Solution:
The random walk hypothesis is most related to the weak-form EMH. Weak form efficiency, also known as the random walk theory, states that future securities' prices are random and not influenced by past events. Advocates of weak form efficiency believe all current information is reflected in stock prices and past information has no relationship with current market prices.

Solution:
The cost of capital of a long term debt is generally Higher than that of owned funds. Cost of capital refers to the opportunity cost of making a specific investment. It is the rate of return that could have been earned by putting the same money into a different investment with equal risk.

Solution:
Profitability moves together with risk is a basic principle of finance as it relates to the management of working capital. Profitability is ability of a company to use its resources to generate revenues in excess of its expenses.

Solution:
Future value of interest if it is calculated two times a year can be a classified as semi-annual compounding. A semiannual event happens twice a year, typically every six months.

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Solution:
Investment decision begins with a determination of the total amount of assets needed to be held by the firm. In other words, investment decision relates to the selection of assets, on which a firm will invest funds.

Solution:
Present Value = FV / ( 1 + r/100 )ⁿ = 5000 / ( 1 + 7/100)²⁰ = Rs. 1292.10