Question # 1 of 20 ( Start time: 03:44:40 AM ) Total Marks: 1
Discounted cash flow methods provide a more objective basis for evaluating and selecting an investment project. These methods take into account:
Select correct option:
Magnitude of expected cash flows
Timing of expected cash flows
Both timing and magnitude of cash flows
None of the given options
Question # 2 of 20 ( Start time: 03:45:20 AM ) Total Marks: 1
What is the most important criteria in capital budgeting?
Select correct option:
Return on investment
Profitability index
Net present value
Pay back period
Question # 3 of 20 ( Start time: 03:46:33 AM ) Total Marks: 1
Discounted cash flow methods provide a more objective basis for evaluating and selecting an investment project. These methods take into account:
Select correct option:
Magnitude of expected cash flows
Timing of expected cash flows
Both timing and magnitude of cash flows
None of the given options
Question # 4 of 20 ( Start time: 03:47:23 AM ) Total Marks: 1
Companies and individuals running different types of businesses have to make the choices of the asset according to which of the following?
Select correct option:
Life span of the project
Validity of the project
Cost of the capital
Return on asset
I selected 4th
Question # 5 of 20 ( Start time: 03:47:52 AM ) Total Marks: 1
What is the present value of Rs.8,000 to be paid at the end of three years if the correct risk adjusted interest rate is 11%?
Select correct option:
Rs.5,850
Rs.4,872
Rs.6,725
Rs.1,842
I think 1st option is correct
Question # 6 of 20 ( Start time: 03:49:00 AM ) Total Marks: 1
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
Question # 7 of 20 ( Start time: 03:50:13 AM ) Total Marks: 1
In 2 years you are to receive Rs.10,000. If the interest rate were to suddenly decrease, the present value of that future amount to you would __________.
Select correct option:
Fall
Rise
Remain unchanged
Incomplete information
Question # 8 of 20 ( Start time: 03:51:32 AM ) Total Marks: 1
Which of the following would NOT improve the current ratio?
Select correct option:
Borrow short term to finance additional fixed assets
Issue long-term debt to buy inventory
Sell common stock to reduce current liabilities
Sell fixed assets to reduce accounts payable
Question # 9 of 20 ( Start time: 03:52:34 AM ) 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
Question # 10 of 20 ( Start time: 03:53:14 AM ) Total Marks: 1
A statistical measure of the variability of a distribution around its mean is referred to as __________.
Select correct option:
Probability distribution
Expected return
Standard deviation
Coefficient of variation
Question # 11 of 20 ( Start time: 03:53:42 AM ) Total Marks: 1
To increase a given future value, the discount rate should be adjusted __________.
Select correct option:
Upward
Downward
First upward and then downward
None of the given options
Question # 12 of 20 ( Start time: 03:54:08 AM ) Total Marks: 1
Which of the following is NOT a cash outflow for the firm?
Select correct option:
Depreciation
Dividends
Interest
Taxes
Question # 13 of 20 ( Start time: 03:54:52 AM ) Total Marks: 1
Total portfolio risk is __________.
Select correct option:
Equal to systematic risk plus non-diversifiable risk
Equal to avoidable risk plus diversifiable risk
Equal to systematic risk plus unavoidable risk
Equal to systematic risk plus diversifiable risk
Question # 14 of 20 ( Start time: 03:55:40 AM ) Total Marks: 1
What is yield to maturity on a bond?
Select correct option:
Below the coupon rate when the bond sells at a discount, and equal to the coupon rate when the bond sells at a premium
The discount rate that will set the present value of the payments equal to the bond price
Based on the assumption that any payments received are reinvested at the coupon rate
None of the above
Question # 15 of 20 ( Start time: 03:56:26 AM ) Total Marks: 1
Why companies invest in projects with negative NPV?
Select correct option:
Because there is hidden value in each project
Because there may be chance of rapid growth
Because they have invested a lot
All of the given options
Question # 16 of 20 ( Start time: 03:57:41 AM ) 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 # 17 of 20 ( Start time: 03:58:21 AM ) Total Marks: 1
Which of the following market in finance is referred to the market for short-term government and corporate debt securities?
Select correct option:
Money market
Capital market
Primary market
Secondary market
(it should be money market)
Question # 18 of 20 ( Start time: 03:58:39 AM ) Total Marks: 1
Which one of the following selects the combination of investment proposals that will provide the greatest increase in the value of the firm within the budget ceiling constraint?
Select correct option:
Cash budgeting
Capital budgeting
Capital rationing
Capital expenditure
Question # 19 of 20 ( Start time: 03:59:56 AM ) Total Marks: 1
A project 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
Question # 20 of 20 ( Start time: 04:00:15 AM ) Total Marks: 1
How "Shareholder wealth" is represented in a firm?
Select correct option:
The number of people employed in the firm
The book value of the firm's assets less the book value of its liabilities
The market price per share of the firm's common stock
The amount of salary paid to its employees
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 53
sec(s)
Question # 1 of 20 ( Start time: 08:13:52 PM ) Total Marks: 1
Which of the following statements is correct in distinguishing between serial bonds and sinking-fund bonds?
Select correct option:
Serial bonds mature at a variety of dates, but sinking-fund bonds mature at a single date.
Serial bonds provide for the deliberate retirement of bonds prior to maturity, but sinking-fund bonds do not provide for the deliberate retirement of bonds prior to maturity
Serial bonds do not provide for the deliberate retirement of bonds prior to maturity, but sinking-fund bonds do provide for the deliberate retirement of bonds prior to maturity.
None of the above are correct since a serial bond is identical to a sinking fund bond.
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 53
sec(s)
Question # 1 of 20 ( Start time: 08:13:52 PM ) Total Marks: 1
Which of the following statements is correct in distinguishing between serial bonds and sinking-fund bonds?
Select correct option:
Serial bonds mature at a variety of dates, but sinking-fund bonds mature at a single date.
Serial bonds provide for the deliberate retirement of bonds prior to maturity, but sinking-fund bonds do not provide for the deliberate retirement of bonds prior to maturity
Serial bonds do not provide for the deliberate retirement of bonds prior to maturity, but sinking-fund bonds do provide for the deliberate retirement of bonds prior to maturity.
None of the above are correct since a serial bond is identical to a sinking fund bond.
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 60
sec(s)
Question # 3 of 20 ( Start time: 08:15:51 PM ) Total Marks: 1
Which of the following will NOT equate the future value of cash inflows to the present value of cash outflows?
Select correct option:
Discount rate
Profitability index
Internal rate of return
Multiple Internal rate of return
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 57
sec(s)
Question # 5 of 20 ( Start time: 08:17:50 PM ) Total Marks: 1
Which of the following would be considered a cash-flow item from an "operating" activity?
Select correct option:
Cash outflow to the government for taxes
Cash outflow to shareholders as dividends
Cash inflow to the firm from selling new common equity shares
Cash outflow to purchase bonds issued by another company
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 63
sec(s)
Question # 6 of 20 ( Start time: 08:18:33 PM ) Total Marks: 1
Where there is single period capital rationing, what the most sensible way of making investment decisions?
Select correct option:
Choose all projects with a positive NPV
Group projects together to allocate the funds available and select the group of projects with the highest NPV
Choose the project with the highest NPV
Calculate IRR and select the projects with the highest IRRs
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 54
sec(s)
Question # 7 of 20 ( Start time: 08:19:12 PM ) Total Marks: 1
Discounted cash flow methods provide a more objective basis for evaluating and selecting an investment project. These methods take into account:
Select correct option:
Magnitude of expected cash flows
Timing of expected cash flows
Both timing and magnitude of cash flows
None of the given options
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 76
sec(s)
Question # 8 of 20 ( Start time: 08:20:29 PM ) Total Marks: 1
Which of the following is NOT the form of cash flow generated by the investments of the shareholders?
Select correct option:
Income
Capital loss
Capital gain
Operating income
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 11
sec(s)
Question # 9 of 20 ( Start time: 08:21:03 PM ) Total Marks: 1
The statement of cash flows reports a firm's cash flows segregated into which of the following categorical order?
Select correct option:
Operating, investing, and financing
Investing, operating, and financing
Financing, operating and investing
Financing, investing, and operating
Saving...
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 68
sec(s)
Question # 10 of 20 ( Start time: 08:22:24 PM ) Total Marks: 1
Which group of ratios measures a firm's ability to meet short-term obligations?
Select correct option:
Liquidity ratios
Debt ratios
Coverage ratios
Profitability ratios
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 72
sec(s)
Question # 11 of 20 ( Start time: 08:22:49 PM ) Total Marks: 1
Which of the following value of the shares changes with investor’s perception about the company’s future and supply and demand situation?
Select correct option:
Par value
Market value
Intrinsic value
Face value
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 20
sec(s)
Question # 12 of 20 ( Start time: 08:23:18 PM ) Total Marks: 1
What should be the focal point of financial management in a firm?
Select correct option:
The number and types of products or services provided by the firm
The minimization of the amount of taxes paid by the firm
The creation of value for shareholders
The dollars profits earned by the firm
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 41
sec(s)
Question # 13 of 20 ( Start time: 08:24:41 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
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 61
sec(s)
Question # 14 of 20 ( Start time: 08:25:47 PM ) Total Marks: 1
_________ is equal to (common shareholders' equity/common shares outstanding).
Select correct option:
Book value per share
Liquidation value per share
Market value per share
None of the above
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 26
sec(s)
Question # 15 of 20 ( Start time: 08:26:20 PM ) Total Marks: 1
What is the present value of Rs.8,000 to be paid at the end of three years if the correct risk adjusted interest rate is 11%?
Select correct option:
Rs.5,850
Rs.4,872
Rs.6,725
Rs.1,842
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 83
sec(s)
Question # 16 of 20 ( Start time: 08:27:38 PM ) Total Marks: 1
Which of the following effects price of the bond?
Select correct option:
Market interest rate
Required rate of return
Interest rate risk
All of the given options
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 10
sec(s)
Question # 17 of 20 ( Start time: 08:27:51 PM ) Total Marks: 1
The value of direct claim security is derived from which of the following?
Select correct option:
Fundamental analysis
Underlying real asset
Supply and demand of securities in the market
All of the given options
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 8
sec(s)
Question # 18 of 20 ( Start time: 08:29:15 PM ) Total Marks: 1
Companies and individuals running different types of businesses have to make the choices of the asset according to which of the following?
Select correct option:
Life span of the project
Validity of the project
Cost of the capital
Return on asset
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 8
sec(s)
Question # 19 of 20 ( Start time: 08:30:47 PM ) Total Marks: 1
The benefit we expect from a project is expressed in terms of:
Select correct option:
Cash in flows
Cash out flows
Cash flows
None of the given option
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 19
sec(s)
Question # 3 of 20 ( Start time: 09:20:12 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
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 15
sec(s)
Question # 4 of 20 ( Start time: 09:21:27 PM ) Total Marks: 1
The DuPont Approach breaks down the earning power on shareholders' book value (ROE) as follows: ROE = __________.
Select correct option:
Net profit margin × Total asset turnover × Equity multiplier
Total asset turnover × Gross profit margin × Debt ratio
Total asset turnover × Net profit margin
Total asset turnover × Gross profit margin × Equity multiplier
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 36
sec(s)
Question # 5 of 20 ( Start time: 09:22:47 PM ) Total Marks: 1
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
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 58
sec(s)
Question # 7 of 20 ( Start time: 09:24:08 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
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 47
sec(s)
Question # 8 of 20 ( Start time: 09:24:55 PM ) Total Marks: 1
Which of the following techniques would be used for a project that has non–normal cash flows?
Select correct option:
Internal rate of return
Multiple internal rate of return
Modified internal rate of return
Net present value
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 77
sec(s)
Question # 10 of 20 ( Start time: 09:25:57 PM ) Total Marks: 1
Cash budgets are prepared from past:
Select correct option:
Balance sheets
Income statements
Income tax and depreciation data
None of the given options
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 83
sec(s)
Question # 11 of 20 ( Start time: 09:26:26 PM ) Total Marks: 1
Which of the following is a major disadvantage of the corporate form of organization?
Select correct option:
Double taxation of dividends
Inability of the firm to raise large sums of additional capital
Limited liability of shareholders
Limited life of the corporate form
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 9
sec(s)
Question # 12 of 20 ( Start time: 09:26:49 PM ) Total Marks: 1
Study the time line and accompanying 5-period cash-flow pattern below. 0 1 2 3 4 5 6 Time line |--------|--------|--------|--------|--------|--------| Rs.10 Rs.10 Rs.10 Rs.10 Rs.10 Cash flows ¦ ¦ A B The present value of the 5-period annuity shown above as of Point A is the present value of a 5-period ______________ , whereas the future value of the same annuity as of Point B is the future value of a 5-period ______________ .
Select correct option:
Ordinary annuity; ordinary annuity
Ordinary annuity; annuity due
Annuity due; annuity due
Annuity due; ordinary annuity
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 2
sec(s)
Question # 16 of 20 ( Start time: 09:30:13 PM ) Total Marks: 1
__________ is the variability of return on stocks or portfolios not explained by general market movements. It is avoidable through diversification.
Select correct option:
Systematic risk
Standard deviation
Unsystematic risk
Coefficient of variation
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 25
sec(s)
Question # 17 of 20 ( Start time: 09:31:46 PM ) Total Marks: 1
In the dividend discount model, _______ which of the following are not incorporated into the discount rate?
Select correct option:
Real risk-free rate
Risk premium for stocks
Return on assets
Expected inflation rate
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 62
sec(s)
Question # 18 of 20 ( Start time: 09:32:57 PM ) Total Marks: 1
When bonds are issued, under which of the following category the value of the bond appears?
Select correct option:
Equity
Fixed assets
Short term loan
Long term loan
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 29
sec(s)
Question # 19 of 20 ( Start time: 09:33:43 PM ) Total Marks: 1
Which of the following is correct, if a firm has a required rate of return equal to the ROE?
Select correct option:
The firm can increase market price and P/E by retaining more earnings.
The firm can increase market price and P/E by increasing the growth rate.
The amount of earnings retained by the firm does not affect market price or the P/E.
None of the given options
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 67
sec(s)
Question # 20 of 20 ( Start time: 09:34:48 PM ) Total Marks: 1
The statement of cash flows reports a firm's cash flows segregated into which of the following categorical order?
Select correct option:
Operating, investing, and financing
Investing, operating, and financing
Financing, operating and investing
Financing, investing, and operating
Discounted cash flow methods provide a more objective basis for evaluating and selecting an investment project. These methods take into account:
Select correct option:
Magnitude of expected cash flows
Timing of expected cash flows
Both timing and magnitude of cash flows
None of the given options
Question # 2 of 20 ( Start time: 03:45:20 AM ) Total Marks: 1
What is the most important criteria in capital budgeting?
Select correct option:
Return on investment
Profitability index
Net present value
Pay back period
Question # 3 of 20 ( Start time: 03:46:33 AM ) Total Marks: 1
Discounted cash flow methods provide a more objective basis for evaluating and selecting an investment project. These methods take into account:
Select correct option:
Magnitude of expected cash flows
Timing of expected cash flows
Both timing and magnitude of cash flows
None of the given options
Question # 4 of 20 ( Start time: 03:47:23 AM ) Total Marks: 1
Companies and individuals running different types of businesses have to make the choices of the asset according to which of the following?
Select correct option:
Life span of the project
Validity of the project
Cost of the capital
Return on asset
I selected 4th
Question # 5 of 20 ( Start time: 03:47:52 AM ) Total Marks: 1
What is the present value of Rs.8,000 to be paid at the end of three years if the correct risk adjusted interest rate is 11%?
Select correct option:
Rs.5,850
Rs.4,872
Rs.6,725
Rs.1,842
I think 1st option is correct
Question # 6 of 20 ( Start time: 03:49:00 AM ) Total Marks: 1
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
Question # 7 of 20 ( Start time: 03:50:13 AM ) Total Marks: 1
In 2 years you are to receive Rs.10,000. If the interest rate were to suddenly decrease, the present value of that future amount to you would __________.
Select correct option:
Fall
Rise
Remain unchanged
Incomplete information
Question # 8 of 20 ( Start time: 03:51:32 AM ) Total Marks: 1
Which of the following would NOT improve the current ratio?
Select correct option:
Borrow short term to finance additional fixed assets
Issue long-term debt to buy inventory
Sell common stock to reduce current liabilities
Sell fixed assets to reduce accounts payable
Question # 9 of 20 ( Start time: 03:52:34 AM ) 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
Question # 10 of 20 ( Start time: 03:53:14 AM ) Total Marks: 1
A statistical measure of the variability of a distribution around its mean is referred to as __________.
Select correct option:
Probability distribution
Expected return
Standard deviation
Coefficient of variation
Question # 11 of 20 ( Start time: 03:53:42 AM ) Total Marks: 1
To increase a given future value, the discount rate should be adjusted __________.
Select correct option:
Upward
Downward
First upward and then downward
None of the given options
Question # 12 of 20 ( Start time: 03:54:08 AM ) Total Marks: 1
Which of the following is NOT a cash outflow for the firm?
Select correct option:
Depreciation
Dividends
Interest
Taxes
Question # 13 of 20 ( Start time: 03:54:52 AM ) Total Marks: 1
Total portfolio risk is __________.
Select correct option:
Equal to systematic risk plus non-diversifiable risk
Equal to avoidable risk plus diversifiable risk
Equal to systematic risk plus unavoidable risk
Equal to systematic risk plus diversifiable risk
Question # 14 of 20 ( Start time: 03:55:40 AM ) Total Marks: 1
What is yield to maturity on a bond?
Select correct option:
Below the coupon rate when the bond sells at a discount, and equal to the coupon rate when the bond sells at a premium
The discount rate that will set the present value of the payments equal to the bond price
Based on the assumption that any payments received are reinvested at the coupon rate
None of the above
Question # 15 of 20 ( Start time: 03:56:26 AM ) Total Marks: 1
Why companies invest in projects with negative NPV?
Select correct option:
Because there is hidden value in each project
Because there may be chance of rapid growth
Because they have invested a lot
All of the given options
Question # 16 of 20 ( Start time: 03:57:41 AM ) 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 # 17 of 20 ( Start time: 03:58:21 AM ) Total Marks: 1
Which of the following market in finance is referred to the market for short-term government and corporate debt securities?
Select correct option:
Money market
Capital market
Primary market
Secondary market
(it should be money market)
Question # 18 of 20 ( Start time: 03:58:39 AM ) Total Marks: 1
Which one of the following selects the combination of investment proposals that will provide the greatest increase in the value of the firm within the budget ceiling constraint?
Select correct option:
Cash budgeting
Capital budgeting
Capital rationing
Capital expenditure
Question # 19 of 20 ( Start time: 03:59:56 AM ) Total Marks: 1
A project 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
Question # 20 of 20 ( Start time: 04:00:15 AM ) Total Marks: 1
How "Shareholder wealth" is represented in a firm?
Select correct option:
The number of people employed in the firm
The book value of the firm's assets less the book value of its liabilities
The market price per share of the firm's common stock
The amount of salary paid to its employees
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 53
sec(s)
Question # 1 of 20 ( Start time: 08:13:52 PM ) Total Marks: 1
Which of the following statements is correct in distinguishing between serial bonds and sinking-fund bonds?
Select correct option:
Serial bonds mature at a variety of dates, but sinking-fund bonds mature at a single date.
Serial bonds provide for the deliberate retirement of bonds prior to maturity, but sinking-fund bonds do not provide for the deliberate retirement of bonds prior to maturity
Serial bonds do not provide for the deliberate retirement of bonds prior to maturity, but sinking-fund bonds do provide for the deliberate retirement of bonds prior to maturity.
None of the above are correct since a serial bond is identical to a sinking fund bond.
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 53
sec(s)
Question # 1 of 20 ( Start time: 08:13:52 PM ) Total Marks: 1
Which of the following statements is correct in distinguishing between serial bonds and sinking-fund bonds?
Select correct option:
Serial bonds mature at a variety of dates, but sinking-fund bonds mature at a single date.
Serial bonds provide for the deliberate retirement of bonds prior to maturity, but sinking-fund bonds do not provide for the deliberate retirement of bonds prior to maturity
Serial bonds do not provide for the deliberate retirement of bonds prior to maturity, but sinking-fund bonds do provide for the deliberate retirement of bonds prior to maturity.
None of the above are correct since a serial bond is identical to a sinking fund bond.
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 60
sec(s)
Question # 3 of 20 ( Start time: 08:15:51 PM ) Total Marks: 1
Which of the following will NOT equate the future value of cash inflows to the present value of cash outflows?
Select correct option:
Discount rate
Profitability index
Internal rate of return
Multiple Internal rate of return
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 57
sec(s)
Question # 5 of 20 ( Start time: 08:17:50 PM ) Total Marks: 1
Which of the following would be considered a cash-flow item from an "operating" activity?
Select correct option:
Cash outflow to the government for taxes
Cash outflow to shareholders as dividends
Cash inflow to the firm from selling new common equity shares
Cash outflow to purchase bonds issued by another company
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 63
sec(s)
Question # 6 of 20 ( Start time: 08:18:33 PM ) Total Marks: 1
Where there is single period capital rationing, what the most sensible way of making investment decisions?
Select correct option:
Choose all projects with a positive NPV
Group projects together to allocate the funds available and select the group of projects with the highest NPV
Choose the project with the highest NPV
Calculate IRR and select the projects with the highest IRRs
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 54
sec(s)
Question # 7 of 20 ( Start time: 08:19:12 PM ) Total Marks: 1
Discounted cash flow methods provide a more objective basis for evaluating and selecting an investment project. These methods take into account:
Select correct option:
Magnitude of expected cash flows
Timing of expected cash flows
Both timing and magnitude of cash flows
None of the given options
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 76
sec(s)
Question # 8 of 20 ( Start time: 08:20:29 PM ) Total Marks: 1
Which of the following is NOT the form of cash flow generated by the investments of the shareholders?
Select correct option:
Income
Capital loss
Capital gain
Operating income
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 11
sec(s)
Question # 9 of 20 ( Start time: 08:21:03 PM ) Total Marks: 1
The statement of cash flows reports a firm's cash flows segregated into which of the following categorical order?
Select correct option:
Operating, investing, and financing
Investing, operating, and financing
Financing, operating and investing
Financing, investing, and operating
Saving...
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 68
sec(s)
Question # 10 of 20 ( Start time: 08:22:24 PM ) Total Marks: 1
Which group of ratios measures a firm's ability to meet short-term obligations?
Select correct option:
Liquidity ratios
Debt ratios
Coverage ratios
Profitability ratios
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 72
sec(s)
Question # 11 of 20 ( Start time: 08:22:49 PM ) Total Marks: 1
Which of the following value of the shares changes with investor’s perception about the company’s future and supply and demand situation?
Select correct option:
Par value
Market value
Intrinsic value
Face value
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 20
sec(s)
Question # 12 of 20 ( Start time: 08:23:18 PM ) Total Marks: 1
What should be the focal point of financial management in a firm?
Select correct option:
The number and types of products or services provided by the firm
The minimization of the amount of taxes paid by the firm
The creation of value for shareholders
The dollars profits earned by the firm
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 41
sec(s)
Question # 13 of 20 ( Start time: 08:24:41 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
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 61
sec(s)
Question # 14 of 20 ( Start time: 08:25:47 PM ) Total Marks: 1
_________ is equal to (common shareholders' equity/common shares outstanding).
Select correct option:
Book value per share
Liquidation value per share
Market value per share
None of the above
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 26
sec(s)
Question # 15 of 20 ( Start time: 08:26:20 PM ) Total Marks: 1
What is the present value of Rs.8,000 to be paid at the end of three years if the correct risk adjusted interest rate is 11%?
Select correct option:
Rs.5,850
Rs.4,872
Rs.6,725
Rs.1,842
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 83
sec(s)
Question # 16 of 20 ( Start time: 08:27:38 PM ) Total Marks: 1
Which of the following effects price of the bond?
Select correct option:
Market interest rate
Required rate of return
Interest rate risk
All of the given options
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 10
sec(s)
Question # 17 of 20 ( Start time: 08:27:51 PM ) Total Marks: 1
The value of direct claim security is derived from which of the following?
Select correct option:
Fundamental analysis
Underlying real asset
Supply and demand of securities in the market
All of the given options
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 8
sec(s)
Question # 18 of 20 ( Start time: 08:29:15 PM ) Total Marks: 1
Companies and individuals running different types of businesses have to make the choices of the asset according to which of the following?
Select correct option:
Life span of the project
Validity of the project
Cost of the capital
Return on asset
MC090204751 : Syed Muhammad Wajahat Riaz
Quiz Start Time: 08:13 PM Time Left 8
sec(s)
Question # 19 of 20 ( Start time: 08:30:47 PM ) Total Marks: 1
The benefit we expect from a project is expressed in terms of:
Select correct option:
Cash in flows
Cash out flows
Cash flows
None of the given option
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 19
sec(s)
Question # 3 of 20 ( Start time: 09:20:12 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
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 15
sec(s)
Question # 4 of 20 ( Start time: 09:21:27 PM ) Total Marks: 1
The DuPont Approach breaks down the earning power on shareholders' book value (ROE) as follows: ROE = __________.
Select correct option:
Net profit margin × Total asset turnover × Equity multiplier
Total asset turnover × Gross profit margin × Debt ratio
Total asset turnover × Net profit margin
Total asset turnover × Gross profit margin × Equity multiplier
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 36
sec(s)
Question # 5 of 20 ( Start time: 09:22:47 PM ) Total Marks: 1
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
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 58
sec(s)
Question # 7 of 20 ( Start time: 09:24:08 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
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 47
sec(s)
Question # 8 of 20 ( Start time: 09:24:55 PM ) Total Marks: 1
Which of the following techniques would be used for a project that has non–normal cash flows?
Select correct option:
Internal rate of return
Multiple internal rate of return
Modified internal rate of return
Net present value
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 77
sec(s)
Question # 10 of 20 ( Start time: 09:25:57 PM ) Total Marks: 1
Cash budgets are prepared from past:
Select correct option:
Balance sheets
Income statements
Income tax and depreciation data
None of the given options
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 83
sec(s)
Question # 11 of 20 ( Start time: 09:26:26 PM ) Total Marks: 1
Which of the following is a major disadvantage of the corporate form of organization?
Select correct option:
Double taxation of dividends
Inability of the firm to raise large sums of additional capital
Limited liability of shareholders
Limited life of the corporate form
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 9
sec(s)
Question # 12 of 20 ( Start time: 09:26:49 PM ) Total Marks: 1
Study the time line and accompanying 5-period cash-flow pattern below. 0 1 2 3 4 5 6 Time line |--------|--------|--------|--------|--------|--------| Rs.10 Rs.10 Rs.10 Rs.10 Rs.10 Cash flows ¦ ¦ A B The present value of the 5-period annuity shown above as of Point A is the present value of a 5-period ______________ , whereas the future value of the same annuity as of Point B is the future value of a 5-period ______________ .
Select correct option:
Ordinary annuity; ordinary annuity
Ordinary annuity; annuity due
Annuity due; annuity due
Annuity due; ordinary annuity
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 2
sec(s)
Question # 16 of 20 ( Start time: 09:30:13 PM ) Total Marks: 1
__________ is the variability of return on stocks or portfolios not explained by general market movements. It is avoidable through diversification.
Select correct option:
Systematic risk
Standard deviation
Unsystematic risk
Coefficient of variation
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 25
sec(s)
Question # 17 of 20 ( Start time: 09:31:46 PM ) Total Marks: 1
In the dividend discount model, _______ which of the following are not incorporated into the discount rate?
Select correct option:
Real risk-free rate
Risk premium for stocks
Return on assets
Expected inflation rate
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 62
sec(s)
Question # 18 of 20 ( Start time: 09:32:57 PM ) Total Marks: 1
When bonds are issued, under which of the following category the value of the bond appears?
Select correct option:
Equity
Fixed assets
Short term loan
Long term loan
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 29
sec(s)
Question # 19 of 20 ( Start time: 09:33:43 PM ) Total Marks: 1
Which of the following is correct, if a firm has a required rate of return equal to the ROE?
Select correct option:
The firm can increase market price and P/E by retaining more earnings.
The firm can increase market price and P/E by increasing the growth rate.
The amount of earnings retained by the firm does not affect market price or the P/E.
None of the given options
MC090203819 : Saqib Taimoor
Quiz Start Time: 09:18 PM Time Left 67
sec(s)
Question # 20 of 20 ( Start time: 09:34:48 PM ) Total Marks: 1
The statement of cash flows reports a firm's cash flows segregated into which of the following categorical order?
Select correct option:
Operating, investing, and financing
Investing, operating, and financing
Financing, operating and investing
Financing, investing, and operating
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