Financial management
return ratios
market value ratios
marginal ratios
equity ratios
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2. Risk on a stock portfolio which cannot be eliminated or reduced by placing it in diversified portfolio is classified as
diversifiable risk
market risk
stock risk
portfolio risk
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3. Operating leverage x Financial leverage = ________
Combined Leverage
Financial Combined Leverage
Operating Combined Leverage
Fixed leverage
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Detailed SolutionOperating leverage x Financial leverage = ________
4. Risk in average individual stock can be reduced by placing an individual stock in
low risk portfolio
diversified portfolio
undiversified portfolio
high risk portfolio
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Detailed SolutionRisk in average individual stock can be reduced by placing an individual stock in
5. A price for equity is called
interest rate
cost of equity
debt rate
investment return
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6. Forecast by analysts, retention growth model and historical growth rates are methods used for an
estimate future growth
estimate option future value
estimate option present value
estimate growth ratio
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7. Use of safety stock by a firm would:
Increase Inventory Cost
Decrease Inventory Cost
No effect on Cost
None of the above
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8. Premium which is considered as difference of expected return on common stock and current yield on Treasury bonds is called
current risk premium
past risk premium
beta premium
expected premium
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9. Total return is equal to________.
capital gain and yield
yield and interest
capital gain
yield
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10. A type of contract in which contract holder has right to sell an asset at specific period for predetermining price is classified as
option
written contract
determined contract
featured contract
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