Campus Credentials

Finance | Pre-Reading Material Quiz

Submit quiz
Once you submit, you will no longer be able to change your answers. Are you sure you want to submit the quiz?
Cancel Submit

Result

90%
18 out of 20 questions answered correctly

Rules for Quiz

  • Please read all the questions very carefully.
  • There are a total of 30 questions in the quiz.
  • All Questions are compulsory.
  • The quiz contains questions based on the reading material which was provided to you before the camp.
  • This is an open book/internet quiz.
  • There is no time limit for the quiz.
  • The student has to score at least 80% to pass the quiz.
  • Students can attempt the test multiple times.
  • Questions count: 20
  • Passing grade: 80%

1. If the nominal rate of return is 32% and inflation rate is 10%, what is the real rate of return?

22%
20%
42%
45.2%

2. A bank lends some amount to its customers and charges interest. When a customer repays the loan along with the interest, the government levies taxes on the ______

Principal component of the repayments.
Interest component of the repayments.
Total amount repaid i.e., principal plus the interest
Banks don’t pay taxes.

3. A bank lends some amount to its customers and charges interest. When a customer repays the loan along with the interest, the government levies taxes on the ______

Principal component of the repayments.
Interest component of the repayments.
Total amount repaid i.e., principal plus the interest
Total amount repaid i.e., principal plus the interest

4. In case of government bonds or corporate bonds, interest is called _____ and the principal is called ___________

yield, par value
coupon, par value
coupon, face value
Both b) and c) are valid

5. A 12% Reliance Corporation bond (paid annually) has a principal of Rs. 100 and matures after a year. If its price is 104, yield is calculated as follows:

104(1+y) = 112, where y is the yield in decimals and multiplying by 100 gives the yield in percentage terms
104(1+y) = 112, where y is the yield in percentage terms i.e., it should not be multiplied by 100
100(1+y) = 112, where y is the yield in decimals and multiplying by 100 gives the yield in percentage terms
None of the above

6. For a discount bond i.e., when the price < principal, which of the following relationship between yield and coupon is true?

yield = coupon
yield < coupon
yield > coupon
Inadequate information

7. For a premium bond i.e., when the price > principal, which of the following relationship between yield and coupon is true?

yield = coupon
yield < coupon
yield > coupon
Inadequate information

8. Based on the market capitalisation and the market price of Infosys Ltd. mentioned in the above image, the number of shares outstanding are _____

4 billion
4.1 billion
4.2 billion
4.3 billion

9. Debt holders earn a lower expected rate of return than shareholders because ____

Debt holders are paid in full before shareholders are paid during bankruptcy
Debt holders are paid their interest even if the company makes losses whereas shareholders are paid dividends only if the company makes profits
Neither a) nor b) is the reason
Both a) and b) are the reasons

10. Which of the following statements is true?

Index funds are actively managed mutual funds
Asset managers choose stocks in a passively managed mutual fund
ICICI Prudential Nifty 50 Index Fund is a passively managed mutual fund
All of the above statements are true

11. Which of the following is true regarding defined contribution plans?

The employer bears the investment risk i.e., the investments may lose their value and therefore the employer makes the loss.
The employee bears the investment risk i.e.,the employee is bearing the risk of reduction in the value of contributions made.
The pension fund bears the investment risk i.e., any fluctuations in the value of contributions made by the employee will have to be borne by the pension fund.
All of the above statements are true.

12. Which of the following is true regarding defined benefit plans?

The employer bears the investment risk i.e., the investments may lose their value and therefore the employer makes the loss.
The employee bears the investment risk i.e.,the employee is bearing the risk of reduction in the value of contributions made.
The pension fund bears the investment risk i.e., any fluctuations in the value of contributions made by the employee will have to be borne by the pension fund.
All of the above statements are true.

13. Which of the following increases the probability of a bank run?

Depositors withdraw their money deposited and such withdrawals are correlated i.e., withdrawal by some depositors results in more depositors withdrawing the money.
Depositors withdraw their money deposited and such withdrawals are uncorrelated i.e., withdrawal by one person has no impact on the decision of another person to withdraw.
Deposits are insured i.e., if banks don’t have the money to fund the deposit withdrawals, insurance companies will pay for the same.
None of the above

14. If you read Nvidia’s earnings announcement on May 22, 2024 for the quarter Jan 2024-Mar 2024, what would your guess for the stock price of Nvidia on May 23, 2024 be?

Stock price of Nvidia is likely to go up on May 23, 2024.
Stock price of Nvidia is likely to go down on May 23, 2024.
Stock price of Nvidia is likely to be volatile on May 23, 2024.
Any of the above would be a possible guess.

15. If you had invested Rs. 10,000 in a fixed deposit in a bank on 1.1.2021, you would receive Rs. 20,000 on 1.1.2025. What is the compounded annual growth rate i.e., what is the annual rate of interest required to be earned so that the investment of Rs. 10,000 becomes Rs. 20,000 after 4 years?

18% per annum
18.9% per annum
25% per annum
Data insufficient

16. If you invest Rs. 100 on 1.1.2024 and earn a 10% compound interest per annum in the first year and 20% compound interest per annum in the second year, what is the compounded annual growth rate?

15% per annum
14.89% per annum
14.14% per annum
None of the above

17. Which of the following statements is true?

If (1+r) doubles, A also doubles.
There is a linear relationship between log A and log (1+r)
There is a nonlinear relationship between A and 1+r
Both b) and c) are true

18. If A = pnr, which of the following statements is true?

There is a linear relationship between A and r
There is a linear relationship between log A and log r
If r doubles, A also doubles.
All the above statements are true

19. Which of the following variables is exogenous for a business person trying to predict the future sales?

Competitive actions of a competitor resulting from the actions taken by the business person.
The rate of Goods and Services Tax (GST) levied by the government.
All variables are endogenous
Advertisement expenditure incurred by the business person.

20. Which of the following costs is a fixed cost for Math.Biz 2024?

Camp kit that will be given to each of the participants.
The cost of travel incurred for the team of Raising a Mathematician Foundation (RAM Foundation) to arrive at Mahindra University
Cost incurred to evaluate the answer books who appeared for the entrance test on March 31, 2024. Assume that evaluators were paid a lump sum amount irrespective of the number of answer sheets they evaluated.
Both b) and c) are fixed costs
Submit quiz
  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20