Financial Management

✅ The correct answer is C.
Tendency of measuring correlation of two variables is classified as correlation coefficient. The correlation coefficient is a statistical measure that calculates the strength of the relationship between the relative movements of two variables.

✅ The correct answer is C.
Partners who are only liable for their own part of investment are considered as corporate partners. Corporate Partnership is an exclusive academic-corporate partnership based on Corporate Partners contributing to the Alliance and its MIM programme and benefitting from privileged access to a global pool of top talent from the world’s leading business schools.

✅ The correct answer is C.
A markets which deals with long-term corporate stocks are classified as capital markets. Capital markets refer to the places where savings and investments are moved between suppliers of capital and those who are in need of capital.

✅ The correct answer is D.
The factors that affects P/E ratio are Growth rate, Debt proportion and Retention ratio.

✅ The correct answer is A.
First factor in Fama French three factor model is CAPM stock beta. The Capital Asset Pricing Model (CAPM) describes the relationship between systematic risk and expected return for assets, particularly stocks.

✅ The correct answer is B.
Type of bond in which payments are made on basis of inflation index is classified as purchasing power bond. Purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you would be able to purchase.

✅ The correct answer is A.
A high portfolio return is subtracted from low portfolio return to calculate HML portfolio. HML is one of three factors in the original Fama and French’s Three-Factor model, which is often used to evaluate a portfolio manager’s returns.

✅ The correct answer is C.
At last day when European and American option can be exercised is classified as expiration date. An expiration date in derivatives is the last day that a derivative, such as options or futures, is valid. On or before this day, investors will have already decided what to do with their expiring position.

✅ The correct answer is B.
In alternative investments, constant cash flow stream is equal to initial cash flow stream in approach which is classified as equivalent annual annuity. The equivalent annual annuity approach is one of two methods used in capital budgeting to compare mutually exclusive projects with unequal lives. The EAA approach calculates the constant annual cash flow generated by a project over its lifespan if it was an annuity.

✅ The correct answer is A.
Stocks in market portfolio are graphically represented with dashed line.