Financial Management - Study Mode
[#721] Money lends to corporations by banks is classified as
Correct Answer
(B) commercial loans
Explanation
Solution: Money lends to corporations by banks is classified as commercial loans. A commercial loan is a debt-based funding arrangement between a business and a financial institution such as a bank.
[#722] Markets in which outstanding securities are traded by investors are classified as
Correct Answer
(B) secondary markets
Explanation
Solution: Markets in which outstanding securities are traded by investors are classified as secondary markets. The secondary market is where investors buy and sell securities they already own. It is what most people typically think of as the "stock market," though stocks are also sold on the primary market when they are first issued.
[#723] In order to find out cost of equity capital under CAPM, which of the following is not required?
Correct Answer
(C) Market Price of Equity Share
[#724] Shares of face value of Rs. 10 are 80% paid up. The company declares a dividend of 50%. Amount of dividend per share is:
Correct Answer
(B) Rs. 4
[#725] If market interest rates are expected to rise, you would expect___________.
Correct Answer
(A) bond prices to fall more than stock prices
Explanation
Solution: If market interest rates are expected to rise, you would expect bond prices to fall more than stock prices. The prevailing rate of interest offered on cash deposits, determined by demand and supply of deposits and based on the duration (the longer the duration, the higher the rate) and amount (the higher the amount, the higher the rate) of deposits.