Financial management

11. Current value of stock including in portfolio is subtracted from present value of portfolio to calculate

last month option price
last year option price
current option price
future option price

Detailed SolutionCurrent value of stock including in portfolio is subtracted from present value of portfolio to calculate

12. For each component of capital, a required rate of return is considered as

component cost
evaluating cost
asset cost
asset depreciation value

Detailed SolutionFor each component of capital, a required rate of return is considered as

13. _____________is concerned with the interrelationships between security returns.

random diversification
correlating diversification
Friedman diversification
Markowitz diversification

Detailed Solution_____________is concerned with the interrelationships between security returns.

14. Capital Budgeting deals with:

Long-term Decisions
Short-term Decisions
Both A and B
Neither A nor B

Detailed SolutionCapital Budgeting deals with:

15. When most people refer to the mean, they are referring to the______________.

median
arithmetic mean
geometric mean
cumulative mean

Detailed SolutionWhen most people refer to the mean, they are referring to the______________.

16. An uncovered cost at start of year is Rs 300, full cash flow during recovery year is Rs 650 and prior years to full recovery is 4 then payback would be

3.46 years
2.46 years
5.46 years
4.46 years

Detailed SolutionAn uncovered cost at start of year is Rs 300, full cash flow during recovery year is Rs 650 and prior years to full recovery is 4 then payback would be

17. Shareholder wealth in a firm is represented by___________.

the number of people employed in the firm
the book value of the firm's assets less the book value of its liabilities
the amount of salary paid to its employees
the market price per share of the firms common stock

Detailed SolutionShareholder wealth in a firm is represented by___________.

18. Stock issued by company have higher rate of return because of

low market to book ratio
high book to market ratio
high market to book ratio
low book to market ratio

Detailed SolutionStock issued by company have higher rate of return because of

19. An example of a derivative security is ______.

a common share of General Motors
a call option on Mobil stock
a commodity futures contract
B and C

Detailed SolutionAn example of a derivative security is ______.

20. If coupon rate is equal to going rate of interest then bond will be sold

at par value
below its par value
more than its par value
seasoned par value

Detailed SolutionIf coupon rate is equal to going rate of interest then bond will be sold

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