MCQ Portal

(i) _______ refers to the uncertainty of the purchasing power of the money to be received in the future.

Market risk Physical risk Purchasing power risk Interest rate risk

(ii) Unsystematic risk is related to __________.

Market risk Inherent risk Beta Interest rate risk

(iii) In which discipline was the supply chain concept originated?

Production Operation Marketing Logistics

(iv) Under perfect competition, at the point of equilibrium of a firm, __________.

The MC curve must be falling The MC curve must be rising The MR curve must be falling None of the above

(v) Financial risk arises out of ___________.

Increased competition Conduct of business and investment The nature of financial transactions Both (B) and (C)

(vi) If a company has a P/E ratio of 20 and a ROE (Return on Equity) of 15%, then the Market to Book Value Ratio is:

3 times 3% Cannot be calculated from the given information None of the above

(vii) Assume that in a stock market the CAPM is working. A company has presently a beta of 0.84 and is going to finance its new project through debt. This would increase its debt/equity ratio to 1.56 from the existing 1.26. Due to the increased debt/equity ratio, the company's beta would:

Increase Decrease Remain unchanged Nothing can be concluded

(viii) Identify which of the following is not a financial liability:

X Ltd. has 1 lakh ₹10 ordinary shares issued X Ltd. has 1 lakh 8% ₹10 redeemable preference shares issued X Ltd. has ₹2,00,000 of 6% bonds issued Both (A) and (B)

(ix) X Ltd.'s share beta factor is 1.40. The risk-free rate of interest on government securities is 9%. The expected rate of return on the company's equity shares is 16%. The cost of equity capital based on CAPM is:

15.8% 16% 18.8% 9%

(x) A firm's current assets and current liabilities are ₹1,600 and ₹1,000 respectively. How much can it borrow on a short-term basis without reducing the current ratio below 1.25?

₹ 1,000 ₹ 1,200 ₹1,400 ₹ 1,600

Dec 2017 SFMBV Paper