Financial management

31. In cash flow analysis, two projects are compared by using common life is classified as

transaction approach
replacement chain approach
common life approach
Both B and C

Detailed SolutionIn cash flow analysis, two projects are compared by using common life is classified as

32. Treasury bonds are exposed to additional risks that are included

reinvestment risk
interest rate risk
investment risk
Both A and B

Detailed SolutionTreasury bonds are exposed to additional risks that are included

33. In financial markets, period of maturity within one to five years of financial instruments is classified as

short-term
long-term
intermediate term
capital term

Detailed SolutionIn financial markets, period of maturity within one to five years of financial instruments is classified as

34. Which of the following short term securities is inappropriate for an individual, desiring funds for financial emergencies?

treasury bills
certificates of deposit
financial futures
savings accounts

Detailed SolutionWhich of the following short term securities is inappropriate for an individual, desiring funds for financial emergencies?

35. One of the statements given below provides evidence for the semi-strongly efficient form.

Low P/E ratio effect
The size effect
Effect on the stock split
Weekend effect

Detailed SolutionOne of the statements given below provides evidence for the semi-strongly efficient form.

36. Pre-emptive right of common stockholders are necessarily included in company

laws
purchase chart
corporate charter
selling charter

Detailed SolutionPre-emptive right of common stockholders are necessarily included in company

37. rate which is divided by compounding periods to calculate periodic rate must be

annuity return
deferred annuity return
nominal rate
semi-annual discount rate

Detailed Solutionrate which is divided by compounding periods to calculate periodic rate must be

38. Net income is Rs 2250 and noncash charges are Rs 1150 then net cash flow would be

Rs 1,100.00
Rs 3,400.00
Rs 2,200.00
Rs 3,500.00

Detailed SolutionNet income is Rs 2250 and noncash charges are Rs 1150 then net cash flow would be

39. If future return on common stock is 19% and rate on T-bonds is 11% then current market risk premium will be

Rs 30.00
30.00%
8.00%
Rs 8.00

Detailed SolutionIf future return on common stock is 19% and rate on T-bonds is 11% then current market risk premium will be

40. In call provision, it is stated that company will pay to issue an amount

higher than par value
lower than par value
equal to par value
zero to par value

Detailed SolutionIn call provision, it is stated that company will pay to issue an amount

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