## STRATEGIC FINANCIAL MANAGEMENT MCQ With Answers

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:
• 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
• 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
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