Professional Documents
Culture Documents
a. 11.1%
b. 23.1%
c. 13.1%
d. 17.1%
79. Issue of 11% preference share will _______________ debt equity ratio of a company
a. Increase
b. Decrease
80. Ploughing back of profits by the company will ________________ its debt equity ratio
a. Increase
b. Decrease
c. Debt equity ratio will remain same
d. None of these
81. Purchase of treasury bills will ____________ its acid test ratio
a. Improve
b. Weaken
c. Will not affect
d. Change may take place in either direction
82. The sustainable growth rate is the maximum rate at which the company can grow by
using its retained earnings
a. True
b. False
83. A company has sold goods worth Rs. 500000 with a gross profit margin of 15%. The
stock at the beginning and end of the year was Rs. 70000 and Rs. 80000 respectively.
The inventory turnover ratio of the company will be
a. 6.67
b. 5.87
c. 5.67
d. 7.67
84. Debt-Equity Ratio is a measure of
a. Long term solvency of the firm
b. Short term solvency of the firm
c. Efficiency of the firm
d. None of these
85. If Sales of a company is Rs. 200000, cost of goods sold is Rs. 100000 and other operating
expenses are Rs. 50000 its Gross Profit Margin and Net Profit Margin will be _________
and ______
a. 50% and 25%
b. 25% and 50%
c. Both ratios will be 25%
d. None of these
86. As per DuPont Model earning power of a company is
I. Net Profit Margin * Asset Turnover
II. Net Profit Margin / Asset Turnover
III. Gross Profit Margin * Asset Turnover
IV. Net Profit Margin * (Sales/Total Assets)
a. I only
b. II only
c. I and IV both
d. II and III both
87. Which of the following method/ratio is not a measure of profitability of a firm?
a. Return on capital employed
b. Return on net assets
c. Working capital turnover
d. DuPont Analysis
88. __________ would mean that no investor would be able to outperform the market with
trading strategies based on historical information. [1 Mark]
92. Price movement between two stocks from different industries would generally have ______
co-variance. [1 Mark]
(a) zero
(b) positive
(c) negative
(d) can assume any value
93. Which of the following accounting statements form the backbone of financial analysis of a
company? [1 Mark]
(a) the income statement (profit & loss),
(b) the balance sheet
(c) statement of cash flows
(d) All of the above
94. The balance sheet of a company is a snapshot of the ______ of the firm at a point in time. [2
Marks]
(a) the sources and applications of funds of the company
(b) expenditure structure
(c) profit structure
(d) income structure
95. A company's net income for a period is Rs. 15,00,00,000 and the average shareholder's fund
during the period is Rs. 1,00,00,00,000. The Return on Average Equity is: [3 Marks]
(a) 13%
(b) 12%
(c) 15%
(d) 16%
96. The share price of PQR Company on 1st April 2009 and 31st March 2010 is Rs. 20 and Rs. 24
respectively. The company paid a dividend of Rs. 5 for the year 2009-10. Calculate the return
for a shareholder of PQR Company in the year 2009-10. [1 Mark]
(a) 45%
(b) 65%
(c) 75%
(d) 55%
97. Price mismatch in two markets of the same script provides an opportunity for [2Marks]
(a) hedging
(b) short selling
(c) arbitrage
(d) going long
98. What is the amount an investor will get on a 1-year fixed deposit of Rs. 10000 that pays 8%
interest compounded quarterly? [1 Mark]
(a) 12824.32
(b) 13824.32
(c) 10824.32
(d) 11824.32
99. For shorter investment horizons investors look at ______ . [2 Marks]
(a) riskier assets like equities
(b) low risk assets like government securities
100. Dividend Per Share = Total Dividend / Number of Shares in issue [1 Mark]
(a) TRUE
(b) FALSE
101. Price movement between two Metal company stocks would generally have a ______ co-
variance. [1 Mark]
(a) positive
(b) negative
(c) zero
(d) can be any value