Financial Markets And Funds(Financial Management And Financial Markets ) Questions and Answers

Question 1. According to demand for funds curve, the demand curve shifts down and to the left if there is a decrease in
  1.    equilibrium supply
  2.    equilibrium savings
  3.    equilibrium demand
  4.    equilibrium interest rate
Explanation:-
Answer: Option D. -> equilibrium interest rate
Answer: (d).equilibrium interest rate
Question 2. For the other non-price conditions, the increase in equilibrium interest rate leads to
  1.    zero restrictiveness
  2.    negative restriction
  3.    increase restrictiveness
  4.    decrease restrictiveness
Explanation:-
Answer: Option D. -> decrease restrictiveness
Answer: (d).decrease restrictiveness
Question 3. The loans for cars and home appliances is classified as loans for
  1.    durable goods
  2.    non-durable goods
  3.    equilibrium goods
  4.    non-equilibrium goods
Explanation:-
Answer: Option A. -> durable goods
Answer: (a).durable goods
Question 4. When the business companies started investing with the funds generated internally is a point which shows that
  1.    cost of loanable funds is high
  2.    cost of loanable fund is low
  3.    equilibrium is zero
  4.    equilibrium is negative
Explanation:-
Answer: Option A. -> cost of loanable funds is high
Answer: (a).cost of loanable funds is high
Question 5. The interest rate considering compounding of interest rate and is earned in 12 months, is considered as
  1.    effective annual return
  2.    ineffective annual return
  3.    decrease in return
  4.    increase in return
Explanation:-
Answer: Option A. -> effective annual return
Answer: (a).effective annual return
Question 6. The maturity of debt instruments which faces more price fluctuations is
  1.    primary maturity
  2.    capital maturity
  3.    short term maturity
  4.    long term maturity
Explanation:-
Answer: Option D. -> long term maturity
Answer: (d).long term maturity
Question 7. The centralized market place where agents can have efficiently and quickly transactions is classified as
  1.    secondary markets
  2.    central market
  3.    traded market
  4.    agents market
Explanation:-
Answer: Option A. -> secondary markets
Answer: (a).secondary markets
Question 8. The financial instruments of public markets include
  1.    transfer funds
  2.    bearer bonds
  3.    shares
  4.    bonds
Explanation:-
Answer: Option C. -> shares
Answer: (c).shares
Question 9. The risk arises from trading of assets because of change in asset prices and exchange rates is classified as
  1.    asset risk
  2.    trade risk
  3.    market risk
  4.    exchange risk
Explanation:-
Answer: Option C. -> market risk
Answer: (c).market risk
Question 10. The type of institutions that write securities, engage in brokerage and security trading are considered as
  1.    trading institutions
  2.    activity institutions
  3.    investment banks
  4.    mortgage banks
Explanation:-
Answer: Option C. -> investment banks
Answer: (c).investment banks
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