Financial management

31. Value of payment is Rs 25 and an interest rate is 2%, then present value will be

Rs 12.54
Rs 12,500.00
Rs 12,504.00
Rs 8,400.00

Detailed SolutionValue of payment is Rs 25 and an interest rate is 2%, then present value will be

32. Commercial paper are generally issued at a price:

Equal to face value
More than face value
Less than face value
Equal to redemption value

Detailed SolutionCommercial paper are generally issued at a price:

33. Which of the following is an argument for the relevance of dividends?

Informational content
Reduction of uncertainty
Some investors' preference for current income
All of the above.

Detailed SolutionWhich of the following is an argument for the relevance of dividends?

34. Price earning ratio and price by cash flow ratio are classified as

marginal ratios
equity ratios
return ratios
market value ratios

Detailed SolutionPrice earning ratio and price by cash flow ratio are classified as

35. Which of the following is not a characteristic of investments companies?

pooled investing
diversification
managed portfolios
reduced expenses

Detailed SolutionWhich of the following is not a characteristic of investments companies?

36. In case of Gordon’s Model, the MP for zero payout is zero. It means that:

Shares are not traded
Shares available free of cost
Investors are not ready to offer any price
None of the above

Detailed SolutionIn case of Gordon’s Model, the MP for zero payout is zero. It means that:

37. A premium charged by lenders for securities that cannot be converted into cash is classified as

required premium
liquidity premium
marketability premium
Both B and C

Detailed SolutionA premium charged by lenders for securities that cannot be converted into cash is classified as

38. In capital budgeting, a technique which is based upon discounted cash flow is classified as

net present value method
net future value method
net capital budgeting method
net equity budgeting method

Detailed SolutionIn capital budgeting, a technique which is based upon discounted cash flow is classified as

39. In calculation of time value of money, ‘PMT’ represents

present money tracking
payment
payment money tracking
future money payment

Detailed SolutionIn calculation of time value of money, ‘PMT’ represents

40. According to put call parity relationship, call option plus present value of exercise price minus stock is to calculate

present value of option
call option
put option
future value of option

Detailed SolutionAccording to put call parity relationship, call option plus present value of exercise price minus stock is to calculate

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