Financial Management

✅ The correct answer is A.
Process in which stockholders transfer right to vote to any other person is classified as proxy. A proxy is an agent legally authorized to act on behalf of another party or a format that allows an investor to vote without being physically present at the meeting.

✅ The correct answer is A.

✅ The correct answer is B.
In capital budgeting, an internal rate of return of project is classified as its internal rate of return. Internal rate of return (IRR) is the interest rate at which the NPV of all the cash flows (both positive and negative) from a project or an investment equals zero.

✅ The correct answer is B.
Intangible assets such as copyrights, trademarks and patents are applicable for amortization. Amortization is an accounting technique used to periodically lower the book value of a loan or intangible asset over a set period of time.

✅ The correct answer is B.
A model which regresses return of stock against return of market is classified as market mode.

✅ The correct answer is C.
Bond’s promised rate of return is also considered as yield to maturity. Yield to maturity (YTM) is the total return anticipated on a bond if the bond is held until it matures. Yield to maturity is considered a long-term bond yield but it is expressed as an annual rate.

✅ The correct answer is B.
Net investment in operating capital is subtracted from net operating profit after taxes to calculate free cash flow. Free cash flow represents the cash a company generates after cash outflows to support operations and maintain its capital assets.

✅ The correct answer is C.
In expected rate of return for constant growth, an expected total rate of return must be equal to expected yield on dividend.

✅ The correct answer is B.
According to market risk premium, an amount of risk premium depends upon investor risk aversion. The term risk-averse refers to investors who, when faced with two investments with a similar expected return, prefer the lower-risk option.

✅ The correct answer is C.
Bond that has been issued in very recent timing is classified as new issue. A new issue is a reference to a security that has been registered, issued, and is being sold on a market to the public for the first time. The term does not necessarily refer to newly issued stocks, although initial public offerings (IPOs) are the most commonly known new issues.