laboursonline – MCQs, Mock Tests | NTS NTS CURRENT AFFAIRS FINANCE MCQ SET 1

The measure for calculating how much two random variable change together is called

1. variance
2. covariance
3. skewness
4. kurtosis

✅ Correct Answer: 2

The normalized version of covariance is called

1. regression
2. correlation
3. cross-section
4. spread

✅ Correct Answer: 2

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. 1
2. 0
3. 1
4. risk cannot be eliminated

✅ Correct Answer: 1

In the beginning, some companies receive equity investment from wealthy individuals. The wealthy individuals are called

1. angel investors
2. corporate investors
3. venture capitalists
4. venture capital firms

✅ Correct Answer: 1

Firms that invest in new companies as they try to grow are called

1. spinning
2. underwriters
3. venture capitalists
4. venture capital firms

✅ Correct Answer: 4

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?

1. $12000
2. $12450
3. $12810
4. $13705

✅ Correct Answer: 3

What is volatility if the duration of a bond is 4 years and yield to maturity is 8%?

1. 3.10%
2. 3.40%
3. 3.70%
4. 4.00%

✅ Correct Answer: 3

The success of a new company critically depends on

1. managers
2. board of directors
3. shareholders
4. venture capitalists

✅ Correct Answer: 1

Companies go public in order to

1. avoid taxes
2. reduce management cost
3. raise more cash
4. get merge

✅ Correct Answer: 3

Companies go public with the help of

1. venture capital firms
2. underwriters
3. shareholders
4. A, B and C

✅ Correct Answer: 2

If beta of a stock is __________ then it tends to amplify the overall market movement.

1. 0
2. 1
3. greater than 1
4. between 0 and 1

✅ Correct Answer: 3

What is the real rate of interest if nominal rate is 10% and inflation rate is 5%?

1. 4.30%
2. 4.80%
3. 5.30%
4. 5.80%

✅ Correct Answer: 2

The relationship between short and long term interest rates is called __________ of interest rates.

1. yield to maturity
2. duration
3. volatility
4. term structure

✅ Correct Answer: 4

Financial managers are interested in __________ when see bond market.

1. yield to maturity
2. duration
3. volatility
4. term structure

✅ Correct Answer: 1

Underwriters are also called

1. bookrunner
2. venture capitalists
3. subscribers
4. angel investors

✅ Correct Answer: 1

Which from the following is not the role of an underwriter?

1. They provide procedural and financial advice
2. They buy the issue
3. They resell the issue to the public
4. They provide funds to the corporation

✅ Correct Answer: 4

Risk __________ with the duration of bond.

1. remains same
2. increases
3. decreases
4. multiplied

✅ Correct Answer: 2

The difference between the public-offer price and the price paid by the underwriter is called

1. underpricing
2. spread
3. commission
4. margin

✅ Correct Answer: 2

The underwriters receive their payments in the shape of

1. underpricing
2. spread
3. commission
4. margin

✅ Correct Answer: 2

Rights issues are for

1. managers
2. directors
3. existing shareholders
4. new shareholders

✅ Correct Answer: 3

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?

1. 9.90%
2. 10.10%
3. 11.11%
4. 12.12%

✅ Correct Answer: 3

According to the MM proposition, dividend policy is

1. correlated
2. under-performed
3. relevant
4. irrelevant

✅ Correct Answer: 4

In portfolio analysis __________ curves play an important role.

1. circle
2. ellipse
3. parabola
4. hyperbola

✅ Correct Answer: 4

If stock prices increases, dividend yield

1. also increases
2. decreases
3. remains same
4. increases to one and a half

✅ Correct Answer: 2

According to residual dividend policy, a firm should pay a dividend of all left over when

1. zero NPV projects have been funded
2. positive NPV projects have been funded
3. projects with IRR equal to risk-free interest rate have been funded
4. projects with IRR greater than risk-free interest rate have been funded

✅ Correct Answer: 2

The value of probability is always between __________ (inclusive).

1. 1 and 0
2. 0 and 1
3. 1 and 1
4. none of these

✅ Correct Answer: 2

The value of correlation is always between __________ (inclusive).

1. 1 and 0
2. 0 and 1
3. 1 and 1
4. none of these

✅ Correct Answer: 3

If two firms in the same line of business merge together, it is called __________ merger.

1. horizontal
2. vertical
3. straight
4. conglomerate

✅ Correct Answer: 1

If two firms at different stages of production merge together, it is called __________ merger.

1. horizontal
2. vertical
3. straight
4. conglomerate

✅ Correct Answer: 2

If two firms in unrelated line of business merge together, it is called __________ merger.

1. horizontal
2. vertical
3. straight
4. conglomerate

✅ Correct Answer: 4