Profitability Index MCQs (Multiple Choice Questions) PDF Download - 70

The process in which the managers of the company identify projects to add value is classified as

1. capital budgeting
2. cost budgeting
3. book value budgeting
4. equity budgeting

In the situation of bankruptcy, the stock which is recorded above common stock and below debt account is

1. debt liabilities
2. preferred stock
3. hybrid stock
4. common liabilities

The greater value of the option, the larger span of time value is usually results in

1. shorter call option
2. longer call option
3. longer put option
4. shorter put option

If security pays $5,000 in 20 years with 7% annual interest rate, the PV of security by using formula is

1. 1292.10 dollars per year
2. 1292.10 dollars
3. 0.00077 dollars per year
4. 16105.1 dollars per year

In the portfolio, the beta of individual security in portfolio represented as their weighted average is classified as

1. average of portfolio
2. beta of portfolio
3. weighted portfolio
4. collective stocks