Question # 2 of 15 ( Start time: 06:56:42 PM ) Total Marks: 1
According to timing difference problem a good project might suffer from _____ IRR even though its NPV is ________.
Select correct option:
Higher; lower
Lower; Lower
Lower; higher
Higher; higher
uiz Start Time: 06:55 PM Time Left 89
sec(s)
Question # 3 of 15 ( Start time: 06:57:21 PM ) Total Marks: 1
For Company A, plow back ratio is 30%. What will be its Pay-out ratio?
Select correct option:
3.33%
30%
31%
70%
Quiz Start Time: 06:55 PM Time Left 89
sec(s)
Question # 4 of 15 ( Start time: 06:58:21 PM ) Total Marks: 1
The value of a bond is directly derived from which of the following?
Select correct option:
Cash flows
Coupon receipts
Par recovery at maturity
All of the given options
Question # 5 of 15 ( Start time: 06:58:48 PM ) Total Marks: 1
________ is paid by companies with lower grade bonds like CC or C ratings.
Select correct option:
Default risk premium
Sovereign Risk Premium
Market risk premium
Maturity risk premium
Question # 6 of 15 ( Start time: 07:00:18 PM ) Total Marks: 1
If Net Present Value technique is used, what is the ranking criterion for projects?
Select correct option:
Choose the highest NPV
Choose the lowest NPV
Choose the project with longest term
Choose the project with shortest term
Question # 7 of 15 ( Start time: 07:00:45 PM ) Total Marks: 1
Which of the following is a capital budgeting technique that is NOT considered as discounted cash flow method?
Select correct option:
Payback period
Internal rate of return
Net present value
Profitability index
Question # 8 of 15 ( Start time: 07:01:58 PM ) Total Marks: 1
The current yield on a bond is equal to ________.
Select correct option:
Annual interest divided by the current market price
The yield to maturity
Annual interest divided by the par value
The internal rate of return
Question # 9 of 15 ( Start time: 07:03:22 PM ) Total Marks: 1
Which of the following is likely to be correct for a company which invests in projects with Positive NPV?
Select correct option:
Company’s EVA (Economic Value Added) rises by the same value
Company’s MVA (Market Value Added) or market value rises
Company Shareholders’ Wealth rises
All of the given options
Question # 10 of 15 ( Start time: 07:04:03 PM ) Total Marks: 1
Which of the following is NOT true regarding an annuity due?
Select correct option:
It is a series of equal cash flows
It is also known as deferred annuity
Cash flows occur for a specific time period
Payments are made at the start of each period
Question # 11 of 15 ( Start time: 07:05:15 PM ) Total Marks: 1
Which of the following is type a Temporary Account?
Select correct option:
Asset
Liability
Reserves
Revenue
Question # 12 of 15 ( Start time: 07:06:35 PM ) Total Marks: 1
If we were to increase ABC company cost of equity assumption, what would we expect to happen to the present value of all future cash flows?
Select correct option:
An increase
A decrease
No change
Incomplete information
Question # 13 of 15 ( Start time: 07:07:47 PM ) Total Marks: 1
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
uestion # 14 of 15 ( Start time: 07:08:32 PM ) Total Marks: 1
Which of the following statements (in general) is correct?
Select correct option:
A low receivables turnover is desirable
The lower the total debt-to-equity ratio, the lower the financial risk for a firm
An increase in net profit margin with no change in sales or assets means a weaker ROI
The higher the tax rate for a firm, the lower the interest coverage ratio
Question # 15 of 15 ( Start time: 07:09:07 PM ) Total Marks: 1
With continuous compounding at 8 percent for 20 years, what is the approximate future value of a Rs. 20,000 initial investment?
Select correct option:
Rs.52,000
Rs.93,219
Rs.99,061
Rs.915,240
Question # 1 of 15 ( Start time: 09:14:05 PM ) Total Marks: 1
When the bond approaches its maturity, the market value of the bond approaches to which of the following?
Select correct option:
Intrinsic value
Book value
Par value
Historic cost
uestion # 2 of 15 ( Start time: 09:14:35 PM ) Total Marks: 1
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
When the zero coupon bond approaches to its maturity, the market value of the bond approaches to which of the following?
Select correct option:
Intrinsic value
Book value
Par value
Historic cost
Question # 4 of 15 ( Start time: 09:17:00 PM ) Total Marks: 1
What is difference between shares and bonds?
Select correct option:
Bonds are representing ownership whereas shares are not
Shares are representing ownership whereas bonds are not
Shares and bonds both represent equity
Shares and bond both represent liabilities
Question # 5 of 15 ( Start time: 09:18:04 PM ) Total Marks: 1
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
Which of the following refers to a highly competitive market where good business ideas are taken up immediately?
Select correct option:
Capital market
Efficient market (v.v.v imp and repetative question)
Money market
Real asset market
A technique that tells us the number of years required to recover our initial cash investment based on the project’s expected cash flows is:
Select correct option:
Pay back period
Internal rate of return
Net present value
Profitability index
Which of the following can not be the drawback of using payback period technique of capital budgeting?
Select correct option:
It does not account for time value of money
It neglects cash flows after the payback period
It does not use interest rate while making calculations
It is a tricky and complicated method
Question # 13 of 15 ( Start time: 09:26:33 PM ) Total Marks: 1
Which of the following is a capital budgeting technique that is NOT considered as discounted cash flow method?
Select correct option:
Payback period
Internal rate of return
Net present value
Profitability index
The value of a bond is directly derived from which of the following?
Select correct option:
Cash flows
Coupon receipts
Par recovery at maturity
All of the given options
Who or what is a person or institution designated by a bond issuer as the official representative of the bondholders?
Select correct option:
Indenture
Debenture
Bond
Bond trustee
Question # 13 of 15 ( Start time: 10:01:09 PM ) Total Marks: 1
What is the present value of Rs. 3,500,000 to be paid at the end of 50 years if the correct risk adjusted interest rate is 18%?
Select correct option:
Rs.105,000
Rs.1,500,000
Rs.3975,000
Rs. 350,000
An annuity due is always worth ___ a comparable annuity.
Select correct option:
Less than
More than
Equal to
Can not be found from the given information
What is the term used for a general impression about an individual based on a single characteristic such as intelligence, sociability, or appearance?
Select correct option:
The contrast effect
Personal bias
The halo effect
Projection
The logic behind _______ is that instead of looking at net cash flows you look at cash inflows and outflows separately for each point in time.
Select correct option:
IRR
MIRR
PV
NPV
______ are also known as Spontaneous Financing.
Select correct option:
Current liabilities
Current assets
Fixed assets
Long-term liabilities
What type of long-term financing most likely has the following features: 1) it has an infinite life, 2) it pays dividends, and 3) its cash flows are expected to be a constant annuity stream?
Select correct option:
Long-term debt
Preferred stock
Common stock
None of the given options
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