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[#481] Match the following. List-I List-II a. Depreciation funds 1. . . . . . . . . is comparatively cheap. b. Public deposits 2. . . . . . . . . is the internal source of financing short-term working capital. c. Term loans 3. . . . . . . . . have been very popular among Indian companies. d. Bank credit 4. . . . . . . . . are resources raised for a period from 3 to 5-7 years.

(A) a-4, b-3, c-2, d-1

(B) a-2, b-3, c-4, d-1

(C) a-3, b-1, c-4, d-2

(D) a-4, b-1, b-2, d-3

Correct Answer

(B) a-2, b-3, c-4, d-1

[#482] Which of the following is the most appropriate form for financing a new capital investment in plant and equipment?

(A) Trade credit

(B) Six months bank notes

(C) Account payable

(D) Common stock equity

Correct Answer

(D) Common stock equity

[#483] Which of the following are the main benefits to originators in the context of asset-based securitization? (i) Securitization improves returns on capital. (ii) Securitization lowers the borrowing costs. (iii) Securitization releases additional capital for expansion. (iv) Securitization improves asset or liability. (v) Securitization improves credit risk management.

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

(B) (i), (ii) and (iv)

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

(D) All of the above

Correct Answer

(D) All of the above

[#484] Which of the following is not a fundamental assumption made by Modigliani and Miller?

(A) No taxes

(B) There is imperfect information

(C) Firms can be classified into distinct risk classes

(D) None of the above

Correct Answer

(B) There is imperfect information

[#485] Arbitrage pricing theory may be more suitable for a company since it is based on the assumption that returns are determined by a number of factors to which a particular risk premium is attached. These factors are

(A) Dependent factors

(B) Independent factors

(C) Internal factors

(D) Contradictory factors

Correct Answer

(B) Independent factors