Which of the following premiums is called the difference between the expected return on common stock and a current yield of treasury bonds?
A. Current risk premium
B. Past risk premium
C. Beta premium
D. Expected premium
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Which of the following concept measures the variability in returns for a given security in relation to variation in returns in the market returns as a whole?
A. Alpha factor
B. Beta factor
C. Weighted average cost of capital
D. Diversification
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Capital budgeting is also known as
A. investments decision-making
B. capital expenditure decisions
C. planning capital expenditure
D. All of the above
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Which of the following function is performed by multilateral netting?
A. It lowers the exchange rate paid to move funds from one currency or country to another
B. It reduces the cost of moving funds from one currency or country to another
C. It raises the exchange rate paid to move funds from one currency or country to another
D. It increases the cost of moving funds from one currency or country to another
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Patterns of capital structure include
A. Only equity shares
B. Equity shares + Preference shares
C. Equity shares + Debentures
D. All of the above
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Financial Instruments issued with detachable warrants and redeemable after certain period are known as:
A. Deep Discount Bonds
B. Secured Premium Notes
C. Bunny Bonds
D. Junk Bonds
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The starting point for understanding how exchange rates are determined is a simple idea called . . . . . . . ., which states-if two countries produce an identical good, the price of the good should be the same throughout the world no matter which country produces it.
A. Gresham's law
B. The law of one price
C. Purchasing power parity
D. Arbitrage
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Which of the following is not true in the context of a leveraged lease?
A. The asset may be purchased with an appropriate mix of debt and equity
B. There is involvement of three parties- lessor, lessee and lender
C. The lease rental is assigned to a bank or financial institution
D. The creditor will have the recourse to lessor only, and not to the lender
Select an option to see the answer and solution.
The amount of current assets required to meet a firm's long-term minimum need is referred to as . . . . . . . . working capital.
A. permanent
B. net
C. temporary
D. gross
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In securitisation, which of the following is/are not a benefit to the issuer?
1. Off-balance sheet treatment.
2. Frees up regulatory capital.
3. Higher credit ratings and lower borrowing costs.
4. Provides Collateral security.
5. Transfer of Credit risk.
Select the correct answer by using the options given below
A. Only 1
B. 2, 3 and 4
C. Only 4
D. All of the above
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Over capitalization may not be as a result of which of the following?
A. Promotion of a company with inflated assets
B. Application of low capitalization rate
C. Shortage of capital
D. Liberal dividend policy
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Capital structure and leverage decisions come in the ambit of
A. Investment decisions
B. Distribution decisions
C. Financing decisions
D. Dividend decisions
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Investment decision include
A. expansion of existing business
B. expansion of new business
C. replacement
D. All of the above
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Which of the following is/are an external source of finance?
A. Lease financing
B. Equity shares
C. Retained earnings
D. All of these
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Which of the following statement(s) is/are incorrect?
A. Cost of capital means the rate of interest at which the capital has been collected
B. Payback is one of the methods of evaluating investment proposals
C. Both A and B
D. None of the above
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Match the following.
List-I
List-II
a. Qualitative
1. . . . . . . . . involves raising funds on the security of the company's.
b. Gross working capital
2. Gross working capital is the . . . . . . . . approach.
c. Commercial Banks
3. Total of current assets is called as . . . . . . . .
d. Factoring
4. . . . . . . . . are also principal sources of working capital.
A. a-4, b-3, c-2, d-1
B. a-2, b-1, c-4, d-3
C. a-3, b-1, c-4, d-2
D. a-2, b-3, c-4, d-1
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The internal sources of finance do not include:
A. Retained earnings
B. Better management of working capital
C. Trade credit
D. Ordinary shares
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Which of the following statement is/are correct?
A. Public deposits have been very popular among Indian companies
B. Central and State Governments provide short-term finance on easy terms
C. Both A and B
D. All of the above
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The form of a discount allowed on the issue of debentures is in the nature of
A. Deferred Revenue Expenditure
B. Capital loss
C. Revenue loss
D. Current loss
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. . . . . . . . is long-term planning for making and financing proposed capital outlays.
A. Capital budgeting
B. Working capital management
C. Planning for capital
D. None of the above
Select an option to see the answer and solution.