Financial Management - Study Mode
[#851] One way to obtain earnings forecasts is the mechanical procedure known as___________.
Correct Answer
(C) time series analysis
Explanation
Solution: One way to obtain earnings forecasts is the mechanical procedure known as time series analysis. Time series analysis is a statistical technique that deals with time series data, or trend analysis. Time series data means that data is in a series of particular time periods or intervals.
[#852] In modern investment analysis, the risk for a stock is related to its_____________.
Correct Answer
(C) beta coefficient
Explanation
Solution: In modern investment analysis, the risk for a stock is related to its beta coefficient. In finance, the beta (β or beta coefficient) of an investment is a measure of the risk arising from exposure to general market movements as opposed to idiosyncratic factors.
[#853] The gross working capital is a _____ concern concept.
Correct Answer
(A) Going concern
Explanation
Solution: Gross working capital is also known as going concern concept since finance manager is highly concerned with the management of these assets with a view of bringing about productivity from other assets
[#854] _____________is concerned with the interrelationships between security returns.
Correct Answer
(D) Markowitz diversification
Explanation
Solution: Markowitz diversification is concerned with the interrelationships between security returns. A strategy that seeks to combine in a portfolio assets with returns that are less than perfectly positively correlated, in an effort to lower portfolio risk (variance) without sacrificing return.
[#855] The rate of return on investment ____ with the shortage of working capital.
Correct Answer
(A) falls
Explanation
Solution: The rate of return on investment falls with the shortage of working capital. Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments.