1. _____________ are examples of investment bankers offering traditional commercial banking services.
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Cash management accounts
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2. Due to ____, market forces should realign the spot rate of a currency among banks.
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Locational arbitrage
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3. A _____ budget allocates resources on the basis of a single estimate of costs.
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Fixed or static
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4. _____ are also called debentures and are not backed by specific collateral.
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Unsecured bonds
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5. The primary goal of a financial manager is ________.
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Maximizing wealth
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6. One major expense associated with issuing new shares of common stock is ________.
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Underpricing
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7. In a business formula such as return on investment, ""on"" means ________.
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Divided by
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8. Identify the cash balance which allows for the business to meet day to day expenses, but reduces cash holding costs is known as _______
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Cash management
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9. Decision relating to working capital and short term financing are referred to as ____________
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Working capital management
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10. Accounts receivables are also known as __________
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Customer receivables
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11. __________ motive refers to the need to hold cash to satisfy normal disbursement collection activities associated with firm’s ongoing operation.
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Transaction motive
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12. The amount owned to a company resulting from the company providing goods and services on credit is known as __________
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Accounts receivable
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13. The minimum amount of working capital which even required during the dullest season of year is known as ___________
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Permanent working capital
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14. The surplus of current assets over current liabilities is known as ______
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Positive working capital
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15. . The difference between current assets and current liabilities of the business concern is termed as ____________
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Net working capital
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16. ________ refers to the amount of funds invested in various components of current assets. It consists of raw materials, work in progress, debtors, finished goods, etc.
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Gross working capital
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17. . Difference between inflow and outflow of funds is known as ___________
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Working capital b
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18. Pay-out ratio denotes that
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Payment of dividend to shareholders
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19. If the firm is r>k means the earnings must be
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Retain
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20. If the firms earns a higher rate of return on its investments than the required rate of return (r>k) it is called
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Decline firm
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21. Walter model is based on the relationship between the firms return on investment (r) and ____
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Cost of capital or required rate of return (k)
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22. In which theory dividend decision does not affect the share holders wealth and valuation of the firm
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Theory of irrelevance
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23. ____ refers to that part of profits of a company which is distributed by the company among its shareholders
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Dividend
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24. In _____ theory, the value of the firm can be increased initially or the cost of capital can be decreased by using more debt is a cheaper source of funds than equity
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Traditional approach
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25. _____ approach is a compromise between the two extremes of net income approach and net operating income approach.
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Traditional approach
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26. In which approach there is nothing as an optimal capital structure and every capital structure is the optimum capital structure
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Net operating income approach
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27. In _____ approach the value of the firm and overall cost of capital remains constant irrespective of method of financing. (Debt-equity)
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Net operating income approach
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28. In _____ approach, the change in the capital structure of company does not affect the market value of the firm
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Net operating income approach
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29. Net operating income theory is suggested by
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Durand
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30. n _____ approach a firm can minimize the weighted average cost of capital and increase the value of a firm and market price of equity share by using debt to the maximum
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Net income approach
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31. _____ approach is based upon certain unrealistic assumptions such a perfect market, or the expected earnings of all the firms have identical risk etc.,
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M and M approach
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32. In_____ approach the debt-equity mix is irrelevant in determination of cost of capital and the value of a firm.
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Net operating income
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33. _____ approach prove that the cost of capital is not affected by changes in the capital structure
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Net operating income
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34. The required rate of return for an investment project should
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Leave the market price of the stock unchanged
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35. The overall cost of capital is used as the minimum acceptable return on
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All investment to be made by the company with similar risk
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36. Interest on debt-capital provides a _______ to the equity holders
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Tax shield
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37. The cost of capital of a long-term debt is generally
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Lower than the owned funds
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38. The company’s’ average cost of capital is
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The average cost of all sources of long-term funds
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39. The expansion of CAPM is
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Capital Asset Pricing Model
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40. Cost of retained earnings is equal to
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Cost of equity
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41. Market value of the cost of capital is decided by
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The investment market
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42. The decision to issue various securities in different proportions is called
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The capital structure decision
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43. v
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Preference shares
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44. _____ means the entire liabilities side of the balance sheet (long term and short term) (debt and equity)
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Financial structure
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45. ____ is quantitative aspect of the financial planning of an enterprise, if denotes total amount of securities issued by a company.
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Capitalisation
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46. The decision to issue various securities in different proportions is called
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The capital structure decision
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47. . Working capital management is managing
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Short-term assets and liabilities
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48. Capital budgeting is related to
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Long –term assets
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49. The primary goal of the financial management is
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To maximize the wealth of owners
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50. Financial accounting is designed
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To record the financial history of the firm
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51. In his traditional role the finance manager is responsible for
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Arrangement and efficient utilization of funds
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52. Financial Management is mainly concerned with
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All aspects of acquiring and utilizing financial resources for firm’s activities
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