Financial management

31. First step in determining an efficient portfolio is to consider

set of attainable portfolios
set of unattainable portfolios
set of attributable portfolios
set of attributable portfolios

Detailed SolutionFirst step in determining an efficient portfolio is to consider

32. Bonds issued by government and backed by U.S government are classified as

issued security
treasury bonds
U.S bonds
return security

Detailed SolutionBonds issued by government and backed by U.S government are classified as

33. Preferred stock dividends must be paid on common stock and must have

fixed amount of dividends
fixed amount of shares
variable amount of dividends
variable amount of shares

Detailed SolutionPreferred stock dividends must be paid on common stock and must have

34. A risk which is classified as its contribution to risk of portfolio is classified as

classified risk
contributed risk
irrelevant risk
relevant risk

Detailed SolutionA risk which is classified as its contribution to risk of portfolio is classified as

35. Right of common stockholders to purchase additional stock issued by company is classified as

common right
pre-emptive right
purchase right
selling right

Detailed SolutionRight of common stockholders to purchase additional stock issued by company is classified as

36. Market risk is best measured by the____________.

alpha
beta
standard deviation
coefficient of variation

Detailed SolutionMarket risk is best measured by the____________.

37. Yield on Treasury bill with a maturity is classified as a risk free rate but must be equal to an

option closing price
option beginning price
option expiration
option model

Detailed SolutionYield on Treasury bill with a maturity is classified as a risk free rate but must be equal to an

38. The objective of financial management is to ______________.

generate the maximum net profit
generate the maximum retained earnings
generate the maximum wealth for its shareholders
generate maximum funds for the firm at the least cost.

Detailed SolutionThe objective of financial management is to ______________.

39. The dividend-payout ratio is equal to __________.

the dividend yield plus the capital gains yield
dividends per share divided by earnings per share
dividends per share divided by par value per share
dividends per share divided by current price per share.

Detailed SolutionThe dividend-payout ratio is equal to __________.

40. Subset of primary market where firms go publicly by issuing stocks in financial markets is considered as

initial public offering market
stock market
issuance market
First stock market

Detailed SolutionSubset of primary market where firms go publicly by issuing stocks in financial markets is considered as

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