Financial Management - Study Mode
[#346] In stock option, a little chance exists for large gain on stock when price of stock
Correct Answer
(C) rarely moves
Explanation
Solution: In stock option, a little chance exists for large gain on stock when price of stock rarely moves. A stock option gives an investor the right, but not the obligation, to buy or sell a stock at an agreed upon price and date.
[#347] A company may raise capital from the primary market through _____________.
Correct Answer
(D) All of the above
Explanation
Solution: A company may raise capital from the primary market through Public issue, Rights issue and Bought out deals.
[#348] Which exchange member is assigned to a specific trading post?
Correct Answer
(C) Specialist
Explanation
Solution: Specialist exchange member is assigned to a specific trading post. A specialist is a person who is a member of a stock exchange, such as the New York Stock Exchange, whose role is to facilitate trading in certain stocks.
[#349] A fixed rate of _________ is payable on debentures
Correct Answer
(C) Interest
Explanation
Solution: A fixed rate of Interest is payable on debentures. Debentures are a debt instrument used by companies and government to issue the loan. The loan is issued to corporates based on their reputation at a fixed rate of interest.
[#350] According to traditional approach, the average cost of capital _______________.
Correct Answer
(C) Decrease up to certain point, remains unchanged for moderate increase in leverage and rises beyond a certain point
Explanation
Solution: According to traditional approach, the average cost of capital decrease up to certain point, remains unchanged for moderate increase in leverage and rises beyond a certain point.