Which of the following suggests that people express a different degree of emotion towards gains than towards losses?

• A) Over confidence
• B) Illusion of control
• C) Anchoring
• D) Loss aversion

A form of the EMH which states that security prices fully reflect all public and private information is known as:

• A) None of the given options
• B) Semi strong form efficiency
• C) Strong form efficiency
• D) Weak form efficiency

Which of the following is the result that deviates from what is expected by finance theory?

• A) Anomaly
• B) Equality
• C) Fairness
• D) Correlation

Which of the following are the securities whose value is derived from another security or derived from underlying assets?

• A) Borrowing securities
• B) Derivative securities
• C) Collateral securities
• D) Mutual funds securities

The duration of a bond:

• A) Decreases with maturity
• B) Is less than maturity for bonds paying coupon interest
• C) Is directly related to coupon yield
• D) Is greater than maturity for zero coupon bonds

Which of the following bonds give the issuer the right to repay the debt prior to maturity?

• A) Municipal bonds
• B) Callable bonds
• C) Convertible bonds
• D) Zero coupon bonds

Which of the following is a positive function of term to maturity & a negative function of size of the coupon of the bond?

• A) Yield to maturity
• B) Duration
• C) Convexity
• D) Immunization

The sensitivity of a coupon bond price to a change in its yield:

• A) Is inversely related to the bond's yield to maturity
• B) Is directly related to the bond's yield to maturity
• C) Is greater for increases in yield to maturity than it is for decreases in yield to maturity
• D) Is constant regardless of whether the yield to maturity increases or decreases

What will be coupon payment of a 5-year bond with par value of Rs.500 at 5% coupon payment annually, the required rate of return of bond is 10%?

• A) 10
• B) 15
• C) 50
• D) 25

Which of the following rated bonds are not paying interest?

• A) D rated
• B) C rated
• C) AAA rated
• D) BBB rated

If an investor wants to reduce or eliminate the reinvestment risk from the security, which of the following will be preferable for the investor?

• A) A 20-year bond with 6% coupon rate
• B) A 10-year bond with 6% coupon rate
• C) A 12-year bond with 5% coupon rate
• D) Zero-coupon bond

“Nominal rate of interest – inflation” is equal to which of the following?

• A) Real rate of interest
• B) Nominal interest
• C) Interest amount
• D) Risk premium

The possibility that a bond issuer will be unable to make interest or principal payments when they are due is known as:

• A) Interest rate risk
• B) Default risk
• C) Liquidity risk
• D) Reinvestment risk

Company A has issued a bond at Rs. 610 with a par value of 600. Bond has been issued at:

• A) Par
• B) Market price
• C) Discount
• D) Premium

Dow Jones Industrial Average is composed of how many “blue-chip” stocks?

• A) 50
• B) 10
• C) 30
• D) 70

Which of the following is shorter than maturity for all bonds except zero coupon bonds?

• A) Convexity
• B) Yield to maturity
• C) Duration
• D) Immunization

Traditionally bond yield to maturity was based on ---------- compounding.

• A) None of the given options
• B) Annual
• C) Quarterly
• D) Semiannual

Which of the following is an example of a non-marketable security?

• A) Negotiated CD
• B) Treasury bill
• C) Banker’s acceptance
• D) U.S. government savings bond

Which of the following value is mentioned on the bond paper?

• A) Par value
• B) None of the given options
• C) Market value
• D) Intrinsic value

Which of the following deals with the study of irrational investment decisions made by the investors?

• A) Efficient market hypothesis
• B) Dividend discount model
• C) Dow theory
• D) Behavioral finance