Finance MCQs

Page No. 29

Treasury bonds are exposed to additional risks that are included________?


aReinvestment risk

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bInterest rate risk

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cInvestment risk

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dBoth A and B

✓


View Answer Both A and B

Bonds that have high liquidity premium are usually have_________?


aInflated trading

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bDefault free trading

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cLess frequently traded

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dFrequently traded

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Falling interest rate leads change to bondholder income which is__________?


aReduction in income

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bIncrement in income

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cMatured income

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dFrequent income

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View Answer Reduction in income

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


aCorporation bonds

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bDefault bonds

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cRisk bonds

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d \Zero risk bonds

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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

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bIndependent projects

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cDependent projects

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dNet value projects

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View Answer Independent projects

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


aEvaluate cash flow

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bEvaluate projects

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cEvaluate budgeting

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dEvaluate equity

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View Answer Evaluate projects

Cash inflows are revenues of project and are represented by__________?


aHurdle number

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bRelative number

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cNegative numbers

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dPositive numbers

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View Answer Positive numbers

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


aNormal costs

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bNon-normal costs

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cNon-normal cash flow

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dNormal cash flow

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View Answer Non-normal cash flow

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


aBe accepted

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bNot be accepted

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cHave capital acceptance

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dHave return rate acceptance

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View Answer Be accepted

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


aTerminal value

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bExisted value

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cQuit value

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dRelative value

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View Answer Terminal value

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