Financial management Archives - Page 2 of 112 - MCQ and Quiz for Exams

11. In arbitrage pricing theory, required returns are functioned of two factors which have

dividend policy

market risk

historical policy

Both A and B

Detailed SolutionIn arbitrage pricing theory, required returns are functioned of two factors which have

12. Type of option which cannot be exercised before an expiry date which is classified as

European option

American option

Australian option

money option

Detailed SolutionType of option which cannot be exercised before an expiry date which is classified as

13. Call options situation in which strike price is greater than current price of stock is classified as

out-of-the-portfolio

in-the-portfolio

in-the-money

out-of-the-money

Detailed SolutionCall options situation in which strike price is greater than current price of stock is classified as

14. Which of the following is / are assumption behind the realized yield approach?

The yield earned by investors has been, on average, in conformity with their expectations

The dividends will continue growing at a constant rate forever

The market price will continue growing at a constant rate forever

Both a and b

Detailed SolutionWhich of the following is / are assumption behind the realized yield approach?

15. Future value of interest if it is calculated two times a year can be a classified as

semi-annual discounting

annual discounting

annual compounding

semi-annual compounding

Detailed SolutionFuture value of interest if it is calculated two times a year can be a classified as

16. Capital gains yield is multiplied for beginning price to calculate

capital gain

growth gain

regular yield

variable yield

Detailed SolutionCapital gains yield is multiplied for beginning price to calculate

17. Stock selling price is Rs 65, expected dividend is Rs 20 and cost of common stock is 42% then expected growth rate will be

0.1123 times

11.23%

11.23 times

Rs 11.23

Detailed SolutionStock selling price is Rs 65, expected dividend is Rs 20 and cost of common stock is 42% then expected growth rate will be

18. Mutual fund allows investors to sale out their share during any normal trading hours is classified as

exchange traded fund

management expense

money trade fund

capital trade fund

Detailed SolutionMutual fund allows investors to sale out their share during any normal trading hours is classified as

19. Risk which is caused by events such as strikes, unsuccessful marketing programs and other lawsuits is classified as

stock risk

portfolio risk

diversifiable risk

market risk

Detailed SolutionRisk which is caused by events such as strikes, unsuccessful marketing programs and other lawsuits is classified as

20. Type of financial security in which loans are secured by borrower’s property is classified as

municipal bonds

corporate bonds

U.S treasury bonds

mortgages

Detailed SolutionType of financial security in which loans are secured by borrower’s property is classified as

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