This quiz works best with JavaScript enabled. Home > Finance > Investments > Investment Banking > Investment Banking – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Investment Banking Quiz 3 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. It is a process through which a potential acquirer evaluates a target firm for acquisition A) Bureaucratic controls. B) Junk bonds. C) Synergy. D) Due diligence. Show Answer Correct Answer: D) Due diligence. 2. Recurring deposit is also a pyramid scheme A) True. B) False. Show Answer Correct Answer: B) False. 3. In a bear market, investment prices rise, so it is important to buy as soon as possible. A) False. B) True. Show Answer Correct Answer: A) False. 4. A major drawback of cryptocurrency is that it is not insured by the government A) True. B) False. Show Answer Correct Answer: A) True. 5. A market where shares in corporations are bought and sold through an organized system. A) Stock Market. B) Index. C) Portfolio. D) CD. Show Answer Correct Answer: A) Stock Market. 6. An example of a blue-chip stock is Best Buy. A) True. B) False. Show Answer Correct Answer: A) True. 7. Big US investment banks charge lower fee than major European banks. A) True. B) False. Show Answer Correct Answer: B) False. 8. If you invest $ 20, 000 in a friend's company and after one year you receive $ 250 as your share of the profit, what is your ROR? A) 0.0125%. B) 8%. C) 1.25%. D) 80%. Show Answer Correct Answer: C) 1.25%. 9. Financial assets include A) Bank deposits. B) Investment in debentures/bonds. C) Investment in equity shares. D) All of these. Show Answer Correct Answer: D) All of these. 10. Financial Investment is the A) Persons commitment to buy a flat or house. B) Employment of funds in securities to earn returns. C) Employment of funds on assets to earn returns. D) Keeping money in locker. Show Answer Correct Answer: B) Employment of funds in securities to earn returns. 11. For shareholders, ..... generates gains in their wealth that they could not duplicate or exceed through their own portfolio diversification decisions. A) Junk bonds. B) Bureaucratic controls. C) Due diligence. D) Synergy. Show Answer Correct Answer: D) Synergy. 12. Management of the acquired firm ..... A) Takeover the firm. B) Acquire power. C) Reports to management of acquiring firm. D) None of above. Show Answer Correct Answer: C) Reports to management of acquiring firm. 13. What is the main role of an investment bank? A) Acting as a broker for pension funds. B) Providing loans to consumers and businesses. C) Managing complex financial transactions. D) Offering financial advice to high-net-worth individuals. Show Answer Correct Answer: C) Managing complex financial transactions. 14. Current policy rate/ discount of SBP is: A) 6. B) 10.25. C) 9. D) 12. Show Answer Correct Answer: C) 9. 15. This states that money is legal tender but has no tangible value A) Cryptocurrency. B) Fiat system. C) Exchange fund transfer. D) Target date fund. Show Answer Correct Answer: B) Fiat system. 16. The relationship between risk and return can be stated as: A) Higher risk indicates higher return. B) Higher risk indicates lower return. C) Lower risk indicates higher return. D) No relationship exists between risk and return. Show Answer Correct Answer: A) Higher risk indicates higher return. 17. The finance manager is accountable for. A) Earning capital assets of the company. B) Arrangement of financial resources. C) Effective management of a fund. D) Proper utilization of funds. Show Answer Correct Answer: B) Arrangement of financial resources. 18. What is Investment banking A) It is a bank. B) It is a type of banking. C) NFT. D) None of these. Show Answer Correct Answer: B) It is a type of banking. 19. The Economic Growth, Regulatory Relief, and Consumer Protection Act gives exemption of Small Banks from the Volcker Rule. A) True. B) False. Show Answer Correct Answer: A) True. 20. Stock exchange is a A) Primary market. B) Secondary market. C) Money market. D) None of these. Show Answer Correct Answer: B) Secondary market. 21. Restructuring refers to a strategy through which a firm changes its set of businesses or its financial structure. A) True. B) False. Show Answer Correct Answer: A) True. 22. What are the core investment banking activities? A) Front office, middle office, and back office. B) Organizational structure, industry profile, and criticisms. C) Corporate finance, sales and trading, and research. D) Risk management, technology, and research. Show Answer Correct Answer: C) Corporate finance, sales and trading, and research. 23. ..... is the organisations, institutions that provide long term funds. A) Capital Market. B) Applies market. C) Money Market. D) Forex Market. Show Answer Correct Answer: A) Capital Market. 24. It is a financing option whereby risky acquisitions are financed with money (debt) that provides a large potential return to lenders (bondholders) A) Bureaucratic controls. B) Synergy. C) Due diligence. D) Junk bonds. Show Answer Correct Answer: D) Junk bonds. 25. Return refers to the money you can earn from an investment. A) False. B) True. Show Answer Correct Answer: B) True. 26. ..... risks cover the risk of market, interest rate risk and purchasing power risk. A) Systematic. B) Business. C) Unsystematic risk. D) Financial. Show Answer Correct Answer: A) Systematic. 27. What division of an investment bank reviews companies and writes reports about their prospects? A) Research. B) Trading. C) Mergers and Acquisitions. D) Financial Advisors. Show Answer Correct Answer: A) Research. 28. This type of investing is a great start as you can invest with a small balance. A) Fiat system. B) Micro-investing. C) Robo-advisors. D) Cryptocurrency. Show Answer Correct Answer: B) Micro-investing. 29. The market value of a share is responsible for. A) Shareholders. B) The government. C) The investment market. D) The respective companies. Show Answer Correct Answer: C) The investment market. 30. Financial services companies exclude:..... A) Commercial banks. B) Insurance companies. C) Co-operative Banks. D) Sole proprietor. Show Answer Correct Answer: D) Sole proprietor. ← PreviousNext →Related QuizzesInvestments QuizzesFinance QuizzesInvestment Banking Quiz 1Investment Banking Quiz 2Investment 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