Financial management

41. Stock option is more worthwhile if it is

extremely volatile
less volatile
stable stock
unstable price stock

Detailed SolutionStock option is more worthwhile if it is

42. In option pricing, an increasing in option price due to

time of expiry increases
time of expiry decreases
exchange time increases
exchange time decreases

Detailed SolutionIn option pricing, an increasing in option price due to

43. In expected rate of return for constant growth, expected total rate of return is equal to

buying pricing
dividend yield
rate of return
selling pricing

Detailed SolutionIn expected rate of return for constant growth, expected total rate of return is equal to

44. Stock with large amount of contribution of risk in a diversified portfolio is represented by

high beta and standard deviation
high beta, low standard deviation
low beta, low standard deviation
low beta, low variance

Detailed SolutionStock with large amount of contribution of risk in a diversified portfolio is represented by

45. Commercial paper is a type of:

Fixed coupon Bond
Unsecured short-term debt
Equity share capital
Government Bond

Detailed SolutionCommercial paper is a type of:

46. Type of partnership in which liabilities are limited for business owners is classified as

unlimited partnership
limited partnership
joint corporate
joint venture

Detailed SolutionType of partnership in which liabilities are limited for business owners is classified as

47. Financial security with low degree risk and investment held by businesses is classified as

treasury bills
commercial paper
negotiable certificate of deposit
money market mutual funds

Detailed SolutionFinancial security with low degree risk and investment held by businesses is classified as

48. Required return is 11% and premium for risk is 8% then risk free return will be

3.00%
19.00%
0.72%
1.38%

Detailed SolutionRequired return is 11% and premium for risk is 8% then risk free return will be

49. Minimum Rate of Return that a firm must earn in order to satisfy its investors, is also known as:

Average Return on Investment
Weighted Average Cost of Capital
Net Profit Ratio
Average Cost of borrowing

Detailed SolutionMinimum Rate of Return that a firm must earn in order to satisfy its investors, is also known as:

50. In lease system, interest is calculated on:

Cash down payment
Cash price outstanding
Hire purchase price
None of the above

Detailed SolutionIn lease system, interest is calculated on:

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