64 questions
4 of 3 mrk’s
4 of 5 mrk’s
56 mcq’s
Mcq new thay zeyada tar past papers me sy 2,3 he ay thay mujy bs
Define Solo proprietership,explain its 2 advantages nd 2 disadvantages. 5 mrk
Bankcurptcy and its types 5 mrk
1 numerical simple Initial investment and 3 years Cf’s were given, to find out NPV nd pay back period 5 mrk.
1 i guess about flat or aisa he kuch topic ha.
find out cost of debt.3 mrk
1 question about Return in dolllar terms. 3 mrk
1 numerical very simple for finding out tax rate nd average tax rate on taxalbe amount which was 80000/- tax schdule was also given.
PAPER 2;
Mostly MCQ’s from past papers
Short quiz’s theory based mostly from last 10 lectures
1.Which of the following type of bond pays no coupon at all and are offered at
a price that is much lower than its stated value?
Select correct option:
Government bonds
Zero coupon bonds pg 85
Floating-rate bonds
Euro bonds
2.A company’s ability to meet long-term obligations can be estimated by using
which of the following set of ratios?
►Liquidity Ratio
►Solvency Ratios
pg 34
►Asset Management Ratios
►Market Value Ratios
3.Which of the following is an example of positive covenant?
Select correct option:
Maintaining any collateral or security in good condition
Limiting the amount of dividend according to some formula
Restricting pledging assets to other lenders
Barring merger with another firm
4.If the dividend for a share is growing at a steady rate then which of the
following formula(s) can be used to find the dividend in two periods?
Select correct option:
D2 = D1 x (1 + g )
D2 = Do x ( 1 + g )2
D2 = Do x ( 1 + g )2
All of the given options pg 92
5.An investment should be accepted if the net present value is __________ and
rejected if it is ________.
Positive; positive
Positive; negative
Negative; negative
Negative; positive
6.Which of the following is NOT a shortcoming of Payback Rule?
Select correct option:
Time value of money is ignored
It fails to consider risk differences
Simple and easy to calculate
None of the given options pg 106
7.Which of the following measures the present value of an investment per
dollar invested?
Select correct option:
Net Present Value (NPV)
Average Accounting Return (AAR)
Internal Rate of Return (IRR)
Profitability Index (PI) pg 119
8_________ paid by corporation is tax deductible but _________ paid are not tax
deductible.
Select correct option:
Interest; dividend
Dividend; interest
Bonus; interest
None of the given options
9.Sumi Inc. has just paid a dividend of Rs. 7 per share. The dividend of this company
grows at a steady rate of 5% per year. What will be the dividend in 5 years?
Select correct option:
Rs. 4.41
Rs. 6.12
Rs. 7.35
Rs. 8.93
10.Which one of the following typically applies to preferred stock but not to
common stock?
Select correct option:
Dividend yield
Cumulative dividends
Voting rights
Tax deductible dividends
11.Which of the following rate makes the Net Present Value (NPV) equal
to zero?
Select correct option:
Average Accounting Return (AAR)
Internal Rate of Return (IRR) pg 109
Required Rate of Return (RRR)
Weighted Average Cost of Capital (WACC)
12.—————- refers to the extent to which fixed-income securities (debt and
preferred stock) are used in a firm’s capital structure.
Select correct option:
Financial risk
Portfolio risk
Operating risk
Market risk
13.Which of the following describes how a product moves through the current asset
accounts ?
Cash Cycle
Operating Cycle
Current Cycle
None of the given options
14.Your gain (or loss) on an investment that you buy is called your : Select
correct option:
Risk on investment
Return on investment
Gain on investment
loss on investment
15.Speculative Motive - the need to hold cash to take advantage of additional investment
opportunities,
such as bargain purchases, attractive interest rates and favorable exchange rater fluctuations.
•Reserve borrowing utility and Marketable securities
16.Standard deviations for Investment A and Investment B are 25% and 12% respectively. This
indicates that :
Select correct option:
Investment A is less volatile than Investment B
Investment B is equally volatile to Investment A
Investment A is more volatile than Investment B
Investment B is more volatile than Investment A
17.of the following statement measures performance over a specific period of
time?
Select correct option:
Income Statement
Balance Sheet
Cash Flow Statement
Retained Earning Statement
18.Which of the expenses in given options is not a cash outflow for the firm?
Select correct option:
Depreciation
Dividends
Interest payments
Taxes
19.Which of the following type of risk can be eliminated by diversification ?
Select correct option:
Systematic Risk
Market Risk
Unsystematic Risk
None of the given options
20.Restocking costs are normally assumed to be ?
fixed.
Variable.
21.Rule of 72 is
To double the money
PAPER 3
d/f between debt and equity?5 marks
d/f between temporary and permanent current assets?5 marks
types of inventory? 3 marks
find portfolio weight
find risk premium
find NPV and PI
PAPER 4
Ali wants to invest Rs.500,000 for 5 years in a bank. On the basis of below information by two banks, suggest him the best alternate. Show complete calculation to support your decision.
Bank
Annual Interest Rate
Type of Interest
Bank A
9%
Simple Interest
Bank B
8.50%
Compound Interest
Define credit instruments? Write a note on different types credit instruments
Briefly describe cost of equity and cost of debt.
A company is evaluating a project that costs Rs. 20,000 and has cash flows of Rs. 5,000 a year for six years. Company has 12 percent cost of capital. Calculate project’s NPV (Net Present Value) and PI (Profitability Index). Is the project feasible?
Define Variance. What does it tell regarding return?
If you plan to save Rs. 12,000 with a bank at an interest rate of 9%, what will be the worth of your amount after 4 years if interest is compounded annually?
What is Weighted Average Cost of Capital (WACC)?
What are the recommendations if policies are flexible with regard to current assets?
