Finance MCQs

Page No. 29

Treasury bonds are exposed to additional risks that are included________?


aReinvestment risk


bInterest rate risk


cInvestment risk


dBoth A and B


View Answer Both A and B

Bonds that have high liquidity premium are usually have_________?


aInflated trading


bDefault free trading


cLess frequently traded


dFrequently traded



Falling interest rate leads change to bondholder income which is__________?


aReduction in income


bIncrement in income


cMatured income


dFrequent income


View Answer Reduction in income

Bonds issued by corporations and exposed to default risk are classified as_________?


aCorporation bonds


bDefault bonds


cRisk bonds


d \Zero risk bonds


View Answer Corporation bonds

A type of project whose cash flows would not depend on each other is classified as______________? A type of project whose cash flows would not depend on each other is classified as______________?


aProject net gain


bIndependent projects


cDependent projects


dNet value projects


View Answer Independent projects

Net present value, profitability index, payback and discounted payback are methods to______________?


aEvaluate cash flow


bEvaluate projects


cEvaluate budgeting


dEvaluate equity


View Answer Evaluate projects

Cash inflows are revenues of project and are represented by__________?


aHurdle number


bRelative number


cNegative numbers


dPositive numbers


View Answer Positive numbers

Cash flow which starts negative than positive then again positive cash flow is classified as__________?


aNormal costs


bNon-normal costs


cNon-normal cash flow


dNormal cash flow


View Answer Non-normal cash flow

If two independent projects having hurdle rate, then both projects should________?


aBe accepted


bNot be accepted


cHave capital acceptance


dHave return rate acceptance


View Answer Be accepted

In estimating value of cash flows, compounded future value is classified as its__________?


aTerminal value


bExisted value


cQuit value


dRelative value


View Answer Terminal value

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