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Finance (Theory) : MCQ Series Lecture - 2
Finance (Theory) : MCQ Series Lecture - 2
Finance (Theory) : MCQ Series Lecture - 2
Finance (Theory)
MCQ Series
Lecture – 2
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Our New Course
Quantitative Aptitude
Reasoning Ability
English
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Question
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Explanation
Based on redemption features
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Explanation
Puttable Bonds
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Explanation
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Question
Q2. Given below are following points related to debt-financing. How many
points are its advantage(s) for issuer?
a) Interest is tax-deductible
b) It reduces WACC
c) Does not dilutes ownership
d) Periodic dividends
A. 1 only
B. 2 only
C. 3 only
D. 4 only
E. None of the above.
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Explanation
Advantages of Debt-financing for issuer
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Question
Q2. Given below are following points related to debt-financing. How many
points are its advantage(s) for issuer?
a) Interest is tax-deductible
b) It reduces WACC
c) Does not dilutes ownership
d) Periodic dividends
A. 1 only
B. 2 only
C. 3 only
D. 4 only
E. None of the above.
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Question
A. Remains constant
B. increase
C. decreases
D. Initially decreases then increases
E. None of the above
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Explanation
Loan Repayment Schedule
EMI
Interest Principle
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Explanation
Loan of Rs 100. @ 10% p.a. EMI = Rs. 20
EMI Paid 20 20 20 20
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Question
A. Remains constant
B. increase
C. decreases
D. Initially decreases then increases
E. None of the above
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Question
Q4. Which of the following is/are the bonds which are first to be paid in case
the issuing company goes for a liquidation process?
A. Subordinated Bond
B. Senior Bond
C. Unsubordinated Bond
D. Junior Bond
E. Both B and C
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Explanation
Based on Priority
Unsubordinated Subordinated
Bonds Bonds
• Senior Bonds • Junior Bonds
• Paid 1st in case of • Paid after the payment to
liquidation. senior bondholders.
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Question
Q4. Which of the following is/are the bonds which are first to be paid in case
the issuing company goes for a liquidation process?
A. Subordinated Bond
B. Senior Bond
C. Unsubordinated Bond
D. Junior Bond
E. Both B and C
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Question
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Explanation
Based on Priority
Unsubordinated Subordinated
Bonds Bonds
• Senior Bonds • Junior Bonds
• Paid 1st in case of • Paid after the payment to
liquidation. senior bondholders.
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Question
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Explanation
Feature of G-Sec
• Almost no risk.
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Question
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Answers to MCQs
Answers:
Q1 : A
Q2 : C
Q3 : C
Q4 : E
Q5: B
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Extra - Question
A. Convertible Bond
B. Subordinate Bond
C. Zero-Coupon Bond
D. Callable Bond
E. None of the above
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Query
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