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Saturday, January 21, 2012

Finance Quiz - 3

1. The future value of a Rs.10,000 investment, which gives an annual rate of return of 20% per annum, after two years would grow to _________ (assume discrete compounding)   
[A]Rs. 14,400
[B]Rs. 14,000
[C]Rs, 14,250
[D]Rs. 14,500



2. An investment should provide an after-tax return which is ________.    
[A]at least higher than the rate of inflation
[B]less than the rate of inflation
[C]equal to the rate of inflation
[D]None of the above



3. Which of the following is not true about ADR?    
[A]ADR represents the foreign shares of the company held on deposit by a custodian bank in the       company's home country.
[B]ADRs may be used in public or private markets inside or outside US.
[C]ADRs do not eliminate the currency risk associated with an investment in a non-U.S. company.
[D]An ADR is a U.S. dollar denominated form of equity ownership in a non-U.S. company.



4. What are the segments of Securities Market?    
[A]Primary market and Secondary market
[B]New issues market
[C]Primary market
[D]Secondary market



5. Which instrument among these is considered the most challenging and rewarding investment option, when compared to other investment options?    
[A]Equity
[B]Fixed Deposit
[C]Bonds
[D]Treasury Bill



6. 'Bid' means the _____________.    
[A]Seller's price
[B]Traded Price
[C]Market price
[D]Buyer's price



7. Profit and Loss account of a company shows _______.    
[A]The revenues and expenses during particular period of time.
[B]The revenues and expenses of the company at a particular point of time.
[C]The financial position of the company at a particular point of time.
[D]None of the above



8. Which instrument among these have historically shown to give the highest returns when invested over long periods?   
[A]Debentures
[B]Equity
[C]Fixed Deposit
[D]Bank Deposit



9. The lenders use ______________ ratio to assess debt servicing capacity of a firm.    
[A]Interest Coverage ratio
[B]Debt-Asset Ratio
[C]Acid-test Ratio
[D]Current Ratio



10. _______ funds do not have a fixed date of redemption.    
[A]Open ended funds
[B]Close ended funds
[C]Diversified funds
[D]Both A and B



11. 'Ask' means the ________.    
[A]Buyer's price
[B]Seller's price
[C]Market price
[D]Traded Price



12. ________________ is maintained by NSE to make good investor claims, which may arise out of non-settlement of obligations by the trading member, who has been declared defaulter, in respect of trades executed on the Exchange.    
[A]Investor Education and Reimbursement Fund (IERF)
[B]Investor Reimbursement Fund (IRF)
[C]Investor Education and Protection Fund (IEPF)
[D]Investor Protection Fund (IPF)



13. At 10% annual inflation rate, an item costing Rs. 100 today, would cost Rs. _______ after one year.    
[A]Rs.101
[B]Rs. 110
[C]Rs.115
[D]Rs. 109



14. What is the present value of Rs. 3000 receivable after two years at a discount rate of 5% under continuous discounting?    
[A]Rs. 3150
[B]Rs. 2714.51
[C]Rs. 2850
[D]Rs. 2970



15. The future value of a Rs.12,000 investment made today, which gives an annual rate of return of 10% per annum, after one year should be _________.    
[A]Rs. 12,200
[B]Rs. 12,500
[C]Rs. 13,200
[D]Rs. 13,100



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