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Personal Financial Planning Online MCQ Practice Set

Study Personal Financial Planning Online MCQ Practice Set for your academic course and prepare for your exam and online assignments. You can give online FREE Quiz and test your knowledge on OMCQ portal.

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Question: A bond issue is broken up so that some investors will receive only interest payments while others will receive only principal payments, which is an example of

  • A. bundling
  • B. un-bundling
  • C. financial engineering
  • D. B & D

View Answer

Answer D. B & D

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Question: A computerized trading network that matches buy and sell orders electronically entered by customers is a

  • A. National markets system
  • B. Electronic communications networks
  • C. Internet investment service
  • D. Global investment network

View Answer

Answer B. Electronic communications networks

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Question: A major difference between a closed-end investment company and an open-end investment company is that

  • A. Closed-end investment companies are generally much riskier
  • B. Their security portfolios are substantially different
  • C. Closed-end investment companies are passive investments and open-ends are not
  • D. Closed-end companies have a more fixed capitalization

View Answer

Answer B. Their security portfolios are substantially different

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Question: A major difference between real and nominal returns is that

  • A. Real returns adjust for inflation and nominal returns do not
  • B. Real returns use actual cash flows and nominal returns use expected cash flows
  • C. Real returns adjust for commissions and nominal returns do not
  • D. Real returns show the highest possible return and nominal returns show the lowest possible return

View Answer

Answer B. Real returns use actual cash flows and nominal returns use expected cash flows

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Question: A technique uses in comparative analysis of financial statement is

  • A. graphical analysis
  • B. preference analysis
  • C. common size analysis
  • D. returning analysis

View Answer

Answer C. common size analysis

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Question: According to Markowitz, rational investors will seek efficient portfolios because these portfolios are optimal based on

  • A. Expected return
  • B. Risk
  • C. Expected return and risk
  • D. Transactions costs

View Answer

Answer C. Expected return and risk

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Question: All new issues being offered for public sale are registered with

  • A. SEBI
  • B. New issue market
  • C. Maloney act of 1936
  • D. Securities investor protection act of1970

View Answer

Answer B. New issue market

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Question: An bond whose price will rise above its face value is classified as

  • A. premium face value
  • B. premium bond
  • C. premium stock
  • D. premium warrants

View Answer

Answer B. premium bond

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Question: An effect of interest rate risk and investment risk on a bond’s yield is classified as

  • A. reinvestment premium
  • B. investment risk premium
  • C. maturity risk premium
  • D. defaulter’s premium

View Answer

Answer C. maturity risk premium

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Question: An example of a derivative security is

  • A. a common share of General Motors
  • B. a call option on Mobil stock
  • C. a commodity futures contract
  • D. B and C

View Answer

Answer D. B and C

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Question: An unmanaged fixed income security portfolio handled by an independent trustee is known as a

  • A. Junk bond fund
  • B. Closed-end investment company
  • C. Unit investment trust
  • D. Hedge fund

View Answer

Answer D. Hedge fund

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Question: Asset allocation affects the investor’s return by

  • A. Altering the returns on individual assets
  • B. Weighting the portfolio return by the allocation
  • C. Assuring diversification
  • D. Increasing the investor’s use of mutual funds

View Answer

Answer B. Weighting the portfolio return by the allocation

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Question: Assets allocation refers to___

  • A. choosing which securities to hold based on their valuation
  • B. investing only in “safe” securities
  • C. the allocation of assets into broad assets classes
  • D. bottom -up analysis

View Answer

Answer C. the allocation of assets into broad assets classes

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Question: Book value is

  • A. The same as market value
  • B. A more accurate valuation technique than the dividend models
  • C. The accounting value of the firm as reflected in the financial statements
  • D. The same as liquidation value

View Answer

Answer C. The accounting value of the firm as reflected in the financial statements

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Question: Commercial banks differ from other businesses in that both their assets and their liabilities are mostly

  • A. illiquid
  • B. financial
  • C. real
  • D. owned by the government

View Answer

Answer B. financial

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Question: Commercial papers are

  • A. unsecured promissory notes
  • B. secured promissory notes
  • C. sold at a premium
  • D. Issued for a period of 1 to 2 years

View Answer

Answer A. unsecured promissory notes

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