STRATEGIC FINANCIAL MANAGEMENT MCQ 3

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 AProject BProject CProject D
Expected NPV (Rs)60,00080,00070,00090,000
Standard deviation (Rs)4,00010,00012,00014,000
Which project will fit the requirement of low risk appetite?
  • 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
6,0000.20
16,0000.80
Risk less
  • 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 (₹/$) are ₹ 74.532/75.4143 and ₹75.1278/76.2538 respectively. What will be the annualized forward margin (with respect to Ask price)?
    • 2.42%
    • 1.60%
    • 2.23%
    • 2.31%
  • B can earn a return of 18% by investing in equity shares on his own. Now he is considering a recently announced equity based Mutual Fund Scheme in which initial expenses are 1% and annual recurring expenses are 2%. How much should  be Mutual Fund earn to provide B, a return of 18%?
    • 18.18%
    • 20.18%
    • 22.18%
    • 21%
  1. You are given the following information of a stock:
Strike Price₹400
Current stock price₹370
Risk free rate of interest5%
Find answer from below mentioned option
  • Theoretical minimum price of a European 6 months put option after six months is
    • ₹9.37
    • ₹20.12
    • ₹30.76
    • ₹20.63
  • MS Ltd. is planning to invest in USA. The annual rates of inflation are 8% in India and 3% in USA. If spot rate is currently ₹75.50/$, what spot rate can the company expect after 3 years?
    • ₹65.49
    • ₹79.16
    • ₹87.04
    • ₹72.00

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