## STRATEGIC FINANCIAL MANAGEMENT MCQ 3

STRATEGIC FINANCIAL MANAGEMENT MCQ – Multiple Choice Question

• A stock is currently selling at ₹270. The call option to buy the stock at ₹265 costs ₹12. What is the Time Value of the option?
• ₹5
• ₹17
• ₹7
• None of (A), (B) or (C)
• A Ltd., an export customer requested his banker B to purchase a bill for USD 80,000. Calculate the rate to be quoted to A Ltd. if B wants a margin of 0.08%, given that the inter bank rate is ₹ \$ 71.50/10.
• ₹71.1569
• ₹71.0431
• ₹71.5572
• ₹71.4428
• A company is considering four projects A, B, C and D with the following information:
• Which project will fit the requirement of low risk appetite?
• Project A
• Project B
• Project C
• Project D
• The spot Value of Nifty is 4430. An investor bought a one month Nifty 4410 call option for a premium of ₹12. The option is:
• In the money
• At the money
• Out of the money
• Insufficient data
• A certain mutual fund has a return of 17% with standard deviation of 3.5% and the sharpe ratio is 4. The risk free rate is
• 12.5%
• 4%
• 3%
• 7.5%
• The following information of a project are given below:
• If certainty equivalent coefficient is 0.7, what will be certain (Risk less) cash flows of the project?
• ₹12,000
• ₹9,800
• ₹9,000
• ₹15,400
• The spot and 6 months forward rates of US dollar in relation to the rupee (₹/\$) are ₹ 74.532/75.4143 and ₹75.1278/76.2538 respectively. What will be the annualized forward margin (with respect to Ask price)?
• 2.42%
• 1.60%
• 2.23%
• 2.31%
• B can earn a return of 18% by investing in equity shares on his own. Now he is considering a recently announced equity based Mutual Fund Scheme in which initial expenses are 1% and annual recurring expenses are 2%. How much should  be Mutual Fund earn to provide B, a return of 18%?
• 18.18%
• 20.18%
• 22.18%
• 21%
1. You are given the following information of a stock:
• Theoretical minimum price of a European 6 months put option after six months is
• ₹9.37
• ₹20.12
• ₹30.76
• ₹20.63
• MS Ltd. is planning to invest in USA. The annual rates of inflation are 8% in India and 3% in USA. If spot rate is currently ₹75.50/\$, what spot rate can the company expect after 3 years?
• ₹65.49
• ₹79.16
• ₹87.04
• ₹72.00
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