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

11. The coupon rate is another name for the__________.

market interest rate

current yield

stated interest rate

yield to maturity

Detailed SolutionThe coupon rate is another name for the__________.

12. In asset portfolio, number of stocks are increased to

reduce return

reduce average

reduce risk

increase prices

Detailed SolutionIn asset portfolio, number of stocks are increased to

13. Bond’s promised rate of return is also considered as

yield to earning

yield to investors

yield to maturity

yield to return

Detailed SolutionBond’s promised rate of return is also considered as

14. Second step in binomial approach of option pricing is to define range of values

at expiration

at buying date

at exchange closing time

at exchange opening time

Detailed SolutionSecond step in binomial approach of option pricing is to define range of values

15. Risk of a Capital budgeting can be incorporated:

Adjusting the cash flows

Adjusting the discount rate

Adjusting the life

All of the above

Detailed SolutionRisk of a Capital budgeting can be incorporated:

16. Cost of common stock is 14% and bond risk premium is 9% then bond yield will be

1.56%

5.00%

23.00%

64.28%

Detailed SolutionCost of common stock is 14% and bond risk premium is 9% then bond yield will be

17. Return on assets = 6.7% and equity multiplier = 2.5% then return on equity will be

16.75%

2.68%

0.37%

9.20%

Detailed SolutionReturn on assets = 6.7% and equity multiplier = 2.5% then return on equity will be

18. An option that gives investors right to sell a stock at predefined price is classified as

put option

call option

money back options

out of money options

Detailed SolutionAn option that gives investors right to sell a stock at predefined price is classified as

19. Miller-Orr Model deals with

Optimum Cash Balance

Optimum Finished Goods

Optimum Receivables

All of the above

Detailed SolutionMiller-Orr Model deals with

20. Which of the following would be considered a risk-free investment?

Gold

Equity in a house

High-grade corporate bonds

Treasury bills

Detailed SolutionWhich of the following would be considered a risk-free investment?

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