Financial management Archives

21. Financial assets ______.

directly contribute to the country's productive capacity

indirectly to the country's productive capacity

contribute to the country's productive capacity both directly and indirectly

do not contribute to the country's productive capacity either directly or indirectly

Detailed SolutionFinancial assets ______.

22. An unsecured bond that provides no lien against property as security for bond obligation is classified as

secured bond

debenture

obligation bond

specific bond

Detailed SolutionAn unsecured bond that provides no lien against property as security for bond obligation is classified as

23. Portfolios lying on the upper right portion of the efficient frontier are likely to be chosen by_______________.

aggressive investors

conservative investors

risk-averse investors

defensive investors

Detailed SolutionPortfolios lying on the upper right portion of the efficient frontier are likely to be chosen by_______________.

24. In uneven cash flow, ‘IRR’ is an abbreviation of an

internal rate of return

international rate of return

intrinsic rate of return

investment return rate

Detailed SolutionIn uneven cash flow, ‘IRR’ is an abbreviation of an

25. The measure of business risk is __________.

operating leverage

financial leverage

total leverage

working capital leverage

Detailed SolutionThe measure of business risk is __________.

26. Bond yield is 12% and bond risk premium is 4.5% then cost of common stock would be

37.50%

7.50%

16.50%

2.67%

Detailed SolutionBond yield is 12% and bond risk premium is 4.5% then cost of common stock would be

27. Constant growth rate is 8% and an expected dividend yield is 5.4% then expected rate of return would be

-3.40%

3.40%

13.40%

-13.40%

Detailed SolutionConstant growth rate is 8% and an expected dividend yield is 5.4% then expected rate of return would be

28. High price to earning ratio shows company’s

low dividends paid

high risk prospect

high growth prospect

high marginal rate

Detailed SolutionHigh price to earning ratio shows company’s

29. Protective covenant devised in market to reduce event risk and to control debt cost is classified as

super poison covenant

super poison put

super poison call

super poison redemption

Detailed SolutionProtective covenant devised in market to reduce event risk and to control debt cost is classified as

30. Unsystematic risk is______.

the risk associated with movements in security prices

reduced through diversification

higher when interest rates rise

the risk of loss of purchasing power

Detailed SolutionUnsystematic risk is______.

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