Financial management

21. Right held with corporations to call issued bonds for redemption is considered as

artificial provision
call provision
redeem provision
original provision

Detailed SolutionRight held with corporations to call issued bonds for redemption is considered as

22. Cost Capital for Equity Share Capital does not imply that:

Market Price is equal to Book Value of share
Shareholders are ready to subscribe to right issue
Market Price is more than Issue Price
AC of the three above

Detailed SolutionCost Capital for Equity Share Capital does not imply that:

23. Which of the following is / are assumption(s) underlying the Miller and Modigliani analysis?

Capital markets are perfect
Investors are assumed to be rational and behave accordingly
There is no corporate or personal income tax
All of the above.

Detailed SolutionWhich of the following is / are assumption(s) underlying the Miller and Modigliani analysis?

24. Real rate of return is equal to:

Nominal Rate × Inflation Rate
Nominal Rate ÷ Inflation Rate
Nominal Rate - Inflation Rate
Nominal Rate + Inflation Rate

Detailed SolutionReal rate of return is equal to:

25. Funds which are used as an interest-bearing checking accounts are classified as

money market funds
capital market funds
money mutual funds
insurance money funds

Detailed SolutionFunds which are used as an interest-bearing checking accounts are classified as

26. Situation in financial options in which strike price is less than current price of stock is classified as

in-the-money
out-of-the-money
out-of-the-portfolio
in-the-portfolio

Detailed SolutionSituation in financial options in which strike price is less than current price of stock is classified as

27. Prices of bonds will be decreased if an interest rates

rises
declines
equals
none of above

Detailed SolutionPrices of bonds will be decreased if an interest rates

28. In Traditional Approach, which one is correct?

kc rises constantly
kd decreases constantly
k0 decreases constantly
None of the above

Detailed SolutionIn Traditional Approach, which one is correct?

29. A theory which states that assets are traded at price equal to its intrinsic value is classified as

efficient money hypothesis
efficient market hypothesis
inefficient market hypothesis
inefficient money hypothesis

Detailed SolutionA theory which states that assets are traded at price equal to its intrinsic value is classified as

30. Financial markets include

primary markets
capital markets
physical asset markets
all of above

Detailed SolutionFinancial markets include

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