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- Question
What is an example of an inflation risk?
- Correct Answer
- Inflation risk, also called purchasing power risk, is the chance that the cash flows from an investment won't be worth as much in the future because of changes in purchasing power due to inflation HOW IT WORKS (EXAMPLE): For example, $1,000,000 in bonds with a 10% coupon might generate enough interest payments for a retiree to live on, but with an annual 3% inflation rate, every $1,000 produced by the portfolio will only be worth $970 next year and about $940 the year after that The rising inflation means that the interest payments have less and less purchasing power And the principal, when it is repaid after several years, will buy substantially less than it did when the investor first purchased the bonds
- 1. In preparing a bank reconciliation, outstanding checks are
Options- A. Deducted from the balance sheet
- B. Added to the bank balance
- C. Deducted from the bank balance
- D. Added to the balance sheet Discuss
- 2. The yield to maturity on a discount bond is
Options- A. equal to both the coupon rate / current yeild
- B. less than the current yeild but greater than the coupon rate
- C. greater than both the coupon rate / current yeild
- D. equal to the current yeild but greater than the coupon rate Discuss
- 3. Saving accounts usually offer ___ interest rates than checking accounts.
Options- A. Higher
- B. Lower
- C. Equal
- D. None Discuss
- 4. Which of the following is the oldest Joint Stock Bank of India ?
Options- A. Patiala Bank
- B. Punjab National Bank
- C. Bank of India
- D. Allahabad Bank Discuss
- 5. Explain What is the difference between debenture holders and creditors ? Discuss
- 6. The income and substitution effects account for
Options- A. the upward sloping curve
- B. the downward sloping curve
- C. Both A & B
- D. None of the above Discuss
- 7. Transfer payments are included in
Options- A. Government subsidies
- B. GDP
- C. Both A & B
- D. None of the above Discuss
- 8. In which of the following cases will total revenue increase?
Options- A. Price rises and demand is inelastic
- B. Price falls and supply is inelastic
- C. Price rises and demand is elastic
- D. Price falls and demand is inelastic Discuss
- 9. Devaluation of currency leads to
Options- A. increase in domestic prices
- B. erratic fluctuations in domestic prices
- C. fall in domestic prices
- D. no impact on domestic prices Discuss
- 10. Fixed Foreign Exchange rate can be changed by
Options- A. SEBI
- B. Ministry of Finance
- C. RBI
- D. All of the above Discuss
Accounting and Finance problems
Search Results
Correct Answer: Deducted from the balance sheet
Explanation:
If an outstanding check of the previous month clears the bank (is paid by the bank) in the current month, you simply remove that check from the list of outstanding checks.
If an outstanding check of the previous month does not clear the bank in the current month, the check will remain on the list of outstanding checks until the month that it does clear the bank.
In the bank reconciliation process, the total amount of the outstanding checks is deducted from the balance appearing on the bank statement.
Correct Answer: equal to both the coupon rate / current yeild
Explanation:
Yield to maturity is a concept for fixed rate bonds and is the internal rate of return i.e. the rate at which future flows are discounted on a compound basis to give the present value of the bond including accrued interest.
Correct Answer: Higher
Explanation:
A savings account is the most basic type of account at a bank or credit union, allowing you to deposit money, keep the funds safe, and withdraw funds as needed. Savings accounts typically pay interest on your deposits, which helps you grow your money, but rates are relatively low on these low-risk accounts.
A checking account is a deposit account held at a financial institution that allows withdrawals and deposits. Also called demand accounts or transactional accounts, checking accounts are very liquid and can be accessed using checks, automated teller machines and electronic debits, among other methods.
Hence, Saving accounts usually offer higher interest rates than checking accounts.
Correct Answer: Allahabad Bank
Explanation:
Oldest Joint Stock bank of India was Bank of Upper India that was established in 1863. But this bank failed in 1913. India's Oldest Joint Stock Bank which is still working is Allahabad Bank. It is also known as India's oldest public sector bank.
Correct Answer: Debenture holder are those who provides long term loan at specific interest rate in term of cash and creditor provides only short term credit in term of cash for purchasing of goods
Correct Answer: the downward sloping curve
Correct Answer: Government subsidies
Explanation:
Transfer payments are included in GDP and not in GDP.
Correct Answer: Price rises and demand is inelastic
Explanation:
In the case of, "Price rises and demand is inelastic", the total revenue increases.
Correct Answer: increase in domestic prices
Correct Answer: RBI
Explanation:
Fixed Foreign Exchange rate can be changed by Reserve Bank Of India (RBI).
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