Classical

Advanced Questions - Section 4

36:  

A lease which is generally not cancellable and covers full economic life of the asset is known as

A.

Sale and leaseback

B.

Operating Lease

C.

Finance Lease

D.

Economic Lease

 
 

Option: C

Explanation :

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37:  

In a diversified portfolio, a new security adds

A.

Systematic Risk

B.

Unsystematic Risk

C.

Liquidity Risk

D.

None of the above.

 
 

Option: A

Explanation :

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38:  

Financial break-even level of EBIT is

A.

Intercept at Y-axis

B.

Intercept at X-axis

C.

Slope of EBIT-EPS line

D.

None of the above.

 
 

Option: B

Explanation :

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39:  

There is deterioration in the management of working capital of XYZ Ltd. What does it refer to?

A.

That the Capital Employed has reduced

B.

That the Profitability has gone up

C.

That debtors collection period has increased

D.

That Sales has decreased.

 
 

Option: C

Explanation :

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40:  

In MM-Model, irrelevance of capital structure is based on

A.

Cost of Debt and Equity

B.

Arbitrage Process

C.

Decreasing k0

D.

All of the above.

 
 

Option: B

Explanation :

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