MGT201 Current Spring 2011 Final Term Paper

Total MCQ 58 ( Mostly form Past Papers)

1.A bank offers you a seven month certificate of deposit (CD) at a 0.76% annual rate that would provide a 7.25% effective annual yield. For the seven month CD is interest being compounded daily, weekly, monthly or quarterly ? and having invested Rs. 10,000 in this CD, how much money would you receive when your CD matures in seven months ? That is what size cheque would the bank given you if you closed your account at the end of seven months? ( 5 Marks)

2.How does long term financing policy affect short term financing requirements ? (5 Marks)

3.How working capital affects performance of business ? (5 Marks)

4.Compare the effects of financial leverage and operational leverage on ROE (5 Marks)

5.Elaborate the effects of leverage on cost of debt (3 marks)

6.If Capital structure changes from equity to debt then what will be the effect on capital structure ( 3 Marks)

7.What are the costs and benefits of holding inventories and cash ? ( 3 Marks)

8.Define Interest rate risk and investment risk ? ( 3 Marks)