NTS MCQ Quiz Hub

1. The measure for calculating how much two random variable change together is called
variance
covariance
skewness
kurtosis

2. The normalized version of covariance is called
regression
correlation
cross-section
spread

3. Suppose our portfolio consists of two stocks A and B. What should be the correlation between them so that we have no risk in our portfolio?
1
0
1
risk cannot be eliminated

4. In the beginning, some companies receive equity investment from wealthy individuals. The wealthy individuals are called
angel investors
corporate investors
venture capitalists
venture capital firms

5. Firms that invest in new companies as they try to grow are called
spinning
underwriters
venture capitalists
venture capital firms

6. An investor will receive $5,000 and $10,000 after one and two years from today respectively. If the interest rate during this period is 10% then what is the present value of this cash flow?
$12000
$12450
$12810
$13705

7. What is volatility if the duration of a bond is 4 years and yield to maturity is 8%?
3.10%
3.40%
3.70%
4.00%

8. The success of a new company critically depends on
managers
board of directors
shareholders
venture capitalists

9. Companies go public in order to
avoid taxes
reduce management cost
raise more cash
get merge

10. Companies go public with the help of
venture capital firms
underwriters
shareholders
A, B and C

11. If beta of a stock is __________ then it tends to amplify the overall market movement.
0
1
greater than 1
between 0 and 1

12. What is the real rate of interest if nominal rate is 10% and inflation rate is 5%?
4.30%
4.80%
5.30%
5.80%

13. The relationship between short and long term interest rates is called __________ of interest rates.
yield to maturity
duration
volatility
term structure

14. Financial managers are interested in __________ when see bond market.
yield to maturity
duration
volatility
term structure

15. Underwriters are also called
bookrunner
venture capitalists
subscribers
angel investors

16. Which from the following is not the role of an underwriter?
They provide procedural and financial advice
They buy the issue
They resell the issue to the public
They provide funds to the corporation

17. Risk __________ with the duration of bond.
remains same
increases
decreases
multiplied

18. The difference between the public-offer price and the price paid by the underwriter is called
underpricing
spread
commission
margin

19. The underwriters receive their payments in the shape of
underpricing
spread
commission
margin

20. Rights issues are for
managers
directors
existing shareholders
new shareholders

21. If the daily prices of a stock on 20 and 21 January are 90 and 100 respectively, then what is the daily rate of return?
9.90%
10.10%
11.11%
12.12%

22. According to the MM proposition, dividend policy is
correlated
under-performed
relevant
irrelevant

23. In portfolio analysis __________ curves play an important role.
circle
ellipse
parabola
hyperbola

24. If stock prices increases, dividend yield
also increases
decreases
remains same
increases to one and a half

25. According to residual dividend policy, a firm should pay a dividend of all left over when
zero NPV projects have been funded
positive NPV projects have been funded
projects with IRR equal to risk-free interest rate have been funded
projects with IRR greater than risk-free interest rate have been funded

26. The value of probability is always between __________ (inclusive).
1 and 0
0 and 1
1 and 1
none of these

27. The value of correlation is always between __________ (inclusive).
1 and 0
0 and 1
1 and 1
none of these

28. If two firms in the same line of business merge together, it is called __________ merger.
horizontal
vertical
straight
conglomerate

29. If two firms at different stages of production merge together, it is called __________ merger.
horizontal
vertical
straight
conglomerate

30. If two firms in unrelated line of business merge together, it is called __________ merger.
horizontal
vertical
straight
conglomerate