Accounting for Managers

291. Which of the following is NOT an example of hybrid equity?

  1. Convertible bonds
  2. Convertible debenture
  3. Common shares
  4. Preferred shares
Correct answer: (C)
Common shares

292. What are the three interrelated areas of finance?

  1. Financial markets, option and forwards
  2. Investment, Financial management and Money & capital markets
  3. Banking, financial institutions and swap currency
  4. All of above
Correct answer: (B)
Investment, Financial management and Money & capital markets

293. Convertible debt is debt that

  1. The issuing firm can pay off early
  2. The bondholder can sell back to the firm at a guaranteed price
  3. The bondholder can convert into shares
  4. All of above
Correct answer: (C)
The bondholder can convert into shares

294. ______________ means value at some future time of a present amount of money evaluated at a given interest rate.

  1. Compounding
  2. Discounting
  3. Nominal rate
  4. Continuous rate
Correct answer: (A)
Compounding

295. When the market's Required Rate of Return for a particular Bond is equal to its Coupon Rate, the Bond is selling at

  1. Premium
  2. Discount
  3. Par
  4. None
Correct answer: (C)
Par

296. A Bond has a $1,000 Face Value, a Market Price of $1,115, and pays interest payments of $ 90 every year. What is the coupon rate?

  1. 4.50 %
  2. 6.75 %
  3. 7.39 %
  4. 9.00 %
Correct answer: (D)
9.00 %

297. A bond with a $1,000 face value and an 8 percent annual coupon pays interest semi-annually. The bond will mature in 15 years. The nominal yield to maturity (i) is 11 percent. What is the price of the bond today?

  1. $ 784.27
  2. $ 781.99
  3. $ 1,259.38
  4. $ 739.19
Correct answer: (B)
$ 781.99

298. The goal of fundamental analysts is to find securities

  1. Whose intrinsic value exceeds market price
  2. With a positive present value of growth opportunities
  3. With high market capitalization rates
  4. All of the above
Correct answer: (A)
Whose intrinsic value exceeds market price

299. ______________ is the set of possible values that a random variable can assume and their association probabilities of occurrence.

  1. Expected Rate of Return
  2. Probability Distribution
  3. Variance
  4. Standard deviation
Correct answer: (B)
Probability Distribution

300. Which of the following is not component of financial report?

  1. Balance sheet
  2. Notes of the account
  3. Comparative figure of previous period
  4. None of the given option
Correct answer: (D)
None of the given option
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