This quiz works best with JavaScript enabled. Home > Finance > Investments > Investment Banking > Investment Banking – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Investment Banking Quiz 2 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. NPV will be positive if A) They won't be. B) Money is given back. C) Discounted cash flows justify initial investment. D) Companies work hard. Show Answer Correct Answer: C) Discounted cash flows justify initial investment. 2. Variance calculation and measuring the Standard deviation is one way of measuring the ..... A) Risk. B) Return. C) Gambling. D) Speculation. Show Answer Correct Answer: A) Risk. 3. Which of the following is not a characteristic of an investment bank? A) The customer base of the bank will only be a few hundred. B) It is an institution for select individuals, governments and corporations and not all citizens. C) Income is from fees and interest. D) It is associated with the performance of the financial markets. Show Answer Correct Answer: C) Income is from fees and interest. 4. A sudden and extreme downturn in stock performance/value A) Index. B) Risk. C) Crash. D) Penalty. Show Answer Correct Answer: C) Crash. 5. Which type of prospectus has the information of share price and number of shares? A) Final prospectus. B) Preliminary prospectus. Show Answer Correct Answer: A) Final prospectus. 6. Merchant banks shall not associate with any business other than that of the securities market. A) True. B) False. Show Answer Correct Answer: A) True. 7. The Average (or Accounting) Rate of Return Method of Investment Appraisal will always select ..... A) The project with the lowest cost. B) The project with the highest total net return. C) The project with the highest average rate of return. D) None of above. Show Answer Correct Answer: C) The project with the highest average rate of return. 8. You invest $ 675 in a computer repair company. At the end of the year, you receive $ 300 as your share of the profit. What is your Rate of Return (ROR)? A) 44%. B) 2.25%. C) 0.44%. D) 22.5%. Show Answer Correct Answer: A) 44%. 9. What is the main role of an investment banker? A) To process financial records using manual and computerized systems. B) To act as financial advisors to corporations, to help raise capital. C) To help clients by assisting with services (Ex:setting up checking account). D) None of above. Show Answer Correct Answer: B) To act as financial advisors to corporations, to help raise capital. 10. A security in which the investor loans money to a company or government, then pays regular interest to the bondholder and returns the principal on the bond's maturity date A) T-Note. B) Bond. C) Dividend. D) Index Fund. Show Answer Correct Answer: B) Bond. 11. What is the role of a licensed broker-dealer in providing investment banking services? A) Coordinating with bidders in mergers and acquisitions. B) Generating pitch books of financial information. C) All of the above. D) Subscribing investors to security issuances. Show Answer Correct Answer: C) All of the above. 12. ..... refers to an intangible investment. A) Return. B) Security. C) Risk. D) Diversification. Show Answer Correct Answer: B) Security. 13. Which one of the following is shown first when the assets are arranged in the order of their liquidity? A) Cash in hand. B) Investment in gold. C) Investment in Land. D) Investment in stock market. Show Answer Correct Answer: A) Cash in hand. 14. Downsizing has a more positive effect on firm performance than does downscoping. A) False. B) True. Show Answer Correct Answer: A) False. 15. The amount you earn as profit from your investment based on your deposited amount, usually expressed as a percentage A) Penalty. B) Emergency Fund. C) Index. D) Interest Rate. Show Answer Correct Answer: D) Interest Rate. 16. Dividends are earned when you sell your stock for more than what you paid for it. A) True. B) False. Show Answer Correct Answer: B) False. 17. Which Act was enacted after the Global Financial Crisis (2007-2009)? A) Dodd-Frank Act. B) Gramm-Leach-Bliley Act. C) Glass-Steagall Act. D) None of above. Show Answer Correct Answer: A) Dodd-Frank Act. 18. Andy earned $ 300 on a $ 1000 investment. What is his current ROI (Return on Investment)? A) 30%. B) 3%. C) 2%. D) 70%. Show Answer Correct Answer: A) 30%. 19. What are the main areas within the markets division of investment banking? A) Investment banking, risk management, and research. B) Corporate finance, technology, and back office. C) Sales and trading, research, and risk management. D) Sales and trading, structuring, and research. Show Answer Correct Answer: D) Sales and trading, structuring, and research. 20. Banker's acceptance is generally a money market instrument issued by a bank to: A) Payment of export proceeds. B) Insurance claim payment. C) Payment of outstanding credit. D) Auction guarantee. Show Answer Correct Answer: A) Payment of export proceeds. 21. ..... is a market for lending & borrowing of short term funds. A) Forex Market. B) Money Market. C) Secondary Market. D) Capital Market. Show Answer Correct Answer: B) Money Market. 22. Which of the following is not a typical job title for an Islamic Investment Bank? A) Mechanic. B) Associate. C) Analyst. D) Shari'ah Auditor. Show Answer Correct Answer: A) Mechanic. 23. Firm buys a controlling or 100% interest in another firm called ..... A) Acquisition. B) Merger. Show Answer Correct Answer: A) Acquisition. 24. World investment report is published by A) UNCTAD. B) IMF. C) World Bank. D) UNDP. Show Answer Correct Answer: A) UNCTAD. 25. Spreading your investments around to increase financial security A) Diversification. B) Risk assessment. C) Liquidity trap. D) Stocks, bonds & cash. Show Answer Correct Answer: A) Diversification. 26. When overseeing the activities required for making acquisitions can divert managerial attention from other matters that are necessary for long-term competitive success. A) Managers overly focused on acquisitions. B) Large or extraordinary debt. C) Inadequate evaluation of target. D) Too large. Show Answer Correct Answer: A) Managers overly focused on acquisitions. 27. It is aligned most closely with establishing and using strategic controls and usually improves performance more on a comparative basis? A) Downscoping. B) Restructuring. C) Downsizing. D) Leveraged Buyouts. Show Answer Correct Answer: A) Downscoping. 28. Diversifying your investments means varying your investments with different levels of risk. A) True. B) False. Show Answer Correct Answer: A) True. 29. How do we call the basic document necessary for conducting an issue on the primary market? A) Prospectus. B) Brochure. C) Offering book. D) None of above. Show Answer Correct Answer: A) Prospectus. 30. The function of brokers in financial markets is very important for other market players because: A) Trusted source of information. B) Guarantee the legality of transactions. C) Speed up transactions. D) Deliver the best price. Show Answer Correct Answer: D) Deliver the best price. ← PreviousNext →Related QuizzesInvestments QuizzesFinance QuizzesInvestment Banking Quiz 1Investment Banking Quiz 3Investment Banking Quiz 4Investment Banking Quiz 5Investment Banking Quiz 6Investment Banking Quiz 7Investment Banking Quiz 8Investment Banking Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books