Financial management

11. An average inflation rate which is expected over life of security is classified as

inflation premium
off season premium
nominal premium
required premium

Detailed SolutionAn average inflation rate which is expected over life of security is classified as

12. A premium which reflects possibility of issuer who does not pay principal amount of bonds is called

seasoned risk premium
nominal risk premium
default risk premium
quoted risk premium

Detailed SolutionA premium which reflects possibility of issuer who does not pay principal amount of bonds is called

13. Constant growth model would not be used in condition if growth rate is

greater than dividend paid
equal to realized rate of return
less than realized rate of return
greater than realized rate of return

Detailed SolutionConstant growth model would not be used in condition if growth rate is

14. Size of firm and market or book ratio are variables which are related to

premium returns
unquoted returns
quoted returns
stock returns

Detailed SolutionSize of firm and market or book ratio are variables which are related to

15. Third factor in Fama French three factor model is ratio which is classified as

book to market ratio
market to book ratio
company to industry ratio
stock to portfolio ratio

Detailed SolutionThird factor in Fama French three factor model is ratio which is classified as

16. New York Stock Exchange’ is an example of

capital markets
money markets
liquid markets
short-term markets

Detailed SolutionNew York Stock Exchange’ is an example of

17. Values of assets purchased or liabilities recorded as recorded by bookkeepers are considered as

appreciated values
depreciated values
market values
book values

Detailed SolutionValues of assets purchased or liabilities recorded as recorded by bookkeepers are considered as

18. An expected dividend yield is added into expected growth rate to calculate

dividend return
expected rate of return
expected capital
invested capita

Detailed SolutionAn expected dividend yield is added into expected growth rate to calculate

19. Which of the following is not included in cost of inventory?

Purchase Cost
Transport in Cost
Import Duty
Selling Costs

Detailed SolutionWhich of the following is not included in cost of inventory?

20. If an investor is attempting to buy a stock that is very volatile, it would be best to use___________.

market order
limit order
stop-loss order
contingency order.

Detailed SolutionIf an investor is attempting to buy a stock that is very volatile, it would be best to use___________.

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