Financial Management

✅ The correct answer is C.
Type of bonds that pays no coupon payment but provides little appreciation are classified as zero coupon bond. A zero-coupon bond is a bond where the face value is repaid at the time of maturity. Note that this definition assumes a positive time value of money. It does not make periodic interest payments, or have so-called coupons, hence the term zero-coupon bond.

✅ The correct answer is A.
A market interest rate for specific type of bond is classified as bonds required rate of return.

✅ The correct answer is B.
Markets which deals with high liquid and short term debt securities are classified as money markets. The money market is the trade in short-term debt investments.

✅ The correct answer is B.
An expected dividend yield is subtracted from an expected rate of return which is used to calculate capital gains yield. Capital gains yield is the percentage price appreciation on an investment.

✅ The correct answer is D.
In balance sheet, sum of retained earnings and common stock are considered as common equity. Common equity is the amount that all common shareholders have invested in a company. Most importantly, this includes the value of the common shares themselves.

✅ The correct answer is B.
Claim against assets are represented by retained earnings. Retained earnings are the profits that a company has earned to date, less any dividends or other distributions paid to investors. This amount is adjusted whenever there is an entry to the accounting records that impacts a revenue or expense account.

✅ The correct answer is B.
In portfolio, beta of individual security in portfolio represented as their weighted average is classified as beta of portfolio. The beta of a portfolio is the weighted sum of the individual asset betas, According to the proportions of the investments in the portfolio.

✅ The correct answer is D.
In binomial approach of option pricing model, last step for finding an option is call price. The call price is the price a bond issuer or preferred stock issuer must pay investors if it wants to buy back, or call, all or part of an issue before the maturity date.

✅ The correct answer is B.
An information uses by investors for expecting future earnings is all recorded in annual report. An annual report is a comprehensive report on a company’s activities throughout the preceding year.

✅ The correct answer is A.