121. Reinvestment risk of bonds is usually higher on______?
✅ B. Callable bonds
Option A : Income bonds Option B : Callable bonds Option C : Premium bonds Option D : Default free bonds Option E : Correct Answer : Callable bonds Read more
Finance MCQs – Page 7
122. Market in which bonds are traded over-the-counter than in an organized exchange is classified as__________?
✅ D. Bond markets
Option A : Organized markets Option B : Trade markets Option C : Counter markets Option D : Bond markets Option E : Correct Answer : Bond markets Read more
123. Coupon payment of bond which is fixed at time of issuance____________?
✅ A. Remains same
Option A : Remains same Option B : Becomes stable Option C : Becomes change Option D : Becomes low Option E : Correct Answer : Remains same Read more
124. Coupon payment is calculated with help of interest rate, then this rate considers as________?
✅ C. Coupon interest
Option A : Payment interest Option B : Par interest Option C : Coupon interest Option D : Yearly interest rate Option E : Correct Answer : Coupon interest Read more
125. An effect of interest rate risk and investment risk on a bonds yield is classified as_________?
✅ C. Maturity risk premium
Option A : Reinvestment premium Option B : Investment risk premium Option C : Maturity risk premium Option D : Defaulters premium Option E : Correct Answer : Maturity risk premium Read more
126. Yield of interest rate which is below than coupon rate, this yield is classified as_________?
✅ B. Yield to call
Option A : Yield to maturity Option B : Yield to call Option C : Yield to earning Option D : Yield to investors Option E : Correct Answer : Yield to call Read more
127. If market interest rate falls below coupon rate then bond will be sold__________?
✅ B. Above its par value
Option A : Below its par value Option B : Above its par value Option C : Equal to return rate Option D : Seasoned price Option E : Correct Answer : Above its par value Read more
128. Rate of return (in percentages) consists of___________?
✅ A. Capital gain yield interest yield
Option A : Capital gain yield interest yield Option B : Return yield + stable yield Option C : Return yield + unstable yield Option D : Par value + market value Option E : Correct Answer : Capital gain yield interest yield Read more
129. Type of bonds that are issued by foreign governments or foreign corporations are classified as__________?
✅ C. Foreign bonds
Option A : Zero risk bonds Option B : Zero bonds Option C : Foreign bonds Option D : Government bonds Option E : Correct Answer : Foreign bonds Read more
130. If market interest rate rises above coupon rate, then bond will be sold_____________?
✅ C. Below its par value
Option A : Equal to return rate Option B : Seasoned price Option C : Below its par value Option D : Above its par value Option E : Correct Answer : Below its par value Read more
131. An interest rate which is used in calculation of cash flows of bonds is called______________?
✅ C. Required rate of return
Option A : Required rate of redemption Option B : Required rate of earning Option C : Required rate of return Option D : Required option Option E : Correct Answer : Required rate of return Read more
132. Type of options that permit bond holder to buy stocks at stated price are classified as______?
✅ C. Warrants
Option A : Provision Option B : Guarantee Option C : Warrants Option D : Convertibles Option E : Correct Answer : Warrants Read more
133. Bond that has been issued in very recent timing is classified as_______?
✅ C. New issue
Option A : Mature issue Option B : Earning issue Option C : New issue Option D : Recent issue Option E : Correct Answer : New issue Read more
134. Bonds issued by local and state governments with default risk are____________?
✅ A. Municipal bonds
Option A : Municipal bonds Option B : Corporation bonds Option C : Default bonds Option D : Zero bonds Option E : Correct Answer : Municipal bonds Read more
135. Maturity date decides at time of issuance of bond and legally permissible is classified as____________?
✅ A. Original maturity
Option A : Original maturity Option B : Permanent maturity Option C : Artificial maturity Option D : Valued maturity Option E : Correct Answer : Original maturity Read more
136. Bonds that can be converted into shares of common stock are classified as_________?
✅ A. Convertible bonds
Option A : Convertible bonds Option B : Stock bonds Option C : Shared bonds Option D : Common bonds Option E : Correct Answer : Convertible bonds Read more
137. Price of an outstanding bond increases when market rate___________?
✅ C. Decreases
Option A : Never changes Option B : Increases Option C : Decreases Option D : Earned Option E : Correct Answer : Decreases Read more
138. If coupon rate is less than going rate of interest, then bond will be sold________?
✅ B. More than its par value
Option A : Seasoned par value Option B : More than its par value Option C : Seasoned par value Option D : At par value Option E : Correct Answer : More than its par value Read more
139. A bond whose price will rise above its face value is classified as________?
✅ B. Premium bond
Option A : Premium face value Option B : Premium bond Option C : Premium stock Option D : Premium warrants Option E : Correct Answer : Premium bond Read more
140. Stated value of bonds or face value is considered as_____________?
✅ B. Par value
Option A : State value Option B : Par value Option C : Bond value Option D : Per value Option E : Correct Answer : Par value Read more