Financial management

1. The random walk hypothesis is most related to the___________.

weak-form EMH
semi strong-form EMH
semi weak-form EMH
strong-form EMH

Detailed SolutionThe random walk hypothesis is most related to the___________.

2. Owners of corporation having certain rights and privileges are considered as

special stockholders
common stockholders
public stocks
enactive stocks

Detailed SolutionOwners of corporation having certain rights and privileges are considered as

3. Stock issued by company have lower rate of return because of

high market to book ratio
low book to market ratio
low market to book ratio
high book to market ratio

Detailed SolutionStock issued by company have lower rate of return because of

4. Bond risk premium is 3% and bond yield is 10.2% then cost of common stock will be

3.40%
13.20%
7.20%
30.60%

Detailed SolutionBond risk premium is 3% and bond yield is 10.2% then cost of common stock will be

5. Bonds that do not pay original coupon payment but payment is made from additional bonds are classified as

payment in-kind bonds
payment off-kind bonds
kind payment
additional bond

Detailed SolutionBonds that do not pay original coupon payment but payment is made from additional bonds are classified as

6. Which of the following is not a usual type of lease arrangement?

Sale & Leaseback
Goods on Approval
Leverage Lease
Direct Lease

Detailed SolutionWhich of the following is not a usual type of lease arrangement?

7. Variable cost per unit.

varies with the level of output
remains constant irrespective of the level of output
changes with the growth of the firm
does not change with volume of production

Detailed SolutionVariable cost per unit.

8. Method of matching orders by posting orders of buying and selling is classified as

electronic communication network
electronic dealer network
electronic stock network
electronic order network

Detailed SolutionMethod of matching orders by posting orders of buying and selling is classified as

9. Liquidity risk_____________.

is the risk that investment bankers normally face
is lower for small OTCEI stocks than for large NSE stocks
is the risk associated with secondary market transactions
increases whenever interest rates increase.

Detailed SolutionLiquidity risk_____________.

10. In order to determine the compound growth rate of an investment over some period, an investor would calculate the_____________.

arithmetic mean
geometric mean
calculus mean
arithmetic median

Detailed SolutionIn order to determine the compound growth rate of an investment over some period, an investor would calculate the_____________.

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