Financial management Archives - Page 4 of 112 - MCQ and Quiz for Exams

31. Case in which average investors risk aversion is greater than slope of line and risk premium respectively is

steeper, greater

steeper, smaller

steeper, zero

Both A and B

Detailed SolutionCase in which average investors risk aversion is greater than slope of line and risk premium respectively is

32. The decision function of financial management can be broken down into the__________ decisions.

financing and investment

investment, financing, and asset management

financing and dividend

capital budgeting, cash management, and credit management

Detailed SolutionThe decision function of financial management can be broken down into the__________ decisions.

33. A company who issues bonds or stocks in result raised funds which finally

increases liabilities

increases equity

increases cash

decreases cash

Detailed SolutionA company who issues bonds or stocks in result raised funds which finally

34. Project whose cash flows are sufficient to repay capital invested for rate of return then net present value will be

negative

zero

positive

independent

Detailed SolutionProject whose cash flows are sufficient to repay capital invested for rate of return then net present value will be

35. International investing is________________.

is only practical for institutional investors

increases the overall risk of a stock portfolio

always leads to higher returns than a domestic portfolio

can reduce risk due to increased diversification

Detailed SolutionInternational investing is________________.

36. Marketable securities are primarily:

Equity shares

Preference shares

Fixed deposits with companies

Short-term debt investments

Detailed SolutionMarketable securities are primarily:

37. Traditional theorists believe that.

there exists an optimal capital structure

no optimal capital structure

equal optimal capital structure

100% debt financial organizations

Detailed SolutionTraditional theorists believe that.

38. If the Real rate of return is 10% and Inflation rate is 40%, then Money Discount Rate is:

14.40%

2.50%

25%

14%

Detailed SolutionIf the Real rate of return is 10% and Inflation rate is 40%, then Money Discount Rate is:

39. Stocks in market portfolio are graphically represented with

dashed line

straight line

market line

risk line

Detailed SolutionStocks in market portfolio are graphically represented with

40. In capital asset pricing model, investors assume that buying and selling activity will

affect stock prices

not affect stock prices

have high taxes

high transaction cost

Detailed SolutionIn capital asset pricing model, investors assume that buying and selling activity will

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