Multiple Choice Question for Strategic Financial Management

- A stock is currently selling at ₹270. The call option to buy the stock at ₹265 costs ₹12. What is the Time Value of the option?
- ₹5
- ₹17
**₹7**- None of (A), (B) or (C)

- A Ltd., an export customer requested his banker B to purchase a bill for USD 80,000. Calculate the rate to be quoted to A Ltd. if B wants a margin of 0.08%, given that the inter bank rate is ₹ $ 71.50/10.
- ₹71.1569
**₹71.0431**- ₹71.5572
- ₹71.4428

- A company is considering four projects A, B, C and D with the following information:

Project A | Project B | Project C | Project D | |

Expected NPV (Rs) | 60,000 | 80,000 | 70,000 | 90,000 |

Standard deviation (Rs) | 4,000 | 10,000 | 12,000 | 14,000 |

- Which project will fit the requirement of low risk appetite?
**Project A**- Project B
- Project C
- Project D

- The spot Value of Nifty is 4430. An investor bought a one month Nifty 4410 call option for a premium of ₹12. The option is:
**In the money**

- At the money

- Out of the money

- Insufficient data

- A certain mutual fund has a return of 17% with standard deviation of 3.5% and the sharpe ratio is 4. The risk free rate is
- 12.5%
- 4%
**3%**- 7.5%

- The following information of a project are given below:

Expected cash flow (₹) | Probability |

6,000 | 0.20 |

16,000 | 0.80 |

- If certainty equivalent coefficient is 0.7, what will be certain (Risk less) cash flows of the project?
- ₹12,000

**₹9,800**

- ₹9,000

- ₹15,400

- The spot and 6 months forward rates of US dollar in relation to the rupee (₹/$) are ₹ 74.532/75.4143 and ₹75.1278/76.2538 respectively. What will be the annualized forward margin (with respect to Ask price)?
- 2.42%
- 1.60%
**2.23%**- 2.31%

- B can earn a return of 18% by investing in equity shares on his own. Now he is considering a recently announced equity based Mutual Fund Scheme in which initial expenses are 1% and annual recurring expenses are 2%. How much should be Mutual Fund earn to provide B, a return of 18%?
- 18.18%
**20.18%**- 22.18%
- 21%

- You are given the following information of a stock:

Strike Price | ₹400 |

Current stock price | ₹370 |

Risk free rate of interest | 5% |

- Theoretical minimum price of a European 6 months put option after six months is
- ₹9.37
**₹20.12**- ₹30.76
- ₹20.63

- MS Ltd. is planning to invest in USA. The annual rates of inflation are 8% in India and 3% in USA. If spot rate is currently ₹75.50/$, what spot rate can the company expect after 3 years?
- ₹65.49
- ₹79.16
**₹87.04**- ₹72.00

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