Financial management

11. The highest level of market efficiency is_____________.

weak form efficiency
semi-strong form efficiency
random walk efficiency
strong form efficiency

Detailed SolutionThe highest level of market efficiency is_____________.

12. When price of bond is calculated below its par value, it is classified as

classified bond
discount bond
compound bond
consideration earning

Detailed SolutionWhen price of bond is calculated below its par value, it is classified as

13. In financial planning, formula MAX [current price of stock-strike price, 0] is used to calculate

option return rate
exercise value
option value
stock value

Detailed SolutionIn financial planning, formula MAX [current price of stock-strike price, 0] is used to calculate

14. A loan that is repaid on monthly, quarterly and annual basis in equal payments is classified as

amortized loan
depreciated loan
appreciated loan
repaid payments

Detailed SolutionA loan that is repaid on monthly, quarterly and annual basis in equal payments is classified as

15. Dividend irrelevance argument of MM Model is based on:

Issue of Debentures
Issue of Bonus Share
Arbitrage
Hedging

Detailed SolutionDividend irrelevance argument of MM Model is based on:

16. Notes, mortgages, bonds, stocks, treasury bills and consumer loans are classified as

financial instruments
capital assets
primary assets
competitive instruments

Detailed SolutionNotes, mortgages, bonds, stocks, treasury bills and consumer loans are classified as

17. Which of the following is a risk factor in capital budgeting?

Industry specific risk factors
Competition risk factors
Project specific risk factors
All of the above

Detailed SolutionWhich of the following is a risk factor in capital budgeting?

18. Partners who are only liable for their own part of investment are considered as

venture partners
corporate partners
limited partners
general partners

Detailed SolutionPartners who are only liable for their own part of investment are considered as

19. In expected rate of return for constant growth, stock price must grow according to an expected rate and

at same price
at different price
at yielded price
at buying price

Detailed SolutionIn expected rate of return for constant growth, stock price must grow according to an expected rate and

20. In Risk-adjusted Discount Rate method, which one is adjusted?

Cash flows
Life of the proposal
Rate of discount
Salvage value

Detailed SolutionIn Risk-adjusted Discount Rate method, which one is adjusted?

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