Quiz Mania

Capital Markets
Q
 How can capital markets boost the economic growth
of a country?
Q
 What is the role of an investment bank?
Q
 Name 2 regulatory authorities of the capital markets
in Pakistan
Q
 Name 2 rating agencies in Pakistan
Q
 Name at least 4 financial markets in Pakistan.
Q
 IF you want to sell the units of mutual funds, who can you sell it to?
Q
 What does a D stand for in the rating scale?
Q
 In the event of liquidation what will be the order of claims amongst the following:
 Junior bonds
 Unsecured subordinate bonds
 Presence shares
 Senior bonds
 Common shares
Q
 An upgrade in ratings shall ____________ the yield of the bond?
Q
 What financial instrument do AMCs sell?
Q
 What is the bond contract called?
Q
 What does TFC stand for and who is the issuer?
Q
 What is the difference between T-bills and PIBs
Q
 Name a financial asset that ahs a beta value of 0
Q
 Aggressive stock will have beta values of:
a) B=1
b) B = negative
c) B > 1
d) B <1
Q
 Shares are rated. True or False? Explain
Q
 Are debentures secured financial assets?
Q
 Correct the following statement:
“Commercial papers are capital market securities, issued at a discount by the
government”
Q
 If the yield of the bond increases what has most likely happened?
Q
 Why would organizations issue short term bonds rather than long term bonds ot
finance a project?
Q
 Explain, what do these features of this bond mean;
 An unsecured bond with a sinking fund provision
Q
 Can an organization get themselves rated by more than one CRA simultaneously?
Q
 Which security has the highest risk;
A. Stocks held in a Japanese firm
B. Unsecured debenture
C. Equity fund
D. TFC
Q
 What is the difference between the required rate of return and the expected rate of
return?
Q
 Name 3 valuation techniques for stocks
Q
 How can we calculate the value of a financial security?
Q
 How often is the monetary policy in Pakistan revised?
Q
 What is meant by private placement?
Q
 If the value of a bond decreases, what would happen to the coupon rate?
Q
Are government securities risk free?
Q
 Correct the following statement:
“T-bills are credit risk free, offer low annual interest rates and are scripted securities”
Q
 Name a liquid security and one illiquid security
Q
 Individuals have credit ratings done by Credit rating agencies?
Q
 Define asymmetric information
Q
 Bonds have a secondary market. True or False? Explain
Q
 When a company announces cash dividends, what impact will it have on the stock
price?
Q
 If a bond has a protective covenant associated to it, it means__________
?
Q
 If bonds are issued by an entity by private placement, who can buy these bonds?
Q
 Can firms who are not required by law to be rated, can get themselves rated?
Explain
Q
 A low liquid asset will have low risk. True or False. Explain .
Q
 Beta measures _____________ risk.
Q
 A Balanced mutual fund will have what sort of asset composition?
Q
 Name 2 risks that debt in the capital structure brings about:
Q
 Give an example of a marketable security and explain
Q
 Ford issues new shares, what sort of signals will be sent out in the market? Explain
Q
 True or False
Debentures are interest bearing securities
Q
 Two firm, Frim A and Firm B, have the following current capital structure:
Firm A: preferred shares 10%, common shares 60%, debt 30%
 Firm B : preferred shares 20%, common shares 70%, debt 15%

 The both firms issues new shares, which firm would you invest in and why?
Q
 A retired person, with only pension as his income, comes to you for investment
advice, name 3 securities that you would recommend him to invest in and why.
Q
 What is the max maturity of Commercial papers?
Q
 Give two ways in which an individual can purchase T-Bills.
Q
 Name 3 basic components of capital structure
Q
 Explain the statement:
“After a certain point the use of debt can offset the benefits of debt”
Q
 Why is it a regulatory requirement for fund managers to invest in T-bills?
Q
 Are preferred share rated? Explain
Q
 Correct the following statement:
“financial flexibility of a firm increases whilst utilizing the mechanism of debt
financing”
Q
 Name a predominant risk faced by bonds?
Q
 What is the max maturity of a T-bill?
Q
 What is meant by the price discovery process?
Q
 Name a mode of indirect investing
Q
 If my stocks returns are moving as per the market, it will have a beta value of:
A. =1
B. <1
C. >1
D. -ve
THE END