MGT201 Current Quiz

Question # 1 of 15 ( Start time: 01:09:51 AM ) Total Marks: 1

In which of the following approach you need to bring all the projects to the same length in time?

Select correct option:

MIRR approach

Going concern approach

Common life approach

Equivalent annual approach

Question # 2 of 15 ( Start time: 01:10:53 AM ) Total Marks: 1

Which of the following is not the present value of the bond?

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Intrinsic value

Market price

Fair price

Theoretical price

Question # 3 of 15 ( Start time: 01:12:15 AM ) Total Marks: 1

Consider two bonds, A and B. Both bonds presently are selling at their par value of Rs. 1,000. Each pays interest of Rs. 120 annually. Bond A will mature in 5 years while bond B will mature in 6 years. If the yields to maturity on the two bonds change from 12% to 10%, ____________.

Select correct option:

Both bonds will increase in value, but bond A will increase more than bond B

Both bonds will increase in value, but bond B will increase more than bond A

Both bonds will decrease in value, but bond A will decrease more than bond B

Both bonds will decrease in value, but bond B will decrease more than bond A

Question # 4 of 15 ( Start time: 01:13:26 AM ) Total Marks: 1

Effective interest rate is different from nominal rate of interest because:

Select correct option:

Nominal interest rate ignores compounding

Nominal interest rate includes frequency of compounding

Periodic interest rate ignores the effect of inflation

All of the given options

Question # 5 of 15 ( Start time: 01:14:32 AM ) Total Marks: 1

For Company A, plow back ratio is 30%. What will be its Pay-out ratio?

Select correct option:

3.33%

30%

31%

70%

Question # 6 of 15 ( Start time: 01:15:27 AM ) Total Marks: 1

What is the most important criteria in capital budgeting?

Select correct option:

Return on investment

Profitability index

Net present value

Pay back period

Question # 7 of 15 ( Start time: 01:16:11 AM ) Total Marks: 1

Which of the following formulas represents a correct calculation of the degree of operating leverage?

Select correct option:

(Q - QBE)/Q

(EBIT) / (EBIT - FC)

[Q(P-V) + FC] /[Q(P-V)]

Q(P-V) / [Q(P-V) - FC]

Question # 8 of 15 ( Start time: 01:17:09 AM ) Total Marks: 1

Which of the following is NOT an example of a financial intermediary?

Select correct option:

Wisconsin S&L, a savings and loan association

Strong Capital Appreciation, a mutual fund

Microsoft Corporation, a software firm

College Credit, a credit union

Question # 9 of 15 ( Start time: 01:17:42 AM ) Total Marks: 1

What are the Indirect securities?

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The securities whose value depends on the cash flows generated by the underlying assets

The securities whose value depends on the value of the underlying assets

The securities that indirectly generate returns for its investors

All of the given options

Question # 10 of 15 ( Start time: 01:18:36 AM ) Total Marks: 1

When Investors want high plowback ratios?

Select correct option:

Whenever ROE > k

Whenever k > ROE

Only when they are in low tax brackets

Whenever bank interest rates are high

Question # 11 of 15 ( Start time: 01:19:28 AM ) Total Marks: 1

According to timing difference problem a good project might suffer from _____ IRR even though its NPV is ________.

Select correct option:

Higher; lower

Lower; Lower

Lower; higher

Higher; higher

Question # 12 of 15 ( Start time: 01:20:19 AM ) Total Marks: 1

The statement of cash flows reports a firm's cash flows segregated into which of the following categorical order?

Select correct option:

Operating, investing, and financing

Investing, operating, and financing

Financing, operating and investing

Financing, investing, and operating

Question # 13 of 15 ( Start time: 01:21:04 AM ) Total Marks: 1

When a bond will sell at a discount?

Select correct option:

The coupon rate is greater than the current yield and the current yield is greater than yield to maturity

The coupon rate is greater than yield to maturity

The coupon rate is less than the current yield and the current yield is greater than the yield to maturity



The coupon rate is less than the current yield and the current yield is less than yield to maturity

Question # 14 of 15 ( Start time: 01:22:17 AM ) Total Marks: 1

Which of the following is the Double Entry Principle?

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Assets + Liabilities = Shareholders’ Equity

Assets = Liabilities + Shareholders’ Equity

Liabilities = Assets + Shareholders’ Equity

None of the given options

Question # 15 of 15 ( Start time: 01:23:17 AM ) Total Marks: 1

Which if the following is (are) true? I. The dividend growth model holds if, at some point in time, the dividend growth rate exceeds the stock’s required return. II. A decrease in the dividend growth rate will increase a stock’s market value, all else the same. III. An increase in the required return on a stock will decrease its market value, all else the same.

Select correct option:

I, II, and III

I only

III only

II and III only