Financial Management Questions

The objective is that students find answers to these questions after reading the course
material as these are just indicative questions. Apart from these questions also
practice numerical questions which are done in the class.

1. Difference between compounding technique and discounting technique?

2. What is time value of money? 
3. Difference between Nominal and Effective interest rate.
4. What Is Inflation and Deflation?
5. Relationship between Inflation and Interest rates in an economy
6. What Is Capital Structure? 
7. Explain Calculation Of The Present Value and Future Value?
8. What is Cost Of Capital? How is it calculated and its relevance.
9. Risk and Return Relationship in Financial Management
10. What is risk premium?
11. What is required/Expected rate of return? How is it calculated?
12. What is Operating and Financial risk?
13. Which is better in case a loan is taken: Simple Interest or Compound Interest and
Why?
14. Difference between annuity and annuity due.
15. Which is cheaper, debt or equity?
16. What Are The Internal Factors Affecting Capital Structure?
17. What Are The External Factors Affecting Capital Structure?
18. Explain Average Cost And Marginal Cost?
19. Explain Explicit Cost And Implicit Cost?

20. What is Free Cash Flow to Firm?

21. What is Free Cash Flow to Equity?

22. What is the meaning and relevance of Intrinsic value.

23. What is the appropriate discount rate to use in an unlevered DCF analysis?

24. What is Beta (β)? How would you calculate beta for a company?

25. What are Equity Warrants, Private Placement and Preferential Allotment?
26. What Is Underwriting?
27. Difference between enterprise value and equity value 

28. What is Dividend Discount Model?

29. Can Terminal Value be Negative?

30. What Is Trade-off Theory?

31. What Is A Junk Bond?
32. What are Callable and Puttable Bonds?
33. What is Capital Market? How Does The Company Raise Funds In Capital Market?
34. What are the uses of the yield curve?
35. What is interest rate risk?
36. Which bond has the greatest associated interest rate risk? A five year zero coupon
bond? Or a five year bond that pays coupons?
37. Which bond has the greatest associated interest rate risk? A five year zero coupon
bond? Or a five year bond that pays coupons?
38. A recession is an economic event that is best characterized as Systematic or
Unsystematic Risk.
39. FCCB vs FCEB
40. Leasing vs Hire Purchase
41. FDI vs FPI
42. Profit maximisation vs wealth maximisation