11161. 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
Management Sciences MCQs – Page 559
11162. 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
11163. Bonds issued by corporations and exposed to default risk are classified as_________?
✅ A. Corporation bonds
Option A : Corporation bonds Option B : Default bonds Option C : Risk bonds Option D : Zero risk bonds Option E : Correct Answer : Corporation bonds Read more
11164. Falling interest rate leads change to bondholder income which is__________?
✅ A. Reduction in income
Option A : Reduction in income Option B : Increment in income Option C : Matured income Option D : Frequent income Option E : Correct Answer : Reduction in income Read more
11165. Bonds that have high liquidity premium are usually have_________?
✅ C. Less frequently traded
Option A : Inflated trading Option B : Default free trading Option C : Less frequently traded Option D : Frequently traded Option E : Correct Answer : Less frequently traded Read more
11166. Treasury bonds are exposed to additional risks that are included________?
✅ D. Both A and B
Option A : Reinvestment risk Option B : Interest rate risk Option C : Investment risk Option D : Both A and B Option E : Correct Answer : Both A and B Read more
11167. Payment divided by par value is classified as______________?
✅ B. Coupon payment
Option A : Divisible payment Option B : Coupon payment Option C : Par payment Option D : Per period payment Option E : Correct Answer : Coupon payment Read more
11168. An annual interest payment divided by current price of bond is considered as_____________?
✅ A. Current yield
Option A : Current yield Option B : Maturity yield Option C : Return yield Option D : Earning yield Option E : Correct Answer : Current yield Read more
11169. Coupon rate of convertible bond is_________?
✅ B. Lower
Option A : Higher Option B : Lower Option C : Variable Option D : Stable Option E : Correct Answer : Lower Read more
11170. An outstanding bond are also classified as__________?
✅ D. Seasoned bonds
Option A : Standing bonds Option B : Outdated bonds Option C : Dated bonds Option D : Seasoned bonds Option E : Correct Answer : Seasoned bonds Read more
11171. A market interest rate for specific type of bond is classified as bonds_____________?
✅ A. Required rate of return
Option A : Required rate of return Option B : Required option Option C : Required rate of redemption Option D : Required rate of earning Option E : Correct Answer : Required rate of return Read more
11172. An inflation rate includes in bonds interest rates is one which is inflation rate________?
✅ B. Expected in future
Option A : At bond issuance Option B : Expected in future Option C : Expected at time of maturity Option D : Expected at deferred call Option E : Correct Answer : Expected in future Read more
11173. An average inflation rate which is expected over life of security is classified as__________?
✅ A. Inflation premium
Option A : Inflation premium Option B : Off season premium Option C : Nominal premium Option D : Required premium Option E : Correct Answer : Inflation premium Read more
11174. Type of bond which pays interest payment only when it earns is classified as__________?
✅ A. Income bond
Option A : Income bond Option B : Interest bond Option C : Payment bond Option D : Earning bond Option E : Correct Answer : Income bond Read more
11175. Net present value, profitability index, payback and discounted payback are methods to______________?
✅ B. Evaluate projects
Option A : Evaluate cash flow Option B : Evaluate projects Option C : Evaluate budgeting Option D : Evaluate equity Option E : Correct Answer : Evaluate projects Read more
11176. A type of project whose cash flows would not depend on each other is classified as______________?
✅ B. Independent projects
Option A : Project net gain Option B : Independent projects Option C : Dependent projects Option D : Net value projects Option E : Correct Answer : Independent projects Read more
11177. A project whose cash flows are more than capital invested for rate of return then net present value will be___________?
✅ A. Positive
Option A : Positive Option B : Independent Option C : Negative Option D : Zero Option E : Correct Answer : Positive Read more
11178. In mutually exclusive projects, project which is selected for comparison with others must have____________?
✅ A. Higher net present value
Option A : Higher net present value Option B : Lower net present value Option C : Zero net present value Option D : All of above Option E : Correct Answer : Higher net present value Read more
11179. Profitability index in capital budgeting is used for_________?
✅ C. Evaluate projects
Option A : Negative projects Option B : Relative projects Option C : Evaluate projects Option D : Earned projects Option E : Correct Answer : Evaluate projects Read more
11180. Relationship between Economic Value Added (EVA) and Net Present Value (NPV) is considered as____________?
✅ C. Direct relationship
Option A : Valued relationship Option B : Economic relationship Option C : Direct relationship Option D : Inverse relationship Option E : Correct Answer : Direct relationship Read more