MCQOPTIONS
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MCQOPTIONS
This section includes 248 Mcqs, each offering curated multiple-choice questions to sharpen your Software Engg knowledge and support exam preparation. Choose a topic below to get started.
| 101. |
_______ policy in which the limits of the risks are determined by place of particularvoyage. |
| A. | Valued. |
| B. | Time. |
| C. | Voyage . |
| D. | Unvalued. |
| Answer» D. Unvalued. | |
| 102. |
The person whose risk is insured is called __________ |
| A. | Insured. |
| B. | Assured. |
| C. | Indemnity. |
| D. | Both 1 and 2. |
| Answer» E. | |
| 103. |
________ involved those losses that occur even if there were no changes in the economicenvironment. |
| A. | Dynamic risk. |
| B. | Static risk. |
| C. | Fundamental risk. |
| D. | Particular risk. |
| Answer» C. Fundamental risk. | |
| 104. |
As age increases risk on the life……….. |
| A. | Increases |
| B. | Decreases |
| C. | No change |
| D. | None of the above |
| Answer» B. Decreases | |
| 105. |
The danger of loss from the unforeseen circumstances in future refers to _____ |
| A. | Risk |
| B. | Perils |
| C. | Hazards |
| D. | Damage |
| Answer» B. Perils | |
| 106. |
When choosing group life insurance, most groups buy _______ |
| A. | whole life insurance |
| B. | one year renewable group term assurance |
| C. | variable life insurance |
| D. | universal life insurance |
| Answer» C. variable life insurance | |
| 107. |
A Re-insurance of re-insurance refers to _____ |
| A. | Line |
| B. | Retention |
| C. | Retrocession |
| D. | Cession |
| Answer» D. Cession | |
| 108. |
One who shares the risk under an insurance policy or policies is known as __________. |
| A. | Assurer. |
| B. | Insurer. |
| C. | Co-insurer. |
| D. | Agent. |
| Answer» D. Agent. | |
| 109. |
In insurance contracts, the insurance company is also known as ________ |
| A. | Insured |
| B. | Beneficiary |
| C. | Insurer |
| D. | policy holder |
| Answer» D. policy holder | |
| 110. |
Reinsurance also termed as….. |
| A. | Double insurance |
| B. | Reinsurance of reinsurance |
| C. | Insurance of insurance |
| D. | None of these |
| Answer» D. None of these | |
| 111. |
A policy protecting a group of persons, usually employees of a firm generally called as ___________ |
| A. | Fire insurance policy. |
| B. | Group insurance policy. |
| C. | Marine insurance. |
| D. | Automobile insurance. |
| Answer» C. Marine insurance. | |
| 112. |
This policy covers all risks to the ship and its cargo while the ship is at a particular port ___________. |
| A. | Voyage policy. |
| B. | floating policy. |
| C. | time policy. |
| D. | port risk policy. |
| Answer» E. | |
| 113. |
Insurance is a risk management technique involving… |
| A. | Risk retention |
| B. | Risk avoidance |
| C. | Loss Control |
| D. | Risk transfer |
| Answer» E. | |
| 114. |
Insurance is a risk management technique involving____________ |
| A. | risk retention. |
| B. | risk avoidance. |
| C. | loss control. |
| D. | risk transfer. |
| Answer» E. | |
| 115. |
Notification of Alteration in Risk is a condition _____________. |
| A. | precedent to liability. |
| B. | subsequent to liability. |
| C. | precedent to the contract. |
| D. | subsequent to the contract. |
| Answer» E. | |
| 116. |
An escape from disability or death in a plain crash by refusing to fly is called… |
| A. | Risk shifting |
| B. | Risk avoidance |
| C. | Risk hedging |
| D. | None of these |
| Answer» C. Risk hedging | |
| 117. |
Maximum period of a policy in case of insurance other than life insurance is….. |
| A. | 12 months |
| B. | 24 months |
| C. | No limit |
| D. | None of these |
| Answer» B. 24 months | |
| 118. |
Risk is measurable…….. |
| A. | Loss |
| B. | Profit |
| C. | Uncertainty |
| D. | None of the above |
| Answer» D. None of the above | |
| 119. |
Wagering policy is otherwise termed as _________ |
| A. | Policy proof of interest. |
| B. | Open policy. |
| C. | Builders risk policy. |
| D. | Port risk policies. |
| Answer» B. Open policy. | |
| 120. |
………… is the process of reducing frequencies and severely of losses. |
| A. | Loss prevention |
| B. | Loss Control |
| C. | Avoidance of risk |
| D. | None of the above |
| Answer» C. Avoidance of risk | |
| 121. |
The person who agrees to compensate the loss arisingfrom the risk is called the ______ |
| A. | insurer |
| B. | assurer |
| C. | underwriter |
| D. | all the above |
| Answer» E. | |
| 122. |
The person who agrees to compensate the loss arising from the risk is called the _____ |
| A. | Insurer. |
| B. | Assurer. |
| C. | Underwriter. |
| D. | All the above |
| Answer» E. | |
| 123. |
Expansion of IRDA is……………. |
| A. | Insurance reforms and development agency |
| B. | Insurance restriction and development authority |
| C. | Insurance regulatory and development authority |
| D. | None of the above |
| Answer» D. None of the above | |
| 124. |
If any risk is concerned with financial loss, it is termed as……….. |
| A. | Business risk |
| B. | Business loss |
| C. | Financial risk |
| D. | Insurable claim |
| Answer» D. Insurable claim | |
| 125. |
Futures markets have grown rapidly because futures |
| A. | are standardized. |
| B. | have lower default risk. |
| C. | are liqu |
| D. | d. all of the above |
| Answer» E. | |
| 126. |
A long contract requires that the investor |
| A. | Sell securities in the future |
| B. | Buy securities in the future |
| C. | Hedge in the future |
| D. | Close out his position in the future |
| Answer» C. Hedge in the future | |
| 127. |
Swaps whose notional accretes when a certain floating rate,often a different rate from the one usedto pay,lies within a range. |
| A. | Range accrual swaps |
| B. | Asian swaps |
| C. | Index amortizing swap |
| D. | Bermudan swaps |
| Answer» B. Asian swaps | |
| 128. |
LIBOR stands for |
| A. | London inter bank offered rate |
| B. | Local industrial bank offered rate |
| C. | Local interbank offered rate |
| D. | London industrial bank offered rate |
| Answer» B. Local industrial bank offered rate | |
| 129. |
Hedging risk for a long position is accomplished by |
| A. | taking another long position. |
| B. | taking a short position. |
| C. | taking additional long and short positionsin equal amounts. |
| D. | taking a neutral position. |
| Answer» C. taking additional long and short positionsin equal amounts. | |
| 130. |
An option contract with underlying asset commoditiesis |
| A. | Commodity option |
| B. | Currency option |
| C. | Stock index option |
| D. | None of the above |
| Answer» B. Currency option | |
| 131. |
Hedging by buying an option |
| A. | Limits gain |
| B. | Limits losses |
| C. | Limits gain & losses |
| D. | Has no limit on losses |
| Answer» C. Limits gain & losses | |
| 132. |
The disadvantage of swaps is that they |
| A. | Lack of liquidity |
| B. | Suffer from default risk |
| C. | Both A & B |
| D. | B only |
| Answer» D. B only | |
| 133. |
Which of the following is potentially obligated to sell an asset at a predetermined price? |
| A. | A put buyer. |
| B. | A call buyer. |
| C. | A put writer. |
| D. | A call writer. |
| Answer» E. | |
| 134. |
A call option gives the seller |
| A. | the right to sell the underlying security. |
| B. | the obligation to sell the underlying security. |
| C. | the right to buy the underlying security. |
| D. | the obligation to buy the underlying security |
| Answer» C. the right to buy the underlying security. | |
| 135. |
The amount to be deposited by buyer and seller of future contarct at the time of entering futurecontract |
| A. | Future margin |
| B. | Future premium |
| C. | Future payoff |
| D. | None of the above |
| Answer» B. Future premium | |
| 136. |
The test used to check the validity of VaR estimate |
| A. | Black testing |
| B. | Back testing |
| C. | Back end test |
| D. | Back to back test |
| Answer» B. Back testing | |
| 137. |
Financial derivatives includes? |
| A. | Stock |
| B. | Bonds |
| C. | Future |
| D. | None of these |
| Answer» D. None of these | |
| 138. |
The option contract that would lead to zero cash flow if it were exercised immediately |
| A. | At the money option |
| B. | In the money option |
| C. | Out of the money option |
| D. | None of the above |
| Answer» B. In the money option | |
| 139. |
A swap that takes into consideration daily variation of market rates within specific range. |
| A. | Barrier swap |
| B. | Corridor swap |
| C. | Digital swap |
| D. | Asian swap |
| Answer» C. Digital swap | |
| 140. |
Using futures contracts to transfer price risk is called: |
| A. | hedging. |
| B. | diversifying |
| C. | arbitrage. |
| D. | speculating. |
| Answer» B. diversifying | |
| 141. |
Which of the following actions will not close a long position in a call option? |
| A. | Selling a call with the same strike price, expiration, and underlying asset. |
| B. | Buying a put with the same strike price, expiration, and underlying asset. |
| C. | Exercising the call. |
| D. | Allowing the call to expire. |
| Answer» C. Exercising the call. | |
| 142. |
The contract where buyer and seller agrees to exchange asset on future date without the involvementof stock exchange |
| A. | Options |
| B. | Futures |
| C. | Forwards |
| D. | Swaps |
| Answer» D. Swaps | |
| 143. |
The difference between option premium and intrinsic value |
| A. | Time value |
| B. | Intrinsic value |
| C. | Money value |
| D. | Premium |
| Answer» B. Intrinsic value | |
| 144. |
The option contract that can be exercised at any time before the maturity date is known as |
| A. | European option |
| B. | American option |
| C. | Bermudan option |
| D. | None of the above |
| Answer» C. Bermudan option | |
| 145. |
The tendency of spot price and future price to come together is |
| A. | Principle of divergence |
| B. | Principle of convergence |
| C. | Principle of backwardation |
| D. | Principle of contango |
| Answer» C. Principle of backwardation | |
| 146. |
The condition where future prices are greater than cashprice resulting in positive basis is |
| A. | Normal backwardation |
| B. | Contango |
| C. | Expectation hypothesis |
| D. | Cost of carry |
| Answer» C. Expectation hypothesis | |
| 147. |
Which of the following is a way to settle option contracts |
| A. | By exercising |
| B. | By letting option expire |
| C. | By offsetting |
| D. | All the above |
| Answer» E. | |
| 148. |
The markets in which derivatives are trade is known as |
| A. | Asset backed market |
| B. | Cash market |
| C. | Mortgage market |
| D. | Derivative market |
| Answer» E. | |
| 149. |
A disadvantage of a forward contract is that |
| A. | it may be difficult to locate a counterparty. |
| B. | the forward market suffers from lack of liquidity. |
| C. | these contracts have default risk. |
| D. | all of the above. |
| Answer» E. | |
| 150. |
Which of the following is not a financial derivative? |
| A. | Stock |
| B. | Futures |
| C. | Options |
| D. | Forward contract |
| Answer» B. Futures | |