Capital expenditure is one which is intended to benefits . . . . . . . . periods.
A. future
B. past
C. current
D. None of these
Select an option to see the answer and solution.
Which of the following options illustrates the use of a hedging approach to financing assets?
A. Temporary current assets financed with long-term liabilities
B. Permanent working capital financed with longterm liabilities
C. Short-term assets financed with equity
D. All assets financed with a mixture of 50% equity and 50% long-term debt
Select an option to see the answer and solution.
Which of the following can be termed as the components of total portfolio risk?
A. Equal to systematic risk plus non-diversifiable risk
B. Equal to avoidable risk plus diversifiable risk
C. Equal to systematic risk plus unavoidable risk
D. Equal to systematic risk plus diversifiable risk
Select an option to see the answer and solution.
Under rigid dividend policy, the rate of dividend is . . . . . . . .
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The payments over the lease term the lessee can or must make, is called
A. principal
B. interest
C. present value payments
D. minimum lease payments
Select an option to see the answer and solution.
The lease where the lessee maintains and insures the leased asset rather than the lessor in a full-service lease is
A. A financial lease
B. An operating lease
C. A net lease
D. None of the above
Select an option to see the answer and solution.
The primary goal of financial management is
A. To maximize the return
B. To minimize the risk
C. To maximize the wealth of owners
D. To maximize profit
Select an option to see the answer and solution.
The dividend irrelevance theorem to share valuation was propounded by
A. James E. Walter
B. Myron Gordon
C. Modigliani and Miller
D. None of the above
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Underwriters of the security issues are required to
A. Purchase the securities underwritten
B. Work as an agent of the company for marketing the securities
C. Manage the issues of the securities
D. Take up securities not subscribed by investors
Select an option to see the answer and solution.
Which of the following is/are, the source(s) of short-term finance?
A. Trade credit
B. Bank credit
C. Short-term borrowings
D. All of these
Select an option to see the answer and solution.
On the basis of the following information, what will be the EBIT corresponding to financial indifference point?
Total capital outlay is Rs. 60,00,000
Financing Plans is 100% Equity is at Rs. 10/- per share
Debt-equity ratio is 2 : 1
Rate of interest is 18% p.a.
Corporate tax rate is 40%
A. Rs. 10,00,000
B. Rs. 12,00,000
C. Rs. 10,80,000
D. Rs. 12,80,000
Select an option to see the answer and solution.
The ratio of the standard deviation of a distribution to the mean of that distribution is referred to as
A. Probability distribution
B. Expected return
C. Standard deviation
D. Coefficient of variation
Select an option to see the answer and solution.
The main objective of employing financial leverage is to
A. Reduce the risk associated with profits
B. Maintain the stability in profits
C. Decrease the cost of debt capital
D. Magnify the return on equity share capital
Select an option to see the answer and solution.
Which of the following are the means of marketing new issues of securities?
1. By listing of securities.
2. Through jobbers and brokers.
3. By private placing of securities.
4. Through privileged subscription.
Select the correct answer by using the options given below
A. Both 1 and 2
B. 1, 2 and 3
C. Both 3 and 4
D. All of the above
Select an option to see the answer and solution.
Match the following.
List-I
List-II
a. Market risk
1. It is known as insolvency risk
b. Inflation risk
2. Risk caused due to demand and supply pressure
c. Credit risk
3. Risk due to inability to meet firm's financial obligations
d. Financial risk
4. Exchange in real value of return as a result of rise in production cost
A. a-4, b-3, c-1, d-2
B. a-1, b-3, c-2, d-4
C. a-2, b-4, c-1, d-3
D. a-3, b-2, c-1, d-4
Select an option to see the answer and solution.
Arbitrageurs in foreign exchange markets
A. attempt to make profits by outguessing the market
B. make their profits through the spread between bid and offer rates of exchange
C. take advantages of the small inconsistencies that develop between markets
D. need foreign exchange in order to buy foreign good
Select an option to see the answer and solution.
A/An . . . . . . . . hedge protects the company from adverse exchange rate movements but allow the company to benefit from favoarable movements.
A. balance sheet
B. forward market
C. money market
D. options market
Select an option to see the answer and solution.
Net working capital refers to
A. total assets minus fixed assets
B. current assets minus current liabilities
C. current assets minus inventories
D. current assets
Select an option to see the answer and solution.
Which of the following is a reason to hedge a portfolio?
A. To increase the probability of gains
B. To limit exposure to risk
C. To profit from capital gains when interest rates fall
D. All of the above
Select an option to see the answer and solution.
Identify by the web-based financial software from the following.
A. Private Equity Software
B. Share Accounting Software
C. Wealth Management Software
D. WINGS 2013
Select an option to see the answer and solution.