MGT201 Final Term Past Papers 2010 by Faheem

Come And Join u · FINA · MGT20

Q1. Which of the following w

Borrow short term to

Issue long-term debt to b Sell common stock to red Sell fixed assets to reduc

Q2. Which group of ratios m

Liquidity ratios Debt ratios Coverage ratios

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would NOT improve the current ratio

o finance additional fixed assets

buy inventory duce current liabilities ce accounts payable

rks: 1 ) - Please choose one

measures how effectively the fir m is us

Site · ement · aqib · pers · com · Marks: 87

o?

s

sing its assets?

Q3. The RBS pays 5.60%, compounded daily (based on 360 days), on a 9-month certificate of deposit, if you deposit Rs. 20, 000 you would expect to earn around__________ in interest. (1 marks)

Rs.840

Rs.858

Rs.1,032 Rs.1,121

Q4. Assume that the interest rate is greater than zero. Which of the fo llowing cash inflow streams totaling Rs.1, 500 would you prefer? The cash flows are listed in order for Year 1, Year 2, and Year 3 respectively. (1 marks)

Rs.700 Rs.500 Rs.300

Rs.300 Rs.500 Rs.700 Rs.500 Rs.500 Rs.500

Any of the above, since they each sum to Rs.1,500

Q5. Which of the following would be considered a cash-flow item from an "operating activity"? (1 marks)

Cash outflow to the government for taxes

Cash outflow to shareholders as dividends Cash inflow to the firm from selling new common equity shares Cash outflow to purchase bonds issued by another company

Q6. Which of the following will NOT equate the future value of cash inflows to the present value of cash outflows? (1 marks)

Discount rate

Profitability index

Internal rate of return Multiple Internal rate of return

Q7. Which of the following is a legal agreement between the corporation issuing (1 marks)

bonds and the bondholders that establish the terms of the bond issue?

Indenture

Debenture Bond Bond trustee

Q8. __________ is a high-risk, high-yield bond. (1 marks)

Zero coupon bond Mortgage bond

Junk bond

Income bond

Q9. A coupon bond pays annual interest, has a par value of Rs.1,000, matures in 4 years, has a coupon rate of 10%, and has a yield to maturity of 12%. What is the current yield on this bond? (1 marks)

10.65%

10. 45%
11. 95%
12. 52%

Q10. When a bond will sell at a discount? (1 marks)

The coupon rate is greater than the current yield and the current yield is greater than yield to maturity

The coupon rate is greater than yield to maturity

The coupon rate is less than the current yield and the current yield is greater than the yield to maturity The coupon rate is less than the current yield and the current yield is less than yield to maturity

Q11. What is the price of a stock? (1 marks)

The future value of all expected future dividends, discounted at the dividend growth rate The present value of all expected future dividends, discounted at the dividend growth rate The future value of all expected future dividends, discounted at the investor’s