Management MCQs

✅ The correct answer is option D.
Consider buying call option, if price of stock falls then buyer of call option has high potential of losses. Traders buy a call option in the commodities or futures markets if they expect the underlying futures price to move higher. Buying a call option entitles the buyer of the option the right to purchase the underlying futures contract at the strike price any time before the contract expires.

✅ The correct answer is option C.
Financial intermediaries offering savings plans to individuals and funds are exempted from taxation are considered as pension funds. Pension funds are investment pools that pay for employee retirement commitments. Funds are paid for by either employees, employers, or both. Corporations and all levels of government provide pensions. The fund managers invest these contributions conservatively.

✅ The correct answer is option B.
Bond which is denominated in dollars and is issued in European financial markets is considered as Eurobonds. A Eurobond is debt instrument that’s denominated in a currency other than the home currency of the country or market in which it is issued. Eurobonds are frequently grouped together by the currency in which they are denominated, such as eurodollar or Euro-yen bonds.

✅ The correct answer is option A.
Federal funds are loans borrowed and lent on single payment basis. Federal funds, often referred to as fed funds, are excess reserves that commercial banks and other financial institutions deposit at regional Federal Reserve banks; these funds can be lent, then, to other market participants with insufficient cash on hand to meet their lending and reserve needs.

✅ The correct answer is option A.
Participants of financial system reduce demand for their funds if economic growth in domestic market is stagnant. A financial system is the set of global, regional, or firm-specific institutions and practices used to facilitate the exchange of funds. Financial systems can be organized using market principles, central planning, or a hybrid of both.

✅ The correct answer is option A.
Money market where securities are issued by governments to obtain funds for short term is classified as money market instruments. There are several money market instruments in most Western countries, including treasury bills, commercial paper, bankers’ acceptances, deposits, certificates of deposit, bills of exchange, repurchase agreements, federal funds, and short-lived mortgage- and asset-backed securities.