MCQ Bank
The application of rational expectations theory is:
- A) Efficient market hypothesis
- B) Segmented market theory
- C) Adaptive expectations
- D) Consumption theory
The investors who takes risks to increase their risk exposure and wealth are called:
- A) Savers
- B) Hedgers
- C) Speculators
- D) Consumers
Who can force laws for firms to work according to standard accounting principles?
- A) Government
- B) Household
- C) Entrepreneur
- D) Banks
What will be the result if venture capital firms work properly?
- A) Economic expansion
- B) Increase in international competitiveness
- C) New jobs creation
- D) All of the given options
The efficient market hypothesis can be implemented in the form of:
- A) Interest rate theory
- B) Random walk theory
- C) Adaptive expectations
- D) Segmented market theory
The consequences of adverse selection is reduced due to:
- A) Adverse selection
- B) Asymmetric information
- C) Political instability
- D) Collateral
Actual gains of an investment are different from an expected return in:
- A) Uncertainty
- B) Revenues
- C) Risk
- D) Hedging
People’s attitude are naturally towards:
- A) Loss aversion
- B) Loss loving
- C) Loss seeking
- D) Loss neutral
Transaction costs are considered as:
- A) Profits
- B) Depreciation
- C) Revenues
- D) Expenses
Future changes in stock prices are unpredictable in:
- A) Segmented market theory
- B) Interest rate theory
- C) Adaptive expectations
- D) Random walk theory
Lenders are willing to lend loans to the firms having:
- A) Low net worth
- B) High net worth
- C) Zero net worth
- D) High risk of default
A person does not know with surety what will happen in the future. It is called as:
- A) Risk management
- B) Risk
- C) Uncertainty
- D) Hedging
How venture capital firms work to reduce the principal-agent problem?
- A) They use the funds to help potential entrepreneurs
- B) All of the given options
- C) They help new firms to start new businesses
- D) They pool the resources of their partners
Severe consequences for companies and the economy may arise due to:
- A) Good sales
- B) Inadequate risk management
- C) High revenues
- D) Efficient risk management
The principal-agent problem arises because:
- A) Managers have complete investment
- B) Stockholder have complete information
- C) Managers have complete information
- D) Stockholder have complete investment
Which of the following is used as a guarantee of payment?
- A) Loans
- B) Acquisition
- C) Collateral
- D) Merger
Prices of securities fully reflect all available information in:
- A) Adaptive expectations
- B) Segmented market theory
- C) Expectations theory
- D) Efficient market hypothesis
How stockholders can reduce principal-agent problem?
- A) By auditing the firms frequently
- B) All of the given options
- C) By monitoring the firm’s activities
- D) By checking on what the management is doing
Which of the following is the form of efficient market hypothesis?
- A) All of the given options
- B) Semi strong form
- C) Strong form
- D) Weak form
The lender’s losses are reduced in the time of default due to:
- A) Low net worth of the firms
- B) Zero net worth of the firms
- C) High net worth of the firms
- D) High risk of default of the firms