The foreign exchange market is referred to as a market where one country's currency is exchanged for another currency. The currency exchange is usually made through the following methods
A. buyers and sellers of foreign exchange meet at a physical location
B. buyers and sellers of foreign exchange meet through a telephone network
C. buyers and sellers of foreign exchange meet through computer communications
D. Both B and C
Select an option to see the answer and solution.
Which one of the following formulas used for calculating average rate of return?
A. Average income ÷ Average investments
B. Average investments ÷ Average income
C. Income ÷ Capital employed
D. None of the above
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Financial leverage in a firm is positively affected by
A. Intensity of tangible assets
B. Operating leverage
C. Profitability
D. Tax Rate
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The most common approach for analyzing the capital structure of a firm is
A. Ratio Analysis
B. Cash Flow Analysis
C. Comparative Analysis
D. Leverage Analysis
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Which of the following period in yearsis called Classical Gold Standard?
A. 1875-1914
B. 1914-1944
C. 1944-1971
D. 1973-2008
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Examine the following statements and choose the correct answer:Assertion (A): The American style option, compared to the European style, provides more freedom to option holders in exercising the option.Reason (R): The American style option can be exercised only at a specified date which is generally the expiration date.
A. Both (A) and (R) are correct
B. Both (A) and (R) are incorrect
C. (A) is correct, but (R) is incorrect
D. (A) is incorrect, but (R) is correct
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Match the following:
List-I List-II
a. Certificate of deposits
1. 91 days, 182 days and 364 days
b. Debentures
2. 3 to 5 months
c. Treasury bills
3. 1 to 270 days
d. Commercial papers
4. Longer periods, i.e. n years
A. a-2, b-4, c-3, d-1
B. a-2, b-4, c-1, d-3
C. a-4, b-3, c-1, d-2
D. a-3, b-4, c-2, d-1
Select an option to see the answer and solution.
The principal reason for the existence of leasing is that
A. intermediate term loans are difficult to obtain
B. this is a type of financing unaffected by changes in tax law
C. companies, financial institutions and individuals derive different benefits from owing assets
D. leasing is a renewable source of intermediate term funds
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After tax cost of debt capital is calculated by
A. (1 + tax rate) × CB (before tax)
B. CB (before tax) × (1 - tax rate)
C. (1 - tax rate) × CB (before tax)
D. None of the above
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Internal source of finance do not include
A. ordinary shares
B. better management of working capital
C. retained earnings
D. trade credit
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Finance is required for
A. social development
B. economic development
C. industrial development
D. All of these
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The international monetary system can be defined as the institutional framework within which
A. international payments are made
B. movement of capital is accomodated
C. exchange rates among currencies are determined
D. All of the above
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Riskness of investing in . . . . . . . . is more than the riskness of investing in . . . . . . . .
A. debentures, equity shares
B. Equity shares, debentures
C. Both A and B
D. None of the above
Select an option to see the answer and solution.
Which is more appropriate for cost of retained earnings?
A. Weighted Average Cost of Capital
B. Opportunity cost to the firm
C. Expected rate of return by the investor
D. None of the above
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Debentures can best be described as a form of
A. Short-term loans with variable interest rates
B. Medium-term loan with variable interest rates
C. Long-term loan with a fixed interest rate
D. Long-term security giving the holder part ownership of the business
Select an option to see the answer and solution.
A business concern should not have
A. inadequate working capital
B. excess working capital
C. Both A and B
D. None of these
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The rate of dividend of preference shares is decided at the time of
A. issue
B. dissolution of company
C. payment
D. None of these
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. . . . . . . . refers to make up of a firm's capitalisation.
A. Capital
B. Capital structure
C. Funds
D. None of these
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Match the items of
List-I with the items of
List-II .
List-I List-II
a. Maturity Financing
1. Trade credit and other payables that arise in the firm's day-to-day operations.
b. Factoring
2. Financing and asset needs over time.
c. Spontaneous Financing
3. A tool for accelerating the collection from the customers.
d. Lockbox System
4. Seeking financial service to finance on its debtor's balances.
A. a-4, b-3, c-2, d-1
B. a-3, b-2, c-4, d-1
C. a-2, b-4, c-1, d-3
D. a-1, b-2, c-3, d-4
Select an option to see the answer and solution.
Public deposits are the deposits, that are raised directly from
A. the public
B. the directors
C. the auditors
D. the owners
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