Financial Management-Valuation Concepts and Valuation of Securities (CBSE-NET (UGC) Management (Paper-II & Paper-III)): Questions 1 - 5 of 8

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Question number: 1

» Financial Management » Valuation Concepts and Valuation of Securities

MCQ▾

Question

The value of a bond with a given maturity period is

(June 2014 Paper II)

Choices

Choice (4) Response

a.

Present value of annual interest plus present value of maturity value

b.

Present value of maturity value of the bond

c.

Maturity value received

d.

Total amount of interest plus the maturity value received

Question number: 2

» Financial Management » Valuation Concepts and Valuation of Securities

Appeared in Year: 2015

MCQ▾

Question

Under the modified accelerated cost recovery system (MACRS) an asset in the’5 years property class would typically be depreciated over how many years? (December)

Choices

Choice (4) Response

a.

7 years

b.

5 years

c.

4 years

d.

6 years

Question number: 3

» Financial Management » Valuation Concepts and Valuation of Securities

MCQ▾

Question

In the context of the Capital Asset Pricing Model (CAPM) the relevant measure of risk is

Choices

Choice (4) Response

a.

unique risk

b.

variance returns

c.

beta

d.

standard deviation of returns

Question number: 4

» Financial Management » Valuation Concepts and Valuation of Securities

MCQ▾

Question

The risk free rate and the expected market rate of return are 0.06 and 0.12 respective. According to the capital asset pricing model (CAPM) the expected rate of return on security X with a beta of 1.2 is equal to

Choices

Choice (4) Response

a.

0.144

b.

0.12

c.

0.132

d.

0.06

Question number: 5

» Financial Management » Valuation Concepts and Valuation of Securities

MCQ▾

Question

According to capital asset pricing model assumptions, investors will borrow unlimited amount of capital at any given

Choices

Choice (4) Response

a.

fixed rate of interest

b.

risk free expected return

c.

risk free rate of interest

d.

identical and fixed returns

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