Financial management

41. Financial security issues by major banks and risk depends on strength of issuer is classified as

negotiable certificate of deposit
mutual funds
U.S treasury bills
commercial paper

Detailed SolutionFinancial security issues by major banks and risk depends on strength of issuer is classified as

42. After-the-fact rate of return often consider as realized or actual can be denoted

s hat r
r bar s
r hat s
s bar r

Detailed SolutionAfter-the-fact rate of return often consider as realized or actual can be denoted

43. If ‘r’ = ‘ke’, than MP by Walter’s Model and Gordon’s Model for different payout ratios would be:

Unequal
Zero
Equal
Negative

Detailed SolutionIf ‘r’ = ‘ke’, than MP by Walter’s Model and Gordon’s Model for different payout ratios would be:

44. Firms that specialize in helping companies raise capital by selling securities are called ________.

commercial banks
investment banks
savings banks
credit unions

Detailed SolutionFirms that specialize in helping companies raise capital by selling securities are called ________.

45. __________ is the most important investment decision because it determines the risk-return characteristics of the portfolio.

Hedging
Market timing
Performance measurement
Asset allocation

Detailed Solution__________ is the most important investment decision because it determines the risk-return characteristics of the portfolio.

46. Formula such as net income available for common stockholders divided by total assets is used to calculate

return on total assets
return on total equity
return on debt
return on sales

Detailed SolutionFormula such as net income available for common stockholders divided by total assets is used to calculate

47. In investment returns, a received amount is subtracted from an invested amount which is used to calculate

dollar received
dollar return
dollar invested
return percentage

Detailed SolutionIn investment returns, a received amount is subtracted from an invested amount which is used to calculate

48. Legal document in which rights of issuing corporation and bondholder’s state is classified as

legal rights classification
indenture
ownership statement
guarantee statement

Detailed SolutionLegal document in which rights of issuing corporation and bondholder’s state is classified as

49. Second mortgages pledged against bond’s security are referred as

loan mortgages
medium mortgages
senior mortgages
junior mortgages

Detailed SolutionSecond mortgages pledged against bond’s security are referred as

50. Cost of Redeemable Preference Share Capital is:

Rate of Dividend
After Tax Rate of Dividend
Discount Rate that equates PV of inflows and outflows relating to capital
None of the above

Detailed SolutionCost of Redeemable Preference Share Capital is:

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