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Question 287 MCQ · 2.0 marks
The total spend on TV ads for each brand in a category?
6406533516725.
Consumer panel
6406533516726.
Indian Readership Study
6406533516727.
TV Audience panel
6406533516728.
Retail audit
6406533516729.
Radio Audience Panel
6406533516730.
Press ad expenditure track
6406533516731.
TV ad expenditure track
6406533516732.
Radio ad expenditure track
6406533516733.
Prescription audit
**Corporate Finance**
**Section Id :** 64065375429
**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 stock price must equal the European call price plus the present value of the strike price.
6406533516736.
TRUE
6406533516737.
FALSE
A published solution is not available for this question yet.
You found an ancient clay pot in your home that was purchased by your father 25 years ago for Rs
1,000. You auction it and sell it for Rs 50,000. What is the annualized rate of return that is earned
on the clay pot?
6406533516756.
8.52%
6406533516757.
16.94%
6406533516758.
20.00%
6406533516759.
32.14%
A published solution is not available for this question yet.
The Tata Steel stock is trading at Rs 500 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
6406533516760.
The Tata Steel stock is underpriced, and an investor should buy Tata Steel
shares.
6406533516761.
The Tata Steel stock is overpriced, and an investor should buy Tata Steel
shares.
6406533516762.
The Tata Steel stock is underpriced, and an investor should sell Tata Steel
shares.
6406533516763.
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 7% rate of return and a risky asset that has an
expected rate of return of 20% and a standard deviation of 10%. What is the slope of the Capital
Allocation Line consisting of these two assets?
6406533516764.
2
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1.3
6406533516766.
-1.3
6406533516767.
-2
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?
Sloka 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 10,000 and is expected to generate Rs 5,000 in year one
and Rs 7,000 in year two. Project B costs Rs 12,000 and is expected to generate Rs 8,000 in year
one, Rs 4,000 in year two, Rs 2,000 in year three, and Rs 1,000 in year four. Sloka Inc.’s required
rate of return for these projects is 5%. Which of the following is true?
6406533516772.
Sloka Inc. should prefer Project B as it has a higher net present value than
Project A.
6406533516773.
Sloka Inc. should prefer Project A as it has a higher net present value than
Project B.
6406533516774.
Sloka Inc. is indifferent between Project A and Project B as both have the same
net present value.
6406533516775.
Sloka 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 US Dollar buys 80 Russian Rubles. The GDP deflator in Russia is 110, while the GDP deflator in
the US is 105. What is the real USD to RUB exchange rate? [Note: Exchange rate is defined with the
US as a home country and Russia as a foreign country]
6406533516776.
83.81
6406533516777.
76.36
6406533516778.
95.45
6406533516779.
104.76
A published solution is not available for this question yet.
The prevailing interest rate in India is 8%, and the prevailing interest rate in the UK is 4%. What is
the expected rate of appreciation of INR to GBP exchange rate?
6406533516780.
-3.70%
6406533516781.
-1.84%
6406533516782.
3.84%
6406533516783.
1.62%
A published solution is not available for this question yet.
A trader invests in XYZ Inc. by buying 100 shares in June for Rs 50 per share. She also buys 100
European put options for Rs 5 each as insurance in case the stock drops sharply. The put options
have a strike price of Rs 52 and a maturity date of December. What is the gain or loss if the spot
price on the maturity date is Rs 55?
6406533516784.
Rs 0, no gain, no loss
6406533516785.
Rs 500 gain
6406533516786.
Rs 500 loss
6406533516787.
Rs 1000 gain
A published solution is not available for this question yet.
The price of a stock is Rs 54. A trader buys a call option on the stock with a strike price of Rs 58
when the option price is Rs 5. When does the trader make a profit?
6406533516796.
When the stock price is above Rs 60
6406533516797.
When the stock price is above Rs 63
6406533516798.
When the stock price is below Rs 52
6406533516799.
When the stock price is above Rs 54
A published solution is not available for this question yet.
You purchase a one-year call option with a strike price of Rs 50 and two one-year put options with
a strike price of Rs 50. The call premium is Rs 4, and the put premium is Rs 2. The current share
price is Rs 45. If one year later, the share price increases to Rs 60
6406533516812.
You make a profit of Rs 12.
6406533516813.
You make a profit of Rs 10.
6406533516814.
You make a profit of Rs 2.
6406533516815.
You incur a loss of Rs 2.
A published solution is not available for this question yet.
The price of a three-month European call option on a non-dividend-paying stock with a strike price
of Rs 80 is Rs 8. The stock price is Rs 85, and the annual risk-free rate is 8% (continuously
compounded). What is the price of a three-month European put option on the stock with a strike
price of Rs 80?
6406533516816.
Rs 10.65
6406533516817.
Rs 7.21
6406533516818.
Rs 4.87
6406533516819.
Rs 1.42
A published solution is not available for this question yet.
A stock is trading at Rs 50 today. In 3 months, the stock price can either increase to Rs 60 or
decrease to Rs 40. The three-month risk-free rate is 4%. A three-month call option has an exercise
price of Rs 55. What is the risk-neutral probability that stock price increases?
6406533516820.
40.0%
6406533516821.
50.0%
6406533516822.
53.3%
6406533516823.
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 16%. 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
6406533516832.
Overpriced
6406533516833.
Underpriced
6406533516834.
Fairly priced
6406533516835.
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 65 or fall to Rs 45. 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 12% 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 40 and a one-year put option with a
strike price of Rs 40. The call premium is Rs 4, and the put premium is Rs 3. The current share price
is Rs 38. If one year later, the share price increases to Rs 50, then how much profit do 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 2% and the expected market return is 7%. If the value of the beta of
security A is 1.2 according to CAPM, what is the expected rate of return (in percentage terms) 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 X has an expected return of 18% and a standard deviation of 25%. Security Y has an
expected return of 16% and a standard deviation of 20%. If the rates of return of the two securities
have a correlation coefficient of 0.8, 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.
