123. According to capital asset pricing model assumptions, investors will borrow unlimited amount of capital at any given

A) identical and fixed returns
B) risk free rate of interest
C) fixed rate of interest
D) risk free expected return
✅ ANSWER: B
According to capital asset pricing model assumptions, investors will borrow unlimited amount of capital at any given risk free rate of interest. The risk-free interest rate is the rate of return of a hypothetical investment with no risk of financial loss, over a given period of time.

121. Ajay pays insurance premium for his employees. Which of the following insurance premiums will not be treated deductible as compensation paid to an employee? I. Health insurance with benefits payable to an employee II. Keyman life insurance with benefits payable to Ajay

A) Only I
B) Only II
C) Both I and II
D) Neither I nor II
✅ ANSWER: B
A keyman life insurance policy is a policy that a company purchases on a key executive’s life. The company is the beneficiary of the plan and pays the insurance policy premiums. It is also known as “key man insurance”, “key woman insurance” or “business life insurance.”

119. Direct cost assignment for specific cost object is classified as

A) cost object line cost
B) cost tracing
C) cost object indirect cost
D) cost object staff cost
✅ ANSWER: B
Direct cost assignment for specific cost object is classified as cost tracing. Cost tracing is the process of directly matching a cost with a product being produced, where cost allocation uses estimates to apply costs to products.

156. While calculating weighted average cost of capital _________.

A) Preference shares are given more weight age
B) Cost of issue is considered
C) Tax factor is ignored
D) Risk factor is ignored
✅ ANSWER: B
While calculating weighted average cost of capital cost of issue is considered. Weighted average cost of capital ( WACC) is the average after-tax cost of a company’s various capital sources used to finance the company.

153. Choose the correct statement.

A) Lower yields are a disadvantage in cash value contracts
B) Discipline in saving is not an advantage in cash value contracts
C) Income Tax advantage is not an advantage in cash value contracts
D) Safe and secure investment is not an advantage in cash value contracts
✅ ANSWER: A
Lower yields are a disadvantage in cash value contracts. Whole life insurance is significantly more expensive. Premiums are often much higher than a term life insurance policy with the same amount of coverage because you’re paying for an insurance policy as well as putting money into the cash value portion of the policy.

150. Market in which bonds are traded over-the-counter than in an organized exchange is classified as

A) organized markets
B) trade markets
C) counter markets
D) bond markets
✅ ANSWER: D
Market in which bonds are traded over-the-counter than in an organized exchange is classified as bond markets. The bond market (also debt market or credit market) is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market.

147. What is the due date for payment of tax?

A) Last day of the month to which payment relates
B) Within 10 days of the subsequent month
C) Within 20 days of the subsequent month
D) Within 15 days of the subsequent month
✅ ANSWER: C

144. What is the name of the new anti‐Spam bill?

A) No‐Spam
B) CAN‐Spam
C) Spam‐Away
D) Stop Spam
✅ ANSWER: B
CAN‐Spam is the name of the new anti‐Spam bill. Controlling the Assault of Non-Solicited Pornography And Marketing (CAN-SPAM) is a law that establishes the rules for commercial email and commercial messages, gives recipients the right to have a business stop emailing them, and outlines the penalties incurred for those who violate the law.