dollar bonds
0 Comments
Correct Answer: A. Treasury notes and bonds

Explanation:

Treasury notes and bonds are debt instruments issued by the government to raise funds for ... Read More Details

10 Finance MCQs

If the marginal income tax rate is 35% and the before-tax rate of return is 12.5%, the after-tax rate of return is ____________?

  • 0.0613
  • 0.0713
  • 0.08125
  • 0.091
0 Comments
Correct Answer: C. 0.08125

Explanation:

The formula for after-tax return is:


After-tax return=Before-tax return×(1−Tax rate)\text{After-tax return} = \text{Before-tax return} ... Read More Details