sybfm sem iv sample questions business economics

SYBFM SEM IV SAMPLE QUESTIONS

BUSINESS ECONOMICS

1. The following is not a subject matter of macroeconomics

(a) national income accounting

(b) law of demand and supply

(c) business cycle

(d) general price level

2. Which branch of macroeconomics specifically focuses On the problems of developing

economies ?

(a) development economics

(b) public finance

(c) monetary economics

(d) trade cycle theory

3. According to Keynes in order to increase employment We have to increase aggregate

(a) Supply

(b) Output

(c) Demand

(d) Investment

4. What is the total money value of the goods and Services produces by the nationals during

a Given year ?

(a) GNI

(b) GDP

(c) NDP

(d) NNI

5. External debt implies borrowing from-------

(a) Individual

(b) Firm

(c) foreign countries

(d) with in the country

6. In which of the economy the leakages in the form of Saving and taxes arise in the circular

flow of income

(a) Two-sector

(b) Three-sector

(c) Open

(d) one- sector

7. The four sector circular flow economy does not Include

(a) world economy

(b) financial market

(c) Crude oil reserves in oil wells

(d) Business

8. Which of the following is not a characteristics of a Trade cycle ?

(a) Fluctuations in aggregate economic activity

(b) Periodic in nature

(c) Is recurrent

9. Which of the following is not true of prosperity ?

(a) It begins at peak

(b) Bank credit grows rapidly

(c) Idle funds are channelized into productive areas

(d) Comes to an end at peak

10. The theory attributes business cycles to Changes in marginal efficiency of capital----------

-.

(a) Monetary

(b) Multiplier-accelerator

(c) Real business

(d) Investment

11. High powered money includes

(a) Currency with public, cash reserves of banks and other deposits with central bank

(b) Money with public and central bank

(c) Deposits with commercial banks, money with government money with the public

(d) demand deposits and time deposits

12. Which one 0f the not following determines money supply?

(a) High powered money

(b) Money multiplier

(c) Community‟s choice

(d) Narrow money

13. according to keynes, as income increase both MPC and APC

(a) rise

(b) fall

(c) remain constant

(d) is zero

14. The term supply of money‟ is _____.

(a) Stock Concept ‟

(b) (b) Stock of money

(c) (c) Flow and stock concepts

(d) (d)Stable concepts

15. _____ is transferred from one person to another in a given period of time is known as “the

velocity of circulation of money.”

(a) The maximum number of times money

(b) The average number of times money

(c)The minimum number of times money

(d)The minimum number of times income

16. “A rise in the general level of price is definition of inflation given by-

(a) Crowther

(b) (b) Coulbourn

(c) (c) Samuelson

(d) (d)J. M. Keynes

17. In Fisher's equation, which of the following is exogenously determined?

(a) P

(b) T

(c) v

(d) M

18. The main authors of broad money are

(a) Marshall,

(b) (b)J.M. Keynes

(c) (c)A.C. Pigou in Gurley- Shaw, Milton Friedman, Radcliffe Committee

(d) (d)Paul Krugman, Irving Fisher, Robertson

19. Following is an effect of Inflation

(a)Fixed income group

(b) Production

(c) Creditors

(d) Borrower

20. Neo classical approach of demand for money was given by

(a) Dr. Marshal

(b) (b)J.B.Say

(c) (c)J.S.Mills

(d) (d)Keynes

21. The deliberate action of the government to stabilize the economy, as opposed to the

inherent automatic stabilizing properties of the fiscal system, is known as

(a) Forced fiscal policy

(b) Manual fiscal policy

(c) Discretionary fiscal policy

(d) Automatic fiscal policy

22. The theory of fiscal policy derives from

(a) Principle of sound finance

(b) N.I. analysis

(c) Welfare economics

(d) Functional Finance Principle

23. Contra-cyclical fiscal policy was popularised by ________________.

(a) Adam Smith

(b) Dalton

(c) J.B. Say

(d) Keynes

24. Which of the following is not a problem with discretionary policies?

(a) Governments might use them in a way which leads to political business cycles.

(b) Discretionary fiscal policies may act too late.

(c) Discretionary monetary policies lose any power that a rules policy has to hold

inflationary expectations down.

(d) They need to be announced in advance.

25. Which of the following policies would not be used by a government which wished to

increase the quantity of labour that will be hired?

(a) A reduction in income tax rates.

(b) An increase in firms' non-labour costs.

(c) A reduction in the benefits paid to unemployed people.

(d) An increase in help for unemployed people to retrain.

26. An example of expansionary fiscal policy would be

(a) cutting taxes.

(b) cutting government spending.

(c) cutting production of consumer goods.

(d) cutting prices of consumer goods.

27. The use of taxes and government spending to affect the economy

(a) Monetary Policy

(b) Fiscal Policy

(c) Contractionary Policy

(d) Expansionary Policy

28. a plan to reduce aggregate demand and slow the economy

(a) Contractionary Fiscal Policy

(b) Expansionary Fiscal Policy

(c) Contractionary Monetary Policy

(d) Expansionary Monetary Policy

29. During a recession, which of the following is likely to occur?

(a) an increase in real wages

(b) an increase in production

(c) and increase in the GDP growth rate

(d) an increase in the unemployment rate

30. Point out which of the following is not an instrument of fiscal policy

(a) An increase in the interest rate

(b) A cut in unemployment compensation

(c) An increase in tobacco taxes

(d) A cut in the marginal rates of IRPF

31. Principle of sound finance refers to

(a) Maximum Government spending

(b) Minimum Government spending

(c) Revenue and expenditure balanced at the minimum level

(d) Everything should be decided by market

32. Which of the following does not form the basis of sound finance?

(a) Say‟s Law

(b) Assumption of full employment

(c) Ricardian Equivalence Theorem

(d) Lerner‟s Fundamental Rules

33. Which of the following is not a fiscal instrument?

(a) Open market operations

(b) Public expenditure

(c) Taxation

(d) Public debt

34. The concept of „Canon of taxation‟ was first propounded by?

(a) Dalton

(b) J.M. Keynes

(c) Adam Smith

(d) Edwin Canon

35. Discretionary fiscal policy is government action that can be changed __________

(a) Each Year

(b) Once in two years

(c) Once in three years

(d) Once in five years

36. The canon of _______ implies that there should be multiple tax system of diverse nature

(a) Certinty

(b) Diversity

(c) Convenience

(d) Equality

37. Public debt is one of the means to finance ___________________

(a) Government expenditure

(b) Government revenue

(c) Government expenditure and revenue

(d) Government Taxes

38. If a nation has an open economy it means that the nation:

(a) Allows private ownership of capital.

(b) Has flexible exchange rates

(c) Has fixed exchange rates

(d) Conducts trade with other countries

39. Find the odd one out : International trade and domestic trade differ because of:

(a) Different government policies

(b) Immobility of factors

(c) Trade restrictions

(d) Trade Cycles

40. Trade between two countries can be useful if cost ratios of goods are:

(a) Undetermined

(b) Decreasing

(c) Equal

(d) Different

41. David Ricardo presented the theory of international trade called:

(a) Theory of absolute cost advantage

(b) Theory of equal cost advantage

(c) Theory of comparative cost advantage

(d) Theory of total cost advantage

42. Comparative Cost Trade Theory is given by

(a) Adam Smith

(b) David Ricardo

(c) Gottfried Haberle

(d) Heckscher Ohlin

43. Trade between two countries takes place when:

(a) Cost ratios of commodities are equal

(b) Cost ratios of commodities are different

(c) Cost ratios of commodities are high

(d) Cost ratios of commodities are low

(a) Modern theory of international trade is based on the views of:

(b) Robbins and Ricardo

(c) Adam Smith and Marshall

(d) Heckcsher and Ohlin

(e) Saleem and Kareem

44. What are factor endowments

(a) Types of technology

(b) Material inputs used up in the process of production

(c) International differences in climate

(d) National resources, labour, physical capital and human capital

45. In the 2-factor, 2 good Heckscher-Ohlin model, the two countries differ in

(a) Military capabilities

(b) labor productivities

(c) relative availabilities of factors of production

(d) tastes

46. Terms of trade of developing countries are generally unfavourable because:

(a) They export primary goods

(b) They export few goods

(c) They export value added capital goods

(d) They import raw materials

47. Policy of Protection in trade:

(a) Facilitates trade

(b) Protects foreign producers

(c) Protects local producers

(d) Protects importers

48. In a free trade world in which no restrictions exist, international trade will lead to:

(a) Reduced real living standard

(b) Increased efficiency

(c) Decreased efficiency

(d) Reduced real GDP

49. Equilibrium terrms of trade is explained by J.S.Mill with the help of the concept of

(a) Reciprocal Demand

(b) Derived Demand

(c) Aggregate Demand

(d) Market Demand

50. Which of the following is a definition of multinational enterprises?

(a) A company employing foreign nationals.

(b) A company headquartered in one country but having operations in other countries.

(c) A company operating in emerging economies

(d) A company originating from developed economies

COMMODITY DERIVATIVES

1) _________ Act gives powers to control production, supply, and distribution etc. of

commodities to maintain equitable distribution at fair prices.

a) Securities Contracts Regulation Act

b) Agricultural Produce Marketing Commission Act

c) Essential Commodities Act

d) Forward Contracts (Regulation) Act

2) ______ is an apex financial institution of the country for agriculture and rural

development.

a) NABARD

b) SEBI

c) IDBI

d) APMC

3) _________ Pool investors‟ money by issuing units to the investors.

a) Equity funds

b) Hedge funds

c) Exchange traded funds

d) Mutual funds

4) _____ is a commodity exchange of Malaysia.

a) SIMES

b) TOCOM

c) COMMEX

d) MCX

5) Trading in futures provides two important function of _______.

a) Price discovery and price risk management

b) Valuation and validation

c) Price volatility and variability

d) Liquidity and returns management

6) Closing out is also known as ____.

a) bucketing

b) offsetting

c) contango

d) winding

7) The predetermined price is also called as _______price.

a) Spot

b) Market

c) Value

d) Strike

8) ____ Contracts are simple derivative contract and are over the counter products.

a) futures

b) forward

c) options

d) swap

9) The prime objective of futures is to ____ against risk of fluctuation in price of the

commodity.

a) hedge

b) speculate

c) day trade

d) arbitrage

10) ______ simultaneously quotes both bid and ask price for the same commodity

throughout the trading session.

a) hedgers

b) market makers

c) scalpers

d) arbitrageurs

11) _________ means a situation where futures contract prices are higher than the

spot price and the futures contracts maturing earlier.

a) congestion

b) convergence

c) basis

d) contango

12) ______ is an order to buy or sell a futures or options contract at whatever price is

obtainable when the order reaches the trading floor.

a) limit order

b) stop loss order

c) market order

d) time order

13) NBOT collects ____ % of settlement value as the delivery margin.

a) 52

b) 20

c) 25

d) 30

14) MTM stands for _______.

a) market-to-mark

b) mark-to-market

c) mark-to-mark

d) market-to-market

15) ____ provides the maximum range within which a contract can be traded in a

session.

a) circuit filter

b) exposure limits

c) deposit requirements

d) margin system

16) Broker is said to be indulging in ______ when he takes directly or indirectly the

opposite site of a customer‟s order either on his account or into an account in

which he has interest without executing the order on an exchange.

a) winding

b) offsetting

c) contango

d) bucketing

17) ______ can be used only for the purpose of settlement of deals entered through the

exchange for the payment of margin money and for any other purpose as may be

specified by the exchange.

a) clearing house

b) clearing Assistant

c) clearing account

d) clearing agent

18) ______ is also referred to as contract grades.

a) dual trading

b) deliverable grades

c) deliverable stocks

d) delivery option

19) _______ have been officially approved by an exchange as deliverable in

settlement of a futures contract.

a) dual trading

b) Contract grades

c) deliverable stocks

d) delivery option

20) ______ is an actual amount of a commodity represented in a contract.

a) contract grades

b) contract units

c) delivery

d) basis

21) ______ refers to having in hand the physical commodity when a short futures or

leverage sale is made or to acquire the commodity that might be deliverable on a

short sale.

a) Basis

b) Liquidation

c) Cover

d) Novation

22) A trade which is not liquidated on the same trading day in which it was

established is called _____

a) overnight trade

b) intraday trade

c) positional trade

d) Delivery

23) _____ is a net bought position.

a) long basis

b) long hedge

c) long position

d) net position

24) _____ is a technical opinion for a market when the market price has decline too

steeply and too fast in relation to underlying fundamental factors.

a) overbought

b) oversold

c) daily trading limit

d) cover

25) Inverted market is also called as _______.

a) liquidation

b) novation

c) congestion

d) backwardation

26) _______ is also referred to as minimum price fluctuation.

a) tick

b) spread

c) basis

d) cover

27) The commodities other than those listed under section 15 are conventionally referred to as

______ commodities.

a) Free

b) Restricted

c) Banned

d) Illegal

28) NSPOT admits members in ___ categories.

a) Two

b) Three

c) Four

d) Five

29) Kisan Call Centre scheme was launched on 21st April, _____.

a) 2000

b) 2002

c) 2003

d) 2004

30) Commodities have historically ______ correlation of daily returns as compared to

equities.

a) Direct

b) Inverse

c) No

d) Strong

31) The ban on futures trading was imposed in ____.

a) 1993

b) 1939

c) 1996

d) 1966

32) ______ Trade are done for 1 hr in a day and are settled the same day.

a) Cash

b) Spot

c) Weekly

d) Hourly

33) _______ Market is used by the exchange to close out the position of the members who

have failed to pay-in their obligations.

a) Auction market

b) Future market

c) Ready delivery market

d) Specific delivery market

34) ______ is applied when price reaches a particular level above or below the previous day‟s

closing price.

a) Special margin

b) Delivery margin

c) Exposure limit

d) Initial margin

35) ______ have been imposed on all commodities to prevent extreme volatility and

unhealthy practices of cornering the market.

a) Exposure limits

b) Price bands

c) Delivery margin

d) Mark to market margin

36) _______ takes and active role in building the businesses in various area of credit market

directly or indirectly through technical affiliation.

a) Atom technologies

b) Micro finance institution

c) Ticker plant limited

d) Credit market services Ltd.

37) ______ includes margining requirements, procedures in respect of exception handling,

position monitoring, exposure limits, investigation techniques and disciplinary action

procedures.

a) Online surveillance

b) Offline surveillance

c) Mark to market margin

d) Exposure limits

38) _______ takes and active role in building the businesses in various area of credit market

directly or indirectly through technical affiliation.

a) Atom technologies

b) Micro finance institution

c) Ticker plant limited

d) Credit market services Ltd.

39) _____ provides information platforms and services to support faster, better decision that

are more informed and immediate.

a) Ticker plant

b) Atom Technology

c) Credit market services

d) MCX-SX Clearing Corporation Ltd.

40) _____ Is a professionally managed online multi Commodity Exchange Promoted by LIC,

NABARD & NSE.

a) NMCE

b) NCDEX

c) MCX

d) ICEX

41) The ____ membership entitles the members to only trade.

a) Professional clearing members

b) Trading cum clearing members

c) Institutional trading cum clearing members

d) Trading members

42) NCDEX currently facilitates trading of _____ commodities.

a) 75

b) 70

c) 57

d) 17

43) The _____ membership entitles the members to clear trades executed to their clients,

TCMs and TMs.

a) Professional clearing members

b) Trading cum clearing members

c) Institutional trading cum clearing members

d) Trading members

44) ____ is a leading government agency engaged in food procurement, distribution and

storage activities.

a) NAFED

b) NIAM

c) FTIL

d) NOL

45) In the _____ market, auctions are initiated by the exchange on behalf of trading members

for settlement related reasons.

a) Primary

b) Secondary

c) Auction

d) Normal

46) FTIL is a principal promoter of _______.

a) MCX

b) NCDEX

c) NMCE

d) ICEX

47) At present futures contracts are available on MCX in _____ categories of commodities.

a) 9

b) 10

c) 11

d) 12

48) _____ located in Mumbai, is a public limited company incorporated on April 23,

2003 under the Companies Act, 1956.

a) MCX

b) NCDEX

c) ICEX

d) NMCE

49) _____ is a public private partnership promoted jointly by India Bulls Financial

Services Ltd.- part of India Bulls Group and MMTC Ltd., a government of India

enterprise.

a) MCX

b) NCDEX

c) ICEX

d) NMCE

50) _____ provides risk management solutions to protect their traders and investors

against adverse market conditions.

a) MCX

b) NCDEX

c) ICEX

d) NMCE

EQUITY MARKET II

1. SEBI was established in the year----------------.

a. 1992

b. 1988

c. 1990

d. 1989

2. Who appoints the chairman of SEBI?

a. Central government

b. Stock exchanges

c. Brokers

d. Investors

3. Listing is mandatory for ------------------.

a. Trading in stock market

b. Marketing a new issue

c. Trading in international markets

d. Declaring dividend

4. ‐‐‐‐‐‐‐‐‐‐‐‐ is the process of admitting securities for trading on a recognized stock

exchange.

a. Issuing

b. Investing

c. Listing

d. De-listing

5. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is the process of converting physical paper share into demat share.

a. Dematerialization

b. Depository

c. Dematerialization

d. Depository Participant

6. An offer document prepared for the purpose of QIP is called ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

a. Placement document

b. Speculation

c. Dematerialization

d. Prospectus

7. Depository participant is the link between the ‐‐‐‐‐‐‐‐‐‐‐ and the owner.

a. Depository

b. Government

c. Corporate

d. RBI

8. National securities clearing corporation Ltd. established in ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

a. 1994

b. 1995

c. 1996

d. 1999

9. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ can be defined as activities, benefits and satisfactions connected with the

sale of money that offer to users and customers, financial related value.

a. Money market

b. Stock exchange

c. Financial services

d. Financial management

10. Equity shares are the ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ shares of a limited company

a. Voting

b. Ordinary

c. Limited

d. Unlimited

11. Bonds, debentures etc. are creditor ship securities, also known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

a. Debt capital

b. Capital stock

c. Working capital

d. Capital issue

12. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ issued by the central government or state governments are referred to as

government securities.

a. Instruments

b. Securities

c. Bonds

d. Shares

13. Origination, underwriting and distribution are the 3 main services of ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

market.

a. Capital market

b. Secondary market

c. SEBI

d. Primary market

14. ESOP stands for‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

a. Employers Stock Option Plan

b. Employees Stock Option Plan

c. Employees Stock Option Premium

d. Employees Stock Ownership Plan

15. The Dow theory uses _________ to follow three major types of market movements.

a. Charting

b. Bar Graph

c. key indicators

d. fundamental analysis

16. The object of portfolio is to reduce ……by diversification

a. A . Return

b. Risk

c. Uncertainty

d. Percentage

17. _________ issue is when a listed company proposes to issue fresh securities to its existing

shareholders.

a. Initial Public offering

b. Dividend

c. Right Issue

d. Sweat Equity

18. The __________ form of the EMH states that the current price fully incorporates all

existing information, private and public.

a. Semi Strong

b. Weak

c. Strong

d. Reuters

19. One of the following is a macroeconomics factor affecting share prices __________.

a. Management Profile

b. PE Ratio

c. Dividend

d. Government Interference

20. Technical analysis differs from fundamental analysis in that technical analysis

___________.

a. is aimed at the market while fundamental analysis aimed at individual stocks.

b. is based on published market data and focuses internal factors.

c. Focuses on the long-term trends of production

d. Does not consider price and volume.

21. _________ relies on charts on past data and volume.

a. Fundamental Analysis

b. Technical Analysis

c. value Analysis

d. Intermediaries

22. Which of the following cannot be called as a debt instrument as referred to in financial

transactions?

a. Certificate of deposit

b. Bonds

c. Stocks

d. Commercial papers

23. People who do not wish to invest in assets where higher expected returns are

unpredictable are.

a. risk seeking

b. risk averse

c. loss averse

d. gain seeking

24. Value of share maintain in the books of accounts is called _______

a. Market Value

b. Face value

c. Trading Value

d. Ask Price

25. _________ relies on charts on past data and volume.

a. Fundamental Analysis

b. Technical Analysis

c. value Analysis

d. Filter Rule

26. __________ is that period after market close during which, the users have inquiry access

only.

a. Open phase

b. Close phase

c. Surveillance and control (SURCON)

d. Government

27. ___________ helps to analyse and understand the financial health and trend of business,

its past performance and makes it possible to forecast the future state of affairs of

business

a. Discounting

b. Fundamental analysis

c. Technical analysis

d. Ratio analysis

28. One of the following is a macroeconomics factor affecting share prices __________.

a. Management Profile

b. PE Ratio

c. Fiscal Policy

d. Customer Base

29. The fundamental analysis is a method of finding out ……

a. ratio

b. Value of shares

c. Tips

d. Future price of security

30. ----------- combines economic, industry and company analysis to forecast future stock

price.

a. Technical analysis

b. Random walk theory

c. Fundamental analysis

d. Diversification

31. Technical analysis study

a. Financial figures of the companies

b. Behaviour of stock prices

c. Data about the industry

d. Company analysis

32. _____________ models predicts a set of possible outcomes weighted by their likelihoods,

or probabilities.

a. Statistical

b. Serial

c. Brownian

d. Stochastic

33. __________ test of randomness is a statistical test that is used to know the randomness in

data.

a) Run

b) Serial Co- relations T

c) Filter rules

d) Stochastic

34. Beta is a measure of the ___________.

a) Volatility

b) Variation

c) Standard Variation

d) Co – variance

35. The _____________ assets that all publicly available information is fully reflected in

securities prices.

a) Weak Form

b) Semi -Strong Form

c) Strong Form

d) Very Strong

36. ___________ means that the market is capable of quickly digesting new information on

the economy, an industry, or the value of an enterprise and accurately holding it into

securities prices.

a) Efficiency

b) Capacity

c) Productivity

d) Stability

37. __________ is the form of the efficient markets hypothesis also states that the current

price fully incorporates information contained in the past history of prices only.

a) Weak Form


c) Strong Form

d) Very Strong

38. There are generally _________ types of opinion about change in share price in context

with past prices and events.

a) Two

b) Three

c) Four

d) Five

39. ___________ is a Brownian Motion where the previous change in the value of a variable

is unrelated to future or past changes.

a) Random Walk

b) Stochastic Models

c) Semi – Strong Form Efficiency

d) Efficient Market Hypothesis

40. The _____________ says nothing about relative price movements that is, about selecting

securities that may or may not perform better than other securities.

a) Random Walk




41. _____________ is the proposition that current stock prices fully reflect available

information about the value of the firm, and there is no way to earn excess profits, by using

this information.

a) Brownian Motion




42. The ___________ version of the efficient market hypothesis states that stock prices

reflect all information relevant to the firm, even including information available only to

company insiders.

a) Weak Form


c) Strong Form

d) Very Strong

43. The main difference between the semi – strong and strong efficiency hypothesis is that in

the letter case, ____________.

a) Nobody should be able to systematically generate profits

b) Everyone should be able to systematically generate profits

c) Nobody should be able to systematically generate loss

d) Everyone should be able to unsystematically generate profits

44. __________________ are some those investors. Those brokers, those participants who

say that the share price is going to actually fall.

a) Bulls

b) Bears

c) Stags

d) Broker

45. __________ gives definition of stock exchange.

a) The Securities Contract Act 1956

b) The Companies Act, 2013

c) Banking Regulations Act, 1949

d) The Companies Act, 1956

46. The „NSE is value weighted Index composed of ___________ stocks.

a) 50

b) 60

c) 70

d) 80

47. ____________ is an organisation which holds securities of investors in elcetronic form at

the request of the investors through a registered Depository Participant.

a) Brokers

b) Custodian

c) Depositories

d) Clearing Members

48. _____________ agency links Clearing Members & NSCCL for funds settlement.

a) Clearing Banks

b) Depository

c) Custodians

d) Clearing Member

49. To work as a Stockbroker ___________ with SEBI is mandatory.

a) Registration

b) Advertisement

c) Promotion

d) Processing

50. Stock Broker should not ________ clients merely to generate business.

a) Mislead

b) Guide

c) Educate

d) Protect

FOREIGN EXCHANGE MARKET – FC

1. The ________ is the rate for a currency at today‟s market prices

A. Sport

B. Spot

C. National

D. International

2. A __ involves the delivery or currency at a specified time in the future at an agreed rate.

A. Forward

B. National

C. International

D. National

3. Real Exchange Rate is the ratio of domestic price indices between _______ countries.

A. two

B. three

C. four

D. five

4. Fixed exchange rate regime is rarely practiced by any country in _______.

A. Present

B. Past

C. National

D. International

5. A currency _________ contains number of currencies with different weight.

A. Basket

B. Normal

C. International

D. National

6. An ___________ rate is the price of one currency in terms of another currency.

A. Exchange

B. Normal

C. Agreed

D. Average

7. An exchange rate is the price of the one currency in terms of ______ currency.

A. Another

B. Domestic

C. National

D. Indian

8. A currency board government does not permit to have discretionary powers to effect

monetary policy.

A. monetary

B. Indian

C. Abroad

D. General

9. _________ economies are able to maintain exchange rate that pegged to a major hard

currency.

A. Stable

B. Mixed

C. Micro

D. Macro

10. __________ involves the delivery of currency at a specified time in the future at an

agreed time.

A. Forward

B. Future

C. Normal

D. Informal

11._____________________ rate at which one currency can be traded against another.

A. Bi-lateral

B. Normal

C. Informal

D. International

12. ________ is the ratio of domestic price indices between two countries.

A. Real

B. General

C. Abnormal

D. Normal

13. The ____________ summarizes the flow of economic transactions between residents of a

given country ad the residents of other countries during a certain period of time.

A. Balance of payment

B. General Information

C. Exchange rate

D. International payment

14. ______________ interest rate differential will also affect the equilibrium exchange rate.

A. Relative

B. Normal

C. Informal

D. Formal

15. The _____________ rates are to a great extent used in nearly all countries of the world.

A. floating

B. Fixed

C. Average

D. Normal

16. The ___ exchange rate regime is also known as dirty float.

A. floating

B. Fixed

C. Normal

D. International

17. The _____ exchange rate is the value of the domestic currency to a foreign currency.

A. Fixed

B. Average

C. Normal

D. General

18. Indian used to peg Indian INR to British Pound till ___________.

A. 1985

B. 1999

C. 1975

D. 1980

19. In _____, china pegged its yuan to a basket of currencies.

A. 2005

B. 1993

C. 1992

D. 2015

20. In _____________the pound had to be devalued because of speculation.

A. 1949

B. 1959

C. 1989

D. 1930

21. Due to _____ exchange rates change in market, demand and market supply of a currency

change in value.

A. Floating

B. Fixed

C. General

D. Normal

22. The ____________ regime is the method a country manages its currency in respect to

foreign currencies.

A. exchange rate

B. General rate

C. Formal rate

D. General rate

23. The _______ is the most common currency used for pegging.

A. US dollar

B. Rupees

C. Average rate

D. Currency

24. The US dollar is the most common currency used for _________.

A. Pegging

B. International trade

C. Transport

D. Trade

25. ___________ capital movements caused by fluctuating ex-change resale.

A. Speculative

B. Movement

C. Currency rate

D. General rate

26. Speculative capital movements caused by fluctuating __________.

A. exchange rate

B. Trade and transport

C. General Rate

D. Movement

27. The monetary authorities generally adopt the policy of ___ against the wind.

A. learning

B. general rate

C. average rate

D. general rate

28. A ___ contract is a contractual obligation to buy from or sell to PNC.

A. forward

B. future

C. general

D. average

29. In __________ maturity Contract the maturity date is fixed.

A. Fixed

B. future

C. general

D. average

30. In partially _________ contracts provide some flexibility.

A. Optional

B. future

C. general

D. average

31. In a______ contract both parties enter into a contract on a given day lock in a fixed rate.

A. future

B. forward

C. general

D. average

32. ________ contracts have a maximum of 3-months trading cycle,

A. future

B. forward

C. general

D. average

33. A _________ contract is forward contract, which is traded on an Exchange.

A. future

B. forward

C. general

D. average

34. NSE commenced trading in futures on individual securities on November 9, ____

A. 2001

B. 1991

C. 2005

D. 2010

35. ____ rates can be quoted as spot or forward contracts.

A. Forex

B. General

C. Average

D. Normal

36. Forex rates can be quoted as ___________ contract

A. Spot

B. General

C. Average

D. Normal

37. Forex rates can be quoted as ___________ contract

A. Forward

B. General

C. Average

D. Normal

38. _________ are cash settled and the settlement is done by calculating the difference

between agreed upon forward rate and spot rate.

A. NDFs

B. NDA

C. NDC

D. NET

39. ____________ price of future contracts on the first day of trading would be the in the

identical in investment portfolios.

A. Base

B. Currency

C. Dollar

D. Indian

40. Future contract highly ____ market.

A. famous

B. general

C. liquid

D. Average

41. ________ contract highly liquid market.

A. famous

B. general

C. liquid

D. Future

42. ______an option giving the buyer of the option, the right out not the obligation to SELL a

currency.

A. Sell

B. Purchase

C. Put

D. Call

43. Full forma of DTB

A. Deutsche Temin Bourse

B. Department Trade Board

C. Dental Term Board

D. Divide Term Bourse

44. Full form of HKFE

A. Hong Kong Future Exchange

B. Hindi Karla Financial Exchange

C. Highish King Fixed Exchange

D. Horn Kon Financial Exchange

45. Full form of CBOT

A. Chicago Board of Trade

B. China Board of Trade

C. China Board of Transport

D. Chicago Board of Travel

46. IMM stands on

A. International Monetary Market

B. Indian Monetary Market

C. Indian Mixed Market

D. International Money Market

47. CRA stands on

A. Country Risk Analysis

B. China Risk Analysis

C. Commodity Risk Analysis

D. China Recommended Analysis

48. ______ is the process of buying and selling the same currency in different markets to

benefit or gain from the price differential.

A. Arbitrage

B. Hedging

C. Speculation

D. Normal

49. In the international parlance, ______ means taking advantage of the price differentials in

the quoted prices of the currencies in different markets.

A. Arbitrage

B. Hedging

C. Speculation

D. Normal

50. A buyer and seller agree on an ______ rate for any date int he future.

A. Exchange

B. Normal

C. Average

D. Internal

CORPORATE FINANCE

Sr. No Particulars

1 The work of the finance manager in a corporation where shares publicly traded is to

_________

a. maximax the EPS

b. decrease the EPS

c. maximax the MPS

d. Maximize the DPS

2 ________ is a situation in which actual profits are not sufficient to pay the interest of

debts and dividends of the share

a. Overcapitalisation

b. Undercapitalisation

c. winding up the company

d. starting up the company

3 An ___________ company is a one that makes exceptionally high profits as compared

to others

a. starting up the company

b. Undercapitalisation

c. winding up the company

d. overcapitalisation

4 _________ is a type of debt where the whole value can be converted into equity

shares.

a. fully convertible preference shares

b. partial debentures

c. fully convertible debentures

d. bank loan

5 ____________ is an offering of securities to an individual or a small group of

investors

a. public placement

b. private placement

c. replacement

d. re issue

6 The basic function of the finance manager is

a. maximization of profits

b. maximization of EPS

c. maximization of MPS

d. Maximization of DPS

7 What is the most appropriate goal of the organisation

a. Maximization of DPS

b. maximization of MPS

c. maximization of profits

d. maximization of EPS

8 _________ is concerned with the acquisition, financing and managing of assets

a. Financial management

b. profit maximization

c. agency theory

d. social responsibility

9 _________ is a type of debt where the whole value cannot be converted into equity

shares.

a. partial debentures

b. non convertible debentures

c. non convertible preference shares

d. bank loan

10 ________ debentures are non transferable

a. Registered

b. Bearer

c. Partial

d. convertible

11 Debentures is a___________ securities.

a. Ownership

b. Creditor ship

c. Government.

d. Working

12 A type of preference shares which can be converted into Equity Shares.

a. Participating Preference Shares.

b. Cumulative Preference Shares

c. Secured Preference Shares.

d. Convertible Preference Shares.

13 Which of the following is a tax - deductible expenditure?

a. Interest on Debt

b. Preference Dividend.

c. Equity Dividend.

d. rent received

14 The ability of the firm in employing long term funds having fixed cost to enhance

returns to the owners

a. Leverage

b. Working capital

c. Receivable Management

d. Cost of capital

15 Responsiveness of firm's EBIT to the changes in sales value

a. Combined Leverage

b. Operating Leverage

c. Financial Leverage

d. Dual Leverage

16 Indicator of responsiveness of firm's EBIT to the changes in its EPS




d. Dual Leverage

17 Potential use of fixed cost, both operating and financial, which magnifies the effect of

sales volume change on EPS of the firm




d. Dual Leverage

18 Level of EBIT where EPS of both plans are same

a. Indifference point

b. Financial BEP

c. Margin of Safety

d. Contribution

19 Level of EBT where EPS = 0 (no profit and no loss)

a. Indifference point

b. Financial BEP

c. Margin of Safety

d. Contribution

20 The rate of return the company has to pay to various suppliers of funds in the

company.

a. Capital budgeting

b. Working capital

c. Capital Structure

d. Cost of capital

21 Rajasthan Group Ltd. issues 3,000 15% Preference shares of Rs.100 each at Rs.90 late

the cost of preference shares.

a. 16.67%

b. 17.77%

c. 18.87%

d. 19.97%

22 A company issues 20%, 1000 irredeemabel preference shares of the fave value of

Rs.100 each. Flotation cost are estimated about 5% of the expected sale price.

Calculate the cost of preference capital when issued at 5% premium.

a. 21.05%

b. 20.05%

c. 23.40%

d. 24.50%

23 Firm's cost of capital is the average cost of

a. All sources

b. All borrowings

c. Share capital

d. Debentures

24 _____ cost is the cost of raising an additional rupee of capital.

a. Marginal

b. Average

c. Fixed

d. Sunk

25 Vikram Ltd. issued Rs.3,00,000, 8% Debentures of Rs.100 each at a premium of 10%.

The flotation costs re 2% on the net proceeds. The tax rate is 50%. You are required

to ascertain cost of debt after tax.

a. 3.71%

b. 13.47%

c. 15.47%

d. 11.23%

26) ___________ refers to the mix of a company‟s debt and equity.

a) Capital Structure

b) Capital Budgeting

c) Capital Stock

d) Capital Assets

27) The full form of the abbreviation BEP is ___________.

a) Break Even Profit

b) Benchmark Earning Profit

c) Break Even Point

d) Before Earning Profit

28) Interest is paid from ____________.

a) Earnings Before Interest and Tax

b) Earning After Interest and Tax

c) Profit After Tax

d) Profit After Tax and Dividend

29) Tax Shelter is available on the ____________ payment.

a) Dividend on Equity Share Capital

b) Interest on Borrowed Capital

c) Dividend on Preference Share Capital

d) None of these

30) The full form of the abbreviation P/E Ratio in P/E Ratio is _____________.

a) Profit Earning

b) Price Equity

c) Preference Equity

d) Price Earning

31) If income tax rate is 35% then post – tax profit is ____________ % of pretax profit.

a) 35

b) 65

c) 85

d) 100

32) EPS is ____________.

a) Economic Per Share

b) Earnings Per Statement

c) Earning Per Share

d) Dividend Per Share

33) The optimal Capital Structure is the mix of debt, equity and preferred stock that

________ the Company‟s Stock Price.

a) Maximizes

b) Minimizes

c) Stabilizes

d) Diminishes

34) The optimal Capital Structure is the mix of debt, equity and preferred stock that

_________ the company‟s Weighted Average Cost of Capital (WACC)

a) Minimizes

b) Miximizes

c) Stabilizes

d) Diminishes

35) ____________ in the corporate tax rate encourage a firm to increase the proportion of

debt in its Capital Structure.

a) An Increase

b) A Decrease

c) Zero

d) Reduction

36) _____________ is the capital structure at which the weighted average cost of capital

is minimum and thereby by value of the firm is maximum.

a) Optimum Capital Structure


c) Financial Structure

d) Management Structure

37) ____________ may be defined as the capital structure or combination of debt and

equity, that leads to the maximum value of the firm.





38) _____________ is also called as Investment Appraisal.





39) ___________ is the planning process used to determine whether an organization‟s

long term investments such as new machinery, replacement of machinery, new plants

etc.





40) One of the primary goals of capital budgeting investments is ___________.

a) To increase the value of the firm to the shareholders.

b) To increase the value of the assets

c) To raise long term funds for a company

d) To raise Debt Capital for a company.

42) Under ___________ method, the entire company is considered a single, profit –

generating system.

a) Throughput Analysis

b) DCF Analysis

c) Payback Analysis

d) Payback Period

43) __________ looks at the initial cash outflow needed to fund a project, the mix of

cash inflows in the form of revenue and other future outflows in the form of

maintenance and other costs.


b) DCF Analysis

c) Payback Analysis

d) Payback Period

44) The _____________ assumes that nearly all costs in the system are operating

expense, that a company needs to maximize the throughput of the entire system to pay

for expenses.


b) DCF Analysis

c) Payback Analysis

d) Payback Period

45) ___________ is the most simple form of capital budgeting analysis and is therefore

the least accurate.


b) DCF Analysis

c) Payback Analysis

d) Payback Period

46) The ____________ is identified by dividing the initial investment by the average

yearly cash inflow.


b) DCF Analysis

c) Payback Analysis

d) Payback Period

47) _________ are owned and controlled by private businessmen.

a) Public Sector Banks

b) Private Sector Banks

c) Foreign Banks

d) Regional Banks

49) _________ are owned and controlled by foreign promoters.

a) Public Sector Banks

b) Private Sector Banks

c) Foreign Banks

d) Regional Banks

50) Scheduled Banks refer to those banks which have been included in the Second

Schedule of __________.

a) Reserve Bank of India Act, 1934

b) The Companies Act, 2013

c) Banking Regulation Act, 1949

d) Securities Regulations Act.

sybfm sem iv sample questions business economics

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