Classical

Advanced Questions - Section 4

11:  

Standard deviation can be used to measure

A.

Risk of an investment

B.

Return of an investment

C.

Both (A) & (B)

D.

None of (A) and (B).

 
 

Option: A

Explanation :


12:  

Capital Budgeting Decisions are based on

A.

Incremental Profit

B.

Incremental Cash Flows

C.

Incremental Assets

D.

Incremental Capital.

 
 

Option: B

Explanation :


13:  

Intrinsic Value of a 'out of money' call option is equal to

A.

Premium

B.

Zero

C.

Spot Price

D.

Strike Price

 
 

Option: B

Explanation :


14:  

If no information is available, the General Rule for valuation of stock for balance sheet is

A.

Replacement Cost

B.

Realizable Value

C.

Historical Cost

D.

Standard Cost.

 
 

Option: C

Explanation :


15:  

If the intrinsic value of a share is less than the market price, which of the most reasonable?

A.

That shares have lesser degree of risk

B.

That market is over valuing the shares

C.

That the company is high dividend paying

D.

That market is undervaluing the share

 
 

Option: B

Explanation :




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