Financial Management

✅ The correct answer is B.
Stock issued by company have higher rate of return because of high book to market ratio. A high ratio is preferred by value managers who interpret it to mean that the company is a value stock, that is, it is trading cheaply in the market compared to its book value.

✅ The correct answer is B.
Bonds issued by government and backed by U.S government are classified as treasury bonds. A Treasury bond (T-bond) is a marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years.

✅ The correct answer is A.
Trading place where traders meet one another to communicate is classified as outcry auction system. Open outcry is a method of verbal and hand signal communication used by traders at stock and futures exchanges. Signals and shouts convey trading information, intentions, and acceptance in the trading pits.

✅ The correct answer is D.
The yield earned by investors has been, on average, in conformity with their expectations. The dividends will continue growing at a constant rate forever are assumption behind the realized yield approach.

✅ The correct answer is D.
Having defined working capital as current assets, it can be further classified according to components and time. Working capital is a financial metric which represents operating liquidity available to a business, organisation or other entity, including governmental entities.

✅ The correct answer is B.
In proper capital budgeting analysis we evaluate incremental cash flow. Capital budgeting, and investment appraisal, is the planning process used to determine whether an organization’s long term investments such as new machinery, replacement of machinery, new plants, new products, and research development projects are worth the funding of cash through the firm’s capitalization structure.

✅ The correct answer is D.
An internal rate of return in capital budgeting can be modified to make it representative of relative profitability.

✅ The correct answer is C.
According to Black Scholes model, short term seller receives today price which full cash proceeds. Proceeds are the cash received from the sale of goods or services and can be discussed as gross or net.

✅ The correct answer is D.
Upto 4 years full cost recovered, only left portion is Rs 300

Cash flow during current year = Rs 650

So 300 recovered with in period of 300/650 = 0.4615

Than payback would be = 4 + 0.4615

= 4.46 years

✅ The correct answer is B.
In capital budgeting, number of non-normal cash flows have internal rate of returns are multiple. Capital budgeting is the process a business undertakes to evaluate potential major projects or investments.