Financial management Archives

21. Dividend present value for period of non-constant growth in addition with horizon value is used to calculate

stock extrinsic value

stock intrinsic value

dividend intrinsic value

stock intrinsic value

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22. According to Black Scholes model, call option is well exercised on its

mid buying date

expiry date

buying date

mid selling date

Detailed Solution

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class="screen-reader-text">According to Black Scholes model, call option is well exercised on its

23. The Markowitz model assumes most investors are_____________.

risk averse

risk neutral

risk seekers

risk moderators

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24. Miller- Orr Model is suitable in those circumstances when the ________.

Demand for cash is steady

Demand for cash is not steady

Carry cost and transaction cost are to be kept at minimum

Demand for cash is variable

Detailed

Solution

25. A technique of lowering risk for multinational companies and globally designed portfolios is classified as

national diversification

behavioral diversification

global diversification

behavioral finance

Detailed SolutionA technique of lowering risk

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for multinational companies and globally designed portfolios is classified as

26. A model for optimizing the selection of securities is the ______ model.

Miller-Orr

Black-Sholes

Markowitz

Gordon

Detailed SolutionA

model for optimizing the selection of securities is the ______ model.

27. Types of option markets do not include

European option

American option

expiry option

covered options

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28. Dividends paid to common shareholders and divided by common shares outstanding are equals to

earning per share

dividends per share

book value of share

market value of shares

Detailed SolutionDividends

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paid to common shareholders and divided by common shares outstanding are equals to

29. A firm has Capital of Rs. 10,00,000; Sales of Rs. 5,00,000; Gross Profit of Rs. 2,00,000 and Expenses of Rs. 1,00,000. What is the Net Profit Ratio?

20%

50%

10%

40%

Detailed SolutionA firm has Capital of Rs. 10,00,000; Sales of Rs. 5,00,000;

Gross Profit of Rs. 2,00,000 and Expenses of Rs. 1,00,000. What is the Net Profit Ratio?

30. An option which can be exercised any desired time before an expiry date is classified as

Australian option

money option

European option

American option

Detailed SolutionAn option which can be

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exercised any desired time before an expiry date is classified as

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