Finance Quiz

Chand basha mcb

i. Multiple choice

1. What is Arbitrage?

a. Tax-loss selling

b. Buying stock options

c. Buying something of value and the selling it for a higher price

2. Negative Beta is called

a. Inversible

b. Reversible

c. Deviation

3. How many companies are listed in Dow Jones Index?

a.30

b.50

c.100

4. What is balloon payment?

a. Payment of maturity on balloon loan

b. Bridge Loan

c. A lump-sum payment at a maturity period

5. Which of the first company listed in NYSE

a. IBM

b. Bank of NewYork

c. Goldman sachs

6. From the following, one is a financial asset

a. Gold

b. Share

c. Silver

7. Government bond is a:

a. Short-term security

b. Long-term security

c. Medium-term security

8. In an option contract, if the option can be exercised only at the time of maturity,

it is called as

a. America option

b. European option

c. Bermuda option

9. The predetermined price in an option contract is called:

a. Spot price

b. Exercise price

c. Option price

10. Financial decisions involve

a. Investment, financing and dividend decisions

b. Investment, financing and sales decisions

c. Financing, dividend and cash decisions

Ans: 1c, 2a, 3a, 4c, 5b, 6b, 7b, 8b, 9b, 10a

ii. Describe the below followings

1. ICRA___________________

2. NSDL___________________

3. SIDBI___________________

4. ICAI__________________

5. NASDAQ______________

6. TOPIX_________________

7. LEAPS________________

8. CRISIL________________

9. IPO______________

10. NIFTY___________

11. NYSE_________________

12. MCX_________________

13. NSCCL_______________

14. ICICI________________

15. SEBI_________________

Ans: 1. Investment Credit Rating Agency of India

2. National Securities Depositories Limited

3. Small Industries Development Bank of India

4. Institute of Charted Accountant in India

5. National Association of Securities Dealers Automated

6. Tokyo price index

7. Long-term Equity Anticipated Securities

8. Credit Rating and Information Services of India Limited

9. Initial Public Offering

10. National Fifty

11. New York stock exchange

12. Multi commodity exchange

13. National securities clearing corporation ltd.

14. Industrial Credit Investment Corporation of India limited

15. Security and Exchange Board of India

iii. Matching the following

1. Royalty on goods sold a. Trading a/c

2. Commercial papers b. Ledger account

3. General journal c. Going concern

4. Global Credit Rating Agency d. Financing for working capital

5. Gross profit/loss e. P&l a/c

6. Conservatism f. Moody's investors service

7. Royalty on goods manufactured g. Subsidiary book

8. Accounting concept h. Accounting convention

9. Cash account i. To meet temporary Govt deficits.

10. Treasury bills are issued for j. Sales-Cost of sales

Ans: 1e, 2d, 3g, 4f, 5j, 6h, 7a, 8c, 9b, 10i

iv. True or False

1. Purchases book is maintained to record all purchases of goods.____

2. Debit note is sent by the buyer when the goods are returned by him to the

seller_____

3. Corner portfolio called as low risk, high return_____

4. Project with short-term payback period is preferable_______

5. Zero interest bonds are sold at discount_________

6. Certificate of deposit is non negotiable_________

7. Bad debts arises in credit card transactions_________

8. Insurance facilities are available to credit cardholders_____

9. CRISIL commences rating exercise at the request of the Government.____

10. Forward contracts are mostly index-based______

Ans: 1F, 2T, 3F, 4T, 5T, 6.F, 7F, 8T, 9F, 10.F

v. Fill in the blanks

1. Purchase Returns Book is also known as_______

2. Long term ratio is also called as___________

3. SEBI Chairman________

4. Purchasing a unit of ownership on limited company______

5. Treasury bills are issued by_________

6. Name of the BSE Index________

7. Ratings indicate the __________ status of a company

8. __________ Contracts are not at all standardized.

9. In the option contracts, the seller is referred to as a___________

10. The liabilities payable in a _________ are called current liabilities

Ans: 1.Returns Outward Book

2. Leverage ratio

3. U.K Sinha

4. Share

5. RBI

6. Sensex

7. Financial/Credit

8. Forward

9. Writer

10. Year

vi. Exercises

1. Following infomation is available from the books of Chand for the year2014

Opening stock: 25000, Purchases: 80000, Direct exp:15500, Sales:100000,

Closing stock: 30500

Calculate Cost of goods sold and gross profit.

a.CGS:90000, GP:10000

b.CGS:65500, GP:15000

c.CGS:80000, GP:12000

Ans: a

2. Estimated EPS of Suzlon is 64, PE is 8. Calculate Market per share of Suzlon

a.342

b.421

c.512

Ans: EPS*PE=512

3. Stock A generates a rate of return is 20% and Standard diviation 20%, Stock B

generates a rate of return is 25% and Standard diviation 15%, Stock C generates a

rate of return is 35% and Standard diviation 25%and Risk free rate is 5%. Then

which stock gives a better risk adusted return.

a. Stock A

b. Stock B

c. Stock C

Ans: Stock A gives => 20-5=15/20=0.17

Stock B gives => 25-5=20/15=1.33

Stock C gives => 35-5=30/25=1.2

Therefore Stock B gives better risk adjusted return.

4. From the following information

Current Ratio=2.6:1

Liquid Ratio=1.5:1

Current Liabilities=Rs.40000

Calculate:

i. Current Asset

a.104000, b.130000, c.98000

ii. Liquid Asset

a.40000, b.60000, c.50000

iii. Inventory

a.36000, b.55000, c.44000

Ans: i.a, ii.b, iii.c

5. The sales of Forma Lt. in the first half of 1999, amounted to Rs.270000 and

profit earned was Rs.7200. The sales in the second half year registered an increase

and amounted to Rs.342000. The profit earned was Rs.20700 in that half year.

Assuming no change in fixed costs, Calculate

i. The profit-volume ratio

a. 35%, b.50%, c.40%

ii. The amount of profit when sales are Rs. 216000

a. 8402, b. 2925, c.4982

iii. The amount of sales required to earn a profit of Rs.36000

a. 423600, b. 562400, c. 234600

Ans: i.c, ii.b, iii.a