[ vuZs.net ] ACC501 MCQs help

Which one of the following is a CORRECT statement about the Price-Earning
Ratio?
A high PE ratio generally means a firm has little prospect
for future.
A firm with high earning per share will also have a very high
PE ratio.
Care must be taken in interpreting very high PE ratios since
they can result
from a firm having very low earnings.
A firm with high earnings per share will also have a very
high PE ratio.
Which one of the following ratios indicates the return firm shareholders are
earning?
Return on assets
Return on investment
Return on equity
Net profit margin
Corporate bonds usually have a face value of Rs. 1,000 which is called:
Principal value
Coupon payments
Yield to maturity
Current yield
Question No: 22 ( Marks: 1 ) - Please choose one

Which of the following allows a company to repurchase part or all of the bond
issue at a stated price?
Repayment
Seniority
Call provision
Protective covenants
Question No: 23 ( Marks: 1 ) - Please choose one
Which of the following long-term rating by PACRA denotes a high default risk?
AAA
BBB
CCC
CC
Question No: 24 ( Marks: 1 ) - Please choose one
Which one of the following statements is INCORRECT regarding
floating-rate
bond?
Holder of this type of bond has the right to redeem the note
at par on the
coupon payment date after some specified period of time.
Coupon rate has a floor and a ceiling i.e. coupon is
subjected to a minimum
and a maximum.
An interesting type of floating rate bonds is an
Inflation-linked bond.
Such bonds have coupons that need not be adjusted according
to the rate of
inflation.
Question No: 19 ( Marks: 1 ) - Please choose one
Between the two identical bonds having different coupon, the
price of the
________ bond will change more than that of ________ bond.
Higher-coupon; lower-coupon
Lower-coupon; higher-coupon
Short-term; long-term
None of the given options
A bond's value will rise above its par value during its life if
interest rate:
Goes up
Goes down
Remains the same
There is no relation between value and interest rate
Which one of the following is a correct formula to calculate
present value of
annuity? PVt = P x ( 1 – Present value factor ) / r
PVt = P x ( 1 – Future value factor ) / r
PVt = P x ( Present value factor – 1 ) / r
PVt = P x ( Future value factor – 1 ) / r
Question No: 11 ( Marks: 1 ) - Please choose one
What will be the annual payment on a 6-year Rs. 14,000 loan
that carries a 7%
interest rate?
Rs. 2,816
Rs. 2,937
Rs. 3,088
Rs. 3,277
Question No: 12 ( Marks: 1 ) - Please choose one
How much must be deposited at 15% each of the next 7 years to have Rs. 4,565?
Rs. 452.75
Rs. 570.50
Rs. 350.20
Rs. 412.50
The present value of a sum of Rs. 100 to be received in the future will be:
Less than Rs. 100
None of the given options
More than Rs. 100
Equal to Rs. 100
Question No: 9 ( Marks: 1 ) - Please choose one
You just won a prize, you can either receive Rs. 950 today
or Rs. 1,000 in one
year. Which option do you prefer and why if you can earn 8
percent on your
money?
Rs. 950 because it has the higher future value
Rs. 950 because you receive it sooner
Rs. 1,000 because it is more than Rs. 950
Either because both options are of equal value
Which of the following is NOT an investing cash flow?
Proceeds from the sale of a retired asset
Purchase of a delivery vehicle
Sale of machinery
Purchase of inventories
Question No: 5 ( Marks: 1 ) - Please choose one
The balance sheet reported a beginning balance of Rs. 23,000
in Accounts
Receivable and an ending balance of Rs. 16,000. The income
statement reported
Sales Revenue of Rs. 230,000. Using this information, what will be the
amount of
cash collected from customers?
Rs. 269,000
Rs. 253,000
Rs. 237,000
Rs. 230,000
Question No: 6 ( Marks: 1 ) - Please choose one
What would be the amount of current assets for a company which
has a current
ratio of 4:1 and net working capital of Rs. 30,000?
Rs. 6,000
Rs. 10,000
Rs. 24,000
Rs. 40,000

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