Financial management

31. A market interest rate for specific type of bond is classified as bonds

required rate of return
required option
required rate of redemption
required rate of earning

Detailed SolutionA market interest rate for specific type of bond is classified as bonds

32. Corporate associations who have common bonds being employees of same firm are classified as

credit unions
debit unions
preferred unions
solving unions

Detailed SolutionCorporate associations who have common bonds being employees of same firm are classified as

33. An average return of portfolio divided by its standard deviation is classified as

Jensen's alpha
Treynor's variance to volatility ratio
Sharpe's reward to variability ratio
Treynor's reward to volatility ratio

Detailed SolutionAn average return of portfolio divided by its standard deviation is classified as

34. Dividend will grow at non-constant rate for N periods and periods such as N is classified as

growth date
terminal date
horizon date
Both B and C

Detailed SolutionDividend will grow at non-constant rate for N periods and periods such as N is classified as

35. Current value of stock in portfolio with current option price Rs 20 is Rs 50, then present value of portfolio would be

Rs 30.00
Rs 70.00
Rs 40.00
Rs 80.00

Detailed SolutionCurrent value of stock in portfolio with current option price Rs 20 is Rs 50, then present value of portfolio would be

36. Second step in calculating value of stock with non-constant growth rate is to find out an

expected intrinsic stock
extrinsic stock
expected price of stock
intrinsic stock

Detailed SolutionSecond step in calculating value of stock with non-constant growth rate is to find out an

37. In options pricing, an exercise price rises from lower to higher which leads to

volatile options
option value increases
option value decreases
option value stable

Detailed SolutionIn options pricing, an exercise price rises from lower to higher which leads to

38. First factor in Fama French three factor model is

CAPM stock beta
economic stock beta
CAPM portfolio beta
CAPM realized beta

Detailed SolutionFirst factor in Fama French three factor model is

39. If coupon rate is more than current rate of interest then bond will be sold

More than its par value
Seasoned par value
At par value
Below its par value

Detailed SolutionIf coupon rate is more than current rate of interest then bond will be sold

40. Which of the following factors does not affect the capital structure of a company?

Cost of capital
Composition of the current assets
Size of the company
Expected nature of cash flows

Detailed SolutionWhich of the following factors does not affect the capital structure of a company?

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