MGT201 Final Term Objective

MGT201 Final Term Past Papers

My today’s paper at 12:00pm

These were all MCQ’s and ques which i remember

Which of the following combinations will produce the highest growth rate? Assume that the firm's projects offer a higher expected return than the market capitalization rate.

1. A high plowback ratio and a high P/E ratio
2. A high plowback ratio and a low P/E ratio
3. A low plowback ratio and a low P/E ratio
4. A low plowback ratio and a high P/E ratio
5. Beta
6. Expected return
7. Coefficient of variation
8. Variance

_________ means expanding the number of investments which cover different kinds of stocks.

1. Diversification
2. Standard deviation
3. Variance
4. Covariance

Which of the following would NOT be the part of the risk if the stock is a single stock investment?

1. Company specific risk
2. Un-diversifiable risk
3. Diversifiable risk
4. Random risk

In efficient market the stock price depends upon the required return which depends upon _________.

1. Market risk
2. Total risk
3. Diversified risk
4. Non- Systematic risk

While calculating the Stock Portfolio Risk using 3x3 Matrix Approach, non-diagonal terms shown in Boxes are called:

1. Variance
2. Coefficient
3. Covariance
4. Correlation

While calculating the stock beta graphically, the formula to calculate the beta coefficient for stock B is:

1. (rM* - rRF) / (rB* - rRF)
2. (rB* - rRF) / (rM* - rRF)
3. (rB* - rRF) / rRF
4. (rB* - rRF) / rM*

High uncertainty is associated with which of the following?

1. Preferred stock
2. Common stock
3. Bonds
4. T –Bills

Operating revenue can be calculated from which of the following formulas?

1. Operating Revenue = Fixed cost * Quantity + Variable cost
2. Operating Revenue = Price / Quantity +Variable cost
3. Operating Revenue = Sale price * Quantity
4. Operating Revenue = Variable cost * Quantity / Fixed cost

Capital structure theory is presented by which of the following?

1. Robert Alan Hill
2. Modigliani & Miller
3. Brigham & Houston
4. Van Horne & Gittman

Which of the followings proposes that the value of the firm is independent of its capital structure?

1. The Capital Asset Pricing Model
2. M&M capital structure theory
3. The law of variable proportion
4. The Law of One Price

Under Net income approach, which of the following is a correct sequence of calculating cost of capital?

1. Net income – Total firm’s market value – WACC
2. Net income – WACC – total firm’s market value
3. WACC – Net income – market value of equity
4. Market value of firm – WACC – Net income

The DuPont Approach breaks down the earning power on shareholders' book value (ROE) as follows: ROE = __________.

1. Net profit margin × Total asset turnover × Equity multiplier
2. Total asset turnover × Gross profit margin × Debt ratio
3. Total asset turnover × Net profit margin
4. Total asset turnover × Gross profit margin × Equity multiplier

A capital budgeting technique that is NOT considered as discounted cash flow method is:

1. Payback period
2. Internal rate of return
3. Net present value
4. Profitability index

Which of the following is NOT a major cause of unsystematic risk. New competitors ► New product management ► Worldwide inflation ► Strikes ►

If stock is a part of totally diversified portfolio then its company risk must be equal to: 0 ►

1. 5 ►

1 ► -1 ►