Financial management Archives - Page 3 of 112 - MCQ and Quiz for Exams

21. Securities with less predictable prices and have longer maturity time is considered as

cash equivalents

long-term investments

inventories

short-term investments

Detailed SolutionSecurities with less predictable prices and have longer maturity time is considered as

22. Degree of financial leverage is a measure of relationship between ___________.

EPS and EBIT

EBIT and quantity produced

EPS and quantity produced

EPS and sales

Detailed SolutionDegree of financial leverage is a measure of relationship between ___________.

23. One way to obtain earnings forecasts is the mechanical procedure known as___________.

cross-reference analysis

exponential trending

time series analysis

data mining

Detailed SolutionOne way to obtain earnings forecasts is the mechanical procedure known as___________.

24. Cost of Equity Share Capital is more than cost of debt because:

Face value of debentures is more than face value of shares

Equity shares have higher risk than debt

Equity shares are easily saleable

All of the three above

Detailed SolutionCost of Equity Share Capital is more than cost of debt because:

25. Slope coefficient of beta is classified statistically significant if its probability is

greater than 5%

equal to 5%

less than 5%

less than 2%

Detailed SolutionSlope coefficient of beta is classified statistically significant if its probability is

26. Variability of stock price, option term to maturity and risk free rate are dependents of

price of an option

expiry of an option

exercise of an option

estimation of an option

Detailed SolutionVariability of stock price, option term to maturity and risk free rate are dependents of

27. In alternative investments, constant cash flow stream is equal to initial cash flow stream in approach which is classified as

greater annual annuity method

equivalent annual annuity

lesser annual annuity method

zero annual annuity method

Detailed SolutionIn alternative investments, constant cash flow stream is equal to initial cash flow stream in approach which is classified as

28. If no information is available, the General Rule for valuation of stock for balance sheet is:

Replacement Cost

Realizable Value

Historical Cost

Standard Cost

Detailed SolutionIf no information is available, the General Rule for valuation of stock for balance sheet is:

29. According to Black Scholes model, rate which is constant and known is classified as

short term return rate

long term return rate

risk free interest rate

risky rate of return

Detailed SolutionAccording to Black Scholes model, rate which is constant and known is classified as

30. An increase in marginal cost of capital and capital rationing are two arising complications of

maximum capital budget

greater capital budget

optimal capital budget

minimum capital budget

Detailed SolutionAn increase in marginal cost of capital and capital rationing are two arising complications of

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