Exam Questions Review ( Ch1 , 2 & 3 )

FINA 110 – Section 2

  1. Multiple Choice Questions

1. If the total earning is OMR 20,000 and the total spending is OMR 25,000, the financial position in this case is:-

- Balanced budget- Surplus position- Deficit position - SSU

2. Firms that convert saving into loans or investments are called:-

- Financial Markets- Financial institutions - Financial instrument - Stock market

3. Which of the following is applicable to indirect finance:-

- non established credit standing

- lender faces more risk

- there is a financial intermediary

- all of the above

4- The number of foreign banks in Oman is:-

- 7 - 10 - 17 - 19

5- If the monetary base is OMR 1,500 and the reserve requirement is 20%, then the money supply will be:-

- 30,000 - 5 - 300 - 7500

6- Capital markets provides:-

- High liquidity and low return

- Low liquidity and high return

- High liquidity and low risk

- Low liquidity and low risk

7- The financial instrument which is used in foreign trade is called:-

- Commercial papers - Certificate of deposits

- Bankers acceptance - T-Bills

8- The Long term loan which is secured and issued by the government is called:-

- T- Notes - T- Bills - Certificate of deposit - Commercial paper

9- The financial organization that controls the issue and trading of securities in Oman is called:-

- Muscat security market - Central Bank of Oman

- Commercial Banks - Mutual Funds

10- Equity security is:-

- Represented ownership for the company with maturity - money market with no maturity

- Capital market with no maturity - Non of all

11-Financial instrument issued by the real estate in capital market is called:-

- T- Bills - Equity securities

- Mortgages - commercial paper

12-Which of the following is a non banking financial intermediary:-

- Bank Muscat - Central Bank

- Dhofar insurance company - HSBC

13-The process of transfer fund from SSU to DSU is called:-

- Finance - Economic units

- Direct finance - Financial system

14-The issuance of local currencies is done in:-

- MSM - Central Bank

- Commercial Banks - financial intermediaries

15-Government Units, Business firm and Household are the three classifications of:-

- Economic units - Financial markets

- Financial system - Non of them

16-Total amount of money available in the economy is called money supply:-

- True - False

17-Money markets provides:-

- High liquidity and low return

- Low liquidity and high return

- High liquidity and high risk

- Low liquidity and low risk

18-The financial instrument which is used in foreign trade is called:-

- Commercial papers - Certificate of deposits

- Bankers acceptance - T-Bills

19-The short term loan which is secured and issued by the government is called:-

- T- Notes - T- Bills - Certificate of deposit - Bonds

20-The financial organization that controls the issue and trading of securities in Oman is called:-

- Muscat security market - Central Bank of Oman

- Commercial Banks - Mutual Funds

21-Which of the following is a feature of equity security:-

- Represented an ownership for the company with maturity date - Money market with no maturity

- Capital market with no maturity

- Non of all

22-The initial public offering period is taken place in secondary market:-

- True - False

23-Existing securities are traded in Muscat Security Market:-

- True - False

24-Treasury note is a type of Money market instrument

- True - False

25-which of the following is not a type of Financial Institutions;-

- Stocks - Banks - Insurance companies - Financial companies

26-Equity shares can be traded in money market

- True - False

27-If the government income is OMR 20 million and the total spending is OMR 25 million, the financial position in this case is:-

- Balanced budget - Surplus position- Deficit position - SSU

28-Buying and selling financial instruments are taken place in:-

- Financial Markets- Financial institutions - Financial System - Stock market

29-Which of the following is applicable to direct finance:-

- Non established credit standing

- Lender faces more risk

- There is no financial intermediary

- all of the above

30-The number of foreign banks working in Oman is:-

- 7 - 10 - 17 - 19

31-Which of the following is a type of short term finance:-

  1. Term loan
  2. Bank loan
  3. Secured loan
  4. Bond

32-If the company give a discount rate to its bills once the buyer pays the full amount, is a type of:-

  1. Long term finance
  2. Short term finance
  3. Medium finance
  4. Non of all

33-Which type of following holders can elect ( choose) the management of the company:-

  1. Creditors
  2. Preference share holders
  3. Bond holders
  4. Equity share holders

34-Long term finance is invested in:-

  1. Fixed assets
  2. Working capital
  3. Both fixed assets and working capital
  4. Daily expenses

35-Mr. Said invested RO 2000 in equity shares. In 2009, the company was not generated a profit and has a loss , then in this case, Mr. Said will:-

  1. Receive the fixed dividends
  2. Not receive the dividends
  3. Receive a cumulative dividends in next year
  4. Non of them

36-The short term instrument which is issued and granted by the government :-

  1. T- Notes
  2. Bonds
  3. Equity securities
  4. T- Bills

37-The financial instrument which represents an ownership in a company is :-

  1. Equity shares
  2. Debenture
  3. Bonds
  4. Term loan
  1. Fill in the blanks
  1. The main functions of money are, medium of exchange, ------, ------, and standard of deferred payment.
  1. Financial market consists of individuals, ------, ------and procedures
  1. Open Questions Examples

1- Write at least three differences between primary and secondary market? (Total 1.5 marks)

2-Explain the role (functions) of Muscat Security Market in the economy?

3-: Answer the two parts:-

  1. What is the purpose (role) of financial market?
  2. What are the four components of financial market?