Mgt201 Online Quiz
Wednesday, January 26, 2011 Posted In MGT Edit This
Which of the following is related to the use Lower financial leverage?
Select correct option:
Fixed costs
Variable costs
Debt financing
Common equity financing
A 5-year ordinary annuity has a present value of Rs.1,000. If the interest rate is 8 percent, the amount of each annuity payment is closest to which of the following?
Select correct option:
Rs. 250.44
Rs. 231.91
Rs.181.62
Rs.184.08
Which of the following could be defined as the capital structure of the Company?
Select correct option:
The firm's mix of different securities
The firm's debt-equity ratio
The market imperfection that the firm's manager can exploit
All of the above
of the following portfolio statistics statements is correct?
Select correct option:
A portfolio's expected return is a simple weighted average of expected returns of the individual securities comprising the portfolio.
A portfolio's standard deviation of return is a simple weighted average of individual security return standard deviations.
The square root of a portfolio's standard deviation of return equals its variance.
The square root of a portfolio's standard deviation of return equals its coefficient of variation.
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
Where there is single period capital rationing, what is the most sensible way of making investment decisions?
Select correct option:
Choose all projects with a positive NPV
Projects together to allocate the funds available and select the ***** of projects with the highest NPV
Choose the project with the highest NPV
Calculate IRR and select the projects with the highest IRRs
Which of the following is NOT the step of Percentage of sales to be used in Financial Forecasting?
Select correct option:
Estimate year-by-year Sales Revenue and Expenses
Estimate Levels of Investment Needs required to Meet Estimated Sales
Estimate the Financing Needs
Estimate the retained earnings
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
An arbitrage opportunity exists if an investor can construct a ________ investment portfolio that will yield a sure profit.
Select correct option:
Positive
Negative
Zero
All of the above
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
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
Which of the following factor(s) do NOT affects the movements in the market index?
Select correct option:
Macroeconomic factors
Socio political factors
Social factors
All of the given options
Which of the following is NOT The cost of equity?
Select correct option:
The minimum rate that a firm should earn on the equity-financed part of an investment
A return on the equity-financed portion of an investment that, at worst, leaves the market
price of the stock unchanged
By far the most difficult component cost to estimate
Generally lower than the before-tax cost of debt
Which of the following market in finance is referred to the market for short-term government and corporate debt securities?
Select correct option:
Money market
Capital market
Primary market
Secondary market
How economic value is added (EVA) calculated?
Select correct option:
It is the difference between the market value of the firm and the book value of equity
It is the firm's net operating profit after tax (NOPAT) less a dollar cost of capital charge
It is the net income of the firm less a dollar cost that equals WAAC multiplied by the book value of liabilities and equities
None of the given option
Select correct option:
Fixed costs
Variable costs
Debt financing
Common equity financing
A 5-year ordinary annuity has a present value of Rs.1,000. If the interest rate is 8 percent, the amount of each annuity payment is closest to which of the following?
Select correct option:
Rs. 250.44
Rs. 231.91
Rs.181.62
Rs.184.08
Which of the following could be defined as the capital structure of the Company?
Select correct option:
The firm's mix of different securities
The firm's debt-equity ratio
The market imperfection that the firm's manager can exploit
All of the above
of the following portfolio statistics statements is correct?
Select correct option:
A portfolio's expected return is a simple weighted average of expected returns of the individual securities comprising the portfolio.
A portfolio's standard deviation of return is a simple weighted average of individual security return standard deviations.
The square root of a portfolio's standard deviation of return equals its variance.
The square root of a portfolio's standard deviation of return equals its coefficient of variation.
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
Where there is single period capital rationing, what is the most sensible way of making investment decisions?
Select correct option:
Choose all projects with a positive NPV
Projects together to allocate the funds available and select the ***** of projects with the highest NPV
Choose the project with the highest NPV
Calculate IRR and select the projects with the highest IRRs
Which of the following is NOT the step of Percentage of sales to be used in Financial Forecasting?
Select correct option:
Estimate year-by-year Sales Revenue and Expenses
Estimate Levels of Investment Needs required to Meet Estimated Sales
Estimate the Financing Needs
Estimate the retained earnings
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
An arbitrage opportunity exists if an investor can construct a ________ investment portfolio that will yield a sure profit.
Select correct option:
Positive
Negative
Zero
All of the above
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
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
Which of the following factor(s) do NOT affects the movements in the market index?
Select correct option:
Macroeconomic factors
Socio political factors
Social factors
All of the given options
Which of the following is NOT The cost of equity?
Select correct option:
The minimum rate that a firm should earn on the equity-financed part of an investment
A return on the equity-financed portion of an investment that, at worst, leaves the market
price of the stock unchanged
By far the most difficult component cost to estimate
Generally lower than the before-tax cost of debt
Which of the following market in finance is referred to the market for short-term government and corporate debt securities?
Select correct option:
Money market
Capital market
Primary market
Secondary market
How economic value is added (EVA) calculated?
Select correct option:
It is the difference between the market value of the firm and the book value of equity
It is the firm's net operating profit after tax (NOPAT) less a dollar cost of capital charge
It is the net income of the firm less a dollar cost that equals WAAC multiplied by the book value of liabilities and equities
None of the given option
