FAQ Finance

QUESTION ANS1 ANS2 ANS3 ANS4 ANS

1 Which of the following is (are) NOT true for Mutual funds? Bears higher risk Both 1 & 2 3

2 10% 20% 30% 1

3 Which of the following is (are) TRUE about liquidity Both 1 & 2 3

4 337009.62 336011.63 337011.63 3

5 Which of the following is(are) true for IRR Both 1 & 2 3

6 Which of the following is(are) True about equity capital Only 1 Both 1 & 2 4

7 Which of the statements are (True) 4

8 Both 1 & 2 3

9 With reference to the debt market which of the following are True Both 1 & 2 3

10 Both 1 & 2 1

11 CARE ICRA CRISIL 3

12 Which of the following holds True for an OTC market. 4

13 Duration of call money is 2 days 14 days 1 day 3

14 In India the main regulator for the money market is SEBI SBI RBI NSE 3

15 Which of the following holds True for forward contract Both (1) and (2) 3

16 In India Derivative markets comes under the regulation of RBI SEBI SBI ICICI 2

17 Custodian is 1

18 Net Asset Value is All of the above 3

19 Following are considered as stake holders of the company Shareholders Creditors Suppliers 4

20 Which of the Following is(are) True All of the above 3

Direct investment in the equity,debt and derivatives market

None of the above

Consider a house purchased for Rs 7,00,000 and leased out at Rs 10,000 per month for 1 year.The house is sold after 1 year to fetch Rs 6,50,000.What would be the ROI(%) in this case.

None of the above

Ensures that you are able to meet your obligations in time

Good sign of financial strength

None of the above

Consider a sum of Rs 2,00,000 invested to earn a rate of 11% per anum for 5 years. The Future Value at the end of the 5th year would work out to be

None of the above

It is that rate of discounting in a project that makes it¿s NPV zero

Projects having higher IRR are preferred to those having lower IRR

None of the above

Represents ownership capital

Does not involve fixed obligation for repayment of dividen

Debentures are instruments for raising long term debt capital.

Preference Capital has some features of equity and some attributes of debentures.

ADR is a negotiable certificate issued by US bank.

All of the above

Which of the following are True with reference to the clearing and settlement cycle.

Clearing house determines the cumulative obligations of each member and electronically transfers the data to clearing members

Settlement is deemed to be complete upon declaration and release of pay-out of funds and securities.

None of the above.

referes to people and entities involved in buying and selling of debt and the quantity and prices Of those transactions over time.

There is no single location or exchange where debt market participants interact for common business.

None of the above

With reference to money market which of the statements are Not True.

Refers to the market for long term requirement

Maturity period is less than one year.

None of the above.

Which one among the undermentioned credit rating agencies is promoted by ICICI

Standard and Poor and Moody

Very popular way of trading

Trading occurs via a network of middlemen called dealers

If an investor wants to buy or sell a bond , he or she must call the bank that makes the market In that bond and asks for quotes.

All of the above.None of the above

It is a type of derivatives

It is an over the counter obligation to buy or sell a financial instrument

None of the above.

Responsible for safekeeping of investments of the fund and monitors all benefits due to the fun

Performs record keeping functions and investor servicing.

Marketing funds to the investors.

Regulatory body.

The commission that an investor has to pay while purchasing units of a mutual fun

The commission that is charged when the investor exits the scheme.

The market value of the assets minus its liabilities.

All of the above

Balance sheet shows the financial position of the company at a given point of time

Profit and Loss or income statement shows the financial performance of the company over a period of time

None of the above

21 Cash and funds flow statement portrays the 3

22 Which of the following are accounting concepts Entity Both (1) and (2) 3

23 Cost concept of accounting suggests that All of the above 2

24 Debits 1

25 Asset 2

26 Revenue reserves represent Unsecured Loans 3

27 Prime University 1

28 14% 1

29 Rs. 1000 2

30 Rs. 5637.09 2

31 12974.4 14873.82 14500 3

32 Interest rate swap 1

33 3

34 The term RAS refers to: 3

35 Dividend yield is The rate of dividend 3

36 ORTOS is a solution for: Basel II Compliance 2

37 All of the above 4

38 Rs 6,000 3

39 All Assets are necessarily 1

40 All liabilities are necessarily 2

41 The difference of Assets and Liabilities¿ is 3

42 Reserves in accounting terms refers to 3

43 Revenue reserves represent 3

44 Capital reserves represents 2

Financial position of the company at any point of time

reflects the financial performance of the company over a period of time

flow of funds through the business during a given accounting period

None of the above

Money Measurement

None of the above

Every transaction has 2 aspects

All Assets of the company are valued at their cost value .

None of the above

All Assets are necessarily Credits Any of the above

None of the above.

With reference to the balance sheet of a sole proprietorship concern Profit is treated as a Liability Income

Expenditure

Secured Loans

accumulated retained earnings from the profits of normal business.

None of the above.

PrimeSourcing''s virtual university to enable continuous learning is known as i-flex university

Flexcube university

None of the above

You buy bonds worth Rs. 500,000/- on which you get a return of Rs. 90,000/- for the year. At the end of the year you sell the bonds for 4,80,000/- What is your ROI 13.9% 14.1% 14.2%You purchased gold at Rs. 10,000/- per 10 grams and sold it after a year at an ROI of 12%. The selling price of gold per gram is Rs. 1120 Rs. 1115

None of the above

The present value of an annuity of Rs. 1000 paid yearly for 5 years earning 6% is Rs. 4212.33 Rs. 5637.90

Rs. 4211.56

The NPV of the following cashflow stream at a cost of capital of 11% is: -100000, 50000, 50000, 40000. Assume yearly cashflows. 12973.76If a party A makes a periodic payment at LIBOR to party B and Party B pays a fixed 3% to Party A, the transaction is called Basis Swap Total Swap

Repo Transaction

If an asset is being depreciated at a constant amount every year, the method is called:

Reducing balance method

Deferred charges method

Straight line method

None of the above

Ratio Analysis System

Reference Association system

Reliability, Availability, serviceability

Repair, Assess, Sustain

The amount received as dividend

The amount of dividend/ Market Price

The rate of dividend/ market price

Operational Risk Management

Credit Card Solution

Offshore development framework of I-Flex Solutions Ltd

The compliance solutions of I-Flex are in the areas of: A) Clause 49, B)AML, C)SOX 1 & 2 1 & 3 2 & 3The owner of the company introduces Rs 6,000 as cash and Rs 4,000 in the form of machinery.The liability of the company would be Rs 4,000 Rs 10,000

None of the above.

Debits Credits Any of the above

None of the above.

Debits Credits Any of the above

None of the above

Reserves Secured Loans Owners Equity

None of the above.

Borrowings of the company against which no security has been provide

Money kept aside to meet future contingencies.

Profits which have been retained in the firm.

None of the above

Unsecured Loans Secured Loans


None of the above.

Balanxce in the profit and Loss account which has not been appropriated to any particular reserve account.

Reserves that arise out of non operational gains such as premium on issue of shares.

Any of the above

None of the above.

45 PrimeSourcing is the 4

46 Credit or default risk is highest for 4

47 Basel II aims to cover the following risk exposures of a bank Credit Risk Market Risk Operational Risk 4

48 3

49 Amortisation refers to 3

50 Goodwill refers to 2

51 Cost of goods sold refers to 3

52 PBIT refers to 2

53 Analysis of Balance sheet is important as it 4

54 4

55 Which of the following is(are)True about salvage value 4

56 Current ratio is 3

57 Quick Ratio is 3

58 Debt ratio refers to 3

59 Which of the following is(are)True about EPS 4

60 Which ratio refers to Market value per share/EPS 3

61 Entity concept of accounting requires that Both (1) and (2) 3

62 Which of the following is not a non operational risk Credit Risk Currency Risk Market Risk 4

63 Duration of call money is 3

64 In India the main regulator for the money market is 3

65 3

Services Outsourcing Division of i-flex solutions lt

Services Outsourcing Division of i-flex consulting

Part of Product Offering

Part of Centers of Excellence

Government Bonds

Government Bonds

State or Municipal Corporation Bonds

Junk bonds All of the above

The most vital role amongst all intermediaries during a public issue is played by

Bankers to the Issue Underwriter

Lead Manager Registrar

It is an asset but not physical in nature

It is excess of purchase price over the fair market value

Paying off of debt in regular installments over a period of time

List of the settled trades





Revenue generated from the sale of all the company¿s products or services

Non operating deficit

sum of costs incurred for manufacturing the goods sold during the accounting period

None of the above

Sum of operating profit and non-operating surplus- non-operating deficit.

A measure of profit which is not influenced by interest and tax factors.

All of the above

None of the above

Identifies potential liquidity problems

May signify the company¿s inability to meet financial obligations

helps an investor to spot the degree to which a company is leveraged or indebte

All of the above

The Balance sheet can be valued by using which valuation method Historical Cost

Current Market Value

Net realizable Value Method

All of the above

Estimated value that an asset will realize upon it¿s sale at the end of the useful life

The value is used in accounting to determine depreciation amounts and in the tax system to determine deductions.

The value can be a best guess of the end value or can be determined by a regulatory body.

All of the above

Also known as the working capital ratio

helps to measure the ability of the firm to meet it¿s current liabilities

Both (1) and (2)

None of the above

Also known as Acid-test ratio

an alternative measure of liquidity that does not include inventory

Both (1) and (2)

None of the above

relative contributions of creditors and owners

Indicates how well the company¿s earnings can cover the interest payments on it¿s debt

the extent to which borrowed funds support the firm¿s assets.

None of the above

refers to earning per share

traditional method of determining corporate value

serves as an indicator of company¿s profitability

All of above

Net profit margin ratio

Gross profit margin ratio

Price to earnings ratio

None of the above

The business be treated separate from it¿s owners

The business firm is regarded as a separate entity as distinct from the persons who are connected to it.

None of the above.None of the above.

2 days 14 days 1 day None of the above

SEBI SBI RBI NSEIf a deposit of Rs. 100,000/- earns a rate of 6% compounded continuously for three years, the deposit will be worth 1,18,789.00 1,19,668.05 1,19,721.74

1,19,722.80

66 1

67 IRR is 3

68 1

69 1

70 2

71 3

72 P/E ratio of a share is: 2

73 Which of the following is not an objective of PD¿s: 2

74 3

75 Capital expenditure is an expenditure which 3

76 2

77 53,000 58,000 63,000 46,400 2

78 Which of the following is (are) true? 2

79 11.59% 12% 5% 1

80 Worldwide currency prices are affected by changes in interest Inflation Political Stability 4

81 2 and 5 5 and 7 2 and 7 7 and 2 3

82 Which of the following is an advantage of a sole proprietorship? 4

83 Bank borrow in the call money market to give loans 2 & 3 4

84 Which of the following is the example of risk-free interest rate? All of the above 3

85 which of the following is not a money market instrument? Treasury bills debentures call money 3

86 When an investment pays only simple interest rate,this means 3

87 Which of the following is not a source of long-term finance? Equity shares Debentures 4

88 29387 41350 30710 20700 1

89 Price Discovery of a security is done by the following process rights issue book building private placement 2

90 Income earned by soleproprietorship is taxable under corporate tax HUF Wealth tax 2

91 stop loss order market order limit order 1

92 15.6 6.93 18.79 10.4 3

93 Who are all kown as stakeholders of a company? Creditors Suppliers Shareholders 4

94 Credit risk Market risk Liquidity risk 3

95 only (i) only (ii) (i) and (ii) (ii) and (iii) 1

The FV of a cash flow stream of Rs. 1000 received at the end of each year over 5 years at 6% will be 5637.09 42142.67 5667.12 5677.30

NPV of all the cash flows

PV of positive cash flows

The discount rate that makes the NPV zero

None of the above

The IRR of the following cashflow stream is 100000, 50000, 50000, 40000. Assume yearly cashflows. 19.69% 10.23% 17.66%

None of the above

The BPD offers, A)FLEXCUBE ¿ UBS, B) FLEXCUBE ¿ CBS, C).FLEXCUBE ¿ PBS

All of the above 1 & 2 1 & 3 2 & 3

The section of SOX that requires attestation by the CEO and CFO is: 302 404 210

All of the above

PrimeSourcing offers solutions for, A).Trade Finance, B).Retail Management, C).Investment Banking All of the above 1 & 2 1 & 3 2 & 3

Issue price of share/EPS

Market price of share/EPS Dividend/EPS

Preference Share/EPS

Ensure development of secondary market in Government bonds

To ensure development of Financial markets

To ensure development of underwriting market in govt. bonds

None of the above

If you place an order to buy 1000 shares and specify each trade should be 200 shares you have entered a:

Disclosed Quantity Order Fill or Kill Order

Minimum fill order

Maximum fill order

benefits the current accounting period

will benefit the next accounting period

results in the acquisition of a permanent asset

results in acquisition of current asset

If Rs.5, 00,000 is left on deposit to earn a rate of 5% for 5 years. What it is worth if the interest is (i) quarterly compounding (ii) half-yearly compounding (iii) continuous compounding?

640000.00,620000.00,610000.00

641018.62, 640042.27, 642012.71

631081.23,640024.17,642111.51

None of the above

If a company's Gross profit is Rs.63,000, salary expenses are 4,000,Rent is 6,000,Interest payments are 5,000,other income is 5,000 and taxes are 20% on the net profits,then what is EBIT?

Equity shareholders can claim their unpaid dividend legally

Preference shareholders do not have voting rights.

Preference dividend is a tax deductible expense to the company.

None of the above

Suppose ABC Ltd co. has following cost and values: market value of Debt - Rs. 500 crs., market value of equity - Rs 350 crs.,cost of debt:12%,cost of equity:17%,Tax:35%.Compute WACC

None of the aboveAll of the above

The minimum number of persons required to form a private limited company and a public limited company respectively are?

Life of a firm is limited to the life of a proprietorship

Fund raising from outside is easy

limited personal liabilities

easy and inexpensive to set up

meet the cash reserve ratio

meet sudden demand for funds arising due to large payments and remittances

SBI Mutual Fund @11% return

9% Long-term Debenture.

7% short term government securities.

certificate of deposits

the future value of investment wil be low

the interest earned is non-taxable to the investor

interest is earned on the original investment

the interest rate is lower than the comparable investments

Reserves and Surplus

Commercial Papers

What is the future value of Rs.20000 invested now for a period of 5 years at an interest rate of 8%?

None of the above

personal income tax

An order which gets activated only when the market price of that security reaches the trigger price

None of the above

What is the return on investment per annum for an asset purchased for Rs.82,50,000 and leased for Rs,1,00,000 per mont.h for 18 months,after which it is sold to fetch Rs.80,00,000?

All of the above

Mr.Ram purchases a house worth Rs.12 lacs, after seven years he is planning to sell; he gets a value of Rs.10 lacs. What is the risk involved?

None of the above

Which of the following factors influence inflation? (i) Interest rate (ii) rising supply (iii) reducing demand

96 The money that is lent for one day is known as? call repo notice term 1

97 Gross profit is equal to 1

98 From the accounting point of view,loss means Increase in liability Decrease in asset 4

99 (i) and (ii) (ii) and (iii) (i) and (iii) 4

100 Which of the following are/is not a fixed asset? Stock Vehicle 4

101 Which of the following is not an intangible asset? Goodwill Trade mark Franchise 4

102 P&L account is prepared for a period of one year by following consistency concept cost concept 3

103 Accounting does not record non-financial transactions because of Entity concept accrual concept cost cancept 2

104 Depreciation is calculated on the cost price of asset market price 3

105 97,000 2,03,000 1,83,000 1,23,000 2

106 2

107 80,000 90,0000 1,10,000 70,000 1

108 112.42 114.24 114.42 112.44 2

109 16,273 18,797.10 20,000 15,850 1

110 fixed asset not an asset current asset 2

111 Insure3 an icsurance solution product is provided by Mantas Castek BNX Capco 2

112 Which of the following is a current liability? Trademark 1

113 If a EUR/USD is quoted as 1.1923,what does it mean? 3

114 Cash profit is 1

115 What are the functions of RBI? a.Issues Currency 4

116 a.Limit order b.Cancel order c.Stop loss order d.Market order 3

117 a.Immediate/cancel b.Stop loss order 1

118 Order conditions are broadly classified into: 4

119 b.Good till date/day 1

120 Credit Rating Agencies promoted by IDBI a.CRISIL c.ICRA d.CARE 4

121 Credit Rating Agencies promoted by IFCI? a. CRISIL b. ICRA C. Care 2

122 a.Long term maturity b.High liquidity c.Highly secured 2

123 Known as Hybrid insurance policy? a.Annuities 3

124 Which of the following is an advantage of partnership firm? 4

125 What is Depository? c.Both (1) and (2) 1

Sales - cost of goods sold

Sales - closing stock + purchases

Net profit - expenses

Opening stock + purchases - closing stock

Increase in owner's equity

Decrease in owner's equity

Which of the following are investments Avenues? (i) Hedge Funds (ii) Property (iii).Ploughing cash back into business

All of the above

Fixed deposit in bank

both (i) and (ii)Accounts receivables

conservation concept

time period concept

Money measurement concept

cost + transport + installation expenses

cost or market value whichever is less

Calculate the opening cash balance if the closing cash is:Rs.1,43,000.Rent paid:20,000,out of which advance rent is:3,000.Salaries paid: 20,000 and to be paid is:5,000.Other revenues:1,00,000

Opening capital is:80,000.Closing capital is:1,20,000.Net profit during the year:20,000.The trader has

Drawings of Rs.20,000

Brought additional capital of Rs.20,000



Opening stock:40,000.Closing stock:50,000.Sales:70,000.Assuning there is no gros profit and direct expenses the purchases made during the year are:

The amount that has to be invested at the end of every year for a period of 6 years at a rate of interest of 15% in order to accumulate Rs.1000 at the end of 6 years is equal toMr. Shankar deposits Rs.1,00,000 on retirement ina bank which pays 10% annunal interest.How much can he draw for a period of 10 years.

Computers taken on hire by a business for a period of 1 year should be classified as

deferred revenue expenditure

outstanding salaries

Discount on issue of shares

prepaid expenses

you can buy 0.8387 USD for one EUR

you can buy 0.8387 EUR for one USD.

you can but 1.1923 USD for one EUR

None of the above

Net profit + depreciation and provision

Gross profit - net profit

gross profit - operational expenses

net profit - non trading profit - depreciation and provision

b.Banker to the government

c.Formulates monetary and credit policies

d.All of the above

An order to sell shares, where brokers are given a particular limit for sustenance of loss is know as

An order that allows a trading members to buy or sell as soon as the order is released into market, failing which the order will be removed from the system?

c.Good till cancelled

d.None of the above

a.Time related conditions

b.Price related conditions

c.Quantity related conditions

d.All of the above

Order that remains in the system until it is cancelled by trading member?

a.Good till cancelled

c.Immediate or cancel

d.Disclosed quantity

b.Standard and poord. Standard and Poor

Which of the following is/are the characteristics of money market instruments? d.Both (B) and

(C)b.Financial Loss insurance

c.Locked fund insurance

d.Credit insurance

a.Life of the firm is perpetual

b.Personal liabilities of the partners are limited

c.Its ability to raise funds is virtually unlimited

d.Its relatively free from government regulations as compared to joint stock companies

a.Hold securities in an account

b.Hold Funds in an account

d.None of the above

126 Depositories are like banks for securities a.True b.False c.Dormant Funds 1

127 1

128 1

129 1

130 1

131 1

132 2

133 3

134 4

135 2

136 2

137 2

138 2

139 4

140 2

141 3

142 2

143 2

144 3

145 3

d.None of the above

The selling of securities to the public in the primary market is known as

IPO FPO Right issue

Bonus issue

IPO is offered in Primary Market Secondary Market Both of the aboveNone of the above

What is the basis of voting rights for members of Co-operative society ?

One Vote per member

Proportion of shares held

Members cannot vote

None of the above

The most vital role amongst all the intermediary during a public issue is played by Lead Manager

Bankers to the issuers Underwriter All of the above

EPS is

Net profit ¿ Pref. dividend / total number of outstanding shares

Gross profit / Outstanding shares

Net profit / Outstanding shares

Net profit / market value of Outstanding shares

DP's have to registered with Stock exchange SEBI RBI B & C

Which of the following are zero coupon debt securities? GILT securities RBI relief bond Treasury Bills All of the above

Custodians perform which of the following activity on behalf of its client

Ensuring timely collection of monetary and non-monetary benefits on securities on behalf of the client

Ensure timely settlement of funds and securities

Maintain clearing accounts with DP¿s

All of the above

The major difference between a broker and a sub-broker is

Broker is member of exchange while sub broker is not

Broker can trade on the exchange while sub broker cannot

The broker is registered but the sub broker need not to be registered

None of the above

Prime dealers in India are the one who areDealer on the trading floor

Authorized dealers of Govt. Securities appointed by RBI

Authorized dealers of Govt. Securities

Members of Clearing house

In the Option, who is obligated to honor the deal ? Buyer of the optionWriter of the option Clearing house Stock exchange

PrimeSourcing is thePart of Product offerings

Services outsourcing division of OFSS

Services outsourcing division of Consulting Parts of COE

PrimeSourcing has domain expertise in which of the following areas

Derivatives Trading and Processing

Insurance claims Processing

MF accounting and operation

All of the above

Mutual Fund facilitates pooling of investors funds which are managed by

The Trustees of the fund

Assets Management Company of the fund Mutual Fund itself

Mutual Fund sponsor

What is the key regulation that govern the issuance the CPs ? Financial Analytics Business Analytics Risk AnalyticsBanking Analytics

What is the key regulation that govern the issuance the CPs ? Issuer must be banks

Issuers must have to be rated by credit rating agencies

They should be issued by RBI

CP should be issued at least for a period of one year and above

Why does the central government borrow money?To fund the MPs salary

To close the budgetary deficit Both of the above

None of the above

What does order book show?

Trades that are matched till yesterday

Trades that are matched till that time

Trades that are pending for matching


Which of the following is not true for ROI

ROI is usually expressed as a percentage

ROI is usually expressed per annum

ROI does not take into account capital loss

ROI takes into account capital loss

146 2

147 1

148 1

149 3

150 1

151 3

152 1

153 1

154 2

155 2

156 2

157 3

158 1

159 3

160 2

161 4

162 2

163 3

164 3

165 2

166 3

BOI shareholding Ltd. Is the clearing house for NSE BSE RBINone of the above

What is Net worth ?

Reserves and Surplus + Equity capital

Long term assets + Equity Capital

Net profit + Reserves

Current Assets + Net Profit

AML solutions help banks to identify and combat

Money being covered and moved by anti-social & anti-national elements

Likely frauds being committed by employees of the bank

Likely money being siphoned off by senior management of the bank

Money being illegally transferred to subsidiaries of the bank

Which of the capital budgeting methods best suited to find out the time required for recovering initial investment cost ? NPV IRR Pay-back period B & C

ROA sometimes also referred as ROI True FALSE

Speculation is for Minimize risk Minimize lossProfit from fluctuation Hedging of risk

An amount of Money today is more valuable than the same amount of Money at a future date TRUE FALSE

In NPV outflows are taken as negative and inflows are taken as positive. TRUE False

IRR is a Discounting rate only

Rate of discounting which makes its NPV equal to zero

Rate of discounting which makes its NPV lower than zero

Rate of discounting which makes its NPV greater than zero

Which of the statements is true ?

For project evaluation lower NPV are preferred over those having a higher NPV

For project evaluation higher NPV are preferred over those having a lower NPV Both of the above

None of the above

Through diversification you can protect your investment from Market RiskUnsystematic Risk Operational Risk Currency Risk

The minimum number of persons required to form a private limited company and a public limited company respectively are? 2 and 5 5 and 7 2 and 7 7 and 2

Equity share holders can face the risk of not only zero return on their return but also capital loss. TRUE FALSE

The method of raising fund from existing shares or debenture holder is known as IPO FPO Rights issue Bonus issue

GDR is a negotiable certificate issued by a US bankan International bank RBI SBI

Debenture holders are Stake holders of the company

Share holders of the company

Creditor of the company A & C

Working Capital Management involves

the relationship between a firm¿s Long-term assets and its long-term liabilities

the relationship between a firm¿s short-term assets and its short-term liabilities

the relationship between a firm¿s mid-term assets and its mid-term liabilities B & C

_________________ is issued by a bank on behalf of its customer (Buyer) to the seller. Draft Cheque Letter of Credit

None of the above

WACC is

Proportion of Equity * Cost of Equity + Proportion of Debt * Cost of Debt

Proportion of Equity * Proportion of Debt + Cost of Equity * Cost of Debt (1-Tax)

Proportion of Equity * Cost of Equity + Proportion of Debt * Cost of Debt (1-Tax)

Proportion of Equity * Cost of Equity + Proportion of Debt * (1-Tax)

__________________ of an investment (project) is the difference between the sum of the discounted cash flows which are expected from the investment and the amount which is initially invested. IRR NPV Pay back

None of the above

The Financial market / Securities market essentially comprises of few categories of participants namely

Issuers of the securities, Investors in Securities Intermediaries A & B

None of the above

167 4

168 4

169 2

170 2

171 2

172 1

173 2

174 1

175 1

176 4

177 4

178 4

179 3

180 1

181 3

182 2

183 3

184 1

185 1

186 2

187 4

188 3

189 2

190 4

Financial market facilitate

The raising of capital (in the capital market)

The transfer of risk (in the derivatives market)

International trade (in the currency market)

All of the above

New issuance of the securities comes under which market? Debt market Stock market Secondary marketPrimary market

The markets which provides short term debt financing and investment is known as Debt market Money market Derivatives market Stock market

Book building is a process used in right issue for efficient price discovery. TRUE FALSE

When an already listed company makes either a fresh issue of securities to the public or an offer of sale to the public, through an offer document, it is known as IPO FPO Preferred issue

Private placement

_______________ issues Treasury bills, Government dated securities and relief bonds? RBI Government Banks B & C

Who regulates the issuance of government securities ? SEBI RBI Government B & C

Who regulates the corporate debt ? SEBI RBI Both of the aboveNone of the above

The ______________ takes up the due diligence of company¿s operations/ management/ business plans/ legal activities etc... Lead Manager Merchant Banker Underwriter

Bankers to the issue

Who assist the company right from preparing prospectus to the listing of securities at the stock exchange ? Lead Manager Merchant Banker Underwriter


Who carry out all the activities of ensuring that the fund are collected and transferred to the Escrow accounts ? Lead Manager Merchant Banker Underwriter


At the time of public offer, who is responsible to do àllotment of shares to the applicant¿s DP account and dispatch of refund order¿ ? Lead Manager Merchant Banker Underwriter R&T agents

What is the major difference between current ratio and quick ratio ?

Quick ratio consider inventory

Current ratio consider inventory

Quick ratio does not consider inventory


RTGS and CLS solutions are provided under aCash management solutions

Treasury management solutions

Wealth management solutions

Trade finance solutions

Clearing house

Provides trading platform for its members

Holds securities on behalf of its members

Match and reconciles trades All of the above

Which of the services is not offered by a depository/DP¿s ? Corporate Actions Trading

Electronic settlement of trades in Stock Exchanges.

Electronic credit of securities allotted in public issues.

NSDL stands for National Security Depository Ltd

National Securities Depository Participant Ltd

National Securities Depository Ltd

National Securities Deposit Ltd

Who take care of the Post-trading activities on behalf of their clients such as FI¿s, Asset management companies, Pension fund, FII¿s etc¿? Custodian Underwriter Merchant banker Lead manager

Which statement is false ?

Broker is not responsible for the acts and dealings of his Sub-Broker

A Sub-broker is an agent of a broker

Sub broker has to registered with SEBI as well as Exchange of which his broker is the member

Clients of the sub broker are to be registered with the main broker

The party who enters orders on the same side of the initiator is known as Initiator Competitor Solicitor

None of the above

Which order is comes under Time related condition ? All or none (AON) Market Order Stop Loss order

Good till cancelled (GTC)

Which order is comes under Price related condition ? All or none (AON) Good till date (GTD) Stop Loss orderGood till cancelled (GTC)

In India, trades in rolling settlement are settled on what basis ? T+1 T+2 T+3 T+4

Which institution is not working as a Credit Rating Agencies ? CRISIL S&P and Moody ICRA IFCI

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_____________________ is the financial market for short term borrowing and lending, typically up to one year. Money Market Stock market MF market

Secondary market

The money that is lent for one is known as Call money Notice money Term money Notice money

The money that is lent for more than one day but less than but less than 15 days it is referred to as Call money Notice money Term money Notice money

Which is the largest financial market in the world ? FX market Stock market Money market Debt market

International offering of debt /equity is managed by SEBI RBI Merchant banker Prime broker

Insurance is a solution provided by BPD PRSG Prime Sourcing None of the above

Which ratio shows the earning left for share holders ? Gross profit ratio Net profit ratio Return on assetsReturn on equity

This ratio measures the extent to which borrowed funds support the firm¿s assets

Interest coverage ratio Current ratio Debt Equity ratio Debt ratio

What is Reverse Repo ?Swapping the cash flows

Buying and selling back

Selling and buying back

None of the above

Which statement(s) talks about financial position of the company at the end of an accounting period ? Fund flow statements Balance sheet

Profit and loss statement A & C

Basel II aims to cover the following risk exposure of a bank Market risk Operational risk Credit riskAll of the above


Trading member is responsible for clearing and settlement of the trades of his own or of his clients.

Trading member is responsible for clearing and settlement of his clients only.

Disclosed Quantity (DQ) is an order with a DQ condition allows the TM to disclose only a part of the order quantity to the market.

Market Order is an order to buy or sell securities at the best price obtainable at the time of entering the order.

Which statement(s) talks about financial performance of the company during an accounting period ? Fund flow statement Balance sheet

Profit and loss statement

None of the above

What is return on investment per annum for an asset purchased for Rs. 750000 and leased it for Rs.15000 per month and later on sold it for Rs. 630000 ? 6.30% 8.00% 6.93% 6.54%

If Joe earns $125 interest in 30 months on money that was invested at 5%, find the Principal amount. $1,100 $1,000 $1,200 $1,150

Ram has invested Rs. 100000 as a FD into a bank for 3 years. Where he will earn interest of 6% monthly compounding. At the end of third years what will be value of investment? 119698.05 119700.05 119668.05 119660.05

You invest $5,000 today. You will earn 8% interest. How much will you have in 4 years ? 6802.5 6805.5 6807.5 6809.5

How much amount should you need for an investment such that you will receive Rs. 337011.63 after five years if rate of interest is 11% p.a. ? 100000 300000 400000 200000

Company XYZ has invested Rs. 5000000 and the expected return of the project amount to Rs. 1250000 annually. Calculate Payback period 5 3 3.5 4

What is the out of the money in put option?

The underlying securities is trading above the put option¿s strike price

The underlying securities is trading below the put option¿s strike price

The underlying securities is trading at the put option¿s strike price

None of the above

If a EUR/USD pair is quoted as 1.19166, what does it mean ?

You can buy 0.839166 EUR for one USD

You can buy 1.19166 USD for one EUR


None of the above

¿The right but not the obligation to buy (sell) some underlying cash instruments at a pre-determined rate on a pre-determined expiration date at a pre-set notional amount¿ relates to Futures Forward Options Swaps

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Leverage ratio refers to

The ability of a firm to meet its obligations in the short run

Provide an indication of the long-term solvency of the firm

How efficiently the assets are utilized by a firm

How does equity stock of the company is assessed in the capital market

Which statement is correct ?

A Depository is an intermediary where the securities are held in the electronic form.

It provides service connected with recording of allotment of securities or transfer of ownership of securities in the record of a depository

A depository cannot directly open the accounts and provide services to the clients.

All of the above

Which is the most popular market for trading of debt instruments? OTC marketStock exchange market Wholesale market A & C

Currently the ___________________ facility is used for the limited physical market as per the SEBI directives. Normal Market Odd lot Market Auction Market A & C

The party who enters orders on the opposite side of the initiator is known as Initiator Competitor Solicitor

None of the above

Which ratio(s) is known as Èfficiency Ratio¿ ?Fixed asset turnover ratio

Inventory turnover ratio

Receivables turnover ratio

All of the above

What is the value of the furniture at the end of 5 years if the PV is 500000 and depreciation rate is 10% ? 350000 295245 250000 305125

Calculate WACC where market value of debt: Rs. 600,000,000, Market value of Equity: Rs. 800,000,000, Cost of debt: 9%, Cost of Equity: 16%, Tax:35% 11.65% 12.75% 12% 11.83%

An investment with an initial cash out flow of $100,000 pays back $34,432 in the first year, $39,530 in the second year, $39,359 in the third year, and $32,219 in the fourth year. If the rate of return is 12%, find the Net Present Value (NPV) 10545.55 10645.45 10745.45 10845.55

Consider an investment of $1,000 that is expected to yield $500 in 1 year and $700 in 2 years. What is the NPV of the investment at an annual discount rate of 9%? 47.77 47.89 47.98 47.78

Companys gross profit is 63000, salary expenses are 4000, rent is 6000, interest payments are 5000, other income is 5000, and taxes are 20% on the net profits. The company declares 15% as dividend to the share holders. What is the amount which will be transferred to reserves and surplus?

35800 36040 38500 39060

What is the ROI for a new project that is expected to cost Rs. 500,000 over the next five years and deliver an additional Rs. 700,000 in increased profits during the same time ? 30% 40% 50% 60%

What is the depreciation charge per annum if machinery has been valued as 50000, life of machinery is 10 years and the salvage value is 5000 ? 2250 2500 4500 5000

_________________ is a process of determining investment in a project that is expected to produce a cash inflow over a period of time Cost of capital Capital structure

Capital budgeting Cash flow

select * from EXAM.QUESTION_MASTER WHERE qid = 5608

QUESTION ANS1

1 Which of the following is (are) NOT true for Mutual funds?

2 10%

3 Which of the following is (are) TRUE about liquidity

4 337009.62

5 Which of the following is(are) true for IRR

6 Which of the following is(are) True about equity capital

7 Which of the statements are (True)

8

9 With reference to the debt market which of the following are True

10

11 CARE

Direct investment in the equity,debt and derivatives market

Consider a house purchased for Rs 7,00,000 and leased out at Rs 10,000 per month for 1 year.The house is sold after 1 year to fetch Rs 6,50,000.What would be the ROI(%) in this case.

Ensures that you are able to meet your obligations in time

Consider a sum of Rs 2,00,000 invested to earn a rate of 11% per anum for 5 years. The Future Value at the end of the 5th year would work out to be

It is that rate of discounting in a project that makes it¿s NPV zero

Represents ownership capital

Debentures are instruments for raising long term debt capital.

Which of the following are True with reference to the clearing and settlement cycle.

Clearing house determines the cumulative obligations of each member and electronically transfers the data to clearing members referes to people and entities involved in buying and selling of debt and the quantity and prices Of those transactions over time.

With reference to money market which of the statements are Not True.

Refers to the market for long term requirement

Which one among the undermentioned credit rating agencies is promoted by ICICI

12 Which of the following holds True for an OTC market.

13 Duration of call money is 2 days

14 In India the main regulator for the money market is SEBI

15 Which of the following holds True for forward contract

16 In India Derivative markets comes under the regulation of RBI

17 Custodian is

18 Net Asset Value is

19 Following are considered as stake holders of the company Shareholders

20 Which of the Following is(are) True

21 Cash and funds flow statement portrays the

22 Which of the following are accounting concepts Entity

23 Cost concept of accounting suggests that

24 Debits

25 Asset

Very popular way of trading

It is a type of derivatives

Responsible for safekeeping of investments of the fund and monitors all benefits due to the fun

The commission that an investor has to pay while purchasing units of a mutual fun

Balance sheet shows the financial position of the company at a given point of time

Financial position of the company at any point of time

Every transaction has 2 aspects

All Assets are necessarilyWith reference to the balance sheet of a sole proprietorship concern Profit is treated as a

26 Revenue reserves represent Unsecured Loans

27 Prime University

28 14%

29 Rs. 1000

30 Rs. 5637.09

31 12974.4

32

33

34 The term RAS refers to:

35 Dividend yield is

36 ORTOS is a solution for:

37 All of the above

38 Rs 6,000

39 All Assets are necessarily

40 All liabilities are necessarily

41 The difference of Assets and Liabilities¿ is

42 Reserves in accounting terms refers to

43 Revenue reserves represent

PrimeSourcing''s virtual university to enable continuous learning is known as

You buy bonds worth Rs. 500,000/- on which you get a return of Rs. 90,000/- for the year. At the end of the year you sell the bonds for 4,80,000/- What is your ROIYou purchased gold at Rs. 10,000/- per 10 grams and sold it after a year at an ROI of 12%. The selling price of gold per gram isThe present value of an annuity of Rs. 1000 paid yearly for 5 years earning 6% isThe NPV of the following cashflow stream at a cost of capital of 11% is: -100000, 50000, 50000, 40000. Assume yearly cashflows.If a party A makes a periodic payment at LIBOR to party B and Party B pays a fixed 3% to Party A, the transaction is called

Interest rate swap

If an asset is being depreciated at a constant amount every year, the method is called:

Reducing balance method

Ratio Analysis System

The rate of dividend

Basel II Compliance

The compliance solutions of I-Flex are in the areas of: A) Clause 49, B)AML, C)SOXThe owner of the company introduces Rs 6,000 as cash and Rs 4,000 in the form of machinery.The liability of the company would be

Debits

Debits

Reserves

Borrowings of the company against which no security has been provide

Unsecured Loans

44 Capital reserves represents

45 PrimeSourcing is the

46 Credit or default risk is highest for

47 Basel II aims to cover the following risk exposures of a bank Credit Risk

48

49 Amortisation refers to

50 Goodwill refers to

51 Cost of goods sold refers to

52 PBIT refers to

53 Analysis of Balance sheet is important as it

54 The Balance sheet can be valued by using which valuation method

55 Which of the following is(are)True about salvage value

Balanxce in the profit and Loss account which has not been appropriated to any particular reserve account.

Services Outsourcing Division of i-flex solutions lt

Government Bonds

The most vital role amongst all intermediaries during a public issue is played by

Bankers to the Issue



Revenue generated from the sale of all the company¿s products or services

Sum of operating profit and non-operating surplus- non-operating deficit.

Identifies potential liquidity problems

Historical Cost

Estimated value that an asset will realize upon it¿s sale at the end of the useful life

56 Current ratio is

57 Quick Ratio is

58 Debt ratio refers to

59 Which of the following is(are)True about EPS

60 Which ratio refers to Market value per share/EPS

61 Entity concept of accounting requires that

62 Which of the following is not a non operational risk Credit Risk

63 Duration of call money is

64 In India the main regulator for the money market is

65

66

67 IRR is

68

69

70 The section of SOX that requires attestation by the CEO and CFO is:

71

72 P/E ratio of a share is:

73 Which of the following is not an objective of PD¿s:

Also known as the working capital ratio

Also known as Acid-test ratio

relative contributions of creditors and owners

refers to earning per share Net profit margin ratio

The business be treated separate from it¿s owners

2 days

SEBIIf a deposit of Rs. 100,000/- earns a rate of 6% compounded continuously for three years, the deposit will be worth 1,18,789.00The FV of a cash flow stream of Rs. 1000 received at the end of each year over 5 years at 6% will be 5637.09

NPV of all the cash flows

The IRR of the following cashflow stream is 100000, 50000, 50000, 40000. Assume yearly cashflows. 19.69%The BPD offers, A)FLEXCUBE ¿ UBS, B) FLEXCUBE ¿ CBS, C).FLEXCUBE ¿ PBS

All of the above

302PrimeSourcing offers solutions for, A).Trade Finance, B).Retail Management, C).Investment Banking

All of the above Issue price of share/EPS Ensure development of secondary market in Government bonds

74

75 Capital expenditure is an expenditure which

76

77 53,000

78 Which of the following is (are) true?

79 11.59%

80 Worldwide currency prices are affected by

81 2 and 5

82 Which of the following is an advantage of a sole proprietorship?

83 Bank borrow in the call money market to give loans

84 Which of the following is the example of risk-free interest rate?

85 which of the following is not a money market instrument? Treasury bills

86 When an investment pays only simple interest rate,this means

87 Which of the following is not a source of long-term finance? Equity shares

88 29387

89 Price Discovery of a security is done by the following process rights issue

90 Income earned by soleproprietorship is taxable under corporate tax

91 stop loss order

92 15.6

93 Who are all kown as stakeholders of a company? Creditors

If you place an order to buy 1000 shares and specify each trade should be 200 shares you have entered a:

Disclosed Quantity Orderbenefits the current accounting period

If Rs.5, 00,000 is left on deposit to earn a rate of 5% for 5 years. What it is worth if the interest is (i) quarterly compounding (ii) half-yearly compounding (iii) continuous compounding?

640000.00,620000.00,610000.00

If a company's Gross profit is Rs.63,000, salary expenses are 4,000,Rent is 6,000,Interest payments are 5,000,other income is 5,000 and taxes are 20% on the net profits,then what is EBIT?

Equity shareholders can claim their unpaid dividend legally

Suppose ABC Ltd co. has following cost and values: market value of Debt - Rs. 500 crs., market value of equity - Rs 350 crs.,cost of debt:12%,cost of equity:17%,Tax:35%.Compute WACC

changes in interest

The minimum number of persons required to form a private limited company and a public limited company respectively are? Life of a firm is

limited to the life of a proprietorship

SBI Mutual Fund @11% return

the future valueof investment wil be low

What is the future value of Rs.20000 invested now for a period of 5 years at an interest rate of 8%?

An order which gets activated only when the market price of that security reaches the trigger price

What is the return on investment per annum for an asset purchased for Rs.82,50,000 and leased for Rs,1,00,000 per mont.h for 18 months,after which it is sold to fetch Rs.80,00,000?

94 Credit risk

95 only (i)

96 The money that is lent for one day is known as? call

97 Gross profit is equal to

98 From the accounting point of view,loss means

99 (i) and (ii)

100 Which of the following are/is not a fixed asset? Stock

101 Which of the following is not an intangible asset? Goodwill

102 P&L account is prepared for a period of one year by following

103 Accounting does not record non-financial transactions because of Entity concept

104 Depreciation is calculated on the

105 97,000

106

107 80,000

108 112.42

109 16,273

110 fixed asset

111 Insure3 an icsurance solution product is provided by Mantas

112 Which of the following is a current liability?

113 If a EUR/USD is quoted as 1.1923,what does it mean?

114 Cash profit is

Mr.Ram purchases a house worth Rs.12 lacs, after seven years he is planning to sell; he gets a value of Rs.10 lacs. What is the risk involved?Which of the following factors influence inflation? (i) Interest rate (ii) rising supply (iii) reducing demand

Sales - cost of goods soldIncrease in liability

Which of the following are investments Avenues? (i) Hedge Funds (ii) Property (iii).Ploughing cash back into business

consistency concept

cost price of asset

Calculate the opening cash balance if the closing cash is:Rs.1,43,000.Rent paid:20,000,out of which advance rent is:3,000.Salaries paid: 20,000 and to be paid is:5,000.Other revenues:1,00,000

Opening capital is:80,000.Closing capital is:1,20,000.Net profit during the year:20,000.The trader has


Opening stock:40,000.Closing stock:50,000.Sales:70,000.Assuning there is no gros profit and direct expenses the purchases made during the year are:

The amount that has to be invested at the end of every year for a period of 6 years at a rate of interest of 15% in order to accumulate Rs.1000 at the end of 6 years is equal toMr. Shankar deposits Rs.1,00,000 on retirement ina bank which pays 10% annunal interest.How much can he draw for a period of 10 years.

Computers taken on hire by a business for a period of 1 year should be classified as

outstanding salaries

you can buy 0.8387 USD for one EUR

Net profit + depreciation and provision

115 What are the functions of RBI? a.Issues Currency

116 a.Limit order

117

118 Order conditions are broadly classified into:

119

120 Credit Rating Agencies promoted by IDBI a.CRISIL

121 Credit Rating Agencies promoted by IFCI? a. CRISIL

122

123 Known as Hybrid insurance policy? a.Annuities

124 Which of the following is an advantage of partnership firm?

125 What is Depository?

126 Depositories are like banks for securities a.True

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128

129

130

131

132

133

An order to sell shares, where brokers are given a particular limit for sustenance of loss is know as

An order that allows a trading members to buy or sell as soon as the order is released into market, failing which the order will be removed from the system?

a.Immediate/cancela.Time related conditions

Order that remains in the system until it is cancelled by trading member?

a.Good till cancelled

Which of the following is/are the characteristics of money market instruments? a.Long term

maturity

a.Life of the firm is perpetuala.Hold securities in an account

The selling of securities to the public in the primary market is known as

IPO

IPO is offered in Primary Market

What is the basis of voting rights for members of Co-operative society ?

One Vote per member

The most vital role amongst all the intermediary during a public issue is played by Lead Manager

EPS is

Net profit ¿ Pref. dividend / total number of outstanding shares

DP's have to registered with Stock exchange

Which of the following are zero coupon debt securities? GILT securities

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136

137

138

139

140

141

142

143

144

145

Custodians perform which of the following activity on behalf of its client

collection of monetary and non-monetary benefits on securities on behalf of the client

The major difference between a broker and a sub-broker is

Broker is member of exchange while sub broker is not

Prime dealers in India are the one who areDealer on the trading floor

In the Option, who is obligated to honor the deal ?Buyer of the option

PrimeSourcing is thePart of Product offerings

PrimeSourcing has domain expertise in which of the following areas

Derivatives Trading and Processing

Mutual Fund facilitates pooling of investors funds which are managed by

The Trustees of the fund

What is the key regulation that govern the issuance the CPs ?Financial Analytics

What is the key regulation that govern the issuance the CPs ?Issuer must be banks

Why does the central government borrow money?To fund the MPs salary

What does order book show?

Trades that are matched till yesterday

Which of the following is not true for ROI

ROI is usually expressed as a percentage

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152

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154

155

156

157

158

159

160

BOI shareholding Ltd. Is the clearing house for NSE

What is Net worth ?

Reserves and Surplus + Equity capital

AML solutions help banks to identify and combat

Money being covered and moved by anti-social & anti-national elements

Which of the capital budgeting methods best suited to find out the time required for recovering initial investment cost ? NPV

ROA sometimes also referred as ROI True

Speculation is for Minimize risk

An amount of Money today is more valuable than the same amount of Money at a future date TRUE

In NPV outflows are taken as negative and inflows are taken as positive. TRUE

IRR is a Discounting rate only

Which of the statements is true ?

For project evaluation lower NPV are preferred over those having a higher NPV

Through diversification you can protect your investment from Market Risk

The minimum number of persons required to form a private limited company and a public limited company respectively are? 2 and 5

Equity share holders can face the risk of not only zero return on their return but also capital loss. TRUE

The method of raising fund from existing shares or debenture holder is known as IPO

GDR is a negotiable certificate issued by a US bank

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162

163

164

165

166

167

168

169

170

171

172

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174

175

Debenture holders are Stake holders of the company

Working Capital Management involves

the relationship between a firm¿s Long-term assets and its long-term liabilities

_________________ is issued by a bank on behalf of its customer (Buyer) to the seller. Draft

WACC is

Proportion of Equity * Cost of Equity + Proportion of Debt * Cost of Debt

__________________ of an investment (project) is the difference between the sum of the discounted cash flows which are expected from the investment and the amount which is initially invested. IRR

The Financial market / Securities market essentially comprises of few categories of participants namely

Issuers of the securities, Investors in Securities

Financial market facilitate

The raising of capital (in the capital market)

New issuance of the securities comes under which market? Debt market

The markets which provides short term debt financing and investment is known as Debt market

Book building is a process used in right issue for efficient price discovery. TRUE

When an already listed company makes either a fresh issue of securities to the public or an offer of sale to the public, through an offer document, it is known as IPO

_______________ issues Treasury bills, Government dated securities and relief bonds? RBI

Who regulates the issuance of government securities ? SEBI

Who regulates the corporate debt ? SEBI

The ______________ takes up the due diligence of company¿s operations/ management/ business plans/ legal activities etc... Lead Manager

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186

187

188

189

Who assist the company right from preparing prospectus to the listing of securities at the stock exchange ? Lead Manager

Who carry out all the activities of ensuring that the fund are collected and transferred to the Escrow accounts ? Lead Manager

At the time of public offer, who is responsible to do àllotment of shares to the applicant¿s DP account and dispatch of refund order¿ ? Lead Manager

What is the major difference between current ratio and quick ratio ?

Quick ratio consider inventory

RTGS and CLS solutions are provided under a

Cash management solutions

Clearing house

Provides trading platform for its members

Which of the services is not offered by a depository/DP¿s ? Corporate Actions

NSDL stands for National Security Depository Ltd

Who take care of the Post-trading activities on behalf of their clients such as FI¿s, Asset management companies, Pension fund, FII¿s etc¿? Custodian


Broker is not responsible for the acts and dealings of his Sub-Broker

The party who enters orders on the same side of the initiator is known as Initiator

Which order is comes under Time related condition ? All or none (AON)

Which order is comes under Price related condition ? All or none (AON)

In India, trades in rolling settlement are settled on what basis ? T+1

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195

196

197

198

199

200

201

202

203

204

205

206

Which institution is not working as a Credit Rating Agencies ? CRISIL

_____________________ is the financial market for short term borrowing and lending, typically up to one year. Money Market

The money that is lent for one is known as Call money

The money that is lent for more than one day but less than but less than 15 days it is referred to as Call money

Which is the largest financial market in the world ? FX market

International offering of debt /equity is managed by SEBI

Insurance is a solution provided by BPD

Which ratio shows the earning left for share holders ? Gross profit ratio

This ratio measures the extent to which borrowed funds support the firm¿s assets

Interest coverage ratio

What is Reverse Repo ?Swapping the cash flows

Which statement(s) talks about financial position of the company at the end of an accounting period ?

Fund flow statements

Basel II aims to cover the following risk exposure of a bank Market risk


Trading member is responsible for clearing and settlement of the trades of his own or of his clients.

Which statement(s) talks about financial performance of the company during an accounting period ?

Fund flow statement

What is return on investment per annum for an asset purchased for Rs. 750000 and leased it for Rs.15000 per month and later on sold it for Rs. 630000 ? 6.30%

If Joe earns $125 interest in 30 months on money that was invested at 5%, find the Principal amount. $1,100

Ram has invested Rs. 100000 as a FD into a bank for 3 years. Where he will earn interest of 6% monthly compounding. At the end of third years what will be value of investment? 119698.05

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208

209

210

211

212

213

214

215

216

217

218

219

You invest $5,000 today. You will earn 8% interest. How much will you have in 4 years ? 6802.5

How much amount should you need for an investment such that you will receive Rs. 337011.63 after five years if rate of interest is 11% p.a. ? 100000

Company XYZ has invested Rs. 5000000 and the expected return of the project amount to Rs. 1250000 annually. Calculate Payback period 5

What is the out of the money in put option?

The underlying securities is trading above the put option¿s strike price

If a EUR/USD pair is quoted as 1.19166, what does it mean ?


¿The right but not the obligation to buy (sell) some underlying cash instruments at a pre-determined rate on a pre-determined expiration date at a pre-set notional amount¿ relates to Futures

Leverage ratio refers to

The ability of a firm to meet its obligations in the short run

Which statement is correct ?

A Depository is an intermediary where the securities are held in the electronic form.

Which is the most popular market for trading of debt instruments? OTC market

Currently the ___________________ facility is used for the limited physical market as per the SEBI directives. Normal Market

The party who enters orders on the opposite side of the initiator is known as Initiator

Which ratio(s) is known as Èfficiency Ratio¿ ?Fixed asset turnover ratio

What is the value of the furniture at the end of 5 years if the PV is 500000 and depreciation rate is 10% ? 350000

220

221

222

223

224

225

226

Calculate WACC where market value of debt: Rs. 600,000,000, Market value of Equity: Rs. 800,000,000, Cost of debt: 9%, Cost of Equity: 16%, Tax:35% 11.65%

An investment with an initial cash out flow of $100,000 pays back $34,432 in the first year, $39,530 in the second year, $39,359 in the third year, and $32,219 in the fourth year. If the rate of return is 12%, find the Net Present Value (NPV) 10545.55

Consider an investment of $1,000 that is expected to yield $500 in 1 year and $700 in 2 years. What is the NPV of the investment at an annual discount rate of 9%? 47.77

Companys gross profit is 63000, salary expenses are 4000, rent is 6000, interest payments are 5000, other income is 5000, and taxes are 20% on the net profits. The company declares 15% as dividend to the share holders. What is the amount which will be transferred to reserves and surplus?

35800

What is the ROI for a new project that is expected to cost Rs. 500,000 over the next five years and deliver an additional Rs. 700,000 in increased profits during the same time ? 30%

What is the depreciation charge per annum if machinery has been valued as 50000, life of machinery is 10 years and the salvage value is 5000 ? 2250

_________________ is a process of determining investment in a project that is expected to produce a cash inflow over a period of time Cost of capital

select * from EXAM.QUESTION_MASTER WHERE qid = 5608

ANS2 ANS3 ANS4 ANS

Bears higher risk Both 1 & 2 3

20% 30% 1

Both 1 & 2 3

336011.63 337011.63 3

Both 1 & 2 3

Only 1 Both 1 & 2 4

4

Both 1 & 2 3

Both 1 & 2 3

Both 1 & 2 1

ICRA CRISIL 3

None of the above

None of the above

Good sign of financial strength

None of the above

None of the above

Projects having higher IRR are preferred to those having lower IRR

None of the above

Does not involve fixed obligation for repayment of dividenPreference Capital has some features of equity and some attributes of debentures.

ADR is a negotiable certificate issued by US bank.

All of the above

Settlement is deemed to be complete upon declaration and release of pay-out of funds and securities.

None of the above.

There is no single location or exchange where debt market participants interact for common business.

None of the above

Maturity period is less than one year.

None of the above.

Standard and Poor and Moody

4

14 days 1 day 3

SBI RBI NSE 3

Both (1) and (2) 3

SEBI SBI ICICI 2

1

3

Creditors Suppliers 4

All of the above 3

3

Both (1) and (2) 3

All of the above 2

1

2

Trading occurs via a network of middlemen called dealers

If an investor wants to buy or sell a bond , he or she must call the bank that makes the market In that bond and asks for quotes.

All of the above.None of the above

It is an over the counter obligation to buy or sell a financial instrument

None of the above.

Performs record keeping functions and investor servicing.

Marketing funds to the investors.

Regulatory body.

The commission that is charged when the investor exits the scheme.

The market value of the assets minus its liabilities.

All of the aboveAll of the above

Profit and Loss or income statement shows the financial performance of the company over a period of time

None of the above

reflects the financial performance of the company over a period of time

flow of funds through the business during a given accounting perio

None of the above

Money Measurement

None of the above

All Assets of the company are valued at their cost value .

None of the above

Credits Any of the above

None of the above.

Liability Income Expenditure

3

1

1

2

2

14873.82 14500 3

1

3

3

3

2

4

3

1

2

3

3

3

Secured Loans


None of the above.

i-flex university

Flexcube university

None of the above

13.9% 14.1% 14.2%

Rs. 1120 Rs. 1115 None of the above

Rs. 4212.33 Rs. 5637.90 Rs. 4211.56

12973.76

Basis Swap Total Swap Repo Transaction

Deferred charges method

Straight line method

None of the above

Reference Association system

Reliability, Availability, serviceability

Repair, Assess, Sustain

The amount received as dividend

The amount of dividend/ Market Price

The rate of dividend/ market price

Operational Risk Management

Credit Card Solution

Offshore development framework of I-Flex Solutions Ltd

1 & 2 1 & 3 2 & 3

Rs 4,000 Rs 10,000 None of the above.


None of the above.


None of the above

Secured Loans

Owners Equity

None of the above.

Money kept aside to meet future contingencies.

Profits which have been retained in the firm.

None of the above

Secured Loans


None of the above.

2

4

4

Market Risk 4

3

3

2

3

2

4

4

4

Reserves that arise out of non operational gains such as premium on issue of shares.

Any of the above

None of the above.

Services Outsourcing Division of i-flex consulting

Part of Product Offering

Part of Centers of Excellence

Government Bonds

State or Municipal Corporation Bonds

Junk bonds

Operational Risk All of the above

Underwriter Lead Manager Registrar


of debt in regular installments over a period of time





Non operating deficit

sum of costs incurred for manufacturing the goods sold during the accounting perio

None of the above

A measure of profit which is not influenced by interest and tax factors.

All of the above

None of the above

May signify the company¿s inability to meet financial obligations

helps an investor to spot the degree to which a company is leveraged or indebte

All of the above

Current Market Value

Net realizable Value Method

All of the above

The value is used in accounting to determine depreciation amounts and in the tax system to determine deductions.

The value can be a best guess of the end value or can be determined by a regulatory body.

All of the above

3

3

3

4

3

Both (1) and (2) 3

Currency Risk Market Risk 4

3

3

3

1

3

1

1

2

3

2

2

helps to measure the ability of the firm to meet it¿s current liabilities

Both (1) and (2)

None of the above

an alternative measure of liquidity that does not include inventory

Both (1) and (2)

None of the above

Indicates how well the company¿s earnings can cover the interest payments on it¿s debt

the extent to which borrowed funds support the firm¿s assets.

None of the above

traditional method of determining corporate value

serves as an indicator of company¿s profitability

All of above

Gross profit margin ratio

Price to earnings ratio

None of the above

The business firm is regarded as a separate entity as distinct from the persons who are connected to it.

None of the above.None of the above.

14 days 1 day None of the above

SBI RBI NSE

1,19,668.05 1,19,721.74 1,19,722.80

42142.67 5667.12 5677.30

PV of positive cash flows

The discount rate that makes the NPV zero

None of the above

10.23% 17.66% None of the above

1 & 2 1 & 3 2 & 3

404 210 All of the above

1 & 2 1 & 3 2 & 3 Market price of share/EPS

Dividend/EPS

Preference Share/EPS

To ensure development of Financial markets

To ensure development of underwriting market in govt. bonds

None of the above

3

3

2

58,000 63,000 46,400 2

2

12% 5% 1

Inflation Political Stability 4

5 and 7 2 and 7 7 and 2 3

4

2 & 3 4

3

debentures call money 3

3

Debentures 4

41350 30710 20700 1

book building 2

HUF Wealth tax 2

market order limit order 1

6.93 18.79 10.4 3

Suppliers Shareholders 4

Fill or Kill Order

Minimum fill order

Maximum fill order

will benefit the next accounting period

results in the acquisition of a permanent asset

results in acquisition of current asset

641018.62, 640042.27, 642012.71

631081.23,640024.17,642111.51

None of the above

Preference shareholders do not have voting rights.

Preference dividend is a tax deductible expense to the company.

None of the above

None of the aboveAll of the above

Fund raising from outside is easy

limited personal liabilities

easy and inexpensive to set up

meet the cash reserve ratio

meet sudden demand for funds arising due to large payments and remittances

9% Long-term Debenture.

7% short term government securities.

All of the above

certificate of deposits

the interest earned is non-taxable to the investor

interest is earned on the original investment

the interest rate is lower than the comparable investments

Reserves and Surplus

Commercial Papers

private placement

None of the above

personal income tax

None of the above

All of the above

Market risk Liquidity risk 3

only (ii) (i) and (ii) (ii) and (iii) 1

repo notice term 1

1

Decrease in asset 4

(ii) and (iii) (i) and (iii) 4

Vehicle both (i) and (ii) 4

Trade mark Franchise 4

cost concept 3

accrual concept cost cancept 2

market price 3

2,03,000 1,83,000 1,23,000 2

2

90,0000 1,10,000 70,000 1

114.24 114.42 112.44 2

18,797.10 20,000 15,850 1

not an asset current asset 2

Castek BNX Capco 2

Trademark 1

3

1

None of the above

Sales - closing stock + purchases

Net profit - expenses

Opening stock + purchases - closing stock

Increase in owner's equity

Decrease in owner's equityAll of the above

Fixed deposit in bank

Accounts receivables

conservation concept

time period concept

Money measurement concept

cost + transport + installation expenses

cost or market value whichever is less




deferred revenue expenditure

Discount on issue of shares

prepaid expenses

you can buy 0.8387 EUR for one USD.

you can but 1.1923 USD for one EUR

None of the above

Gross profit - net profit

gross profit - operational expenses

net profit - non trading profit - depreciation and provision

4

b.Cancel order c.Stop loss order d.Market order 3

b.Stop loss order 1

4

1

c.ICRA d.CARE 4

b. ICRA C. Care 2

b.High liquidity c.Highly secured 2

3

4

1

b.False c.Dormant Funds 1

1

1

1

1

1

2

3

b.Banker to the government

c.Formulates monetary and credit policies

d.All of the above

c.Good till cancelled

d.None of the above

b.Price related conditions

c.Quantity related conditions

d.All of the above

b.Good till date/day

c.Immediate or cancel

d.Disclosed quantity

b.Standard and poor

d. Standard and Poor

d.Both (B) and (C)

b.Financial Loss insurance

c.Locked fund insurance

d.Credit insurance

b.Personal liabilities of the partners are limited

c.Its ability to raise funds is virtually unlimited

d.Its relatively free from government regulations as compared to joint stock companies

b.Hold Funds in an account

c.Both (1) and (2)

d.None of the aboved.None of the above

FPO Right issue

Bonus issue

Secondary MarketBoth of the above

None of the above

Proportion of shares held

Members cannot vote

None of the above

Bankers to the issuers Underwriter

All of the above

Gross profit / Outstanding shares

Net profit / Outstanding shares

Net profit / market value of Outstanding shares

SEBI RBI B & C

RBI relief bond Treasury Bills All of the above

4

2

2

2

2

4

2

3

2

2

3

3

Ensure timely settlement of funds and securities

Maintain clearing accounts with DP¿s

All of the above

Broker can trade on the exchange while sub broker cannot

The broker is registered but the sub broker need not to be registered

None of the above

Authorized dealers of Govt. Securities appointed by RBI

Authorized dealers of Govt. Securities

Members of Clearing house

Writer of the option Clearing house

Stock exchange

Services outsourcing division of OFSS

Services outsourcing division of Consulting Parts of COE

Insurance claims Processing

MF accounting and operation

All of the above

Assets Management Company of the fund

Mutual Fund itself

Mutual Fund sponsor

Business Analytics Risk Analytics

Banking Analytics

Issuers must have to be rated by credit rating agencies

They should be issued by RBI

CP should be issued at least for a period of one year and above

To close the budgetary deficit

Both of the above

None of the above

Trades that are matched till that time

Trades that are pending for matching


ROI is usually expressed per annum

ROI does not take into account capital loss

ROI takes into account capital loss

2

1

1

3

1

3

1

1

2

2

2

3

1

3

2

BSE RBINone of the above

Long term assets + Equity Capital

Net profit + Reserves

Current Assets + Net Profit

Likely frauds being committed by employees of the bank

Likely money being siphoned off by senior management of the bank

Money being illegally transferred to subsidiaries of the bank

IRR Pay-back period B & C

FALSE

Minimize lossProfit from fluctuation Hedging of risk

FALSE

False

Rate of discounting which makes its NPV equal to zero

Rate of discounting which makes its NPV lower than zero

Rate of discounting which makes its NPV greater than zero

For project evaluation higher NPV are preferred over those having a lower NPV

Both of the above

None of the above

Unsystematic Risk Operational Risk Currency Risk

5 and 7 2 and 7 7 and 2

FALSE

FPO Rights issue Bonus issue

an International bank RBI SBI

4

2

3

3

2

3

4

4

2

2

2

1

2

1

1

Share holders of the company

Creditor of the company A & C

the relationship between a firm¿s short-term assets and its short-term liabilities

the relationship between a firm¿s mid-term assets and its mid-term liabilities B & C

Cheque Letter of CreditNone of the above

Proportion of Equity * Proportion of Debt + Cost of Equity * Cost of Debt (1-Tax)

Proportion of Equity * Cost of Equity + Proportion of Debt * Cost of Debt (1-Tax)

Proportion of Equity * Cost of Equity + Proportion of Debt * (1-Tax)

NPV Pay backNone of the above

Intermediaries A & BNone of the above

The transfer of risk (in the derivatives market)

International trade (in the currency market)

All of the above

Stock marketSecondary market

Primary market

Money marketDerivatives market Stock market

FALSE

FPO Preferred issuePrivate placement

Government Banks B & C

RBI Government B & C

RBIBoth of the above

None of the above

Merchant Banker UnderwriterBankers to the issue

4

4

4

3

1

3

2

3

1

1

2

4

3

2



Merchant Banker Underwriter R&T agents


Quick ratio does not consider inventory


Treasury management solutions

Wealth management solutions

Trade finance solutions

Holds securities on behalf of its members

Match and reconciles trades

All of the above

Trading

Electronic settlement of trades in Stock Exchanges.

Electronic credit of securities allotted in public issues.

National Securities Depository Participant Ltd

National Securities Depository Ltd

National Securities Deposit Ltd

Underwriter Merchant banker Lead manager

A Sub-broker is an agent of a broker

Sub broker has to registered with SEBI as well as Exchange of which his broker is the member

Clients of the sub broker are to be registered with the main broker

Competitor SolicitorNone of the above

Market Order Stop Loss order


Good till date (GTD) Stop Loss order


T+2 T+3 T+4

4

1

1

4

1

2

3

2

4

2

2

4

2

3

2

2

3

S&P and Moody ICRA IFCI

Stock market MF marketSecondary market

Notice money Term money Notice money

Notice money Term money Notice money

Stock market Money market Debt market

RBI Merchant banker Prime broker

PRSG Prime Sourcing None of the above

Net profit ratio Return on assetsReturn on equity

Current ratio Debt Equity ratio Debt ratio

Buying and selling back

Selling and buying back

None of the above

Balance sheetProfit and loss statement A & C

Operational risk Credit riskAll of the above

Trading member is responsible for clearing and settlement of his clients only.

Disclosed Quantity (DQ) is an order with a DQ condition allows the TM to disclose only a part of the order quantity to the market.

Market Order is an order to buy or sell securities at the best price obtainable at the time of entering the order.

Balance sheetProfit and loss statement

None of the above

8.00% 6.93% 6.54%

$1,000 $1,200 $1,150

119700.05 119668.05 119660.05

1

4

4

2

2

3

2

4

1

2

3

4

2

6805.5 6807.5 6809.5

300000 400000 200000

3 3.5 4

The underlying securities is trading below the put option¿s strike price

The underlying securities is trading at the put option¿s strike price

None of the above

You can buy 1.19166 USD for one EUR


None of the above

Forward Options Swaps

Provide an indication of the long-term solvency of the firm

How efficiently the assets are utilized by a firm

How does equity stock of the company is assessed in the capital market

It provides service connected with recording of allotment of securities or transfer of ownership of securities in the record of a depository

A depository cannot directly open the accounts and provide services to the clients.

All of the above

Stock exchange market

Wholesale market A & C

Odd lot Market Auction Market A & C

Competitor SolicitorNone of the above

Inventory turnover ratio

Receivables turnover ratio

All of the above

295245 250000 305125

1

3

2

2

2

3

3

12.75% 12% 11.83%

10645.45 10745.45 10845.55

47.89 47.98 47.78

36040 38500 39060

40% 50% 60%

2500 4500 5000

Capital structureCapital budgeting Cash flow

Documents

FAQ Finance