Assertion (A): The financial statements prepared on a historical cost basis, results in an erosion of capital in the long run.Reason (R): Maintaining the books of accounts as per the current purchasing power technique only may contain the inflationary pressure.
A. Both (A) and (R) are true, and (R) is the correct explanation of (A)
B. Both (A) and (R) are true, but (R) is not the correct explanation of (A)
C. (A) is true, but (R) is false
D. (A) is false, but (R) is true
Select an option to see the answer and solution.
In SARFAESI Act, 'E' stands for
A. Equity
B. Enhancement
C. Empowerment
D. Enforcement
Select an option to see the answer and solution.
What is the popular term used for a type of option in Foreign Exchange Market which provides the holder with the right to purchase or sell foreign currency at the most favourable exchange rate realized over the life of the option?
A. Forward reversing option
B. Preference option
C. Look-back option
D. Basket option
Select an option to see the answer and solution.
Which of the following refers to cash inflow under the payback period method?
A. Cash flow before depreciation and taxes
B. Cash flow after depreciation and taxes
C. Cash flow after depreciation but before taxes
D. Cash flow before depreciation and after taxes
Select an option to see the answer and solution.
In the Fiat system
A. Currency notes issued carry more value than the material used in them
B. Automatic demonetization takes place
C. Currency notes issued carry the same value equal to the material used in them
D. They are issued by private banks
Select an option to see the answer and solution.
Finance is related to
A. monetary resources
B. tax planning
C. borrowing
D. lending
Select an option to see the answer and solution.
Which of the following are key characteristics of ordinary shares in limited companies?
A. Have a limited life, voting rights, and receive dividends
B. Havea limited lifewith no voting rights, but receive dividends
C. Have an unlimited life, voting rights, and receive dividends
D. Havean unlimited life and voting rights, but receive no dividends
Select an option to see the answer and solution.
Which of the following statement is/are correct?
A. Payback period provides approximation of the rate of return
B. Where revenues are unequal, discounted cash flow method is used
C. Accounting rate of return method establishes ratio of average annual profits to total outlay
D. None of the above
Select an option to see the answer and solution.
Which form of market efficiency states that current security prices fully reflect all information, both public and private?
A. Weak
B. Semi-strong
C. Strong
D. None of the above
Select an option to see the answer and solution.
Which form of market efficiency states that current prices fully reflect the historical sequence of prices?
A. Weak
B. Semi-strong
C. Strong
D. None of the above
Select an option to see the answer and solution.
Which of the following combinations of rules stands true while preparing a schedule of changes in working capital?
A. Increase in current assets increases working capital
B. Increase in current assets decreases working capital
C. Increase in current liabilities decreases working capital
D. Increase in current liabilities mcreases working capital
Select an option to see the answer and solution.
Need for budgeting arise due to
A. relatively high cost
B. permanent commitment
C. long-run effect
D. All of these
Select an option to see the answer and solution.
Under which of the following exchange rate systems, exchange rates are either held constant or allowed to fluctuate only within very narrow boundaries?
A. Fixed exchange rate system
B. Freely floating exchange rate system
C. Managed float exchange rate system
D. Pegged exchange rate system
Select an option to see the answer and solution.
When a company gives an option to its shareholders to receive dividend either in cash or kind, then it is called
A. option dividend
B. option currency
C. option shareholders
D. None of these
Select an option to see the answer and solution.
Efficient frontier comprises of
A. inefficient portfolios
B. efficient portfolios
C. portfolios that have negatively correlated securities
D. portfolios that have positively correlated securities
Select an option to see the answer and solution.
Which method does not consider the time value of money?
A. Net Present Value
B. Internal Rate of Return
C. Average Rate of Return
D. Profitability Index
Select an option to see the answer and solution.
In 2 years, I am set to receive Rs. 1,00,000. If the interest rate were to suddenly decrease, the present value of that future amount to me would
A. Fall
B. Rise
C. Remain unchanged
D. The answer needs more information
Select an option to see the answer and solution.
A firm's cost of capital is the
A. overall cost of financing to the firm
B. cost of bonds
C. cost of issuing stock
D. None of the above
Select an option to see the answer and solution.
There are important differences between translation, transaction and economic exposure. Which of the following statements regarding these differences is true?
A. Translation and economic exposure look to the future impact of an exchange rate change which has occurred or may occur
B. Translation and transaction exposure involve actual or potential cash flow changes
C. Economic exposure is essentially objective because it depends on outstanding obligations which existed before changes in exchange rates
D. Economic exposure is essentially subjective because it depends on estimated future cash flows for an arbitrary
Select an option to see the answer and solution.
The working capital ratio is
A. Working capital + Sales
B. Working capital + Total assets
C. Current assets + Sales
D. Current assets + Current liabilities
Select an option to see the answer and solution.
