Financial management

1. Real risk-free interest rate in addition with an inflation premium is equal to

required interest rate
quoted risk-free interest rate
liquidity risk-free interest rate
premium risk-free interest rate

Detailed SolutionReal risk-free interest rate in addition with an inflation premium is equal to

2. The return after the pay off period is not considered in case of __________.

Payback period method
Interest rate method
Present value method
Discounted cash flow method

Detailed SolutionThe return after the pay off period is not considered in case of __________.

3. Corner portfolio are calculated where a ___________.

Security enters
Security leaves
Security enters or leave
Security with high extreme value enters

Detailed SolutionCorner portfolio are calculated where a ___________.

4. Traditional approach confines finance function only to _________ funds

raising
mobilizing
utilizing
financing

Detailed SolutionTraditional approach confines finance function only to _________ funds

5. Cost of Capital for Bonds and Debentures is calculated on:

Before Tax basis
After Tax basis
Risk-free Rate of Interest basis
None of the above

Detailed SolutionCost of Capital for Bonds and Debentures is calculated on:

6. Markets for products such as wheat, rice, cotton, real estate and autos dealing is classified as

physical asset markets
intangible assets
competitive markets
easy markets

Detailed SolutionMarkets for products such as wheat, rice, cotton, real estate and autos dealing is classified as

7. Coefficient of variation is used to identify an effect of

risk
return
deviation
Both A and B

Detailed SolutionCoefficient of variation is used to identify an effect of

8. A project which have one series of cash inflows and results in one or more cash outflows is classified as

abnormal costs
normal cash flows
abnormal cash flow
normal costs

Detailed SolutionA project which have one series of cash inflows and results in one or more cash outflows is classified as

9. Special situation in which large projects are financed by with and securities claims on project’s cash flow is classified as

claimed securities
project financing
stock financing
interest cost

Detailed SolutionSpecial situation in which large projects are financed by with and securities claims on project’s cash flow is classified as

10. Payback period in which an expected cash flows are discounted with help of project cost of capital is classified as

discounted payback period
discounted rate of return
discounted cash flows
discounted project cost

Detailed SolutionPayback period in which an expected cash flows are discounted with help of project cost of capital is classified as

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