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Question 289 MCQ · 2.0 marks
The total number of spots on TV for each brand in a category?
6406533530354.
Consumer panel
6406533530355.
Indian Readership Study
6406533530356.
TV Audience panel
6406533530357.
Retail audit
6406533530358.
Radio Audience Panel
6406533530359.
Press ad expenditure track
6406533530360.
TV ad expenditure track
6406533530361.
Radio ad expenditure track
6406533530362.
Prescription audit
**Corporate Finance**
**Section Id :** 64065375583
**Section Number :** 13
**Section type :** Online
**Mandatory or Optional :** Mandatory
**Number of Questions :** 36
**Number of Questions to be attempted :** 36
**Section Marks :** 100
**Display Number Panel :** Yes
**Section Negative Marks :** 0
**Group All Questions :** No
**Enable Mark as Answered Mark for Review and**
No
**Clear Response :**
**Section Maximum Duration :** 0
**Section Minimum Duration :** 0
**Section Time In :** Minutes
**Maximum Instruction Time :** 0
A published solution is not available for this question yet.
The put-call parity result for a non-dividend-paying stock states that the European put price plus
the present value of the strike price must equal the European call price plus the stock price.
6406533530365.
TRUE
6406533530366.
FALSE
A published solution is not available for this question yet.
You found an ancient painting in your home that was purchased by your father 20 years ago for Rs
1,000. You auction it and sell it for Rs 30,000. What is the annualized rate of return that is earned
on the painting?
6406533530385.
8.52%
6406533530386.
18.54%
6406533530387.
27.38%
6406533530388.
32.14%
A published solution is not available for this question yet.
The Tata Steel stock is trading at Rs 300 today. Tata Steel is expected to pay a dividend of Rs 20 per
share next year. If the growth rate of Tata Steel's dividend is 2% every year and the appropriate
rate of return is 7% per year, then according to the Gordon growth model
6406533530389.
The Tata Steel stock is underpriced, and an investor should buy Tata Steel
shares.
6406533530390.
The Tata Steel stock is overpriced, and an investor should buy Tata Steel
shares.
6406533530391.
The Tata Steel stock is underpriced, and an investor should sell Tata Steel
shares.
6406533530392.
The Tata Steel stock is overpriced, and an investor should sell Tata Steel
shares.
A published solution is not available for this question yet.
There are two assets: a risk-free asset that offers a 6% rate of return and a risky asset that has an
expected rate of return of 15% and a standard deviation of 10%. What is the slope of the Capital
Allocation Line consisting of these two assets?
6406533530393.
1.5
6406533530394.
0.9
6406533530395.
-0.9
6406533530396.
-1.5
A published solution is not available for this question yet.
There are two risky assets that are negatively correlated with ρ = – 0.5. Asset 1 has an expected
return of 15% and a standard deviation of 10%. Asset 2 has an expected return of 20% and a
standard deviation of 12%. What are the weights of the assets in the minimum variance portfolio?
Sahitya Inc. is considering two different projects, A and B, for investment and can choose at most
one project to invest in. Project A costs Rs 12,000 and is expected to generate Rs 5,000 in year one
and Rs 10,000 in year two. Project B costs Rs 10,000 and is expected to generate Rs 5,000 in year
one, Rs 4,000 in year two, Rs 3,000 in year three, and Rs 2,000 in year four. Sahitya Inc.’s required
rate of return for these projects is 5%. Which of the following is true?
6406533530401.
Sahitya Inc. should prefer Project B as it has a higher net present value than
Project A.
6406533530402.
Sahitya Inc. should prefer Project A as it has a higher net present value than
Project B.
6406533530403.
Sahitya Inc. is indifferent between Project A and Project B as both have the
same net present value.
6406533530404.
Sahitya Inc. should not invest in either projects A or B as both have negative
net present value.
A published solution is not available for this question yet.
A British Pound buys 100 Russian Rubles. The GDP deflator in Russia is 110, while the GDP deflator
in the UK is 105. What is the real GBP to RUB exchange rate? [Note: Exchange rate is defined with
the UK as a home country and Russia as a foreign country]
6406533530405.
83.81
6406533530406.
76.36
6406533530407.
95.45
6406533530408.
104.76
A published solution is not available for this question yet.
The prevailing interest rate in India is 9%, and the prevailing interest rate in the UK is 5%. What is
the expected rate of appreciation of INR to GBP exchange rate?
6406533530409.
-3.67%
6406533530410.
-1.84%
6406533530411.
3.81%
6406533530412.
1.62%
A published solution is not available for this question yet.
The share price for Infosys is Rs 500 today. A trader invests in Infosys by buying 100 European call
options on Infosys for Rs 10 each with a strike price of Rs 490 and maturity of three months. What
is the gain or loss if the share price on the maturity date is Rs 495?
6406533530413.
Rs 0, no gain, no loss
6406533530414.
Rs 500 loss
6406533530415.
Rs 500 gain
6406533530416.
Rs 1000 loss
A published solution is not available for this question yet.
The price of a stock is Rs 84. A trader buys a put option on the stock with a strike price of Rs 80
when the option price is Rs 10. When does the trader make a profit?
6406533530425.
When the stock price is below Rs 90
6406533530426.
When the stock price is below Rs 84
6406533530427.
When the stock price is below Rs 77
6406533530428.
When the stock price is below Rs 74
A published solution is not available for this question yet.
You purchase two one-year call options with a strike price of Rs 80 and a one-year put option with
a strike price of Rs 80. The call premium is Rs 4, and the put premium is Rs 3. The current share
price is Rs 78. If one year later, the share price increases to Rs 87
6406533530441.
You make a profit of Rs 14.
6406533530442.
You make a profit of Rs 3.
6406533530443.
You incur a loss of Rs 3.
6406533530444.
You incur a loss of Rs 11.
A published solution is not available for this question yet.
The price of a three-month European put option on a non-dividend-paying stock with a strike price
of Rs 60 is Rs 6. The stock price is Rs 58, and the annual risk-free rate is 8% (continuously
compounded). What is the price of a three-month European call option on the stock with a strike
price of Rs 60?
6406533530445.
Rs 9.45
6406533530446.
Rs 5.19
6406533530447.
Rs 2.09
6406533530448.
Rs 0.64
A published solution is not available for this question yet.
A stock is trading at Rs 100 today. In 3 months, the stock price can either increase to Rs 120 or
decrease to Rs 90. The three-month risk-free rate is 5%. A three-month call option has an exercise
price of Rs 105. What is the risk-neutral probability that stock price increases?
6406533530449.
40.0%
6406533530450.
50.0%
6406533530451.
53.3%
6406533530452.
60.0%
A published solution is not available for this question yet.
Your opinion is that Cipla stock has an expected rate of return of 15%. Cipla has a beta of 1.5. The
risk-free rate of return is 5%, and the expected market rate of return is 12%. According to the
capital asset pricing model, Cipla is
6406533530461.
Overpriced
6406533530462.
Underpriced
6406533530463.
Fairly priced
6406533530464.
Insufficient information
A published solution is not available for this question yet.
The current price of a non-dividend-paying stock is Rs 50. Over the next six months, it is expected
to rise to Rs 70 or fall to Rs 40. Assume the risk-free rate is zero. A six-month call option with a
strike price of Rs 55 is trading at Rs 5. How many options are required to hedge the purchase of 2
shares of the stock?
**Note:**The answer is a single digit integer between 0-9.
A published solution is not available for this question yet.
A risky asset has a 10% expected rate of return and a 20% standard deviation of the rate of return.
If the Sharpe ratio of this risky asset is 0.8, then what is the prevailing risk-free rate of return (in
%)?
**Note:**The answer is a single digit integer between 0-9.
A published solution is not available for this question yet.
You purchase a one-year call option with a strike price of Rs 20 and a one-year put option with a
strike price of Rs 20. The call premium is Rs 1, and the put premium is Rs 2. The current share price
is Rs 19. If one year later, the share price decreases to Rs 15, then how much profit you earn (in
Rs)?
**Note:**The answer is a single digit integer between 0-9.
A published solution is not available for this question yet.
Suppose the risk-free rate is 4% and the expected market return is 9%. If the value of the beta of
security A is 0.6 according to CAPM, what is the expected rate of return (in %) on security A?
**Note:**The answer is a single digit integer between 0-9.
A published solution is not available for this question yet.
Security A has an expected return of 18% and a standard deviation of 20%. Security B has an
expected return of 16% and a standard deviation of 25%. If the rates of return of the two securities
have a correlation coefficient of 0.4, what is their covariance (in %)?
**Note:**The answer is a single digit integer between 0-9.
A published solution is not available for this question yet.
