NTS/NTS CURRENT AFFAIRS FINANCE MCQ SET 3 Sample Test,Sample questions

Question:
A companys agreement with the underwriter include

1.spread

2.greenshoe option

3.A and B

4.whiteshoe option


Question:
A four year zero-coupon bond has 6% yield. What is its duration in years?

1.4

2.5

3.6

4.7


Question:
Allocating stock in popular new issues to manager of their important corporate clients is called

1.subscription

2.under-performance

3.rights

4.spinning


Question:
An agreement on a telephone or email to buy/sell an asset at an agreed future time for an agreed price is called

1.spot contract

2.forward contract

3.future contract

4.swap


Question:
An investment of $9,000 today will yield $10,000 after one year. What is the Net Present Value if the interest rate is 10%?

1.$71

2.$81

3.$91

4.$101


Question:
An option that allows the underwriter to increase the number of shares bought by 15% is called

1.spread

2.spinning

3.whiteshoe

4.greenshoe


Question:
Changes in interest rates have a __________ impact on the prices of long-term bonds than the short-term bonds.

1.greater

2.smaller

3.both have same impact

4.interest rate does not matter


Question:
Difference between strike price and stock price is called

1.intrinsic value

2.option premium

3.time premium

4.none of these


Question:
If a random variable X has a normal distribution, then X has a/an _____ distribution.

1.lognormal

2.exponential

3.Poisson

4.binomial


Question:
If an experiment is repeated independently for a large number of times, it converges to a/an

1.expected value

2.variance mean

3.normal distribution

4.uniform distribution


Question:
If market price of the share at expiration is $100 and exercise price is $80, then value of a call option at expiration is

1.$20

2.$0

3.$1

4.$20


Question:
If market price of the share at expiration is $100 and exercise price is $80, then value of a put option at expiration is

1.$20

2.$0

3.$1

4.$20


Question:
If the co-variance between stock A and market returns is 12, and the standard deviation of market returns is 3 then what is the value of beta?

1.0.96

2.1

3.1.33

4.1.45


Question:
If the distribution is symmetric about mean then the skewness is

1.0

2.1

3.positive

4.negative


Question:
If the spot price is $1200 and the exercise price is $1000 then the payoff of a party assuming a long position is

1.-$200

2.$0

3.$1

4.$200


Question:
If the spot price is $1200 and the exercise price is $1000 then the payoff of a party assuming a short position is

1.$200

2.$0

3.$1

4.$200


Question:
In a module, quiz contributes 10%, assignment 30%, and final exam contributes 60% towards the final result. A student obtained 80% marks in quiz, 65% in assignment, and 75% in the final exam. What are average marks?

1.64.50%

2.68.50%

3.72.50%

4.76.50%


Question:
On 1 January you enter a contract to buy 1 million barrel of oil for $80 per barrel to be delivered on 1 March. The price on 1 March is $82 per barrel. Your gain is

1.$200

2.$20000

3.$200000

4.$2000000


Question:
Rolling of a die is an example of a random

1.event

2.outcome

3.experiment

4.sample space


Question:
Spread is __________ for IPOs.

1.highest

2.lowest

3.average

4.uncertain


Question:
The arithmetic mean of all possible outcomes is known as

1.expected value

2.critical value

3.variance

4.standard deviation


Question:
The error of rejecting the null hypothesis when it is true is known as

1.Type-I error

2.Type-II error

3.Type-III error

4.Type-IV error


Question:
The interest rate earned if a financial asset is held until its maturity is called

1.term structure

2.spinning

3.yield

4.spread


Question:
The long-run returns of Initial Public Offerings (IPOs) tend to __________ the market.

1.underperform

2.accelerate

3.amplify

4.none of these


Question:
The mean and variance of Poisson distribution are both

1.0

2.1

3.?

4.1/?


Question:
The mean and variance of standard normal distribution is _____ and _____ respectively

1.0, 1

2.1, 0

3.�1, 1

4.��?,�?


Question:
The mean, mode, and median of the data set: 5, 4, 10, 12, 1, 5, 3, 7, 15, and 8 is respectively

1.�5, 6, 7

2.7, 6, 5

3.6, 5, 7

4.7, 5, 6


Question:
The party that agrees to buy the underlying asset in a forward contract is said to assumes

1.forward position

2.backward position

3.long position

4.short position


Question:
The party that agrees to sell the underlying asset in a forward contract is said to assumes

1.forward position

2.backward position

3.long position

4.short position


Question:
The price of a stock is $100, and it could be $95 or $115 the next year. What is the expected return?

1.5%

2.6%

3.7%

4.7.50%


Question:
The price of a stock is $100, and there are 40% chances that it would be $95 and 60% chances that it would be $115 the next year. What is the expected return?

1.5%

2.6%

3.7%

4.7.50%


Question:
The return that is forgone by investing in the project rather than investing in financial markets at the same level of risk is called

1.internal rate of return

2.capital saving

3.opportunity cost

4.opportunity saving


Question:
The value of a financial derivative depends on the

1.maturity

2.duration

3.forward interest rate

4.underlying


Question:
The value of R2, the coefficient of determination, is always between

1.0 and 1, including 0 and 1

2.0 and 1, excluding 0 and 1

3.�1�and 1, including��1 and 1

4.�1�and 1, excluding��1 and 1


Question:
Var (X + Y) = ?

1.E[X/Y] + E[Y]

2.E[Y/X] + E[X]

3.Var(X) + Var(Y) + 2 Cov(X, Y)

4.Var(X) + Var(Y) - 2 Cov(X, Y)


Question:
Var (X) = ?

1.E[X2]

2.E[X2] E[X]

3.E[X2] + E[X]2

4.E[X2] - E[X]2


Question:
What is the arithmetic mean of the data set: 4, 5, 0, 10, 8, and 3?

1.4

2.5

3.6

4.7


Question:
What is the average of 3%, 7%, 10%, and 16% ?

1.8%

2.9%

3.10%

4.11%


Question:
What is the average of the data set: 3, 4, 5, 0, 8, and 10?

1.4

2.5

3.6

4.7


Question:
What is the geometric mean of: 1, 2, 8, and 16?

1.4

2.5

3.6

4.7


Question:
What is variance of the data set: 2, 10, 1, 9, and 3?

1.15.5

2.17.5

3.5.5

4.7.5


Question:
When forward contract is traded on an exchange, it is called

1.spot contract

2.future contract

3.call option

4.put option


Question:
Which from the following issues has the lowest total direct cost?

1.straight bonds

2.corporate stocks

3.all issues have same cost

4.none of these


Question:
Which from the following statements is incorrect?

1.A European option can only be exercised at expiry

2.An American option can only be exercised at expiry

3.A European option is a right but not obligation

4.An American option is a right but not obligation


Question:
Which measure is used to determine whether the distribution is heavy-tailed or light-tailed?

1.skewness

2.kurtosis

3.variance

4.standard deviation


Question:
Which of the following cannot be the probability of an event?

1.0

2.0.3

3.0.9

4.1.2


Question:
Which of the following cannot be the value of a correlation coefficient?

1.1

2.0.75

3.0

4.1.2


Question:
Which probability distribution is used to model the time elapsed between events?

1.Exponential

2.Poisson

3.Normal

4.Gamma


Question:
Which statistical method is used to estimate the relationship between two variables?

1.Correlation

2.Regression

3.Covariance

4.ANOVA


Question:
Which test is applied to Analysis of Variance (ANOVA)?

1.t test

2.z test

3.F test

4.2 test


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  29. NTS CURRENT AFFAIRS EDUCATION MCQ SET 3
  30. NTS CURRENT AFFAIRS ACCOUNTING SET 2
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