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- Question
Explain the difference between fixed and flexible budgets ?
- 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
- 1. Galloping inflation is also known as
Options- A. Hyperinflation
- B. Jumping inflation
- C. Moderate inflation
- D. None Discuss
- 2. Diversification is important in investing because
Options- A. It ensures that you only make low-risk investments.
- B. It helps you to balance your risk across different types of investments.
- C. It helps you gain the highest rate of return despite any risks.
- D. It increases your overall risk, which guarantees that you will make more money. Discuss
- 3. Someone who loans money is called
Options- A. Lender
- B. Borrower
- C. Investee
- D. Investor Discuss
- 4. What is Treasury Bills? Discuss
- 5. What is hedging? Discuss
- 6. Financial management process deals with
Options- A. Financing decisions
- B. Investments
- C. Both A & B
- D. None of the above Discuss
- 7. Demand is said to be inelastic when
Options- A. Percentage change in demand is less than the percentage change in price of the good
- B. Percentage change in demand is greater than the percentage change in price of the good
- C. Percentage change in demand is equal to the percentage change in price of the good
- D. None of the above Discuss
- 8. RBI issued currency notes under which system
Options- A. Maximum Fiduciary System
- B. Proportional Reserve System
- C. Fixed Fiduciary System
- D. Fixed Minimum Reserve System Discuss
- 9. Comprehensive income includes all of the following except
Options- A. expenses
- B. contributions by owners
- C. extraordinary items
- D. losses Discuss
- 10. Cheque deposited but not cleared means Discuss
Finance problems
Search Results
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: It helps you to balance your risk across different types of investments.
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: 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.
Correct Answer: contributions by owners
Explanation:
Comprehensive income is the sum of net income and other items that must bypass the income statement because they have not been realized, including items like an unrealized holding gain or loss from available for sale securities and foreign currency translation gains or losses.
Correct Answer: A Bank Reconciliation Statement is a statement prepared periodically by a customer to explain the divergence (difference) between the bank balance as per cash book and the bank balance as per Pass Book It clearly shows the two differing balances and the outstanding items which causes the balances to disagree The objective of preparing such a statement is to know the causes of differences between the two balances and pass necessary correcting or adjusting entries in the books of the firm But it is to be noted that some differences are automatically adjusted For example - A cheque that has been sent for collection, but not yet collected, causes a difference between the balance as shown by the pass book and the balance as shown by the cash book, but no adjusting entry is required in the cash book for such a difference because, the bank will credit the firm?s account as soon as the cheque is collected
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