Practice Quiz

FRM Financial Risk Manager Practice Test - Question List

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46. The Dutch tulip bulb crisis (AKA “Tulipmania”) in February 1637, happened as the contract prices for Tulip bulbs soared from November 1636 to January 1637 and suddenly collapsed in February 1637. What does the case illustrate?
  1. Frenzy optimism about the growth in Tulip bulb prices.
  2. A speculative bubble.
  3. Irrational investing.
  4. A confidence crisis.
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47. What is a bond? Select all that apply:
  1. It is a contract by which an investor lends money in return for a promise of future cash flows.
  2. It is an instrument for large institutions such as governments and large companies to borrow on the world capital markets.
  3. A token of trust between lenders and borrowers.
  4. A piece of paper that represents an amount of money that is lent or borrowed.
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48. The maturity date of a bond is...
  1. The date on which the principal amount of a bond is to be paid in full.
  2. The date on which the bond expires.
  3. The date on which the bond’s interest is paid.
  4. The date on which the bond is issued.
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49. A bond is often referred to as being short-, medium- or long-term depending on its maturity. What type of bond is a two-year bond?
  1. A short-term bond.
  2. A medium-term bond.
  3. An intermediate-term bond.
  4. A long-term bond.
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50. A callable bond...
  1. Has specific names.
  2. Allows the issuer to retire the bond before it matures.
  3. Is designed for specific investors.
  4. Has zero interest rates.
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