Financial management

21. An official entity that represents bondholders and ensures stated rules in indenture is classified as

trustee
trust
stated entity
owner entity

Detailed SolutionAn official entity that represents bondholders and ensures stated rules in indenture is classified as

22. If there is no inflation during a period, then the Money Cashflow would be equal to:

Present Value
Real Cash flow
Real Cash flow + Present Value
Real Cash flow - Present Value

Detailed SolutionIf there is no inflation during a period, then the Money Cashflow would be equal to:

23. ‘That there is no corporate tax’ is assumed by:

Net Income Approach
Net Operating Income Approach,
Traditional Approach
All of these

Detailed Solution‘That there is no corporate tax’ is assumed by:

24. According to Black Scholes model, purchaser can borrow fraction of security at risk free interest rate which is

short term
long term
transaction cost
no transaction cost

Detailed SolutionAccording to Black Scholes model, purchaser can borrow fraction of security at risk free interest rate which is

25. Sellers of options in financial markets are classified as

expiry writer
option writer
contract writer
bond writer

Detailed SolutionSellers of options in financial markets are classified as

26. Members and employees of credit unions are loaned for

mortgages
home improvement loans
auto purchases
all of above

Detailed SolutionMembers and employees of credit unions are loaned for

27. Out of the following, what is not true in respect of factoring?

Continuous arrangement between Factor and Seller
Sale of Receivables to the factor
Factor provides cost free finance to seller
None of the above

Detailed SolutionOut of the following, what is not true in respect of factoring?

28. An additional desired compensation by investors for assuming an additional risk on investment is classified as

risk premium
investor premium
additional premium
assumed premium

Detailed SolutionAn additional desired compensation by investors for assuming an additional risk on investment is classified as

29. The Real Cashflows must be discounted to get the present value at a rate equal to:

Money Discount Rate
Inflation Rate
Real Discount Rate
Risk free rate of interest

Detailed SolutionThe Real Cashflows must be discounted to get the present value at a rate equal to:

30. While calculating weighted average cost of capital _________.

Preference shares are given more weight age
Cost of issue is considered
Tax factor is ignored
Risk factor is ignored

Detailed SolutionWhile calculating weighted average cost of capital _________.

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