MGT201 Quiz 1 Solution and Discussion
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When the zero coupon bond approaches to its maturity, the market value of the bond approaches to which of the following?
Select correct option: -
@zareen said in MGT201 Quiz 1 Solution and Discussion:
When the zero coupon bond approaches to its maturity, the market value of the bond approaches to which of the following?
Select correct option:Intrinsic value
Book value (Correct)
Par value
Historic cost -
What is difference between shares and bonds?
Select correct option:
Bonds are representing ownership whereas shares are not
Shares are representing ownership whereas bonds are not (Correct)
Shares and bonds both represent equity
Shares and bond both represent liabilities -
Effective interest rate is different from nominal rate of interest because:
Select correct option:Nominal interest rate ignores compounding
Nominal interest rate includes frequency of compounding (Correct)
Periodic interest rate ignores the effect of inflation
All of the given options -
Which of the following refers to a highly competitive market where good business ideas are taken up immediately?
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@zareen said in MGT201 Quiz 1 Solution and Discussion:
Which of the following refers to a highly competitive market where good business ideas are taken up immediately?
Capital market
Efficient market (Correct)
Money market
Real asset market -
A technique that tells us the number of years required to recover our initial cash investment based on the project’s expected cash flows is:
Select correct option:Pay back period (Correct)
Internal rate of return
Net present value
Profitability index -
Which of the following allows to graphically depicting the timing of the cash flows as well as their nature as either inflows or outflows?
Select correct option:Cash flow diagram (Correct)
Cash budget
Cash flow statement
None of the given options -
Which of the following statements is TRUE regarding Permanent Accounts?
Select correct option:Accounts that are found on Income Statement
Accounts that are found on Statement of Retained Earnings
Accounts that are found on Balance Sheet
All of the given options -
The statement of cash flows reports a firm’s cash flows segregated into which of the following categorical order?
Select correct option:Operating, investing, and financing
Investing, operating, and financing
Financing, operating and investing
Financing, investing, and operating -
Which of the following needs to be excluded while we calculate the incremental cash flows?
Select correct option:Depreciation
Sunk cost (Correct)
Opportunity cost
Non-cash item -
Which of the following is a capital budgeting technique that is NOT considered as discounted cash flow method?
Select correct option:Payback period (Correct)
Internal rate of return
Net present value
Profitability index -
The value of a bond is directly derived from which of the following?
Select correct option:Cash flows
Coupon receipts (Correct)
Par recovery at maturity
All of the given options -
The value of a bond is directly derived from which of the following?
Select correct option:Cash flows
Coupon receipts (Correct)
Par recovery at maturity
All of the given options -
A technique that tells us the number of years required to recover our initial cash investment based on the project’s expected cash flows is:
Select correct option:
Pay back period (Correct)
Internal rate of return
Net present value
Profitability index -
Which of the following is NOT an example of a financial intermediary?
Select correct option:
Wisconsin S&L, a savings and loan association
Strong Capital Appreciation, a mutual fund
Microsoft Corporation, a software firm (Correct)
College Credit, a credit union