Financial Management

✅ The correct answer is D.
Financial markets include primary markets, capital markets and physical asset markets.

✅ The correct answer is C.
Stock in large companies and own by people who are not active in management is classified as publicly held stock. A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a corporation whose ownership is dispersed among the general public in many shares of stock which are freely traded on a stock exchange or in over-the-counter markets.

✅ The correct answer is B.
The bonus issue is made to make the nominal value and the Market value of the shares of the company. A bonus issue, also known as a scrip issue or a capitalization issue, is an offer of free additional shares to existing shareholders.

✅ The correct answer is A.
In call provision, it is stated that company will pay to issue an amount higher than par value. A call provision is a provision in a bond contract that gives the issuing corporation the right to redeem the bonds under specified terms prior to the normal maturity date. The call provision generally states that the company must pay the bondholders an amount greater than the par value if they are called.

✅ The correct answer is A.
In option pricing, an increasing in option price due to time of expiry increases. Option pricing is the amount per share at which an option is traded. Although the option holder is not obligated to exercise the option, the seller must buy or sell the underlying instrument if the option is exercised.

✅ The correct answer is C.
Set of rules consisting of behavior towards its directors, creditors, shareholders, competitors and community is considered as corporate governance. Corporate governance is the combination of rules, processes or laws by which businesses are operated, regulated or controlled.

✅ The correct answer is D.
Accounting Rate of Return techniques of project appraisal does not consider the time value of money. Under this method, the asset’s expected accounting rate of return (ARR) is computed by dividing the expected incremental net operating income by the initial investment and then compared to the management’s desired rate of return to accept or reject a proposal.

✅ The correct answer is A.
Cash and equivalents, inventories and accounts receivables are classified as Cash and equivalents, inventories and accounts receivables are classified as assets on balance sheet.

✅ The correct answer is D.
In the weekly efficient market, the stock price reflects the past price and traded volumes. Weak form efficiency claims that past price movements, volume and earnings data do not affect a stock’s price and can’t be used to predict its future direction. Weak form efficiency is one of the three different degrees of efficient market hypothesis (EMH).

✅ The correct answer is B.
Required rate of return = Preferred dividend / Value of stock * 100
= 120 / 1200 * 100 = 10.00%