Practice Alternate Sources of Finance Questions and Answers

• Which among the following is not made only to existing shareholders?
• Which of the following formulae correctly calculates the Operating Profit Margin?
• Provision for Bad Debts is required to be maintained in the books as per which principle?
• Dividends earned on the investments in shares represents a part of an income. To which of the following categories of income, does it belong to?
• Total debt service cost implies which among the following?
• What among the following is the correct formula to calculate the cost of Equity under CAPM model?
• Depreciation is charged on which among the following?
• Where are the exchange differences treated in the financial statements?
• In case a foreign exchange quote is expressed in terms of home Currency Price for the one unit of foreign currency, it is referred to as:
• In case the company has issued Bonus shares, which among the following ratios will be affected?
• If the budgeted production units were 500 and the budgeted material required was 1000. Actual material used up is 800 units for the output of 350 units. He...
• …………. refers to a plan relating to a definite future period of time expressed in monetary or quantitative terms. ...
• The current yield on a bond is calculated to find the return on a bond. How is current yield calculated?
•   There is a project which involves purchase of a machinery that costs Rs.50,000, which has useful life of 3 years, after which it has a scrap value of Rs...
• PMSYM is social security scheme of labor ministry, what is the pension assured by the scheme to unoriginated workers?
• Identify the financial entity which does not belong to the World Bank Group ?
• As the number of stocks in a portfolio increases, the portfolio’s systematic risk:
• A company has Rs.500,000 of debt outstanding with a coupon rate of 10%. The yield to maturity on these bonds is 15%. If the rate of tax is 40%, what is the...
• An investor will most likely exercise a put option when the price of the stock is:
• Which of the following would not be a good reason for a company to repurchase shares of its own stock?
• A measure of how the returns of two risky assets move in relation to each other is the:
• The expected return on the stock is 15%, the risk-free rate is 8% and the beta for the stock is 1.2. Compute the rate of return that would be expected on t...
• What is the risk measure associated with the Capital Market Line (CML)?
• RSP Ltd has a net profit margin of 12% and a total asset turnover of 1.2 times and a financial leverage multiplier of 1.2 times. RSP Ltd’s return on equi...
• In a period of rising prices and stable inventory quantities, which of the following best describes the effect on gross profit of using LIFO as compared to...
•   For the current period, inappropriate capitalization is most likely to:
•   Which of the following is least likely a condition necessary for revenue recognition?
• Which of the following is most likely an essential characteristic of an asset?
• Which of the following ratios are used to measure a firm’s liquidity and solvency? 
• The group into which business activities are classified for financial reporting of cash flow statement are:
•   With respect to the futures transactions, the purpose of margin is to ________
• A risk-averse investor is best described as an individual as __________
• ABC Ltd has made purchases of Rs.100,000 during the year. The balance sheet shows an average accounts payable balance of Rs12,000. ABC Ltd payable payment ...
• Jay Ltd sells units for Rs 4/bottle. The variable cost for the unit per bottle is Rs.2 and has a fixed operating cost of Rs 4000 and a fixed financing cost...
• Compared to investing in a single security, diversification provides investors a way to _______
• Determine the debt-equity ratio of XYZ Ltd Debt outstanding = 800,000 Equity capital = 1000,000 Share reserves = 100,000
• According to CAPM (Capital Asset Pricing Model), what is the required rate of return for a stock with a beta of 0.7 when the risk-free rate is 5% and the e...
• The value stated on a bond certificate is called ______
• A company’s 1000 par preferred stock pays a Rs 50 annual dividend and has a required rate of return of 8%. Calculate the value of the preferred stock ...
• The stage of venture capital investing that involves product development and market research is referred to as ___________