Financial Management - Study Mode

[#486] In capital budgeting, positive net present value results in
Correct Answer

(B) positive economic value added

Explanation

Solution: In capital budgeting, positive net present value results in positive economic value added. Capital budgeting is the process a business undertakes to evaluate potential major projects or investments.

[#487] Markets dealing with residential loans, industry real estate loans, agricultural loans and commercial loans are called
Correct Answer

(B) mortgage markets

Explanation

Solution: Markets dealing with residential loans, industry real estate loans, agricultural loans and commercial loans are called mortgage markets. The mortgage market can seem complicated to the uninitiated. The fact is that it is not as complicated as it is ever-changing. Most people have no idea how the market works. By understanding this, you will get a better idea about mortgage programs that are offered by certain lenders. Armed with this new information, you can make an informed decision in your quest for the perfect mortgage.

[#488] Type of financial security in which loans are secured by borrower's property is classified as
Correct Answer

(D) mortgages

Explanation

Solution: Type of financial security in which loans are secured by borrower's property is classified as mortgages. A mortgage is a debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments.

[#489] In financial markets, period of maturity more than five years of financial instruments is classified as
Correct Answer

(D) long-term

Explanation

Solution: In financial markets, period of maturity more than five years of financial instruments is classified as long-term. Generally, a time frame for investing in which an asset is held for at least seven to ten years. The measure of a "long term" time frame can vary depending on the asset held or the investment objective. In business accounting measures, long term can be a period of time that exceeds 12 months.

[#490] Merrill Lynch, Morgan Stanley and Credit Suisse Group plan for raising capital is classified as
Correct Answer

(A) investment banking houses

Explanation

Solution: Merrill Lynch, Morgan Stanley and Credit Suisse Group plan for raising capital is classified as investment banking houses. Investment banking is a special segment of banking operation that helps individuals or organisations raise capital and provide financial consultancy services to them.