MGT201 Quiz 1 Solution and Discussion

@zareen said in MGT201 Quiz 1 Solution and Discussion:
Which of the following refers to the risk associated with interest rate uncertainty?
Select correct option:Default risk premium (Correct)
Sovereign Risk Premium
Market risk premium
Maturity risk premium 
Which of the following refers to the risk associated with interest rate uncertainty?
Select correct option: 
@zareen said in MGT201 Quiz 1 Solution and Discussion:
When the bond approaches its maturity, the market value of the bond approaches to which of the following?
Intrinsic value
Book value
Par value (Correct)
Historic cost 
When the bond approaches its maturity, the market value of the bond approaches to which of the following?

“Which of the following is FALSE about Perpetuity?” MGT201

@zareen said in MGT201 Quiz 1 Solution and Discussion:
Long term debt and corporate stocks is the financial instrument of which of the following market?
Markets. News. Company News · Markets News · Trading News · Political News · Trends … These assets can be cash, a contractual right to deliver or receive cash … OTC is a market or process whereby securities–that are not listed on … Shortterm debtbased financial instruments last for one year or less.

Long term debt and corporate stocks is the financial instrument of which of the following market?

@zareen said in MGT201 Quiz 1 Solution and Discussion:
The ____________ presents a company’s financial position at the specified date.
balance sheet
The balance sheet presents a company’s financial position at the end of a specified date. Some describe the balance sheet as a “snapshot” of the company’s financial position at a point (a moment or an instant) in time. 
The ____________ presents a company’s financial position at the specified date.

Which of the following statements is true for “Portfolio Diversification”?

@zareen said in MGT201 Quiz 1 Solution and Discussion:
The formula to calculate future value of an amount using continuous compounding is:
Future Value (FV) = PV x [1 + (i / n)](n x t) Calculating the limit of this formula as n approaches infinity (per the definition of continuous compounding) results in the formula for continuously compounded interest: FV = PV x e (i x t), where e is the mathematical constant approximated as 2.7183.

The formula to calculate future value of an amount using continuous compounding is:

What is the additional amount a borrower must pay to lender to compensate for assuming the risk associated with nonpayment?

Suppose sales of Company “S” have increased from Rs. 500,000 to Rs. 650,000 after 1 year. What will be the sale growth rate of Company S?

An ____________is a series of fixed payments, which might be over a fixed number of years, or over the lifetime of an individual, or both.
Annuity due
Ordinary annuity
Annuity
All of the given options 
Identify that which of the following allows depicting graphically the timing of cash flows along with its nature, as either inflows or outflows?
Cash flow diagram
Cash flow diagram
Cash flow diagram
Cash flow diagram