Quiz  /  Investment Gate & PSU MCQ Questions With Answers

  • 1. 
    The flexible accelerator model of investment can be shown as

  • In, t = λ(αYt – Kt – 1).
  • In, t = λ(αYt – Kt + 1).
  • In, t = λ(αYt + Kt– 1).
  • In, t = λ(αYt + Kt+ 1).
  • None of above

  • 2. 
    An investment is:

  • A contract between you and your bank for a checking account
  • The outlay of funds for income or profit
  • Only something that can be done through your 401K
  • never a risk

  • 3. 
    Which of the following is the securities market in Malaysia?

  • Securities Comission
  • Bank Negara Malaysia
  • Bursa Malaysia

  • 4. 
    This has a fixed interest rate that you leave in the bank for a fixed period of time.

  • Government Bond
  • Stock
  • Certificate of Deposit

  • 5. 
    The "rate of return" is

  • The rate of how long you have to hold an investment
  • The rate that you have to pay to buy an investment
  • The percentage of increase or decrease expressed by percentage of the investment's cost
  • The interest rate earned

  • 6. 
    The best chance of a gain in a portfolio is:

  • a diversified approach over an extended period of time
  • luck
  • trading as Warren Buffet does
  • investing in the same way that your parents/grandparent did

  • 7. 
    Which of the following is not traded in Bursa Malaysia?

  • Commercial Paper
  • Shares
  • Foreign Exchange Traded Fund (ETF)
  • Real Estate

  • 8. 
    When you buy a stock, you are buying a small piece of _______ in a company.

  • debt
  • ownership
  • risk

  • 9. 
    Which of the following is not an investment?

  • Wage
  • Property
  • Stocks
  • Shares

  • 10. 
    If the mortgage rate is 4 percent and the expected inflation rate is 6 percent, then the real borrowing cost would be

  • 2 percent
  • -2 percent
  • 4 percent
  • 10 percent

  • 11. 
    The largest component of investment is

  • capital investment.
  • inventory investment.
  • business fixed investment.
  • residential construction.

  • 12. 
    A mutual fund is

  • like a loan where you are giving money in exchange for an interest payment.
  • is issued by the government to support government spending (schools, roads, low-income housing).
  • an investment with diversified stocks and bonds.

  • 13. 
    A single share of ownership of a legally formed company is called a:

  • Bond
  • Mutual Fund
  • Annuity
  • Stock

  • 14. 
    Keynesians argue that investment is the most volatile component of GDP because of

  • a. volatile changes in permanent income.
  • b. volatile expectations.
  • c. volatile changes in current income.
  • d. volatile changes in productivity.
  • all of above

  • 15. 
    The chance of loss.

  • Stock
  • Reward
  • Risk
  • Real Estate

  • 16. 
    If a firm faces financing constraints on its investment spending, the most important determinant of how much it invests will be the

  • firm's current profitability.
  • the firm's future profitability.
  • the nominal interest rate.
  • the real interest rate.
  • the firms cost of capital.

  • 17. 
    The closing time for Bursa Malaysia is

  • 6pm
  • 530pm
  • 5pm
  • 430pm

  • 18. 
    If the life cycle theory of consumption holds, as the fraction of our population that is retired rises over the next 20 years, the national savings rate should

  • rise and interest rates should rise.
  • fall and interest rates should fall.
  • fall and interest rates should rise.
  • rise and interest rates should fall.
  • none of the above

  • 19. 
    Business fixed investment

  • is only a minor component of total aggregate demand.
  • does not play an important role in the process of longer-run economic growth.
  • averages roughly 11 percent of GDP.
  • has declined every year since 1993 as a percentage of total output.

  • 20. 
    Which of the following would increase the cost of capital to the firm (holding constant the other elements of the cost of capital)?

  • A fall in the expected inflation rate
  • A fall in the depreciation rate
  • A fall in the nominal interest rate
  • A rise in the investment tax credit

  • 21. 
    Investment in the national income accounts includes which of the following?

  • a. Purchases of durable equipment and structures
  • b. Residential construction expenditures
  • c. Changes automobile sales
  • d. Both a and b
  • e. All of the above

  • 22. 
    High interest rates will

  • shift the flow supply schedule for new housing to the right
  • shift the flow supply schedule for new homes to the left.
  • shift the demand schedule for new housing to the right.
  • have no effect on the cost of new housing, only on existing homes.

  • 23. 
    Stocks are long-term investments.

  • True
  • False
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