**111. Changes in interest rates have a __________ impact on the prices of long-term bonds than the short-term bonds.**

**(A) greater**

(B) smaller

(C) both have same impact

(D) interest rate does not matter

**112. An investment of $9,000 today will yield $10,000 after one year. What is the Net Present Value if the interest rate is 10%?**

(A) $71

(B) $81

**(C) $91**

(D) $101

**113. The return that is forgone by investing in the project rather than investing in financial markets at the same level of risk is called**

(A) internal rate of return

(B) capital saving

**(C) opportunity cost**

(D) opportunity saving

**114. The party that agrees to buy the underlying asset in a forward contract is said to assumes**

(A) forward position

(B) backward position

**(C) long position**

(D) short position

**115. The party that agrees to sell the underlying asset in a forward contract is said to assumes**

(A) forward position

(B) backward position

(C) long position

**(D) short position**

**116. If the spot price is $1200 and the exercise price is $1000 then the payoff of a party assuming a long position is**

(A) -$200

(B) $0

(C) $1

**(D) $200**

**117. If the spot price is $1200 and the exercise price is $1000 then the payoff of a party assuming a short position is**

**(A) –$200**

(B) $0

(C) $1

(D) $200

**118. If the co-variance between stock A and market returns is 12, and the standard deviation of market returns is 3 then what is the value of beta?**

(A) 0.96

(B) 1.0

**(C) 1.33**

(D) 1.45

**119. Difference between strike price and stock price is called**

**(A) intrinsic value**

(B) option premium

(C) time premium

(D) none of these

**120. Option value at expiration is a function of:**

**(I)** interest rate

**(II)** volatility

**(III)** stock price

**(IV)** exercise price

(A) I only

(B) III only

(C) I and II

**(D) III and IV**

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