Q81: According to___approach, the investor arrives at the market price of an equity share by capitalizing the set of expected dividends payments
- A. MM
- B. Net operating income
- C. Operating income
- D. Dividend price
Answer
Answer D. Dividend price
Q82: In case of___weights method, weights are assigned to each source of funds in proportion of financing inputs the firm intends to employ
- A. Marginal
- B. Average
- C. High
- D. Low
Answer
Answer A. Marginal
Q83: MM approach assumes that___markets are perfect
- A. Secondary
- B. Primary
- C. Capital
- D. Investment
Answer
Answer C. Capital
Q84: Cost of capital serves as___rate for capital investment decisions
- A. Cut off
- B. Cut on
- C. Interest
- D. Dividend
Answer
Answer A. Cut off
Q85: The policy concerning quantum of profits to be distributed as dividends is termed as
- A. Interest policy
- B. Bonus policy
- C. Dividend policy
- D. None of the above
Answer
Answer C. Dividend policy
Q86: The company must implement the bonus issue decision within___of the directors’ approval
- A. 6 months
- B. 3 months
- C. 9 months
- D. 11 months
Answer
Answer A. 6 months
Q87: The most appropriate dividend policy is payment of
- A. High dividend per share
- B. Low dividend per share
- C. Constant dividend per share
- D. None of the above
Answer
Answer C. Constant dividend per share
Q88: The declaration of bonus issue in lieu of___should not be made
- A. Interest
- B. Capital
- C. Dividend
- D. Profit
Answer
Answer C. Dividend
Q89: A company having easy access to the capital markets can follow a___dividend policy
- A. Strict
- B. Liberal
- C. Standard
- D. None of the above
Answer
Answer B. Liberal
Q90: ___is a pictorial representation in tree form which indicates the magnitude, probability and inter relationship of all possible outcomes
- A. Sensitivity analysis
- B. Decision tree
- C. Risk adjustment analysis
- D. Capital budgeting
Answer
Answer B. Decision tree
Q91: CAPM accounts for
- A. Unsystematic risk
- B. Systematic risk
- C. Both a and b
- D. None of the above
Answer
Answer A. Unsystematic risk
Q92: In his traditional role the financial manager was responsible for
- A. Arrangement and efficient utilization of funds
- B. Arrangement of financial resources
- C. Acquiring capital assets for the organization
- D. All the above
Answer
Answer B. Arrangement of financial resources
Q93: The term___refers to the part of the profits of a company which is distributed amongst its shareholders
- A. Dividend
- B. Interest
- C. Capital
- D. Profit
Answer
Answer A. Dividend
Q94: The dividend decision of the firm is taken by___
- A. Risk manager
- B. Marketing manager
- C. Purchase manager
- D. Finance manager
Answer
Answer D. Finance manager
Q95: Who strongly supports the doctrine that dividend policy almost always affects the value of the enterprise?
- A. Myron Gordon
- B. John Linter
- C. James Walter
- D. Modigliani and Miller
Answer
Answer C. James Walter
Q96: Which of the following external factors affect the dividend policy?
- A. General state of economy
- B. State of capital market
- C. Legal restrictions
- D. All of the above
Answer
Answer D. All of the above
Q97: A forward currency transaction
- A. is always at a premium over the spot rate
- B. means the delivery and payment must be made within one business day or two business days after the transaction date
- C. calls for exchange in the future of currencies at an agreed rate of exchange
- D. none of the above
Answer
Answer C. calls for exchange in the future of currencies at an agreed rate of exchange
Q98: The date of settlement for a foreign exchange transaction is referred to as
- A. clearing date
- B. swap date
- C. maturity date
- D. value date
Answer
Answer D. value date
Q99: Which of the following is not a type of foreign exchange exposure?
- A. tax exposure
- B. translation exposure
- C. transaction exposure
- D. economic exposure
Answer
Answer A. tax exposure
Q100: Which of the following is not an interest rate derivative used for interest rate management?
- A. Swap
- B. Cap
- C. Floor
- D. All of the above
Answer
Answer D. All of the above
Q101: Foreign currency forward market is
- A. an over the counter unorganized market
- B. organized market without trading
- C. organized listed market
- D. unorganized listed market
Answer
Answer D. unorganized listed market
Q102: Interest rate swaps are usually possible because international financial market in different countries are
- A. efficient
- B. perfect
- C. imperfect
- D. both a and b
Answer
Answer C. imperfect
Q103: floating exchange rate is
- A. is determined by the national governments involved
- B. remains extremely stable over long periods of time
- C. is determined by the actions of central banks
- D. is allowed to vary according to market forces
Answer
Answer D. is allowed to vary according to market forces
Q104: The Purchasing Power Parity should hold
- A. Under a fixed exchange rate is given
- B. Under a flexible exchange rate regime
- C. Under a dirty exchange rate regime
- D. Always
Answer
Answer B. Under a flexible exchange rate regime
Q105: Which of the following may be participants in the foreign exchange markets?
- A. bank and non-bank foreign exchange dealers
- B. central banks and treasuries
- C. speculators and arbitragers
- D. all of the above
Answer
Answer D. all of the above
Q106: Which of the following trade policies limits specified quantity of goods to be imported at one tariff rate?
- A. quota
- B. import tariff
- C. specific tariff
- D. all of the above
Answer
Answer A. quota
Q107: Nations conduct international trade because
- A. Some nations prefer to produce one thing while others produce other things
- B. Resources are not equally distributed among all trading nations
- C. Trade enhances opportunities to accumulate profits
- D. Interest rates are not identical in all trading nations
Answer
Answer B. Resources are not equally distributed among all trading nations
Q108: The portfolio investment by foreign institutional investors is called
- A. FDI
- B. FII
- C. Balance of Payment
- D. SDR
Answer
Answer B. FII
Q109: Which of the following is an institution of World Bank?
- A. IBRD
- B. IDA
- C. IFC
- D. All the above
Answer
Answer D. All the above
Q110: An acquisition is the same thing as
- A. a spin-off
- B. a takeover
- C. a merger
- D. an amalgamation
Answer
Answer B. a takeover
Q111: Financial motives for Mergers and Acquisitions do not relate to
- A. corporation tax
- B. value added tax
- C. unemployed tax shields
- D. earnings per share
Answer
Answer B. value added tax
Q112: Managerial motives for Mergers & Acquisitions do not relate to
- A. dividends
- B. Power
- C. Emoluments
- D. Job security
Answer
Answer A. dividends
Q113: The three broad approaches to company valuation do not include
- A. inventory valuation
- B. stock market valuation
- C. future earnings valuation
- D. asset valuation
Answer
Answer A. inventory valuation
Q114: Asset based company valuations do not include the
- A. Realizable value method
- B. Book value method
- C. Marginal cost method
- D. Replacement cost method
Answer
Answer C. Marginal cost method
Q115: Earnings-based company valuations do not include the
- A. ABC method
- B. P/E method
- C. ARR method
- D. DCF method
Answer
Answer A. ABC method
Q116: Other reasons for company valuations do not include
- A. tax evasion
- B. capital gains tax assessment
- C. inheritance tax assessment
- D. security for loans
Answer
Answer A. tax evasion
Q117: Banking or banking action that is consistent with main beliefs of Shariah and its realistic application from beginning to end improvement of Islamic economics is
- A. Islamic banking or financing
- B. Development bank
- C. All the above
- D. Conventional banking
Answer
Answer A. Islamic banking or financing
Q118: A number of Islamic banks were formed to provide to this particular banking market in late
- A. 18th century
- B. 19th century
- C. 20th century
- D. none of these
Answer
Answer C. 20th century
Q119: A bank is considered as a custodian and trustee of money is
- A. Wadiah
- B. Safekeeping
- C. A and B
- D. Hibah
Answer
Answer C. A and B
Q120: Banks are dealing a large number of commodities and services and facing a strong competition to attract
- A. Potential buyers
- B. Potential customers
- C. Potential employees
- D. Potential sellers
Answer
Answer B. Potential customers
