Which of the following are part of investment decision by an organization?
A. 1, 2 and 3
B. 2, 3 and 4
C. 1, 3 and 4
D. 1, 2, 3 and 4
Select an option to see the answer and solution.
If an investor buybacks a volatile stock, which of the following should be the best option?
A. Market order
B. Limit order
C. Stop-loss order
D. Contingency order
Select an option to see the answer and solution.
The dividend paid on preference share is not deductible expenditure for
A. income tax
B. corporate tax
C. gift tax
D. property tax
Select an option to see the answer and solution.
Which of the following financial asset is/are traded in international financial market?
A. Bonds
B. Stocks
C. Derivatives
D. All of the above
Select an option to see the answer and solution.
If an opposing position is taken in two positively correlated securities, it is called
A. Simple hedging
B. Cross hedging
C. Leading
D. Lagging
Select an option to see the answer and solution.
According to Walter, a firm should pay 100% dividend, if
A. r > k
B. r = k
C. r < k
D. None of these
Select an option to see the answer and solution.
The working capital requirement (WCR) is
A. Working capital minus short-term debt minus cash
B. Inventories plus receivables minus payables
C. Inventories plus receivables minus payables plus prepayments minus accruals
D. Working capital plus short-term debt plus cash
Select an option to see the answer and solution.
The conflicts in project ranking in capital budgeting as per NPV and IRR may arise because of
A. Size disparity
B. Time disparity
C. Life disparity
D. All the above
Select an option to see the answer and solution.
Which of the following statements are true in the context of securitization of assets?
A. It is a process that enhances liquidity in the market
B. The company clubs its different financial assets or debts to form a consolidated financial instrument issued to investors
C. The investors may get interest as a return to them
D. All of the above
Select an option to see the answer and solution.
Arrange the following in chronological order about the steps of capital budgeting process.
A. 3, 2, 1, 4
B. 3, 1, 2, 4
C. 2, 3, 4, 1
D. 4, 3, 2, 1
Select an option to see the answer and solution.
Match the items of
List-I with
List-II and indicate the correct answer:
List-I List-II
a. ABC Analysis
1. Dividend Decision
b. Walter Model
2. Capital Budgeting Decision
c. Capital Rationing
3. Capital Structure Decision
d. Net Operating Income Approach
4. Working Capital Management Decision
A. a-1, b-3, c-2, d-4
B. a-2, b-1, c-3, d-4
C. a-4, b-1, c-2, d-3
D. a-3, b-1, c-2, d-4
Select an option to see the answer and solution.
Which of the following is/are included under causes of undercapitalisation?
A. Under estimation of income
B. Promotion during deflation
C. Conservative dividend policy
D. All of the above
Select an option to see the answer and solution.
The concept of present value is based on the
A. Principle of compounding
B. Principle of discounting
C. Both A and B
D. None of the above
Select an option to see the answer and solution.
Stock dividend . . . . . . . . the number of equity shares.
A. increases
B. decreases
C. neutralise
D. Both A and B
Select an option to see the answer and solution.
The potential for an increase or decrease in the parent's net worth and reported net income caused by a change in exchange rates since the last consolidation of international operations is a reflection of
A. Economic exposure
B. Operating exposure
C. Exchange rate exposure
D. Translation exposure
Select an option to see the answer and solution.
. . . . . . . . method is also known as time adjusted rate of return method.
A. Account rate of return method
B. Net present value method
C. Internal rate of return method
D. None of the above
Select an option to see the answer and solution.
Which of the following are termed as permanent facilities for the general balance of payment's support?
A. Reserve tranche facilities
B. Credit tranche facilities
C. Both A and B
D. None of the above
Select an option to see the answer and solution.
In case the projects are divisible under capital rationing, an appropriate project appraisal method is
A. Net Present Value Method
B. Profitability Index Method
C. Internal Rate of Return Method
D. Payback Period Method
Select an option to see the answer and solution.
Match the statements in
List-I with dividend models in
List-II as follows:
List-I List-II
a. Dividend Capitalization Approach
1. Traditional Model
b. Dividend policy has a bearing on the share valuation
2. Gordon Model
c. Stock market places more weight on dividends than on retain earnings
3. Walter Model
d. Dividend payout is irrelevant to the value of the firm
4. Modigliani and Miller Model
A. a-2, b-3, c-1, d-4
B. a-1, b-2, c-4, d-3
C. a-4, b-1, c-3, d-2
D. a-3, b-4, c-2, d-1
Select an option to see the answer and solution.
Exchange rates are determined in the
A. money market
B. foreign exchange market
C. stock market
D. capital market
Select an option to see the answer and solution.
