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

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Market Value Ratios

You just won a prize, you can either receive Rs. 1000 today or Rs. 1,050 in one year. Which option do you prefer and why if you can earn 5 percent on your money?

A: Rs. 1,000 because it has the higher future value

B: Rs. 1,000 because you receive it sooner

C: Rs. 1,050 because it is more money

D: Either because both options are of equal value

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Either because both options are of equal value

Which of the following ratios are particularly interesting to shortterm creditors?

A: Liquidity Ratios

B: Long-term Solvency Ratios

C: Profitability Ratios

D: Market Value Ratios

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Liquidity Ratios

In which form of Business, owners have limited liability?

A: sole proprietorship

B: partnership

C: joint stock company

D: none of the above

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joint stock company

Which of the following is a special case of annuity, where the stream of cash flows continues forever?

A: Ordinary Annuity

B: Special Annuity

C: Annuity Due

D: Perpetuity

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Perpetuity

Balance Sheet is based upon which of the following formula?

A: Assets = Liabilities “ Stockholders equity

B: Assets + Liabilities = Stockholders equity

C: Assets + Stockholders equity = Liabilities

D: Assets = Liabilities + Stockholders equity

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Assets = Liabilities + Stockholder’s equity

Quick Ratio is also known as_________?

A: Current Ratio

B: Acid-test Ratio

C: Cash Ratio

D: None of the given options

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Acid-test Ratio

Which of the following statement is CORRECT regarding compound interest?

A: It is the most basic form of calculating interest.

B: It earns profit not only on principal but also on interest.

C: It is calculated by multiplying principal by rate multiplied by tim

D: It does not take into account the accumulated interest for calculation.

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It earns profit not only on principal but also on interest.

When real rate is high, all the interest rates tend to be ___________?

A: Higher

B: Lower

C: Constant

D: None of these

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Higher

Profitability index (PI) rule is to take an investment, if the index exceeds___________?

A: -1

C: 1

D: 2

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