FIN 630

Question No: 23 (Marks: 1) - Please choose one

Ames Corporation's net accounts receivable were Rs. 750,000 on December 31,
20X1, and Rs.1, 250,000 on December 31, 20X2. Net cash sales for 20X2
were Rs. 3,300,000. The accounts receivable turnover ratio for 20X2 was 16.
What were the total net sales for 20X2?
Rs. 12,800,000
Rs. 16,000,000
Rs. 16,100,000
Rs. 19,300,000

Question No: 26 (Marks: 1) - Please choose one

The DuPont Approach breaks down the earning power on shareholders' equity
(ROE) as which of the following?
Net profit margin × Total asset turnover × Equity multiplier
Total asset turnover × Gross profit margin × Debt ratio
Total asset turnover × Net profit margin
Total asset turnover × Gross profit margin × Equity multiplier

Question No: 27 (Marks: 1) - Please choose one

Which of the following statement best describes the operating profit margin?
It shows what portion of profits are being distributed to shareholders
It shows what return is being made on assets employed in the business
It shows how well a company is controlling its costs, including overheads
It shows how efficiently a company is turning profits into cash

Question No: 35 (Marks: 1) - Please choose one

What will be the effect on the EPS of the company, if it paid stock dividend on
common stock?
Increase
Decrease
No effect

Question No: 36 ( Marks: 1 ) - Please choose one

What will be the effect of appropriated retained earnings on the rate of return on
stockholder's equity?
Increase
Decrease
No effect
Can not be found from the given information

Question No: 32 ( Marks: 1 ) - Please choose one

Which of the following is TRUE regarding short hedge?

Price realized=S2+ (F1 F2)

Price realized= S2 (F1+F2)

Price realized= S2 (F2 F1)

Price realized= S2+ (F1+F2

Question No: 29 ( Marks: 1 ) - Please choose one

Which of the following is defined as a trader, who trades or takes position without having exposure in the
physical market, with the sole intention of earning profit?

Hedger

Arbitrager

Speculator

Broker

Question No: 27 ( Marks: 1 ) - Please choose one

Which of the following is a derivative in which one party exchanges a stream of interest payments for
another party's stream of cash flows?

Foreign currency swap

Total return swap

Credit default swap

Interest rate swap

Question No: 38 ( Marks: 1 ) - Please choose one

Which of the following is an option which is paid for now, but will start at some prespecified date in the
future?

Barrier option

Forward start option

Over-the-counter options

Compound options

Question No: 39 ( Marks: 1 ) - Please choose one

The direct trade between large institutional investors takes place in which of the following market?

Primary market

Secondary market

Third market

Fourth market

Question No: 41 ( Marks: 1 ) - Please choose one

An investor will purchase shares of companies in the development stage for:

Current income

Current income and capital gains

Passive losses to offset other income

Capital gains only

Question No: 11 ( Marks: 1 ) - Please choose one

Which of the following would justify an investor preference for cash
dividends?
Illusion of control
Anchoring
Mental accounting
Asset segregation
Question No: 28 ( Marks: 1 ) - Please choose one
Which of the following statement is TRUE regarding efficient frontier?

It is a downward sloping curved line

It is an upward sloping straight line
It is a downward sloping straight line
It is an upward sloping curved line
Question No: 32 ( Marks: 1 ) - Please choose one
Nominal rate of interest - inflation is equal to which of the following?
Interest amount
Nominal interest
Risk premium
Real rate of interest
Question No: 31 ( Marks: 1 ) - Please choose one
The _________ is a measure of the average rate of return an investor
will earn if the investor buys the bond now and holds until maturity.
Current yield
Dividend yield
P/E ratio
Yield to maturity
Question No: 34 ( Marks: 1 ) - Please choose one
Which of the following is a financial instrument whose return is derived
from the return on another instrument?

Derivative security
Fixed income security
Equity security
Money market security

MGT 603
Question No: 17 ( Marks: 1 ) - Please choose one
What type of strategies would you recommend when a firm's SPACE Matrix
directional vector has the coordinates (-4, -4)?
► Aggressive
► Conservative
► Competitive
► Defensive
Question No: 17 (Marks: 1) - Please choose one
What type of strategies would you recommend when a firm’s SPACE Matrix directional
vector has the coordinates (-2, +3)?
Aggressive
Conservative
Competitive
Defensive

Question No: 19 (Marks: 1) - Please choose one

The business has a strong competitive position but is in a slow-growth industry.
Further, the business typically has high cash flow levels and limited internal growth
needs. The statement refers which of the following?
The firm falling in Quadrant I of Grand Strategy Matrix
The firm falling in Quadrant II of Grand Strategy Matrix
The firm falling in Quadrant III of Grand Strategy Matrix
The firm falling in Quadrant IV of Grand Strategy Matrix

Firm with its SPACE matrix vector in conservative quadrant should peruse all of
the following strategies EXCEPT:

► Market penetration

► Product development

► Market development

► Divestiture