Financial management

11. According to Black Scholes model, selling and buying of stock have

discount rate
transaction costs
no transaction costs
no discounts

Detailed SolutionAccording to Black Scholes model, selling and buying of stock have

12. A line which shows relationship between an expected return and risk on efficient portfolio is considered as

efficient market line
attributable market line
capital market line
security market line

Detailed SolutionA line which shows relationship between an expected return and risk on efficient portfolio is considered as

13. The return component that gives periodic cash flows to the investor is known as the______________.

capital gain
interest rate
yield
unrealized gain.

Detailed SolutionThe return component that gives periodic cash flows to the investor is known as the______________.

14. Present value of future cash flows is Rs 4150 and an initial cost is Rs 1300 then profitability index will be

3.00%
3.19
0.31 times
Rs 5,450.00

Detailed SolutionPresent value of future cash flows is Rs 4150 and an initial cost is Rs 1300 then profitability index will be

15. A retirement plans funded for workers by corporations, administered and commercial banks are classified as

retirement funds
pension funds
future funds
workers funds

Detailed SolutionA retirement plans funded for workers by corporations, administered and commercial banks are classified as

16. ______________ is the distribution of the profits of a company among its shareholders.

Shares
Interest
Dividend
Commission

Detailed Solution______________ is the distribution of the profits of a company among its shareholders.

17. Which of the following is not a capital budgeting decision?

Expansion Programme
Merger
Replacement of an Asset
Inventory Level

Detailed SolutionWhich of the following is not a capital budgeting decision?

18. Operating leverage examines.

The effect of the change in the quantity on EBIT
The effect of the change in EBIT on the EPS of the company
The effect of the change in output to the EPS of the company
The effect of change in EPS on the output of the company

Detailed SolutionOperating leverage examines.

19. Money Discount Rate if equal to:

(1 + Inflation Rate) (1 + Real Rate) - 1
(1 + Inflation Rate) 4 - (1 + Real Rate) - 1
(1 + Real Rate) 4 - (1 + Inflation Rate) - 1
(1 + Real Rate) + (1 + Inflation Rate) - 1

Detailed SolutionMoney Discount Rate if equal to:

20. Discounted cash flow analysis is also classified as

time value of stock
time value of money
time value of bonds
time value of treasury bonds

Detailed SolutionDiscounted cash flow analysis is also classified as

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