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July 1st, 2014, 08:10 AM
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FCI Management Trainee Exam Finance question paper
Give me question paper for Food Corporation of India (FCI) Management Trainees (MT) finance Examination ? Here I am giving you question paper for Food Corporation of India (FCI) Management Trainees (MT) finance Examination 1. type of risk is avoidable through proper diversification. portfolio risk systematic risk unsystematic risk total risk 2. A statistical measure of the degree to which two variables (e.g., securities’ returns) move together. coefficient of variation variance covariance certainty equivalent 3. An “aggressive” common stock would have a “beta” equal to zero. greater than one. equal to one. less than one. 4. A line that describes the relationship between an individual security’s returns and returns on the market portfolio. characteristic line security market line capital market line beta 5. According to the capital-asset pricing model (CAPM), a security’s expected (required) return is equal to the risk-free rate plus a premium equal to the security’s beta. based on the unsystematic risk of the security. based on the total risk of the security. based on the systematic risk of the security. 6. The risk-free security has a beta equal to, while the market portfolio’s beta is equal to . one; more than one. one; less than one. zero; one. less than zero; more than zero. 7. Carrie has a “certainty equivalent” to a risky gamble’s expected value that is less than the gamble’s expected value. Carrie shows risk aversion. risk preference. risk indifference. a strange outlook on life. 8. Beta is the slope of the security market line. the capital market line. a characteristic line. the CAPM. 9. A measure of “risk per unit of expected return.” standard deviation coefficient of variation correlation coefficient beta 10. The greater the beta, the of the security involved. greater the unavoidable risk greater the avoidable risk less the unavoidable risk less the avoidable risk Select correct option: Sales variability Level of fixed operating costs Closeness to its operating break-even point Debt-to-equity ratio What is the expected return of a zero-beta security? Select correct option: The risk-free rate Zero rate of return A negative rate of return The market rate of return The objective of financial management is to maximize _________ wealth. Select correct option: Stakeholders Shareholders Bondholders Directors Which of the following formulas represents a correct calculation of the degree of operating leverage? Select correct option: (Q – QBE)/Q (EBIT) / (EBIT – FC) [Q(P-V) + FC] /[Q(P-V)] Q(P-V) / [Q(P-V) - FC] Which of the following is a capital budgeting technique that is NOT considered as discounted cash flow method?Select correct option: Payback period Internal rate of return Net present value Profitability index When taxes are considered, the value of a levered firm equals the value of the________. Select correct option: Unlevered firm Unlevered firm plus the value of the debt Unlevered firm plus the present value of the tax shield Unlevered firm plus the value of the debt plus the value of the tax shield At the termination of project, which of the following needs to be considered relating to project assets? Select correct option: Salvage value Book value Intrinsic value Fair value What is the most important criteria in capital budgeting? Select correct option: Return on investment Profitability index Net present value Pay back period Which of the following is the cash required during a specific period to meet interest expenses and principal payments? Select correct option: Debt capacity Debt-service burden Adequacy capacity Fixed-charge burden Which of the following is the maximum amount of debt (and other fixed-charge financing) that a firm can adequately service? Select correct option: Debt capacity Debt-service burden Adequacy capacity Fixed-charge burden Which of the following shows ALL possible Risk –Return combinations for All combinations of the stocks in the portfolio- whether efficient or not. Select correct option: Parachute graph Capital market line Security market line All of the given options Which of the following factors might affect stock returns? Select correct option: Business cycle Interest rate fluctuations Inflation rates All of the above The weighted average of possible returns, with the weights being the probabilities of occurrence is referred to as __________. Select correct option: Probability distribution Expected return Standard deviation Coefficient of variation Which of the following formulas represents a correct calculation of the degree of operating leverage? Select correct option: (Q – QBE)/Q (EBIT) / (EBIT – FC) [Q(P-V) + FC] /[Q(P-V)] Q(P-V) / [Q(P-V) - FC] Which of the following is as EBIT? Select correct option: Funds provided by operations Earnings before taxes Net income Operating profit Total portfolio risk is a combination of: Select correct option: Systematic risk plus non-diversifiable risk Avoidable risk plus diversifiable risk Systematic risk plus unavoidable risk Systematic risk plus diversifiable risk In which of the following approach you need to bring all the projects to the same length in time? Select correct option: MIRR approach Going concern approach Common life approach Equivalent annual approach Which of the following is NOT the form of cash flow generated by the investments of the shareholders? Select correct option: Income Capital loss Capital gain Operating income What are two major areas of capital budgeting? Select correct option: Net present value, profitability index Net present value; internal rate of return Net present value; payback period Pay back period; profitability index Which of the following factors might affect stock returns? Select correct option: Business cycle Interest rate fluctuations Inflation rates All of the above Which of the following is related to the use Lower financial leverage? Select correct option: Fixed costs Variable costs Debt financing Common equity financing Who determine the market price of a share of common stock? Select correct option: The board of directors of the firm The stock exchange on which the stock is listed The president of the company Individuals buying and selling the stock _________ is equal to (common shareholders’ equity/common shares outstanding). Select correct option: Book value per share Liquidation value per share Market value per share None of the above Where the efficient stock combination of risk and return in efficient market should lie? Select correct option: On the SML Below the SML Above the SML It may lie anywhere for efficient combination An annuity due is always worth _____ a comparable annuity. Select correct option: Less than More than Equal to Can not be found from the given information Where the stock points will lie, if a stock is a part of totally diversified portfolio? Select correct option: It will lie below the regression line It will line above the regression line It will line exactly on the regression line It will be tangent to the regression line What is the easiest method to diversify away firm-specific risks? Select correct option: To buy stocks with a beta of 1.0 To build a portfolio with 5-10 individual stocks To purchase the shares of a mutual fund To purchase stocks that plot above the security market line Nominal Interest Rate is also known as: Select correct option: Effective interest Rate Annual percentage rate Periodic interest rate Required interest rate When taxes are considered, the value of a levered firm equals the value of the________. Select correct option: Unlevered firm Unlevered firm plus the value of the debt Unlevered firm plus the present value of the tax shield Unlevered firm plus the value of the debt plus the value of the tax shield Which of the following is correct regarding the opportunity cost of capital for a project? Select correct option: The opportunity cost of capital is the return that investors give up by investing in the project rather than in securities of equivalent risk. Financial managers use the capital asset pricing model to estimate the opportunity cost of capital The company cost of capital is the expected rate of return demanded by investors in a company All of the given options For which of the following costs is it generally necessary to apply a tax adjustment to a yield measure? Select correct option: Cost of debt Cost of preferred stock Cost of common equity Cost of retained earnings Which of the followings expressed the proposition that the cost of equity is a positive linear function of capital structure? Select correct option: The Capital Asset Pricing Model M&M Proposition I M&M Proposition II The Law of One Price The current yield on a bond is equal to ________. Select correct option: Annual interest divided by the current market price The yield to maturity Annual interest divided by the par value The internal rate of return Last edited by Neelurk; May 19th, 2020 at 05:51 PM. |
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