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Financial management

11. Money market funds were a financial innovation partly inspired to circumvent __________.

[amp_mcq option1=”Regulation Q, which is no longer in existence” option2=”Regulation M” option3=”Regulation D” option4=”Regulation B, which is still in existence” correct=”option1″]

Detailed SolutionMoney market funds were a financial innovation partly inspired to circumvent __________.

12. Which of the following is not true with reference capital budgeting?

[amp_mcq option1=”Capital budgeting is related to asset replacement decisions” option2=”Cost of capital is equal to minimum required return” option3=”Existing investment in a project is not treated as sunk cost” option4=”Timing of cash flows is relevant” correct=”option2″]

Detailed SolutionWhich of the following is not true with reference capital budgeting?

13. Securitization is related to conversion of:

[amp_mcq option1=”Receivables” option2=”Stock” option3=”Investments” option4=”Creditors” correct=”option1″]

Detailed SolutionSecuritization is related to conversion of:

14. Retention ratio is 0.55 and return on equity is 12.5% then growth retention model would be

[amp_mcq option1=”11.95%” option2=”6.88%” option3=”13.05%” option4=”22.72%” correct=”option3″]

Detailed SolutionRetention ratio is 0.55 and return on equity is 12.5% then growth retention model would be

15. In weighted average cost of capital, cost of capital which is risk adjusted and developed for each category of

[amp_mcq option1=”long-term projects” option2=”industry [industrial] projects” option3=”divisional projects” option4=”short-term projects” correct=”option1″]

Detailed SolutionIn weighted average cost of capital, cost of capital which is risk adjusted and developed for each category of

16. Which of the following is not normally one of the reasons for a change in an investor’s circumstances?

[amp_mcq option1=”Change in market conditions” option2=”Change in legal considerations” option3=”Change in time horizon” option4=”Change in tax circumstances” correct=”option1″]

Detailed SolutionWhich of the following is not normally one of the reasons for a change in an investor’s circumstances?

17. According to top rating agencies S&P triple-A and double-A rating bonds are classified as an

[amp_mcq option1=”extremely discounted” option2=”extremely safe” option3=”extremely risky” option4=”extremely inflated” correct=”option2″]

Detailed SolutionAccording to top rating agencies S&P triple-A and double-A rating bonds are classified as an

18. Which element of the basic NPV equation is adjusted by the RADR?

[amp_mcq option1=”Denominator” option2=”Numerator” option3=”Both A and B” option4=”None of these” correct=”option3″]

Detailed SolutionWhich element of the basic NPV equation is adjusted by the RADR?

19. Noncash revenues and noncash charges if it subtracted from net income is equal to

[amp_mcq option1=”free cash flow” option2=”retained cash flow” option3=”net cash flow” option4=”financing cash flow” correct=”option1″]

Detailed SolutionNoncash revenues and noncash charges if it subtracted from net income is equal to

20. To whom does the Treasurer most likely report?

[amp_mcq option1=”Chief Financial Officer” option2=”Vice President of Operations” option3=”Chief Executive Officer” option4=”Board of Directors” correct=”option1″]

Detailed SolutionTo whom does the Treasurer most likely report?

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