Practice Alternate Sources of Finance Questions and Answers

• A company fails to accrue wages for March that will be paid in April. The company’s year-end balance sheet liabilities:
• An agreement sold over an exchange to buy/sell a commodity or financial instrument at a designated future date is known as:
• Investing cash flows most likely reflect changes in which of the balance sheets’ components?
• Risk of losses caused by flaw in the process, events, systems etc that disrupt the business operations is called:
• ACB Ltd Financial Statement for 2021 include the following information:   There was no sales of property and equipment in the year, depreciation expense...
• A rate at which RBI (Reserve Bank of India) lends to commercial banks by purchasing securities is know as ______
• Which reference rate is likely to get scrapped completely by the end of year 2021?
• During 2021, ZXC Ltd reported a net income of Rs115,600 and had 200,000 shares of common stock and 1000 preferred stock outstanding for the entire year. Pr...
• Issuing bonds by a company would be considered in which activity in a cash flow statement?
• Which of the following are Financial Analysis Techniques?
• The discount rate that makes the present value of expected cash flows from the project equal to the initial cost of the project is called:
• Which of the following most likely increases the wealth of shareholders?
• Compute the payoff to a long position in a forward contract given that the forward price is Rs 35 and the price at maturity is Rs 55.
• For which type of bond, duration of a bond would be equal to its time to maturity
• An option that can be exercised only at expiration is called ____
• Mr. X bought a bond at 1000 at a 10% coupon rate. But he intends to sell the bond after a year to Mr. Y. Mr. Y purchased the bond at 986. At the end of the...
• Bonds with original maturities of one year or less are called:
• In a repurchase agreement, the percentage difference between the repurchase price and amount borrowed is equal to:
• On-the-run government securities are the ones that are _____
• Ratio of change in the price of a call option to a change in price of underlying asset is called:
• Which of the following is not true about the market value of a bond?
• Loan in the repo market involves a very little credit risk because ________
• Why Treasury rates are significantly lower as compared to other rates?
• Which of the following decisions do not affect the Free Cash Flow to equity?
• Options’ sensitivity to decrease in time to expiration is called:
• Reinvestment risk would not occur if:
• The current expected risk-free rate is 4%, the equity premium is 3.9% and the beta is 0.8. calculate the return on equity.
• Byron Ltd reported 32000 in earnings during the current financial year. The total shares outstanding are 40000 at a market price of 18 per share. What is B...
• Depreciation would be classified as:
•  Which of the following methods of redeeming the bonds before maturity is generally considered the most detrimental for bondholders?
• The process in which certain types of assets are pooled so that they can be repackaged into interest-bearing securities is called:
• `Which of the following financial reports are considered to be of lowest quality? Financial reports that reflect:
• The ratio of a firm’s property, plant, and equipment, net of accumulated depreciation, to its annual depreciation expense is an estimate of:
• Which of the following is not likely to be a motivation to overreport earnings?
• At the end of last year, Max Ltd’s assets and liabilities are: Total assets = 85500 Accrued liabilities = 6500 Bonds payable = 37500 Max Ltd’s debt...
• The bonds which are issued outside the jurisdiction of one country and denominated in a currency different from the currency of the countries in which they...
• ABC Ltd has its Earning before Interest and Tax as 45000. The tax rate applicable for the year is 25%. It has made a capital expenditure of Rs 22500 and a ...
• The adjustments required in cash flow from operations to find free cash flow to the firm are:
• Individuals can now directly purchase treasury bills, dated securities, sovereign gold bonds (SGB) and state development loans (SDLs) under RBI’s _______...
• Corona Kavach is a health insurance policy designed to cover the hospitalisation and medical expenses arising out of COVID-19 treatment. The premium paid o...