Financial management

31. If payment of security is paid as Rs 100 at end of year for three years, it is an example of

fixed payment investment
lump sum amount
fixed interval investment
annuity

Detailed SolutionIf payment of security is paid as Rs 100 at end of year for three years, it is an example of

32. Investors seeking to avoid actively managing their portfolios will prefer which of the following assets?

Common stock
Commercial bank deposits
Financial futures
Real estate

Detailed SolutionInvestors seeking to avoid actively managing their portfolios will prefer which of the following assets?

33. Business risk can be measured by:

Financial leverage
Operating leverage
Combined leverage
None of the above

Detailed SolutionBusiness risk can be measured by:

34. Which of the following is not a motive to hold cash?

Transactionary Motive
Precautionary Motive
Capital Investment
None of the above

Detailed SolutionWhich of the following is not a motive to hold cash?

35. Rate of required return by debt holders is used for estimation the

cost of debt
cost of equity
cost of internal capital
cost of reserve assets

Detailed SolutionRate of required return by debt holders is used for estimation the

36. An increasing in interest rate leads to decline in value of

junk bonds
outstanding bonds
standing bonds
premium bonds

Detailed SolutionAn increasing in interest rate leads to decline in value of

37. In expected future returns, tighter probability distribution shows risk on given investment which is

smaller
greater
less risky
highly risky

Detailed SolutionIn expected future returns, tighter probability distribution shows risk on given investment which is

38. Payment of security if it is made at end of each period such as beginning of year is classified as

annuity due
payment fixed series
ordinary annuity
deferred annuity

Detailed SolutionPayment of security if it is made at end of each period such as beginning of year is classified as

39. Market in which bonds are traded over-the-counter than in an organized exchange is classified as

organized markets
trade markets
counter markets
bond markets

Detailed SolutionMarket in which bonds are traded over-the-counter than in an organized exchange is classified as

40. An internal rate of return in capital budgeting can be modified to make it representative of

relative outflow
relative inflow
relative cost
relative profitability

Detailed SolutionAn internal rate of return in capital budgeting can be modified to make it representative of

Page 1Page 2Page 3Page 4Page 5
Test 1Test 2Test 3Test 4Test 5Test 6Test 7Test 8Test 9Test 10Test 11Test 12Test 13Test 14Test 15Test 16Test 17Test 18Test 19Test 20Test 21Test 22Test 23