Management MCQs

As compared to unsecured bonds, mortgage bonds are considered as

by
A. more risky
B. less risky
C. term risk
D. serial risk
✅ The correct answer is option B.
As compared to unsecured bonds, mortgage bonds are considered as less risky. Unsecured bonds or debentures are bonds that are not backed by some type of collateral. In other words, the bond is only secured by the bond issuer’s good credit standing. There are no building, equipment, vehicles, or other assets backing up the bond. A mortgage bond is a bond secured by a mortgage or pool of mortgages. These bonds are typically backed by real estate holdings and real property such as equipment. In a default situation, mortgage bondholders have a claim to the underlying property and could sell it off to compensate for the default.

Ownership of mortgaged property will be transferred to financial institution if

by
A. borrower defaults
B. borrower does not default
C. borrower want less rate
D. borrower want profit
✅ The correct answer is option A.
Ownership of mortgaged property will be transferred to financial institution if borrower defaults. The mortgaged property can be transferred/inherited only with the written consent of the lender. This means that if a person passes away while the home loan was still running on the property that has to be bequeathed, the beneficiary (spouse, or children of the deceased) will have to pay the outstanding loan.

A memorandum (memo) is considered a brief form of written communication for

by
A. legal use
B. internal use
C. external use
D. formal use
✅ The correct answer is option B.
A memorandum (memo) is considered a brief form of written communication for internal use. A memorandum (a memo), is a short message or record used for internal communication in a business.

Maturity of debt instruments which faces more price fluctuations is

by
A. primary maturity
B. capital maturity
C. short term maturity
D. long term maturity
✅ The correct answer is option D.
Maturity of debt instruments which faces more price fluctuations is long term maturity. Term to maturity refers to the remaining life of a debt instrument. With bonds, term to maturity is the time between when the bond is issued and when it matures, known as its maturity date, at which time the issuer must redeem the bond by paying the principal or face value.

In interest rate swap transaction, party who pays floating payments of interest is considered as

by
A. notion buyer
B. notion seller
C. swap buyer
D. swap seller
✅ The correct answer is option D.
In interest rate swap transaction, party who pays floating payments of interest is considered as swap seller. A swap is an agreement between two parties to exchange sequences of cash flows for a set period of time.

The goal of the cost leader is to:

by
A. start a price war
B. minimize wages
C. charge the lowest price
D. make high margins
✅ The correct answer is option D.
The goal of the cost leader is to make high margins. Leader pricing is a common pricing strategy used by retailers to attract customers. It involves setting lower price points and reducing typical profit margins to introduce brands or stimulate interest in the business as a whole or a particular product line. Products sold in this strategy are often sold at a loss.

The semantic markers used to indicate the development of ideas or to list the ideas arethe semantic markers used to indicate the development of ideas or to list the ideas are : 1. Primarily 2. Secondly 3. Finally 4. Consequently

by
A. 3, 2, 4
B. 1, 2, 4
C. 1, 3, 4
D. 1, 2, 3
✅ The correct answer is option D.
The semantic markers used to indicate the development of ideas or to list the ideas arethe semantic markers used to indicate the development of ideas or to list the ideas are Primarily, Secondly and Finally.

Ability of an asset to be converted in to cash very quickly is classified as

by
A. variable securities
B. convertible securities
C. liquidity
D. constant securities
✅ The correct answer is option C.
Ability of an asset to be converted in to cash very quickly is classified as liquidity. Financial liquidity refers to how easily assets can be converted into cash. Assets like stocks and bonds are very liquid since they can be converted to cash within days. However, large assets such as property, plant, and equipment are not as easily converted to cash.