Business-Finance Objective Questions and Answers

365. Which of the following items is a model describing the relationship between risk and expected return (in this model the expected return is equal to the risk-free return plus a premium based on the systematic risk of the security)?

366. Funds required for purchasing current assets is an example of

A. fixed capital requirement

B. lease financing

C. working capital requirement

D. ploughing back of profits

Discussion

367. Which of the following factor(s) is/are responsible for overcapitalisation?

A. High promotion expenses

B. Liberal dividend policy

C. Both A and B

D. None of the above

Discussion

368. Which form of market efficiency states that current prices fully reflect all publicly available information?

369. Which of the following examples best represents a passive dividend policy?

A. The proportion of dividends paid from net income remains constant

B. The firm pays dividends with the remains of net income after taking acceptable investment projects

C. The quantity (rupee amount per share) of dividends paid from net income remains constant

D. All of the above examples indicate passive dividend policies

Discussion

370. A firm operating in India cannot hedge its foreign currency exposure through

371. The capital budgeting technique that explicitly incorporates an estimated interest rate into its basic computations is the

A. payback period method

B. accounting rate of return method

C. internal rate of return method

D. NPV method

Discussion

Business-Finance MCQs