Financial management

41. Formula written as 0.67(Historical Beta) + 0.35(1.0) is used to calculate

historical betas
adjusted betas
standard betas
varied betas

Detailed SolutionFormula written as 0.67(Historical Beta) + 0.35(1.0) is used to calculate

42. Present value of dividends which is expected to be provided in future is classified as an

intrinsic value of stock
extrinsic value of stock
intrinsic bonds
extrinsic bonds

Detailed SolutionPresent value of dividends which is expected to be provided in future is classified as an

43. For investors, steeper slope of indifference curve shows more

risk averse investor
risk taker investor
in differential investor
ineffective investment

Detailed SolutionFor investors, steeper slope of indifference curve shows more

44. According to capital asset pricing model assumptions, variances, expected returns and covariance of all assets are

identical
not identical
fixed
variable

Detailed SolutionAccording to capital asset pricing model assumptions, variances, expected returns and covariance of all assets are

45. Which of the following would not be considered as capital market security?

A corporate bond
A common stock
A 6-month Treasury bill
A mutual fund share

Detailed SolutionWhich of the following would not be considered as capital market security?

46. Which of the following is true of Net Income Approach?

VF = VE + VD
VE = VF + VD
VD = VF + VE
VF = VE - VD

Detailed SolutionWhich of the following is true of Net Income Approach?

47. Other factors held constant, but lesser project liquidity is because of

shorter payback period
greater payback period
less project return
greater project return

Detailed SolutionOther factors held constant, but lesser project liquidity is because of

48. Effective cost of debentures is _________ as compared to shares.

higher
lower
equal
medium

Detailed SolutionEffective cost of debentures is _________ as compared to shares.

49. A company may raise capital from the primary market through _____________.

Public issue
Rights issue
Bought out deals
All of the above

Detailed SolutionA company may raise capital from the primary market through _____________.

50. In estimating value of cash flows, compounded future value is classified as its

terminal value
existed value
quit value
relative value

Detailed SolutionIn estimating value of cash flows, compounded future value is classified as its

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