MCQOPTIONS
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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.
| 2051. |
Case in which average investors risk aversion is greater than slope of line and risk premium respectively is$? |
| A. | steeper, greater |
| B. | steeper, smaller |
| C. | steeper, zero |
| D. | Both A and B |
| Answer» B. steeper, smaller | |
| 2052. |
An additional desired compensation by investors for assuming an additional risk on investment is classified as$? |
| A. | risk premium |
| B. | investor premium |
| C. | additional premium |
| D. | assumed premium |
| Answer» B. investor premium | |
| 2053. |
Method of stock valuation which is multiple of earning per share, book value and net income is classified as$? |
| A. | stock multiple analysis |
| B. | dividend multiple analysis |
| C. | market multiple analysis |
| D. | stock and multiple analysis |
| Answer» D. stock and multiple analysis | |
| 2054. |
Stock issued by company have lower rate of return because of$? |
| A. | high market to book ratio |
| B. | low book to market ratio |
| C. | low market to book ratio |
| D. | high book to market ratio |
| Answer» C. low market to book ratio | |
| 2055. |
Relationship between total risk of stock, diversifiable risk and market risk is classified as$? |
| A. | total risk |
| B. | standard deviation |
| C. | standard alpha |
| D. | treynor alpha |
| Answer» B. standard deviation | |
| 2056. |
According to Fama French Three-Factor model, market value of company equity is used to calculate$? |
| A. | size of portfolio |
| B. | size of industry |
| C. | size of market |
| D. | size of company |
| Answer» E. | |
| 2057. |
A measure which is not included in Fama French Three-Factor model is$? |
| A. | realized risk free rate |
| B. | rate of return on market |
| C. | random error |
| D. | risk premium |
| Answer» E. | |
| 2058. |
Stock issued by company have higher rate of return because of$? |
| A. | low market to book ratio |
| B. | high book to market ratio |
| C. | high market to book ratio |
| D. | low book to market ratio |
| Answer» C. high market to book ratio | |
| 2059. |
In capital asset pricing model, characteristic line is classified as$? |
| A. | regression line |
| B. | probability line |
| C. | scattered points |
| D. | weighted line |
| Answer» B. probability line | |
| 2060. |
A high portfolio return is subtracted from low portfolio return to calculate$? |
| A. | HML portfolio |
| B. | R portfolio |
| C. | subtracted portfolio |
| D. | ML portfolio |
| Answer» B. R portfolio | |
| 2061. |
A curve which shows attitude towards risk just way reflected in return trade-off function is classified as$? |
| A. | difference curve |
| B. | indifference curve |
| C. | efficiency curve |
| D. | affectivity curve |
| Answer» C. efficiency curve | |
| 2062. |
Return on assets = 5.5%, Total assets Rs 3,000 and common equity Rs 1,050 then return on equity would be$? |
| A. | Rs 22,275.00 |
| B. | 15.71% |
| C. | 1.93% |
| D. | 1.925 times |
| Answer» C. 1.93% | |
| 2063. |
An equity multiplier is multiplied to return on assets to calculate$? |
| A. | return on assets |
| B. | return on multiplier |
| C. | return on turnover |
| D. | return on stock |
| Answer» B. return on multiplier | |
| 2064. |
In calculation of net cash flow, depreciation and amortization are treated as$? |
| A. | current liabilities |
| B. | income expenses |
| C. | non-cash revenues |
| D. | non-cash charges |
| Answer» E. | |
| 2065. |
In balance sheet, sum of retained earnings and common stock are considered as$? |
| A. | preferred equity |
| B. | due equity |
| C. | common perpetuity |
| D. | common equity |
| Answer» E. | |
| 2066. |
Type of basic financial statements consist of$? |
| A. | balance sheet and income statement |
| B. | statement of retained earning |
| C. | statement of cash flows |
| D. | all of above |
| Answer» E. | |
| 2067. |
An information uses by investors for expecting future earnings is all recorded in$? |
| A. | five years report |
| B. | annual report |
| C. | stock report |
| D. | exchange report |
| Answer» C. stock report | |
| 2068. |
Net income available to stockholders is Rs 150 and total assets are Rs 2,100 then return on total assets would be$? |
| A. | 0.07% |
| B. | 7.14% |
| C. | 0.05 times |
| D. | 7.15 times |
| Answer» C. 0.05 times | |
| 2069. |
Profit margin multiply assets turnover multiply equity multiplier is used to calculate$? |
| A. | return on turnover |
| B. | return on stock |
| C. | return on assets |
| D. | return on equity |
| Answer» E. | |
| 2070. |
An unsystematic risk which can be eliminated but market risk is the? |
| A. | aggregate risk |
| B. | remaining risk |
| C. | effective risk |
| D. | ineffective risk |
| Answer» C. effective risk | |
| 2071. |
If stock market price is higher than strike price so call option? |
| A. | price will be lower |
| B. | rate will be higher |
| C. | price will be higher |
| D. | rate will be lower |
| Answer» D. rate will be lower | |
| 2072. |
First step in determining an efficient portfolio is to consider? |
| A. | set of attainable portfolios |
| B. | set of unattainable portfolios |
| C. | set of attributable portfolios |
| D. | set of attributable portfolios |
| Answer» B. set of unattainable portfolios | |
| 2073. |
An average return of portfolio divided by its coefficient of beta is classified as? |
| A. | Sharpe's reward to variability ratio |
| B. | treynor's reward to volatility ratio |
| C. | Jensen's alpha |
| D. | treynor's variance to volatility ratio |
| Answer» C. Jensen's alpha | |
| 2074. |
Movement of price or rise or fall of prices of options is classified as? |
| A. | option lattice |
| B. | pricing movement |
| C. | price change |
| D. | binomial lattice |
| Answer» E. | |
| 2075. |
Asset allocation affects the investor's return by______________.? |
| A. | altering the returns on individual assets |
| B. | weighting the portfolio return by the allocation |
| C. | assuring diversification |
| D. | increasing the investor's use of mutual funds |
| Answer» C. assuring diversification | |
| 2076. |
The method of raising equity capital from existing members by offering securities on pro rata basis is referred to as __________.? |
| A. | Public issue |
| B. | Right Issue |
| C. | Private placement |
| D. | Bought-Out-Deal |
| Answer» C. Private placement | |
| 2077. |
Another name for stock brokers is______________.? |
| A. | specialists |
| B. | registered representatives |
| C. | security analysts |
| D. | portfolio managers |
| Answer» C. security analysts | |
| 2078. |
Under which of the following approaches cost of equity capital is assumed to be constant with the change in leverage?? |
| A. | Net income approach |
| B. | Modigliani and Miller approach |
| C. | Net operating income approach |
| D. | Traditional approach |
| Answer» B. Modigliani and Miller approach | |
| 2079. |
Degree of financial leverage is a measure of relationship between ___________.? |
| A. | EPS and EBIT |
| B. | EBIT and quantity produced |
| C. | EPS and quantity produced |
| D. | EPS and sales |
| Answer» B. EBIT and quantity produced | |
| 2080. |
A growth industry is defined as ____________.? |
| A. | an industry with 15% rate of growth per annum |
| B. | an industry where demand for its product is growing |
| C. | an industry with high capital investment |
| D. | an industry with average growth higher than the growth of the economy |
| Answer» E. | |
| 2081. |
Which of the following is not an assumption in Miller and Modigliani approach?? |
| A. | There are no corporate or personal income tax |
| B. | Investors are assumed to be rational and behave accordingly |
| C. | There is no corporate tax though there are personal income tax |
| D. | Capital markets are perfect |
| Answer» E. | |
| 2082. |
The relationship between potential unsystematic risk and reward is given by ___________.? |
| A. | Excess return to beta ratio |
| B. | Excess return to security |
| C. | Excess return to security |
| D. | Excess return to beta square ratio |
| Answer» B. Excess return to security | |
| 2083. |
The growth in book value per share shows the_____________.? |
| A. | rise in share price |
| B. | increase in physical asset of the firm |
| C. | increase in net worth |
| D. | growth in reserves |
| Answer» E. | |
| 2084. |
Mumbai stock exchange was recognized on a permanent basis in___________.? |
| A. | 1950 |
| B. | 1956 |
| C. | 1957 |
| D. | 1965 |
| Answer» D. 1965 | |
| 2085. |
The material wealth of a society is equal to the sum of _________.? |
| A. | all financial assets |
| B. | all real assets |
| C. | all financial and real assets |
| D. | all physical assets |
| Answer» D. all physical assets | |
| 2086. |
Investment bankers perform the following role ___________.? |
| A. | market new stock and bond issues for firms |
| B. | provide advice to the firms as to market conditions, price, etc |
| C. | design securities with desirable properties |
| D. | all of the above |
| Answer» E. | |
| 2087. |
Stock option is considered more valuable in situation when stock have? |
| A. | price hike in market |
| B. | market stability |
| C. | not volatile |
| D. | highly volatile |
| Answer» E. | |
| 2088. |
Stock option is more worthwhile if it is? |
| A. | extremely volatile |
| B. | less volatile |
| C. | stable stock |
| D. | unstable price stock |
| Answer» B. less volatile | |
| 2089. |
If default probability is zero and bond is not called then yield to maturity is? |
| A. | mature expected return rate |
| B. | lower than expected return rate |
| C. | higher than expected return rate |
| D. | equal to expected return rate |
| Answer» E. | |
| 2090. |
In binomial approach of option pricing model, value of stock is subtracted from call option obligation value to calculate? |
| A. | current value of portfolio |
| B. | future value of portfolio |
| C. | put option value |
| D. | call option value |
| Answer» B. future value of portfolio | |
| 2091. |
Situation in financial options in which strike price is less than current price of stock is classified as? |
| A. | in-the-money |
| B. | out-of-the-money |
| C. | out-of-the-portfolio |
| D. | in-the-portfolio |
| Answer» B. out-of-the-money | |
| 2092. |
An inflation rate including in quoted interest rate on security, is inflation rate? |
| A. | expected over security life |
| B. | expected at deferred call |
| C. | at bond issuance |
| D. | expected at time of maturity |
| Answer» B. expected at deferred call | |
| 2093. |
According to Black Schools model, stocks with call option pays the? |
| A. | dividends |
| B. | no dividends |
| C. | current price |
| D. | past price |
| Answer» C. current price | |
| 2094. |
Price at which European and American options can be exercised is classified as? |
| A. | exercise price |
| B. | strike price |
| C. | horizon price |
| D. | Both A and B |
| Answer» E. | |
| 2095. |
According to Black Scholes model, trading of securities and stock prices moves respectively? |
| A. | constant and randomly |
| B. | randomly and constant |
| C. | randomly and continuously |
| D. | continuously and randomly |
| Answer» E. | |
| 2096. |
Present value of portfolio is Rs 500 and current option price is Rs 1200 then value of stock included in portfolio will be? |
| A. | Rs 1,700.00 |
| B. | -Rs 1,700.00 |
| C. | Rs 700.00 |
| D. | -Rs 700.00 |
| Answer» B. -Rs 1,700.00 | |
| 2097. |
If current price increases from lower to higher then an? |
| A. | option value equal to one |
| B. | option value will increase |
| C. | option value will decrease |
| D. | option value equal to zero |
| Answer» C. option value will decrease | |
| 2098. |
Second step in binomial approach of option pricing is to define range of values? |
| A. | at expiration |
| B. | at buying date |
| C. | at exchange closing time |
| D. | at exchange opening time |
| Answer» B. at buying date | |
| 2099. |
An investor who writes stock call options in his own portfolio is classified as? |
| A. | due option |
| B. | covered option |
| C. | undue option |
| D. | uncovered option |
| Answer» C. undue option | |
| 2100. |
Preferred dividend is divided by preferred stock price multiply by (1-floatation cost) is used to calculate? |
| A. | transaction cost of preferred stock |
| B. | financing of preferred stock |
| C. | weighted cost of capital |
| D. | component cost of preferred stock |
| Answer» E. | |