MCQOPTIONS
Saved Bookmarks
MCQOPTIONS
This section includes 2436 Mcqs, each offering curated multiple-choice questions to sharpen your Commerce knowledge and support exam preparation. Choose a topic below to get started.
| 1801. |
_ Stock which has fixed payments and failure of payments which do not lead to bankruptcy is classified as$? |
| A. | common stock |
| B. | preferred stock |
| C. | bonds equity |
| D. | common shares |
| Answer» C. bonds equity | |
| 1802. |
_ An amount invested is Rs 4000 and return is Rs 300 then rate of return will be$? |
| A. | 4.30% |
| B. | 3.70% |
| C. | 7.50% |
| D. | 0.08% |
| Answer» D. 0.08% | |
| 1803. |
_ An efficient set of portfolios represented through graph is classified as an$? |
| A. | attained frontier |
| B. | efficient frontier |
| C. | inefficient frontier |
| D. | unattained frontier |
| Answer» C. inefficient frontier | |
| 1804. |
_ Type of option which cannot be exercised before an expiry date which is classified as$? |
| A. | European option |
| B. | American option |
| C. | Australian option |
| D. | money option |
| Answer» B. American option | |
| 1805. |
_ Members and employees of credit unions are loaned for$? |
| A. | mortgages |
| B. | home improvement loans |
| C. | auto purchases |
| D. | all of above |
| Answer» E. | |
| 1806. |
_ In his traditional role the finance manager is responsible for ___________.$? |
| A. | proper utilisation of funds |
| B. | arrangement of financial resources |
| C. | acquiring capital assets of the organization |
| D. | Efficient management of capital |
| Answer» E. | |
| 1807. |
_ If coupon rate is more than going rate of interest then bond will be sold$? |
| A. | more than its par value |
| B. | seasoned par value |
| C. | at par value |
| D. | below its par value |
| Answer» E. | |
| 1808. |
_ Rate denoted as r* is best classified as$? |
| A. | real risk-free interest rate |
| B. | real-risk free nominal rate |
| C. | real-risk free quoted rate |
| D. | real-risk free nominal premium |
| Answer» B. real-risk free nominal rate | |
| 1809. |
_ According to top rating agencies S&P double-B and other lower grade bonds are classified as$? |
| A. | development bonds |
| B. | junk bonds |
| C. | compounded bonds |
| D. | discounted bonds |
| Answer» C. compounded bonds | |
| 1810. |
_ Forecast by analysts, retention growth model and historical growth rates are methods used for an$? |
| A. | estimate future growth |
| B. | estimate option future value |
| C. | estimate option present value |
| D. | estimate growth ratio |
| Answer» B. estimate option future value | |
| 1811. |
_ An increase in marginal cost of capital and capital rationing are two arising complications of$? |
| A. | maximum capital budget |
| B. | greater capital budget |
| C. | optimal capital budget |
| D. | minimum capital budget |
| Answer» D. minimum capital budget | |
| 1812. |
_ Owning two securities instead of one will not reduce the risk taken by an investor if the two securities are______________.$? |
| A. | perfectly positively correlated with each other |
| B. | perfectly independent of each other |
| C. | perfectly negatively correlated with each other |
| D. | of the same category, eg blue chips |
| Answer» B. perfectly independent of each other | |
| 1813. |
_ A major difference between real and nominal returns is that_______________.$? |
| A. | real returns adjust for inflation and nominal returns do not |
| B. | real returns use actual cash flows and nominal returns use expected cash flows |
| C. | real returns adjust for commissions and nominal returns do not |
| D. | real returns show the highest possible return and nominal returns show the lowest possible return |
| Answer» B. real returns use actual cash flows and nominal returns use expected cash flows | |
| 1814. |
_ Portfolio weights are found by_________________.$? |
| A. | dividing standard deviation by expected value |
| B. | calculating the percentage each asset is to the total portfolio value |
| C. | calculating the return of each asset to total portfolio return |
| D. | dividing expected value by the standard deviation |
| Answer» C. calculating the return of each asset to total portfolio return | |
| 1815. |
_ The volume of sales is influenced by ____ of a firm.$? |
| A. | finance policy |
| B. | credit policy |
| C. | profit policy |
| D. | fund policy |
| Answer» C. profit policy | |
| 1816. |
_ Which of the following portfolios has the least reduction of risk?$? |
| A. | A portfolio with securities all having positive correlation with each other |
| B. | A portfolio with securities all has zero correlation with each other |
| C. | A portfolio with securities all having negative correlation with each other |
| D. | A portfolio with securities all has skewed correlation with each other |
| Answer» B. A portfolio with securities all has zero correlation with each other | |
| 1817. |
_ A model in which behavior of asset returns is measured for set of risk factors and market risk is classified as$? |
| A. | factorization model |
| B. | Two factor model |
| C. | multifactor model |
| D. | quoted factor model |
| Answer» D. quoted factor model | |
| 1818. |
_ Coefficient of beta is used to measure stock volatility$? |
| A. | coefficient of market |
| B. | relative to market |
| C. | irrelative to market |
| D. | same with market |
| Answer» C. irrelative to market | |
| 1819. |
_ Stock which has higher correlation with market tend to have$? |
| A. | high beta, less risky |
| B. | low beta, more risky |
| C. | high beta, more risky |
| D. | low beta, less risky |
| Answer» D. low beta, less risky | |
| 1820. |
_ If stock has a great risk related to it than a required return is$? |
| A. | higher |
| B. | lower |
| C. | zero |
| D. | all of above |
| Answer» B. lower | |
| 1821. |
_ Market risk premium is 8% and risk free return is 7% then market required return would be$? |
| A. | 15.00% |
| B. | 1.00% |
| C. | 5.60% |
| D. | 1.14% |
| Answer» B. 1.00% | |
| 1822. |
_ In an individual stock, relevant risk is classified as$? |
| A. | alpha coefficient |
| B. | beta coefficient |
| C. | stand-alone coefficient |
| D. | relevant coefficient |
| Answer» C. stand-alone coefficient | |
| 1823. |
_ Required return is 15% and premium for risk is 11% then risk free return would be$? |
| A. | 26.00% |
| B. | 4.00% |
| C. | 16.50% |
| D. | 1.36% |
| Answer» C. 16.50% | |
| 1824. |
_ If risk can be eliminated with help of diversification, then relevant risk is$? |
| A. | smaller than stand-alone risk |
| B. | larger than stand-alone risk |
| C. | smaller than diverse risk |
| D. | larger than diverse risk |
| Answer» B. larger than stand-alone risk | |
| 1825. |
_ A modified internal rate of return is considered as present value of costs and is equal to$? |
| A. | PV of hurdle rate |
| B. | FV of hurdle rate |
| C. | PV of terminal value |
| D. | FV of terminal value |
| Answer» D. FV of terminal value | |
| 1826. |
_ In alternative investments, constant cash flow stream is equal to initial cash flow stream in approach which is classified as$? |
| A. | greater annual annuity method |
| B. | equivalent annual annuity |
| C. | lesser annual annuity method |
| D. | zero annual annuity method |
| Answer» C. lesser annual annuity method | |
| 1827. |
_ An uncovered cost at start of year is Rs 200, full cash flow during recovery year is Rs 400 and prior years to full recovery is 3 then payback would be$? |
| A. | 5 years |
| B. | 3.5 years |
| C. | 4 years |
| D. | 4.5 years |
| Answer» C. 4 years | |
| 1828. |
_ In capital budgeting, an internal rate of return of project is classified as its$? |
| A. | external rate of return |
| B. | internal rate of return |
| C. | positive rate of return |
| D. | negative rate of return |
| Answer» C. positive rate of return | |
| 1829. |
_ Dividend per share is Rs 15 and sell it for Rs 120 and floatation cost is Rs 3.0 then component cost of preferred stock will be$? |
| A. | 12.82 times |
| B. | 0.1282 times |
| C. | 12.82% |
| D. | Rs 12.82 |
| Answer» D. Rs 12.82 | |
| 1830. |
_ Type of variability in which a project contributes in return of company is considered as$? |
| A. | variable risk |
| B. | within firm risk |
| C. | corporate risk |
| D. | Both B and C |
| Answer» E. | |
| 1831. |
_ Initial cost is Rs 5000 and probability index is 3.2 then present value of cash flows is$? |
| A. | Rs 8,200.00 |
| B. | Rs 16,000.00 |
| C. | Rs 10,000.00 |
| D. | Rs 1,562.50 |
| Answer» C. Rs 10,000.00 | |
| 1832. |
_ Other factors held constant, greater project liquidity is because of$? |
| A. | less project return |
| B. | greater project return |
| C. | shorter payback period |
| D. | greater payback period |
| Answer» D. greater payback period | |
| 1833. |
_ A discount rate which equals to present value of TV to project cost present value is classified as$? |
| A. | negative internal rate of return |
| B. | modified internal rate of return |
| C. | existed internal rate of return |
| D. | relative rate of return |
| Answer» C. existed internal rate of return | |
| 1834. |
_ Cost which is used to calculate weighted average cost of capital is classified as$? |
| A. | weighted cost of capital |
| B. | component cost of preferred stock |
| C. | transaction cost of preferred stock |
| D. | financing of preferred stock |
| Answer» C. transaction cost of preferred stock | |
| 1835. |
_ Cash outflows are costs of project and are represented by$? |
| A. | negative numbers |
| B. | positive numbers |
| C. | hurdle number |
| D. | relative number |
| Answer» B. positive numbers | |
| 1836. |
_ First step in calculation of net present value is to find out$? |
| A. | present value of equity |
| B. | future value of equity |
| C. | present value cash flow |
| D. | future value of cash flow |
| Answer» D. future value of cash flow | |
| 1837. |
_ In weighted average cost of capital, cost of capital which is risk adjusted and developed for each category of$? |
| A. | long-term projects |
| B. | industry [industrial] projects |
| C. | divisional projects |
| D. | short-term projects |
| Answer» C. divisional projects | |
| 1838. |
_ A situation in which an outside group solicit proxies to take control of business is classified as$? |
| A. | outside group |
| B. | solicit process |
| C. | proxy fight |
| D. | controlled management |
| Answer» D. controlled management | |
| 1839. |
_ Calculation of formula in common stock valuation does not include$? |
| A. | intrinsic value |
| B. | dividend of stockholder |
| C. | number of stock issued |
| D. | expected growth rate |
| Answer» D. expected growth rate | |
| 1840. |
_ Preferred dividend is Rs 60 and required rate of return is 20% then value of preferred stock will be$? |
| A. | Rs 40.00 |
| B. | Rs 120.00 |
| C. | Rs 12.00 |
| D. | Rs 300.00 |
| Answer» E. | |
| 1841. |
_ Real rate of return, risk and expected inflation are primary determinants of$? |
| A. | minimum rate of return |
| B. | accepted return |
| C. | expected return |
| D. | real risk free rate |
| Answer» B. accepted return | |
| 1842. |
_ Growth rate which is predicted by marginal investors for dividends is classified as$? |
| A. | expected growth rate |
| B. | annual growth rate |
| C. | past growth rate |
| D. | unexpected growth rate |
| Answer» B. annual growth rate | |
| 1843. |
_ Capital gain is Rs 2 and beginning price is Rs 24 then capital gains yield will be$? |
| A. | 22.00% |
| B. | 24.00% |
| C. | 14.00% |
| D. | 12.00% |
| Answer» E. | |
| 1844. |
_ Value of stock is Rs 400 and required rate of return is 20% then preferred dividend would be$? |
| A. | Rs 80.00 |
| B. | Rs 8,000.00 |
| C. | Rs 20.00 |
| D. | Rs 50.00 |
| Answer» B. Rs 8,000.00 | |
| 1845. |
_ A right which controls and prevents transfer from current stockholders to other new stockholders is considered as$? |
| A. | corporate charter |
| B. | selling charter |
| C. | laws |
| D. | purchase chart |
| Answer» B. selling charter | |
| 1846. |
_ Third step in calculating value of stock with non-constant growth rate is to find$? |
| A. | PV of expected dividends |
| B. | FV of expected dividends |
| C. | PV of intrinsic rate |
| D. | FV of intrinsic rate |
| Answer» B. FV of expected dividends | |
| 1847. |
_ Paid dividend with dividend yield 25% is Rs 5 then cost price would be$? |
| A. | 30.00% |
| B. | Rs 30.00 |
| C. | 20.00% |
| D. | Rs 20.00 |
| Answer» E. | |
| 1848. |
_ Owners of corporation having certain rights and privileges are considered as$? |
| A. | special stockholders |
| B. | common stockholders |
| C. | public stocks |
| D. | enactive stocks |
| Answer» C. public stocks | |
| 1849. |
_ According to investors point of view, an expected rate of return is rate on stocks which they$? |
| A. | receive in future |
| B. | received in past |
| C. | yearly growth |
| D. | semi-annual growth |
| Answer» B. received in past | |
| 1850. |
_ Cash flow which is available for all investors of company is classified as$? |
| A. | extrinsic stock |
| B. | intrinsic stock |
| C. | investing cash |
| D. | free cash flow |
| Answer» E. | |