Diversification is important in investing because

Correct Answer: Lender

Explanation:

Someone who receives money in exchange for a promise to pay it back later is called a borrower1, and the person making the loan is the lender.

Correct Answer: A Treasury Bill (known as T-Bill) is an instrument of money market, used to finance short term requirements of Government of a country A T-Bill is issued at a rate lower than the Face value, and redeemed at Face value on maturity, this difference is the rate of interest on T-Bill This rate of interest is called Risk free Rate of the country

Correct Answer: Hedging is a tool to minimize the risks It is thus like an 'insurance' where one pays a premium but gets an assured amount in case of some uncertain event to the extent of the loss actually suffered on an equally opposite position for which the hedge was done Thus, hedger is different from arbitrageur and speculators, as the intention here is not to maximize the profit but to minimize the loss Eg In Capital Markets, suppose an investor has an equity portfolio of Rs 2 lacs and the portfolio consists of all the major stocks of NIFTY He thinks the market will improve in the long run but might go on a downside in the shortrun NIFTY today stands at 4300 To minimize the risk of downfall, he enters into an option contract by buying NIFTY-PUT of strike 4300 at a premium of, say, Rs 100 Thus, the actual amount paid is Rs 5,000(lot size of NIFTY is 50) Also, the number of NIFTY-PUTs to be bought will vary on the beta of the portfolio so as to completely hedge the positon

Correct Answer: Exchange Traded Funds (ETFs) are a relatively new phenomenon and are gaining popularity rapidly This post outlines the key features of an ETF ETFs are like mutual funds because they hold an underlying asset like stocks, debt, commodities future contracts etc If you are new to the concept of an ETF, think of it as a mutual fund, and build your understanding from thereon An example of an ETF is the SBI Gold ETF, which holds physical gold as its underlying asset

Correct Answer: Secondary market refers to market where securities are traded after being initially offered to the public in the primary market and/or listed on the stock exchange

Correct Answer: Jumping inflation

Explanation:

Galloping inflation is also known as jumping inflation.

 

It refers to a type of inflation that occurs when the prices of goods and services increase at the two-digit or three-digit rate per annum.

Correct Answer: 1 A fixed budget is established for a specific level of activity whereas flexible budget is prepared for various levels of activity 2 Fixed budget cannot be changed after the period commences, whereas a flexible budget can be changed after the period commence 3 Fixed budget is more suitable for fixed expenses whereas flexible budget takes both fixed as well as variable expenses in account 4 Fixed budget includes only fixed costs, whereas a flexible budget includes fixed costs, variable costs and semi variable costs 5 Fixed budget is mainly used in planning stage whereas flexible budget is used in controlling stage

Correct Answer: Financing decisions

Explanation:

Financial management refers to the efficient and effective management of money (funds) in such a manner as to accomplish the objectives of the organization. It is the specialized function directly associated with the top management.

 

Hence, it deals with Financial decisions.

Correct Answer: Percentage change in demand is less than the percentage change in price of the good

Explanation:

Demand is said to be inelastic, when the demand for the good doesn't change much or it is negotiable when the price of the good changed.

Correct Answer: Fixed Minimum Reserve System

Explanation:

RBI issued currency notes under Fixed Minimum Reserve System.