FIN622 QUIZ

Subject: FIN622 QUIZ Fri Jun 25, 2010 1:38 pm

Question # 1 of 15 ( Start time:
11:20:12 AM )

Total
Marks: 1

Which of the following statement
best describe the term Market Correction?

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	Market Correction refers to the situation where equilibrium of supply & demand of shares occurs in the market
	Market correction occurs when sharesâ€™ intrinsic values becomes equal to face values
	Market Correction occurs when there is a boom in the economy
	Market Correction occurs when inflation rate is above the market interest rate

Question # 2 of 15 ( Start time:
11:21:25 AM )

Total
Marks: 1

Which of the following illustrates
the use of a hedging (maturity matching) approach to financing?

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	Permanent working capital financed with long-term liabilities.
	Short-term assets financed with equity.
	All assets financed with 50 percent equity, 50 percent long-term debt mixture.
	Short-term assets financed with long-term liabilities.

Question # 3 of 15 ( Start time:
11:22:31 AM )

Total
Marks: 1

If two projects offer the same,
positive NPV, then which of the following would be a reasonable conclusion?

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	The projects would have the same IRR.
	The projects would have the same payback period.
	The projects are mutually exclusive.
	The projects would add the same amount to the value of the firm.

Question # 4 of 15 ( Start time:
11:23:57 AM )

Total
Marks: 1

If a creditor wanted to know if a
potential customer paid its bills on time, the creditor could look at the
potential customer's:

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	Current ratio.
	Acid ratio.
	Average age of accounts payable.
	Average age of accounts receivable

Question # 5 of 15 ( Start time:
11:25:18 AM )

Total
Marks: 1

Which of the following is closely
related to a sales budget?

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	Miscellaneous income
	Future profits
	Cash outflow
	Cash inflow

Question # 6 of 15 ( Start time:
11:26:43 AM )

Total
Marks: 1

What is the future value of Rs.1
invested for 10 years if the 12 percent annual rate of interest is compounded
quarterly?

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	Rs.2.30
	Rs.3.26
	Rs.3.25
	Rs.2.93

Question # 7 of 15 ( Start time:
11:28:05 AM )

Total
Marks: 1

Which of the following methods
would be most suitable for calculating the return on stocks of a non-listed
company?

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	Dividend Growth model
	Capital Asset Pricing Model
	Security Market Line
	Characteristics line

Question # 8 of 15 ( Start time:
11:29:20 AM )

Total
Marks: 1

Which of the following is tax
deductible?

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	Dividend on preferred shares
	Dividend on common stocks
	Coupon payments on bonds
	Capital gain on common stocks

Question # 9 of 15 ( Start time:
11:30:30 AM )

Total
Marks: 1

Suppose a stock is selling today
for Rs.35 per share. At the end of the year, it pays a dividend of Rs.2.00
per share and sells for Rs.39.00. What is the dividend yield on the stock?

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	2%
	3%
	4%
	5%

Question # 10 of 15 ( Start time:
11:31:31 AM )

Total
Marks: 1

Which of the following would lower
a firm's operating break-even point?

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	An increase in the cost of goods sold
	An increase in selling price
	An increase in wages paid to employees
	An increase in total sales

Question # 11 of 15 ( Start time:
11:32:42 AM )

Total
Marks: 1

If two projects are independent,
that means that ___________.

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	Selection of one precludes selection of the other.
	You should analyze the projects independently.
	Both the given options may apply
	None of the given options

Question # 12 of 15 ( Start time:
11:33:54 AM )

Total
Marks: 1

Which of the following is a method
of evaluating securities by analyzing statistics generated by market
activity, such as past prices and volume?

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	Technical analysis
	Fundamental analysis
	Common size analysis
	Ration analysis

Question # 13 of 15 ( Start time:
11:34:59 AM )

Total
Marks: 1

The variance of an investment's
returns is a measure of the:

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	Volatility of the rates of return.
	Probability of a negative return.
	Historic return over long periods.
	Average value of the investment.

Question # 14 of 15 ( Start time:
11:36:05 AM )

Total
Marks: 1

Which of the following statement
is CORRECT regarding residual dividend policy?

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	Shareholders are paid dividend from capital
	Dividend are paid after meeting all the financial needs of the firm
	The management sets a fixed payout ratio
	Shareholders are paid fixed dividend every year

Question # 15 of 15 ( Start time:
11:37:10 AM )

Total
Marks: 1

Juan is starting a software
writing company. He is the owner and has only 3 employees. He wants a simple
inexpensive form of ownership that leaves him in control and that he can
quickly dissolve if he decides to change to another business. His best choice
of form of ownership would be:

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	S-corporation.
	Partnership.
	Corporation
	Sole proprietorship

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