Search This Blog

Monday, July 30, 2012

Financial Management MCQ - 13

1. Mr. Naresh deposited Rs.2,000 at the beginning of every month in a bank for five years, if the interest rate is 12% p.a. compounded monthly, then the accumulated amount he will get after 5 years is

2. Following is the probability distribution of rates of return of a stock:
Return (%) 10 12 15 20
Probability 0.30 0.10 0.40 0.20
The expected rate of return from the stock is

3. Net working capital is equal to
[A]Current assets – Current liabilities.
[B]Fixed assets – current assets
[C]Current Assets – Cash
[D]Long term loans – short term loans

4. The objective of financial management is to
[A]Maximize the revenues
[B]Minimize the expenses
[C]Maximize the return on investment
[D]Maximize the wealth of the owners by increasing the value of the firm

5. Mr. Sharma wishes to purchase a 91 day T-bill of face value Rs.100, maturing after 60 days. If, on maturity, he wishes to earn a yield of 11.5%, the purchase price of T-bill for Mr. Sharma should be

6. If the return on a security lies below the security market line,
[A]The security is conservative security
[B]The security is aggressive security
[C]The ris k free rate of return is more than the expected return from that security
[D]The security is over priced

7. A stock has an expected return of 12.25 percent. The beta of the stock is 1.15 and the risk-free rate is 5 percent. What is the market risk premium?

8. Which of following statements is/are true with respect to rights issue?
I. It involves the issue of securities to the existing shareholders and to the public simultaneously.
II. It involves the issue of securities to the existing shareholders at a price, which is generally lower than the current market price.
III. It generally entails lower cost of issue.
IV. It is generally made to high networth individuals.
[A]Only (I) above
[B]Only (III) above
[C]Both (II) and (III) above
[D]Both (II) and (IV) above

9. The cost of debt remains more or less constant up to a certain degree of leverage but rises there after at an increasing rate. This proposition is based on
[A]Net income approach on capital structure
[B]Net operating income approach on capital structure
[C]Traditional approach on capital structure
[D]Modigliani and Miller approach

10. Which of the following statements is/are true regarding the capital recovery factor?
I. It is the inverse of the PVIF factor.
II. It represents the amount that has to be invested at the end of every year for a period of ‘n’ years at the rate of interest ‘k’ in order to accumulate Re.1 at the end of the period.
III. It can be applied to find out the amount to be invested periodically to liquidate a loan over a specified period at a given rate of interest.
[A]Only (II) above
[B]Only (III) above
[C]Both (II) and (III) above
[D]Both (I) and (III) above

11. As the number of securities in a portfolio increases,
[A]The portfolio variance increases
[B]The portfolio variance depends more on average covariance
[C]The portfolio variance depends more on average expected value
[D]The portfolio variance depends more on average variance

12. Which of the following can be inferred from the Miller and Modigliani model on dividend policy?
[A]As the dividend payout ratio increases, the share price decreases, if the rate of return is greater than the cost of capital
[B]As the dividend payout ratio decreases, the share price decreases, if the rate of return is less than the cost of capital
[C]The dividend policy of the firm does not influence its value
[D]Irrespective of the rate of return and cost of capital the share price increases, as the amount of dividend payout ratio increases

13. Which of the following statements is/are true?
I. Current yield is equal to the coupon rate, if the market price is equal to the face value of the bond.
II. When the required rate of return (kd) is greater than the coupon rate, the value of the bond is less than its par value.
III. Current yield is equal to the interest paid divided by the face value of the bond.
[A]Only (I) above
[B]Both (I) and (II) above
[C]Both (I) and (III) above
[D]Both (II) and (III) above

14. In a world with corporate taxes but no possibility of firm’s financial distress, the value of the firm will be maximized, when
[A]Pure debt is used
[B]Pure equity is used
[C]Debt and equity are used in equal proportion
[D]Debt-equity ratio is 2:1

15. Consider the following data regarding a product:
Total cost of ordering and carrying inventory Rs.870
Quantity per order 1,000 units
Carrying cost as a percentage of the purchase price 3%
Fixed cost per order Rs.100
Purchase price Rs.10
The annual usage of the material is
[A]3,000 units
[B]7,200 units
[C]8,900 units
[D]9,000 units



#AhilyaBaiHolkarJayanti #Current Affairs #FamousPersons #GeneralKnowledge #GK #GS #Hindi #HinduSamrajyaDiwas #Ling #Management #ShivajiMaharaj 2012 2012 GK 2013 Current Affairs 2013 Daily Logo Quiz 2013 General Knowledge 2013 Logo Game Quiz 2014AugustCA 2014AugustGK 2014AugustGS 2014AugustIPC 2014CA 2014DecemberCA 2014DecemberGK 2014DecemberGS 2014DecemberIPC 2014JulyCA 2014JulyGK 2014JulyGS 2014JulyIPC 2014JuneCA 2014JuneGK 2014JuneGS 2014JuneIPC 2014MayCA 2014MayGK 2014MayGS 2014MayIPC 2014NovemberCA 2014NovemberGK 2014NovemberGS 2014NovemberIPC 2014OctoberCA 2014OctoberGK 2014OctoberGS 2014OctoberIPC 2014SeptemberCA 2014SeptemberGK 2014SeptemberGS 2014SeptemberIPC 2015GK 2015GScience 2015IndianPolity 2017 Current Affairs 2017August 2017December 2017November 2017October 2017September 2018 Current Affairs 2018FebruaryCA 2018JanuaryCA 2019GK 2020 Current Affairs 2020AugustCA 2020DecCA 2020GeneralScience 2020GK 2020JulyCA 2020JuneCA 2020MayCA 2020NovCA 2020OctCA 2020SepCA 2020SepGK 2021 April GK 2021 Current Affairs 2021 Feb GK 2021 January GK 2021 March GK 26 January A.R.M.Y. Accounting Adjectives Allahabad AllahabadQuiz Ancient History Angular Framework AngularJS April 2012 April 2013 Current Affairs April 2013 GK April 2013 Vocabulary Quiz April 2014 Aptitude Articles Assam August 2012 August2020 Authors Auto Quiz Automobile Quiz Automotive Quiz B School Banaras Bangalore Quiz Bangtan Sonyeondan Bank Exam Entrance Bank PO Exam Banking Banking Clerical Preparation Banking GK Banking Terminology BAT BCA Benares Benares Quiz Bengaluru Bharat Bollywood Quiz BollywoodPersons Books Boudh Festival Britain BTS Buddhism Festivals Bulletproof Boy Scouts Business Communication Business Current Affairs 2012 Business Ethics Business Law Business Management Business Quiz Business School Interview Business World C Programming Capital Market CAT Celebrity Quiz Christmas Quiz Cities of India City Quiz Civil Service Exams Class12English Class2Computer Class2English Class2GA Class2Maths Class3English Class3GA Class3GK Class3Maths Class4English Class7 Class7English Class8Science Class9English Cloud Computing CMMI-DEV Commodity and Derivatives Commodity Market Quiz Compensation and Benefits Compensation Management Computer Quiz Computers Conjunctive Adverbs Corporate Laws Countries Country Quiz Current Affairs Cyber Security Daily Quote Data Mining Data Science Database Management System DataBase Quiz DBMS DBMS True False Questions December 2012 Current Affairs December 2012 GK December 2013 Deepawali Delhi Delhi Quiz Demonetization Dev Anand Quiz Dev Sahab Dilli Diwali Diwali Quiz Dus ka Dum Eco Quiz Economics Economics MCQ Economics Multiple Choice Economics True False Quiz Email Etiquette English Environment Estimation Models EVS Facts about Allahabad Facts about Bangalore Facts about Delhi Facts about Dev Anand Facts about India Facts about Mahatma Gandhi Facts about Patna Facts about Rabindranath Tagore Facts about Varanasi FamousAuthors FamousBooks February 2012 February 2013 Current Affairs February 2013 GK February 2014 Festival Quiz Festivals of India FestivalWishes Filmy Quiz Finance Finance MCQ Finance Multiple Choice Finance Objective Questions Finance Quiz Finance True False Financial Accounting Financial Institutions Financial Management Firewalls Fun Quiz FunTrivia Gautam Buddha Gender General Knowledge GeneralAwareness Geography Gerunds Ghrisneshwar Jyotirling Temple GK GK Quiz GK2016 GKToday GMAT Grammar GRE English GurPurab Gurudev Rabindranath Tagore GuruPurnima Gyan Guru HarryPotter HCM Helping Verbs Hindi Cinema Hindi Movies Quiz Hindi Synonyms Class 4 Hindi4 Hindu Festivals Hindu Gods Hindustan History Holi Quiz Holika Dahan HR HRD HRM Quiz Human Capital Management Human Resource Human Resource Management Quiz IAS IEO3English IEO4English IIFT IIM Interview IMO3Maths IMO4Maths IndependenceDay. SwatantraDiwas India Quiz Indian Budget Indian Cinema Indian Festivals Indian Polity and Constitution Information Technology International Days International Economics International Finance International Marketing Introduction to Management ISB Interview IT IT Aptitude Jain Festivals Janmashtmi January 2012 January 2013 Current Affairs January 2013 GK January 2014 Java Java Interview Questions Java MCQ Java Multiple Choice Java Programming July 2012 July 2013 Current Affairs July 2013 GK July 2013 Vocabulary Quiz July2020 June 2012 June 2013 GK June 2013 Vocabulary Quiz Jyotirling Kashi Vishwanath Mandir KBC KBC Questions Kedarnath Temple Know Allahabad Know Bangalore Know Delhi Know Patna Law MCQ Law Quiz Learn English LLB Quiz Logical Reasoning Logo Quiz Lohri Lord Buddha Macro Economics Mahatma Gandhi Quiz Maintenance Management MakarSankranti Mallikarjuna Jyotirlinga temple Management Management Accounting Management MCQ Management Quiz Managerial Economics Managerial Effectiveness Manipur MarathaKing March 2012 March 2013 Current Affairs March 2013 GK March 2013 Vocabulary Quiz March 2014 Mark II Function Point Analysis Marketing Marketing Management Quiz MAT MataVaishnoDevi Material Management Material Requirement Planning Materials Management May 2012 May 2013 Current Affairs May 2013 GK May 2013 Vocabulary Quiz May 2014 MBA MBA Entrance MBA IT MCA Medieval History Meghalaya Mental Ability Micro Economics Mizoram MM Modern History Monuments of India Multiple Choice Questions MyGov Quiz Nagaland National Days National Education Policy National Girl Child Day NCERT6Maths NCERT7Geog NCERT7Hindi NCERT7Maths NCERTGeography NCFM NEP2020 New Delhi Nouns November 2012 November 2012 GK November 2013 Numerical Ability OB OB Quiz October 2012 October 2012 GK Olympics Omkareshwar Jyotirlinga Temple Online Quiz Contest Operations Operations Management Organisation Behavior Organisation Behaviour Organizational Behaviour PADMAN Patliputra Patna Patna Quiz PCS Personality Quiz Personnel Administration Personnel Management Quiz PGCPM PGDBA PGDCA PGDIT Placement Papers of IT Companies PMP PMP Certification PMP Questions Portfolio Management Possessive Nouns Pratiyogita Darpan Prayag Production and Operation Management Programming Languages Project Management Project Management MCQ QMBlog QT Quant Quantitative Aptitude Quantitative Technique Quotations Rabindranath Tagore Quiz Rashtriya Ekta Divas RDBMS Republic Day Samanya Gyan Sangam Santa Claus SAP HANA SAT Satyamev Jayate Science Security Analysis September 2012 September 2012 GK Shree Mahakaleshwar Temple Shree Siddhivinayak Ganapati Temple Shree Somnath Temple Siddhartha SNAP Software Testing Spellings Sports SportsPersons Sri Ramanathaswamy Temple SSO StatesOfIndia Static GK Strategic Finance Strategic Management Strategy Strategy True False SundayFun Swami Vivekanand Swami Vivekananda Quiz Synonyms Systems Quiz Taiwan National Day Tata Crucible Teasers Teej Temples Temples of India Time and Calendar TOEFL Trimbakeshwar Jyotirlinga Temple Tripura TV Show UK Quiz United Kingdom Vaidyanatha Jyotirlinga temple Varanasi Verbal Ability Vocab Vocabulary World Heart Day World Mental Health Day World Teachers Day World Tourism Day XLRI Interview