Business Finance - Study Mode

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[#281] Concessions, mainly multinational in character, come under the principle of

(A) Non-discrimination

(B) Reciprocity

(C) Market Access

(D) Fair Competition

Correct Answer

(B) Reciprocity

[#282] If the risk-free return (Rf) is 6%, the beta value is 1.5, and the market rate of return (Km) is 10%, the expected rate of return would be

(A) 15%

(B) 12%

(C) 17.5%

(D) 16%

Correct Answer

(B) 12%

[#283] Hedging in finance refers to protecting investments. What are the areas where hedging is applied? (i) Securities market (ii) Commodities market (iii) Interest Rates (iv) Currencies

(A) (i), (ii), (iii) and (iv)

(B) (i), (iii) and (iv)

(C) (i), (ii) and (iv)

(D) (i), (ii) and (iii)

Correct Answer

(A) (i), (ii), (iii) and (iv)

[#284] Match the following. List-I (Concepts) List-II (Disadvantages) a. Undercapitalisation 1. Ignores time patterns of returns b. Overcapitalisation 2. Increase in speculative activities c. Profit maximisation 3. Decline in value of securities

(A) a-3, b-1, c-2

(B) a-1, b-2, c-3

(C) a-3, b-2, c-1

(D) a-2, b-3, c-1

Correct Answer

(D) a-2, b-3, c-1

[#285] Which of the following equates the present value of cash outflows and the present value of expected cash inflows from a project?

(A) Net Present Value

(B) Internal Rate of Return

(C) Payback Period

(D) Accounting Rate of Return

Correct Answer

(B) Internal Rate of Return