STRATEGIC FINANCIAL MANAGEMENT MCQ With Answers

Spread the love

STRATEGIC FINANCIAL MANAGEMENT MCQ With Answers – Multiple Choice Question – STRATEGIC FINANCIAL MANAGEMENT MCQ With Answers

  • A project had an equity beta of 1.3 and was going to be financed by a combination of 30% debt and 70% equity. Assuming debt-beta to be zero, the project beta is :
    • 0.81
    • 0.71
    • 0.51
    • 0.91
  • An investor buys a call option contract for a premium of ₹150. The exercise price is ₹15 and the current market price of the share is ₹12. If the share price after three months reaches ₹20, what is the profit made by the option holder on exercising the option? Contract is for 100 shares. Ignore the transaction charges.
    • ₹450
    • ₹350
    • ₹375
    • ₹475
  • Mr. X can earn a return of 18% by investing in equity shares on his own. Now he is considering recently announced equity based mutual fund scheme in which initial expenses are 6.70% and annual recurring expenses are 1.7%. How much should the mutual fund earn to provide Mr. X a return of 18 per cent?
    • 22
    • 19
    • 24
    • 21
  • CNX Nifty is currently quoting at 9100. Each lot is 75. An investor purchases a May Futures contract at 9200. He has been asked to pay 5% margin. What amount of initial margin is he required to deposit? To what level NIFTY futures should in increase to get a gain of 4%?
    • 9318.4
    • 9218.4
    • 9218.5
    • 9118.4
  • P Ltd. has an EPS of ₹75 per share. Its Dividend Payout Ratio is 30%. Earnings and dividends of the company are expected to grow at 6% per annum. Find out the cost of equity capital if its market price is ₹300 per share.
    • 11.5%
    • 12.5%
    • 13.5%.
    • 14.5%
  • An investor has three alternatives of varying investment values. The data available for each of these alternatives are given below:
AlternativeExpected Return (%)Standard Deviation of Return
I II III23 20 188.00 9.50 5.00
Which alternative would be the best if coefficient of variation is used?
  • Which alternative would be the best if coefficient of variation is used?
    • Alternative III is the best as its co-efficient of variation is the lowest
    • Alternative II is the best as its co-efficient of variation is the lowest
    • Alternative I is the best as its co-efficient of variation is the lowest
    • None

STRATEGIC FINANCIAL MANAGEMENT MCQ With Answers

  • A student ordered a book from USA on 01-05-2018 for $ 90, when the spot rate was ₹68.50/$. Payment was made ten days later, on 11-05-2018 when the book was delivered. By this time, the rupee had appreciated by 10%. How much did it cost the student in Rupees? (Ignore transaction and delivery cost).
    • ₹5304.55
    • ₹5404.55
    • ₹5504.55
    • ₹5604.55
  • You are a forex dealer in India. Rates of rupee and pound in the international market are US $0.01386952 and US $1.3181401 respectively. What will be your direct quote of £ (pound) to your customer.
    • ₹54.6987
    • ₹71.1408
    • ₹95.0386
    • ₹0.0105
  • ‘Bank rate’ published by the Reserve Bank refers to
    • the repo rate transacted by RBI
    • the rate at which housing or other long term loans shall be sanctioned by scheduled banks to their customers
    • The rate at which RBI is willing to buy or rediscount bills of exchange or other commercial paper
    • the rate which RBI uses as cut-off for auction of Government securities
  • An investor has invested in a mutual fund when the NAV was ₹15.50 per unit. After 90 days the NAV was ₹14.45 per unit. During the period the investor got a cash dividend of ₹1.35 per unit and capital gain distribution of Re. 0.20. The annualized return based on 360 days year count will be
    • 3.23%
    • 12.92%
    • 0.8075%
    • 16.45%
  • Initial investment of a project is ₹25 lakh. Expected annual cash flows are ₹6.5 lakh for 10 years Cost of capital is 15%. The annuity factor for 15% for 10 years is 5.019. The Profitability Index of the project will be
    • 1.305
    • 3.846
    • 0.26
    • 0.7663
  • Rate of inflation = 5.1%, β = 0.85, Risk premium = 2.295%, Market return = 12%. The real rate of return will be
    • 4.2%
    • 11.70%
    • 6%
    • 5.95%
  • In a constant dividend model, the following estimates the difference between the required rate of return and the growth rate:
    • Earnings Retention ratio
    • Leverage ratio
    • Dividend Pay-out ratio
    • Dividend yield ratio
  • Presently, a company’s share price is ₹120. After 6 months, the price will be either ₹ 150 with a probability of 0.8 or ₹110 with a probability of 0.2. A call option exists with an exercise price of ₹130. What will be the expected value of call option at maturity date?
    • ₹20
    • ₹16
    • ₹12
    • ₹10
  • An Indian Company is planning to invest in the US. The annual rates of inflation are 8% in India and 3% in USA. If the spot rate is currently ₹60.50/$, what spot rate can you expect after 5 years, assuming the inflation rates will remain the same over 5 years?
    • ₹88.89
    • ₹54.95
    • ₹76.68
    • ₹76.10
  • Which of the following securities is most liquid?
    • Money Market instruments
    • Capital Market instruments
    • Gilt-edged securities
    • Index futures
  • While plotting a graph with risk on X-axis and expected return on Y-axis, a line drawn with co-ordinates (0, rf) and (β, rm) is called
    • Security Market Line
    • Characteristic Line
    • Capital Market Line
    • CAPM Line
  • If the RBI intends to reduce the supply of money as part of anti-inflation policy, it might
    • Lower the bank rate
    • Increase the Cash Reserve Ratio
    • Decrease the SLR
    • Buy Government securities in the open market.
  • Which of the following is not an investment constraint?
    • Liquidity
    • The absence of the need for regular income.
    • The preferred time horizon
    • Risk tolerance
  • It is given that ₹/£ quote is ₹100.68 – 102.95 and ₹/$ quote is ₹61.86 – 62.87. What would be the $/£ quote? It is given that ₹/£ quote is ₹100.68 – 102.95 and ₹/$ quote is ₹61.86 – 62.87. What would be the $/£ quote?
    • $1.6014-$1.6642(quote)
    • $1.6014-$1.6542(quote)
    • $1.6014-$6352(quote)
    • $1.6014-$6252(quote)
  • The theoretical forward price of the following security for 6 months is: Spot Price (Sx) ₹160 Risk free interest rate 9% [Given: e0.045 = 1.046028]
    • ₹166.3645
    • ₹167.4645
    • ₹167.3645
    • ₹166.4656

Must read – Seva Sindhu Service Plus Login, registration, Apply Online – 2021, YSR Pension Kanuka Status- 2021 sspensions.ap.gov.in, Operations Management MCQ June 21