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

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

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