Financial Management - Study Mode

[#761] A company sells its stock shares for raising more equity capital is classified as
Correct Answer

(B) seasoned equity offering

Explanation

Solution: A company sells its stock shares for raising more equity capital is classified as seasoned equity offering. A seasoned issue is an issue of additional securities from an established company whose securities already trade in the secondary market. A seasoned issue is also known as a "seasoned equity offering" or "follow-on offering." New shares issued by blue-chip companies are considered seasoned issues.

[#762] All partners have limited liability in
Correct Answer

(B) limited liability partnership

Explanation

Solution: All partners have limited liability in limited liability partnership. LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.

[#763] Range of probability distribution with 99.74% lies within
Correct Answer

(A) (+ 3σ and -3σ)

Explanation

Solution: Range of probability distribution with 99.74% lies within (+ 3σ and -3σ).

[#764] Risk per unit of return or stand alone risk is represented by
Correct Answer

(C) coefficient of variation

Explanation

Solution: Risk per unit of return or stand alone risk is represented by coefficient of variation. The coefficient of variation (CV) is a statistical measure of the dispersion of data points in a data series around the mean.

[#765] Risk on a stock portfolio which can be reduced by placing it in diversified portfolio is classified as
Correct Answer

(C) diversifiable risk

Explanation

Solution: Risk on a stock portfolio which can be reduced by placing it in diversified portfolio is classified as diversifiable risk. Diversifiable risk is the possibility that there will be a change in the price of a security because of the specific characteristics of that security.