Which one of the following terms refers to the risk arises for bond owners from fluctuating interest rates?

A: Fluctuations Risk

B: Interest Rate Risk

C: Real-Time Risk

D: Inflation Risk

Answer & Explanation Discussion
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Interest Rate Risk

Which of the following set of ratios relates the market price of the firms common stock to selected financial statement items?

A: Liquidity Ratios

B: Leverage Ratios

C: Profitability Ratios

D: Market Value Ratios

Answer & Explanation Discussion
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Market Value Ratios

If a firm uses cash to purchase inventory, its quick ratio will?

A: Increase

B: Decrease

C: Remain unaffected

D: Become zero

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Decrease

Standard Corporation sold fully depreciated equipment for Rs.5,000. This transaction will be reported on the cash flow statement as a(n):

A: Operating activity

B: Investing activity

C: Financing activity

D: None of the given options

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Investing activity

Which of the following ratios are particularly interesting to short term creditors?

A: Liquidity Ratios

B: Long-term Solvency Ratios

C: Profitability Ratios

D: Market Value Ratios

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Liquidity Ratios

Mr. Y and Mr. Z are planning to share their capital to run a business. They are going to employ which of the following type of business?

A: Sole-proprietorship

B: Partnership

C: Corporation

D: None of the given options

Answer & Explanation Discussion
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Partnership

Which of the following item provides the important function of shielding part of income from taxes?

A: Inventory

B: Supplies

C: Machinery

D: Depreciation

Answer & Explanation Discussion
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Depreciation

When the markets required rate of return for a particular bond is much less than its coupon rate, the bond is selling at:

A: Premium

B: Discount

C: Par

D: Cannot be determined without more information

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Premium

The process of determining the present value of a payment or a stream of payments that is to be received in the future is known as:

A: Discounting

B: Compounding

C: Factorization

D: None of the given options

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Discounting

You need Rs. 10,000 to buy a new television. If you have Rs. 6,000 to invest at 5 percent compounded annually, how long will you have to wait to buy the television?

A: 8.42 years

B: 10.51 years

C: 15.75 years

D: 18.78 years

Answer & Explanation Discussion
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10.51 years

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