Financial Management - Study Mode
[#101] Type of financial security in which loans are secured by borrower's property is classified as
Correct Answer
(D) mortgages
Explanation
Solution: Type of financial security in which loans are secured by borrower's property is classified as mortgages. A mortgage is a debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments.
[#102] In financial markets, period of maturity more than five years of financial instruments is classified as
Correct Answer
(D) long-term
Explanation
Solution: In financial markets, period of maturity more than five years of financial instruments is classified as long-term. Generally, a time frame for investing in which an asset is held for at least seven to ten years. The measure of a "long term" time frame can vary depending on the asset held or the investment objective. In business accounting measures, long term can be a period of time that exceeds 12 months.
[#103] Merrill Lynch, Morgan Stanley and Credit Suisse Group plan for raising capital is classified as
Correct Answer
(A) investment banking houses
Explanation
Solution: Merrill Lynch, Morgan Stanley and Credit Suisse Group plan for raising capital is classified as investment banking houses. Investment banking is a special segment of banking operation that helps individuals or organisations raise capital and provide financial consultancy services to them.
[#104] Trading procedures dimensions include
Correct Answer
(D) Both A and B
Explanation
Solution: Trading procedures dimensions include location dimension and method of matching orders. Trading process consists of two major steps Order openingand Order closing.
[#105] Trading place where traders meet one another to communicate is classified as
Correct Answer
(A) outcry auction system
Explanation
Solution: Trading place where traders meet one another to communicate is classified as outcry auction system. Open outcry is a method of verbal and hand signal communication used by traders at stock and futures exchanges. Signals and shouts convey trading information, intentions, and acceptance in the trading pits.