Which of the following is/are component(s) of capital asset pricing model (CAPM)?

• A) Market Rate of Return
• B) All of the above given options
• C) Beta
• D) Risk Free Rate of Return

The variability in portfolio returns that can be avoided through diversification is termed as:

• A) Standard deviation
• B) Systematic risk
• C) Coefficient of variation
• D) Unsystematic risk

Which of the following statement is TRUE in regards to hedging approach to financing working capital?

• A) Financing the short term needs of the business through long term debt
• B) Financing the seasonal needs of the business through long term debt
• C) Financing the short term needs of the business through short term debt
• D) Financing the long term needs of the business through short term debt

Which of the following reflects the variability in portfolios return due to change in market return?

• A) Unsystematic risk
• B) Coefficient of variation
• C) Standard deviation
• D) Systematic risk

Coefficient of variation is a measure of relative dispersion (risk) per unit of:

• A) All of the above given options
• B) Expected volatility
• C) Expected risk
• D) Expected return

Which of the following is a shortcoming of using payback period to determine the acceptability of a project?

• A) It ignores cash flows during payback period of a project
• B) It takes into account cash flows after payback period of a project
• C) It ignores time value of money
• D) It takes into account times value of money

All are the techniques of capital budgeting EXCEPT:

• A) Payback period
• B) Internal Rate of return
• C) Profitability Index
• D) Net profitability value

What will be YTM of a 10 years Rs. 1000 face value bond which is paying a coupon of Rs. 100 and bond is currently selling at Rs. 950?

• A) 10.76%
• B) 12.25%
• C) 15%
• D) None of the given options

Securities issued to offer specified rate of return are classified as:

• A) Debt instruments
• B) All of the given options
• C) Interest-bearing instruments
• D) Debentures

Which of the following is a type of bond?

• A) All of the given options
• B) Maturity bond
• C) Zero coupon bond
• D) Coupon bond

Which of the followings is/are the example(s) of capital expenditures?

• A) All of the given options
• B) Purchase of new fixed asset
• C) Replacement of existing fixed asset
• D) Investment in alteration of fixed assets

All of the following are depreciation methods, Except:

• A) Declining Balance Method
• B) Specific Identification Method
• C) Straight Line Method
• D) Units of Output Method

Capital asset pricing model takes into account:

• A) Beta
• B) All of the given options
• C) Risk free rate of return
• D) Market return

Which of the followings is/are the type(s) of capital budgeting technique?

• A) Net Present Value
• B) Payback Period
• C) All of the given options
• D) Internal Rate of Return

Which of the following capital budgeting technique use “Interpolation method”?

• A) Profitability Index
• B) Profitability Index
• C) Payback period
• D) Internal Rate of return

Cost of capital includes:

• A) Cost of preferred shares
• B) All of the given options
• C) Cost of common shares
• D) Cost of bonds

What will be NPV of a project if PV of cash inflows is Rs. 550,000 and initial investment is Rs. 600,000?

• A) Rs. 550,000
• B) Rs. 600,000
• C) Rs. 50,000
• D) Rs. 1,150,000

All are the examples of non-cash items EXCEPT:

• A) Financial charges
• B) Bad debts
• C) Depreciation
• D) Amortization

Cost of debt includes:

• A) Cost of debentures
• B) Cost of fixed income securities
• C) All of the given options
• D) Cost of bonds

What will be cost of preferred shares if a company is paying Rs. 12 per share dividend and the shares are selling Rs. 95 per share in the market?

• A) None of the given options
• B) 7%
• C) 15%
• D) 12.63%