Financial management Archives

41. Nominal rate which is quoted to consumers on loans is considered as

annual percentage rate

annual rate of return

loan rate of return

local rate of return

Detailed SolutionNominal rate which is quoted to consumers on loans is considered as

42. Trading place where traders meet one another to communicate is classified as

outcry auction system

outcry system

face to face communication

money communication

Detailed SolutionTrading place where traders meet one another to communicate is classified as

43. The value of a derivative security _______.

depends on the value of the related primitive security

can only cause increased risk

is unrelated to the value of the related primitive security

is worthless today

Detailed SolutionThe value of a derivative security _______.

44. Which of the following is incorrect for value of the firm?

In the initial preposition, MM Model argues that value is independent of the financing mix

Total value of levered and unlevered firms is otherwise arbitrage will take place

Total value incorporates borrowings by firm but excludes personal borrowing

Total value does not change because underlying does not change with financing mix

Detailed SolutionWhich of the following is incorrect for value of the firm?

45. A modified internal rate of return is considered as present value of costs and is equal to

PV of hurdle rate

FV of hurdle rate

PV of terminal value

FV of terminal value

Detailed SolutionA modified internal rate of return is considered as present value of costs and is equal to

46. Stocks which has high book for market ratio are considered as

more risky

less risky

pessimistic

optimistic

Detailed SolutionStocks which has high book for market ratio are considered as

47. Physical location exchange or telephone networks are types of

long-term markets

secondary markets

money markets

capital markets

Detailed SolutionPhysical location exchange or telephone networks are types of

48. In balance sheet, sum of retained earnings and common stock are considered as

preferred equity

due equity

common perpetuity

common equity

Detailed SolutionIn balance sheet, sum of retained earnings and common stock are considered as

49. If two independent projects having hurdle rate then both projects should

be accepted

not be accepted

have capital acceptance

have return rate acceptance

Detailed SolutionIf two independent projects having hurdle rate then both projects should

50. Cash inflows are revenues of project and are represented by

hurdle number

relative number

negative numbers

positive numbers

Detailed SolutionCash inflows are revenues of project and are represented by

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