Financial management

11. Movement of price or rise or fall of prices of options is classified as

option lattice
pricing movement
price change
binomial lattice

Detailed SolutionMovement of price or rise or fall of prices of options is classified as

12. Altering the leverage ratio does not influence the market value of the firm. This is the basic premise of _______.

net income approach
traditional approach
modern approach
net operating income approach

Detailed SolutionAltering the leverage ratio does not influence the market value of the firm. This is the basic premise of _______.

13. Capital gain is Rs 2 and beginning price is Rs 24 then capital gains yield will be

22.00%
24.00%
14.00%
12.00%

Detailed SolutionCapital gain is Rs 2 and beginning price is Rs 24 then capital gains yield will be

14. Mutual funds may be affiliated with an underwriter. This means____________.

the underwriter has an exclusive right to distribute shares
the underwriter selects the securities in the portfolio
there is no risk to the issuer of the mutual fund
there is no risk to the investor of the mutual fund.

Detailed SolutionMutual funds may be affiliated with an underwriter. This means____________.

15. Greater chance of lower actual return than expected return and greater variation is indicated by

smaller standard deviation
larger standard deviation
smaller variance
larger variance

Detailed SolutionGreater chance of lower actual return than expected return and greater variation is indicated by

16. Values recorded as determined in marketplace are considered as

market values
book values
appreciated values
depreciated values

Detailed SolutionValues recorded as determined in marketplace are considered as

17. A firm has EBIT of Rs. 50,000. Market value of debt is Rs. 80,000 and overall capitalization rate is 20%. Market value of firm under NOI Approach is:

Rs. 2,50,000
Rs. 1,70,000
Rs. 30,000
Rs. 1,30,000

Detailed SolutionA firm has EBIT of Rs. 50,000. Market value of debt is Rs. 80,000 and overall capitalization rate is 20%. Market value of firm under NOI Approach is:

18. An increase in value of option leads to low present value of exercise cost only if it has

low volatility
interest rates are high
interest rates are low
high volatility

Detailed SolutionAn increase in value of option leads to low present value of exercise cost only if it has

19. An earning of business which is available for free distribution to all stockholders and creditors is classified as

free cash flows
free distribution
available income
cash income

Detailed SolutionAn earning of business which is available for free distribution to all stockholders and creditors is classified as

20. A markets which deals with long-term corporate stocks are classified as

liquid markets
short-term markets
capital markets
money markets

Detailed SolutionA markets which deals with long-term corporate stocks are classified as

Page 1Page 2Page 3Page 4Page 5
Test 1Test 2Test 3Test 4Test 5Test 6Test 7Test 8Test 9Test 10Test 11Test 12Test 13Test 14Test 15Test 16Test 17Test 18Test 19Test 20Test 21Test 22Test 23