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Sunday, September 26, 2010 Posted In Edit This

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Sunday, September 26, 2010 Posted In Edit This


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NOTE:
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Sunday, September 26, 2010 Posted In Edit This

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Thanks to visit us.

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Mgt201 Online Quiz

Sunday, September 12, 2010 Posted In Edit This
Question # 1 of 15 ( Start time: 09:14:05 PM ) Total Marks: 1 
When the bond approaches its maturity, the market value of the bond approaches to which of the following? 
Select correct option: 

Intrinsic value 
Book value 
Par value (Correct)
Historic cost 

Question # 2 of 15 ( Start time: 09:14:35 PM ) Total Marks: 1 
Which of the following refers to the risk associated with interest rate uncertainty? 
Select correct option: 

Default risk premium (Correct)
Sovereign Risk Premium 
Market risk premium 
Maturity risk premium 


Question # 3 of 15 ( Start time: 09:15:38 PM ) Total Marks: 1 
When the zero coupon bond approaches to its maturity, the market value of the bond approaches to which of the following? 
Select correct option: 

Intrinsic value 
Book value (Correct)
Par value 
Historic cost 



Question # 4 of 15 ( Start time: 09:17:00 PM ) Total Marks: 1 
What is difference between shares and bonds? 
Select correct option: 

Bonds are representing ownership whereas shares are not 
Shares are representing ownership whereas bonds are not (Correct)
Shares and bonds both represent equity 
Shares and bond both represent liabilities 


mc090401219: Question # 5 of 15 ( Start time: 09:18:04 PM ) Total Marks: 1 
Effective interest rate is different from nominal rate of interest because: 
Select correct option: 

Nominal interest rate ignores compounding 
Nominal interest rate includes frequency of compounding (Correct)
Periodic interest rate ignores the effect of inflation 
All of the given options 


Question # 6 of 15 ( Start time: 09:18:48 PM ) Total Marks: 1 
Which of the following refers to a highly competitive market where good business ideas are taken up immediately? 
Select correct option: 

Capital market 
Efficient market (Correct)
Money market 
Real asset market 


Question # 7 of 15 ( Start time: 09:20:10 PM ) Total Marks: 1 
A technique that tells us the number of years required to recover our initial cash investment based on the project’s expected cash flows is: 
Select correct option: 

Pay back period (Correct)
Internal rate of return 
Net present value 
Profitability index 

Question # 8 of 15 ( Start time: 09:21:01 PM ) Total Marks: 1 
Which of the following can not be the drawback of using payback period technique of capital budgeting? 
Select correct option: 

It does not account for time value of money (Correct)
It neglects cash flows after the payback period 
It does not use interest rate while making calculations 
It is a tricky and complicated method 


Question # 9 of 15 ( Start time: 09:22:03 PM ) Total Marks: 1 
Which of the following allows to graphically depicting the timing of the cash flows as well as their nature as either inflows or outflows? 
Select correct option: 

Cash flow diagram (Correct)
Cash budget 
Cash flow statement 
None of the given options 

Question # 10 of 15 ( Start time: 09:22:45 PM ) Total Marks: 1 
Which of the following statements is TRUE regarding Permanent Accounts? 
Select correct option: 

Accounts that are found on Income Statement 
Accounts that are found on Statement of Retained Earnings 
Accounts that are found on Balance Sheet 
All of the given options 

Question # 11 of 15 ( Start time: 09:24:06 PM ) Total Marks: 1 
The statement of cash flows reports a firm's cash flows segregated into which of the following categorical order? 
Select correct option: 

Operating, investing, and financing 
Investing, operating, and financing (Correct)
Financing, operating and investing 
Financing, investing, and operating 


Question # 12 of 15 ( Start time: 09:25:15 PM ) Total Marks: 1 
Which of the following needs to be excluded while we calculate the incremental cash flows? 
Select correct option: 

Depreciation 
Sunk cost (Correct)
Opportunity cost 
Non-cash item 

Question # 13 of 15 ( Start time: 09:26:33 PM ) Total Marks: 1 
Which of the following is a capital budgeting technique that is NOT considered as discounted cash flow method? 
Select correct option: 

Payback period (Correct)
Internal rate of return 
Net present value 
Profitability index 

Question # 14 of 15 ( Start time: 09:27:40 PM ) Total Marks: 1 
The value of a bond is directly derived from which of the following? 
Select correct option: 

Cash flows 
Coupon receipts (Correct)
Par recovery at maturity 
All of the given options 

Question # 14 of 15 ( Start time: 09:27:40 PM ) Total Marks: 1 
The value of a bond is directly derived from which of the following? 
Select correct option: 

Cash flows 
Coupon receipts (Correct)
Par recovery at maturity 
All of the given options 
--------------------------------------------------------------------------


Question # 1 of 15 ( Start time: 09:32:06 PM ) Total Marks: 1
A technique that tells us the number of years required to recover our initial cash investment based on the project’s expected cash flows is:
Select correct option:
Pay back period (Correct)
Internal rate of return
Net present value
Profitability index


Question # 2 of 15 ( Start time: 09:33:11 PM ) Total Marks: 1
Which of the following is NOT an example of a financial intermediary?
Select correct option:
Wisconsin S&L, a savings and loan association
Strong Capital Appreciation, a mutual fund
Microsoft Corporation, a software firm (Correct)
College Credit, a credit union


Question # 3 of 15 ( Start time: 09:33:49 PM ) Total Marks: 1
When a bond will sell at a discount?
Select correct option:
The coupon rate is greater than the current yield and the current yield is greater than yield to maturity
The coupon rate is greater than yield to maturity
The coupon rate is less than the current yield and the current yield is greater than the yield to maturity
The coupon rate is less than the current yield and the current yield is less than yield to maturity (Correct)


Question # 4 of 15 ( Start time: 09:34:34 PM ) Total Marks: 1
When bonds are issued, under which of the following category the value of the bond appears?
Select correct option:
Equity
Fixed assets
Short term loan
Long term loan (Correct)

Question # 5 of 15 ( Start time: 09:35:06 PM ) Total Marks: 1
Which of the following can not be the drawback of using payback period technique of capital budgeting?
Select correct option:
It does not account for time value of money
It neglects cash flows after the payback period
It does not use interest rate while making calculations
It is a tricky and complicated method (Correct)


Question # 6 of 15 ( Start time: 09:35:46 PM ) Total Marks: 1
An investment proposal should be judged in whether or not it provides:
Select correct option:
A return equal to the return require by the investor
A return more than required by investor (Correct)
A return less than required by investor
A return equal to or more than required by investor

Question # 7 of 15 ( Start time: 09:36:51 PM ) Total Marks: 1
Which of the following is a major disadvantage of the corporate form of organization?
Select correct option:
Double taxation of dividends (Correct)
Inability of the firm to raise large sums of additional capital
Limited liability of shareholders
Limited life of the corporate form


Question # 8 of 15 ( Start time: 09:37:49 PM ) Total Marks: 1
Which of the following is NOT an example of hybrid equity
Select correct option:
Convertible Bonds
Convertible Debenture
Common shares (Correct)
Preferred shares


Question # 9 of 15 ( Start time: 09:38:55 PM ) Total Marks: 1
Which of the following is/are the component(s) of working capital management?
Select correct option:
Current assets (Correct)
Fixed assets
Fixed assets and long-term liabilities
Current assets and current liabilities


Question # 10 of 15 ( Start time: 09:40:18 PM ) Total Marks: 1
Which of the following statements (in general) is correct?
Select correct option:
A low receivables turnover is desirable
The lower the total debt-to-equity ratio, the lower the financial risk for a firm (Correct)
An increase in net profit margin with no change in sales or assets means a weaker ROI
The higher the tax rate for a firm, the lower the interest coverage ratio


Question # 11 of 15 ( Start time: 09:41:43 PM ) Total Marks: 1
What should be the focal point of financial management in a firm?
Select correct option:
The number and types of products or services provided by the firm
The minimization of the amount of taxes paid by the firm
The creation of value for shareholders
The dollars profits earned by the firm(Correct)


Question # 12 of 15 ( Start time: 09:42:43 PM ) Total Marks: 1
With continuous compounding at 8 percent for 20 years, what is the approximate future value of a Rs. 20,000 initial investment?
Select correct option:
Rs.52,000
Rs.93,219 (Correct)
Rs.99,061
Rs.915,240

Question # 13 of 15 ( Start time: 09:43:14 PM ) Total Marks: 1
Who or what is a person or institution designated by a bond issuer as the official representative of the bondholders?
Select correct option:
Indenture
Debenture
Bond
Bond trustee (Correct)


Question # 14 of 15 ( Start time: 09:44:04 PM ) Total Marks: 1
Which of the following is FALSE about Perpetuity?
Select correct option:
It is a series of cash flows
Cash flows occur for a specific time period
Its cash flows are identical (Correct)
None of the given options


Question # 15 of 15 ( Start time: 09:45:14 PM ) Total Marks: 1
Which of the following refers to bringing the future cash flow to the present time?
Select correct option:
Net present value
Discounting (Correct)
Opportunity cost
Internal rate of return

----------------------------------------------------------------------------------------------------------

Question # 1 of 15 ( Start time: 09:49:12 PM ) Total Marks: 1
Given no change in required returns, the price of a stock whose dividend is constant will________.
Select correct option:
Decrease over time at a rate of r%
Remain unchanged (Correct)
Increase over time at a rate of r%
Decrease over time at a rate equal to the dividend growth rate

Question # 2 of 15 ( Start time: 09:50:02 PM ) Total Marks: 1
Which of the following refers to a highly competitive market where good business ideas are taken up immediately?
Select correct option:
Capital market
Efficient market (Correct)
Money market
Real asset market

Virtual: 2

zahid.famous: 2

saadkhan545: Question # 3 of 15 ( Start time: 09:50:40 PM ) Total Marks: 1
Which of the following is the Double Entry Principle?
Select correct option:
Assets + Liabilities = Shareholders’ Equity 
Assets = Liabilities + Shareholders’ Equity
Liabilities = Assets + Shareholders’ Equity (Correct)
None of the given options

Question # 4 of 15 ( Start time: 09:51:21 PM ) Total Marks: 1
Which of the following equation is NOT correct?
Select correct option:
Gross Revenue – Admin & Operating Expenses = Operating Revenue
Other Expenses + Other Revenue = EBIT (Correct)
EBIT – Financial Charges & Interest = EBT
Net Income – Dividends = Retained Earning

Question # 5 of 15 ( Start time: 09:52:38 PM ) Total Marks: 1
With continuous compounding at 8 percent for 20 years, what is the approximate future value of a Rs. 20,000 initial investment?
Select correct option:
Rs.52,000
Rs.93,219 (Correct)
Rs.99,061
Rs.915,240
5:53 PM 

Question # 6 of 15 ( Start time: 09:54:01 PM ) Total Marks: 1
To increase a given future value, the discount rate should be adjusted ________.
Select correct option:
Upward
Downward (Correct)
First upward and then downward
None of the given options

Question # 7 of 15 ( Start time: 09:55:36 PM ) Total Marks: 1
Which of the following value of the shares changes with investor’s perception about the company’s future and supply and demand situation?
Select correct option:
Par value
Market value (Correct)
Intrinsic value
Face value

Question # 8 of 15 ( Start time: 09:57:06 PM ) Total Marks: 1
Which of the following refers to time value of money concept?
Select correct option:
A rupee in one’s hand at present is worth less than the rupee that one is going to receive tomorrow (Correct)
A rupee in one’s hand at present is worth more than the rupee that one is going to receive tomorrow
A rupee in one’s hand at present is worth same as the rupee that one is going to receive tomorrow
All of the given options


Question # 9 of 15 ( Start time: 09:57:59 PM ) Total Marks: 1
Which of the following is NOT true regarding an ordinary annuity?
Select correct option:
It is a series of equal cash flows
Cash flows occur for a specific time period (Correct)
Payments are made at the start of each period
It is also known as deferred annuity

Question # 10 of 15 ( Start time: 09:58:47 PM ) Total Marks: 1
Which of the following includes the planning, directing, monitoring, organizing, and controlling of the monetary resources of an organization?
Select correct option:
Financial accounting
Financial management (Correct)
Financial engineering
Financial budgeting
5:59 PM 

Question # 11 of 15 ( Start time: 09:59:08 PM ) Total Marks: 1
Which of the following is FALSE about Perpetuity?
Select correct option:
It is a series of cash flows
Cash flows occur for a specific time period
Its cash flows are identical (Correct)
None of the given options

Question # 12 of 15 ( Start time: 10:00:31 PM ) Total Marks: 1
Which of the following term may be defined as incidental cash flows that arise because of the effect of new project on the running business?
Select correct option:
Sunk cost
Opportunity cost
Externalities (Correct)
Contingencies

Question # 13 of 15 ( Start time: 10:01:09 PM ) Total Marks: 1
What is the present value of Rs. 3,500,000 to be paid at the end of 50 years if the correct risk adjusted interest rate is 18%?
Select correct option:
Rs.105,000
Rs.1,500,000
Rs.3975,000
Rs. 350,000


saadkhan545: Question # 14 of 15 ( Start time: 10:02:19 PM ) Total Marks: 1
Which if the following refers to capital budgeting?
Select correct option:
Investment in long-term liabilities (Correct)
Investment in fixed assets
Investment in current assets
Investment in short-term liabilities

Question # 15 of 15 ( Start time: 10:03:16 PM ) Total Marks: 1
An annuity due is always worth ___ a comparable annuity.
Select correct option:
Less than
More than (Correct)
Equal to
Can not be found from the given information

----------------------------------------------------------------------------------------------------------


Question # 1 of 15 ( Start time: 10:22:47 PM ) Total Marks: 1
The statement of cash flows reports a firm's cash flows segregated into which of the following categorical order?
Select correct option:
Operating, investing, and financing
Investing, operating, and financing (Correct)
Financing, operating and investing
Financing, investing, and operating

Question # 2 of 15 ( Start time: 10:23:52 PM ) Total Marks: 1
When a bond will sell at a discount?
Select correct option:
The coupon rate is greater than the current yield and the current yield is greater than yield to maturity
The coupon rate is greater than yield to maturity
The coupon rate is less than the current yield and the current yield is greater than the yield to maturity
The coupon rate is less than the current yield and the current yield is less than yield to maturity (Correct)

Question # 3 of 15 ( Start time: 10:24:25 PM ) Total Marks: 1
If Net Present Value technique is used, what is the minimum acceptance criterion for a project?
Select correct option:
NPV<0
NPV=0
NPV>0
NPV<=0 (Correct)

Question # 4 of 15 ( Start time: 10:25:44 PM ) Total Marks: 1
Which if the following refers to capital budgeting?
Select correct option:
Investment in long-term liabilities
Investment in fixed assets (Correct)
Investment in current assets
Investment in short-term liabilities

Question # 5 of 15 ( Start time: 10:26:13 PM ) Total Marks: 1
Which of the following is FALSE about Perpetuity?
Select correct option:
It is a series of cash flows
Cash flows occur for a specific time period
Its cash flows are identical (Correct)
None of the given options

---------------------------------------------------------------------------------------

Question # 1 of 15 ( Start time: 10:37:35 PM ) Total Marks: 1
What are the three classes of factors that influence perception?
Select correct option:
Factors in the setting, factors in the environment and factors in the motives
Factors in the perceiver, factors in the target and factors in the situation
Factors in the character, factors in knowledge and factors in experience
Factors in the personality, factors in the character and factors in the values


Question # 6 of 15 ( Start time: 10:39:02 PM ) Total Marks: 1 
Characteristics such as age, gender and marital status are known as _______________ 
Select correct option: 

Psychographic characteristics 
Biographical characteristics 
Geographical characteristics 
Behavioral characteristics


Question # 2 of 15 ( Start time: 10:39:05 PM ) Total Marks: 1
What is the term used for a general impression about an individual based on a single characteristic such as intelligence, sociability, or appearance?
Select correct option:
The contrast effect
Personal bias
The halo effect (Correct)
Projection


Question # 3 of 15 ( Start time: 10:40:25 PM ) Total Marks: 1
Ability to understand what is read or heard and the relationship of words to each other is called ___________
Select correct option:
Verbal comprehension (Correct)
Non verbal comprehension
Perceptual speed
Memory


Question # 8 of 15 ( Start time: 10:40:50 PM ) Total Marks: 1 
Which of the following is true of people with a Type A personality? 
Select correct option: 

They are generally content with their place in the world 
They generally feel little need to discuss their achievements 
They are easy going and relaxed that’s why take no tension of work 
They have an intense desire to achieve and are extremely competitive (Correct)


Question # 4 of 15 ( Start time: 10:41:19 PM ) Total Marks: 1
A person or ***** with a direct interest, involvement, or investment in organization is called ____________.
Select correct option:
Shareholder (Correct)
Stakeholder
Stockholder
Patron

Question # 5 of 15 ( Start time: 10:42:18 PM ) Total Marks: 1
If a person responds the same way over time, attribution theory states that the behavior shows:
Select correct option:
Distinctiveness
Consensus
Consistency (Correct)
Continuity


Question # 6 of 15 ( Start time: 10:43:45 PM ) Total Marks: 1
_________ focuses on the study of people in relation to their social environment.
Select correct option:
Psychology
Sociology (Correct)
Corporate strategy
Political science

Question # 7 of 15 ( Start time: 10:45:13 PM ) Total Marks: 1
Which of the following term is used to describe broad range of feelings that people experience?
Select correct option:
Mood (Correct)
Affect
Emotion
Emotional Intelligence


Question # 8 of 15 ( Start time: 10:46:41 PM ) Total Marks: 1
Hanif is dissatisfied with his job but believes that his supervisor is a good man who will do the right thing. Hanif has decided that if he just waits, conditions will improve. Henry’s approach to this problem is termed as:
Select correct option:
Exit
Voice
Loyalty
Neglect (Correct)

Question # 9 of 15 ( Start time: 10:48:11 PM ) Total Marks: 1
Job satisfaction is best described as __________.
Select correct option:
A result
A value
An attitude (Correct)
A discipline


Question # 10 of 15 ( Start time: 10:49:37 PM ) Total Marks: 1
Which of the following theory is proposed by Clayton Alderfer?
Select correct option:
Theory X and Theory Y
Hierarchy of Needs
ERG Theory (Correct)
Theory Z


Question # 11 of 15 ( Start time: 10:50:24 PM ) Total Marks: 1
Robert Katz identified three essential skills that managers need to have in order to reach their goals. What are these skills?
Select correct option:
Technical, decisional and interpersonal (Correct)
Technical, human, and conceptual
Interpersonal, informational and decisional
Conceptual, communication and networking


Question # 12 of 15 ( Start time: 10:51:47 PM ) Total Marks: 1
One of the shortcuts used to judge others involves evaluating a person based on how he/she compares to other individuals on the same characteristic. What is this shortcut called?
Select correct option:
Selective perception
The contrast effect
The halo effect (Correct)
Stereotyping

Question # 13 of 15 ( Start time: 10:52:24 PM ) Total Marks: 1
Which of the following factors make it imperative that organizations be fast and flexible?
Select correct option:
Temporariness
Corporate excess
Advances in corporate strategy
Globalization

Question # 14 of 15 ( Start time: 10:53:58 PM ) Total Marks: 1
When Job satisfaction is increased, absenteeism tends to:
Select correct option:
Increase
Decrease
Have no effect
None of the above

Question # 15 of 15 ( Start time: 10:54:48 PM ) Total Marks: 1
Difficulty in expressing emotions by an individual and understanding other's emotions is termed as:
Select correct option:
Anemia
Thalassemia
Alexithymia
Myopia

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Question # 1 of 15 ( Start time: 10:58:08 PM ) Total Marks: 1 
What is the present value of Rs.8,000 to be paid at the end of three years if interest rate is 11%? 
Select correct option: 

Rs.6,015 
Rs.4,872 
Rs.6,725 
Rs.1,842
6:59 PM 


Question # 3 of 15 ( Start time: 11:00:17 PM ) Total Marks: 1 
The logic behind _______ is that instead of looking at net cash flows you look at cash inflows and outflows separately for each point in time. 
Select correct option: 

IRR 
MIRR (Correct)
PV 
NPV

Question # 5 of 15 ( Start time: 11:02:10 PM ) Total Marks: 1 
_______ is equal to (common shareholders' equity/common shares outstanding). 
Select correct option: 

Book value per share 
Liquidation value per share (Correct)
Market value per share 
None of the above


Question # 7 of 15 ( Start time: 11:03:42 PM ) Total Marks: 1 
Discounted cash flow methods provide a more objective basis for evaluating and selecting an investment project. These methods take into account: 
Select correct option: 

Magnitude of expected cash flows 
Timing of expected cash flows 
Both timing and magnitude of cash flows 
None of the given options


Question # 7 of 15 ( Start time: 11:03:42 PM ) Total Marks: 1 
Discounted cash flow methods provide a more objective basis for evaluating and selecting an investment project. These methods take into account: 
Select correct option: 

Magnitude of expected cash flows 
Timing of expected cash flows 
Both timing and magnitude of cash flows 
None of the given options


Question # 8 of 15 ( Start time: 11:04:28 PM ) Total Marks: 1 
Which of the following allows to graphically depicting the timing of the cash flows as well as their nature as either inflows or outflows? 
Select correct option: 

Cash flow diagram 
Cash budget 
Cash flow statement 
None of the given options (Correct)


Question # 9 of 15 ( Start time: 11:05:08 PM ) Total Marks: 1 
Which of the following is/are the characteristic(s) of Perpetuity? 
Select correct option: 

It is an annuity 
It has no definite end (Correct)
It is a constant stream of identical cash flows 
All of the given options



Question # 10 of 15 ( Start time: 11:06:02 PM ) Total Marks: 1 
What type of long-term financing most likely has the following features: 1) it has an infinite life, 2) it pays dividends, and 3) its cash flows are expected to be a constant annuity stream? 
Select correct option: 

Long-term debt 
Preferred stock 
Common stock 
None of the given options (Correct)


Question # 11 of 15 ( Start time: 11:06:58 PM ) Total Marks: 1 
What is the most important criteria in capital budgeting? 
Select correct option: 

Return on investment 
Profitability index (Correct)
Net present value 
Pay back period


mehak: Question # 12 of 15 ( Start time: 11:08:07 PM ) Total Marks: 1 
What is the additional amount a borrower must pay to lender to compensate for assuming the risk associated with non-payment? 
Select correct option: 

Default risk premium 
Sovereign Risk Premium (Correct)
Market risk premium 
Maturity risk premium


Question # 13 of 15 ( Start time: 11:08:46 PM ) Total Marks: 1 
What is the present value of Rs.1,000 to be paid at the end of 5 years if the correct risk adjusted interest rate is 8%? 
Select correct option: 

Rs.714 
Rs.1,462 
Rs.322.69 
Rs.401.98


Question # 14 of 15 ( Start time: 11:10:09 PM ) Total Marks: 1 
______ are also known as Spontaneous Financing. 
Select correct option: 

Current liabilities 
Current assets (Correct)
Fixed assets 
Long-term liabilities



Question # 15 of 15 ( Start time: 11:11:06 PM ) Total Marks: 1 
Effective interest rate is different from nominal rate of interest because: 
Select correct option: 

Nominal interest rate ignores compounding 
Nominal interest rate includes frequency of compounding (Correct)
Periodic interest rate ignores the effect of inflation 
All of the given options



Question # 1 of 15 ( Start time: 06:55:34 PM ) Total Marks: 1 
What is yield to maturity on a bond? 
Select correct option: 

Below the coupon rate when the bond sells at a discount, and equal to the coupon rate when the bond sells at a premium 
The discount rate that will set the present value of the payments equal to the bond price 
Based on the assumption that any payments received are reinvested at the coupon rate 
None of the above 




Question # 2 of 15 ( Start time: 06:56:42 PM ) Total Marks: 1 
According to timing difference problem a good project might suffer from _____ IRR even though its NPV is ________. 
Select correct option: 

Higher; lower 
Lower; Lower 
Lower; higher 
Higher; higher 








Quiz Start Time: 06:55 PM Time Left 89 
sec(s) 


Question # 3 of 15 ( Start time: 06:57:21 PM ) Total Marks: 1 
For Company A, plow back ratio is 30%. What will be its Pay-out ratio? 
Select correct option: 

3.33% 
30% 
31% 
70% 










Quiz Start Time: 06:55 PM Time Left 89 
sec(s) 


Question # 4 of 15 ( Start time: 06:58:21 PM ) Total Marks: 1 
The value of a bond is directly derived from which of the following? 
Select correct option: 

Cash flows 
Coupon receipts 
Par recovery at maturity 
All of the given options 










Quiz Start Time: 06:55 PM Time Left 89 
sec(s) 


Question # 5 of 15 ( Start time: 06:58:48 PM ) Total Marks: 1 
________ is paid by companies with lower grade bonds like CC or C ratings. 
Select correct option: 

Default risk premium 
Sovereign Risk Premium 
Market risk premium 
Maturity risk premium 










Quiz Start Time: 06:55 PM Time Left 89 
sec(s) 


Question # 6 of 15 ( Start time: 07:00:18 PM ) Total Marks: 1 
If Net Present Value technique is used, what is the ranking criterion for projects? 
Select correct option: 

Choose the highest NPV 
Choose the lowest NPV 
Choose the project with longest term 
Choose the project with shortest term 









Quiz Start Time: 06:55 PM Time Left 89 
sec(s) 


Question # 7 of 15 ( Start time: 07:00:45 PM ) Total Marks: 1 
Which of the following is a capital budgeting technique that is NOT considered as discounted cash flow method? 
Select correct option: 

Payback period 
Internal rate of return 
Net present value 
Profitability index 










Quiz Start Time: 06:55 PM Time Left 89 
sec(s) 


Question # 8 of 15 ( Start time: 07:01:58 PM ) Total Marks: 1 
The current yield on a bond is equal to ________. 
Select correct option: 

Annual interest divided by the current market price 
The yield to maturity 
Annual interest divided by the par value 
The internal rate of return 










Quiz Start Time: 06:55 PM Time Left 89 
sec(s) 


Question # 9 of 15 ( Start time: 07:03:22 PM ) Total Marks: 1 
Which of the following is likely to be correct for a company which invests in projects with Positive NPV? 
Select correct option: 

Company’s EVA (Economic Value Added) rises by the same value 
Company’s MVA (Market Value Added) or market value rises 
Company Shareholders’ Wealth rises 
All of the given options 










Quiz Start Time: 06:55 PM Time Left 89 
sec(s) 


Question # 10 of 15 ( Start time: 07:04:03 PM ) Total Marks: 1 
Which of the following is NOT true regarding an annuity due? 
Select correct option: 

It is a series of equal cash flows 
It is also known as deferred annuity 
Cash flows occur for a specific time period 
Payments are made at the start of each period 










Quiz Start Time: 06:55 PM Time Left 89 
sec(s) 


Question # 11 of 15 ( Start time: 07:05:15 PM ) Total Marks: 1 
Which of the following is type a Temporary Account? 
Select correct option: 

Asset 
Liability 
Reserves 
Revenue 










Quiz Start Time: 06:55 PM Time Left 89 
sec(s) 


Question # 12 of 15 ( Start time: 07:06:35 PM ) Total Marks: 1 
If we were to increase ABC company cost of equity assumption, what would we expect to happen to the present value of all future cash flows? 
Select correct option: 

An increase 
A decrease 
No change 
Incomplete information 










Quiz Start Time: 06:55 PM Time Left 89 
sec(s) 


Question # 13 of 15 ( Start time: 07:07:47 PM ) Total Marks: 1 
Which of the following refers to the risk associated with interest rate uncertainty? 
Select correct option: 

Default risk premium 
Sovereign Risk Premium 
Market risk premium 
Maturity risk premium 










Quiz Start Time: 06:55 PM Time Left 88 
sec(s) 


Question # 14 of 15 ( Start time: 07:08:32 PM ) Total Marks: 1 
Which of the following statements (in general) is correct? 
Select correct option: 

A low receivables turnover is desirable

The lower the total debt-to-equity ratio, the lower the financial risk for a firm 
An increase in net profit margin with no change in sales or assets means a weaker ROI 
The higher the tax rate for a firm, the lower the interest coverage ratio 











Quiz Start Time: 06:55 PM Time Left 89 
sec(s) 


Question # 15 of 15 ( Start time: 07:09:07 PM ) Total Marks: 1 
With continuous compounding at 8 percent for 20 years, what is the approximate future value of a Rs. 20,000 initial investment? 
Select correct option: 

Rs.52,000 

Rs.93,219 

Rs.99,061 

Rs.915,240



Quiz Start Time: 05:31 PM
Time Left 38
sec(s)
Question # 1 of 15 ( Start time: 05:31:55 PM ) Total Marks: 1
Which of the following is the general assumption of Percent of Sales Forecasting?
Select correct option:
Current Assets usually grow in proportion to Revenues
Current Assets usually grow in proportion to Expenses
Current Assets usually grow in proportion to Liabilities
Current Assets usually grow in proportion to Sales






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 2 of 15 ( Start time: 05:33:20 PM ) Total Marks: 1
In 2 years you are to receive Rs.10,000. If the interest rate were to suddenly decrease, the present value of that future amount to you would __________.
Select correct option:
Fall
Rise
Remain unchanged
Incomplete information






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 3 of 15 ( Start time: 05:33:59 PM ) Total Marks: 1
Effective interest rate is different from nominal rate of interest because:
Select correct option:
Nominal interest rate ignores compounding
Nominal interest rate includes frequency of compounding
Periodic interest rate ignores the effect of inflation
All of the given options






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 4 of 15 ( Start time: 05:35:22 PM ) Total Marks: 1
What is a legal agreement, also called the deed of trust, between the corporation issuing bonds and the bondholders that establish the terms of the bond issue?
Select correct option:
Indenture
Debenture
Bond
Bond trustee






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 5 of 15 ( Start time: 05:36:28 PM ) Total Marks: 1
All of the following are the reasons for Uncertain NPV calculations EXCEPT:
Select correct option:
Estimated discount rate does not change with the markets
Estimated Life of project is doubtful
Annual after-tax cash flows are difficult to estimate
Timing of cash flows is not exactly predictable






Quiz Start Time: 05:31 PM
Time Left 90
sec(s)
Question # 6 of 15 ( Start time: 05:37:36 PM ) Total Marks: 1
Which of the following would generally have unlimited liability?
Select correct option:
A limited partner in a partnership
A shareholder in a corporation
The owner of a sole proprietorship
A member in a limited liability company (LLC)






Quiz Start Time: 05:31 PM
Time Left 88
sec(s)
Question # 7 of 15 ( Start time: 05:38:38 PM ) Total Marks: 1
Why we need Capital rationing? (
Select correct option:
Because, there are not enough positive NPV projects
Because, companies do not always have access to all of the funds they could make use of
Because, managers find it difficult to decide how to fund projects
Because, banks require very high returns on projects






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 8 of 15 ( Start time: 05:39:53 PM ) Total Marks: 1
What is the present value of Rs. 3,500,000 to be paid at the end of 50 years if the correct risk adjusted interest rate is 18%?
Select correct option:
Rs.105,000
Rs.1,500,000
Rs.3975,000
Rs. 350,000






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 9 of 15 ( Start time: 05:41:20 PM ) Total Marks: 1
When the zero coupon bond approaches to its maturity, the market value of the bond approaches to which of the following?
Select correct option:
Intrinsic value
Book value
Par value
Historic cost






Quiz Start Time: 05:31 PM
Time Left 90
sec(s)
Question # 10 of 15 ( Start time: 05:41:27 PM ) Total Marks: 1
Which of the following would be considered a cash-flow item from an "operating" activity?
Select correct option:
Cash outflow to the government for taxes
Cash outflow to shareholders as dividends
Cash inflow to the firm from selling new common equity shares
Cash outflow to purchase bonds issued by another company






Quiz Start Time: 05:31 PM
Time Left 90
sec(s)
Question # 11 of 15 ( Start time: 05:42:22 PM ) Total Marks: 1
Which of the following refers to the risk associated with interest rate uncertainty?
Select correct option:
Default risk premium
Sovereign Risk Premium
Market risk premium
Maturity risk premium






Quiz Start Time: 05:31 PM
Time Left 90
sec(s)
Question # 12 of 15 ( Start time: 05:42:35 PM ) Total Marks: 1
Which of the following refers to a highly competitive market where good business ideas are taken up immediately?
Select correct option:
Capital market
Efficient market
Money market
Real asset market






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 13 of 15 ( Start time: 05:42:58 PM ) Total Marks: 1
What is the most important criteria in capital budgeting?
Select correct option:
Return on investment
Profitability index
Net present value
Pay back period






Quiz Start Time: 05:31 PM
Time Left 90
sec(s)
Question # 14 of 15 ( Start time: 05:43:23 PM ) Total Marks: 1
Which of the following statements (in general) is correct?
Select correct option:
A low receivables turnover is desirable
The lower the total debt-to-equity ratio, the lower the financial risk for a firm
An increase in net profit margin with no change in sales or assets means a weaker ROI
The higher the tax rate for a firm, the lower the interest coverage ratio






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 15 of 15 ( Start time: 05:44:06 PM ) Total Marks: 1
What should be the focal point of financial management in a firm?
Select correct option:
The number and types of products or services provided by the firm
The minimization of the amount of taxes paid by the firm
The creation of value for shareholders
The dollars profits earned by the firm

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