Latest topics | » QURAN MAJEED KE TAFSEERMon Aug 20, 2012 2:59 am by YOUSUFHALI » PHY301 CIRCUIT THEORY REFERENCE BOOKWed Jul 25, 2012 11:36 am by shabbir1915 » MTH202 ASSIGNMENT NO 3 SOLUVEDMon Jun 11, 2012 9:51 am by jaffarhussain » Retrieve the DTC In the Jewel Module of 1995 FordThu May 31, 2012 11:51 am by obd2tool » How you can Obvious the Check Engine Light on the Thu May 31, 2012 11:43 am by obd2tool » send free sms and send free sms update on facebook Tue May 15, 2012 8:33 pm by rizwan269 » United Bank Limited (UBL) - Fee DepositThu May 10, 2012 3:33 pm by irumnaz » PHOTO MIXER SOFTWAREFri Apr 20, 2012 10:02 am by sacredwkb » Entrepreneurship SurveyThu Mar 08, 2012 2:20 pm by Admin» Fall 2011 Semester Result AnnouncedThu Mar 08, 2012 2:19 pm by Admin |
Social bookmarking |
Bookmark and share the address of KING'S IT WORLD on your social bookmarking website
Bookmark and share the address of KING'S IT WORLD on your social bookmarking website |
|
FLAG COUNTER | |
| | MGT201 2010 | |
| | Author | Message |
---|
Admin Admin
Posts : 638 Points : 2155 Reputation : 19 Join date : 2010-05-15 Age : 36 Location : islamabad
| Subject: MGT201 2010 Fri May 28, 2010 10:07 pm | |
| Question No: 1 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. Which of the following statements is correct for a sole proprietorship?
► The sole proprietor has limited liability
► The sole proprietor can easily dispose of their ownership position relative to a shareholder in a corporation
► The sole proprietorship can be created more quickly than a corporation
► The owner of a sole proprietorship faces double taxation unlike the partners in a partnership
Question No: 2 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. Which of the following market refers to the market for relatively long-term financial instruments?
► Secondary market
► Primary market
► Money market
► Capital market
Question No: 3 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. Felton Farm Supplies, Inc., has an 8 percent return on total assets of Rs.300,000 and a net profit margin of 5 percent. What are its sales?
► 750,0Rs.3, 750,000
► Rs.48Rs.480, 000
► Rs.30Rs.300, 000
► Rs.1, Rs.1, 500,000
Question No: 4 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. An investment proposal should be judged in whether or not it provides:
► A return equal to the return require by the investor
► A return more than required by investor
► A return less than required by investor
► A return equal to or more than required by investor
Question No: 5 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. A capital budgeting technique through which discount rate equates the present value of the future net cash flows from an investment project with the project's initial cash outflow is known as:
► Payback period
► Internal rate of return
► Net present value
► Profitability index
Question No: 6 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. A capital budgeting technique that is NOT considered as discounted cash flow method is:
► Payback period
► Internal rate of return
► Net present value
► Profitability index
Question No: 7 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. Why net present value is the most important criteria for selecting the project in capital budgeting?
► Because it has a direct link with the shareholders dividends maximization
► Because it has direct link with shareholders wealth maximization
► Because it helps in quick judgment regarding the investment in real assets
► Because we have a simple formula to calculate the cash flows
Question No: 8 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. You are selecting a project from a mix of projects, what would be your first selection in descending order to give yourself the best chance to add most to the firm value, when operating under a single-period capital-rationing constraint?
► Profitability index (PI)
► Net present value (NPV)
► Internal rate of return (IRR)
► Payback period (PBP)
Question No: 9 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. Bond is a type of Direct Claim Security whose value is NOT secured by __________.
► Tangible assets
► Intangible assets
► Fixed assets
► Real assets
Question No: 10 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. If a 7% coupon bond is trading for Rs. 975 it has a current yield of _________ percent.
► 7.00
► 6.53
► 8.53
► 7.18
Question No: 11 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. Which of the following is designated by the individual investor's optimal portfolio?
► The point of tangency with the opportunity set and the capital allocation line
► The point of highest reward to variability ratio in the opportunity set
► The point of tangency with the indifference curve and the capital allocation line
► The point of the highest reward to variability ratio in the indifference curve
Question No: 12 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. Assume that the expected returns of the portfolios are the same but their standard deviations are given in the options given below, which of the option represent the most risky portfolio according to standard deviation?
► 1.5%
► 2.0%
► 3.0%
► 4.0%
Question No: 13 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. Which of the following is a drawback of percentage of sales method?
► It is a rough approximation
► There is change in fixed asset during the forecasted period
► Lumpy assets are not taken into account
► All of the given options
Question No: 14 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. Which of the following need to be excluded while we calculate the incremental cash flows?
► Depreciation
► Sunk cost
► Opportunity cost
► Non-cash item
Question No: 15 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. Which of the following is NOT an example of a financial intermediary?
► Wisconsin S&L, a savings and loan association
► Strong Capital Appreciation, a mutual fund
► Microsoft Corporation, a software firm
► College Credit, a credit union
Question No: 16 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. An 8% coupon Treasury note pays interest on May 30 and November 30 and is traded for settlement on August 15. What is the accrued interest on Rs. 100,000 face value of this note?
► Rs. 491.80
► Rs. 800.00
► Rs. 983.61
► Rs. 1,661.20
Question No: 17 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. A preferred stock will pay a dividend of Rs. 3.50 in the upcoming year, and every year thereafter, i.e., dividends are not expected to grow. You require a return of 11% on this stock. Use the constant growth model to calculate the intrinsic value of this preferred stock.
► Rs. 0.39
► Rs. 0.56
► Rs. 31.82
► Rs. 56.25
Question No: 18 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. Information that goes into __________ can be used to prepare __________.
► A forecast balance sheet; a forecast income statement
► Forecast financial statements; a cash budget
► Cash budget; forecast financial statements
► A forecast income statement; a cash budget
Question No: 19 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. What is the present value of Rs.8,000 to be paid at the end of three years if the interest rate is 11% compounded annually?
► Rs.5,850
► Rs.4,872
► Rs.6,725
► Rs.1,842
Question No: 20 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. “Do not compare apples with oranges” is the concept in:
► Discounting and Net present value
► Risk & return
► Insurance management
► Time value of money
Question No: 21 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. Which of the following is NOT the interest rate used for discounting calculation?
► Benchmark interest rate
► Effective interest rate
► Periodic interest rate
► Nominal interest rate
Question No: 22 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. Which of the following is the formula to calculate the future value of perpetuity?
► Constant cash flows × interest rate
► Constant cash flows / interest rate
► Constant cash flows + Constant cash flows × interest rate
► Constant cash flows - Constant cash flows/ interest rate
Question No: 23 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. Which of the following interest rate keeps on moving and changing on daily basis?
► Book value
► Market value
► Salvage value
► Face value
Question No: 24 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. From which of the following formula we can calculate coupon rate?
► Coupon receipt / market value
► Coupon receipt / present value
► Coupon receipt / salvage value
► Coupon receipt / book value
Question No: 25 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. Value of “g” in the formula of constant growth rate can be calculated from which of the following formula?
► g = plowback ratio × ROE
► g = plowback ratio × ROA
► g = payout ratio + ROE
► g = payout ratio + ROA
Question No: 26 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. In Gordon's formula (rCE = DIV1 / Po + g), rCE is considered as __________ and “g” is considered as __________.
► Dividend yield, operating expenses
► Dividend yield, operating income
► Dividend yield, capital loss
► Dividend yield, capital gain
Question No: 27 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. To calculate the annual rate of return for an investment, we require which of the following(s)?
► The income created
► The gain or loss in value
► The original value at the beginning of the year
► All of the given options
Question No: 28 ( Marks: 1 ) - Please choose one
Your browser may not support display of this image. This is an example of which of the following?
Real estate prices fell across the board because the market was glutted with surplus pre-owned homes for sale.
► Economic risk
► Industry risk
► Company risk
► Market risk
Question No: 29 ( Marks: 3 )
Your browser may not support display of this image. Briefly explain what call provision is and in which case companies use this option.
Question No: 30 ( Marks: 3 )
Your browser may not support display of this image. There are two stocks in the portfolio of Mr. N, Stock A and Stock B. the information of this portfolio is as follows:
Common stock Expected rate of return Standard deviation Stock A 15% 10% Stock B 20% 15%
Calculate the expected rate of return on this portfolio assuming that Stock A consists of 75% of the total funds invested in the stocks and the remainder in Stock B.
Question No: 31 ( Marks: 5 )
Your browser may not support display of this image.
(a) What is correlation of coefficient?
(b) What are efficient portfolios?
Question No: 32 ( Marks: 5 )
Your browser may not support display of this image. Suppose you approach a bank for getting loan. And the bank offers to lend you Rs.1, 000,000 and you sign a bond paper. The bank asks you to issue a bond in their favor on the following terms required by the bank: Par Value = Rs 1, 000,000, Maturity = 3 years
Coupon Rate = 15% p.a, Security = Machinery
You are required to calculate the cash flow of the bank which you will pay every month as well as the present value of this option. | |
| | | Admin Admin
Posts : 638 Points : 2155 Reputation : 19 Join date : 2010-05-15 Age : 36 Location : islamabad
| Subject: Re: MGT201 2010 Sun May 30, 2010 2:33 pm | |
| Question No: 1 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Among the pairs given below select a(n) example of a principal and a(n) example of an agent respectively. ► Shareholder; manager ► Manager; owner ► Accountant; bondholder ► Shareholder; bondholder Question No: 2 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Which group of ratios measures a firm's ability to meet short-term obligations? ► Liquidity ratios ► Debt ratios ► Coverage ratios ► Profitability ratios Question No: 3 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Which of the following would be considered a cash-flow item from an "investing" activity? ► Cash outflow to the government for taxes ► Cash outflow to shareholders as dividends ► Cash outflow to lenders as interest ► Cash outflow to purchase bonds issued by another company Question No: 4 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] All of the following influence capital budgeting cash flows EXCEPT __________. ► Choice of depreciation method for tax purposes ► Economic length of the project ► Projected sales (revenues) for the project ► Sunk costs of the project Question No: 5 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] An investment proposal should be judged in whether or not it provides: ► A return equal to the return require by the investor ► A return more than required by investor ► A return less than required by investor ► A return equal to or more than required by investor Question No: 6 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Which of the following technique would be used for a project that has non-normal cash flows? ► Internal rate of return ► Multiple internal rate of return ► Modified internal rate of return ► Net present value Question No: 7 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Which of the following statements is correct in distinguishing between serial bonds and sinking-fund bonds? ► 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 Question No: 8 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] The value of a bond is directly derived from which of the following? ► Cash flows ► Coupon receipts ► Par recovery at maturity ► All of the given options Question No: 9 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Which of the following affects the price of the bond? ► Market interest rate ► Required rate of return ► Interest rate risk ► All of the given options Question No: 10 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] If all things equal, when diversification is most effective? ► Securities' returns are positively correlated ► Securities' returns are uncorrelated ► Securities' returns are high ► Securities' returns are negatively correlated Question No: 11 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] You wish to earn a return of 12% on each of two stocks, A and B. Each of the stocks is expected to pay a dividend of Rs. 2 in the upcoming year. The expected growth rate of dividends is 9% for stock A and 10% for stock B. The intrinsic value of stock A: ► Will be greater than the intrinsic value of stock B ► Will be the same as the intrinsic value of stock B ► Will be less than the intrinsic value of stock B ► None of the given options Question No: 12 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] In the dividend discount model, which of the following is (are) NOT incorporated into the discount rate? ► Real risk-free rate ► Risk premium for stocks ► Return on assets ► Expected inflation rate Question No: 13 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Which of the following is NOT a major cause of systematic risk. ► A worldwide recession ► A world war ► World energy supply ► Company management change Question No: 14 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Which of the following term may be defined as incidental cash flows that arise because of the effect of new project on the running business? ► Sunk cost ► Opportunity cost ► Externalities ► Contingencies Question No: 15 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] A preferred stock will pay a dividend of Rs. 2.75 in the upcoming year, and every year thereafter, i.e., dividends are not expected to grow. You require a return of 10% on this stock. Use the constant growth model to calculate the intrinsic value of this preferred stock. ► Rs. 0.275 ► Rs. 27.50 ► Rs. 31.82 ► Rs. 56.25 Question No: 16 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] What is the present value of Rs.1,000 to be paid at the end of 5 years if the interest rate is 8% compounded annually? ► Rs.680.58 ► Rs.1,462.23 ► Rs.322.69 ► Rs.401.98 Question No: 17 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] What is the present value of Rs.53,000 to be paid at the end of 15 years if the interest rate is 9% compounded annually? ► Rs.25,300 ► Rs.34,122 ► Rs.14,549 ► Rs.11,989 Question No: 18 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] The objective of ________ is to maximize the shareholder’s wealth. ► Financial economics ► Financial management ► Financial accounting ► Financial engineering Question No: 19 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Which of the following accounting equation is accurate? ► Assets +Equity = Liabilities + Expenses ► Assets + Expenses = Liabilities +Expenses + Revenue ► Assets + Liabilities = Equity + Expenses + Revenue ► Assets + Revenue + Liabilities = Equity Question No: 20 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Through which of the following formula desired growth rate can be calculated? ► Return on equity × (1- payout ratio) ► Return on equity / (1- payout ratio) ► Return on equity + (1+ payout ratio) ► Return on equity - (1/ payout ratio) Question No: 21 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Which of the following is a type of annuity in which no time span is involved? ► Ordinary annuity ► Annuity due ► Perpetuity ► None of the given options Question No: 22 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Which of the following is not a type of problem in capital rationing? ► Size difference of projects ► Timing difference of projects ► Different lives of different projects ► Different cash flow streams Question No: 23 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Market price of a share will be determined from __________. ► Supply of share only ► Demand of share only ► Price of share of Benchmark Company ► From demand and supply in the market Question No: 24 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Which of the following is called hybrid equity as it is the combination of both equity and debt factor? ► Common stocks ► Preferred stocks ► Bonds & securities ► All of the given options Question No: 25 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Which of the following can be used as measure of return? ► Forecasted selling price ► Forecasted purchase price ► Forecasted dividend ► Forecasted time span of project Question No: 26 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Which of the following formula could be used to calculate expected rate of return ? ► Po / Po × P1 ► P1 + Po / Po ► P1 – Po / Po ► Po – P1 / Po Question No: 27 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] Finance consists of which of the following area(s)? ► Money and capital market ► Investment ► Financial management ► All of the given options Question No: 28 ( Marks: 1 ) - Please choose one[You must be registered and logged in to see this image.] A proposal is accepted if payback period falls within the time period of 3 years. According to the given criteria, which of the following project is most suitable to accept? | Payback period | Project A | 1.66 | Project B | 2.66 | Project C | 3.66 | ► Project A ► Project B ► Project C ► Project A & B Question No: 29 ( Marks: 3 ) [You must be registered and logged in to see this image.] Define interest rate risk and investment risk. Question No: 30 ( Marks: 3 ) [You must be registered and logged in to see this image.] A stock is expected to pay a dividend of Rs.0.75 at the end of the year. The required rate of return is ks = 10.5%, and the expected constant growth rate is g = 6.4%. What is the stock's current price? Question No: 31 ( Marks: 5 ) [You must be registered and logged in to see this image.] There are some risks (Unique Risk) that we can diversify but some of the risks (Market risks) are not diversifiable. Explain both types of risk. Question No: 32 ( Marks: 5 ) [You must be registered and logged in to see this image.] Hammad Inc. is considering two alternative, mutually exclusive projects. Both projects require an initial investment of Rs. 10,000 and are typical, average-risk projects for the firm. Project A has an expected life of 2 years with after-tax cash inflow of Rs. 6,000 and Rs. 8,000 at the end of year 1 and 2, respectively. Project B has an expected life of 4 years with after-tax cash inflow of Rs. 4,000 at the end of each of next 4 years. The firm’s cost of capital is 10 percent.If the projects cannot be repeated, which project will be selected, and what is the net present value? | |
| | | | MGT201 2010 | |
|
Similar topics | |
|
| Permissions in this forum: | You cannot reply to topics in this forum
| |
| |
| |