Financial Management

✅ The correct answer is B.
Set of rules made by corporation founders such as directors election procedure are classified as by laws. Corporate bylaws (sometimes spelled “by-laws”) are the rules of a corporation, established by the board of directors during the process of starting a corporation. When a corporation is formed (a process called incorporation), one of the first tasks of the new corporation is to have corporate bylaws formed.

✅ The correct answer is B.
Market risk is best measured by the beta. Market risk is the possibility of an investor experiencing losses due to factors that affect the overall performance of the financial markets in which he or she is involved.

✅ The correct answer is A.
The difference between the cash price and the futures price on the same asset or commodity is known as the basis. It is a crucial concept for portfolio managers and traders because this relationship between cash and futures prices affects the value of the contracts used in hedging.

✅ The correct answer is A.
Business owned by a single person in unincorporated way and self controlled is called proprietorship. A sole proprietorship, also known as the sole trader, individual entrepreneurship or proprietorship, is a type of enterprise that is owned and run or managed by single person and in which there is no legal distinction between the owner and the business entity.

✅ The correct answer is A.
Markets for products such as wheat, rice, cotton, real estate and autos dealing is classified as physical asset markets. Physical asset markets are for physical products such as wheat, autos, real estate, computers, and machinery.

✅ The correct answer is D.
Free cash flow = Net operating profit after taxes – Net investment in operating capital
= 11000 – 7000 = Rs. 4000.

✅ The correct answer is B.
Relevant information about stock market price if it is given, then this price is called intrinsic price. Intrinsic value is the perceived or calculated value of an asset, an investment, or a company. The term finds use in fundamental analysis to estimate the value of a company and its cash flows. Another use of intrinsic value is in the amount of profit that exists in an options contract.

✅ The correct answer is A.
Value of stock included in portfolio = Current option price + Present value of portfolio
= Rs. 1200 + Rs. 500 = Rs. 1700.

✅ The correct answer is A.
Owning two securities instead of one will not reduce the risk taken by an investor if the two securities are perfectly positively correlated with each other. The term “security” is a fungible, negotiable financial instrument that holds some type of monetary value. It represents an ownership position in a publicly-traded corporation via stock a creditor relationship with a governmental body or a corporation represented by owning that entity’s bond or rights to ownership as represented by an option.

✅ The correct answer is D.
Markowitz’s main contribution to portfolio theory is insight about the relative importance of variances and co variances in determining portfolio risk.