Financial management

41. A major difference between real and nominal returns is that_______________.

real returns adjust for inflation and nominal returns do not
real returns use actual cash flows and nominal returns use expected cash flows
real returns adjust for commissions and nominal returns do not
real returns show the highest possible return and nominal returns show the lowest possible return

Detailed SolutionA major difference between real and nominal returns is that_______________.

42. Future value of interest if it is calculated once a year is classified as

One time compounding
annual compounding
semi-annual compounding
monthly compounding

Detailed SolutionFuture value of interest if it is calculated once a year is classified as

43. Yield of interest rate which is below than coupon rate, this yield is classified as

yield to maturity
yield to call
yield to earning
yield to investors

Detailed SolutionYield of interest rate which is below than coupon rate, this yield is classified as

44. If a firm has no preference share capital, financial break-even level is defined as equal to:

EBIT
Interest liability
Equity dividend
Tax liability

Detailed SolutionIf a firm has no preference share capital, financial break-even level is defined as equal to:

45. The return relative solves the problem of______________.

inflation
negative returns
interest rates
tax differences

Detailed SolutionThe return relative solves the problem of______________.

46. Prices of bonds will be increased if interest rates

equals
lump sum declines
rises
declines

Detailed SolutionPrices of bonds will be increased if interest rates

47. Periodic rate if it is multiplied with per year number of compounding periods is called

extrinsic rate of return
intrinsic rate of return
annual rate of return
nominal annual rate

Detailed SolutionPeriodic rate if it is multiplied with per year number of compounding periods is called

48. In order to calculate EPS, Profit after Tax and Preference Dividend is divided by:

MP of Equity Shares
Number of Equity Shares
Face Value of Equity Shares
None of the above

Detailed SolutionIn order to calculate EPS, Profit after Tax and Preference Dividend is divided by:

49. The company’s cost of capital is called ________.

Leverage
Hurdle rate
Risk rate
Return rate

Detailed SolutionThe company’s cost of capital is called ________.

50. Other factors held constant, greater project liquidity is because of

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

Detailed SolutionOther factors held constant, greater project liquidity is because of

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